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SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. ____)
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Check the appropriate box:
|_| Preliminary Proxy Statement |_| Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
|X| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Under Rule 14a-12
MARVELL TECHNOLOGY GROUP LTD.
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(Name of Registrant as Specified in Its Charter)
N/A
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(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
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0-11.
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pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee
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or the form or schedule and the date of its filing.
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MARVELL TECHNOLOGY GROUP LTD.
4TH FLOOR
WINDSOR PLACE
22 QUEEN STREET
P.O. BOX HM 1179
HAMILTON HM EX
BERMUDA
May 21, 2001
Dear Shareholder:
You are cordially invited to attend the 2001 Annual General Meeting of
Shareholders of Marvell Technology Group Ltd., a Bermuda corporation, scheduled
to be held at the offices of the Company's subsidiary, Marvell Semiconductor,
Inc., 525 Almanor Avenue, Sunnyvale, California 94085, on Thursday, June 21,
2001 at 10:00 a.m. local time.
As described in the accompanying Notice of Annual General Meeting of
Shareholders and Proxy Statement, shareholders will be asked to vote on the
election of Class 1 directors of the Company, to approve the Company's Second
Amended and Restated Bye-Laws, to approve the Company's Amended and Restated
1995 Stock Option Plan, and to re-appoint PricewaterhouseCoopers LLP as the
Company's independent auditors for the Company's 2002 fiscal year and to
authorize the Board of Directors to fix the auditor's remuneration. Directors
and executive officers of the Company will be present at the Annual General
Meeting to respond to any questions that our shareholders may have regarding the
business to be transacted.
YOUR VOTE IS VERY IMPORTANT, REGARDLESS OF THE NUMBER OF SHARES YOU OWN. I
URGE YOU TO VOTE YOUR PROXY AS SOON AS POSSIBLE. Whether or not you plan to
attend the Annual General Meeting in person, I urge you to sign, date and
promptly return the enclosed proxy card in the accompanying postage prepaid
envelope. You may, of course, attend the Annual General Meeting and vote in
person even if you have previously returned your proxy card.
On behalf of the Board of Directors and all of the employees of the
Company, I wish to thank you for your continued support of the Company.
Sincerely yours,
/s/ SEHAT SUTARDJA
Sehat Sutardja
Co-Chairman of the Board, President
and Chief Executive Officer
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MARVELL TECHNOLOGY GROUP LTD.
4TH FLOOR
WINDSOR PLACE
22 QUEEN STREET
P.O. BOX HM 1179
HAMILTON HM EX
BERMUDA
------------------------
NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 21, 2001
The 2001 Annual General Meeting of Shareholders of Marvell Technology Group
Ltd., a Bermuda corporation, will be held at the offices of the Company's
subsidiary, Marvell Semiconductor, Inc., 525 Almanor Avenue, Sunnyvale,
California 94085, on Thursday, June 21, 2001 at 10:00 a.m. local time, subject
to adjournment or postponement by the Board of Directors, for the following
purposes:
1. To elect four directors constituting Class 1 of the Company's Board
of Directors, each to hold office for a three-year term and until
their successor is duly elected and qualified;
2. To consider and approve, as a Special Resolution, the Company's
Second Amended and Restated Bye-Laws;
3. To consider and approve the Company's Amended and Restated 1995 Stock
Option Plan;
4. To re-appoint PricewaterhouseCoopers LLP as the independent auditors
of the Company for the Company's 2002 fiscal year ending January 26,
2002 and to authorize the Board of Directors to fix the auditor's
remuneration; and
5. To transact such other business as may properly come before the
Annual General Meeting and any or all adjournments or postponements
thereof.
Only holders of record of common stock of the Company on April 30, 2001,
will be entitled to notice of, and to vote at, the Annual General Meeting and
any adjournment or postponement thereof.
In order to constitute a quorum for the conduct of business at the Annual
General Meeting, it is necessary that holders of a majority of all outstanding
shares of common stock be present in person or be represented by proxy. Your
attention is invited to the accompanying proxy statement. To assure your
representation at the Annual General Meeting, please date, sign and mail the
enclosed proxy, for which a return envelope is provided. Execution of a proxy
will not in any way affect a shareholder's right to attend the Annual General
Meeting and vote in person, and any person giving a proxy has the right to
revoke it at any time before it is exercised.
By order of the Board of Directors
/s/ WEILI DAI
WEILI DAI
Secretary
Sunnyvale, California
May 21, 2001
PLEASE SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD PROMPTLY.
NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
If you have any questions, or have any difficulty voting your shares, please
contact Matthew Gloss at (408) 222-2500.
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TABLE OF CONTENTS
PAGE
----
Notice of Annual General Meeting of Shareholders
Proxy Statement............................................. 1
Proposal No. 1: Election of Directors....................... 4
Proposal No. 2: Approval of Second Amended and Restated
Bye-Laws.................................................. 8
Proposal No. 3: Approval of Amended and Restated 1995 Stock
Option Plan............................................... 13
Proposal No. 4: Re-Appointment of Independent Auditors...... 18
Security Ownership of Certain Beneficial Owners and
Management................................................ 19
Board of Directors and Committees of The Board.............. 22
Compensation Committee Interlocks and Insider
Participation............................................. 23
Executive Compensation...................................... 26
Joint Report of the Compensation and Stock Option
Committees................................................ 28
Report of the Audit Committee............................... 30
Information Concerning Independent Auditors................. 31
Stock Performance Graph..................................... 32
Related Party Transactions.................................. 33
Shareholders' Proposals for the 2002 Annual General
Meeting................................................... 33
Other Matters............................................... 34
Section 16(a) Beneficial Ownership Reporting Compliance..... 34
Annual Report on Form 10-K.................................. 35
Appendix A: Second Amended and Restated Bye-Laws............ A-1
Appendix B: Amended and Restated 1995 Stock Option Plan..... B-1
Appendix C: Amended Audit Committee Charter................. C-1
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MARVELL TECHNOLOGY GROUP LTD.
4TH FLOOR
WINDSOR PLACE
22 QUEEN STREET
P.O. BOX HM 1179
HAMILTON HM EX
BERMUDA
------------------------
PROXY STATEMENT
ANNUAL GENERAL MEETING OF SHAREHOLDERS
JUNE 21, 2001
------------------------
INTRODUCTION
This proxy statement is furnished in connection with the solicitation by
the board of directors of Marvell Technology Group Ltd., a Bermuda corporation
("Marvell" or the "Company"), of proxies for use at the 2001 Annual General
Meeting of Shareholders of the Company scheduled to be held at the offices of
the Company's subsidiary, Marvell Semiconductor, Inc., 525 Almanor Avenue,
Sunnyvale, California 94085, on Thursday, June 21, 2001 at 10:00 a.m. local
time, and at any and all postponements and adjournments thereof.
INFORMATION REGARDING VOTING AT THE ANNUAL GENERAL MEETING
GENERAL
At the Annual General Meeting, the shareholders of the Company are being
asked to consider and to vote upon (1) the election of the four directors
constituting Class 1 of the Board of Directors nominated by the Company's Board
of Directors to serve until the Annual General Meeting of Shareholders to be
held in calendar year 2004 (see "Election of Directors" at page 4 of this proxy
statement), (2) as a Special Resolution, the approval of the Company's Second
Amended and Restated Bye-Laws (see "Approval of Second Amended and Restated
Bye-Laws" at page 8 of this proxy statement), (3) the approval of the Company's
Amended and Restated 1995 Stock Option Plan (see " Approval of Amended and
Restated 1995 Stock Option Plan" at page 13 of this proxy statement), and (4)
the re-appointment of PricewaterhouseCoopers LLP as the Company's independent
auditors for its 2002 fiscal year and to authorize the Board of Directors to fix
the auditor's remuneration (see "Re-Appointment of Independent Auditors" at page
18 of this proxy statement). Shares represented by properly executed proxies
received by the Company will be voted at the Annual General Meeting in the
manner specified therein or, if no instructions are marked on the proxy card,
FOR each of the director nominees identified on such card, FOR approval of the
Company's Second Amended and Restated Bye-Laws, FOR approval of the Company's
Amended and Restated 1995 Stock Option Plan, and FOR the re-appointment of
PricewaterhouseCoopers LLP as the Company's independent auditors for the
Company's 2002 fiscal year and to authorize the Board of Directors to fix the
auditor's remuneration. Although management does not know of any other matter to
be acted upon at the Annual General Meeting, unless contrary instructions are
given, shares represented by valid proxies will be voted by the persons named on
the accompanying proxy card in accordance with their respective best judgment
with respect to any other matters that may properly come before the Annual
General Meeting.
The approximate date on which this proxy statement and the enclosed proxy
card are first being sent to shareholders is May 21, 2001.
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PRINCIPAL EXECUTIVE OFFICE
The mailing address of the principal executive offices of the Company is
4th Floor, Windsor Place, 22 Queen Street, P.O. Box HM 1179, Hamilton HM EX,
Bermuda, and our telephone number there is (441) 296-6395.
RECORD DATE AND VOTING
April 30, 2001 has been set as the record date for the Annual General
Meeting. Only shareholders of record on Monday, April 30, 2001, will be entitled
to notice of and to vote at the Annual General Meeting. On the record date,
115,396,288 shares of the Company's common stock, par value $0.002 per share,
were outstanding. Each share of outstanding common stock is entitled to one vote
on each matter to be voted on at the Annual General Meeting.
The presence, in person or by proxy, of the holders of at least a majority
of the voting power of the stock issued and outstanding and entitled to vote is
necessary to constitute a quorum at the Annual General Meeting. In the event
there are not sufficient votes for a quorum at the time of the Annual General
Meeting, the Annual General Meeting may be adjourned in order to permit the
further solicitation of proxies.
Abstentions and broker non-votes are counted for the purpose of determining
the presence or absence of a quorum for the transaction of business. With regard
to the election of directors, votes may be cast in favor or withheld. Directors
are elected by plurality, and therefore votes that are withheld and broker
non-votes will be excluded entirely from the vote and will have no effect.
Abstentions are counted in tabulations of the votes cast on proposals presented
to shareholders other than the election of directors, thus having the effect of
a negative vote, whereas broker non-votes are not counted for purposes of
determining whether a proposal has been approved and therefore will have no
effect on the outcome of such matter. Subject to limited exceptions, any
shareholder proposals that properly come before the Annual General Meeting
require, in general, the affirmative vote of a majority of the voting power of
the shares of common stock present, in person or represented by proxy, at the
Annual General Meeting and entitled to vote on the subject matter. The proposal
to approve the Company's Second Amended and Restated Bye-Laws requires a Special
Resolution of the shareholders. A Special Resolution is a resolution approved by
not less than 66 2/3% of the voting power of the shares and 66 2/3% in number of
the shareholders, present in person or represented by proxy, and entitled to
vote at the Annual General Meeting.
Shareholders should complete and return the proxy card as soon as possible.
To be valid, the proxy card must be completed in accordance with the
instructions on it and received at the address set forth below at least two
hours prior to the Annual General Meeting:
Marvell Technology Group Ltd.
c/o First Union National Bank
Attn: Proxy Tabulation NC-1153
P.O. Box 217950
Charlotte, NC 28254-3555
U.S.A.
No postage is required if the proxy is mailed in the enclosed envelope
within the United States to the United States address set forth above.
REVOCATION OF PROXIES
Execution of a proxy will not in any way affect a shareholder's right to
attend the Annual General Meeting and vote in person, and any person giving a
proxy has the right to revoke it at any time before it is exercised. A proxy may
be revoked by either:
- delivering to the Secretary of the Company, prior to the commencement of
the Annual General Meeting, either a written notice of revocation or a
duly executed proxy bearing a later date at the address set forth above;
or
- voting in person at the Annual General Meeting.
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SOLICITATION
The Company is making this solicitation, and the cost of preparing,
assembling and mailing the Notice of Annual General Meeting of Shareholders,
this Proxy Statement and the enclosed proxy card will be paid by the Company.
Following the mailing of this proxy statement, directors, officers and other
employees of the Company may solicit proxies by mail, telephone, e-mail or in
person. Such persons will receive no additional compensation for such services.
Brokerage houses and other nominees, fiduciaries and custodians nominally
holding shares of common stock of record will be requested to forward proxy
soliciting material to the beneficial owners of such shares, and will be
reimbursed by the Company for their reasonable charges and expenses in
connection therewith.
PRESENTATION OF FINANCIAL STATEMENTS
In accordance with Section 84 of the Companies Act 1981 of Bermuda and
Bye-Law 73 of the Company, the Company's audited consolidated financial
statements for the fiscal year ended January 27, 2001 will be presented at the
Annual General Meeting. These statements have been approved by the Company's
directors. There is no requirement under Bermuda law that such statements be
approved by shareholders, and no such approval will be sought at the Annual
General Meeting.
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PROPOSAL NO. 1
ELECTION OF DIRECTORS
The number of directors of the Company is currently 10. The Board of
Directors is divided into three classes with Class 1 having four members and
each of Classes 2 and 3 having three members. One class of the Board of
Directors is elected each year. At the Annual General Meeting, shareholders of
the Company will be asked to vote on the election of four directors as Class 1
directors. All directors elected at the Annual General Meeting will be elected
to three-year terms and will serve until their successors have been duly elected
and qualified.
NOMINEES FOR ELECTION
Set forth below are the names of persons nominated by the Company's Board
of Directors for election as Class 1 directors at the Annual General Meeting.
The information set forth below as to each nominee has been furnished by the
nominee.
CLASS OF TERM
NAME AGE DIRECTOR EXPIRES CURRENT OCCUPATION
---- --- -------- ------- ------------------
John M. Cioffi(1)....... 44 1 2004 Director since March 2000. Dr. Cioffi has
been a professor of Electrical Engineering at
Stanford University since 1986. In 1991, he
founded Amati Communications Corporation,
which designs and manufactures modems for
Asymmetric Digital Subscriber Lines, and
served as the Chief Technology Officer and
Vice President until the company's
acquisition by Texas Instruments, Inc. in
1998. Dr. Cioffi is an IEEE fellow and serves
as a director for ITEX.
Paul R. Gray(1)......... 58 1 2004 Director since March 2000. Since July 2000,
Dr. Gray has served as Executive Vice
Chancellor and Provost at the University of
California at Berkeley. During his 28-year
tenure with the University, Dr. Gray has held
numerous administrative posts, including
Director of the Electronics Research
Laboratory, Vice Chairman of the EECS
Department for Computer Resources, Dean of
the College of Engineering and Chairman of
the Department of Electrical Engineering and
Computer Sciences.
Avigdor Willenz......... 44 1 2004 Director and the Executive Vice President of
the Communications Business Group of Galileo
Technology Ltd. since January 2001, upon the
consummation of the acquisition of Galileo
Technology Ltd. by the Company. Mr. Willenz
was the founder of Galileo Technology Ltd.,
and from its inception in November 1992 until
January 2001, Mr. Willenz served as its
Chairman of the Board and Chief Executive
Officer. From August 1988 until February
1993, Mr. Willenz was Corporate Product
Definition Manager/Chief Engineer for
Integrated Device Technology (IDT), which
develops semiconductor devices for data
networking and telecommunications equipment.
Mr. Willenz serves as a director for Radware
Ltd. Mr. Willenz holds a Bachelor of Science
degree in Electrical Engineering from the
Technion in Israel.
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CLASS OF TERM
NAME AGE DIRECTOR EXPIRES CURRENT OCCUPATION
---- --- -------- ------- ------------------
Manuel Alba............. 45 1 2004 Director and Vice President of Strategy and
Business Development of the Communications
Business Group of Galileo Technology, Inc., a
subsidiary of Galileo Technology Ltd., since
January 2001. From April 1994 until the
acquisition of Galileo Technology Ltd. by the
Company in January 2001, Mr. Alba served as a
director and the President of Galileo
Technology Ltd. and as President of Galileo
Technology, Inc. Mr. Alba holds a Bachelor of
Science degree in Electrical Engineering from
the National Polytechnic Institute in Mexico
City, a Master of Science degree in
Electrical Engineering from the University of
Southern California and a Master of Business
Administration degree from the University of
Santa Clara.
---------------
(1) Member of the Compensation Committee.
The Company has been advised by each nominee named in this proxy statement
that he is willing to be named as such herein and is willing to serve as a
director if elected. However, if any of the nominees should be unable to serve
as a director, the enclosed proxy will be voted in favor of the remainder of
those nominees not opposed by the shareholder on such proxy and may be voted for
a substitute nominee selected by the Board of Directors.
BOARD RECOMMENDATION AND REQUIRED VOTE
The Board of Directors recommends that you vote FOR all of the nominees for
director identified above. Unless authority to do so is withheld, the proxy
holders named in each proxy will vote the shares represented thereby FOR the
election of all of the nominees for director named above. Assuming the presence
of a quorum, directors will be elected by a plurality of the votes of the shares
present and entitled to vote at the Annual General Meeting. Because directors
are elected by plurality, abstentions and broker non-votes will be entirely
excluded from the vote and will have no effect on the outcome.
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OTHER DIRECTORS
The following table sets forth certain information with respect to the
other directors of the Company. The information as to each director has been
furnished by the director.
CLASS OF TERM
NAME OF DIRECTOR AGE DIRECTOR EXPIRES CURRENT OCCUPATION
---------------- --- -------- ------- ------------------
Sehat Sutardja(3)....... 39 3 2003 A co-founder of the Company, Dr. S. Sutardja
has served as its President since inception
in January 1995 and as its Co-Chairman of the
Board and Chief Executive Officer since
August 1995. In addition, he has served as
President, Chief Executive Officer and a
Director of Marvell Semiconductor, Inc. since
its inception. Dr. Sutardja received his
Master of Science and Ph.D. degrees in
Electrical Engineering and Computer Science
from the University of California at
Berkeley. Dr. Sutardja is the husband of
Weili Dai and the brother of Dr. Pantas
Sutardja.
Diosdado P.
Banatao(2)(1)......... 54 2 2002 Co-Chairman of the Board since October 1995.
Mr. Banatao is currently the managing partner
of Tallwood Venture Capital, which he founded
in June 2000. He was a venture partner in
Mayfield Fund, a venture capital fund, from
1998 until June 2000. Prior to joining
Mayfield Fund, Mr. Banatao founded S3,
Incorporated, a designer and manufacturer of
graphics and video accelerators for personal
computers and related peripheral products.
Mr. Banatao served as President and Chief
Executive Officer of S3 from 1989 until 1992
and as its Chairman from 1992 to 1998. Mr.
Banatao holds a Bachelor of Science degree in
Electrical Engineering from the Mapua
Institute of Technology and a Master of
Science degree in Electrical Engineering and
Computer Science from Stanford University.
Weili Dai(3)............ 39 3 2003 A co-founder of the Company, Ms. Dai has
served as its Vice President and one of its
directors since inception in January 1995 and
its Secretary since June 2000. Ms. Dai was
promoted from Vice President to Executive
Vice President in 1996, which position she
currently holds. Ms. Dai has also served as
Executive Vice President and Director for
Marvell Semiconductor, Inc. since its
inception. Ms. Dai also holds the position of
Executive Vice President of the
Communications Business Group of Marvell
Semiconductor, Inc. effective April, 2001.
She is also responsible for the human
resources functions. Ms. Dai holds a Bachelor
of Science degree in Computer Science from
the University of California at Berkeley. Ms.
Dai is the wife of Dr. Sehat Sutardja.
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CLASS OF TERM
NAME OF DIRECTOR AGE DIRECTOR EXPIRES CURRENT OCCUPATION
---------------- --- -------- ------- ------------------
Pantas Sutardja......... 38 3 2003 A co-founder of the Company, Dr. P. Sutardja
has served as its Vice President and one of
its directors since inception in January
1995, and as Vice President of Engineering
for Marvell Semiconductor, Inc. from its
inception until 1999, when he was appointed
Chief Technology Officer. Dr. Sutardja has
also been a Director of Marvell
Semiconductor, Inc. from its inception. Dr.
Sutardja holds Bachelor of Science, Master of
Science and Ph.D. degrees in Electrical
Engineering and Computer Science from the
University of California at Berkeley. Dr.
Sutardja is the brother of Dr. Sehat
Sutardja.
Kuo Wei (Herbert)
Chang(2)(1)........... 39 2 2002 A Director since November 1996. Since April
1996, Mr. Chang has been President of
InveStar Capital, Inc., a technology venture
capital management firm based in Taiwan.
Since February 1998, Mr. Chang has also been
the managing member of Forefront Associates
LLC, which is the general partner of
Forefront Venture Partners, L.P. From 1994 to
1996, Mr. Chang was Senior Vice President of
WK Technology Fund, a venture capital fund.
Mr. Chang serves as a director for Oplink
Communications, Inc. Mr. Chang holds a
Bachelor of Science degree from National
Taiwan University and a Master of Business
Administration degree from National
Chiao-Tung University in Taiwan.
Ronald D. Verdoorn(2)... 50 2 2002 A Director since January 1998. Since January
1999, Mr. Verdoorn has served as Executive
Vice President of Global Operations for
Affymetrix, Inc., a company specializing in
the development of technology for acquiring
and managing complex genetic information for
use in biomedical research, genomics and
clinical diagnostics. From 1997 to 1999, Mr.
Verdoorn served as an independent consultant
to the hard disk drive industry. From 1983 to
1997, Mr. Verdoorn held a number of positions
with Seagate Technology, Inc., most recently
as Executive Vice President and Chief
Operating Officer of Storage Products. Mr.
Verdoorn holds a Bachelor of Arts degree in
Sociology from Linfield College.
---------------
(1) Member of the Compensation Committee.
(2) Member of the Audit Committee.
(3) Member of the Stock Option Committee.
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PROPOSAL NO. 2
APPROVAL OF SECOND AMENDED AND RESTATED BYE-LAWS
At the Annual General Meeting, the shareholders will be asked to approve
the Company's Second Amended and Restated Bye-Laws, including re-designating all
previously designated preferred shares as "blank check" preferred shares. A copy
of the Second Amended and Restated Bye-Laws is attached hereto as Appendix A.
In connection with its initial public offering in June 2000, the Company
adopted certain Bye-Law changes with the goal of easing its administration as a
public company and providing appropriate protections against changes in control.
Because of certain features of the Company's then-existing Bye-Laws related to
outstanding preferred shares, however, all of which converted into common shares
on the date of the Company's initial public offering, the Company was not able
to adopt all of the changes it believed necessary at that time. Therefore,
effective as of May 1, 2001, the Board approved and adopted the Second Amended
and Restated Bye-Laws, subject to shareholder approval.
SUMMARY OF CHANGES
The material changes to the Bye-Laws, each of which is discussed in further
detail below, include the following:
1. The Bye-Laws have been amended to eliminate previous designations
of preferred shares as shares of Series A, Series B, Series C, Series D and
Series E preferred shares. The effect of this change is to redesignate all
8 million of the Company's authorized preferred shares as preferred shares
that may be issued with such rights, preferences and privileges as the
Board may designate;
2. The Bye-Laws have been amended to change the definition of "Special
Resolution" by eliminating the requirement that a Special Resolution
include the approval of 66 2/3% of those record shareholders present and
voting in person or by proxy at the specified meeting, regardless of the
number of shares those shareholders are voting. The definition as revised
simply requires the approval of 66 2/3% of the shares voted at the meeting;
3. The Bye-Laws have been amended to clarify that the Company's prior
change of control measures, which required a Special Resolution for the
approval of any business combination, are applicable only with respect to
transactions that do not receive the approval of 66 2/3% of the Board.
Prior to the amendment, the Company's change of control Bye-Laws required a
Special Resolution of the shareholders for any transaction involving a
merger or amalgamation of the Company or any subsidiary of the Company,
regardless of the approval of the Company's Board and regardless of whether
the Company was the initiating party for such transaction. Any merger or
amalgamation of the Company will still be subject to the shareholder
approval requirements of Bermuda's Companies Act 1981;
4. The Bye-Laws have been amended to provide that shareholder
nominations of directors and other shareholder proposals may be presented
not less than 60 nor more than 180 days prior to the date of the relevant
annual general meeting. The Bye-Laws previously provided that shareholders
had to provide such notice not less than 60 nor more than 90 clear days
prior to the date of the annual general meeting, which was inconsistent
with the requirement that proposals and nominations be provided to the
Company 120 days prior to the annual general meeting for inclusion in the
Company's proxy statement;
5. The Bye-Laws previously provided that approval by at least four
members of the Board was required for any borrowings in excess of $1
million, entering into any contract or commitment which required payments
in excess of $1 million or purchasing, acquiring, selling or disposing of
assets for amounts in excess of $1 million. The Bye-Laws have been amended
to specify that the approval threshold is an absolute majority of the
directors then in office. The Bye-Laws were also amended to raise the
threshold with regard to borrowings to $25 million and to eliminate
specific absolute majority requirements with regard to contracts and asset
sales. Such transactions will nonetheless remain subject to the
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requirements of Bermuda law and to the listed company requirements of the
NASDAQ National Market;
6. The Bye-Laws have been amended to provide that the Board of
Directors, rather than the shareholders in general meeting, may determine
the remuneration of directors;
7. The Bye-Laws have been amended to provide that in the event the
office of Auditor is vacant for any reason, the Board can appoint an
interim Auditor to serve until the next annual general meeting of
shareholders;
8. The Bye-Laws have been amended to allow amendments to the Bye-Laws
to be approved by a simple majority of shareholders, excluding only those
Bye-Laws that require that any act be taken by Special Resolution; and
9. The Bye-Laws have been otherwise amended to eliminate clauses
related solely to actions taken in connection with the Company's
organization, to eliminate duplicative clauses and to correct typographical
errors.
DESCRIPTION OF CHANGES
The following is a description of the changes to the Bye-Laws summarized
above. The description does not purport to be complete and is qualified in its
entirety by reference to the full text of the Second Amended and Restated
Bye-Laws attached to this proxy statement as Appendix A and incorporated herein
by reference. Shareholders are encouraged to read the text of the Second Amended
and Restated Bye-Laws in their entirety.
Elimination of previous designations of preferred shares as Series A through
Series E preferred shares
At the time of its initial public offering, all of the Company's preferred
shares were designated as either Series A, Series B, Series C, Series D or
Series E preferred shares. In connection with the initial public offering, all
outstanding preferred shares converted to common shares and the specific rights,
preferences and privileges of each series of preferred shares expired. However,
because the prior Bye-Laws and the resolutions approving prior designations of
preferred shares contained conflicting language regarding the Board's right to
reissue without shareholder approval previously designated preferred shares, the
Bye-Laws have been amended to clarify that the Board may reissue the Company's
8,000,000 preferred shares with such rights, preferences and privileges as the
Board may determine.
The Board believes that preferred shares are often a useful financial tool.
If opportunities arise that would make desirable the issuance of the Company's
preferred shares through either public offerings or private placements, the
proposed amendment would avoid the possible delay and expense of a shareholder's
meeting. The Company's shareholders will have no preemptive rights with respect
to the issuance of any such shares. Issuance of the preferred stock could result
in one or more classes of securities outstanding that will have certain
preferences with respect to dividends and in liquidation over the common stock,
and could result in the dilution of voting rights, net income per share and net
book value over the common stock. The specific terms of any series of preferred
stock will depend primarily on market conditions and other factors existing at
the time of issuance. The Board has no present plans, understandings or
agreements for issuing any preferred shares and the Board does not intend to
issue any such shares except on terms that it deems to be in the best interest
of the Company and its shareholders.
In the event of a hostile attempt to take over the Company that the Board
determines is not in the best interest of the Company and its shareholders, it
may be possible for the Board to issue preferred shares with rights and
preferences that could impede the completion of a takeover. Such possibilities
may make the Company less attractive as a takeover candidate and may deter
takeover attempts not approved by the Board.
The designations, preferences and rights that may be designated by the
Board include, without limitation, the following: (i) the class or series of
preferred shares, (ii) the dividend rate of such class or series and the
conditions and dates on which the dividend is payable, (iii) the redemption
provisions and terms of such
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redemption, (iv) the terms and amount of any sinking funds established
therefore, (iv) the terms and conditions on which any series or class of
preferred shares may be converted into common shares or other securities of the
Company, (vi) the voting rights, if any, of the preferred shares, (vii) the
restrictions on the issue or reissue of any additional preferred shares, and
(viii) the rights of the holders of such series or class upon liquidation or
dissolution of the Company.
Amendment to definition of "Special Resolution"
The Bye-Laws have been amended to clarify the definition of "Special
Resolution" by eliminating the requirement that a Special Resolution include the
approval of 66 2/3% of those record shareholders present and voting in person or
by proxy at the specified meeting, regardless of the number of shares those
shareholders are voting. The definition as revised simply requires the approval
of 66 2/3% of the shares voted at the meeting.
The Board believes that this amendment makes the provision more appropriate
for shareholders of a public company, especially in light of the fact that all
shareholders holding their shares through the Depository Trust Company are
counted as one record shareholder for the purposes of this provision. Thus,
regardless of the number of shares held by shareholders through DTC, those
shareholders will be counted as a single record shareholder, with the result
that the intentions of those shareholders might be thwarted through the
application of the previous "body count" definition of Special Resolution.
Amendment to change of control provisions
The Bye-Laws have been amended to clarify that the Company's prior change
of control measures, which required a Special Resolution for the approval of any
Business Combination, are applicable only with respect to transactions that do
not receive the approval of 66 2/3% of the directors then in office. Any merger
or amalgamation of the Company will still be subject to the shareholder approval
requirements of Bermuda's Companies Act 1981. The definition of Business
Combination has also been amended to clarify that any merger or amalgamation of
any subsidiary of the Company formed with the approval of the Board of Directors
for the purpose of engaging in the merger or amalgamation shall not be a
Business Combination.
As previously drafted, the Company's change of control Bye-Laws required a
Special Resolution of the shareholders for any transaction involving a Business
Combination of the Company or any subsidiary of the Company, regardless of the
approval of the Company's Board and regardless of whether the Company was the
initiating party for such transaction. The result of this provision was to
require a Special Resolution approving virtually any corporate transaction that
the Company undertook. For example, if the Company wanted to complete a $5
million transaction by forming a subsidiary and merging that subsidiary into the
target (a typical "reverse triangular merger" structure), the prior change of
control provisions would have required that the Company call a special general
meeting and seek a Special Resolution from the shareholders approving the
transaction.
The change of control provisions have thus been amended to provide that any
Business Combination approved by not less than 66 2/3% of the Board shall not
require a Special Resolution, which will allow the Company greater flexibility
in structuring strategic acquisitions. This amendment does not in any way alter
the Company's obligation to seek shareholder approval for transactions that
require such approval pursuant to the Bermuda Companies Act 1981 or the Listed
Company Rules of the NASDAQ National Market.
Amendment to clarify the time for presentation of shareholder nominations and
proposals
The current Bye-Laws regarding the timing of shareholder nominations of
directors and the shareholder proposals require notice not less than 60 nor more
than 90 days prior to the date proposed for the annual general meeting. However,
under United States federal securities laws, a company is not required to
include nominations or proposals in its proxy statement if those nominations or
proposals are not received at least 120 days prior to the date set for the
annual general meeting (or if no such date is set, the date that is 120 days
prior to the anniversary of the previous year's annual general meeting).
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Bye-Laws 12(5)(b) and 34 have been amended to clarify that shareholder
nominations of directors and shareholder proposals may be presented to the
Company not less than 60 nor more than 180 days prior to the date set for the
annual general meeting (or if no such date is set, the date that is not less
than 60 nor more than 180 days prior to the anniversary of the previous year's
annual general meeting). This allows shareholders to present proposals in a
timely manner for inclusion in the Company's annual proxy statement. The
Bye-Laws have also been amended to allow shareholders to nominate directors for
election at any special general meeting by providing notice to the Company not
more than ten days after the Company first announces that it intends to hold a
special general meeting for the election of directors.
Changes to required Board approval levels
The Bye-Laws previously provided that approval by at least four members of
the Board was required for any borrowings in excess of $1 million, entering into
any contract or commitment which required payments in excess of $1 million or
purchasing, acquiring, selling or disposing of assets for amounts in excess of
$1 million. The Bye-Laws have been amended to specify that the approval
threshold is an absolute majority of the directors then in office. The Bye-Laws
were also amended to raise the threshold with regard to borrowings to $25
million and to eliminate specific requirements with regard to contracts and
asset sales.
The previous threshold of four directors was adopted at a time when the
Company had seven directors and four represented an absolute majority of the
Board. The amendment to the threshold continues the intent of this provision,
which is to require an absolute majority of the directors then in office to
approve certain transactions. However, the Board also believes that given the
size and scope of transactions with which the Company is involved, the types and
size of transactions that required the approval of an absolute majority of the
Board represented an impediment to day-to-day operations. The Company will
nonetheless remain subject to the requirements of Bermuda law and to the Listed
Company Rules of the NASDAQ National Market.
Amendment to allow Board to establish director remuneration
The Company's Bye-Laws require shareholder approval of payments to
Directors for ordinary services as a Director. The Company is seeking
shareholder approval to amend the Bye-Laws to provide that Director remuneration
may be set by the Board without shareholder approval.
This Board believes that this proposed amendment would merely implement an
arrangement common for U.S. companies. The Company needs the flexibility to pay
Directors in a manner comparable to directors of similar companies in order to
be able to continue to attract and retain highly qualified directors. The
requirement in the Bye-Laws to obtain shareholder approval makes it difficult
for the Company to react in a timely manner to changes in compensation
practices. Moreover, companies similar to the Company do not have similar
procedures governing director compensation, which could place the Company at a
competitive disadvantage in its ability to provide competitive compensation to
directors.
Amendment to allow appointment of interim Auditor
The Bye-Laws have been amended to provide that in the event the office of
Auditor is vacant for any reason, the Board can appoint an interim Auditor to
serve until the next annual general meeting of shareholders.
Bermuda law requires that the Company appoint an Auditor annually. The
prior Bye-Laws required that upon the resignation of the Auditor or upon the
occurrence for any other reason of a vacancy in the office of Auditor, the
Company is required to call a special general meeting for the purpose of filling
the vacancy.
The Company believes that it is important to ensure that the position of
Auditor is filled at all times and thus believes that leaving the position of
Auditor open for even a short period of time is not in the shareholders' best
interests. Furthermore, if the vacancy were to occur at certain times during the
Company's reporting cycle, the Company would be unable to release earnings or to
prepare and file reports required by United States federal securities laws.
Finally, the Board also believes that the time and expense of calling a special
general meeting is not warranted in light of the fact that the Auditor is
reappointed each year.
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Amendment to lower threshold required for amendment of Bye-Laws
The Bye-Laws have been amended to allow other amendments to the Bye-Laws to
be approved by a simple majority of shareholders, excluding only those Bye-Laws
that require that any act be taken by Special Resolution. The current Bye-Laws
require that any amendment to the Bye-Laws be approved by a Special Resolution.
While this is certainly appropriate with respect to changing any Bye-Law that
requires that an action be approved by a Special Resolution, there are many
Bye-Laws that are simply administrative in nature. The Board believes that
amending those Bye-Laws should not require the approval of more than a majority
of the shareholders voting on the amendment.
The Bye-Laws that require that an action be approved by a Special
Resolution include those relating to nominating a director from the floor of an
annual general meeting, those relating to removal of a director for cause and
those relating to Business Combinations. Any amendment to those Bye-Laws will,
by virtue of the proposed amendment to the Bye-Laws, still require a Special
Resolution. All other provisions of the Bye-Laws would require the approval of a
simple majority.
Conforming and correcting amendments
In addition to the specific amendments described above, the Bye-Laws have
been otherwise amended to eliminate clauses related solely to actions taken in
connection with the Company's organization, to eliminate duplicative clauses and
to correct typographical errors.
BOARD RECOMMENDATION AND REQUIRED VOTE
The Board of Directors recommends that you vote FOR the approval of the
Company's Second Amended and Restated Bye-Laws. Approval of the Company's Second
Amended and Restated Bye-laws requires an affirmative vote of shareholders by
Special Resolution. A Special Resolution is a resolution approved by not less
than 66 2/3% of the voting power of the shares and 66 2/3% in number of the
shareholders, present in person or represented by proxy, and entitled to vote at
the Annual General Meeting.
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PROPOSAL NO. 3
APPROVAL OF AMENDED AND RESTATED 1995 STOCK OPTION PLAN
At the Annual General Meeting, the shareholders of the Company will be
asked to approve the Company's Amended and Restated 1995 Stock Option Plan,
including the Appendix attached thereto (the "Amended Plan"), a copy of which is
attached hereto as Appendix B. A maximum aggregate amount of 38,268,553 shares
have been authorized to be issued under the existing Amended and Restated 1995
Stock Option Plan of the Company, as currently in effect (the "Current Plan").
As of May 1, 2001, an aggregate amount of 7,196,586 shares of common stock
remained available under the Current Plan for the grant of stock options. In
addition, the Current Plan provides that on the first business day of each
fiscal year, the number of shares available to be issued under the plan will be
increased by the lesser of (1) 5,000,000 shares of common stock, (2) 5.0% of the
outstanding shares of capital stock on such date, or (3) an amount determined by
the Board.
The Board of Directors believes that such number of shares may be
insufficient to allow the Company to continue to make substantial use of
stock-based incentives to attract, retain and motivate qualified employees and
consultants. Therefore, in order to increase the number of shares available for
stock-based incentives, the Board amended the Current Plan, subject to
shareholder approval, on May 6, 2001 to provide that the number of shares
available to be issued under the plan will annually be increased by the lesser
of (a) 10,000,000 shares of common stock, (b) 5.0% of the outstanding shares of
capital stock on the date of increase, and (c) an amount determined by the
Board. The Amended Plan also clarifies that the 10,000,000 shares are subject to
the anti-dilution provisions of the Amended Plan. If approved by the
shareholders of the Company, the Amended Plan shall be effective as of the date
of shareholder approval.
The following is a description of the material features of the Amended
Plan. The description does not purport to be complete and is qualified in its
entirety by reference to the full text of the Amended Plan attached to this
proxy statement as Appendix B and incorporated herein by reference. Shareholders
are encouraged to read the text of the Amended Plan in its entirety.
DESCRIPTION OF PLAN
Plan Purpose. The purpose of the Amended Plan is to enable the Company and
its subsidiaries to attract and retain the best available individuals as
employees and consultants, to provide additional incentives to those employees
and consultants, and to promote the success of the Company's business.
Awards of Stock Options. The Amended Plan authorizes the administrator to
grant eligible participants from time to time, in its discretion, options to
purchase common stock of the Company. The options may be incentive stock options
("ISO") that qualify under Section 422 of the Internal Revenue Code of 1986, as
amended (the "Internal Revenue Code") or nonstatutory stock options ("NSO").
Eligible Participants. Any person who is an employee or consultant of the
Company or any of its subsidiaries is eligible to be considered for the grant of
stock options under the Amended Plan, except that consultants are not eligible
to receive incentive stock options under the Amended Plan. Currently, it is
estimated that approximately 765 persons will be eligible for selection to
receive awards under the Amended Plan, consisting of approximately 761
non-executive officer employees, 4 executive officers and no consultants.
Plan Administration and Amendment. The Amended Plan will be administered by
the Board of Directors of the Company or a committee of the Board of Directors.
The Board may provide for administration of the Amended Plan with respect to
employees who are also officers or directors of the Company by a Committee
constituted so as to permit the Amended Plan to comply as a discretionary plan
within Rule 16b-3 promulgated under the Securities Exchange Act or any successor
thereto.
The administrator has final and binding authority (1) to select, in its
discretion, the eligible participants to whom it will grant awards, (2) to
determine the terms and conditions of each option, including the exercise price,
number of shares, vesting schedule, expiration date and type of option (NSO or
ISO), (3) to approve
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forms of agreement to use under the Amended Plan, (4) to determine when to buy
out an option under the terms of the Amended Plan's option buy-out provision,
(5) to modify grants of options to eligible participants who are foreign
nationals or employed outside of the United States to recognize differences in
local law, tax policies or customs, and (6) to construe and interpret the
Amended Plan and options granted under the Amended Plan. No member of the
administrator shall be liable for any determination, decision or interpretation
made in good faith relating to the Amended Plan or an award.
The Board may also amend, alter or discontinue at any time, including in
the event of a change of control, the Amended Plan or any agreement or other
document evidencing an award made under the Amended Plan so long as such action
does not impair the rights of any recipient under any then-outstanding award.
Per-Share Exercise Price of Options. The per-share exercise price of an
option shall be determined by the administrator at the time of grant, however,
(1) in the case of an ISO:
(A) granted to an employee, who at the time of grant, owns stock
representing more than 10% of the voting power of all classes of stock of
the Company or any parent or subsidiaries, the per-share exercise price
shall be at least 110% of the Fair Market Value (as such term is defined in
the Amended Plan) on the date of grant; or
(B) granted to any other employee, the per-share exercise price shall
be at least the Fair Market Value on the date of grant.
(2) in the case of a NSO:
(A) granted to an employee, who at the time of grant, owns stock
representing more than 10% of the voting power of all classes of stock of
the Company or any parent or subsidiaries, the per-share exercise price
shall be at least equal to the Fair Market Value on the date of grant; or
(B) granted to any other employee, the per-share exercise price shall
be at least 85% of the Fair Market Value on the date of grant.
Notwithstanding the foregoing, to the extent NSOs are intended to be
"performance-based compensation" under Section 162(m) of the Internal Revenue
Code, the per-share exercise price shall be at least the Fair Market Value on
the date of grant.
The closing per share price of the Company's common stock on May 16, 2001
was $29.16.
Term and Vesting. The term of each option shall be determined by the
administrator at the time of grant but shall not exceed 10 years. In the case of
an ISO granted to an eligible participant who, at the time of grant, owns stock
representing more than 10% of the voting power of all classes of stock of the
Company or any parent or subsidiaries, the option term shall not exceed 5 years.
Options granted under the Amended Plan shall vest as determined by the
administrator at the time of grant and as otherwise permissible under the
Amended Plan, including without limitation, performance criteria with respect to
the Company and/or the eligible participant.
Termination of Employment or Consulting Relationship. If an option holder's
continuous service as an employee or consultant terminates, the option holder
may exercise the option within the time period provided by the administrator
(but no later than the expiration date of the option), but only to the extent
that the option holder was entitled to exercise the option on the termination
date unless otherwise determined by the administrator.
Payment for Options. Payment for shares upon exercise of an option shall be
made in any lawful consideration approved by the administrator, including but
not limited to: cash; payment by check; payment using other shares with a Fair
Market Value on the date of payment equal to the aggregate exercise price of the
shares represented by the option being exercised; delivery by a broker or
brokerage firm approved by the administrator of a properly executed exercise
notice together with payment of the exercise price and such other documentation
as the administrator shall require; and any combination of the foregoing.
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Available Shares. The maximum number of shares of Company common stock that
may be issued pursuant to awards granted under the Amended Plan is 38,268,553,
plus the increase on the first business day of each fiscal year, of the lesser
of (1) 10,000,000 shares of common stock, (2) 5.0% of the outstanding shares of
capital stock on such date, or (3) an amount determined by the Board (with all
such amounts subject to anti-dilution adjustments). Shares underlying options
that expire or become unexercisable are available for future issuance under the
Amended Plan. Shares retained to satisfy tax withholding obligations do not
reduce the number of shares authorized for issuance.
Buy-Out of Options. The administrator may at any time buyout an option for
cash or shares of common stock of the Company, on such terms as the
administrator shall determine. In addition, if upon receipt of notice of
exercise of an option, the administrator believes that the shares of common
stock cannot be issued within 21 days, the administrator will make an offer to
buy out the portion of the option corresponding to the shares whose issuance is
prevented.
Tax Code Limitations. No employee shall be granted, in any fiscal year of
the Company, options to purchase more than 1,000,000 shares, as adjusted
proportionately pursuant to the Amended Plan's anti-dilution provision. In
addition, the aggregate fair market value of any employee's ISOs that become
first exercisable during any calendar year may not exceed $100,000, and may be
further limited to other requirements in the Internal Revenue Code. If this
limitation is exceeded, the excess ISOs will be treated as NSOs.
Non-Transferability of Options. Options may not be sold, pledged, assigned,
hypothecated, transferred, or disposed of in any manner other than by will or by
the laws of descent or distribution and may be exercised, during the lifetime of
the optionee, only by the optionee.
Change of Control. The administrator may, in its discretion, determine at
any time from and after the grant of an option the effect that a change in
control shall have upon an option, provided that such effect shall not have the
effect of impairing the rights of any optionee under any then-outstanding option
without his or her consent.
Termination. The Amended Plan became effective upon the plan's adoption by
the Board of Directors on April 18, 1995 and shall continue in effect for a term
of ten years unless sooner terminated pursuant to its terms.
PROVISIONS APPLICABLE TO ISRAELI EMPLOYEES
Israeli Awards. In addition to the types of awards described above, the
Appendix to the Amended Plan in respect of Israeli employees of the Company and
its subsidiaries (the "Israel Plan") permits certain awards to Israeli employees
of the Company or its subsidiaries. The Israeli Plan is designed to benefit
from, and is made pursuant to, the provisions of Section 102 of the Israeli
Income Tax Ordinance (New Version), 5721-1961 (the "Ordinance"). However, option
awards granted under the Israel Plan to Israeli employees subject to Israeli
taxation may or may not contain such terms as will qualify such option awards
for the special tax treatment under section 102 of the Ordinance. Pursuant to
the Israel Plan all options and the shares of common stock of the Company
purchased upon exercise of such options are to be held by a trustee (the
"Trustee") which will not release such options or shares of common stock prior
to the full payment of the beneficiary employee's tax liabilities arising from
such options. The Trustee shall hold option awards granted under Section 102 of
the Ordinance for a minimum period of two years from the later of (1) the date
the options are issued, or (2) the date of approval by the Income Tax
Commissioner that the Amended Plan satisfies the special conditions set by such
Commissioner pursuant to the powers vested in him/her under Section 102 of the
Ordinance.
Pursuant to the Israeli Plan, awards will not be granted to any Israeli
employee who is, or upon giving effect to such grant will become, the holder of
a controlling interest in the Company, as defined in section 32(9) of the
Ordinance. Further, the Trustee is entitled to set additional exercise
procedures to those described in the Amended Plan, as the Trustee shall see fit,
provided that the Trustee has given the Company prior written notice of any such
procedures.
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UNITED STATES FEDERAL INCOME TAX TREATMENT
The following is a brief description of the federal income tax treatment
that will generally apply to awards made under the Amended Plan, based on
federal income tax laws in effect on the date hereof. The exact federal income
tax treatment of awards will depend on the specific nature of any such award.
The summary addresses only current United States federal income tax law and
expressly does not discuss the income tax laws of any state, municipality,
non-United States taxing jurisdiction, including Israel, or gift, estate or
other tax laws other than United States federal income tax law. The Company
advises all optionees to consult their own tax advisor concerning the tax
implications of option grants and exercises and the disposition of stock
acquired upon such exercises under the plan.
Incentive Stock Options (ISO). Options granted under the Amended Plan may
qualify as ISOs within the meaning of Section 422 of the Internal Revenue Code.
If an optionee (i) exercises an ISO in accordance with its terms, (ii) exercises
the option while an employee of the Company (or of any parent or subsidiary of
the Company) or within three months following termination of such employment (or
within one year, if termination was due to a permanent and total disability),
and (iii) does not dispose of the shares acquired upon exercise within two years
from the date of the grant of the ISO nor within one year from the date of
transfer of such shares to the optionee (the "Required Holding Periods"), the
optionee generally will not be subject to regular federal income tax liability
and the Company will not be entitled to any deduction, on either the grant or
the exercise of the ISO. An optionee's basis in the shares acquired upon
exercise will be the amount paid upon exercise for the shares. Provided the
shares are held as a capital asset, an optionee's gain or loss, if any,
recognized on the sale or other disposition will be capital gain or loss. The
amount of an optionee's gain or loss will be the difference between the amount
realized on the disposition of the shares and the optionee's basis in the
shares. Any such gain or loss will be long-term or short-term, depending on the
holding period of the shares.
If, however, an optionee disposes of the acquired shares at any time prior
to the expiration of the Required Holding Periods, then the optionee will
recognize ordinary income at the time of such disposition which will equal the
excess, if any, of the lesser of (i) the amount realized on such disposition or
(ii) the fair market value of the shares on the date of exercise, over the
optionee's basis in the shares. The Company generally will be entitled to a
deduction in an amount equal to the amount of ordinary income recognized by an
optionee. Any gain in excess of such ordinary income amount will be a short-term
or long-term capital gain, depending on the optionee's holding period. If an
optionee disposes of such shares for less than the optionee's basis in the
shares, the difference between the amount realized and the optionee's basis will
be short-term or long-term capital loss, depending upon the holding period of
the shares.
The amount by which the fair market value of shares the optionee acquires
upon exercise of an ISO (determined as of the date of exercise) exceeds the
purchase price paid for the shares upon exercise of the ISO will be included as
a positive adjustment in the calculation of the optionee's "alternative minimum
taxable income" in the year of exercise. The "alternative minimum tax" will
generally equal the amount by which 26% or 28% (depending upon the amount of the
optionee's alternative minimum taxable income reduced by certain exemption
amounts) of the optionee's alternative minimum taxable income (reduced by
certain exemption amounts) exceeds the optionee's regular income tax liability
for the year.
Nonstatutory Stock Options (NSO). In general, there are no tax consequences
to the optionee or to the Company on the grant of a NSO. On exercise, however,
the optionee generally will recognize ordinary income equal to the excess of the
fair market value of the shares as of the exercise date over the purchase price
paid for such shares, and the Company will be entitled to a deduction equal to
the amount of ordinary income recognized by the optionee. Provided the shares
are held as a capital asset, upon the disposition of the shares the optionee
will recognize capital gain or loss in an amount equal to the difference between
the amount realized upon disposition and his or her basis for the shares.
The basis will be equal to the sum of the price paid for the shares and the
amount of income realized upon exercise of the option. Any capital gain or loss
to the optionee will be characterized as long-term or short-term, depending upon
the holding period of the shares.
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Special Rules Applicable to "Insiders." If a optionee is an "insider" (a
director, officer or other individual subject to Section 16 of the Exchange
Act), the optionee may be required to defer determination of the amount of
income and the timing of income recognition in connection with an option award
under the plan, and the beginning of the holding period for any shares the
optionee receives, until the earlier of (1) the expiration of the six-month
period during which the optionee would be subject to suit under Section 16(b) of
the Exchange Act or (2) the first day on which the sale of such shares at a
profit would not subject the optionee to suit under Section 16(b). The optionee
will not be required to defer these determinations if the optionee makes a valid
election under Section 83(b) of the Internal Revenue Code.
Miscellaneous Tax Issues. The terms of awards granted under the Amended
Plan may provide for accelerated vesting or payment of an award in connection
with a change in ownership or control of the Company. In that event and
depending upon the individual circumstances of the recipient, certain amounts
with respect to such awards may constitute "excess parachute payments" under the
"golden parachute" provisions of the Internal Revenue Code. Pursuant to these
provisions, a participant will be subject to a 20% excise tax on any "excess
parachute payments" and the Company will be denied any deduction with respect to
such payment.
Under current tax legislation and Treasury regulations, including Section
162(m)(4)(C) of the Internal Revenue Code, compensation paid to each of certain
executive officers in excess of $1,000,000 in any taxable year will not be
deductible to the Company for federal income tax purposes unless such
compensation qualifies as "performance-based compensation" or is otherwise
exempt from such limits on deductibility. Options are excluded from this rule if
they qualify as performance-based compensation. Options granted under the
Amended Plan are intended by the Company to satisfy the requirements for
deductibility under Section 162(m) as performance-based compensation; however,
they may not so qualify given ambiguities and uncertainties as to the
application and interpretation of Section 162(m) and the Treasury regulations
issued thereunder.
The Company will generally be required to withhold applicable taxes with
respect to any ordinary income recognized by a participant in connection with
awards made under the Amended Plan. Whether or not such withholding is required,
the Company will make such information reports to the Internal Revenue Service
as may be required with respect to any income (whether or not that of an
employee) attributable to transactions involving awards.
EXECUTIVE OFFICER PARTICIPATION
Participation in the Amended Plan is in the discretion of the
administrator. Accordingly, future participation by executive officers and other
employees under the Amended Plan is not determinable.
BOARD RECOMMENDATION AND REQUIRED VOTE
The Board of Directors recommends that you vote FOR the approval of the
Amended Plan. The affirmative vote of shareholders representing a majority of
the voting power of all outstanding shares of our common stock, present or
represented by proxy and voting at the Annual General Meeting, is required to
approve the Amended Plan.
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PROPOSAL NO. 4
RE-APPOINTMENT OF INDEPENDENT AUDITORS
In accordance with Section 89 of the Companies Act 1981 of Bermuda, the
Company's shareholders have the authority to appoint the Company's independent
auditors and to authorize the Board of Directors to fix the auditors'
remuneration. At the meeting, shareholders will be asked to re-appoint
PricewaterhouseCoopers LLP as the Company's independent auditors and to
authorize the Board of Directors to fix their remuneration. One or more
representatives of PricewaterhouseCoopers is expected to be present at the
Annual General Meeting, will have the opportunity to make a statement if they
desire to do so and will be available to respond to appropriate questions.
BOARD RECOMMENDATION
The Board of Directors recommends that you vote FOR the re-appointment of
PricewaterhouseCoopers as the Company's independent auditors for the 2002 fiscal
year and to authorize the Board of Directors to fix the remuneration of
PricewaterhouseCoopers. The affirmative vote of the holders of common stock
representing a majority of the voting power of the outstanding common stock,
present or represented by proxy and voting at the Annual General Meeting, is
required to appoint PricewaterhouseCoopers and to authorize the Board of
Directors to fix their remuneration. In the event that the shareholders do not
appoint independent auditors at the Annual General Meeting, the Board of
Directors are required under Bermuda law to forthwith appoint independent
auditors and will do so.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information regarding the beneficial
ownership of the Company's common stock as of May 1, 2001, except as noted
otherwise, for:
- each person known by the Company to own beneficially more than 5% of the
Company's outstanding shares;
- each director and director nominee, and each executive officer named in
the Summary Compensation Table on page 26 of this proxy statement; and
- all directors and executive officers as a group.
Unless otherwise indicated, the address of each person owning more than 5%
of our outstanding shares is c/o Marvell Semiconductor, Inc., 645 Almanor
Avenue, Sunnyvale, CA 94085.
SHARES BENEFICIALLY
OWNED(1)
---------------------
NAME AND ADDRESS OF BENEFICIAL OWNER NUMBER PERCENT
------------------------------------ ---------- -------
Sehat Sutardja(2)........................................... 24,092,312 20.9%
Weili Dai(2)................................................ 24,092,312 20.9%
Pantas Sutardja(3).......................................... 11,776,000 10.2%
George Hervey(4)............................................ 177,499 *
Avigdor Willenz(5).......................................... 6,156,275 5.3%
Manuel Alba(6).............................................. 1,165,542 1.0%
Diosdado P. Banatao(7)...................................... 6,837,312 5.9%
635 Waverley Street
Palo Alto, CA 94301
Kuo Wei (Herbert) Chang(8).................................. 8,739,140 7.6%
3600 Pruneridge Avenue, Suite 300
Santa Clara, CA 95051
John M. Cioffi(9)........................................... 180,000 *
Paul R. Gray(10)............................................ 180,000 *
Ron Verdoorn(11)............................................ 612,812 *
Executive Officers and Directors
as a Group (11 persons)(12)............................... 59,916,892 51.9%
Putnam Investments LLC(13).................................. 12,096,705 10.5%
One Post Office Square
Boston, MA 02109
Entities Affiliated with InveStar Capital, Inc.(14)......... 8,373,524 7.3%
3600 Pruneridge Avenue, Suite 300
Santa Clara, CA 95051
---------------
* Less than one percent.
** The percentage of beneficial ownership for the following table is based on
115,396,288 shares of common stock outstanding on May 1, 2001.
(1) Unless otherwise indicated, to the Company's knowledge, all persons listed
have sole voting and investment power with respect to their shares of
common stock, except to the extent authority is shared by spouses under
applicable law. The number of shares beneficially owned by each shareholder
is determined in accordance with the rules of the Securities and Exchange
Commission and are not necessarily indicative of beneficial ownership for
any other purpose. Under these rules, beneficial ownership includes those
shares of common stock that the shareholder has sole or shared voting of
investment power and any shares of common stock that the shareholder has a
right to acquire within 60 days after May 1, 2001 through the exercise of
any option, warrant or other right. The percentage ownership of the
outstanding common stock, however, is based on the assumption, expressly
required by the rules of the Securities and Exchange Commission, that only
the person or entity whose ownership is
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being reported has converted options or warrants into shares of common
stock. The amounts shown are based on information furnished by the people
named.
(2) Dr. Sehat Sutardja and Ms. Dai are husband and wife. Includes 8,950,000
shares held by Dr. Sutardja, of which Ms. Dai may be deemed to be a
beneficial owner, although Ms. Dai disclaims such beneficial ownership;
8,950,000 shares held by Ms. Dai, of which Dr. Sutardja may be deemed to be
a beneficial owner, although Dr. Sutardja disclaims such beneficial
ownership; 92,312 shares jointly held by Dr. Sutardja and Ms. Dai; and
6,100,000 shares held by the Sutardja Family Partners of which Dr. Sutardja
and Ms. Dai are the general partners. Dr. Sutardja and Ms. Dai disclaim
beneficial ownership of the 6,100,000 shares held by the Sutardja Family
Partners, except to the extent of their pecuniary interest, if any.
(3) Includes 4,000 shares held by Dr. Pantas Sutardja's mother-in-law. Dr.
Sutardja disclaims beneficial ownership of the shares held by his
mother-in-law, except to the extent of his pecuniary interest, if any.
(4) Includes 177,333 shares subject to stock options that are currently
exercisable or will become exercisable within 60 days after May 1, 2001.
(5) Includes 220,709 shares subject to stock options that are currently
exercisable or will become exercisable within 60 days after May 1, 2001.
(6) Includes 29,168 shares held Mr. Alba's wife; and 156,391 shares subject to
stock options that are currently exercisable or will become exercisable
within 60 days after May 1, 2001, including 17,365 shares subject to stock
options held by Mr. Alba's wife that are currently exercisable or will
become exercisable within 60 days after May 1, 2001. Mr. Alba disclaims
beneficial ownership of the shares and shares subject to stock options held
by his wife, except to the extent of his pecuniary interest, if any.
(7) Includes 1,680,000 shares subject to stock options that are currently
exercisable or will become exercisable within 60 days after May 1, 2001;
1,880,684 shares held by the Diosdado and Maria C. Banatao Trust of which
Mr. Banatao is co-trustee; 1,880,680 shares held by Tallwood Partners, of
which the Diosdado and Maria C. Banatao Trust is the general partner; and
20,948 shares held by Mr. Banatao's daughter. Mr. Banatao disclaims
beneficial ownership of the shares held by his daughter, except to the
extent of his pecuniary interest, if any. Of the 1,680,000 shares subject
to stock options, the options with respect to 21,000 shares will not be
fully vested within 60 days after May 1, 2001. Until fully vested, if the
option to purchase these 21,000 shares was exercised, the shares would be
subject to repurchase by the Company in the event of termination of Mr.
Banatao's services as a non-employee director of the Company.
(8) Includes 646,156 shares held by InveStar Dayspring Venture Capital, Inc.;
184,616 shares held by InveStar Excelsus Venture Capital (Int'l), Inc.;
4,665,412 shares held by InveStar Semiconductor Development Fund, Inc.;
2,826,544 shares held by InveStar Burgeon Venture Capital, Inc.; 184,616
shares held by Forefront Venture Partners, L.P.; and 50,796 shares held by
InveStar Capital, Inc. Mr. Chang is the President of InveStar Capital,
Inc., which is the investment manager of each of InveStar Dayspring Venture
Capital, Inc., InveStar Excelsus Venture Capital (Int'l), Inc., InveStar
Semiconductor Development Fund, Inc., and InveStar Burgeon Venture Capital,
Inc. Mr. Chang is also the managing director of Forefront Associates LLC,
which is the general partner of Forefront Venture Partners, L.P. Mr. Chang
disclaims beneficial ownership of these shares, except to the extent of his
pecuniary interest, if any. Also includes 21,000 shares acquired upon
exercise of an option to purchase shares, which shares will not be fully
vested within 60 days after May 1, 2001. Until fully vested, these 21,000
shares are subject to repurchase by the Company in the event of termination
of Mr. Chang's services as a non-employee director of the Company.
(9) Includes 123,000 shares acquired upon exercise of an option to purchase
shares, which shares will not be fully vested within 60 days after May 1,
2001. Until fully vested, these 123,000 shares are subject to repurchase by
the Company in the event of termination of Mr. Cioffi's services as a
non-employee director of the Company.
(10) Includes 144,000 shares subject to stock options that are currently
exercisable or will become exercisable within 60 days after May 1, 2001. Of
the 144,000 shares subject to stock options, the options
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25
with respect to 126,000 shares will not be fully vested within 60 days
after May 1, 2001. Until fully vested, if the option to purchase these
126,000 shares was exercised, the shares would be subject to repurchase by
the Company in the event of termination of Mr. Gray's services as a
non-employee director of the Company.
(11) Includes 500 shares held by Mr. Verdoorn's daughter. Mr. Verdoorn disclaims
beneficial ownership of such shares, except to the extent of his pecuniary
interest, if any. Also includes 199,500 shares acquired upon exercise of an
option to purchase shares, which shares will not be fully vested within 60
days after May 1, 2001. Until fully vested, these 199,500 shares are
subject to repurchase by the Company in the event of termination of Mr.
Verdoorn's services as a non-employee director of the Company.
(12) Includes 2,378,433 shares subject to stock options that are currently
exercisable or will become exercisable within 60 days after May 1, 2001. Of
the shares subject to stock options, the options with respect to 147,000
shares will not be fully vested within 60 days after May 1, 2001. Until
fully vested, if the option to purchase these 147,000 shares was exercised,
the shares would be subject to repurchase by the Company in the event of
termination of the services of the applicable optionee as a non-employee
director of the Company. Includes 343,500 shares acquired upon exercise of
options to purchase shares, which shares will not be fully vested within 60
days after May 1, 2001. Until fully vested, these 343,500 shares are
subject to repurchase by the Company in the event of termination of the
services of the applicable shareholder as a non-employee director of the
Company.
(13) Based on information filed by Putnam Investments, LLC with the Securities
and Exchange Commission on April 10, 2001 and includes 12,096,705 shares
beneficially held by Putnam Investments, LLC, 524,492 shares for which it
possesses shared voting power, and 12,096,705 shares for which it possesses
shared dispositive power; 10,371,457 shares beneficially held by Putnam
Investment Management, LLC, for which it possesses shared dispositive
power; and 1,725,248 shares beneficially held by the Putnam Advisory
Company, LLC, 524,492 shares for which it possesses shared voting power,
and 1,725,248 shares for which it possesses shared dispositive power.
(14) Includes 646,156 shares held by InveStar Dayspring Venture Capital, Inc.,
184,616 shares held by InveStar Excelsus Venture Capital (Int'l), Inc.,
4,665,412 shares held by InveStar Semiconductor Development Fund, Inc.,
2,826,544 shares held by InveStar Burgeon Venture Capital, Inc., and 50,796
shares held by InveStar Capital, Inc. Mr. Kuo Wei (Herbert) Chang is the
President of InveStar Capital, Inc., which is the investment manager of
each of InveStar Dayspring Venture Capital, Inc., InveStar Excelsus Venture
Capital (Int'l), Inc., InveStar Semiconductor Development Fund, Inc., and
InveStar Burgeon Venture Capital, Inc. InveStar Capital, Inc. disclaims
beneficial ownership of the shares held by InveStar Dayspring Venture
Capital, Inc., InveStar Excelsus Venture Capital (Int'l), Inc., InveStar
Semiconductor Development Fund, Inc. and InveStar Burgeon Venture Capital,
Inc., except to the extent of its pecuniary interest, if any.
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BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD
COMPOSITION OF THE BOARD OF DIRECTORS
The Company's Amended and Restated Bye-Laws provide for two or more
directors, and the number of directors is currently fixed at 10 directors. The
Company's Board of Directors is divided into three classes, each serving
staggered three-year terms, which means that only one class of directors is
elected at each Annual General Meeting of Shareholders, with the other classes
continuing for the remainder of their respective terms. Directors may only be
removed for cause by a Special Resolution of the shareholders of the Company.
BOARD OF DIRECTORS MEETINGS, ATTENDANCE AND COMPENSATION
Meetings of the Board of Directors
There were eight meetings of the Board of Directors in fiscal 2001. Each of
the directors attended at least 75% of the total number of meetings of the Board
of Directors and committees on which such director served.
Compensation of Directors
The Company's directors do not receive cash compensation for their service
as directors or as members of any committee of the Board of Directors. Under the
Company's 1997 Directors' Stock Option Plan, each new non-employee director
receives an option to purchase 30,000 shares of common stock upon joining the
Board of Directors. The options vest over a period of five years, with 20%
vesting on the first anniversary of the grant date, and 1.67% vesting each month
thereafter provided that the non-employee director remains a director of the
Company through such period. In addition, under the plan, each incumbent
non-employee director is entitled to receive an option to purchase an additional
6,000 shares of the Company's common stock following the date of each annual
general meeting of the Company, provided that on such date the director has
served on the board for at least six months prior to the date of that annual
general meeting. This option vests 8.33% each month beginning on the day that is
one month after the fourth anniversary of the grant date, provided that the
non-employee director remains a director of the Company through such period. The
exercise price per share for each option is equal to the fair market value on
the date of grant. Mr. Banatao, Mr. Chang and Mr. Verdoorn were eligible to
receive grants for fiscal 2001. During fiscal 2001, Mr. Banatao also received
from the Company a fee of $18,000 for services provided to the Company in his
capacity as Co-Chairman of the Board of Directors.
COMMITTEES OF THE BOARD OF DIRECTORS AND ATTENDANCE
The Company's Board of Directors has a standing Audit Committee,
Compensation Committee and Stock Option Committee. The current membership of
each committee is as follows, with the Chairman of the committee listed first in
each case:
AUDIT COMMITTEE COMPENSATION COMMITTEE STOCK OPTION COMMITTEE
--------------- ---------------------- ----------------------
Diosdado P. Banatao Diosdado P. Banatao Sehat Sutardja
Kuo Wei (Herbert) Chang Kuo Wei (Herbert) Chang Weili Dai
Ronald D. Verdoorn John M. Cioffi
Paul R. Gray
Audit Committee
The Audit Committee's responsibilities are generally to assist the Board in
fulfilling its legal and fiduciary responsibilities relating to accounting,
audit and reporting policies and practices of the Company and its subsidiaries.
The Audit Committee also, among other things, oversees the Company's financial
reporting process, recommends to the Board of Directors the engagement of the
Company's independent auditors, monitors and reviews the quality and activities
of the Company's internal audit function and those of its independent auditors,
and monitors the adequacy of the Company's operating and internal controls as
reported by management and internal auditors. The Board of Directors has adopted
a written charter for the Audit Committee. The Audit Committee charter, as
amended to date, is included as Appendix C hereto. The Board
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of Directors has determined that the members of the Audit Committee are
independent as defined under the National Association of Securities Dealers'
listing standards. The Audit Committee meets quarterly and at such additional
times as are necessary or advisable. The Audit Committee held three meetings
during the period from its inception in March 2000 through the end of the
Company's 2001 fiscal year.
Compensation Committee
The Compensation Committee has the authority to approve salaries and
bonuses and other compensation matters for the Company's executive officers and
consultants, to approve employee health and benefit plans and to administer its
stock option plans. The Compensation Committee held one meeting during the
period from its inception in March 2000 through the end of the Company's 2001
fiscal year.
Stock Option Committee
The Stock Option Committee is authorized to make grants of stock options
under the Company's 1995 Stock Option Plan to employees of the Company. The
Stock Option Committee held five meetings during the period from its inception
in December 2000 through the end of the Company's 2001 fiscal year.
NOMINATIONS FOR ELECTION OF DIRECTORS
The Company's Board of Directors selects nominees for election as
directors. The candidates for election at this Annual General Meeting were
nominated by the Board of Directors. The Board of Directors will consider
proposals for nomination from shareholders that are made in writing to the
Secretary, that are timely and that contain sufficient background information
concerning the nominee to enable proper judgment to be made as to his or her
qualifications. See "Shareholders' Proposals For The 2002 Annual General
Meeting" on page 33.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company's Compensation Committee for fiscal 2001 consisted of the
following members: Diosdado P. Banatao, Kuo Wei (Herbert) Chang, John M. Cioffi,
and Paul Gray. No member of the Compensation Committee is a current or former
officer or employee of the Company or its subsidiaries or had any relationship
to the Company requiring disclosure herein under the applicable rules of the
Securities and Exchange Commission. In addition, to the Company's knowledge,
there are no Compensation Committee interlocks between the Company and other
entities, involving the Company's executive officers or Board members who serve
as executive officers or board members of such other entities.
MANAGEMENT
Set forth below is certain information regarding the executive officers and
some of the other officers of the Company and its subsidiaries, together with
the positions currently held by those persons, as of May 7, 2001, other than the
Company's directors, information for whom is set forth beginning at page 4 of
this proxy statement.
George Hervey joined the Company in April 2000 as its Vice President of
Finance and Chief Financial Officer, and serves in a similar capacity for
Marvell Semiconductor, Inc. From March 1997 to April 2000, Mr. Hervey served as
Senior Vice President, Chief Financial Officer and Secretary for Galileo
Technology Ltd., which was acquired by the Company in January 2001. From June
1992 to February 1997, Mr. Hervey was Senior Vice President of Finance and Chief
Financial Officer of S3 Incorporated, a designer and manufacturer of graphics
and video accelerators for personal computers and related peripheral products.
Mr. Hervey holds a Bachelor of Science degree in Business Administration from
the University of Rhode Island.
Alan J. Armstrong has served as Vice President of Marketing of the Storage
Business Group of Marvell Semiconductor, Inc. since June 1999. From 1992 until
1999, Dr. Armstrong held various positions at Cirrus Logic Inc., a designer and
manufacturer of analog and mixed-signal circuits, most recently as Director of
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Product Planning and Applications for Data Storage Products. Dr. Armstrong holds
a Bachelor of Science degree in Electrical Engineering from San Diego State
University and Master of Science and Ph.D. degrees in Electrical Engineering
from the University of California, San Diego.
Bill Brennan has served as Vice President of Sales of the Storage Business
Group of Marvell Semiconductor, Inc. since July 2000. From 1993 until 2000, Mr.
Brennan served as Vice President for Exis, Inc., which specializes in account
management for semiconductor companies. From 1986 to 1993, Mr. Brennan held
various sales and marketing positions at Texas Instruments, including Sales
Manager for the HDD segment. Mr. Brennan holds a Bachelor of Science degree in
Electrical Engineering from the University of Colorado.
Gani Jusuf has served as Vice President of Product Development of the
Communications Business Group of Marvell Semiconductor, Inc., since February
2000. From 1998 to February 2000, Dr. Jusuf was a Research and Development
Manager for Agilent Technologies, Inc., a subsidiary of Hewlett-Packard, which
develops test measurement and monitoring products and devices. From 1995 to
1998, Dr. Jusuf served as Director of Engineering for Marvell Semiconductor,
Inc., where he was responsible for product definition and development. Dr. Jusuf
holds a Bachelor of Science, Master of Science and Ph.D. degrees in Electrical
Engineering and Computer Science from the University of California at Berkeley.
David Matteucci joined the Company in January 2001 as the Vice President
and General Manager of the Internetworking Products Business Unit of the
Communications Business Group of Galileo Technology, Inc., upon consummation of
the acquisition of Galileo Technology Ltd. by the Company. From March 2000 until
the acquisition of Galileo Technology Ltd. by the Company, Mr. Matteucci served
as Vice President and General Manager, Internetworking Products Group for
Galileo Technology Ltd. From 1976 to March 2000, Mr. Matteucci held a number of
positions with National Semiconductor, most recently as Director of Information
Appliance Products. Mr. Matteucci holds a Bachelor of Science degree in
Electrical Engineering from the University of California at Berkeley and a
Master of Business Administration degree from Santa Clara University.
Nersi Nazari has served as Vice President of Signal Processing Technology
for Marvell Semiconductor, Inc. since October 1997. From 1994 until 1997, Dr.
Nazari served as Chief Technologist at GEC Plessey Semiconductors, a designer
and manufacturer of integrated circuits, including data storage and data
communications products. Dr. Nazari holds Bachelor of Science degrees in
Electrical Engineering and Mathematics from Southern Illinois University, a
Master of Science degree in Electrical Engineering from the University of
Missouri, and a Ph.D. in Electrical Engineering from the University of Colorado.
George Papa has served as Vice President of Worldwide Sales of the
Communications Business Group of Marvell Semiconductor, Inc. since February
2000. From 1997 until 2000, Mr. Papa served as Vice President of Worldwide Sales
for Level One Communications, Inc., a subsidiary of Intel Corporation. From 1991
to 1997, Mr. Papa served as Vice President of North American Sales for Siemens
Corporation. Mr. Papa holds a Bachelor of Science degree in Electrical
Engineering from Northeastern University.
Ed Rodriguez joined the Company in January 2001 as Senior Vice President
and Chief Operating Officer of Galileo Technology, Inc., and in April 2001 was
promoted to Vice President of Operations of Galileo Technology, Inc. From June
1999 until the acquisition of Galileo Technology Ltd. by the Company in January
2001, Mr. Rodriguez served as Senior Vice President and Chief Operating Officer
of Galileo Technology, Inc. From March 1998 to May 1999, Mr. Rodriguez was Vice
President and General Manager of the Datacom Division of Cypress Semiconductor
Corporation. Prior to working at Cypress Semiconductor Corporation, Mr.
Rodriguez spent 17 years at National Semiconductor Corporation, most recently as
Vice President and General Manager of its Networking Products Division. Mr.
Rodriguez holds Bachelor of Science and Master of Science degrees in Electrical
Engineering from the University of Miami.
Gary Smerdon joined the Company in January 2001 as the Vice President of
Marketing of the Switching Products Business Unit of the Communications Business
Group of Galileo Technology, Inc. From September 2000 until the acquisition of
Galileo Technology Ltd. by the Company in January 2001, Mr. Smerdon served as
Vice President of Marketing, Switching Products Group of Galileo Technology,
Inc. From
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May 1999 to August 2000, Mr. Smerdon was Vice President of Sales for RealChip, a
communications semiconductor startup. Prior to RealChip, Mr. Smerdon spent 14
years at AMD where he held marketing and sales positions, most recently as
Director of Marketing for the Networking Products Division. Mr. Smerdon holds a
Bachelor of Science degree in Electrical Engineering from Duke University.
Moshe Steiner joined the Company in January 2001 as the Vice President and
General Manager of the Switching Products Business Unit of the Communications
Business Group of Galileo Technology, Ltd. From October 1999 until the
acquisition of Galileo Technology Ltd. by the Company in January 2001, Mr.
Steiner served as Vice President and General Manager, Switching Products Group
of Galileo Technology Ltd. and from February 1998 to October 1999, he served as
Local Area Network Products Director of Galileo Technology Ltd. From February
1996 to January 1998, Mr. Steiner was Vice President of Technologies at Zapex
Technologies, a VLSI company that developed solutions for MPEG-2 digital video
compression applications. Before Zapex, Mr. Steiner worked for Intel Israel for
more than 10 years, most recently leading the MMX cluster development of the
first Pentium-MMX CPU. Mr. Steiner holds a Bachelor of Science degree in Civil
Engineering and a Master of Business Administration degree from the Technion in
Israel.
Lawrence Tse has served as Vice President of Engineering, Wireless, of
Marvell Semiconductor, Inc. since June 2000. From 1998 to 2000, Mr. Tse served
as the Vice President of Engineering for Volterra Semiconductor Corporation, a
designer and manufacturer of power management products. From 1991 until 1998, he
held various positions at Chrontel, Inc., a designer and manufacturer of
mixed-signal visual communication products, most recently as Vice President of
Engineering. Mr. Tse holds a Bachelor of Engineering degree in Electrical
Engineering from McMaster University, Canada, and a Master of Science degree in
Electrical Engineering from the University of California at Berkeley.
Lee Chung Yiu has served as Vice President of Engineering, Core Technology,
for Marvell Semiconductor, Inc. since May 1999. From 1995 until 1997, Dr. Yiu
served as the Director of Engineering for SEEQ Technology Inc., a supplier of
Ethernet data communications products for networking applications. From 1997
until 1999, Dr. Yiu was the Vice President of Engineering for Newave
Semiconductor Corporation, a privately held company developing integrated
circuits for the telecommunications market. Dr. Yiu holds a Bachelor of Science
degree in Electrical Engineering from National Taiwan University and Master of
Science and Ph.D. degrees in Electrical Engineering from the University of
California at Berkeley.
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EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table shows the cash compensation paid or accrued to the
Company's Chief Executive Officer and each of its three most highly compensated
executive officers other than the Chief Executive Officer for the fiscal year
ended January 27, 2001. The Company did not make any restricted stock awards or
long-term incentive plan payments in the fiscal year ended January 27, 2001. All
amounts are in United States dollars.
LONG TERM
ANNUAL COMPENSATION AWARDS
COMPENSATION(1) ---------------------
-------------------- SECURITIES UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITIONS FISCAL YEAR SALARY($) BONUS($) OPTIONS(#) COMPENSATION(2)
---------------------------- ----------- --------- -------- --------------------- ---------------
Sehat Sutardja.................. 2001 $250,000 -- -- $1,628
Co-Chairman of the Board,
President and Chief
Executive Officer
Weili Dai....................... 2001 $200,000 -- -- $1,628
Executive Vice President,
Secretary and Director
Pantas Sutardja................. 2001 $240,000 -- -- $1,628
Vice President
and Director
George Hervey(3)................ 2001 $138,462 -- 800,000 --
Vice President of Finance
and Chief Financial Officer
---------------
(1) The amount of cash compensation does not include the aggregate value of
personal benefits or securities, property or other non-cash compensation
paid or distributed other than pursuant to a plan that was less than the
lesser of $50,000 and 10% of the cash compensation received by such officer,
which represents the threshold reporting requirement.
(2) These amounts consist of discretionary profit sharing payments.
(3) Mr. Hervey joined the Company in April 2000.
OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS POTENTIAL REALIZABLE VALUE AT
--------------------------------------------------------------------- ASSUMED ANNUAL RATE OF
NUMBER OF % OF TOTAL STOCK PRICE APPRECIATION FOR
SECURITIES UNDERLYING OPTIONS GRANTED EXERCISE OR OPTION TERM(D)
OPTIONS GRANTED TO EMPLOYEES IN BASE PRICE EXPIRATION ------------------------------
NAME (#)(A,B) FISCAL YEAR ($/SH)(C) DATE 5%($) 10%($)
---- --------------------- ------------------ ----------- ---------- ------------- --------------
Sehat Sutardja....... -- -- -- -- -- --
Weili Dai............ -- -- -- -- -- --
Pantas Sutardja...... -- -- -- -- -- --
George Hervey........ 760,000 10.1% $10.00 5/8/10 $4,779,599 $12,112,443
40,000 0.5% $21.38 1/2/11 $ 537,705 $ 1,362,650
---------------
(A) Options generally vest and become exercisable as follows: 20% one year after
the date of grant, and increments of 1.67% per month thereafter.
(B) All options were granted for a term of 10 years, subject to earlier
termination in certain events related to termination of employment. All of
the options were granted under the Company's Amended and Restated 1995
Stock Option Plan. Under the terms of the plan, the compensation committee
retains discretion, subject to plan limits, to modify certain of the terms
of outstanding options.
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(C) After the common stock of the Company was publicly traded, the exercise
price for the options was the closing market price for the Company's common
stock on the date of grant. Prior to the public trading of the common stock
of the Company, the Board of Directors determined the fair market value of
the Company's common stock on the date of grant, and the exercise price was
set at such value. The exercise price and tax withholding obligations, if
any, may be paid by delivery of already owned shares.
(D) Potential realizable values are net of the option exercise price, but before
taxes associated with exercise.
OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
The following table shows the number of unexercised options previously
granted to the named executive officers which were exercisable and unexercisable
at January 27, 2001. There were no option exercises by the named executive
officers in fiscal 2001.
NUMBER OF
SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
AT JANUARY 27, 2001(#) AT JANUARY 27, 2001($)
---------------------------- ----------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ------------- ----------- -------------
Sehat Sutardja............................ -- -- -- --
Weili Dai................................. -- -- -- --
Pantas Sutardja........................... -- -- -- --
George Hervey............................. -- 800,000 -- $19,595,000
EMPLOYMENT CONTRACTS AND CHANGE-IN-CONTROL ARRANGEMENTS
The Company does not have any employment agreements with any of its
executive officers. The Company also does not have any compensatory plan or
arrangement that would result in any payments to any executive officers upon
such officer's resignation, retirement or other termination or from a change in
control of the Company. Accordingly any of the Company's executive officers may
resign at any time and the employment of any executive officer may be terminated
at any time by the Board of Directors.
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THE JOINT REPORT OF THE COMPENSATION AND STOCK OPTION COMMITTEES, THE
REPORT OF THE AUDIT COMMITTEE AND THE STOCK PERFORMANCE GRAPH THAT APPEAR
IMMEDIATELY BELOW SHALL NOT BE DEEMED TO BE "SOLICITING MATERIAL" OR TO BE
"FILED" WITH THE SECURITIES AND EXCHANGE COMMISSION, NOR SHALL THEY BE
INCORPORATED BY ANY GENERAL STATEMENT INCORPORATING BY REFERENCE THIS PROXY
STATEMENT INTO ANY FILING UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, EXCEPT TO THE EXTENT THAT THE
COMPANY SPECIFICALLY INCORPORATES THIS INFORMATION BY REFERENCE AND SHALL NOT
OTHERWISE BE DEEMED FILED UNDER SUCH ACTS.
JOINT REPORT OF THE COMPENSATION AND STOCK OPTION COMMITTEES
To: The Board of Directors:
The compensation of our executive officers for fiscal 2001 was fixed by our
full Board of Directors prior to the establishment of our Compensation Committee
in March 2000 and our Stock Option Committee in December 2000. Accordingly, the
Compensation and Stock Option Committees did not establish the executive
compensation for fiscal 2001. Rather, they reviewed the compensation policies
established by our full Board of Directors and monitored the compensation levels
of our executive officers against those for companies with which it competes for
executive talent. The primary responsibility of the Compensation Committee is to
oversee compensation practices for the Company's executive officers. In this
capacity, it is responsible for reviewing salaries, benefits and other
compensation as well as recommending compensation levels of persons designated
as executive officers by the Board of Directors. The Stock Option Committee
administers the Company's option plans and, in this role, is responsible for
reviewing and recommending stock option grants to all of the Company's eligible
employees, including its executive officers.
OVERALL EXECUTIVE COMPENSATION PHILOSOPHY
The Committees believe that the compensation programs for executive
officers should reflect the Company's performance and the value created for our
shareholders. In addition, the compensation programs should support the
short-term and long-term strategic goals and values of the Company, should
reward individual contributions to the Company's success, and reflect comparable
market salaries for similar officers within the Company's industry.
The policy for the Committees is to provide these officers with
compensation opportunities that are based upon their personal performance, the
financial performance of the Company and their contribution to that performance,
and that are competitive enough to attract and retain highly skilled
individuals. With the exception of our three founders, Dr. Sehat Sutardja, Ms.
Weili Dai and Dr. Pantas Sutardja, each officer's compensation package is
comprised of two elements: (i) a base salary and (ii) long-term incentives
through the award of stock options under the Company's stock option plans.
The compensation package of Dr. Sehat Sutardja, Ms. Weili Dai and Dr.
Pantas Sutardja are comprised of (i) a base salary and (ii) profit sharing
participation. At present, no long-term, stock-based incentive awards have been
made available to these three officers, as the Committees believe that their
share holdings in the Company are sizable enough to ensure that these officers'
financial interests are aligned with those of the other shareholders of the
Company. The Company's profit sharing plan, which was established prior to its
initial public offering, has been suspended, and the Company has no present
plans to re-instate such arrangement. The payments under such program reported
in this proxy statement were paid to these officers prior to the effective date
of the Company's initial public offering in June 2000.
The Company and the Committees currently do not endorse employment
contracts and, therefore, none of the current executive officers of the Company
is a party to an employment contract.
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ANNUAL SALARY AND INCENTIVE COMPENSATION PROGRAM
The principal factors that the Committees took into account in establishing
the officers' compensation packages for the 2001 fiscal year are described
below. Either Committee may, however, in its discretion apply entirely different
factors, such as different measures of financial performance, or create
different compensation elements, in future fiscal years.
Base Salaries. The base salary for each executive officer was generally
established by the Compensation Committee on the basis of relative parity with
other executive officers of the Company's industry.
Stock Option Grants. The Company does not offer a long-term cash incentive
plan. To reward executives on a long-term basis, stock options have been granted
to provide the equity link to shareholders. Stock options may be granted by the
Stock Option Committee to executive officers and other employees under the
Company's Amended and Restated 1995 Stock Option Plan. Because of the direct
relationship between the value of an option and the stock price, the Stock
Option Committee believes that options motivate those executive officers granted
options to manage the Company in a manner that is consistent with shareholder
interests. Stock option grants are intended to focus the attention of the
recipient on the Company's long-term performance, which the Company believes
results in improved shareholder value, and to retain the services of the
executive officers in a competitive job market by providing significant
long-term earnings potential. To this end, stock options generally vest and
become fully exercisable over a five-year period. Initial option grants
typically vest as follows: 20% of the total shares underlying the option on the
first anniversary of the vesting commencement date and 1.67% of the total shares
on the monthly anniversary of the vesting commencement date thereafter. The
principal factors considered in granting stock options to executive officers of
the Company are the executive officer's equity interest in the Company, the
executive officer's prior performance, level of responsibility and other
compensation and the executive officer's ability to influence the Company's
long-term growth and profitability. The Stock Option Committee determines the
grants of stock options to executive officers.
COMPENSATION OF THE PRESIDENT AND CEO
The Compensation Committee has set the base salary of Dr. Sehat Sutardja at
a level that it believes approximates the median of base salary level for the
chief executive officers of those companies with which the Company competes for
executive talent. While Dr. Sehat Sutardja's salary for the last completed
fiscal year was not directly related to the Company's performance, the
Compensation Committee believes that his significant equity stake in the Company
provides him with a substantial incentive to continue contributing to the
Company's financial success because he will benefit from any appreciation in the
value of the Company's common stock.
It is the opinion of the Committees that each of their respective
compensation policies and plans provide the necessary total remuneration program
to properly align the interests of each of the foregoing executive officers and
the interests of the Company's shareholders through the use of competitive and
equitable executive compensation in a balanced and reasonable manner, for both
the short and long-term.
Submitted by the Compensation and Stock Option Committees of the Company's
Board of Directors:
May 6, 2001
COMPENSATION COMMITTEE STOCK OPTION COMMITTEE
Diosdado P. Banatao Sehat Sutardja
Kuo Wei (Herbert) Chang Weili Dai
John M. Cioffi
Paul R. Gray
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34
REPORT OF THE AUDIT COMMITTEE
To: The Board of Directors
As members of the Audit Committee for the 2001 fiscal year, we are
responsible for representing the Board of Directors in discharging its
responsibilities relating to the accounting, reporting, and financial practices
of the Company and its subsidiaries, and have general responsibility for
overseeing the system of internal controls and accounting and audit activities
of the Company and its subsidiaries. The Board of Directors has determined that
each member of the Audit Committee is an independent director as defined under
the rules of National Association of Securities Dealers. The Board of Directors
on May 6, 2001 updated the Audit Committee Charter adopted by the Board of
Directors on June 25, 2000. The Audit Committee Charter as updated is attached
to this proxy statement as Appendix C.
The Audit Committee has reviewed and discussed with management and the
independent auditors the audited financial statements of the Company. Management
has the primary responsibility for the financial statements and the reporting
process of the Company. PricewaterhouseCoopers LLP, the Company's independent
auditors, are responsible for expressing an opinion on the conformity of the
Company's audited financial statements to generally accepted accounting
principles.
The Audit Committee has discussed with PricewaterhouseCoopers the matters
required to be discussed by Statements on Auditing Standards No. 61
(Communication with Audit Committees). In addition, PricewaterhouseCoopers has
provided to the Audit Committee the written disclosures and the letter required
by Independence Standards Board Standard No. 1 (Independence Discussions with
Audit Committees) and the committee discussed with PricewaterhouseCoopers their
independence from the Company and its management. The Audit Committee also
considered PricewaterhouseCoopers' provision of non-audit services to the
Company and determined that such provision of such services was compatible with
maintaining the independence of PricewaterhouseCoopers.
Based on the review and discussions referred to above, the Audit Committee
recommended, and the Board of Directors approved, that the audited financial
statements be included in the Company's Annual Report on Form 10-K for the year
ended January 27, 2001, for filing with the Securities and Exchange Commission
and that PricewaterhouseCoopers be appointed independent auditors for the
Company for fiscal 2002.
May 6, 2001
AUDIT COMMITTEE
Diosdado P. Banatao
Kuo Wei (Herbert) Chang
Ronald D. Verdoorn
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35
INFORMATION CONCERNING INDEPENDENT AUDITORS
PricewaterhouseCoopers LLP, independent public accountants, have been the
auditors for the financial statements of the Company for each year since the
year ended January 31, 1998. Representatives of PricewaterhouseCoopers will be
present at the 2001 Annual General Meeting, and they will be given an
opportunity to make a statement if they desire to do so and will be available to
respond to any appropriate questions from shareholders.
In addition to retaining PricewaterhouseCoopers to audit the consolidated
financial statements for fiscal 2001, the Company and its subsidiaries retained
PricewaterhouseCoopers to provide various consulting services in fiscal 2001.
The aggregate fees billed for professional services by PricewaterhouseCoopers in
fiscal 2001 for these various services were:
Audit Fees: Fees of $457,000 were billed for professional services rendered
to the Company and its subsidiaries for the audit of the Company's financial
statements for fiscal 2001 and review of the financial statements included in
the Company's quarterly reports on Form 10-Q for fiscal 2001.
Financial Information Systems Design and Implementation Fees: No services
were rendered by PricewaterhouseCoopers in connection with financial information
systems design and implementation, and as a result no fees were billed with
respect to such matters.
All Other Fees: Fees of $555,000 were billed for other services, including
tax services, services related to mergers and acquisitions, and services related
to public securities offerings.
As noted in the report of the Audit Committee at page 30 of this proxy
statement, the Audit Committee considered the provision by
PricewaterhouseCoopers of non-audit services to the Company and determined that
the provision of such services was compatible with maintaining the independence
of PricewaterhouseCoopers.
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36
STOCK PERFORMANCE GRAPH
The graph below compares the cumulative total shareholder return of the
Company's common stock with the cumulative total return of the S&P 500 Index and
the Hambrecht & Quist Technology Index since June 27, 2000, when the Company's
common stock was first registered under the Exchange Act, through January 27,
2001. The graph assumes that $100 was invested on June 27, 2000 in the Company's
common stock and each index and that any dividends were reinvested. No cash
dividends have been declared on the Company's common stock since the initial
public offering. Shareholder returns over the indicated period should not be
considered indicative of future shareholder returns.
COMPARISON OF CUMULATIVE TOTAL RETURN
AMONG MARVELL TECHNOLOGY GROUP LTD.,
THE S&P 500 INDEX AND THE H&Q TECHNOLOGY INDEX
[PERFORMANCE GRAPH]
MARVELL
TECHNOLOGY GROUP H&Q TECHNOLOGY
LTD. INDEX S&P 500 INDEX
---------------- -------------- -------------
6/27/00 100.00 100.00 100.00
6/30/00 100.66 102.19 100.00
7/31/00 80.68 95.66 98.44
8/31/00 126.05 112.51 104.55
9/30/00 136.20 100.33 99.03
10/31/00 98.45 91.20 98.61
11/30/00 50.55 65.29 90.84
12/31/00 38.74 65.20 91.28
1/27/01 61.92 70.79 94.52
ASSUMES $100 INVESTED ON JUNE 27, 2000
ASSUMES DIVIDEND REINVESTED
FISCAL YEAR ENDING JAN. 27, 2001
---------------
(1) The Company's common stock returns were calculated based on the closing
sales prices per share of the common stock as follows: June 27, 2000
(initial trading day), $56.625; June 30, 2000, $57.00; July 31, 2000,
$45.6875; August 31, 2000, $71.375; September 29, 2000, $77.125; October 31,
2000, $55.75; November 30, 2000, $28.625; December 29, 2000, $21.9375; and
January 26, 2001, $35.0625.
(2) The $15.00 per share initial public offering price of the Company's common
stock was not used in calculating the Company's graph points.
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37
RELATED PARTY TRANSACTIONS
Since February 1, 2000, there has not been nor is there currently proposed
any transaction or series of similar transactions to which Marvell was or will
be a party in which the amount involved exceeded or will exceed $60,000 and in
which any director, executive officer, holder of more than 5% of Marvell's stock
or any member of his or her immediate family had or will have a direct or
indirect material interest, except as noted below.
ISSUANCES OF COMMON STOCK IN CONNECTION WITH THE GALILEO TRANSACTION
On January 21, 2001, the Company consummated a transaction with Galileo
Technology Ltd. in which Galileo merged with a wholly-owned subsidiary of the
Company, with Galileo as the surviving corporation. Upon consummation of the
Galileo transaction, outstanding ordinary shares of Galileo were converted into
shares of common stock of the Company, and each stock option or other right to
acquire Galileo ordinary shares was converted into an option or other right, as
applicable, to buy common stock of the Company. The exchange ratio for shares of
common stock of the Company issued for each outstanding ordinary share of
Galileo was 0.674. The share numbers and exercise prices of the options received
in exchange for existing options to purchase Galileo shares, equaled the share
number and exercise price for such existing options as adjusted by the exchange
ratio. In connection with the Galileo transaction the Company issued the
following shares of common stock and options to named executive officers and
directors:
- George Hervey, the Chief Financial Officer of the Company, received
42,661 shares of common stock of the Company in exchange for ordinary
shares of Galileo Technology held by Mr. Hervey.
- Avigdor Willenz, a director of the Company, received 5,935,566 shares of
common stock of the Company in exchange for ordinary shares of Galileo
Technology held by Mr. Willenz, and Mr. Willenz received options to
purchase 447,623 shares of common stock of the Company in exchange for
his options to purchase ordinary shares of Galileo Technology Ltd.
- Manuel Alba, a director of the Company, received 979,983 shares of common
stock of the Company in exchange for ordinary shares of Galileo
Technology held by Mr. Alba, and Mr. Alba received options to purchase
287,531 shares of common stock of the Company in exchange for his options
to purchase ordinary shares of Galileo Technology. In connection with the
Galileo transaction, Mr. Alba's wife also received 29,168 shares of
common stock of the Company in exchange for ordinary shares of Galileo
Technology held by Mr. Alba's wife, and she received options to purchase
27,140 shares of common stock of the Company in exchange for her options
to purchase ordinary shares of Galileo Technology.
Both Messrs. Willenz and Alba, became directors of the Company in
connection with the Galileo transaction. Mr. Hervey acquired his shares upon
exercise of stock options he was granted as Senior Vice President and Chief
Financial Officer of Galileo Technology, Ltd., positions he held from March 1997
to April 2000.
SHAREHOLDERS' PROPOSALS FOR THE 2002 ANNUAL GENERAL MEETING
Under United States federal securities laws, any proposal of an eligible
shareholder of the Company that such shareholder wishes to have considered for
inclusion in the Company's proxy solicitation materials relating to the
Company's 2002 Annual General Meeting of Shareholders must be received by the
Company at its principal executive offices no later than January 21, 2002. Under
United States federal securities laws, a shareholder is eligible to present
proposals to the Board of Directors if he or she is the record or beneficial
owner of at least one percent or $2,000 in market value of securities entitled
to be voted at the 2002 Annual General Meeting and has held such securities for
at least one year, and he or she continues to own such securities through the
date on which the meeting is held.
Although information received after such date will not be included in proxy
materials sent to shareholders, a shareholder proposal for the nomination of
directors may still be presented at the Annual General Meeting if such proposal
complies with the Company's Bye-Laws then in effect. In accordance with
33
38
Bye-Law 34 of the Company's Amended and Restated Bye-Laws currently in effect,
shareholder nominations for election of directors may be voted on at an Annual
General Meeting only if such nominations are made pursuant to written notice
timely given to the Corporate Secretary accompanied by certain information. To
be timely, a shareholder's written notice must be received at the principal
executive offices of the Company not earlier than the 90th day prior to
anniversary of the prior year's Annual General Meeting nor later than the 60th
day prior to such anniversary. Under Bye-Laws 12(5)(b) and 34 of the Company's
Second Amended and Restated Bye-laws, to be timely the shareholder's written
notice must be received by the Company not less than 60 nor more than 180 days
prior to the date set for the annual general meeting (or if no such date is set,
the date that is not less than 60 nor more than 180 days prior to the
anniversary of the previous year's annual general meeting). The notice must
contain the name and business background of any person being nominated by such
shareholder as a director and all material information on any proposal,
statement or resolution to be put to the meeting and details of the shareholder
submitting the proposal, statement or resolution, as well as other information
that may be specified by the Board of Directors. The Board of Directors will
review proposals from eligible shareholders which it receives by that date and
will determine whether any such proposal has been received in accordance with
the Company's Bye-Laws then in effect and whether any such proposal will be
acted upon at the Annual General Meeting.
In addition, Section 79 of the Companies Act 1981 of Bermuda, provides that
shareholders representing either: (1) 5% of the total voting power of the shares
of common stock eligible to vote at a general meeting of the Company, or (2) not
less than one hundred shareholders, may propose any resolution which may be
properly moved at the next annual general meeting of the Company; or circulate a
statement with respect to any matter referred to in a proposed resolution at the
next annual general meeting of the Company. To be timely, the proposal requiring
notice of a resolution must be deposited at the registered office of the Company
at least six weeks before the annual general meeting. Notice of a statement
referred to in a proposed resolution must be deposited at the registered office
of the Company not less than one week prior to the annual general meeting. In
each case, the shareholders proposing the requisition must deposit with the
Company funds sufficient to meet the Company's expenses incurred to give effect
to the shareholder proposal.
All shareholder proposals should be sent to the Secretary at the Company's
principal executive offices located at 4th Floor, Windsor Place, 22 Queen
Street, P.O. Box HM 1179, Hamilton HM EX, Bermuda.
OTHER MATTERS
At the time of preparation of this proxy statement, the Board of Directors
of the Company was not aware of any other matters to be brought before the
Annual General Meeting. No eligible shareholder had submitted notice of any
proposal before the printing and mailing of this proxy statement. However, if
any other matters are properly presented for action, in the absence of
instructions to the contrary, it is the intention of the persons named in the
enclosed form of proxy to vote, or refrain from voting, in accordance with their
respective best judgment on such matters.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Pursuant to Section 16(a) of the Exchange Act and the rules promulgated
thereunder and requirements of the National Association of Securities Dealers,
officers and directors of the Company and persons who beneficially own more than
10% of the common stock of the Company are required to file with the SEC and the
NASD and furnish to the Company reports of ownership and change in ownership
with respect to all equity securities of the Company.
Based solely on its review of the copies of such reports received by it
during or with respect to the fiscal year ended January 27, 2001, and written
representations from such reporting persons, the Company believes that its
officers, directors and 10% shareholders complied with all Section 16(a) filing
requirements applicable to such individuals, except for the following reports
that were inadvertently filed late: the Form 4 of Kuo Wei (Herbert) Chang
reporting the acquisition of 7,500 shares in June 2000, and the Form 4 of George
Hervey reporting the acquisition of 4,381 shares in January 2001.
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ANNUAL REPORT ON FORM 10-K
Along with this proxy statement, the Company has provided each shareholder
entitled to vote, a copy of its Annual Report on Form 10-K for the year ended
January 27, 2001 without the exhibits thereto. THE COMPANY WILL PROVIDE, WITHOUT
CHARGE, A COPY OF ITS 2001 FORM 10-K, OR A COPY OF THE EXHIBITS TO ITS 2001 FORM
10-K, UPON THE WRITTEN OR ORAL REQUEST OF ANY SHAREHOLDER OR BENEFICIAL OWNER OF
COMMON STOCK. REQUESTS SHOULD BE DIRECTED TO THE FOLLOWING ADDRESS:
General Counsel
Marvell Semiconductor, Inc.
645 Almanor Avenue
Sunnyvale, California 94085
Telephone: (408) 222-2500
By order of the Board of Directors,
/s/ WEILI DAI
WEILI DAI
Secretary
Sunnyvale, California
May 21, 2001
PLEASE SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD PROMPTLY.
NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
If you have any questions, or have any difficulty voting your shares, please
contact Matthew Gloss at
(408) 222-2500.
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40
APPENDIX A
SECOND
AMENDED & RESTATED
BYE-LAWS
OF
MARVELL TECHNOLOGY GROUP LTD.
41
TABLE OF CONTENTS
BYE-LAW PAGE
------- ----
1 Interpretation.............................................. A-1
2 Board of Directors.......................................... A-2
3 Management of the Company................................... A-2
4 Power to appoint managing director or chief executive
officer..................................................... A-2
5 Power to appoint manager.................................... A-2
6 Power to authorise specific actions......................... A-3
7 Power to appoint attorney................................... A-3
8 Power to delegate to a committee............................ A-3
9 Power to appoint and dismiss employees...................... A-3
10 Power to borrow and charge property......................... A-3
11 Exercise of power to purchase shares of or discontinue the
Company..................................................... A-3
12 Election of Directors....................................... A-3
13 Defects in appointment of Directors......................... A-4
14 Alternate Directors......................................... A-5
15 Removal of Directors........................................ A-5
16 Vacancies of the Board...................................... A-5
17 Notice of meetings of the Board............................. A-6
18 Quorum at meetings of the Board............................. A-6
19 Meetings of the Board....................................... A-6
20 Unanimous written resolutions............................... A-6
21 Contracts and disclosure of Directors' interests............ A-6
22 Remuneration of Directors................................... A-7
23 Officers of the Company..................................... A-7
24 Appointment of Officers..................................... A-7
25 Remuneration of Officers.................................... A-7
26 Duties of Officers.......................................... A-7
27 Chairman of meetings........................................ A-7
28 Register of Directors and Officers.......................... A-8
29 Obligations of Board to keep minutes........................ A-8
30 Indemnification of Directors and Officers of the Company.... A-8
31 Waiver of claim by Member................................... A-8
32 Notice of annual general meeting............................ A-9
33 Notice of special general meeting........................... A-9
34 Advance Notice.............................................. A-9
35 Accidental omission of notice of general meeting............ A-9
36 Meeting called on requisition of Members.................... A-9
37 Short notice................................................ A-9
38 Postponement of meetings.................................... A-10
39 Quorum for general meeting.................................. A-10
40 Adjournment of meetings..................................... A-10
41 Attendance at meetings...................................... A-10
42 Written resolutions......................................... A-11
43 Attendance of Directors..................................... A-11
44 Voting at meetings.......................................... A-11
45 Voting on show of hands..................................... A-12
46 Decision of chairman........................................ A-12
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42
BYE-LAW PAGE
------- ----
47 Demand for a poll........................................... A-12
48 Seniority of joint holders voting........................... A-13
49 Proxies and Corporate Representations....................... A-13
50 Rights of shares............................................ A-14
51 Power to issue shares....................................... A-14
52 Variation of rights, alteration of share capital and
purchase of shares of the Company........................... A-15
53 Registered holder of shares................................. A-15
54 Reserved.................................................... A-15
55 Share certificates.......................................... A-15
56 Calls on shares............................................. A-16
57 Forfeiture of shares........................................ A-16
58 Contents of Register of Members............................. A-16
59 Inspection of Register of Members........................... A-17
60 Determination of record dates............................... A-17
61 Instrument of Transfer...................................... A-17
62 Restriction on Transfer..................................... A-17
63 Transfers by joint holders.................................. A-18
64 Representative of deceased Member........................... A-18
65 Registration on death or bankruptcy......................... A-18
66 Declaration of dividends by the Board....................... A-18
67 Other distributions......................................... A-18
68 Reserve fund................................................ A-19
69 Payment of Dividends and deduction of Amounts due to the
Company..................................................... A-19
70 Issue of bonus shares....................................... A-19
71 Records of account.......................................... A-19
72 Financial year end.......................................... A-20
73 Financial statements........................................ A-20
74 Appointment of Auditor...................................... A-20
75 Remuneration of Auditor..................................... A-20
76 Vacation of office of Auditor............................... A-20
77 Access to books of the Company.............................. A-20
78 Report of the Auditor....................................... A-20
79 Business Combinations....................................... A-21
80 Service of Notices and Other Documents...................... A-21
81 Service and delivery of notice.............................. A-21
82 The Seal.................................................... A-22
83 Manner in which seal is to be affixed....................... A-22
84 Winding-up/distribution by liquidator....................... A-22
85 Alteration of Bye-laws...................................... A-22
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INTERPRETATION
1. Interpretation
(1) In these Bye-laws the following words and expressions shall, where not
inconsistent with the context, have the following meanings respectively:-
(a) "Act" means the Companies Act 1981 as amended from time to time;
(b) "Alternate Director" means an alternate Director appointed in
accordance with these Bye-laws;
(c) "Auditor" includes any individual or partnership;
(d) "Board" means the Board of Directors appointed or elected pursuant
to these Bye-laws and acting by resolution in accordance with the Act and
these Bye-laws or the Directors present at a meeting of Directors at which
there is a quorum;
(e) "Business Combination" means any scheme of arrangement,
reconstruction, amalgamation, takeover or similar business combination
involving the Company or any subsidiary of the Company and any other
person; provided that any such transaction with any direct or indirect
subsidiary of the Company formed by the Company with the approval of its
board of directors for the purpose of engaging in any scheme of
arrangement, reconstruction, amalgamation, takeover or similar business
combination shall not be a Business Combination for the purposes of these
Bye-laws;
(f) "Cause" means:
(i) conviction on indictment of an indictable offence involving the
management of the Company; or
(ii) persistent breaches of the Act;
(g) "Clear Days" means, in relation to the period of a notice, that
period excluding the day on which the notice is given or served, or deemed
to be given or served, and the day for which it is given or on which it is
to take effect;
(h) "Company" means Marvell Technology Group Limited;
(i) "Director" means a director of the Company and shall include an
Alternate Director;
(j) "Member" means the person registered in the Register of Members as
the holder of shares in the Company and, when two or more persons are so
registered as joint holders of shares, means the person whose name stands
first in the Register of Members as one of such joint holders or all of
such persons as the context so requires;
(k) "notice" means written notice as further defined in these Bye-laws
unless otherwise specifically stated;
(l) "Officer" means any person appointed by the Board to hold an
office in the Company;
(m) "Register" means the Register of Members of the Company and
includes any branch register;
(n) "Registered Office" means the registered office for the time being
of the Company;
(o) "Register of Directors and Officers" means the Register of
Directors and Officers referred to in these Bye-laws;
(p) "Register of Members" means the Register of Members referred to in
these Bye-laws;
(q) "Secretary" means the person appointed to perform any or all the
duties of secretary of the Company and includes any deputy or assistant
secretary;
(r) "Special Resolution" means a resolution passed by a majority of
not less than 66 2/3% of votes cast by such Members as, being entitled so
to do, vote in person or by proxy or by duly authorised
A-1
44
corporate representative at a general meeting of which not less than
twenty-one (21) clear days' notice (save where a longer period is required
by these Bye-Laws), specifying the intention to propose the resolution as a
Special Resolution, has been duly given;
(2) In these Bye-laws, where not inconsistent with the context:-
(a) words denoting the plural number include the singular number and
vice versa;
(b) words denoting the masculine gender include the feminine gender;
(c) words importing persons include companies, associations or bodies
of persons whether corporate or not;
(d) the word:-
(i) "may" shall be construed as permissive;
(ii) "shall" shall be construed as imperative; and
(e) unless otherwise provided herein words or expressions defined in
the Act shall bear the same meaning in these Bye-laws.
(3) Expressions referring to writing or written shall, unless the contrary
intention appears, include facsimile, printing, lithography, photography and
other modes of representing words in a visible form.
(4) Headings used in these Bye-laws are for convenience only and are not to
be used or relied upon in the construction hereof.
BOARD OF DIRECTORS
2. Board of Directors
The business of the Company shall be managed and conducted by the Board.
3. Management of the Company
(1) In managing the business of the Company, the Board may exercise all
such powers of the Company as are not, by statute or by these Bye-laws, required
to be exercised by the Company in general meeting subject, nevertheless, to the
provisions of any statute and to such regulations as may be prescribed by the
Company in general meeting.
(2) No regulation or alteration to these Bye-laws made by the Company in
general meeting shall invalidate any prior act of the Board which would have
been valid if that regulation or alteration had not been made.
4. Power to appoint managing director or chief executive officer
The Board may from time to time appoint one or more Directors to the office
of managing director or chief executive officer of the Company who shall,
subject to the control of the Board, supervise and administer all of the general
business and affairs of the Company.
5. Power to appoint manager
The Board may appoint a person to act as manager of the Company's day to
day business and may entrust to and confer upon such manager such powers and
duties as it deems appropriate for the transaction or conduct of such business.
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6. Power to authorise specific actions
The Board may from time to time and at any time authorise any company,
firm, person or body of persons to act on behalf of the Company for any specific
purpose and in connection therewith to execute any agreement, document or
instrument on behalf of the Company.
7. Power to appoint attorney
The Board may from time to time and at any time by power of attorney
appoint any company, firm, person or body of persons, whether nominated directly
or indirectly by the Board, to be an attorney of the Company for such purposes
and with such powers, authorities and discretions (not exceeding those vested in
or exercisable by the Board) and for such period and subject to such conditions
as it may think fit and any such power of attorney may contain such provisions
for the protection and convenience of persons dealing with any such attorney as
the Board may think fit and may also authorise any such attorney to sub-delegate
all or any of the powers, authorities and discretions so vested in the attorney.
Such attorney may, if so authorised under the seal of the Company, execute any
deed or instrument under such attorney's personal seal with the same effect as
the affixation of the seal of the Company.
8. Power to delegate to a committee
The Board may delegate any of its powers to a committee appointed by the
Board which may consist partly or entirely of non-Directors and every such
committee shall conform to such directions as the Board may impose on them. The
meeting and proceedings of any such committee shall be governed by the
provisions of these Bye-Laws regulating the meetings and proceedings of the
Board, so far as the same are applicable and are not superseded by directions
imposed by the Board.
9. Power to appoint and dismiss employees
The Board may appoint, suspend or remove any manager, secretary, clerk,
agent or employee of the Company and may fix their remuneration and determine
their duties.
10. Power to borrow and charge property
The Board may exercise all the powers of the Company to borrow money and to
mortgage or charge its undertaking, property and uncalled capital, or any part
thereof, and may issue debentures, debenture stock and other securities whether
outright or as security for any debt, liability or obligation of the Company or
any third party.
11. Exercise of power to purchase shares of or discontinue the Company
(1) The Board may exercise all the powers of the Company to purchase all or
any part of its own shares pursuant to Section 42A of the Act.
(2) The Board may exercise all the powers of the Company to discontinue the
Company to a named country or jurisdiction outside Bermuda pursuant to Section
132G of the Act.
12. Election of Directors
(1) The Board shall consist of not less than two Directors or such number
in excess thereof as the Board may from time to time determine.
(2) The Board shall consist of three classes of Directors which shall be
known as Class 1, Class 2 and Class 3. Class 1 shall retire at the first annual
general meeting after June 17, 2000; Class 2 shall retire at the second annual
general meeting after June 17, 2000 and Class 3 shall retire at the third annual
general meeting after June 17, 2000. This sequence shall be repeated thereafter.
Each director in a Class shall, upon proper nomination in accordance with the
provisions of Bye-Law 12(5), be eligible for re-election at the annual
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general meeting of the Company at which such Class retires to hold office for
three years or until successors are elected or appointed.
(3) Any additional Directors elected so as to increase the total number of
Directors then in office shall be elected to such Class as will ensure that the
number of Directors in each Class remains equal and if that is not possible to
the Class which is retiring at the annual general meeting at which such Director
is elected or, if any such Director is elected otherwise than at an annual
general meeting to the Class which was elected at the most recent prior annual
general meeting.
(4) If at the meeting at which a Director retires by rotation, the Company
does not fill the vacancy so created, the retiring Director shall, if willing to
act, be deemed to have been reappointed unless at the meeting it is resolved not
to fill the vacancy or unless a resolution for the reappointment of the Director
is put to the meeting and lost.
(5) No person shall be appointed or reappointed a Director at any general
meeting unless:
(a) he or she is recommended by the Board; or
(b) in the case of an annual general meeting, not less than 60 nor
more than 180 Clear Days before the date appointed for the meeting (or if
such date is not at the time of such nomination known, the anniversary of
the previous year's annual meeting), a notice containing the information
set forth below in Bye-Law 12(6) and executed by a Member qualified to vote
at the meeting has been given to the Company of the intention of that
Member to propose that person for appointment or reappointment as a
Director; or
(c) in the case of a special general meeting, not less than 10 days
after the Company first publicly announces its intention to hold a special
general meeting for the purpose of electing directors, a notice containing
the information set forth below in Bye-Law 12(6) and executed by a Member
qualified to vote at the meeting has been given to the Company of the
intention of that Member to propose that person for appointment or
reappointment as a Director; or
(d) the appointment or reappointment is approved by a Special
Resolution of the Members.
(6) A notice of nomination from a Member shall:
(a) specify the meeting at which the person nominated is proposed for
election as a Director;
(b) contain all such information relating to the nominee as is
required in solicitations of proxies for the election of Directors or as
may be otherwise required pursuant to Section 14 of, and Schedule 14A
under, the United States Securities Exchange Act of 1934, as amended;
(c) state the names and addresses, as they appear in the Register, of
the Member(s) giving the notice and the class and number of shares which
are held by such Member(s) at the date of the notice and be signed by such
Member(s); and
(d) be accompanied by the written consent of the nominee to his being
named in a proxy statement as a nominee and to serving as a Director, if
elected.
(7) The Board may appoint one or more persons willing to act to be a
Director, either to fill a vacancy or vacancies or, as an additional Director or
Directors. A Director so appointed shall hold office only until the next
following annual general meeting, and shall not be taken into account in
determining the Directors who are to retire by rotation at the meeting, and
shall then be eligible for re-election.
13. Defects in appointment of Directors
All acts done bona fide by any meeting of the Board or by a committee of
the Board or by any person acting as a Director shall, notwithstanding that it
be afterwards discovered that there was some defect in the appointment of any
Director or person acting as aforesaid, or that they or any of them were
disqualified, be as valid as if every such person had been duly appointed and
was qualified to be a Director.
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14. Alternate Directors
(1) Any general meeting of the Company may elect a person or persons to act
as a Director in the alternative to any one or more of the Directors of the
Company or may authorise the Board to appoint such Alternate Directors. Unless
the Members otherwise resolve, any Director may appoint a person or persons to
act as a Director in the alternative to himself or herself by notice in writing
deposited with the Secretary. Any person so appointed shall have all the rights
and powers of the Director or Directors for whom such person is appointed in the
alternative provided that such person shall not be counted more than once in
determining whether or not a quorum is present.
(2) An Alternate Director shall be entitled to receive notice of all
meetings of the Board and to attend and vote at any such meeting at which a
Director for whom such Alternate Director was appointed in the alternative is
not personally present and generally to perform at such meeting all the
functions of such Director for whom such Alternate Director was appointed.
(3) An Alternate Director shall cease to be such if the Director for whom
such Alternate Director was appointed ceases for any reason to be a Director but
may be re-appointed by the Board as alternate to the person appointed to fill
the vacancy in accordance with these Bye-laws.
15. Removal of Directors
(1) The Members may, at any special general meeting convened and held in
accordance with these Bye-laws only, remove a Director for Cause PROVIDED THAT
(a) the notice of any such meeting convened for the purpose of
removing a Director shall contain a statement of the intention so to do and
be served on such Director not less than 14 days before the meeting and at
such meeting such Director shall be entitled to be heard on the motion for
such Director's removal;
(b) the resolution is passed as a Special Resolution; and
(c) no more than one third of the Directors for the time being in
office shall be removed at any general meeting.
(2) A vacancy on the Board created by the removal of a Director under the
provisions of subparagraph (1) of this Bye-law may be filled by the Members at
the meeting at which such Director is removed and, in the absence of such
election or appointment, the Board may fill the vacancy.
16. Vacancies on the Board
(1) The Board shall have the power from time to time and at any time to
appoint any person as a Director to fill a vacancy on the Board occurring as the
result of the death, disability, disqualification or resignation of any Director
and to appoint an Alternate Director to any Director so appointed.
(2) The Board may act notwithstanding any vacancy in its number but, if and
so long as its number is reduced below the number fixed by these Bye-laws as the
quorum necessary for the transaction of business at meetings of the Board, the
continuing Directors or Director may act for the purpose of (i) summoning a
general meeting of the Company or (ii) preserving the assets of the Company.
(3) The office of Director shall be vacated if the Director:-
(a) is removed from office pursuant to these Bye-laws or is prohibited
from being a Director by law;
(b) is or becomes bankrupt or makes any arrangement or composition
with his creditors generally;
(c) is or becomes of unsound mind or dies; or
(d) resigns his or her office by notice in writing to the Company.
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17. Notice of meetings of the Board
(1) A Director may, and the Secretary on the requisition of a Director
shall, at any time summon a meeting of the Board.
(2) Notice of a meeting of the Board shall be deemed to be duly given to a
Director if it is given to such Director verbally in person or by telephone or
otherwise communicated or sent to such Director by post, overnight courier,
cable, telex, telecopier, facsimile, electronic mail or other mode of
representing words in a legible and non-transitory form at such Director's last
known address or any other address given by such Director to the Company for
this purpose.
18. Quorum at meetings of the Board
The quorum necessary for the transaction of business at a meeting of the
Board may be fixed by the Directors and, unless so fixed, shall be a majority of
the Directors.
19. Meetings of the Board
(1) The Board may meet for the transaction of business, adjourn and
otherwise regulate its meetings as it sees fit.
(2) Directors may participate in any meeting of the Board by means of such
telephone, electronic or other communication facilities as permit all persons
participating in the meeting to communicate with each other simultaneously and
instantaneously, and participation in such a meeting shall constitute presence
in person at such meeting.
(3) A resolution put to the vote at a meeting of the Board shall be carried
by the affirmative votes of a majority of the votes cast and in the case of an
equality of votes the resolution shall fail. Notwithstanding the foregoing, a
resolution to approve any of the following shall require the affirmative vote of
an absolute majority of the directors holding office at the date of the
resolution:
(a) the issue of shares in the capital of the Company or any
obligations, charges or debts convertible into shares or involving rights
to vote under any circumstances;
(b) recommending the winding up, dissolution or termination of the
corporate existence of the Company; and
(c) borrowing of any amount by the Company which exceeds in the
aggregate $25,000,000 or the mortgage, pledge or grant of a security
interest in any property of the Company which exceeds in the aggregate
$25,000,000.
20. Unanimous written resolutions
A resolution in writing signed by all the Directors which may be in
counterparts, shall be as valid as if it had been effected at a meeting of the
Board duly called and constituted. For the purposes of this Bye-law only,
"Director" shall not include an Alternate Director except that an Alternate
Director may sign such a resolution on behalf of a principal Director.
21. Contracts and disclosure of Directors' interests
(1) Any Director, or any Director's firm, partner or any company with whom
any Director is associated, may act in a professional capacity for the Company
and such Director or such Director's firm, partner or such company shall be
entitled to remuneration for professional services as if such Director were not
a Director, provided that nothing herein contained shall authorise a Director or
Director's firm, partner or such company to act as Auditor of the Company.
(2) A Director who is directly or indirectly interested in a contract or
proposed contract or arrangement with the Company shall declare the nature of
such interest as required by the Act.
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(3) Following a declaration being made pursuant to this Bye-law, and unless
disqualified by the chairman of the relevant Board meeting, a Director may vote
in respect of any contract or proposed contract or arrangement in which such
Director is interested and may be counted in the quorum at such meeting.
22. Remuneration of Directors
(1) Each Director shall be entitled to receive such fees for his services
as a Director, if any, as the Board may from time to time determine. Each
Director shall be paid all expenses properly and reasonably incurred by him or
her in the conduct of the Company's business or in the discharge of his duties
as a Director, including (but without limitation) his reasonable travelling,
hotel and incidental expenses in attending and returning from meetings of the
Board or any committee of the Board or general meetings.
(2) Any Director who serves on any committee of the Board or who performs
services which in the opinion of the Board go beyond the ordinary duties of a
Director may be paid such extra remuneration (whether by way of salary,
commission, participation in profits or otherwise) as the Board may determine,
and such extra remuneration shall be in addition to any remuneration or other
amounts payable to a Director pursuant to any other Bye-Law.
(3) The Board may from time to time determine that, subject to the
requirements of the Act, all or part of any fees or other remuneration payable
to any Director or other Officer of the Company shall be provided in the form of
shares or other securities of the Company or any subsidiary of the Company, or
options or rights to acquire such shares or other securities, on such terms as
the Board may decide.
OFFICERS
23. Officers of the Company
The Officers of the Company shall consist of a President and a Vice
President or a Chairman and a deputy Chairman, a Secretary and such additional
Officers as the Board may from time to time determine all of whom shall be
deemed to be Officers for the purposes of these Bye-laws.
24. Appointment of Officers
(1) The Board shall, as soon as practicable after each annual general
meeting appoint a President and Vice President or a Chairman and Deputy Chairman
who shall be Directors.
(2) The Secretary and additional Officers, if any, shall be appointed by
the Board from time to time.
25. Remuneration of Officers
The Officers shall receive such remuneration as the Board may from time to
time determine.
26. Duties of Officers
The Officers shall have such powers and perform such duties in the
management, business and affairs of the Company as may be delegated to them by
the Board from time to time.
27. Chairman of meetings
Unless otherwise agreed by a majority of those attending and entitled to
attend and vote thereat, the Chairman, if there be one, and if not the President
shall act as chairman at all meetings of the Members and of the Board at which
such person is present. In their absence the Deputy Chairman or Vice President,
if present, shall act as chairman and in the absence of all of them a chairman
shall be appointed or elected by those present at the meeting and entitled to
vote. If more than one person holds any of the offices enumerated herein, the
Board shall determine which of the persons shall act as Chairman at meetings.
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28. Register of Directors and Officers
The Board shall cause to be kept in one or more books a Register of
Officers and Directors and shall enter therein the particulars required by the
Act.
MINUTES
29. Obligations of Board to keep minutes
The Board shall cause minutes to be duly entered in books provided for the
purpose:-
(a) of all elections and appointments of Officers;
(b) of the names of the Directors present at each meeting of the Board
and of any committee appointed by the Board; and
(c) of all resolutions and proceedings of general meetings of the
Members, meetings of the Board, meetings of managers and meetings of
committees appointed by the Board.
INDEMNITY
30. Indemnification of Directors and Officers of the Company
The Directors, Secretary and other Officers (such term to include any
person appointed to any committee by the Board) for the time being of the
Company and the liquidator or trustees (if any) for the time being acting in
relation to any of the affairs of the Company and every one of them, and their
heirs, executors and administrators, shall be indemnified and secured harmless
out of the assets of the Company from and against all actions, costs, charges,
losses, damages and expenses which they or any of them, their heirs, executors
or administrators, shall or may incur or sustain by or by reason of any act
done, concurred in or omitted in or about the execution of their duty, or
supposed duty, or in their respective offices or trusts, and none of them shall
be answerable for the acts, receipts, neglects or defaults of the others of them
or for joining in any receipts for the sake of conformity, or for any bankers or
other persons with whom any moneys or effects belonging to the Company shall or
may be lodged or deposited for safe custody, or for insufficiency or deficiency
of any security upon which any moneys of or belonging to the Company shall be
placed out on or invested, or for any other loss, misfortune or damage which may
happen in the execution of their respective offices or trusts, or in relation
thereto, PROVIDED THAT this indemnity shall not extend to any matter in respect
of any fraud or dishonesty which may attach to any of said persons.
31. Waiver of claim by Member
Each Member agrees to waive any claim or right of action such Member might
have, whether individually or by or in the right of the Company, against any
Director or Officer on account of any action taken by such Director or Officer,
or the failure of such Director or Officer to take any action in the performance
of his duties with or for the Company, PROVIDED THAT such waiver shall not
extend to any matter in respect of any fraud or dishonesty which may attach to
such Director or Officer or to any matter arising under United States federal
securities laws.
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MEETINGS
32. Notice of annual general meeting
The annual general meeting of the Company shall be held in each year at
such time and place as the President or the Chairman or any two Directors or any
Director and the Secretary or the Board shall appoint. At least five days notice
of such meeting shall be given to each Member stating the date, place and time
at which the meeting is to be held, that the election of Directors will take
place thereat, and as far as practicable, the other business to be conducted at
the meeting.
33. Notice of special general meeting
The President or the Chairman or any two Directors or any Director and the
Secretary or the Board may convene a special general meeting of the Company
whenever in their judgment such a meeting is necessary, upon not less than five
days' notice which shall state the date, time, place and the general nature of
the business to be considered at the meeting.
34. Advance notice
Not less than sixty (60) nor more than one hundred eighty (180) Clear Days
advance notice in writing shall at all times be required for the nomination,
other than by or at the direction of the Board, of candidates for election as
directors, as well as any other proposals, statements or resolutions to be put
forward by Members for consideration at an annual general meeting or special
general meeting. In the case of an annual general meeting such notice must be
received by the Company not less than sixty (60) nor more than one hundred
eighty (180) Clear Days prior to the date appointed for the annual general
meeting (or if such date is not at the time of such nomination or proposal
known, the anniversary of the prior year's annual general meeting). The notice
must contain the information specified in Bye-Law 12(6) with respect to the
person to be nominated as director and all material information on the proposal,
statement or resolution to be put to the meeting, together with details of the
Member submitting the proposal, statement or resolution and such other
information as may from time to time be specified by the Board. The foregoing
rights in relation to proposals, statements or resolutions are in addition to
any rights conferred by the Act.
35. Accidental omission of notice of general meeting
The accidental omission to give notice of a general meeting to, or the
non-receipt of notice of a general meeting by, any person entitled to receive
notice shall not invalidate the proceedings at that meeting.
36. Meeting called on requisition of Members
Notwithstanding anything herein, the Board shall, on the requisition of
Members holding at the date of the deposit of the requisition not less than
one-tenth of such of the paid-up share capital of the Company as at the date of
the deposit carries the right to vote at general meetings of the Company,
forthwith proceed to convene a special general meeting of the Company and the
provisions of section 74 of the Act shall apply.
37. Short notice
A general meeting of the Company shall, notwithstanding that it is called
by shorter notice than that specified in these Bye-laws, be deemed to have been
properly called if it is so agreed by (i) all the Members entitled to attend and
vote thereat in the case of an annual general meeting; and (ii) by a majority in
number of the Members having the right to attend and vote at the meeting, being
a majority together holding not less than 95% in nominal value of the shares
giving a right to attend and vote thereat in the case of a special general
meeting.
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38. Postponement of meetings
The Secretary may postpone any general meeting called in accordance with
the provisions of these Bye-laws (other than a meeting requisitioned under these
Bye-laws) provided that notice of postponement is given to each Member before
the time for such meeting. Fresh notice of the date, time and place for the
postponed meeting shall be given to each Member in accordance with the
provisions of these Bye-laws.
39. Quorum for general meeting
At any general meeting of the Company two persons present in person and
representing in person or by proxy in excess of 50% of the total issued voting
shares in the Company throughout the meeting shall form a quorum for the
transaction of business, PROVIDED that if the Company shall at any time have
only one Member, one Member present in person or by proxy shall form a quorum
for the transaction of business at any general meeting of the Company held
during such time. If within half an hour from the time appointed for the meeting
a quorum is not present, the meeting shall stand adjourned to the same day one
week later, at the same time and place or to such other day, time or place as
the Board may determine.
40. Adjournment of meetings
(1) The chairman of a general meeting may, with the consent of the Members
at any general meeting at which a quorum is present (and shall if so directed),
adjourn the meeting. In addition the chairman may adjourn the meeting to another
time and place without such consent or direction if it appears to him or her
that:
(a) it is likely to be impracticable to hold or continue that meeting
because of the number of Members wishing to attend who are not present; or
(b) the unruly conduct of persons attending the meeting prevents, or
is likely to prevent, the orderly continuation of the business of the
meeting; or
(c) an adjournment is otherwise necessary so that the business of the
meeting may be properly conducted.
(2) Unless the meeting is adjourned to a specific date and time, fresh
notice of the date, time and place for the resumption of the adjourned meeting
shall be given to each Member in accordance with the provisions of these
Bye-laws.
41. Attendance at meetings
(1) A meeting of the Members or any class thereof may be held by means of
such telephone, electronic or other communication facilities as permit all
persons participating in the meeting to communicate with each other
simultaneously and instantaneously, and participation in such a meeting shall
constitute presence in person at such meeting. In addition, the Board may
resolve to enable persons entitled to attend a general meeting of the Company or
of any class of Members to do so by simultaneous attendance and participation at
a satellite meeting place anywhere in the world. The Members present at any such
satellite meeting place in person or by proxy and entitled to vote shall be
counted in the quorum for, and shall be entitled to vote at, the general meeting
in question if the chairman of the general meeting is satisfied that adequate
facilities are available throughout the general meeting to ensure that Members
attending at all the meeting places are able to:
(a) communicate simultaneously and instantaneously with the persons
present at the other meeting place or places, whether by the use of
microphones, loud-speakers, audio-visual or other communications equipment
or facilities; and
(b) have access to all documents which are required by the Act and
these Bye-Laws to be made available at the meeting.
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The chairman of the general meeting shall be present at, and the meeting
shall be deemed to take place at, the principal meeting place.
If it appears to the chairman of the general meeting that the facilities at
the principal meeting place or any satellite meeting place are or become
inadequate for the purposes referred to above, then the chairman may, without
the consent of the meeting, interrupt or adjourn the general meeting. All
business conducted at that general meeting up to the time of such adjournment
shall be valid.
(2) The Board and the chairman of any general meeting may make any
arrangement and impose any requirement or restriction it, he or she considers
appropriate to ensure the security of a general meeting including, without
limitation, requirements for evidence of identity to be produced by those
attending the meeting, the searching of their personal property and the
restriction of items that may be taken into the meeting place. The Board and the
chairman of any general meeting shall be entitled to refuse entry to a person
who refuses to comply with any such arrangements, requirements or restrictions.
42. Written resolutions
(1) Subject to subparagraph (6) of this Bye-Law, anything which may be done
by resolution of the Company in general meeting or by resolution of a meeting of
any class of the Members of the Company, may, without a meeting and without any
previous notice being required, be done by resolution in writing signed by, or,
in the case of a Member that is a corporation whether or not a company within
the meaning of the Act, on behalf of, all the Members who at the date of the
resolution would be entitled to attend the meeting and vote on the resolution.
(2) A resolution in writing may be signed by, or, in the case of a Member
that is a corporation whether or not a company within the meaning of the Act, on
behalf of, all the Members, or any class thereof, in as many counterparts as may
be necessary.
(3) For the purposes of this Bye-law, the date of the resolution is the
date when the resolution is signed by, or, in the case of a Member that is a
corporation whether or not a company within the meaning of the Act, on behalf
of, the last Member to sign and any reference in any Bye-law to the date of
passing of a resolution is, in relation to a resolution made in accordance with
this Bye-law, a reference to such date.
(4) A resolution in writing made in accordance with this Bye-law is as
valid as if it had been passed by the Company in general meeting or by a meeting
of the relevant class of Members, as the case may be, and any reference in any
Bye-law to a meeting at which a resolution is passed or to Members voting in
favour of a resolution shall be construed accordingly.
(5) A resolution in writing made in accordance with this Bye-law shall
constitute minutes for the purposes of sections 81 and 82 of the Act.
(6) This Bye-law shall not apply to:
(a) a resolution passed pursuant to section 89(5) of the Act; or
(b) a resolution passed for the purpose of removing a Director before
the expiration of his term of office under Bye-law 15.
43. Attendance of Directors
The Directors of the Company shall be entitled to receive notice of and to
attend and be heard at any general meeting.
44. Voting at meetings
(1) Subject to the provisions of the Act and these Bye-laws, any question
proposed for the consideration of the Members at any general meeting shall be
decided by the affirmative votes of a majority of the votes cast in accordance
with the provisions of these Bye-laws and in the case of an equality of votes
the resolution shall fail.
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(2) No Member shall be entitled to vote at any general meeting unless such
Member has paid all the calls on all shares held by such Member.
45. Voting on show of hands
At any general meeting a resolution put to the vote of the meeting shall,
in the first instance, be voted upon by a show of hands and, subject to any
rights or restrictions for the time being lawfully attached to any class of
shares and subject to the provisions of these Bye-laws, every Member present in
person and every person holding a valid proxy at such meeting shall be entitled
to one vote and shall cast such vote by raising his or her hand.
46. Decision of chairman
(1) At any general meeting if an amendment is proposed to any resolution
under consideration and the chairman of the meeting rules on whether the
proposed amendment is out of order, the proceedings on the substantive
resolution shall not be invalidated by any error in such ruling.
(2) At any general meeting a declaration by the chairman of the meeting
that a question proposed for consideration has, on a show of hands, been
carried, or carried unanimously, or by a particular majority, or lost, and an
entry to that effect in a book containing the minutes of the proceedings of the
Company shall, subject to the provisions of these Bye-laws, be conclusive
evidence of that fact.
47. Demand for a poll
(1) Notwithstanding the provisions of the immediately preceding two
Bye-laws, at any general meeting of the Company, in respect of any question
proposed for the consideration of the Members (whether before or on the
declaration of the result of a show of hands as provided for in these Bye-laws),
a poll may be demanded by any of the following persons:
(a) the chairman of such meeting; or
(b) at least three Members present in person or represented by proxy;
or
(c) any Member or Members present in person or represented by proxy
and holding between them not less than one-tenth of the total voting rights
of all the Members having the right to vote at such meeting; or
(d) any Member or Members present in person or represented by proxy
holding shares in the Company conferring the right to vote at such meeting,
being shares on which an aggregate sum has been paid up equal to not less
than one-tenth of the total sum paid up on all such shares conferring such
right.
(2) Where, in accordance with the provisions of subparagraph (1) of this
Bye-law, a poll is demanded, subject to any rights or restrictions for the time
being lawfully attached to any class of shares, every person present at such
meeting shall have one vote for each share of which such person is the holder or
for which such person holds a proxy and such vote shall be counted in the manner
set out in sub-paragraph (4) of this Bye-Law or in the case of a general meeting
at which one or more Members are present by telephone in such manner as the
chairman of the meeting may direct and the result of such poll shall be deemed
to be the resolution of the meeting at which the poll was demanded and shall
replace any previous resolution upon the same matter which has been the subject
of a show of hands.
(3) A poll demanded in accordance with the provisions of subparagraph (1)
of this Bye-law, for the purpose of electing a chairman or on a question of
adjournment, shall be taken forthwith and a poll demanded on any other question
shall be taken in such manner and at such time and place as the chairman may
direct and any business other than that upon which a poll has been demanded may
be proceeded with pending the taking of the poll.
(4) Where a vote is taken by poll, each person present and entitled to vote
shall be furnished with a ballot paper on which such person shall record his or
her vote in such manner as shall be determined at the
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meeting having regard to the nature of the question on which the vote is taken,
and each ballot paper shall be signed or initialed or otherwise marked so as to
identify the voter and the registered holder in the case of a proxy. At the
conclusion of the poll, the ballot papers shall be examined and counted by a
committee of not less than two Members or proxy holders appointed by the
chairman for the purpose and the result of the poll shall be declared by the
chairman.
48. Seniority of joint holders voting
In the case of joint holders the vote of the senior who tenders a vote,
whether in person or by proxy, shall be accepted to the exclusion of the votes
of the other joint holders, and for this purpose seniority shall be determined
by the order in which the names stand in the Register of Members.
49. Proxies and Corporate Representatives
(1) The instrument appointing a proxy shall be in writing under the hand of
the appointor or the appointor's attorney authorised in writing or, if the
appointor is a corporation, either under its seal or under the hand of an
officer, attorney or other person authorised to sign the same.
(2) Any Member may appoint a standing proxy or (if a corporation) a
standing corporate representative by delivery to the Registered Office (or such
other place as the Board may from time to time specify for such purposes) of
evidence of such appointment. The appointment of such a standing proxy or
representative shall be valid for all general meetings and adjournments thereof
or, resolutions in writing, as the case may be, until notice of revocation is
received at the Registered Office. Where an appointment of a standing proxy or
corporate representative has been made, its operation shall be deemed to have
been suspended at any general meeting or adjournment thereof at which the Member
is present or in respect of which the Member has specially appointed a proxy or
corporate representative. The Board may from time to time require such evidence
as it shall deem necessary as to the due execution and continuing validity of
any such appointment of the standing proxy or corporate representative and the
operation of any such appointment shall be deemed to be suspended until such
time as the Board determines that it has received the requested evidence or
other evidence satisfactory to it.
(3) The instrument appointing a proxy or corporate representative, together
with such other evidence as to its due execution as the Board may from time to
time require, shall be delivered at the Registered Office (or at such place as
may be specified in the notice convening the meeting or in any notice of any
adjournment or, in either case or the case of a written Resolution, in any
document sent therewith) prior to the holding of the relevant meeting or
adjourned meeting at which the person named in the instrument proposes to vote
or, in the case of a poll taken subsequently to the date of a meeting or
adjourned meeting, before the time appointed for the taking of the poll, or, in
the case of a written Resolution, prior to the effective date of the written
Resolution, and in default the instrument of proxy shall not be treated as
valid. Delivery of the proxy or instrument appointing a corporate representative
may be effected by facsimile communication to any facsimile number specified in
the notice convening the general meeting.
(4) A proxy may be appointed by an instrument in any common form or in such
other form as the Board may approve, and the Board may, if it thinks fit, send
out with the notice of any meeting or any written Resolution forms of
instruments of proxy for use at that meeting. The instrument of proxy shall be
deemed to confer authority to demand or join in demanding a poll and to vote on
any amendment of a written Resolution or amendment of a Resolution put to the
meeting for which it is given as the proxy thinks fit. The instrument of proxy
shall, unless the contrary is stated therein, be valid as well for any
adjournment of the meeting as for the meeting to which it relates.
(5) A vote given by proxy shall be valid notwithstanding the previous death
or insanity of the principal, or revocation of the instrument of proxy or of the
authority under which it was executed; provided, however, that no intimation in
writing of such death, insanity or revocation shall have been received by the
Company at the Registered Office (or such other place as may be specified for
the delivery of instruments of proxy in the notice convening the meeting or
other documents sent therewith) one hour at least before the commencement
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of the meeting or adjourned meeting, or the taking of the poll, or the day
before the effective date of any written Resolution at which the instrument of
proxy is used.
(6) Subject to the Act, the Board may at its discretion waive any of the
provisions of these Bye-Laws related to proxies or authorisations and, in
particular, may accept such verbal or other assurances as it thinks fit as to
the right of any person to attend and vote on behalf of any Member at general
meetings or to sign written resolutions.
SHARE CAPITAL AND SHARES
50. Subject to any resolution of the Members to the contrary, the share capital
of the Company is divided into two classes of shares to be designated
respectively Common Stock (the "Common") and Preferred Stock (the "Preferred").
The Preferred may be issued from time to time in one or more series. The Board
is authorized to fix the number of shares of any series of the Preferred and to
determine or alter the rights, preferences, privileges, and restrictions granted
to or imposed upon any wholly unissued series of the Preferred and, within the
limits and restrictions stated in any resolution or resolutions of the Board
originally fixing the number of shares constituting any series of the Preferred,
to increase or decrease (but not below the number of shares of any such series
then outstanding) the number of shares of any such series subsequent to the
issue of shares of that series. The particular rights and restrictions attached
to any series of Preferred shall be recorded in a resolution of the Board. The
Board may at any time before the allotment of any shares of Preferred by further
resolution in any way amend such rights and restrictions or vary or revoke its
designation. A copy of any such resolution or amending resolution for the time
being in force shall be annexed as an appendix to (but shall not form part of)
these Bye-Laws.
51. Power to issue shares
(1) Subject to these Bye-laws and to any resolution of the Members to the
contrary and without prejudice to any special rights previously conferred on the
holders of any existing shares or class of shares, the Board shall have power to
issue any unissued shares of the Company on such terms and conditions as the
Board may determine.
(2) The Board shall, in connection with the issue of any share, have the
power to pay such commission and brokerage as may be permitted by law.
(3) The Company shall not give, whether directly or indirectly, whether by
means of loan, guarantee, provision of security or otherwise, any financial
assistance for the purpose of a purchase or subscription made or to be made by
any person of or for any shares in the Company, but nothing in this Bye-Law
shall prohibit transactions mentioned in Sections 39A, 39B and 39C of the Act.
(4) The Board may from time to time do any one or more of the following
things:
(a) make arrangements on the issue of shares for a difference between
the Members in the amounts and times of payments of calls on their shares;
(b) accept from any Member the whole or a part of the amount remaining
unpaid on any shares held by him or her, although no part of that amount
has been called up;
(c) pay dividends in proportion to the amount paid up on each share
where a larger amount is paid up on some shares than on others; and
(d) issue its shares in fractional denominations and deal with such
fractions to the same extent as its whole shares and shares in fractional
denominations shall have in proportion to the respective fractions
represented thereby all of the rights of whole shares including (but
without limiting the generality of the foregoing) the right to vote, to
receive dividends and distributions and to participate in a winding up.
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52. Variation of rights, alteration of share capital and purchase of shares of
the Company
(1) Subject to the provisions of Sections 42 and 43 of the Act any
preference shares may be issued as shares that, at a determinable date or at the
option of the Company, are liable to be redeemed on such terms and in such
manner as the Board may determine.
(2) If at any time the share capital is divided into different classes of
shares, the rights attached to any class (unless otherwise provided by the terms
of issue of the shares of that class) may, whether or not the Company is being
wound-up, be varied with the consent in writing of the holders of three-fourths
of the issued shares of that class or with the sanction of a resolution passed
by a majority of the votes cast at a separate general meeting of the holders of
the shares of the class in accordance with Section 47 (7) of the Act. The rights
conferred upon the holders of the shares of any class issued with preferred or
other rights shall not, unless otherwise expressly provided by the terms of
issue of the shares of that class, be deemed to be varied by the creation or
issue of further shares ranking pari passu therewith.
(3) The Company may from time to time by resolution of the Members change
the currency denomination of, increase, alter or reduce its share capital in
accordance with the provisions of Sections 45 and 46 of the Act. Where, on any
alteration of share capital, fractions of shares or some other difficulty would
arise, the Board may deal with or resolve the same in such manner as it thinks
fit including, without limiting the generality of the foregoing, the issue to
Members, as appropriate, of fractions of shares and/or arranging for the sale or
transfer of the fractions of shares of Members.
(4) Subject to the Companies Acts, the Company may purchase its own shares
and the Board may authorise any exercise of the Company's power to purchase its
own shares, whether in the market, by tender or by private treaty, at such
prices and otherwise on such terms and conditions as the Board may from time to
time determine. The whole or any part of the amount payable on any such purchase
may be paid or satisfied otherwise than in cash, to the extent permitted by the
Companies Acts.
53. Registered holder of shares
(1) The Company shall be entitled to treat the registered holder of any
share as the absolute owner thereof and accordingly shall not be bound to
recognise any equitable or other claim to, or interest in, such share on the
part of any other person.
(2) Any dividend, interest or other moneys payable in cash in respect of
shares may be paid by cheque or draft sent through the post directed to the
Member at such Member's address in the Register of Members or, in the case of
joint holders, to such address of the holder first named in the Register of
Members, or to such person and to such address as the holder or joint holders
may in writing direct. If two or more persons are registered as joint holders of
any shares any one can give an effectual receipt for any dividend paid in
respect of such shares.
54. Reserved
55. Share certificates
(1) Shares shall be issued in registered form. Unless otherwise provided by
the rights attaching to or by the terms of issue of any particular Shares, each
Member shall, upon becoming the holder of any Share, be entitled to a Share
certificate for all the Shares of each class held by such Member (and, on
transferring a part of such Member's holding, to a certificate for the balance),
but the Board may decide not to issue certificates for any Shares held by, or by
the nominee of, any securities exchange or depository or any operator of any
clearance or settlement system except at the request of any such person. In the
case of a Share held jointly by several persons, delivery of a certificate in
their joint names to one of several joint holders shall be sufficient delivery
to all.
(2) If a Share certificate is defaced, lost or destroyed, it may be
replaced without fee but on such terms (if any) as to evidence and indemnity and
to payment of the costs and out-of-pocket expenses of the Company
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in investigating such evidence and preparing such indemnity as the Board may
think fit and, in case of defacement, on delivery of the old certificate to the
Company.
(3) The Board may by resolution determine, either generally or in any
particular case, that any signatures on any such certificates need not be
autographic but may be affixed to such certificates by some mechanical means or
may be printed thereon or that such certificates need not be signed by any
persons.
(4) Nothing in these Bye-Laws shall preclude title to a Share being
evidenced or transferred otherwise than in writing to the extent permitted by
the Act and as may be determined by the Board from time to time.
56. Calls on shares
(1) The Board may from time to time make such calls as it thinks fit upon
the Members in respect of any monies unpaid on the shares allotted to or held by
such Members and, if a call is not paid on or before the day appointed for
payment thereof, the Member may at the discretion of the Board be liable to pay
the Company interest on the amount of such call at such rate as the Board may
determine, from the date when such call was payable up to the actual date of
payment. The joint holders of a share shall be jointly and severally liable to
pay all calls in respect thereof.
(2) The Board may, on the issue of shares, differentiate between the
holders as to the amount of calls to be paid and the times of payment of such
calls.
57. Forfeiture of shares
(1) If any Member fails to pay, on the day appointed for payment thereof,
any call in respect of any share allotted to or held by such Member, the Board
may, at any time thereafter during such time as the call remains unpaid, direct
the Secretary to forward to such Member a notice in the form, or as near thereto
as circumstances admit, of Form "A" in the Schedule hereto.
(2) If the requirements of such notice are not complied with, any such
share may at any time thereafter before the payment of such call and the
interest due in respect thereof be forfeited by a resolution of the Board to
that effect, and such share shall thereupon become the property of the Company
and may be disposed of as the Board shall determine.
(3) A Member whose share or shares have been forfeited as aforesaid shall,
notwithstanding such forfeiture, be liable to pay to the Company all calls owing
on such share or shares at the time of the forfeiture and all interest due
thereon.
(4) The Board may accept the surrender of any share which it is in a
position to forfeit on such terms and conditions as may be agreed. Subject to
those terms and conditions, a surrendered share shall be treated as if it had
been forfeited.
REGISTER OF MEMBERS
58. Contents of Register of Members
(1) The Board shall cause to be kept in one or more books a Register of
Members and shall enter therein the particulars required by the Act.
(2) The Company may also keep one or more branch registers at such place or
places outside Bermuda to the extent and in the manner permitted by the
Companies Acts and the Board may make such regulations as it thinks fit
regarding the keeping of any branch register and may revoke or vary any such
regulations. The Board may authorise any share on the Register to be included in
a branch register or any share registered on a branch register to be registered
on another branch register, provided that at all times the Register is
maintained in accordance with the Companies Acts.
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59. Inspection of Register of Members
The Register of Members shall be open to inspection at the registered
office of the Company on every business day, subject to such reasonable
restrictions as the Board may impose, so that not less than two hours in each
business day be allowed for inspection. The Register of Members may, after
notice has been given by advertisement in an appointed newspaper to that effect,
be closed for any time or times not exceeding in the whole thirty days in each
year.
60. Determination of record dates
Notwithstanding any other provision of these Bye-laws, the Board may fix
any date as the record date for:
(a) determining the Members entitled to receive any dividend,
distribution, allotment or issue; and
(b) determining the Members entitled to receive notice of and to vote
at any general meeting of the Company.
TRANSFER OF SHARES
61. Instrument of Transfer
(1) An instrument of transfer shall be in such common form as the Board may
accept. Such instrument of transfer shall be signed by or on behalf of the
transferor and transferee provided that, in the case of a fully paid share, the
Board may accept the instrument signed by or on behalf of the transferor alone.
The transferor shall be deemed to remain the holder of such share until the same
has been transferred to the transferee in the Register of Members.
(2) The Board may refuse to recognise any instrument of transfer unless it
is accompanied by the certificate in respect of the shares to which it relates
and by such other evidence as the Board may reasonably require to show the right
of the transferor to make the transfer.
62. Restriction on Transfer
(1) Subject to the Act and to such of the restrictions contained in these
Bye-Laws as may be applicable, any Member may transfer all or any of such
Member's shares by an instrument of transfer in the usual common form or in any
other form that the Board may approve.
(2) The instrument of transfer of a share shall be signed by or on behalf
of the transferor and, when any share is not fully paid, the transferee, and the
transferor shall be deemed to remain the holder of the share until the name of
the transferee is entered in the Register in respect thereof. All instruments of
transfer when registered may be retained by the Company. The Board may, in its
absolute discretion and without assigning any reason therefor, decline to
register any transfer of any Share that is not a fully paid Share or that is in
violation of these Bye-Laws or of any agreement of which the Company has notice.
The Board may also decline to register any transfer unless:
(a) the instrument of transfer is duly stamped, if required, and
lodged with the Company at the registered office or any other place as the
Board may from time to time specify, accompanied by the certificate (if
any) for the Shares to which it relates, and such other evidence as the
Board may reasonably require to show the right of the transferor to make
the transfer;
(b) the instrument of transfer is in respect of only one class of
Share;
(c) where applicable, the permission of the Bermuda Monetary Authority
with respect thereto has been obtained; and
(d) where applicable, the Board is satisfied that the transfer
complies with securities laws.
(3) If the Board declines to register a transfer it shall, within three
months after the date on which the instrument of transfer was lodged, send to
the transferee notice of such refusal.
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(4) No fee shall be charged by the Company for registering any transfer, or
otherwise making an entry in the Register concerning any other document relating
to or affecting the title to any Share.
(5) Subject to any directions of the Board from time to time in force, the
Secretary may exercise the powers and discretions of the Board under Bye-Laws
62(1), 62(2) and 62(3).
63. Transfers by joint holders
The joint holders of any share or shares may transfer such share or shares
to one or more of such joint holders, and the surviving holder or holders of any
share or shares previously held by them jointly with a deceased Member may
transfer any such share to the executors or administrators of such deceased
Member.
TRANSMISSION OF SHARES
64. Representative of deceased Member
In the case of the death of a Member, the survivor or survivors where the
deceased Member was a joint holder, and the legal personal representatives of
the deceased Member where the deceased Member was a sole holder, shall be the
only persons recognised by the Company as having any title to the deceased
Member's interest in the shares. Nothing herein contained shall release the
estate of a deceased joint holder from any liability in respect of any share
which had been jointly held by such deceased Member with other persons. Subject
to the provisions of Section 52 of the Act, for the purpose of this Bye-law,
legal personal representative means the executor or administrator of a deceased
Member or such other person as the Board may in its absolute discretion decide
as being properly authorised to deal with the shares of a deceased Member.
65. Registration on death or bankruptcy
Any person becoming entitled to a share in consequence of the death or
bankruptcy of any Member may be registered as a Member upon such evidence as the
Board may deem sufficient or may elect to nominate some person to be registered
as a transferee of such share, and in such case the person becoming entitled
shall execute in favour of such nominee an instrument of transfer in the form,
or as near thereto as circumstances admit, of Form "B" in the Schedule hereto.
On the presentation thereof to the Board, accompanied by such evidence as the
Board may require to prove the title of the transferor, the transferee shall be
registered as a Member but the Board shall, in either case, have the same right
to decline or suspend registration as it would have had in the case of a
transfer of the share by that Member before such Member's death or bankruptcy,
as the case may be.
DIVIDENDS AND OTHER DISTRIBUTIONS
66. Declaration of dividends by the Board
The Board may, subject to these Bye-laws and in accordance with Section 54
of the Act, declare a dividend to be paid to the Members, in proportion to the
number of shares held by them, and such dividend may be paid in cash or wholly
or partly in specie in which case the Board may fix the value for distribution
in specie of any assets. No unpaid dividend shall bear interest as against the
Company unless the terms of the issue of shares otherwise provide.
67. Other distributions
The Board may declare and make such other distributions (in cash or in
specie) to the Members as may be lawfully made out of the assets of the Company.
No unpaid distribution or other monies payable in respect of shares shall bear
interest as against the Company unless the terms of the issue of shares
otherwise provide.
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68. Reserve fund
The Board may from time to time before declaring a dividend set aside, out
of the surplus or profits of the Company, such sum as it thinks proper as a
reserve fund to be used to meet contingencies or for equalising dividends or for
any other special purpose.
69. Payment of Dividends and deduction of Amounts due to the Company
(1) Any dividend or other monies payable in respect of a share may be paid
by cheque or warrant sent through the post to the registered address of the
Members (in the case of joint Members, the senior joint holder, seniority being
determined by the order in which the names stand in the Register of Members) or
person entitled thereto, or by direct bank transfer to such bank account as such
Member or person entitled thereto may direct. Every such cheque shall be made
payable to the order of the person to whom it is sent or to such persons as the
Member may direct, and payment of the cheque or warrant shall be a good
discharge to the Company. Every such cheque or warrant shall be sent at the risk
of the person entitled to the money represented thereby.
(2) Any dividend or other monies payable in respect of a share which has
remained unclaimed for 12 years from the date when it became due for payment
shall, if the Board so resolves, be forfeited and cease to remain owing by the
Company. The payment of any unclaimed dividend or other monies payable in
respect of a share may (but need not) be paid by the Company into an account
separate from the Company's own account. Such payment shall not constitute the
Company a trustee in respect thereof.
(3) The Company shall be entitled to cease sending dividend warrants and
cheques by post or otherwise to a Member if those instruments have been returned
undelivered to, or left uncashed by, that Member on at least two consecutive
occasions, or, following one such occasion, reasonable enquiries have failed to
establish the Member's new address. The entitlement conferred on the Company by
this Bye-law 69(3) in respect of any Member shall cease if the Member claims a
dividend or cashes a dividend warrant or cheque.
(4) The Board may deduct from the dividends or distributions payable to any
Member all monies due from such Member to the Company on account of calls or
otherwise.
CAPITALISATION
70. Issue of bonus shares
(1) The Board may resolve to capitalise any part of the amount for the time
being standing to the credit of any of the Company's share premium or other
reserve accounts or to the credit of the profit and loss account or otherwise
available for distribution by applying such sum in paying up unissued shares to
be allotted as fully paid bonus shares pro rata to the Members.
(2) The Company may capitalise any sum standing to the credit of a reserve
account or sums otherwise available for dividend or distribution by applying
such amounts in paying up in full partly paid shares of those Members who would
have been entitled to such sums if they were distributed by way of dividend or
distribution.
ACCOUNTS AND FINANCIAL STATEMENTS
71. Records of account
The Board shall cause to be kept proper records of account with respect to
all transactions of the Company and in particular with respect to:-
(a) all sums of money received and expended by the Company and the
matters in respect of which the receipt and expenditure relates;
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(b) all sales and purchases of goods by the Company; and
(c) the assets and liabilities of the Company.
Such records of account shall be kept at the registered office of the Company
or, subject to Section 83(2) of the Act, at such other place as the Board thinks
fit and shall be available for inspection by the Directors during normal
business hours.
72. Financial year end
The financial year end of the Company may be determined by resolution of
the Board and failing such resolution shall be the Saturday nearest January 31st
in each year.
73. Financial statements
Subject to any rights to waive laying of accounts pursuant to Section 88 of
the Act, financial statements as required by the Act shall be laid before the
Members in general meeting.
AUDIT
74. Appointment of Auditor
Subject to Section 88 of the Act, at the annual general meeting or at a
subsequent special general meeting in each year, an independent representative
of the Members shall be appointed by them as Auditor of the accounts of the
Company. Such Auditor may be a Member but no Director, Officer or employee of
the Company shall, during his or her continuance in office, be eligible to act
as an Auditor of the Company.
75. Remuneration of Auditor
The remuneration of the Auditor shall be fixed by the Members in general
meeting or in such other manner as the Members may determine
76. Vacation of office of Auditor
If the office of Auditor becomes vacant by the resignation or death of the
Auditor, or by the Auditor becoming incapable of acting by reason of illness or
other disability at a time when the Auditor's services are required, the Board
may appoint an interim Auditor to fill the vacancy created thereby to serve
until the next annual general meeting.
77. Access to books of the Company
The Auditor shall at all reasonable times have access to all books kept by
the Company and to all accounts and vouchers relating thereto, and the Auditor
may call on the Directors or Officers of the Company for any information in
their possession relating to the books or affairs of the Company.
78. Report of the Auditor
(1) Subject to any rights to waive laying of accounts or appointment of an
Auditor pursuant to Section 88 of the Act, the accounts of the Company shall be
audited at least once in every year.
(2) The financial statements provided for by these Bye-laws shall be
audited by the Auditor in accordance with generally accepted auditing standards.
The Auditor shall make a written report thereon in accordance with generally
accepted auditing standards and the report of the Auditor shall be submitted to
the Members in general meeting.
(3) The generally accepted auditing standards referred to in subparagraph
(2) of this Bye-law may be those of a country or jurisdiction other than
Bermuda. If so, the financial statements and the report of the Auditor must
disclose this fact and name such country or jurisdiction.
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BUSINESS COMBINATIONS
79. Business Combinations
In addition to any approval required under the Act, a Business Combination
that is not approved by at least 66 2/3% of the directors holding office at the
date of the Board Resolution must be approved by a Special Resolution of the
Members.
NOTICES
80. Service of Notices and Other Documents
(1) Any notice or other document (including a Share certificate) may be
served on or delivered to any Member by the Company either personally or by
sending it through the post in a prepaid letter addressed to such Member at the
address appearing in the Register or by delivering it to or leaving it at such
registered address. In the case of joint holders of a Share, service or delivery
of any notice or other document on or to one of the joint holders shall for all
purposes be deemed as sufficient service on or delivery to all the joint
holders. Any notice or other document if sent by post shall be deemed to have
been served or delivered five Clear Days after it was put in the post, and, in
proving such service or delivery, it shall be sufficient to prove that the
notice or document was properly addressed, stamped and put in the post.
(2) Any notice of a general meeting of the Company shall be deemed to be
duly given to a Member, or other person entitled to it, if it is sent by post,
courier, cable, telex, telecopier, facsimile, electronic mail or other mode of
representing words in a legible and non-transitory form to the address as it
appears in the Register or any other address given to the Company for this
purpose. Any such notice shall be deemed to have been served 24 hours after its
dispatch except in the case of air courier in which case such notice shall be
deemed to have been served 48 hours after its dispatch.
(3) Any notice or other document delivered, sent or given to a Member in
any manner permitted by these Bye-Laws shall, notwithstanding that such Member
is then dead or bankrupt or that any other event has occurred, and whether or
not the Company has notice of the death or bankruptcy or other event, be deemed
to have been duly served or delivered in respect of any Share registered in the
name of such Member as sole or joint holder unless such Member's name shall, at
the time of the service or delivery of the notice or document, have been removed
from the Register as the holder of the Share, and such service or delivery shall
for all purposes be deemed as sufficient service or delivery of such notice or
document on all persons interested (whether jointly with or as claiming through
or under such Member) in the Share.
Any notice or other document (including without limitation a proxy, appointment
of corporate representative or nomination form for a director) may be delivered
by any Member to the Company either personally, by air courier or by sending it
through the post in a pre-paid letter addressed to the Company and the
registered office of the Company. Where a notice convening a general meeting
indicates that any document which is to be delivered by a Member to the Company
in connection with such general meeting may be delivered by facsimile and
indicates a facsimile number for delivery, then any Member may deliver such
document or documents by facsimile transmission to the number identified in the
notice of general meeting.
81. Service and delivery of notice
Any notice shall be deemed to have been served at the time when the same
would be delivered in the ordinary course of transmission save for notices sent
by post which shall be deemed to have been served five (5) days after posting
and, in proving such service, it shall be sufficient to prove that the notice
was properly addressed and prepaid, if posted, and the time when it was posted,
delivered to the courier or to the cable company or transmitted by telex,
facsimile or other method as the case may be.
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SEAL OF THE COMPANY
82. The Seal
(1) The Board shall provide for the safe custody of the Seal. The Seal
shall only be used by the authority of the Board or of a committee authorised by
the Board in that behalf. The Board may determine who (if anyone) shall sign any
instrument to which the Seal is affixed and shall unless otherwise determined by
resolution of the Board be signed by one Director.
(2) The Board may by resolution determine either generally or in any
particular case that any certificates or warrants for Shares or debentures or
representing any other form of security to which the Seal is to be affixed may
have signatures affixed to them by some mechanical means, or printed thereon or
that such certificates need not bear any signature.
(3) Where the Company engages in business outside Bermuda the Company may,
if the Board so determines, have for use in any country, territory or place
outside Bermuda a seal which shall be a duplicate of the Seal and which shall be
affixed in the same manner as the Seal.
(4) The Company may, if the Board so determines, have for use for sealing
securities issued by the Company and for sealing documents creating or
evidencing securities so issued an official seal which shall be a facsimile of
the Seal with the addition on its face of the word "Securities".
83. Manner in which seal is to be affixed
The seal of the Company shall not be affixed to any instrument except
attested by the signature of a Director and the Secretary or any two Directors,
or some other person appointed by the Board for the purpose, provided that any
Director, or Officer, may affix the seal of the Company attested by such
Director or Officer's signature only to any authenticated copies of these
Bye-laws, the incorporating documents of the Company, the minutes of any
meetings or any other documents required to be authenticated by such Director or
Officer.
WINDING-UP
84. Winding-up/distribution by liquidator
If the Company shall be wound up the liquidator may, with the sanction of a
resolution of the Members, divide amongst the Members in specie or in kind the
whole or any part of the assets of the Company (whether they shall consist of
property of the same kind or not) and may, for such purpose, set such value as
he or she deems fair upon any property to be divided as aforesaid and may
determine how such division shall be carried out as between the Members or
different classes of Members. The liquidator may, with the like sanction, vest
the whole or any part of such assets in trustees upon such trusts for the
benefit of the Members as the liquidator shall think fit, but so that no Member
shall be compelled to accept any shares or other securities or assets whereon
there is any liability.
ALTERATION OF BYE-LAWS
85. Alteration of Bye-laws
No Bye-law shall be rescinded, altered or amended and no new Bye-law shall
be made until the same has been approved by a resolution of the Board and by a
resolution of the Members; provided that any provision of these Bye-Laws
requiring a Special Resolution by the Members shall not be amended without a
Special Resolution.
*****
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SCHEDULE -- FORM A (BYE-LAW 57)
NOTICE OF LIABILITY TO FORFEITURE FOR NON PAYMENT OF CALL
You have failed to pay the call of [amount of call] made on the day of
, 20 last, in respect of the [number] share(s) [numbers in
figures] standing in your name in the Register of Members of the Company, on the
day of , 20 last, the day appointed for payment of such call.
You are hereby notified that unless you pay such call together with interest
thereon at the rate of per annum computed from the said day of
20 last, on or before the day of 20 next at the place
of business of the said Company the share(s) will be liable to be forfeited.
Dated this day of , 20
[Signature of Secretary]
By order of the Board
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SCHEDULE -- FORM B (BYE-LAW 65)
TRANSFER BY A PERSON BECOMING ENTITLED ON DEATH/BANKRUPTCY
OF A MEMBER
I/We having become entitled in consequence of the [death/bankruptcy] of
[name of the deceased Member] to [number] share(s) numbered [number in figures]
standing in the register of members of [Company] in the name of the said [name
of deceased Member] instead of being registered myself/ourselves elect to have
[name of transferee] (the "Transferee") registered as a transferee of such
share(s) and I/we do hereby accordingly transfer the said share(s) to the
Transferee to hold the same unto the Transferee his or her executors
administrators and assigns subject to the conditions on which the same were held
at the time of the execution thereof; and the Transferee does hereby agree to
take the said share(s) subject to the same conditions.
WITNESS our hands this day of , 20
Signed by the above-named )
[person or persons entitled] )
in the presence of: )
Signed by the above-named )
[transferee] )
in the presence of: )
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APPENDIX B
MARVELL TECHNOLOGY GROUP LTD.
AMENDED AND RESTATED 1995 STOCK OPTION PLAN
(AS AMENDED THROUGH MAY 6, 2001)
1. Purpose. This Plan is intended to attract and retain the best available
individuals as Employees and Consultants of the Company and its Subsidiaries, to
provide additional incentives to those Employees and Consultants, and to promote
the success of the Company's business.
2. Defined Terms. The meanings of defined terms (generally, capitalized
terms) in this Plan are provided in Section 22 ("Glossary").
3. Shares Reserved. Subject to Section 14, a maximum aggregate of
38,268,553 Shares may be issued under this Plan; provided however, that
beginning the first business day of each fiscal year starting January 30, 2002
or after, there shall be added to this Plan the lesser of an additional (i)
10,000,000 shares of Common Stock, (ii) 5.0% of the outstanding shares of
capital stock on such date, or (iii) an amount determined by the Board. The
Shares may be authorized, but unissued, or reacquired Common Stock. If an Option
expires or becomes unexercisable for any reason, any unpurchased Optioned Stock
shall be available for future issuance under this Plan. Shares retained to
satisfy tax withholding obligations do not reduce the number authorized for
issuance.
4. Administration.
(a) In General. This Plan shall be administered by the Board or a Committee
appointed by the Board. Once appointed, a Committee shall serve until otherwise
directed by the Board. From time to time, the Board may increase the size of the
Committee and appoint additional members, remove members (with or without cause)
and appoint new members in their stead, fill vacancies however caused, and
terminate the Committee and thereafter directly administer this Plan.
(b) After Exchange Act Applies. After the Company becomes subject to
Section 16 of the Exchange Act, the Board may provide for administration of this
Plan with respect to Employees who are also officers or directors of the Company
by a Committee constituted so as to permit this Plan to comply as a
discretionary plan with Rule 16b-3 promulgated under the Exchange Act or any
successor thereto. A Committee appointed under this Section 4(b) may be separate
from any Committee appointed to administer this Plan with respect to Employees
who are neither officers nor directors.
(c) Powers of the Administrator. Subject to the provisions of this Plan and
in the case of a Committee, the specific duties delegated by the Board, the
Administrator shall have the authority, in its discretion:
(i) to determine the Fair Market Value of the Common Stock;
(ii) to grant Options to such Consultants and Employees as it selects;
(iii) to determine the terms and conditions of each Option granted,
including without limitation the number of Shares of Optioned Stock, the
exercise price per share, and whether an Option is to be granted as an ISO
or a NSO;
(iv) to approve forms of agreement for use under this Plan;
(v) to determine whether and under what circumstances to offer to buy
out an Option for cash or Shares under Section 13;
(vi) to modify grants of Options to participants who are foreign
nationals or employed outside of the United States in order to recognize
differences in local law, tax policies, or customs; and
(vii) to construe and interpret the terms of this Plan and Options
granted pursuant to this Plan.
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(d) Administrator's Decisions Binding. All decisions, determinations, and
interpretations of the Administrator shall be final and binding on all Optionees
and any other holders of any Options, and no member of the Administrator shall
be liable for any such determination, decision, or interpretation made in good
faith.
5. Eligibility.
(a) NSOs/ISOs. Nonstatutory Stock Options may be granted to Employees and
Consultants. Incentive Stock Options may be granted only to Employees. An
Employee or Consultant who has been granted an Option may, if otherwise
eligible, be granted additional Options.
(b) Limitations. If the Company or a successor issues any class of equity
securities required to be registered under Section 12 of the Exchange Act or if
this Plan is assumed by a corporation that has a class of such securities, the
following limitations shall apply to grants of Options to Employees: No Employee
shall be granted, in any fiscal year of the Company, Options to purchase more
than 1,000,000 Shares, adjusted proportionately in connection with any change in
the Company's capitalization as described in Section 14. If an Option is granted
but canceled in the same fiscal year, it shall nonetheless count against the
foregoing limit. Reduction of an Option's exercise price is treated as a
cancellation of the Option and the grant of a new Option.
6. Term of Options. The term of each Option shall be determined by the
Administrator at the time of grant but shall not exceed ten years. In the case
of an ISO granted to an Optionee who, at the time of grant, owns stock
representing more than ten percent of the voting power of all classes of stock
of the Company or any Parent or Subsidiary, the Option term shall not exceed
five years.
7. Date of Grant. Unless otherwise determined by the Administrator, the
date of grant of an Option shall be the date on which the Administrator
completes the actions necessary to grant the Option. Notice of the grant shall
be given to the Optionee within a reasonable time after the date of the grant.
8. Exercise Price and Form of Consideration.
(a) Price. The per-Share exercise price of an Option shall be determined by
the Administrator at the time of grant, but:
(i) In the case of an ISO:
(A) granted to an Employee who, at the time of grant, owns stock
representing more than ten percent of the voting power of all classes of
stock of the Company or any Parent or Subsidiary, the per-Share exercise
price shall be at least 110% of the Fair Market Value on the date of
grant; or
(B) granted to any other Employee, the per-Share exercise price
shall be at least the Fair Market Value on the date of grant.
(ii) In the case of a NSO:
(A) granted to an Employee who, at the time of grant, owns stock
representing more than ten percent of the voting power of all classes of
stock of the Company or any Parent or Subsidiary, the per-Share exercise
price shall be at least the Fair Market Value on the date of grant; or
(B) granted to any other Employee, the per-Share exercise price
shall be at least 85% of the Fair Market Value on the date of grant.
Notwithstanding the foregoing, to the extent any NSO is intended to constitute
"performance-based compensation" as defined in Section 162(m) of the Internal
Revenue Code and is granted to any Employee subject to Section 162(m) of the
Internal Revenue Code, the per-Share exercise price shall be at least the Fair
Market Value on the date of grant.
(b) Form of Payment. Payment for Shares upon exercise of an Option shall be
made in any lawful consideration approved by the Administrator and may, without
limitation, consist of (1) cash, (2) check, (3) other Shares that have a Fair
Market Value on the date of payment equal to the aggregate exercise price of the
Shares as to which Option is exercised, (4) delivery by a broker or brokerage
firm approved by the
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Administrator of a properly executed exercise notice together with payment of
the exercise price and such other documentation as the Administrator shall
require, or (5) any combination of the foregoing.
9. Exercise.
(a) Exercisability. Each Option shall be exercisable at such times and
under such conditions as determined by the Administrator at the time of grant.
(b) Vesting. Each Option and the corresponding Optioned Stock shall vest at
such times and under such conditions as determined by the Administrator at the
time of grant, and as are otherwise permissible under the terms of this Plan,
including without limitation, performance criteria with respect to the Company
and/or the Optionee.
(c) Fractional Shares. An Option may not be exercised for a fraction of a
Share.
(d) Manner of Exercise; Rights as a Shareholder. Unless otherwise allowed
by the Administrator, an Option shall be exercised by delivery to the Company of
all of the following: (i) written notice of exercise by the Optionee, in a form
approved by the Administrator and in accordance with the terms of the Option,
(ii) full payment for the Shares with respect to which the Option is exercised,
and (iii) payment (or provision for payment) of withholding taxes pursuant to
Subsection (g), below. Delivery of any of the foregoing may be by electronic
means approved by the Administrator. The Optionee shall be treated as a
shareholder of the Company with respect to the purchased Shares upon completion
of exercise of the Option.
(e) Optionee Representations. If Shares purchasable pursuant to the
exercise of an Option have not been registered under the Securities Act of 1933,
as amended, at the time the Option is exercised, the Optionee shall, if required
by the Administrator, as a condition to exercise of all or any portion of the
Option, deliver to the Company an investment representation statement in a form
approved by the Administrator.
(f) Termination of Employment or Consulting Relationship. If an Optionee's
Continuous Service terminates, the Optionee (or the Optionee's estate or heirs,
if termination is due to death or the Optionee dies during the post-termination
exercise period of the Option) may exercise the Option, (i) only within such
period of time as is determined by the Administrator (but no later than the
expiration date for the Option determined by the Administrator at the time of
grant) and the Option shall terminate at the end of that period, and (ii) unless
otherwise determined by the Administrator, only to the extent that the Optionee
was entitled to exercise it at the date of termination.
(g) Tax Withholding. The Company's obligation to deliver Shares upon
exercise of an Option is subject to payment (or provision for payment
satisfactory to the Administrator) by the Optionee of all federal, state, and
local income and employment taxes that the Administrator determines in its
discretion to be due as a result of the exercise of the Option or sale of the
Shares.
10. Rule 16b-3. Except to the extent determined by the Administrator,
Options granted to persons subject to Section 16(b) of the Exchange Act shall
comply with Rule 16b-3 and shall contain such terms as may be required or
desirable to qualify Plan transactions for the maximum exemption from Section 16
of the Exchange Act.
11. Non-Transferability of Options. Options may not be sold, pledged,
assigned, hypothecated, transferred, or disposed of in any manner other than by
will or by the laws of descent or distribution and may be exercised, during the
lifetime of the Optionee, only by the Optionee.
12. Lockup Agreement. Grant and exercise of each Option are subject to the
Optionee's agreement, upon the request of (and in form and substance
satisfactory to) the Company or the underwriters managing an initial firmly
underwritten public offering of the Company's securities, not to sell, make any
short sale of, loan, grant any option for the purchase of, or otherwise dispose
of any Shares or any derivative security (unless included in the registration of
Shares offered) without the prior written consent of the Company or such
underwriters, as the case may be, for such period of time (not to exceed 180
days) from the effective date of the registration as the Company or underwriters
may specify.
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13. Buyout of Options. The Administrator may at any time offer to buy out
an Option for a payment in cash or Shares, based on such terms and conditions as
the Administrator shall establish and communicate to the Optionee at the time of
the offer.
14. Changes in Capitalization or Control.
(a) Changes in Capitalization. Subject to any required action by the
shareholders of the Company, the number of shares of Optioned Stock and the
number of Shares that have been authorized for issuance under this Plan but as
to which no Options have then been granted (including the annual Share increase
set forth in Section 3), or that have been returned to this Plan upon
cancellation or expiration of an Option, as well as the price per share of
Optioned Stock, shall be proportionately adjusted for any change in the number
of issued Shares resulting from a stock split, reverse stock split, stock
dividend, combination or reclassification of the Common Stock, or any other
change in the number of issued Shares effected without receipt of consideration
by the Company (not counting Shares issued upon conversion of convertible
securities of the Company as "effected without receipt of consideration"). Such
adjustment shall be made by the Board and shall be final, binding, and
conclusive. Except as expressly provided herein, no issuance by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, shall affect, and no consequent adjustment shall be made with respect
to, the number or price of Shares subject to this Plan.
(b) Change in Control. The Administrator may, in its discretion, determine
at any time from and after the grant of an Option the effect that a Change in
Control shall have upon the Option; provided however, that a Change in Control
shall not have the effect of impairing the rights of any Optionee under any
then-outstanding Option without his or her prior written consent. Without
limiting the foregoing sentence, the Administrator may determine that upon a
Change in Control, an Option:
(i) shall become fully vested and exercisable either for a limited
period following the Change in Control or for the remainder of the Option's
term;
(ii) shall terminate upon or after a specified period following the
Change in Control;
(iii) shall be cancelled in exchange for cash in the amount of the
excess of the fair market value of the Optioned Shares over the exercise
price upon termination; or
(iv) shall be treated as provided under a combination of clauses (i)
through (iii), or shall be so treated only if not adequately assumed (or
substituted for) by a surviving or successor person or entity in the
transactions or events that give rise to the Change in Control.
For purposes of this Section 14(b), (x) the occurrence of any of the foregoing
clauses (i), (ii), (iii) or (iv) shall not constitute an impairment of the
rights of any Optionee and (y) the "Administrator" shall be the Administrator as
constituted before the Change in Control occurs.
15. Amendments. The Board may at any time amend, alter, suspend, or
discontinue this Plan, but no such action shall impair the rights of any
Optionee under any then-outstanding Option without his or her prior written
consent.
16. Securities Regulation Requirements.
(a) Compliance with Rule; Buy-Out Offer. In general, Shares shall not be
issued pursuant to the exercise of an Option unless the exercise of the Option
and issuance of the Shares comply with all relevant provisions of law,
including, without limitation, any applicable state securities laws, the
Securities Act of 1933, as amended, the Exchange Act, the rules and regulations
promulgated thereunder, the requirements of any stock exchange or national
market system upon which the Shares may then be listed, and the requirements of
any regulatory body having jurisdiction. When the Company receives notice of
exercise of an Option, if the Administrator believes in its discretion that the
period before Shares may be issued will exceed 21 days, the Administrator shall
(unless it determines that such an offer is itself prevented by the rules
described in the preceding sentence) make an offer pursuant to Section 13 to buy
out the portion of the Option corresponding to the number of Shares whose
issuance is thus prevented. The buy-out offer shall be valid for at least 21
days.
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(b) Optionee Investment Representation. As a condition to the exercise of
an Option, the Company may require the person exercising the Option to represent
and warrant that the Shares are being purchased only for investment and without
any present intention to sell or distribute the Shares if, in the opinion of
counsel for the Company, such a representation is required by law.
17. Written Option Agreements. Options shall be evidenced by written
agreements in a form the Administrator approves from time to time. The written
agreement shall designate the Option as either an Incentive Stock Option or a
Nonstatutory Stock Option. Delay in executing a written agreement shall not
affect the date of grant of an Option; however, an Option may not be exercised
until a written agreement has been executed by the Company and the Optionee.
18. Shareholder Approval. This Plan is subject to approval by the
shareholders of the Company within 12 months after the Board initially adopts
this Plan. Shareholder approval shall be obtained in the degree and manner
required under applicable state and federal law and the rules of any stock
exchange or national market system upon which the Common Stock is listed.
19. Information to Optionees. The Company shall provide to each Optionee
copies of financial statements at least annually, at the same time and in the
same form as it furnishes such information to its shareholders. The Company
shall not be required to provide such statements to key employees whose duties
assure their access to equivalent information.
20. No Employment Rights. This Plan does not confer upon any Optionee any
right with respect to continuation of employment or consulting relationship with
the Company, nor shall it interfere in any way with the Company's right to
terminate his or her employment or consulting relationship at any time, with or
without cause.
21. Term of Plan. This Plan shall become effective upon the earlier to
occur of the initial adoption by the Board or initial approval by the
shareholders of the Company, as described in Section 18. It shall continue in
effect for a term of ten years unless sooner terminated under Section 15.
22. Glossary. The following definitions apply for purposes of this Plan:
(a) "Administrator" means the Board or a committee appointed by the
Board under Section 4.
(b) "Board" means the Board of Directors of the Company.
(c) "Change in Control" means a change in ownership or control of the
Company by any of:
(i) a merger or consolidation in which the holders of stock
possessing a majority of the voting power in the surviving entity (or a
parent of the surviving entity) did not own a majority of the Common
Stock immediately before the transaction;
(ii) the sale of all or substantially all of the Company's assets
to any other person or entity (other than a Subsidiary);
(iii) the liquidation or dissolution of the Company;
(iv) the direct or indirect acquisition by any person or related
group of persons of beneficial ownership (within the meaning of Rule
13d-3 of the Exchange Act) of securities possessing more than 50% of the
total combined voting power of the Company's outstanding securities
pursuant to a tender or exchange offer made directly to the Company's
shareholders that the Board does not recommend that the shareholders
accept, or
(v) a change in composition of the Board over a period of 36
consecutive months such that a majority of the Board ceases, by reason
of one or more contested elections for Board membership, to be composed
of individuals who either (A) have been Board members continuously since
the beginning of that period or (B) have been elected or nominated for
election as Board members during that period by at least a majority of
the Board members described in clause (A) who were in office when the
Board approved the election or nomination.
(d) "Code" means the Internal Revenue Code of 1986, as amended.
(e) "Common Stock" means the common stock of the Company.
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(f) "Company" means Marvell Technology Group Ltd., a Bermuda
corporation.
(g) "Consultant" means any person, other than an Employee, who is
engaged by the Company or any Parent or Subsidiary to perform consulting or
advisory services.
(h) "Continuous Service" means that an Optionee's employment and/or
consulting relationship with the Company or a Parent or Subsidiary is not
interrupted or terminated. Continuous Service is not interrupted by (i) any
leave of absence approved by the Company, (ii) transfers between locations
of the Company or between the Company, a Parent, a Subsidiary, or any
successor, or (iii) changes in status from Employee to Consultant or
Consultant to Employee.
(i) "Employee" means any person employed by the Company or any Parent
or Subsidiary of the Company.
(j) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(k) "Fair Market Value" means, as of any date, the value of common
Stock determined as follows:
(i) If the Common Stock is quoted on an established stock exchange
or national market system, including without limitation the National
Association of Securities Dealers, Inc. Automated Quotation ("NASDAQ")
National Market System, Fair Market Value shall be the closing sales
price (or the closing bid, if no sales are reported) as quoted on that
exchange or system for the day of the determination, as reported in The
Wall Street Journal or an equivalent source, or if the determination
date is not a trading day, then on the most recent preceding trading
day;
(ii) If the Common Stock is quoted on NASDAQ (but not on the
National Market System) or regularly quoted by a recognized securities
dealer but selling prices are not reported, Fair Market Value shall be
the mean between the high bid and low asked prices for the Common Stock
on the day of the determination, or on the most recent preceding trading
day if the determination date is not a trading day; or
(iii) In the absence of an established market for the Common Stock,
Fair Market Value shall be determined by the Administrator.
(l) "Incentive Stock Option" or "ISO" means an Option intended to
qualify as an "incentive stock option" within the meaning of, and to the
extent otherwise permitted by, Section 422 of the Code.
(m) "Nonstatutory Stock Option" or "NSO" means an Option not intended
to qualify as an ISO.
(n) "Officer" means a person who is an officer of the Company within
the meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.
(o) "Option" means a stock option granted pursuant to this Plan.
(p) "Optioned Stock" means the Common Stock subject to an Option.
(q) "Optionee" means the Employee or Consultant who receives an Option
and includes any person who owns all or any part of an Option, or who is
entitled to exercise an Option, after the death or disability of an
Optionee.
(r) "Parent" means a "parent corporation," present or future, as
defined in Section 424(e) of the Code.
(s) "Plan" means this Amended and Restated 1995 Marvell Technology
Group Ltd. Stock Option Plan.
(t) "Share" means a share of the Common Stock, as adjusted in
accordance with Section 14(a).
(u) "Subsidiary" means a "subsidiary corporation," present or future,
as defined in Section 424(f) of the Code.
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APPENDIX TO THE AMENDED AND
RESTATED 1995 STOCK OPTION PLAN
OF MARVELL TECHNOLOGY GROUP LTD.
IN RESPECT OF ISRAELI EMPLOYEES
1. Purpose
The purpose of this appendix is to modify, to the extent set forth herein,
the Amended and Restated 1995 Marvell Technology Group Ltd. Stock Option Plan
(the "PLAN") in respect of the Israeli employees of Marvell Technology Group
Ltd. and its affiliates and subsidiaries who are eligible to participate in the
Plan in accordance with its terms, in order to reflect the specific requirements
of the Israeli law.
2. Defined Terms
(a) Capitalised terms used but not defined herein shall have the meanings
provided in Section 22 of the Plan.
(b) In addition, in this Appendix, the following terms shall have the
meanings set forth beside them:
"102 Provisions" The provisions of section 102 of the Ordinance and of the
Income Tax Rules (Tax Relief in Allocating Shares to
Employees), 5749-1989, as they shall apply from time to
time on shares and options issued hereunder, including the
Special Conditions;
"Effective Date" The latest of the date the Options were issued or the date
of the Income Tax Commissioner approval that the Plan
satisfies the Special Conditions;
"Employer" The Company, any of its Subsidiaries or its Parent
employing Israeli Employees;
"Israeli Employees" Employees subject to taxation in Israel;
"Trustee" Galileo Technology Ltd., or in the alternate, the Trust
Company of Investek Bank, or any other trustee who shall
replace same by the Board for the purposes of this Plan;
"Ordinance" The Income Tax Ordinance (New Version), 5721-1961;
"Special Conditions" Special conditions set by the Israeli Income Tax
Commissioner in connection with the issuance of the
Options hereunder, by the power vested in him/her under
section 102 of the Ordinance, if and to the extent the
Commissioner shall so set;
"Tax Lockup Period" Two years following the Effective Date or such other
period of time in accordance with the 102 Provisions, as
they shall be amended from time to time.
(c) The Israeli Employees shall be entitled to exercise their options in
accordance with the terms of the Plan, subject to the terms of this Appendix. In
the event of any contradiction between any term of this Appendix and any term of
the Plan, the provisions of this Appendix shall override with respect to the
Israeli Employees, in respect of whom this Appendix shall constitute an integral
part of the Plan and references to the Plan in respect of the Israeli Employees
shall be interpreted accordingly.
3. Special Conditions
(a) The Company shall apply to the Income Tax Commissioner to approve the
Trustee and the Plan under the 102 Provisions. Subject to the approval of this
Plan by the Israeli Income Tax Commissioner, the Special Conditions shall apply
to the plan and to this Appendix.
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(b) The Administrator shall exercise its discretion under the Plan in
accordance with the terms of this Appendix.
4. Eligibility
Options shall not be granted to any Israeli Employee who is, or on giving
effect to such grant, will become, the holder of a controlling interest ("baal
shlita") in the Company, as defined in section 32(9) of the Ordinance.
5. Trust
(a) The Options and the Shares shall be issued directly in the name of the
Trustee and shall be held in escrow by the Trustee for the Israeli Employees'
benefit, for no less then the Tax Lockup Period, all according to the terms of
this Appendix.
(b) In the event that bonus shares shall be issued on account of the
Shares, such bonus shares shall be issued by the Company to the Trustee. The 102
Provisions shall apply to such bonus shares for all purposes.
(c) The Trustee shall be entitled to set additional exercise procedures to
those described in the Plan, as the Trustee shall see fit, provided that the
Trustee has given the Company prior written notice of any such procedures.
6. Taxes
(a) The Israeli Employees shall be taxed in respect of the Options in
accordance with the provisions of the Ordinance, including the 102 Provisions.
The Israeli Employee will not be entitled to the exemption from tax contained in
sections 95 or 97(a) of the Ordinance.
(b) Without derogating from section 9(g) of the Plan, any tax imposed in
respect of the Options and/or the Shares and/or the sale and/or the transfer of
the Options and/or the Shares shall be borne solely by the Israeli Employee, and
in the event of the death of the Israeli Employee, by the Israeli Employee's
heirs or successors. The Employer, shall not bear the aforementioned taxes,
directly or indirectly, nor shall the Employer be required to gross such tax up
in the Israeli Employee's salaries or remuneration. The imposed tax shall be
paid by the Israeli Employee or deducted, on the date such tax is payable, from
the sale consideration paid to the Trustee by the Israeli Employee, as
applicable.
(c) At the end of the Tax Lockup Period, the Israeli Employee (or the
Israeli Employee's heirs or successors) shall be entitled at any time to
instruct the Trustee to transfer the Options or the Shares to which such Israeli
Employee is entitled to the Israeli Employee or its nominees, or, if
appropriate, to sell the Shares and pay the consideration received to the
Israeli Employee.
Subject to the 102 Provisions, the Trustee shall not transfer the Options
and/or the Shares to the Israeli Employee's name, and shall not transfer the
consideration received from the sale of the Shares to the Israeli Employee,
unless one of the following conditions shall be fulfilled:
(i) The Israeli Employee has provided the Trustee with certification
from the assessing officer that the tax has been paid; or
(ii) The Israeli Employee has paid the Trustee an amount equal to 30%
of the "consideration", as defined in section 102 of the Ordinance (the
"Taxable Consideration") for such sale, and the Trustee has reviewed the
manner of calculating the payable amount and is fully satisfied that the
calculation was performed lawfully; or
(iii) The Trustee has deducted an amount equal to 30% of the Taxable
Consideration from the consideration received from the sale of the Shares.
(d) The effects of any future amendment to the tax arrangements which apply
to the issuance of securities to the Israeli Employees, shall apply to the
Israeli Employees in accordance with such provisions of
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law, and the Israeli Employees shall bear the full cost thereof, unless the
modified arrangement expressly provides otherwise.
(e) Each Israeli Employee shall indemnify the Employer and/or the Trustee,
immediately upon receipt of notice from the Employer and/or the Trustee, for any
amount (including interest and/or fines of any type and/or linkage differentials
in respect of tax and/or withheld tax) payable by such Israeli Employee under
law (including under the 102 Provisions), and which has been paid by the
Employer or the Trustee or which the Employer or the Trustee are required to pay
by the tax authorities.
(f) Should the Israeli Amendment of Tax Law Bill 2000 (or any other
substantially similar draft legislation) (the "NEW LAW") enter into effect, the
Board shall be entitled, at its absolute discretion, to order the Trustee to
make an application to the Israeli Tax Commission in order to request that the
provisions set out in the New Law, which replace the 102 Provisions, shall apply
to the Israeli Employees, regarding either existing or future allotments, as
shall be determined in the New Law.
7. Miscellaneous
(a) The Israeli Employees shall sign any document required by the Trustee
or the Income Tax Commission to give effect to the provisions of this Appendix.
(b) Without derogating section 20 of the Plan, it is hereby acknowledged
that the Options and/or the Exercise Shares are extraordinary, one-off benefits
granted to the Offerees, and are not and shall not be deemed a salary component
for any purpose whatsoever, including in connection with calculating severance
compensation under the Severance Pay Law, 5723-1963 and the regulations
promulgated thereunder.
(c) The grant of Options to each Israeli Employee shall be made in
consideration of a waiver on the part of such Israeli Employee of a portion of
the Israeli Employee's salary in the amount of NIS 1.
(d) In the event of a change in control of the Company is proposed during
the Tax Lock Up Period, the consummation which will cause the breach of the
terms of the 102 Provisions, the Company will use its best efforts to apply to
the Israeli Tax Authorities to obtain a pre-ruling to regulate the tax treatment
applicable to the Options in the context of the proposed transaction.
(e) Except as expressly provided in this Appendix, the provisions of this
Appendix do not supercede any provisions of the Plan, and the provisions of the
Plan shall govern all Options granted to Israeli Employees.
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APPENDIX C
MARVELL TECHNOLOGY GROUP LTD.
AMENDED AUDIT COMMITTEE CHARTER
PURPOSE
The primary purpose of the Audit Committee (the "Committee") is to assist
the Board of Directors (the "Board") of Marvell Technology Group Ltd. (the
"Company") in fulfilling its responsibility to oversee management's conduct of
the Company's financial reporting process, including by overviewing the
financial reports and other financial information provided by the Company to its
shareholders, the Company's systems of internal accounting and financial
controls and the annual independent audit of the Company's financial statements.
In discharging its oversight role, the Committee is empowered to
investigate any matter brought to its attention with full access to all books,
records, facilities and personnel of the Company and the power to retain outside
counsel, auditors or other experts for this purpose. The Board and the Committee
are in place to represent the Company's shareholders; accordingly, the outside
auditor is ultimately accountable to the Board and the Committee.
The Committee shall review the adequacy of this Charter on an annual basis.
MEMBERSHIP AND MEETINGS
The Committee shall be comprised of not less than three non-employee
members of the Board. The Board shall designate a chairman of the Committee. The
Committee's composition will meet the requirements of the Audit Committee Policy
of the NASDAQ.
Accordingly, all of the members will be directors who:
- Have no relationship to the Company that may interfere with the exercise
of their independence from management and the Company; and
- Are financially literate or who become financially literate within a
reasonable period of time after appointment to the Committee. In
addition, at least one member of the Committee will have accounting or
related financial management expertise.
The Committee shall meet at least four times annually or more frequently as
the committee may deem appropriate.
KEY RESPONSIBILITIES
The Committee's job is one of oversight and it recognizes that the
Company's management is responsible for preparing the Company's financial
statements and that the independent auditors are responsible for auditing those
financial statements. Additionally, the Committee recognizes that financial
management including any internal audit staff, as well as the outside auditors,
have more time, knowledge and more detailed information about the Company than
do Committee members; consequently, in carrying out its oversight
responsibilities, the Committee is not providing any expert or special assurance
as to the Company's financial statements or any professional certification as to
the outside auditor's work.
The following functions shall be the common recurring activities of the
Committee in carrying out its oversight function. These functions are set forth
as a guide with the understanding that the Committee may diverge from this guide
as appropriate given the circumstances.
- Review and discuss with management and the independent auditors the
audited financial statements to be included in the Company's Annual
Report on Form 10-K (or the Annual Report to Shareholders if distributed
prior to the filing of Form 10-K), and review and consider with the
outside auditors the matters required to be discussed by Statement of
Auditing Standards ("SAS") No. 61.
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- Review with the outside auditors the Company's interim financial results
to be included in the Company's quarterly reports to be filed with
Securities and Exchange Commission and the matters required to be
discussed by SAS No. 61; this review will occur prior to the Company's
filing of the Form 10-Q.
- Discuss with management and the outside auditors the quality and adequacy
of the Company's internal controls.
- The audit committee shall review the independence and performance of the
auditors. With respect to the independence of the independent auditors,
the Committee shall:
- Request from the outside auditors annually, a formal written statement
delineating all relationships between the auditor and the Company
consistent with Independence Standards Board Standard Number 1;
- Discuss with the outside auditors any such disclosed relationships and
their impact on the outside auditor's independence; and
- Recommend that the Board take appropriate action to oversee the
independence of the outside auditor.
- The Committee, subject to any action that may be taken by the full Board,
shall have the ultimate authority and responsibility to select (or
nominate for shareholder approval), evaluate and, where appropriate,
replace the outside auditor.
OTHER MATTERS
The Committee shall prepare such reports as are required by the Securities
and Exchange Commission for inclusion in the Company's annual proxy statement
and maintain minutes of its meetings.
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78
THE ANNUAL GENERAL MEETING OF SHAREHOLDERS
OF
MARVELL TECHNOLOGY GROUP LTD.
WILL BE HELD AT THE OFFICES OF
MARVELL SEMICONDUCTOR, INC.
525 ALMANOR AVENUE
SUNNYVALE, CALIFORNIA 94085
ON
THURSDAY, JUNE 21, 2001
AT 10:00 A.M., LOCAL TIME
DIRECTIONS:
FROM SAN FRANCISCO AIRPORT: Take the 101 South. Take the Mathilda Avenue exit
towards Sunnyvale. Turn right onto Almanor. (approximate time 30 minutes)
FROM SAN JOSE AIRPORT: Take the 101 North. Take the Mathilda Avenue South exit
towards Sunnyvale. Turn right onto Almanor. (approximate time 15 minutes)
79
THE ANNUAL GENERAL MEETING OF SHAREHOLDERS
OF
MARVELL TECHNOLOGY GROUP LTD.
WILL BE HELD AT:
Marvell Semiconductor, Inc.
525 Almanor Avenue
Sunnyvale, California 94085
Thursday, June 21, 2001
10:00 a.m., Local Time
For your vote to count, your proxy card must be received at least two hours
prior to the Annual General Meeting at the address set forth on the reverse
hereof. Regardless of the number of shares you own or whether you plan to attend
the meeting, it is important that your shares be represented and voted. Please
complete, sign, date and return this proxy card. Returning this proxy card does
NOT deprive you of your right to attend the Annual General Meeting and to vote
your shares in person.
X FOLD AND DETACH HERE X
................................................................................
MARVELL TECHNOLOGY GROUP LTD.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
THE COMPANY FOR THE ANNUAL GENERAL MEETING ON JUNE 21, 2001
The undersigned, a shareholder of MARVELL TECHNOLOGY GROUP LTD., a Bermuda
corporation ("Marvell"), acknowledges receipt of a copy of the Notice of Annual
General Meeting of Shareholders of Marvell and the accompanying Proxy Statement
and Marvell's Annual Report on Form 10-K for the year ended January 27, 2001;
and, revoking any proxy previously given, hereby constitutes and appoints Sehat
Sutardja and George Hervey, and each of them, his, her or its true and lawful
agents and proxies with full power of substitution in each, to vote the shares
of common stock of Marvell standing in the name of the undersigned at the Annual
General Meeting of Shareholders of Marvell to be held on Thursday, June 21, 2001
at 10:00 a.m., local time, and at any adjournment thereof, on all matters coming
before such meeting as set forth on the reverse hereof or, to the extent no such
instruction is given, as set forth herein, and authorizes each of the
undersigned's lawful agents and proxies to vote in his discretion on such other
business as may properly come before the meeting or any adjournment or
postponement thereof.
PLEASE COMPLETE, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
YOUR VOTE IS VERY IMPORTANT.
SEE REVERSE
SIDE
80
MARVELL TECHNOLOGY GROUP LTD.
PROXY VOTING INSTRUCTION CARD
Dear Marvell Shareholder:
Your vote is important. Please consider the proposals discussed in
Marvell's enclosed Proxy Statement and cast your vote by:
- Completing, dating, signing and mailing the proxy card in the enclosed
postage-paid envelope; or
- Sending the proxy card, if the envelope is missing, to:
Marvell Technology Group Ltd.
c/o First Union National Bank
Attn: Proxy Tabulation NC-1153
P.O. Box 217950
Charlotte, NC 28254-3555
If you receive more than one set of proxy materials from Marvell, please
act promptly on each set you receive because each set represents separate
shares. If you return multiple cards, you may use the same return envelope.
Please indicate if you plan to attend the meeting in the box provided. If you
wish to revoke your proxy you may do so at any time before your proxy is voted
at the Annual General Meeting. You can do this in one of three ways:
(1) you can send a written notice stating that you want to revoke your
proxy;
(2) you can complete and submit a new proxy card; or
(3) you can attend the Annual General Meeting and vote in person.
You must submit your notice of revocation or a new proxy card to Marvell at
the address set forth above. Your notice of revocation must be received at least
two hours prior to the Annual General Meeting.
- FOLD AND DETACH HERE -
--------------------------------------------------------------------------------
[X] Please mark your votes as in this example.
-----------------------------------------------------------------------------------------------------------------------
UNLESS OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED FOR EACH OF THE NOMINEES
FOR DIRECTOR AND EACH PROPOSAL OF MARVELL LISTED BELOW.
-----------------------------------------------------------------------------------------------------------------------
1. Election of Nominees: 2. Approval of Marvell's 3. Approval of Marvell's 4. Re-appointment of
four directors 1. Manuel Alba Second Amended and Amended and Restated PricewaterhouseCoopers
2. John M. Cioffi Restated Bye-Laws 1995 Stock Option Plan LLP as the independent
3. Paul R. Gray auditors of Marvell
4. Avigdor Willenz for Marvell's 2002
fiscal year and
authorization for the
Board of Directors of
Marvell to fix the
auditor's remuneration
FOR all Nominees listed WITHHOLD authority for fiscal 2002
(except as marked to to vote for
the contrary below) all nominees FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
To withhold authority to vote for any
nominee(s), write the name(s) of such
nominee(s) in the space provided below.
---------------------------------------
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[ ] I plan on attending the meeting.
This proxy must be signed exactly as
the shareholder name appears hereon.
In the case of joint ownership, any
owner may sign but the vote of a
senior shareholder who tenders a vote,
in person or by proxy, will be
accepted to the exclusion of the other
owners. Seniority is determined by the
order in which the names stand in the
Register of Shareholders. Executors,
administrators, trustees, etc., should
give their full title, as such. If the
shareholder is a corporation, a duly
authorized officer should sign on
behalf of the corporation and should
indicate his or her title.
--------------------------------------
--------------------------------------
SIGNATURE(S) DATE