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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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☒
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Definitive Proxy Statement
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Definitive Additional Materials
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☐
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Soliciting Material Pursuant to §240.14a-12
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No fee required.
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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(1)
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Title of each class of securities to which transaction applies:
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(2)
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Aggregate number of securities to which transaction applies:
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(3)
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
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(4)
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Proposed maximum aggregate value of transaction:
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(5)
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Total fee paid:
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☐
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
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(1)
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Amount Previously Paid:
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(2)
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Form, Schedule or Registration Statement No.:
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(3)
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Filing Party:
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(4)
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Date Filed:
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Date:
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Monday, March 30, 2020
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Time:
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11:00 a.m. Pacific Time
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Place:
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1320 Ridder Park Drive, San Jose, California 95131
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Items of
business: |
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To elect each of the nine director nominees named in the proxy statement for the next year.
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To ratify the appointment of PricewaterhouseCoopers LLP to serve as our independent registered public accounting firm for the fiscal year ending November 1, 2020.
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To hold an advisory vote to approve the compensation of our named executive officers.
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To transact any other business as may properly come before the meeting or any postponements or adjournments to the meeting.
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Record date:
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February 6, 2020
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Page
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PROXY STATEMENT SUMMARY
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2020 Annual Meeting of Stockholders
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How to Vote
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Proposals and Board Recommendations
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2020 Director Nominees
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Our Financial Performance
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Executive Compensation
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Corporate Governance
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Stockholder Engagement
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PROPOSAL 1: ELECTION OF DIRECTORS
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Director Nominees
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CORPORATE GOVERNANCE
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Board of Directors
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Board Leadership Structure and Oversight of Risk Management
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Director Independence
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Board Committees
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Director Nominations
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Code of Ethics and Business Conduct
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Corporate Governance Guidelines
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Succession Planning
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Stock Ownership Guidelines
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Compensation Committee Interlocks and Insider Participation
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Stockholder Communications With Our Board
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Forward-Looking Statements
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DIRECTOR COMPENSATION
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Director Compensation Program
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Director Compensation for Fiscal Year 2019
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PROPOSAL 2: RATIFICATION OF APPOINTMENT OF OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
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Principal Accounting Fees and Services
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Audit Committee Pre-Approval of Services Policy
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AUDIT COMMITTEE REPORT
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PROPOSAL 3: NON-BINDING, ADVISORY VOTE TO APPROVE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS
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EXECUTIVE OFFICERS
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COMPENSATION DISCUSSION AND ANALYSIS
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Executive Summary: Fiscal Year 2019 Company Performance and Key Pay Decisions
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Overview of Our Executive Compensation Program
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Compensation Philosophy and Objectives
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Compensation Determination Process
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Compensation Competitive Analysis
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Elements of Executive Compensation
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Additional Compensation Practices and Policies
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COMPENSATION COMMITTEE REPORT
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EXECUTIVE COMPENSATION
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Page
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Fiscal Year 2019 Summary Compensation Table
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Fiscal Year 2019 Supplemental Summary Compensation Data
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Fiscal Year 2019 Grants of Plan-Based Awards Table
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Fiscal Year 2019 Outstanding Equity Awards at Fiscal Year-End Table
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Fiscal Year 2019 Option Exercises and Stock Vested Table
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Severance and Change in Control Agreement with Named Executive Officers; Death and Permanent Disability Policies
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Potential Payments and Benefits upon Certain Terminations of Employment in Connection with a Change in Control
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Potential Payments and Benefits upon Certain Terminations of Employment
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Potential Payments under our Death and Permanent Disabilities Policies
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CEO PAY RATIO
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EQUITY COMPENSATION PLAN INFORMATION
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Plans Approved by Our Stockholders
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Plans Not Approved by Our Stockholders
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STOCKHOLDER INFORMATION
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Security Ownership of Certain Beneficial Owners, Directors and Executive Officers
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Section 16(a) Beneficial Ownership Reporting Compliance
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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
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Related Party Transactions
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Other Relationships
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ADDITIONAL MEETING INFORMATION
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Electronic Delivery of Our Stockholder Communications
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Meeting Attendance and Admission
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Quorum
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Voting Rights
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Voting Procedures
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Voting Revocation
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Board Recommendations, Required Vote and Effects of Abstentions and Broker Non-Votes
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Uninstructed Votes
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Inspector of Election
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Costs of Solicitation
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OTHER INFORMATION
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Householding of Proxy Materials
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Stockholder Proposals and Director Nominations for the 2021 Annual Meeting
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Other Matters
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APPENDIX A – Reconciliation of Non-GAAP Financial Measures
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A-1
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APPENDIX B – Directions to the Annual Meeting
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B-1
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Date
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Monday, March 30, 2020
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Time
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11:00 a.m., Pacific Time
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Place
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Broadcom Inc., 1320 Ridder Park Drive, San Jose, CA 95131
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Record Date
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February 6, 2020
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Internet
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Telephone
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Mail
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Vote your shares online at www.proxyvote.com
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Vote by calling (800) 690-6903
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Complete, sign and date your proxy card and return it in the postage-paid envelope
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Proposal
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Board Recommendation
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Page
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To elect each of the nine director nominees for the next year
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For
each director nominee |
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To ratify the appointment of our independent registered public accounting firm for our fiscal year ending November 1, 2020
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For
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To hold an advisory vote to approve the compensation of our named executive officers
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For
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Name
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Independent
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Committees
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# of Other Public Company Boards
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Audit
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Compensation
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Nominating /
Governance |
Executive
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Hock E. Tan (CEO)
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u
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—
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Henry Samueli, Ph.D. (Chairman of the Board)
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v
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—
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Eddy W. Hartenstein (Lead Independent Director)
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ü
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v
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v
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u
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3
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Diane M. Bryant
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ü
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u
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1
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Gayla J. Delly
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ü
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u
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u
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1
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Raul J. Fernandez
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ü
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u
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u
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1
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Check Kian Low
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ü
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u
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u
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1
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Justine F. Page
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ü
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v
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u
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—
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Harry L. You
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ü
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u
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u
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1
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•
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Continued increase in year-over-year revenue to $22,597 million, an 8% increase over our fiscal year ended November 4, 2018 (“Fiscal Year 2018”).
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Although GAAP operating income decreased $1,691 million to $3,444 million, a 33% decrease over Fiscal Year 2018, our non-GAAP operating income increased $1,505 million to $11,929 million, a 14% increase over Fiscal Year 2018.*
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•
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Net cash provided by operating activities of $9,697 million, a 9% increase over Fiscal Year 2018, and free cash flow of $9,265 million, a 12% increase over Fiscal Year 2018.*
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•
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Our one-year TSR increased to 39.6% for Fiscal Year 2019.
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•
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Our TSR has increased by 24.0% annually on average over the past three years, and by 30.9% annually on average over the past five years.
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Our TSR for all three of these periods have significantly outperformed our peer group median and the S&P 500 Index.
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•
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We have significantly increased our absolute TSR since our initial public offering in 2009 by over 2,085%, with a cumulative TSR increase of 35.1% annually on average.
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Best Practices We Employ
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Practices We Do Not Employ
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ü
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Majority of CEO and other NEO compensation tied to long-term performance
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X
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No excessive risk taking in our incentive plan design
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ü
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Performance metrics are directly tied to value creation for stockholders
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X
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No re-pricing of underwater stock options
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ü
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Caps on cash and equity incentive plan payouts
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X
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No excise tax gross-ups
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“Double trigger” change in control payments and benefits
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X
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No supplemental retirement and pension benefits
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ü
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Engagement of an independent compensation consultant
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X
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No guaranteed bonuses
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ü
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Annual risk assessment of all of our compensation programs
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X
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No perquisites, other than in modest amounts
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ü
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CEO compensation is reviewed and approved by the independent directors
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ü
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Proactive adoption of market standard proxy access provisions
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ü
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Annual election of directors
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Two or more stockholders holding at least 10% of outstanding shares may call special meetings
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ü
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Majority voting for directors in uncontested election
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ü
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Annual say-on-pay vote
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ü
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Separate Chairman and CEO roles, with a Lead Independent Director
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ü
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No supermajority voting requirements for bylaw amendments
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ü
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Strong independent Board, 7 of 9 directors
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ü
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No “poison pill” anti-takeover provisions
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ü
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Annual Board and committee evaluations
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ü
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Anti-hedging and anti-pledging policy for employees and directors
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ü
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Mandatory offer of board resignation at age 75
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Stock ownership guidelines for all executive officers and directors (increased in December 2019)
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Active board refreshment process, resulting in the addition of 4 new directors since 2018
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Members
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Primary Responsibilities
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Meetings in Fiscal Year 2019
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Justine F. Page (Chair)
Gayla J. Delly
Raul J. Fernandez
Harry L. You
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• Oversee the quality and integrity of our financial statements and internal controls
• Determine the appointment, compensation, retention, qualifications and independence of our independent registered public accounting firm
• Conduct an annual performance evaluation of our internal audit function and independent registered public accounting firm
• Oversee our financial and operational risk exposures, including any exposures related to data privacy and information technology systems controls and security, and the steps management takes to monitor, control and report such exposure
• Oversee our compliance with legal and regulatory requirements
• Review related party transactions
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5
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Members
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Primary Responsibilities
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Meetings in Fiscal Year 2019
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Eddy W. Hartenstein (Chair)
Diane M. Bryant
Check Kian Low
Peter J. Marks
Harry L. You
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• Determine our executives’ base and incentive compensation (other than that of our CEO)
• Provide input and recommendations to the independent directors of our Board regarding our CEO’s compensation
• Design (in consultation with management or our Board) and evaluate our compensation plans, policies and programs
• Administer our equity-based plans and approve the terms of equity-based grants pursuant to those plans
• Confirm that our compensation programs do not encourage unnecessary risk taking
• Review and discuss, at least annually, the relationship between risk management policies and practices, business strategy and officers’ compensation
• Establish and periodically review policies concerning perquisite benefits
• Review and approve all employment agreements, severance and change-in-control arrangements and perquisites for officers and other executives, other than the CEO, and make recommendations to our Board regarding such agreements and perquisites with our CEO
• Review and make recommendations to our Board compensation for non-employee directors
• Provide oversight over the Committee’s compensation consultant
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5
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Members
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Primary Responsibilities
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Meetings in Fiscal Year 2019
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Eddy W. Hartenstein (Chair)
Gayla J. Delly
Raul J. Fernandez
Check Kian Low
Peter J. Marks
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• Take a leadership role in shaping our corporate governance policies and procedures and develop recommendations for our Board
• Identify, evaluate and recommend to our Board qualified candidates to become directors and to fill vacancies on the Board
• Assess director independence
• Oversee the annual evaluation of our Board and its committees
• Consider stockholder proposals submitted for consideration at our annual meeting of stockholders
• Periodically assess director continuing education with respect to our business, financial statements, corporate governance and other appropriate subjects
• Periodically review and assess our Corporate Governance Guidelines and recommend changes to our Board
• Review, and periodically report to the Board, on matters of corporate responsibility and sustainability, and our public reporting on these topics.
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4
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Members
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Primary Responsibilities
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Meetings in Fiscal Year 2019
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Henry Samueli, Ph.D. (Chair)
Eddy W. Hartenstein
Justine F. Page
Hock E. Tan
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Review and approve, subject to specified limitations:
• investments, acquisitions, dispositions and capital expenditures;
• new or incremental debt financings or borrowings, or amendments thereto, or refinancings thereof, including convertible debt, bond financing and commercial paper; and
• treasury, cash management and other banking matters.
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—
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Review and provide recommendations to our Board on matters requiring full Board approval, including:
• business opportunities, strategies and proposals, and other strategic matters;
• business plans, annual budgets, targets, operational plans, capital structure and dividend policy;
• proposed transactions that exceed its approval thresholds; and
• efficient organization and management structure of our Company.
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•
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independence from management;
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•
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personal and professional integrity, ethics and values;
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•
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experience as an officer in corporate management;
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•
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experience and expertise in our industry and international business and familiarity with Broadcom;
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•
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experience as a board member of another public company;
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•
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practical and mature business judgment;
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•
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diversity of background and perspective (inclusive of age, ethnicity, experience, gender and race);
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•
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current Board size and composition and the extent to which a candidate would fill a present need on our Board; and
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•
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the other ongoing commitments and obligations of the candidate.
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Aggregate Value*
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Position
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Prior to December 2019
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Effective December 2019
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Non-employee Director
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3x annual cash retainer
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5x annual cash retainer
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CEO
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3x base salary
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6x base salary
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Executive Officer
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1x base salary
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3x base salary
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Annual Fees
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Board membership (payable to all non-employee directors)
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$
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90,000
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Additional amounts, as applicable, payable to:
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Independent Chairperson of the Board
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$
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150,000
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Lead Independent Director
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$
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100,000
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Chairperson of the Audit Committee
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$
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40,000
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Chairperson of the Compensation Committee
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$
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22,500
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Chairperson of the Nominating/Governance Committee
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$
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20,000
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Member of the Audit Committee (other than chairperson)
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$
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15,000
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Member of the Compensation Committee (other than chairperson)
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$
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10,000
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Member of the Nominating/Governance Committee (other than chairperson)
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$
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10,000
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•
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upon appointment to our Board, an initial RSU award using a target value of $220,000, prorated based on the expected portion of a year to be served between the time of such director’s appointment and the anticipated date of our annual meeting of stockholders immediately following the director’s appointment; and, thereafter,
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•
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an annual RSU award using a target value of $220,000, to be granted on the date of each annual meeting of stockholders, subject to the director’s re-election at such meeting.
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Name
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Fees Earned or
Paid in Cash |
Stock
Awards(1) |
Total
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||||
Diane M. Bryant
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$
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75,000
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$
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282,890
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$ 357,890
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Gayla J. Delly
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$
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110,875
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$
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227,602
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$ 338,477
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James C. Diller(2)
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$
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92,000
|
|
—
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$ 92,000
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(3)
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Lewis C. Eggebrecht(2)
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$
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47,500
|
|
—
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$ 47,500
|
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Eddy W. Hartenstein
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$
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214,375
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$
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227,602
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$ 441,977
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Check Kian Low
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$
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104,000
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|
$
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227,602
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$ 331,602
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Donald Macleod(2)
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$
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66,250
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|
—
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$ 66,250
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|
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Peter J. Marks
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$
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108,375
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$
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227,602
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$ 335,977
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Justine F. Page
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$
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65,000
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$
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182,915
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$ 247,915
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Harry L. You
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$
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78,750
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$
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279,657
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$ 358,407
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(1)
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Represents the grant date fair value of RSU awards granted in Fiscal Year 2019, determined in accordance with Accounting Standards Codification Topic Number 718 (“ASC 718”), which is the closing market price of our common stock on the date of grant, reduced by the present value of dividends expected to be paid on our common stock prior to vesting. The amounts shown represent the grant date fair value of an RSU award for 775 shares of common stock granted to the director, other than Ms. Page, on April 1, 2019 following his or her election to our Board. With respect to Ms. Bryant and Mr. You, the amounts also represent the grant date fair value of an initial RSU award of 223 shares of common stock granted on January 11 and January 8, 2019, respectively, in connection with their appointment to our Board. With respect to Ms. Page, the amount represents the grant date fair value of an initial RSU award of 673 shares of common stock granted on June 11, 2019 in connection with her appointment to our Board. The table below shows the aggregate number of shares of common stock underlying RSUs held by our non-employee directors as of November 3, 2019:
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Name
|
Number of Shares Underlying RSUs (#)
|
Diane M. Bryant
|
775
|
Gayla J. Delly
|
775
|
James V. Diller
|
—
|
Lewis C. Eggebrecht
|
—
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Eddy W. Hartenstein
|
775
|
Check Kian Low
|
775
|
Donald Macleod
|
—
|
Peter J. Marks
|
775
|
Justine F. Page
|
673
|
Harry L. You
|
775
|
(2)
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Messrs. Diller, Eggebrecht and Macleod did not stand for re-election and cased to be directors effective April 1, 2019.
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(3)
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At the time Mr. Diller ceased to be a director, he held 119,500 shares of common stock that were issued upon exercise of stock options granted prior to the adoption of ASC 718. Our Board declared dividends of $2.65 per share in each of December 2018 and March 2019. As a result, Mr. Diller received an aggregate of $633,350 dividend payments while serving on our Board in Fiscal Year 2019. These payments were made on the same basis as dividend payments to all other holders of our common stock and do not represent compensation paid to Mr. Diller for service on our Board.
|
|
Fiscal Year 2019
Services to
Broadcom
|
|
Fiscal Year 2018
Services to Broadcom Limited |
||||
|
($ in thousands)
|
||||||
Audit Fees
|
$
|
16,420
|
|
|
$
|
12,933
|
|
Audit-Related Fees
|
592
|
|
|
994
|
|
||
Tax Fees
|
2,984
|
|
|
1,310
|
|
||
All Other Fees
|
229
|
|
|
10
|
|
||
|
|
|
|
||||
Total
|
$
|
20,225
|
|
|
$
|
15,247
|
|
|
|
|
|
•
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the quality and integrity of the Company’s financial statements and internal controls;
|
•
|
the appointment, compensation, retention, qualifications and independence of the Company’s independent registered public accounting firm;
|
•
|
the performance of the Company’s internal audit function and independent registered public accounting firm;
|
•
|
the Company’s compliance with legal and regulatory requirements; and
|
•
|
related party transactions.
|
•
|
Higher quality audit work and accounting advice due to PwC’s institutional knowledge of and familiarity with the Company’s business and operations, accounting policies and financial systems, and internal control framework
|
•
|
Operational efficiencies and a resulting lower fee structure because of PwC’s history and familiarity with the Company’s business
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Name
|
Age
|
Position
|
Biography
|
|
|
|
|
Hock E. Tan
|
68
|
President, Chief Executive Officer and Director
|
Mr. Tan has served as our President and Chief Executive Officer since March 2006. From September 2005 to January 2008, he served as Chairman of the board of directors of IDT. Prior to becoming chairman of IDT, Mr. Tan was the President and Chief Executive Officer of ICS, from June 1999 to September 2005. Prior to ICS, Mr. Tan was Vice President of Finance with Commodore International, Ltd. from 1992 to 1994, and previously held senior management positions with PepsiCo, Inc. and General Motors Corporation. Mr. Tan served as managing director of Pacven Investment, Ltd., a venture capital fund in Singapore from 1988 to 1992, and served as managing director for Hume Industries Ltd. in Malaysia from 1983 to 1988.
|
Thomas H. Krause Jr.
|
42
|
Chief Financial Officer
|
Mr. Krause has served as our Chief Financial Officer since October 2016, and served as our Vice President and acting Chief Financial Officer and principal financial officer from March 2016 to October 2016. Mr. Krause also served as our Vice President, Corporate Development from January 2012 to October 2016. Prior to joining us, he was an independent management consultant representing several public and private technology companies. Mr. Krause previously served as Vice President of Business Development at Techwell, Inc., a mixed-signal fabless semiconductor company, and held various roles with Technology Crossover Ventures and Robertson Stephens.
|
Charlie B. Kawwas, Ph.D.
|
49
|
Senior Vice President and Chief Sales Officer
|
Dr. Kawwas has served as our Senior Vice President and Chief Sales Officer since June 2015 and served as our Senior Vice President, Worldwide Sales from May 2014 to June 2015. Dr. Kawwas served as Senior Vice President of Sales for LSI Corporation (“LSI”) from 2010 to May 2014, when we acquired LSI, having joined LSI in 2007 as Vice President of Marketing through its acquisition of Agere Systems. Prior to joining Agere Systems in 2005, he served as the leader of product line management for optical Ethernet and multiservice edge portfolio at Nortel Networks.
|
Mark D. Brazeal
|
52
|
Chief Legal Officer
|
Mr. Brazeal has served as our Chief Legal Officer since April 2017. Mr. Brazeal is responsible for the legal, governance, compliance and public affairs functions across the company. Prior to his current role, he served as the Chief Legal Officer and Senior Vice President, IP Licensing for SanDisk Corporation, from December 2014 until it was acquired by Western Digital Corporation in 2016. Before joining SanDisk, Mr. Brazeal spent 15 years at Broadcom Corporation in various positions of increasing responsibility, most recently as the Senior Vice President and Senior Deputy General Counsel in charge of all commercial, operational, IP licensing and litigation matters for Broadcom Corporation. Prior to that, Mr. Brazeal was an attorney in the transactional and IP groups at the law firms of Wilson Sonsini Goodrich & Rosati in Palo Alto, CA, Yuasa & Hara in Tokyo, Japan and Howrey & Simon in Washington, D.C. He earned a J.D. and a B.A. in American Government from the University of Virginia.
|
Kirsten M. Spears
|
56
|
Chief Accounting Officer, Vice President and Corporate Controller
|
Ms. Spears has served as our Chief Accounting Officer since March 2016 and as our Vice President and Corporate Controller since May 2014. Prior to our acquisition of LSI, Ms. Spears served as Vice President and Corporate Controller of LSI. She joined LSI in September of 1997 and held a number of management positions in accounting and reporting before becoming the Corporate Controller in 2007. Before joining LSI, Ms. Spears worked for Price Waterhouse LLP in audit; for Raychem Corporation, managing a variety of accounting functions; and for Bank of America, managing branch operations.
|
•
|
Hock E. Tan, President and CEO;
|
•
|
Thomas H. Krause, Jr., CFO;
|
•
|
Charlie B. Kawwas, Ph.D., Senior Vice President and Chief Sales Officer;
|
•
|
Mark D. Brazeal, Chief Legal Officer; and
|
•
|
Bryan T. Ingram, Senior Vice President and General Manager, Wireless Semiconductor Division.
|
•
|
Continued increase in year-over-year revenue to $22,597 million, an 8% increase over Fiscal Year 2018.
|
•
|
Although GAAP operating income decreased $1,691 million to $3,444 million, a 33% decrease over Fiscal Year 2018, our non-GAAP operating income increased $1,505 million to $11,929 million, a 14% increase over Fiscal Year 2018.*
|
•
|
Net cash provided by operating activities of $9,697 million, a 9% increase over Fiscal Year 2018, and free cash flow of $9,265 million, a 12% increase over Fiscal Year 2018.*
|
•
|
Our one-year TSR increased to 39.6% for Fiscal Year 2019.
|
•
|
Our TSR has increased by 24.0% annually on average over the past three years, and by 30.9% annually on average over the past five years.
|
•
|
Our TSR for all three of these periods have significantly outperformed our peer group median and the S&P 500 Index.
|
•
|
We have significantly increased our absolute TSR since our initial public offering in 2009 by over 2,085%, with a cumulative TSR increase of 35.1% annually on average.
|
•
|
Significant transactions occurring during Fiscal Year 2019 included:
|
◦
|
The completion of our acquisition of CA on November 5, 2018, providing us with a diverse set of technology solutions in infrastructure software, enabling us to better serve the needs of the world’s largest enterprises.
|
◦
|
Structuring, negotiating and entering into an agreement to acquire the Symantec Business, an asset carve-out, on August 8, 2019 and successfully completing that acquisition less than three months later on November 4, 2019 (the first day of Fiscal Year 2020). The Symantec Business expands our footprint of mission critical infrastructure software for the Forbes Global 2000.
|
•
|
We continued to focus the scope of our acquired businesses, concentrating on core, mission critical technologies, and successfully divested various non-core CA businesses held for sale during Fiscal Year 2019.
|
•
|
The target attainment levels for the two corporate performance goals - revenue and adjusted non-GAAP operating margin (as defined in “Elements of Executive Compensation – Annual Cash Incentive Bonus Plan” below) - for Fiscal Year 2019 were set by the Compensation Committee at levels significantly above our Fiscal Year 2018 actual performance levels and were designed to significantly enhance stockholder value, be difficult to attain and to require substantial effort to achieve. The divisional or functional performance goals were also set by the Compensation Committee at levels difficult to attain and to require substantial effort on behalf of the division or function, and the NEO in charge of the division or function, to achieve.
|
•
|
Although revenue increased 8% over Fiscal Year 2018, our semiconductor solutions segment was negatively impacted by a broad-based slowdown in demand for semiconductor products worldwide, resulting in our revenue falling significantly below the target performance level and, as a result, in 62% attainment of the corporate performance goals under the APB Plan.
|
•
|
Despite adverse macro-economic and other conditions outside of our control during the year, the Compensation Committee elected not to adjust the challenging performance goals set for our Fiscal Year 2019 APB Plan, which significantly reduced our annual cash incentive bonus payouts for the year.
|
•
|
Nearly all of the divisional or functional performance goals unrelated to revenue met or exceeded target performance levels.
|
•
|
The Compensation Committee, following consideration of our CEO’s recommendations (other than with respect to himself), judiciously applies individual performance multipliers to recognize the extraordinary efforts of our executives despite negative market conditions or exceptional performance with respect to our corporate performance goals or an executive’s division or function results. Economic factors outside of our control, including increased tensions between the U.S. and its trading partners and the slowdown in the semiconductor industry negatively impacted our ability to achieve our corporate performance goals during Fiscal Year 2019. The Compensation Committee carefully assessed individual executives’ performance, including increased revenue year-over-year, despite these macro-economic factors, and the successful integration of CA. As such, our NEOs, other than our CEO, received individual performance multipliers of 100-130%, with those exceeding division or function targets receiving higher multipliers. Our CEO (upon approval of the independent directors), received an individual performance multiplier of 117%, resulting in a payout of 73% of his target bonus.
|
Best Practices We Employ
|
Practices We Do Not Employ
|
||
ü
|
Majority of CEO and other NEO compensation tied to long-term performance
|
X
|
No excessive risk taking in our incentive plan designs
|
ü
|
Performance metrics are directly tied to value creation for stockholders
|
X
|
No re-pricing of underwater stock options
|
ü
|
Caps on cash and equity incentive plan payouts
|
X
|
No excise tax gross-ups
|
ü
|
“Double trigger” change in control payments and benefits
|
X
|
No supplemental retirement or pension benefits
|
ü
|
Engagement of an independent compensation consultant
|
X
|
No guaranteed bonuses
|
ü
|
Annual risk assessment of all of our compensation programs
|
X
|
No perquisites, other than in modest amounts
|
ü
|
CEO compensation is reviewed and approved by the independent directors
|
|
|
•
|
attract qualified, experienced and talented executives in a highly competitive market;
|
•
|
retain, motivate and reward these executives whose skills, knowledge and performance are critical to our on-going success;
|
•
|
encourage our executives to focus on the achievement of our corporate financial and operational performance goals by aligning their APB Plan payout to the achievement of pre-established annual corporate and divisional or functional goals, as well as the individual contributions and performance of each executive; and
|
•
|
align our executives’ interests with those of our stockholders by linking a significant portion of each executive’s target total direct compensation opportunity to returns realizable by our stockholders in the form of PSU awards that are subject to the attainment of pre-established performance-based objectives, and the rest in the form of service-based RSU awards.
|
•
|
senior management succession planning in particular with respect to Mr. Tan;
|
•
|
the structure of our CEO compensation; and
|
•
|
our equity compensation strategy, including our Multi-Year Equity Awards.
|
•
|
current base salary, target APB Plan opportunities (and prior fiscal year payouts), the accumulated value of outstanding and unvested equity awards and other benefits; and
|
•
|
our CEO’s recommendation on compensation and individual performance (other than for himself), the executive’s performance and his or her importance to our Company.
|
•
|
Revenues: comparability across annual revenue, generally 0.5 to 2.0 times that of our Company;
|
•
|
Market capitalization: market capitalizations that generally fall between 0.3 to 3.0 times that of our Company; and
|
•
|
Industry: companies in semiconductor-related and other technology-focused industries having a similar scale.
|
Fiscal Year 2019 Peer Group
|
|||
Applied Materials, Inc.
|
Hewlett Packard Enterprise Company
|
NVIDIA Corporation
|
Texas Instruments, Inc.
|
Booking Holdings
|
Intel Corporation
|
Oracle Corporation
|
Thermo Fisher Scientific, Inc.
|
Cisco Systems, Inc.
|
International Business Machines Corporation
|
PayPal Holdings, Inc.
|
Visa, Inc.
|
Cognizant Technology Solutions Corporation
|
Mastercard, Inc.
|
Qualcomm Inc.
|
Western Digital Corporation
|
DXC Technology Company
|
Micron Technology, Inc.
|
Salesforce.com, Inc.
|
|
|
Percentile
|
Revenue
($mm)(1)
|
Market Capitalization
($mm)(2)
|
Fiscal Year 2019 Peer Group
|
25th
Median 75th |
$ 14,999
$ 20,647 $ 29,328 |
$ 51,822
$103,553 $176,222 |
Broadcom
|
|
$ 20,248
|
$ 93,713
|
|
Rank
|
46%
|
37%
|
•
|
Radford Global Technology Survey;
|
•
|
Radford Global Sales Survey; and
|
•
|
Mercer High Tech Salary Survey (Asia).
|
•
|
base salary;
|
•
|
an annual cash incentive bonus plan;
|
•
|
LTI compensation in the form of equity awards, including a substantial weighting toward PSU awards;
|
•
|
severance and change in control payments and benefits; and
|
•
|
modest perquisites and other personal benefits.
|
NEO
|
Title
|
Base Salary
(USD) Effective
July 1, 2018
|
Base Salary
(USD) Effective
July 1, 2019
|
% Change
|
Hock E. Tan
|
President and Chief Executive Officer
|
$ 1,100,000
|
$ 1,100,000
|
0%
|
Thomas H. Krause Jr.
|
Chief Financial Officer
|
$ 400,000
|
$ 400,000
|
0%
|
Charlie B. Kawwas, Ph.D.
|
Senior Vice President and Chief Sales Officer
|
$ 488,529
|
$ 488,529
|
0%
|
Mark D. Brazeal
|
Chief Legal Officer
|
$ 450,000
|
$ 450,000
|
0%
|
Bryan T. Ingram
|
Senior Vice President and General Manager, Wireless Semiconductor Division
|
$ 592,250
|
$ 592,250
|
0%
|
NEO
|
APB Plan Target Bonus
(as a % of base salary) |
Hock E. Tan
|
150%
|
Thomas H. Krause Jr.
|
75%
|
Charlie B. Kawwas, Ph.D.
|
75%
|
Mark D. Brazeal
|
60%
|
Bryan T. Ingram
|
100%
|
•
|
revenue threshold attainment level set at $23,171 million, target set at $24,390 million and maximum set at $25,610 million; and
|
•
|
adjusted non-GAAP operating income as a percentage of revenue, referred to as “adjusted non-GAAP operating margin,” threshold attainment level set at 52.5%, target set at 53.5% and maximum set at 55.5%.
|
Revenue Performance Goal Attainment
|
||||
Fiscal Year 2018
APB Plan Adjusted Non-GAAP Revenue Achieved
(in millions)
|
Fiscal Year 2019
Revenue Threshold
Attainment Level
(in millions)
|
Fiscal Year 2019
Revenue Target
Attainment Level
(in millions)
|
Fiscal Year 2019 Revenue Maximum
Attainment Level
(in millions)
|
Fiscal Year 2019
Revenue Achieved
(in millions)
|
$20,943
|
$23,171
|
$24,390
|
$25,610
|
$22,597
|
Name
|
Bonus
Target Percent |
Fiscal Year 2019 Bonus Goals
|
Fiscal Year
2019 Bonus Achievement |
Fiscal Year 2019 Payout Amount
in Dollars (USD) and as a Percentage of Base Salary Paid(1) |
||
Hock E. Tan
|
150%
|
Revenue (50%)
|
0%
|
|
|
|
President and Chief
Executive Officer |
|
Adjusted non-GAAP Operating Margin (50%)
|
125%
|
|
|
|
|
Fiscal Year 2019 Attainment
|
62%
|
$ 1,202,281
|
109.3
|
%
|
|
Thomas H. Krause Jr.
|
75%
|
Revenue (25%)
|
0%
|
|
|
|
Chief Financial Officer
|
|
Adjusted non-GAAP Operating Margin (25%)
|
125%
|
|
|
|
|
|
Direct Expenses (50%)(2)
|
120%
|
|
|
|
|
|
Fiscal Year 2019 Attainment
|
91%
|
$ 355,443
|
88.9
|
%
|
Charlie B. Kawwas, Ph.D.
|
75%
|
Revenue (25%)
|
0%
|
|
|
|
Senior Vice President and Chief Sales Officer
|
|
Adjusted non-GAAP Operating Margin (25%)
|
125%
|
|
|
|
|
Product Revenue (15%)
|
0%
|
|
|
||
|
Bookings (12.5%)
|
111%
|
|
|
||
|
|
Design Wins (12.5%)
|
134%
|
|
|
|
|
|
Direct Expenses (10%)(2)
|
120%
|
|
|
|
|
|
Fiscal Year 2019 Attainment
|
74%
|
$ 351,418
|
71.9
|
%
|
Mark D. Brazeal
|
60%
|
Revenue (25%)
|
0%
|
|
|
|
Chief Legal Officer
|
|
Adjusted non-GAAP Operating Margin (25%)
|
125%
|
|
|
|
|
|
Direct Expenses (50%)(2)
|
100%
|
|
|
|
|
|
Fiscal Year 2019 Attainment
|
81%
|
$ 285.436
|
63.4
|
%
|
Bryan T. Ingram
|
100%
|
Revenue (25%)
|
0%
|
|
|
|
Senior Vice President and
General Manager,
Wireless Semiconductor Division (WSD) |
|
Adjusted non-GAAP Operating Margin (25%)
|
125%
|
|
|
|
|
WSD Revenue (25%)
|
0%
|
|
|
||
|
WSD Operating Margin (25%)
|
59%
|
|
|
||
|
Fiscal Year 2019 Attainment
|
46%
|
$ 271,299
|
45.8
|
%
|
•
|
Relative TSR less than the 25th percentile, no shares will be earned for that performance period.
|
•
|
Relative TSR at the 25th percentile, 50% of the target number of shares subject to that performance period will be earned.
|
•
|
Relative TSR at the 50th percentile, 100% of the target number of shares subject to that performance period will be earned.
|
•
|
For the fourth performance period:
|
◦
|
Relative TSR greater than 50th but less than 75th percentile, between 100% and 200% of the total number of the target shares subject to the award will be earned.
|
◦
|
Relative TSR at or greater than 75th percentile, 200% of the total number of the target shares subject to the award will be earned.
|
◦
|
In the aggregate, the maximum payout over four years is 200% of the total target number of shares.
|
•
|
If our absolute TSR for the fourth performance period is negative, maximum payout over four years is 100% of the total target number of shares.
|
•
|
If the Relative TSR is between two of the percentile levels, the number of shares earned will be determined using linear interpolation.
|
Relative TSR
|
TSR Achievement Factor
|
Performance Periods 1, 2 and 3
|
|
At the 50th Percentile of the S&P 500
|
1
|
At the 25th Percentile of the S&P 500
|
0.5
|
Below the 25th Percentile of the S&P 500
|
0
|
Performance Period 4
|
|
At the 75th Percentile of the S&P 500
|
Absolute TSR Negative = 4 less the Prior Achievement Sum
Absolute TSR Neutral or Positive = 8 less the Prior Achievement
Sum |
At the 50th Percentile of the S&P 500
|
4 less the Prior Achievement Sum
|
At the 25th Percentile of the S&P 500
|
Prior Achievement Sum greater than or equal to 1.5 = 0.5
Prior Achievement Sum less than 1.5 = 2 less the Prior
Achievement Sum |
Below the 25th Percentile of the S&P 500
|
0
|
|
January 2019
|
||||||||
|
PSUs
(Maximum Number of Shares)(1)(2)
|
|
Service-Based RSUs
(Number of Shares)(2)
|
||||||
NEO
|
Award 1
|
Award 2
|
Award 3
|
Award 4
|
|
Award 1
|
Award 2
|
Award 3
|
Award 4
|
Thomas H. Krause Jr.
|
20,000
|
20,000
|
20,000
|
20,000
|
|
10,000
|
10,000
|
10,000
|
10,000
|
Charlie B. Kawwas, Ph.D.
|
20,000
|
20,000
|
20,000
|
20,000
|
|
10,000
|
10,000
|
10,000
|
10,000
|
Mark D. Brazeal
|
15,000
|
15,000
|
15,000
|
15,000
|
|
7,500
|
7,500
|
7,500
|
7,500
|
Bryan T. Ingram
|
15,000
|
15,000
|
15,000
|
15,000
|
|
7,500
|
7,500
|
7,500
|
7,500
|
(1)
|
Represents the maximum number of shares of common stock that may be earned. The target number of shares that may be earned is 50% of this amount.
|
(2)
|
The vesting start date for Award 1, Award 2, Award 3 and Award 4 are March 15, 2019, 2020, 2021 and 2022, respectively.
|
Performance Period
|
2017-2018
|
2017-2019
|
|
Relative TSR Attainment
|
57th Percentile
|
67th Percentile
|
|
Percentage of Target Shares Earned
|
100%
|
100%
|
|
Thomas H. Krause, Jr.
|
3,125 shares
|
3,125 shares
|
|
Charlie B. Kawwas, Ph.D.
|
3,125 shares
|
3,125 shares
|
|
Mark D. Brazeal
|
3,125 shares
|
3,125 shares
|
|
Bryan T. Ingram
|
3,125 shares
|
3,125 shares
|
|
|
|
|
Performance Period
|
2018-2019
|
|
|
Relative TSR Attainment
|
71st Percentile
|
|
|
Percentage of Target Shares Earned
|
100%
|
|
|
Thomas H. Krause, Jr.
|
2,000 shares
|
|
|
Charlie B. Kawwas, Ph.D.
|
1,875 shares
|
|
|
Mark D. Brazeal
|
1,675 shares
|
|
|
Bryan T. Ingram
|
1,875 shares
|
|
|
|
|
|
Name and Principal
Positions
|
Fiscal
Year |
Salary
($) |
Bonus
($)
|
Stock
Awards ($)(1) |
Non-Equity
Incentive Plan Compensation ($)(2) |
All Other
Compensation ($) |
Total
($) |
Hock E. Tan
|
2019
|
1,100,000
|
0
|
0
|
1,202,281
|
64,607(3)
|
2,366,888
|
President and Chief
Executive Officer
|
2018
|
1,121,154
|
0
|
0
|
3,855,288
|
66,495
|
5,042,937
|
2017
|
1,100,000
|
0
|
98,322,843
|
3,712,500
|
75,820
|
103,211,163
|
|
|
|
|
|
|
|
|
|
Thomas H. Krause Jr.
|
2019
|
400,000
|
0
|
17,073,150
|
355,443
|
16,800(4)
|
17,845,393
|
Chief Financial Officer
|
2018
|
407,692
|
200,000
|
6,168,190
|
541,042
|
16,500
|
7,333,425
|
|
2017
|
400,000
|
100,000
|
10,101,125
|
520,888
|
16,200
|
11,138,213
|
|
|
|
|
|
|
|
|
Charlie B. Kawwas, Ph.D.
|
2019
|
488,529
|
0
|
17,073,150
|
351,418
|
16,800(4)
|
17,929,897
|
Senior Vice President
and Chief Sales Officer
|
2018
|
497,924
|
200,000
|
5,860,388
|
686,715
|
16,500
|
7,261,527
|
2017
|
488,529
|
0
|
7,322,750
|
672,688
|
16,200
|
8,500,167
|
|
|
|
|
|
|
|
|
|
Mark D. Brazeal
|
2019
|
450,000
|
0
|
12,804,863
|
285,436
|
16,800(4)
|
13,557,099
|
Chief Legal Officer
|
2018
|
458,654
|
100,000
|
4,747,443
|
492,075
|
19,200
|
5,817,372
|
|
2017
|
268,269
|
0
|
5,906,188
|
243,935
|
12,462
|
6,430,854
|
|
|
|
|
|
|
|
|
Bryan T. Ingram
|
2019
|
592,250
|
0
|
12,804,863
|
271,299
|
16,800(4)
|
13,685,212
|
Senior Vice President
and General Manager, Wireless
Semiconductor Division
|
2018
|
603,640
|
0
|
5,860,388
|
1,080,171
|
16,500
|
7,560,699
|
2017
|
592,250
|
0
|
7,322,750
|
1,145,780
|
16,200
|
9,076,980
|
|
|
|
|
|
|
|
|
(1)
|
Represents the grant date fair value of service-based RSU awards and PSU awards, determined in accordance with ASC 718. Although the Multi-Year Equity Awards have four staggered vesting start dates of March 15, 2019, 2020, 2021 and 2022, under ASC 718 we are required to include the grant date fair value of all the Multi-Year Equity Awards in Fiscal Year 2019. As the PSU awards are not subject to performance conditions as defined under ASC 718, the maximum grant date fair values for such awards do not differ from the fair values presented in this table. The amounts in this column do not reflect compensation actually received by the NEOs or the actual value that may be recognized by the NEO. For a discussion of the valuation assumptions used in the calculations, see Note 2 to the Consolidated Financial Statements included in Part II, Item 8 of our 2019 Annual Report filed with the SEC on December 20, 2019.
|
(2)
|
Represents amounts paid under the APB Plan for each fiscal year. Please see the plan description in “Compensation Discussion and Analysis—Elements of Executive Compensation—Annual Cash Incentive Bonus Plan” above.
|
(3)
|
Represents $7,888 in expense reimbursements for travel to Mr. Tan’s residence in Pennsylvania, a $16,800 Section 401(k) employer matching contribution and $39,919 for car service.
|
(4)
|
Represents Section 401(k) employer matching contributions.
|
Name and Principal
Positions
|
Fiscal
Year |
Salary
($) |
Bonus
($)
|
Stock
Awards ($) |
Non-Equity
Incentive Plan Compensation ($) |
All Other
Compensation ($) |
Total
($) |
Hock E. Tan
|
2019
|
1,100,000
|
0
|
0
|
1,202,281
|
64,607
|
2,366,888
|
President and Chief
Executive Officer
|
2018
|
1,121,154
|
0
|
0
|
3,855,288
|
66,495
|
5,042,937
|
2017
|
1,100,000
|
0
|
98,322,843
|
3,712,500
|
75,820
|
103,211,163
|
|
|
|
|
|
|
|
|
|
Thomas H. Krause Jr.
|
2019
|
400,000
|
0
|
4,713,700
|
355,443
|
16,800
|
5,485,943
|
Chief Financial Officer
|
2018
|
407,692
|
200,000
|
6,168,190
|
541,042
|
16,500
|
7,333,425
|
|
2017
|
400,000
|
100,000
|
10,101,125
|
520,888
|
16,200
|
11,138,213
|
|
|
|
|
|
|
|
|
Charlie B. Kawwas, Ph.D.
|
2019
|
488,529
|
0
|
4,713,700
|
351,418
|
16,800
|
5,570,447
|
Senior Vice President
and Chief Sales Officer
|
2018
|
497,924
|
200,000
|
5,860,388
|
686,715
|
16,500
|
7,261,527
|
2017
|
488,529
|
0
|
7,322,750
|
672,688
|
16,200
|
8,500,167
|
|
|
|
|
|
|
|
|
|
Mark D. Brazeal
|
2019
|
450,000
|
0
|
3,535,275
|
285,436
|
16,800
|
4,287,511
|
Chief Legal Officer
|
2018
|
458,654
|
100,000
|
4,747,443
|
492,075
|
19,200
|
5,817,372
|
|
2017
|
268,269
|
0
|
5,906,188
|
243,935
|
12,462
|
6,430,854
|
|
|
|
|
|
|
|
|
Bryan T. Ingram
|
2019
|
592,250
|
0
|
3,535,275
|
271,299
|
16,800
|
4,415,624
|
Senior Vice President
and General Manager, Wireless
Semiconductor Division
|
2018
|
603,640
|
0
|
5,860,388
|
1,080,171
|
16,500
|
7,560,699
|
2017
|
592,250
|
0
|
7,322,750
|
1,145,780
|
16,200
|
9,076,980
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated Future Payouts
Under Non-Equity Incentive Plan Awards(2) |
|
Estimated Future Payouts
Under Equity Incentive Plan Awards |
All Other
Stock Awards: Number of Shares of Stock or Units
(#)(3)
|
Grant
Date Fair Value of Stock and Option Awards ($)(4) |
||||
Name
|
Approval
Date(1) |
Grant
Date(1) |
Vesting Start Date
|
Threshold
($) |
Target
($) |
Maximum
($) |
|
Threshold
(#) |
Target(5)
(#) |
Maximum
(#) |
||
Hock E. Tan
|
|
|
|
206,250
|
1,650,000
|
3,712,500
|
|
|
|
|
|
|
Thomas H. Krause Jr.
|
|
|
|
18,750
|
300,000
|
675,000
|
|
|
|
|
|
|
|
12/4/2018
|
1/15/2019
|
3/15/2019
|
|
|
|
|
1,250
|
10,000
|
20,000
|
|
2,757,600
|
|
12/4/2018
|
1/15/2019
|
3/15/2020
|
|
|
|
|
1,250
|
10,000
|
20,000
|
|
2,631,600
|
|
12/4/2018
|
1/15/2019
|
3/15/2021
|
|
|
|
|
1,250
|
10,000
|
20,000
|
|
2,511,400
|
|
12/4/2018
|
1/15/2019
|
3/15/2022
|
|
|
|
|
1,250
|
10,000
|
20,000
|
|
2,396,750
|
|
12/4/2018
|
1/15/2019
|
3/15/2019
|
|
|
|
|
|
|
|
10,000
|
1,956,100
|
|
12/4/2018
|
1/15/2019
|
3/15/2020
|
|
|
|
|
|
|
|
10,000
|
1,791,500
|
|
12/4/2018
|
1/15/2019
|
3/15/2021
|
|
|
|
|
|
|
|
10,000
|
1,611,200
|
|
12/4/2018
|
1/15/2019
|
3/15/2022
|
|
|
|
|
|
|
|
10,000
|
1,417,000
|
Charlie B. Kawwas, Ph.D.
|
|
|
|
9,160
|
366,397
|
824,393
|
|
|
|
|
|
|
|
12/4/2018
|
1/15/2019
|
3/15/2019
|
|
|
|
|
1,250
|
10,000
|
20,000
|
|
2,757,600
|
|
12/4/2018
|
1/15/2019
|
3/15/2020
|
|
|
|
|
1,250
|
10,000
|
20,000
|
|
2,631,600
|
|
12/4/2018
|
1/15/2019
|
3/15/2021
|
|
|
|
|
1,250
|
10,000
|
20,000
|
|
2,511,400
|
|
12/4/2018
|
1/15/2019
|
3/15/2022
|
|
|
|
|
1,250
|
10,000
|
20,000
|
|
2,396,750
|
|
12/4/2018
|
1/15/2019
|
3/15/2019
|
|
|
|
|
|
|
|
10,000
|
1,956,100
|
|
12/4/2018
|
1/15/2019
|
3/15/2020
|
|
|
|
|
|
|
|
10,000
|
1,791,500
|
|
12/4/2018
|
1/15/2019
|
3/15/2021
|
|
|
|
|
|
|
|
10,000
|
1,611,200
|
|
12/4/2018
|
1/15/2019
|
3/15/2022
|
|
|
|
|
|
|
|
10,000
|
1,417,000
|
Mark D. Brazeal
|
|
|
|
16,875
|
270,000
|
607,500
|
|
|
|
|
|
|
|
12/4/2018
|
1/15/2019
|
3/15/2019
|
|
|
|
|
937
|
7,500
|
15,000
|
|
2,068,200
|
|
12/4/2018
|
1/15/2019
|
3/15/2020
|
|
|
|
|
937
|
7,500
|
15,000
|
|
1,973,700
|
|
12/4/2018
|
1/15/2019
|
3/15/2021
|
|
|
|
|
937
|
7,500
|
15,000
|
|
1,883,550
|
|
12/4/2018
|
1/15/2019
|
3/15/2022
|
|
|
|
|
937
|
7,500
|
15,000
|
|
1,797,563
|
|
12/4/2018
|
1/15/2019
|
3/15/2019
|
|
|
|
|
|
|
|
7,500
|
1,467,075
|
|
12/4/2018
|
1/15/2019
|
3/15/2020
|
|
|
|
|
|
|
|
7,500
|
1,343,625
|
|
12/4/2018
|
1/15/2019
|
3/15/2021
|
|
|
|
|
|
|
|
7,500
|
1,208,400
|
|
12/4/2018
|
1/15/2019
|
3/15/2022
|
|
|
|
|
|
|
|
7,500
|
1,062,750
|
Bryan T. Ingram
|
|
|
|
37,016
|
592,250
|
1,332,563
|
|
|
|
|
|
|
|
12/4/2018
|
1/15/2019
|
3/15/2019
|
|
|
|
|
937
|
7,500
|
15,000
|
|
2,068,200
|
|
12/4/2018
|
1/15/2019
|
3/15/2020
|
|
|
|
|
937
|
7,500
|
15,000
|
|
1,973,700
|
|
12/4/2018
|
1/15/2019
|
3/15/2021
|
|
|
|
|
937
|
7,500
|
15,000
|
|
1,883,550
|
|
12/4/2018
|
1/15/2019
|
3/15/2022
|
|
|
|
|
937
|
7,500
|
15,000
|
|
1,797,563
|
|
12/4/2018
|
1/15/2019
|
3/15/2019
|
|
|
|
|
|
|
|
7,500
|
1,467,075
|
|
12/4/2018
|
1/15/2019
|
3/15/2020
|
|
|
|
|
|
|
|
7,500
|
1,343,625
|
|
12/4/2018
|
1/15/2019
|
3/15/2021
|
|
|
|
|
|
|
|
7,500
|
1,208,400
|
|
12/4/2018
|
1/15/2019
|
3/15/2022
|
|
|
|
|
|
|
|
7,500
|
1,062,750
|
(1)
|
The approval date represents the date on which the award was approved by the Compensation Committee or the independent directors, as applicable. The grant date is the date on which the award became effective.
|
(2)
|
Represents potential payouts under the APB Plan for Fiscal Year 2019. Target bonus amount for Fiscal Year 2019 were as follows: Mr. Tan 150%, Mr. Krause 75%, Dr. Kawwas 75%, Mr. Brazeal 60% and Mr. Ingram 100%, as a percentage of base salary. The threshold amount for Mr. Tan was 12.5% of his target bonus amount, calculated based on the achievement of a single corporate goal at 50% of the target for such goal and with the individual performance multiplier set at target 50%. The threshold amount for each of Messrs. Krause, Brazeal and Ingram was 6.25% of his target bonus amount, calculated based on the achievement of a single corporate or divisional goal at 25% of the target for such goal and with the individual performance multiplier set at target 50%. The threshold amount for Dr. Kawwas was 2.5% of his target bonus amount, calculated based on the achievement of a single corporate or divisional goal at 10% of the target for such goal and with the individual performance multiplier set at target 50%. The maximum bonus payable was 225% of the target bonus amount for Mr. Tan, which assumes maximum (150%) performance for each corporate goal and with the individual performance multiplier set at 150%. The maximum bonus payable was 225% of the target bonus amount for Messrs. Krause, Brazeal and Ingram, and Dr. Kawwas, which assumes maximum (150%) performance for (i) each corporate goal and (ii) each divisional or functional goal and with the maximum individual performance multiplier set at 150%.
|
(3)
|
Represents the four service-based RSU Multi-Year Equity Awards granted in January 2019, which vest at a rate of 25% per year on each anniversary of the applicable vesting start date, subject to the NEO’s continued employment with us through the relevant vesting date. The vesting start dates are March 15, 2019, 2020, 2021 and 2022.
|
(4)
|
Represents the grant date fair value of the equity awards, as determined in accordance with ASC 718. For a discussion of the valuation assumptions used in the calculations, see Note 2 to the Consolidated Financial Statements included in Part II, Item 8 of our 2019 Annual Report filed with the SEC on December 20, 2019.
|
(5)
|
Represents the four PSU Multi-Year Equity Awards granted in January 2019, which will vest at a rate of 25% per year on each anniversary of the applicable vesting start date, subject to the NEO’s continued employment with us through the relevant vesting date and subject to the achievement of specified performance goals over each performance period, as determined by the Compensation Committee within 60 days following the end of each performance period. The Multi-Year Equity Awards have staggered vesting start dates of March 15, 2019, 2020, 2021 and 2022. The performance criteria is based on our Relative TSR over four performance periods beginning on the March 2nd immediately prior to the applicable vesting start date and ending on the immediately following March 1st. The number of shares of common stock that may be earned is capped at one-quarter of the target number of shares of common stock for each of the first three performance periods. In the aggregate, the NEO may earn up to 200% of the total target number of shares of common stock for each PSU award, if during the fourth performance period our Relative TSR is at or above the 75th percentile of the S&P 500 and our absolute TSR is not negative. If the minimum performance criterion is not met, no shares of common stock will be issued and this award will be cancelled.
|
|
|
Option Awards(1)
|
|
Restricted Share Unit Awards(1)
|
|
||||||||||||
Name
|
Grant Date
|
Number of
Securities Underlying Unexercised Options (#) Exercisable |
Number of
Securities Underlying Unexercised Options (#) Unexercisable |
Option
Exercise Price ($) |
Option
Expiration Date |
|
Number of
Shares or Units of Stock that Have Not Vested (#) |
Market
Value of Shares or Units of Stock that Have Not Vested ($)(2) |
Equity
Incentive Plan Awards: Number of Securities Underlying Unearned Units of Stock (#) |
Market
Value of Shares or Units of
Stock that
Have Not Vested ($)(2) |
Multi-Year
Equity Award Vest
Start Date
|
||||||
Hock E. Tan
|
9/13/2013
|
1,229,166
|
|
—
|
|
38.99
|
9/12/2020
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
|
1/2/2014
|
750,000
|
|
—
|
|
52.65
|
1/1/2021
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
|
12/15/2016
|
—
|
|
—
|
|
|
|
|
3,004(3)
|
|
890,956
|
|
—
|
|
—
|
|
|
|
6/15/2017
|
—
|
|
—
|
|
|
|
|
—
|
|
—
|
|
756,000(4)
|
|
224,222,040
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Thomas H. Krause Jr.
|
3/15/2016
|
—
|
|
—
|
|
|
|
|
2,500(3)
|
|
741,475
|
|
—
|
|
—
|
|
|
|
3/15/2016
|
—
|
|
—
|
|
|
|
|
2,500(5)
|
|
741,475
|
|
—
|
|
—
|
|
|
|
11/15/2016
|
—
|
|
—
|
|
|
|
|
5,000(3)
|
|
1,482,950
|
|
—
|
|
—
|
|
|
|
11/15/2016
|
—
|
|
—
|
|
|
|
|
5,000(5)
|
|
1,482,950
|
|
—
|
|
—
|
|
|
|
12/15/2016
|
—
|
|
—
|
|
|
|
|
2,500(3)
|
|
741,475
|
|
—
|
|
—
|
|
|
|
3/15/2017
|
—
|
|
—
|
|
|
|
|
6,250(3)
|
|
1,853,688
|
|
18,750(6)
|
|
5,561,063
|
|
|
|
12/15/2017
|
—
|
|
—
|
|
|
|
|
3,750(3)
|
|
1,112,213
|
|
—
|
|
—
|
|
|
|
3/15/2018
|
—
|
|
—
|
|
|
|
|
6,000(3)
|
|
1,779,540
|
|
14,000(7)
|
|
4,152,260
|
|
|
|
1/15/2019
|
—
|
|
—
|
|
|
|
|
10,000(9)
|
|
2,965,900
|
|
10,000(10)
|
|
2,965,900
|
|
3/15/2019
|
|
1/15/2019
|
—
|
|
—
|
|
|
|
|
10,000(9)
|
|
2,965,900
|
|
10,000(10)
|
|
2,965,900
|
|
3/15/2020
|
|
1/15/2019
|
—
|
|
—
|
|
|
|
|
10,000(9)
|
|
2,965,900
|
|
10,000(10)
|
|
2,965,900
|
|
3/15/2021
|
|
1/15/2019
|
—
|
|
—
|
|
|
|
|
10,000(9)
|
|
2,965,900
|
|
10,000(10)
|
|
2,965,900
|
|
3/15/2022
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Charlie B. Kawwas, Ph.D.
|
6/10/2014
|
20,000
|
|
—
|
|
71.86
|
6/9/2021
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
|
12/15/2015
|
—
|
|
—
|
|
|
|
|
750(3)
|
|
222,443
|
|
—
|
|
—
|
|
|
|
3/15/2016
|
—
|
|
—
|
|
|
|
|
3,750(3)
|
|
1,112,213
|
|
—
|
|
—
|
|
|
|
3/15/2016
|
—
|
|
—
|
|
|
|
|
3,750(5)
|
|
1,112,213
|
|
—
|
|
—
|
|
|
|
12/15/2016
|
—
|
|
—
|
|
|
|
|
2,500(3)
|
|
741,475
|
|
—
|
|
—
|
|
|
|
3/15/2017
|
—
|
|
—
|
|
|
|
|
6,250(3)
|
|
1,853,688
|
|
18,750(6)
|
|
5,561,063
|
|
|
|
12/15/2017
|
—
|
|
—
|
|
|
|
|
3,750(3)
|
|
1,112,213
|
|
—
|
|
—
|
|
|
|
3/15/2018
|
—
|
|
—
|
|
|
|
|
5,625(3)
|
|
1,668,319
|
|
13,125(7)
|
|
3,892,744
|
|
|
|
1/15/2019
|
—
|
|
—
|
|
|
|
|
10,000(9)
|
|
2,965,900
|
|
10,000(10)
|
|
2,965,900
|
|
3/15/2019
|
|
1/15/2019
|
—
|
|
—
|
|
|
|
|
10,000(9)
|
|
2,965,900
|
|
10,000(10)
|
|
2,965,900
|
|
3/15/2020
|
|
1/15/2019
|
—
|
|
—
|
|
|
|
|
10,000(9)
|
|
2,965,900
|
|
10,000(10)
|
|
2,965,900
|
|
3/15/2021
|
|
1/15/2019
|
—
|
|
—
|
|
|
|
|
10,000(9)
|
|
2,965,900
|
|
10,000(10)
|
|
2,965,900
|
|
3/15/2022
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Mark D. Brazeal
|
4/15/2017
|
—
|
|
—
|
|
|
|
|
6,250(3)
|
|
1,853,688
|
|
18,750(8)
|
|
5,561,063
|
|
|
|
12/15/2017
|
—
|
|
—
|
|
|
|
|
2,250(3)
|
|
667,328
|
|
—
|
|
—
|
|
|
|
3/15/2018
|
—
|
|
—
|
|
|
|
|
4,875(3)
|
|
1,445,876
|
|
11,375(7)
|
|
3,373,711
|
|
|
|
1/15/2019
|
—
|
|
—
|
|
|
|
|
7,500(9)
|
|
2,224,425
|
|
7,500(10)
|
|
2,224,425
|
|
3/15/2019
|
|
1/15/2019
|
—
|
|
—
|
|
|
|
|
7,500(9)
|
|
2,224,425
|
|
7,500(10)
|
|
2,224,425
|
|
3/15/2020
|
|
1/15/2019
|
—
|
|
—
|
|
|
|
|
7,500(9)
|
|
2,224,425
|
|
7,500(10)
|
|
2,224,425
|
|
3/15/2021
|
|
1/15/2019
|
—
|
|
—
|
|
|
|
|
7,500(9)
|
|
2,224,425
|
|
7,500(10)
|
|
2,224,425
|
|
3/15/2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards(1)
|
|
Restricted Share Unit Awards(1)
|
|
||||||||||||
Name
|
Grant Date
|
Number of
Securities Underlying Unexercised Options (#) Exercisable |
Number of
Securities Underlying Unexercised Options (#) Unexercisable |
Option
Exercise Price ($) |
Option
Expiration Date |
|
Number of
Shares or Units of Stock that Have Not Vested (#) |
Market
Value of Shares or Units of Stock that Have Not Vested ($)(2) |
Equity
Incentive Plan Awards: Number of Securities Underlying Unearned Units of Stock (#) |
Market
Value of Shares or Units of
Stock that
Have Not Vested ($)(2) |
Multi-Year
Equity Award Vest
Start Date
|
||||||
Bryan T. Ingram
|
12/15/2015
|
—
|
|
—
|
|
|
|
|
1,000(3)
|
|
296,590
|
|
—
|
|
—
|
|
|
|
3/15/2016
|
—
|
|
—
|
|
|
|
|
2,500(3)
|
|
741,475
|
|
—
|
|
—
|
|
|
|
3/15/2016
|
—
|
|
—
|
|
|
|
|
2,500(5)
|
|
741,475
|
|
—
|
|
—
|
|
|
|
12/15/2016
|
—
|
|
—
|
|
|
|
|
2,500(3)
|
|
741,475
|
|
—
|
|
—
|
|
|
|
3/15/2017
|
—
|
|
—
|
|
|
|
|
6,250(3)
|
|
1,853,688
|
|
18,750(6)
|
|
5,561,063
|
|
|
|
12/15/2017
|
—
|
|
—
|
|
|
|
|
3,750(3)
|
|
1,112,213
|
|
—
|
|
—
|
|
|
|
3/15/2018
|
—
|
|
—
|
|
|
|
|
5,625(3)
|
|
1,668,319
|
|
13,125(7)
|
|
3,892,744
|
|
|
|
1/15/2019
|
—
|
|
—
|
|
|
|
|
7,500(9)
|
|
2,224,425
|
|
7,500(10)
|
|
2,224,425
|
|
3/15/2019
|
|
1/15/2019
|
—
|
|
—
|
|
|
|
|
7,500(9)
|
|
2,224,425
|
|
7,500(10)
|
|
2,224,425
|
|
3/15/2020
|
|
1/15/2019
|
—
|
|
—
|
|
|
|
|
7,500(9)
|
|
2,224,425
|
|
7,500(10)
|
|
2,224,425
|
|
3/15/2021
|
|
1/15/2019
|
—
|
|
—
|
|
|
|
|
7,500(9)
|
|
2,224,425
|
|
7,500(10)
|
|
2,224,425
|
|
3/15/2022
|
(1)
|
The awards shown in these columns are awards granted under our 2009 Plan unless otherwise noted.
|
(2)
|
The amounts shown in this column represent the number of shares of common stock that have not vested multiplied by $296.59, the closing price per share of common stock on November 1, 2019, the last trading day of Fiscal Year 2019.
|
(3)
|
Represents service-based RSU awards that vest at a rate of 25% per year on each anniversary of the grant date, subject to the NEO’s continued employment with us through the applicable vesting date.
|
(4)
|
Represents the PSU award granted in Fiscal Year 2017 based on attainment of the maximum performance level, given that the level of performance through November 3, 2019 is tracking at above target. This PSU award vests in two overlapping performance periods, one over a three-year performance period ending in 2020 (“Performance Period #1”) and one over a four-year performance period ending in 2021 (“Performance Period #2,” together with Performance Period #1, the “Performance Periods”), with each commencing on June 15, 2017. The shares of common stock earned at the end of each Performance Period will be fully vested on the last day of each Performance Period, subject to Mr. Tan’s continued employment with us through each such date. The number of shares of common stock earned during a Performance Period will depend on the level of performance achieved based on our Relative TSR and our absolute TSR over the Performance Periods, as determined by the independent directors within 60 days following the end of each Performance Period. Based upon the level of performance achieved, a maximum of 756,000 shares of common stock may be earned under the PSU award. If the minimum performance criterion is not met, no shares of common stock will be issued and this award will be cancelled.
|
(5)
|
Represents PSU awards that are scheduled to vest at the rate of 25% a year on each anniversary of the grant date, subject to the satisfaction of a share price contingency (set at the grant date) and the NEO’s continued employment with us through the applicable vesting date. No shares of common stock will vest until the average closing price per share of our common stock over a 20 consecutive trading day period is equal to or greater than 120% of the fair market value of a share of common stock on the grant date. The share price contingency for this PSU award was met prior to the fourth anniversary of the grant date and therefore all of the shares of common stock subject to the PSU have the potential to vest (assuming continued service). If the share price contingency was not met by the fourth anniversary of the grant date or the time the NEO ceases to provide services to us, the PSUs would not vest and the award would have expired or immediately terminated, as applicable.
|
(6)
|
Represents a PSU award based on attainment of the maximum performance level, given that the level of performance through November 3, 2019 is tracking at above target. The PSU award will vest at a rate of 25% per year on the last day of the performance period, subject to the NEO’s continued employment with us through the applicable vesting date and subject to the achievement of specified performance goals over each performance period, as determined by the Compensation Committee within 60 days following the end of each performance period. The performance criteria is based on our Relative TSR over four performance periods beginning on the grant date and ending on each of March 14 of 2018, 2019, 2020 and 2021. The number of shares of common stock that may be earned is capped at one-quarter of the target number of shares of common stock for each of the first three performance periods. In the aggregate, the NEO may earn up to 200% of the total target number of shares of common stock, if during the fourth performance period our Relative TSR is at or above the 75th percentile of the S&P 500 and our absolute TSR is not negative. If the minimum performance criterion is not met, no shares of common stock will be issued and this award will be cancelled. Our Relative TSR for the first performance period was at the 57th percentile and for the second performance period was at the 67th percentile, and as a result, 25% of the PSU award was earned in Fiscal Year 2018 and Fiscal Year 2019 respectively. The amounts shown in the table reflect the shares that may be earned with respect to the remaining performance periods.
|
(7)
|
Represents a PSU award based on attainment of the maximum performance level, given that the level of performance through November 3, 2019 is tracking at above target. The PSU award will vest at a rate of 25% per year on each anniversary of the grant date, subject to the NEO’s continued employment with us through the applicable vesting date and subject to the achievement of specified performance goals over each performance period, as determined by the Compensation Committee within 60 days following the end of each performance period. The performance criteria is based on our Relative TSR over four performance periods beginning on March 2. 2018 and ending on each of March 1 of 2019, 2020, 2021 and 2022. The number of shares of common stock that may be earned is capped at one-quarter of the target number of shares of common stock for each of the first three performance periods. In the aggregate, the NEO may earn up to 200% of the total target number of shares of common stock, if during the fourth performance period our Relative TSR is at or above the 75th percentile of the S&P 500 and our absolute TSR is not negative. If the minimum performance criterion is not met, no shares of common stock will be issued and this award will be cancelled. Our Relative TSR for the first performance period was at the 71st percentile, and as a result, 25% of the PSU award was earned in Fiscal Year 2019. The amounts shown in the table reflect the shares that may be earned with respect to the remaining performance periods.
|
(8)
|
Represents a PSU award based on attainment of the maximum performance level, given that the level of performance through November 3, 2019 is tracking at above target. The PSU award will vest at a rate of 25% per year on the later of (i) each anniversary of the grant date and (ii) the last day of the performance period, subject to the NEO’s continued employment with us through the applicable vesting date and subject to the achievement of specified performance goals over each performance period, as determined by the Compensation Committee within 60 days following the end of each performance period. The performance criteria is based on our Relative TSR over four performance periods beginning on
|
(9)
|
Represents a service-based RSU Multi-Year Equity Award that will vest at a rate of 25% per year on each anniversary of the applicable vesting start date, subject to the NEO’s continued employment with us through the relevant vesting date. The Multi-Year Equity Awards have staggered vesting start dates of March 15, 2019, 2020, 2021 and 2022.
|
(10)
|
Represents a PSU Multi-Year Equity Award based on attainment of the target performance level, given that the level of performance through November 3, 2019 is tracking below target. The PSU award will vest at a rate of 25% per year on each anniversary of the applicable vesting start date, subject to the NEO’s continued employment with us through the applicable vesting date and subject to the achievement of specified performance goals over each performance period, as determined by the Compensation Committee within 60 days following the end of each performance period. The Multi-Year Equity Awards have staggered vesting start dates of March 15, 2019, 2020, 2021 and 2022. The performance criteria is based on our Relative TSR over four performance periods beginning on the March 2nd immediately prior to the applicable vesting start date and ending on the immediately following March 1st. The number of shares of common stock that may be earned is capped at one-quarter of the target number of shares of common stock for each of the first three performance periods. In the aggregate, the NEO may earn up to 200% of the total target number of shares of common stock for each PSU award, if during the fourth performance period our Relative TSR is at or above the 75th percentile of the S&P 500 and our absolute TSR is not negative. If the minimum performance criterion is not met, no shares of common stock will be issued and this award will be cancelled.
|
|
Option Awards
|
RSU and PSU Awards
|
||
Name
|
Number of Shares
Acquired on Exercise (#) |
Value Realized
on Exercise ($) |
Number of Shares
Acquired on Release (#)(1) |
Value Realized on
Vesting/Release ($) |
Hock E. Tan
|
240,000
|
57,835,743
|
235,071
|
62,495,748
|
Thomas H. Krause Jr.
|
22,500
|
4,388,868
|
27,750
|
7,697,148
|
Charlie B. Kawwas, Ph.D.
|
39,330
|
8,695,268
|
28,250
|
8,085,448
|
Mark D. Brazeal
|
—
|
—
|
10,250
|
3,112,065
|
Bryan T. Ingram
|
—
|
—
|
32,500
|
9,245,140
|
(1)
|
These shares include shares vested under PSU awards granted in Fiscal Year 2017 and Fiscal Year 2018.
|
Name
|
Continued
Base Salary
|
Bonus(1)
|
Health
Benefits
Continuation
Coverage
|
Equity Award
Vesting
Acceleration(2)
|
Hock E. Tan
|
24 months
|
200%
|
—
|
100%
|
Thomas H. Krause, Jr.
|
12 months
|
100%
|
12 months
|
100%
|
Charlie B. Kawwas, Ph.D.
|
12 months
|
100%
|
12 months
|
100%
|
Mark D. Brazeal
|
12 months
|
100%
|
12 months
|
100%
|
(1)
|
Bonus payments are calculated using the lesser of the NEO’s prior year’s actual bonus or prior year’s target bonus.
|
(2)
|
Upon a qualifying termination of a NEO’s employment in connection with a change in control of our Company, the NEO will receive full acceleration of all outstanding service-based equity awards, and acceleration of outstanding performance-based equity awards to the extent (i) the effective price per share paid by the acquirer meets or exceeds any share price contingency applicable to any share-price performance-based awards or (ii) other performance goals have been deemed satisfied, in the discretion of our Board, based on our performance through the date of the change in control, for all other types of performance-based equity awards.
|
Name
|
Continued Base
Salary |
Bonus(1)
|
Health Benefits
Continuation Coverage |
Hock E. Tan
|
12 months
|
100%
|
—
|
Thomas H. Krause, Jr.
|
9 months
|
50%
|
6 months
|
Charlie B. Kawwas, Ph.D.
|
9 months
|
50%
|
6 months
|
Mark D. Brazeal
|
9 months
|
50%
|
6 months
|
(1)
|
Bonus payments are calculated using the lesser of the NEO’s prior year’s actual bonus or prior year’s target bonus.
|
Name
|
Cash Severance Base Salary
($) |
Cash Severance Bonus
($) |
Health Benefits Continuation Coverage
($)(1) |
Value of RSU/PSU
Acceleration ($)(2) |
Total
($) |
|
Hock E. Tan
|
2,200,000
|
3,300,000
|
—
|
77,479,985(3)
|
82,979,985
|
|
Thomas H. Krause Jr.
|
400,000
|
300,000
|
21,996
|
22,075,787(4)
|
22,797,783
|
|
Charlie B. Kawwas, Ph.D.
|
488,529
|
366,397
|
23,557
|
19,772,469(4)
|
20,650,952
|
|
Mark D. Brazeal
|
450,000
|
270,000
|
21,678
|
14,152,682(4)
|
14,894,360
|
|
(1)
|
Represents the cost of our subsidized continued healthcare benefits based on our current costs to provide such coverage.
|
(2)
|
The amounts in this column include, for each service-based RSU award and PSU award subject to a share price contingency that has been met, the number of shares of common stock that would have vested multiplied by $296.59, the closing price per share of common stock on November 1, 2019, the last trading day of Fiscal Year 2019. As of such date, all share price contingencies have been met and the vesting of all such awards would have accelerated in the event of a qualifying termination.
|
(3)
|
This amount includes, for each PSU award for which the applicable performance goals have been deemed satisfied based on our actual performance immediately prior to November 1, 2019, the last trading day of Fiscal Year 2019, that would have accelerated, the number of shares of common stock that would have vested multiplied by $296.59, the closing price per share of common stock on November 1, 2019. As of such date, 258,232 shares of common stock subject to the PSU awards granted in Fiscal Year 2017, would have vested in the event of a qualifying termination.
|
(4)
|
This amount includes, for each PSU award for which the applicable performance goals have been deemed satisfied based on our actual performance immediately prior to November 1, 2019, the last trading day of Fiscal Year 2019, that would have accelerated, the number of shares of common stock that would have vested multiplied by $296.59, the closing price per share of common stock on November 1, 2019. As of such date, the following shares would have vested in the event of a qualifying termination: 12,011 shares subject to the Fiscal Year 2017 PSU awards for each of Messrs. Krause and Brazeal, and Dr. Kawwas, 10,265 shares for Mr. Krause, 9,624 shares for Dr. Kawwas and 8,340 shares for Mr. Brazeal subject to the Fiscal Year 2018 PSU awards, and 8,656 shares for Mr. Krause, 8,656 shares for Dr. Kawwas and 6,492 shares for Mr. Brazeal subject to the Fiscal Year 2019 PSU awards with a vesting start date of March 15, 2019.
|
Name
|
Cash Severance Base Salary
($) |
Cash Severance Bonus
($) |
Health Benefits Continuation Coverage
($)(1) |
Total
($) |
|
Hock E. Tan
|
1,100,000
|
1,650,000
|
—
|
2,750,000
|
|
Thomas H. Krause Jr.
|
300,000
|
150,000
|
10,998
|
460,998
|
|
Charlie B. Kawwas, Ph.D.
|
366,397
|
183,198
|
11,778
|
561,374
|
|
Mark D. Brazeal
|
337,500
|
135,000
|
10,839
|
483,339
|
|
(1)
|
Represents the cost of our subsidized continued healthcare benefits, based on our current costs to provide such coverage.
|
Name
|
Value of RSU/PSU Acceleration
($)(1)(2) |
|
Hock E. Tan
|
113,001,976(3)
|
|
Thomas H. Krause Jr.
|
12,901,665
|
|
Charlie B. Kawwas, Ph.D.
|
10,778,461
|
|
Mark D. Brazeal
|
6,191,316
|
|
(1)
|
The amounts in this column include for each service-based RSU award and PSU award subject to a share price contingency that had been met, the number of shares of common stock that would have vested multiplied by $296.59, the closing price per share of common stock on November 1, 2019, the last trading day of Fiscal Year 2019. As of such date, all share price contingencies had been met and the vesting of all such awards would have accelerated.
|
(2)
|
The amounts in this column do not include accelerations of the PSU awards subject to performance goals based on criteria other than share price contingencies, except as noted below, as these awards are not eligible for acceleration upon death or permanent disability.
|
(3)
|
This amount includes the acceleration of the PSU award granted in Fiscal Year 2017 with respect to 50% of the target number of shares of common stock for each performance period multiplied by $296.59, the closing price per share of our common stock on November 1, 2019, the last trading day of Fiscal Year 2019.
|
•
|
We collected compensation data from our human resources system of record for all employees globally, whether employed on a full-time, part-time, temporary or seasonal basis, as of November 3, 2019.
|
•
|
We annualized the compensation of all permanent full-time and part-time employees who we hired between November 5, 2018 and November 3, 2019. We applied an exchange rate used in our human resources system of record as of November 3, 2019 to convert all international currencies into U.S. dollars.
|
•
|
We used target total direct compensation as of November 3, 2019, as our consistently applied compensation measure. In this context, target total direct compensation means (1) the applicable annual base salary level in effect as of November 3, 2019, (2) the annual incentive cash target amount or commission target amount payable for service in Fiscal Year 2019, and (3) the approved value of the annual equity awards granted during Fiscal Year 2019.
|
Plan Category
|
Number of Shares of Common Stock to be Issued Upon Exercise of Outstanding Options, Warrants and Rights
(a)
|
Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights ($)
(b)(1) |
Number of Shares of Common Stock Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a))
(c)
|
Equity Compensation plans
approved by stockholders
|
15,084,650(2)
|
$ 49.20
|
—
|
Employee stock purchase plans
approved by stockholders
|
|
|
7,116,791
|
Equity compensation plans not
approved by stockholders
|
28,909,131(3)
|
$ 73.60
|
85,017,727(4)(5)
|
Total
|
43,993,781
|
$ 51.83
|
92,134,518(5)
|
(1)
|
Shares of common stock issuable upon vesting of RSU awards have been excluded from the calculation of the weighted average exercise price because they have no exercise price associated with them.
|
(2)
|
Represents 3,926,897 shares of common stock subject to outstanding stock options and 11,157,753 shares of common stock that may be issued upon vesting of outstanding RSU awards and PSU awards (assuming the maximum performance level for PSUs), in each case pursuant to equity awards issued under the 2009 Plan.
|
(3)
|
Represents (i) 475,355 shares of common stock subject to outstanding stock options and 834,543 shares of common stock that may be issued upon the vesting of outstanding RSU awards, all of which were awarded under the LSI Plan, (ii) 27,520,374 shares of common stock that may be issued upon the vesting of outstanding RSU awards and PSU awards (assuming the maximum performance level for PSUs), all of which were awarded under the 2012 Plan, and (iii) and 78,859 shares of common stock that may be issued upon the vesting of outstanding RSU awards granted pursuant to other equity compensation plans and agreements assumed by us in connection with our acquisition of LSI, Broadcom Corporation, Brocade, CA, and other companies that originally established those plans or agreements.
|
(4)
|
Represents shares of common stock available for issuance under the LSI Plan and the 2012 Plan, of which 852,119 shares of common stock and 81,786,822 shares of common stock, respectively, may be used for RSU awards.
|
(5)
|
The 2012 Plan has an automatic annual share renewal provision pursuant to which the aggregate number of shares of common stock available for issuance under the 2012 Plan increases automatically on the first trading day of January each calendar year by 12,195,965 shares of common stock. In accordance with this provision, on January 2, 2020 (the first trading day in January 2020), the number of shares of common stock available for future issuance under the 2012 Plan increased by 12,195,965 shares of common stock, which is not reflected in the table.
|
•
|
each named executive officer;
|
•
|
each of our directors and nominees for director; and
|
•
|
all of our executive officers and directors as a group.
|
|
Shares Beneficially Owned(1)
|
|
Name and Address of Beneficial Owners
|
Number of
Shares Common Stock |
Percentage
of Common Stock |
5% Stockholders:
|
|
|
Capital World Investors(2)
|
46,299,089
|
11.6%
|
333 South Hope Street
|
|
|
Los Angeles, CA 90071
|
|
|
The Vanguard Group(3)
|
32,549,055
|
8.1%
|
100 Vanguard Blvd.
|
|
|
Malvern, PA 19355
|
|
|
Capital International Investors(4)
|
30,981,014
|
7.8%
|
11100 Santa Monica Boulevard
|
|
|
16th Floor
|
|
|
Los Angeles, CA 90025
|
|
|
Capital Research Global Investors(5)
|
28,648,555
|
7.2%
|
333 South Hope Street
|
|
|
Los Angeles, CA 90071
|
|
|
BlackRock, Inc.(6)
|
25,939,870
|
6.5%
|
55 East 52nd Street
|
|
|
New York, NY 10055
|
|
|
Named Executive Officers, Directors and Nominees:
|
|
|
Hock E. Tan(7)
|
1,896,560
|
*
|
Thomas H. Krause, Jr.(8)
|
42,342
|
*
|
Charles B. Kawwas, Ph.D.(9)
|
79,839
|
*
|
Mark D. Brazeal(10)
|
11,309
|
*
|
Bryan T. Ingram(11)
|
32,104
|
*
|
Diane M. Bryant(12)
|
1,030
|
*
|
Gayla J. Delly(13)
|
1,826
|
*
|
Raul J. Fernandez(14)
|
115
|
*
|
Eddy W. Hartenstein(15)
|
35,723
|
*
|
Check Kian Low(16)
|
2,822
|
*
|
Peter J. Marks(17)
|
33,787
|
*
|
Justine F. Page(18)
|
1,913
|
*
|
Henry Samueli, Ph.D.(19)
|
9,688,006
|
2.4%
|
Harry L. You(20)
|
998
|
*
|
All 14 current executive officers and directors as a group(21)
|
11,828,565
|
3.0%
|
*
|
Represents beneficial ownership of less than 1%.
|
(1)
|
Amounts shown in the table above include securities held in the beneficial owner’s name or jointly with others, or in the name of a bank, nominee or trustee for the beneficial owner’s account.
|
(2)
|
Number of shares of common stock is based solely on information reported by Capital World Investors on the Schedule 13G/A filed with the SEC on February 14, 2020, reporting ownership as of December 31, 2019. According to such Schedule 13G/A, Capital World Investors has sole dispositive power over these shares and sole voting power over 46,184,805 of these shares. Ownership percentage assumes the stockholder continued to own the number of shares reflected in the table above on February 6, 2020.
|
(3)
|
Number of shares of common stock is based solely on information reported by The Vanguard Group on the Schedule 13G/A filed with the SEC on February 12, 2020, reporting ownership as of December 31, 2019. According to such Schedule 13G/A. The Vanguard Group has sole voting power over 613,208 of these shares, sole dispositive power over 31,863,352 of these shares, shared voting power over 110,350 of these shares and shared dispositive power over 685,703 of these shares. Ownership percentage assumes the stockholder continued to own the number of shares reflected in the table above on February 6, 2020.
|
(4)
|
Number of shares of common stock is based solely on information reported by Capital International Investors on the Schedule 13G/A filed with the SEC on February 14, 2020, reporting ownership as of December 31, 2019. According to such Schedule 13G/A, Capital International Investors has sole dispositive power over these shares and sole voting power over 30,710,046 of these shares. Ownership percentage assumes the stockholder continued to own the number of shares reflected in the table above on February 6, 2020.
|
(5)
|
Number of shares of common stock is based solely on information reported by Capital Research Global Investors on the Schedule 13G/A filed with the SEC on February 14, 2020, reporting ownership as of December 31, 2019. According to such Schedule 13G/A, Capital Research Global Investors has sole dispositive power over these shares and sole voting power over 28,648,155 of these shares. Ownership percentage assumes the stockholder continued to own the number of shares reflected in the table above on February 6, 2020.
|
(6)
|
Number of shares of common stock is based solely on information reported by BlackRock, Inc. on the Schedule 13G/A filed with the SEC on February 10, 2020, reporting ownership as of December 31, 2019. According to such Schedule 13G/A, BlackRock, Inc. has sole dispositive power over these shares and sole voting power over 22,789,349 of these shares. Ownership percentage assumes the stockholder continued to own the number of shares reflected in the table above on February 6, 2020.
|
(7)
|
Shares shown in the table above include 1,728,020 shares that Mr. Tan has the right to acquire within 60 days after February 6, 2020 upon the exercise of stock options.
|
(8)
|
Shares shown in the table above include 12,625 shares that Mr. Krause has the right to acquire within 60 days after February 6, 2020 upon the vesting of RSUs. These shares do not include any shares that may be earned pursuant to PSU awards for the performance periods ending March 1 and 14, 2020.
|
(9)
|
Shares shown in the table above include 20,000 shares and 15,000 shares that Dr. Kawwas has the right to acquire within 60 days after February 6, 2020 upon the exercise of stock options and the vesting of RSUs, respectively. These shares do not include any shares that may be earned pursuant to PSU awards for the performance periods ending March 1 and 14, 2020.
|
(10)
|
Shares shown in the table above include 3,500 shares that Mr. Brazeal has the right to acquire within 60 days after February 6, 2020 upon the vesting of RSUs. These shares do not include any shares that may be earned pursuant to PSU awards for the performance periods ending March 1 and 14, 2020.
|
(11)
|
Shares shown in the table above consist of (i) 20,229 shares, based on information provided by Mr. Ingram on November 18, 2019, and (ii) 11,875 shares that Mr. Ingram has the right to acquire within 60 days after February 6, 2020 upon the vesting of RSUs. These shares do not include any shares that may be earned pursuant to PSU awards for the performance periods ending March 1 and 14, 2020.
|
(12)
|
Shares shown in the table above include 32 shares held by the The Diane M. Bryant Trust u/a/d 11/08/17 and 775 shares that Ms. Bryant has the right to acquire within 60 days after February 6, 2020 upon the vesting of RSUs.
|
(13)
|
Shares shown in the table above include 775 shares that Ms. Delly has the right to acquire within 60 days after February 6, 2020 upon the vesting of RSUs.
|
(14)
|
Shares shown in the table above include 115 shares that Mr. Fernandez has the right to acquire within 60 days after February 6, 2020 upon the vesting of RSUs.
|
(15)
|
Shares shown in the table above include 32,188 shares held by The Hartenstein Family Trust and 775 shares that Mr. Hartenstein has the right to acquire within 60 days after February 6, 2020 upon the vesting of RSUs.
|
(16)
|
Shares shown in the table above include 775 shares that Mr. Low has the right to acquire within 60 days after February 6, 2020 upon the vesting of RSUs.
|
(17)
|
Shares shown in the table above include 775 shares that Mr. Marks has the right to acquire within 60 days after February 6, 2020 upon the vesting of RSUs.
|
(18)
|
Shares shown in the table above include 673 shares that Ms. Page has the right to acquire within 60 days after February 6, 2020 upon the vesting of RSUs.
|
(19)
|
The shares in the table include 7,019 shares that Dr. Samueli has the right to acquire within 60 days after February 6, 2020 upon the vesting of RSUs, but does not include any shares that may be earned pursuant to PSU awards for the performance periods ending March 1 and 14, 2020. Shares in the table also include (i) 5,752,978 shares held by HS Portfolio L.P., (ii) 399,918 shares held by HS Management, L.P., (iii) 459,690 shares held by H&S Portfolio II L.P., (iv) 2,815,759 shares held by H&S Investments I L.P., and (v) 1,860 shares held by H&S Ventures LLC. Dr. Samueli disclaims beneficial ownership of the shares held by HS Management, L.P., HS Portfolio L.P., H&S Portfolio II, L.P and H&S Investments I, L.P. (collectively, the “H&S Partnerships”) and H&S Ventures LLC, except to the extent of his pecuniary interest therein. H&S Ventures LLC is the general partner of the H&S Partnerships. As the indirect owner of H&S Ventures LLC, Dr. Samueli has sole dispositive and voting power over the shares held by the H&S Partnerships and H&S Ventures LLC.
|
(20)
|
Shares shown in the table above include 775 shares that Mr. You has the right to acquire within 60 days after February 6, 2020 upon the vesting of RSUs.
|
(21)
|
Shares shown in the table above include 1,763,770 shares and 52,270 shares that directors and executive officers have the right to acquire within 60 days after February 6, 2020 upon the exercise of stock options and the vesting of RSUs, respectively. These shares do not include any shares that may be earned by our executive officers pursuant to their respective PSU awards for the performance periods ending March 1 and 14, 2020.
|
•
|
the amount involved exceeded or will exceed $120,000; and
|
•
|
any director, nominee, executive officer, holder of more than 5% of our common stock, or any member of their immediate family had or will have a direct or indirect material interest.
|
When:
|
March 30, 2020
|
Time:
|
11:00 a.m. Pacific Time
|
Where:
|
1320 Ridder Park Drive
San Jose, California 95131 |
Record Date:
|
February 6, 2020
|
•
|
the Internet Notice;
|
•
|
a proxy card;
|
•
|
a voting instruction card;
|
•
|
a brokerage statement or letter from a broker, bank or other nominee indicating ownership as of the Record Date; or
|
•
|
a legal proxy provided by your broker, bank or other nominee.
|
•
|
Internet: vote your shares at www.proxyvote.com.
|
•
|
Telephone: call (800) 690-6903.
|
•
|
Mail: complete, sign and date your proxy card and return it in the postage-paid envelope. You cannot vote by marking the Internet Notice and returning it.
|
•
|
At the Annual Meeting: The method or timing of your vote will not limit your right to vote in person at the Annual Meeting. However, if your shares are held in the name of a broker, bank or other nominee, you must obtain a legal proxy, executed in your favor, from the holder of record to be able to vote at the Annual Meeting. You should allow yourself enough time prior to the Annual Meeting to obtain this proxy from the holder of record.
|
•
|
by submitting a duly executed proxy card bearing a later date;
|
•
|
by granting a subsequent proxy over the Internet or by telephone;
|
•
|
by giving written notice of revocation to the Secretary of Broadcom prior to or at the Annual Meeting; or
|
•
|
by voting in person at the Annual Meeting.
|
Proposal
|
Voting Options
|
Board Recommendation
|
Vote Required
|
Effect of Abstentions
|
Effect of Broker Non-Votes
|
To elect each of the nine director nominees named for the next year
|
For
Against Abstain |
For each nominee
|
Affirmative vote of a majority of votes cast
|
None
|
None
|
To ratify the appointment of PwC to serve as our independent auditors
|
For
Against Abstain |
For
|
Affirmative vote of a majority of votes represented at the Annual Meeting and entitled to vote
|
Against
|
Broker has discretion to vote
|
To hold an advisory vote to approve compensation of our named executive officers
|
For
Against Abstain |
For
|
Affirmative vote of a majority of votes represented at the Annual Meeting and entitled to vote
|
Against
|
None
|
•
|
By Internet: www.proxyvote.com
|
•
|
By telephone: (800) 579-1639
|
•
|
By email: sendmaterial@proxyvote.com
|
•
|
By Mail: Broadcom Inc., 1320 Ridder Park Drive, San Jose, California 95131, Attention: Secretary
|
•
|
By Email: compliance.officer@broadcom.com
|
|
|
|
|||||||
|
|
Fiscal Year Ended
|
|||||||
|
|
November 3,
2019
|
|
November 4,
2018
|
|
October 29,
2017
|
|||
|
|
(in millions)
|
|||||||
Operating income on GAAP basis
|
$
|
3,444
|
|
$
|
5,135
|
|
$
|
2,371
|
|
Acquisition-related purchase accounting revenue adjustment (1)
|
|
—
|
|
|
14
|
|
29
|
||
Purchase accounting effect on inventory
|
|
—
|
|
|
70
|
|
4
|
||
Amortization of acquisition-related intangible assets
|
|
5,212
|
|
|
3,545
|
|
4,275
|
||
Stock-based compensation expense
|
|
2,185
|
|
|
1,227
|
|
920
|
||
Restructuring, impairment and disposal charges
|
|
813
|
|
|
239
|
|
180
|
||
Litigation settlements
|
|
—
|
|
|
14
|
|
122
|
||
Acquisition-related costs
|
|
275
|
|
|
180
|
|
98
|
||
Operating income on non-GAAP basis
|
$
|
11,929
|
|
$
|
10,424
|
|
$
|
7,999
|
|
|
|
|
|
|
|
|
|||
Operating income on non-GAAP basis
|
|
11,929
|
|
|
|
|
|
||
Provisions or accruals for anticipated payouts under APB Plan
|
|
374
|
|
|
|
|
|
||
Adjusted Operating income on non-GAAP basis
|
$
|
12,303
|
|
|
|
|
|
||
Net cash provided by operating activities
|
$
|
9,697
|
|
$
|
8,880
|
|
$
|
6,551
|
|
Purchases of property, plant and equipment
|
|
(432)
|
|
(635)
|
|
(1,069)
|
|||
Free cash flow
|
$
|
9,265
|
|
$
|
8,245
|
|
$
|
5,482
|
|
1.
|
Take Brokaw Road exit and turn right onto Brokaw Road and move into the left lane.
|
2.
|
Turn left onto Ridder Park Drive.
|
3.
|
Turn into the Broadcom campus, which is the second building on the right, at the main entrance sign.
|
1.
|
Exit onto US-880 North.
|
2.
|
Take Brokaw Road exit and turn right onto Brokaw Road and move into the left lane.
|
3.
|
Turn left onto Ridder Park Drive.
|
4.
|
Turn into the Broadcom campus, which is the second building on the right, at the main entrance sign.
|
1.
|
Take Brokaw Road exit and turn right onto Brokaw Road and move into the left lane.
|
2.
|
Turn left onto Ridder Park Drive.
|
3.
|
Turn into the Broadcom campus, which is the second building on the right, at the main entrance sign.
|