MRVL » Topics » Subject: 2007 Director Stock Incentive Plan

This excerpt taken from the MRVL DEFA14A filed Oct 15, 2007.

Subject:         2007 Director Stock Incentive Plan

 

Dear [Shareholder]:

 

Based on feedback received from the Company’s shareholders relating to the proposed 2007 Director Stock Incentive Plan (the “Proposed Plan”), Marvell Technology Group Ltd. (the “Company”) would like to provide you with the following information:

 

              Adoption of the Proposed Plan will not result in increased dilution.  The Proposed Plan would take the place of the Company’s existing 1997 Director’s Stock Option Plan (the “Existing Plan”).  The Existing Plan currently has available for future awards an aggregate of approximately 2.5 million Common Shares.  The Proposed Plan, if adopted, would provide for the future awards of 750,000 Common Shares.  Upon adoption of the Proposed Plan, the Existing Plan would terminate and no future awards would be granted thereunder.  As a result, upon adoption of the Proposed Plan, there would be a net decrease of approximately 1.75 million shares available for future grant to the Company’s outside directors.

 

              Adoption of the Proposed Plan will help the Company offer competitive compensation packages to recruit and retain new outside directors.  The Company has been advised by an independent compensation consultant that the equity grants contemplated by the Proposed Plan are competitive with prevailing market practices.  If the Company were to offer less equity compensation to outside directors, it may become more difficult for the Company to recruit and retain outside directors, unless the Company provides outside directors with increased cash compensation.  The Company believes that provision of equity compensation to outside directors will better align the interests of the Company’s outside directors and shareholders.

 

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