Exhibit 10.1
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Avago Performance Bonus (“APB”)
FY2011 Plan Document for Executive Employees

     
Document: Annual
Performance Bonus for
Executives
  Applicability: Executive employees (Division Vice President, Vice President,
Senior Vice President, President and Chief Executive Officer (“CEO”))
 
   
Approved: March 8, 2011
  Effective Date: November 1, 2010
 
   
 
  Review date: Annual

Purpose
The purpose and scope of the Avago Performance Bonus (“APB”) Plan Document for
Executive Employees is to define the process to award the annual incentive bonus
and to ensure the Plan parameters are managed consistently across Avago
Technologies (the “Company”).
Introduction
The Company has established the Avago Performance Bonus (“Program”) for eligible
executive employees. The objectives of this discretionary Program are to:

  §   Share the success of the Company     §   Reward employees for outstanding
business results     §   Recognize levels of individual performance multiplier  
  §   Foster teamwork     §   Retain employees

Program Period
Incentive awards under the Program are based on Corporate performance and, where
applicable, Business Division or Function performance measured against
predetermined targets for each Program period. The Program period begins on the
first day of each fiscal year and ends on the last day of the fiscal year.
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Eligibility
Prior to the beginning of each Program period the criteria for participation in
the Program will be set by the Compensation Committee of the Company’s Board of
Directors (the “Compensation Committee”) at its sole discretion.
Conditions of Eligibility: All regular full-time and regular part-time executive
employees who are:

  •   Not on a Sales Incentive Plan (SIP)     •   Employed before fiscal year
fourth quarter     •   Employed on the APB payout date     •   On leave of
absence (“LOA”) with eligible earnings during the Program period

Description
The performance results for the Program period are based on a weighting system
comprised of Corporate performance and where applicable Business
Division/Function performance.

     
Corporate
Performance
  Corporate performance for the Program period will be based on the attainment
of Company targets as defined for the specific fiscal year: Targets are set by
the CEO and the Compensation Committee. Attainment measurements and targets are
maintained by Finance.
 
   
Business Division
or Function
Performance
  Business Division or Function performance for the Program period will be based
on the attainment of Business Division or Function goals. Goals are set by the
CEO and the Compensation Committee. Attainment measurements and targets are
maintained by Finance.
 
   
Program Award
Determination
  The Program award payout (“Program Award”) for each participant will be
determined as follows.

Definitions:

  1.   Eligible Earnings: Represents base wages paid during the performance
period and includes vacation, holiday and sick pay. Eligible earnings exclude
disability payments, bonus payments and allowances. Total eligible earnings for
the Program period will reflect part-time status, unpaid LOA, hire date or
re-hire date.     2.   Attainment %: Payout on performance attainment for each
goal between the threshold and the maximum will be determined by a linear
formula.     3.   Performance Multiplier: Based on performance each participant,
other than the CEO, will be assigned a performance multiplier on a scale of 0.5
to 1.5 by the CEO, subject to the review and approval of the Compensation
Committee. In the discretion of the Compensation Committee, the CEO may be
assigned a performance multiplier on a scale of 0.5 to 1.5.

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  4.   Target Bonus Percent: Percent of eligible earnings that will be paid if
the Company and Business Division/Function attainment is 100% of goals. This
percent is assigned to each executive function or individual, as determined by
the CEO and the Compensation Committee.         Target Bonus Percent is prorated
based on eligibility and may be prorated based on a change in an executive’s
function or position that results in a change in Target Bonus Percentage during
the performance period.

Any exceptions require approval from both the CEO and the Compensation Committee
Payout
The fiscal year end payout is made in cash after the end of the fiscal year and
is calculated using the payout formula based on:

  •   Actual attainment against fiscal year Corporate and Division/Function
metrics     •   Current year performance multiplier

Payout formula
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                                                              Payout   Payout  
Payout Metric   Weight   Threshold   Minimum   Target   Maximum
Revenue Growth
    25 %     60 %1     50 %     100 %     150 %
Operating Profit
    25 %     90 %1     50 %     100 %     150 %
Business Division or Function Results (includes Direct Expenses)
    50 %   Division/ Function Specific 2     50 %     100 %     150 %

 

1   To be validated by Finance each year.   2   Direct Expenses have a payout
range of minimum 80% to maximum 120%

In the event the Compensation Committee elects to assign the CEO a Performance
Multiplier greater than 1.0, the Compensation Committee may elect to pay the
portion of the CEO’s bonus amount that exceeds the bonus amount calculated using
a Performance Multiplier of 1.0 in the form of an equity award, instead of
paying such amount in cash. The Compensation Committee shall determine the type
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and terms of any such equity award, which award shall be granted under the
Company’s 2009 Equity Incentive Award Plan.
Policies and Practices
Various considerations may impact the administration and payout of the Program.
Such considerations may include, but are not limited to the following:

  1.   Program Administration: The Compensation Committee will establish
guidelines for the Program in line with corporate strategies and objectives. The
Compensation Committee has final authority as to any issues related to the
interpretation and the administration of the Program, including the resolution
of any unusual circumstances.     2.   Compensation Committee Discretion: The
Compensation Committee will set the Program performance targets. The
Compensation Committee may, at its sole discretion, at any time alter, amend,
suspend or in any other way modify the Program to align with the changing needs
of the Company without prior notification to any participant.     3.   Payment
Authorization: Employees will be eligible to participate in the APB program
period if they are employed before the fiscal year fourth quarter and remain
employed on the payout date. All awards must be approved by the CEO and the
Compensation Committee. The Program award will be paid in full, as soon as
administratively feasible, following the end of a Program period.     4.  
Termination: Any employee may be excluded from Program participation, at any
time, at the sole discretion of the Compensation Committee. Except as required
by applicable law or regulation, in order to receive a Program award payment for
the applicable Program period, an employee must be: (1) on the payroll, and
(2) an eligible participant of the Program at the time of payout. Except as
required by applicable law or regulation, the Company will not seek repayment of
a valid bonus payout if the employee terminates employment after payment for the
previous performance period.     5.   Pro-rated Payments: Pro-rated payment will
be made in cases as set forth below:

  •   Position changes from non-sales to sales (on SIP) or from sales (on SIP)
to non-sales.     •   Transfer between Business Divisions or Functions during
the fiscal year of the performance period.     •   Termination for disability:
In the event a participant terminates employment with the Company for disability
reasons, such employee will be considered eligible for completed plan periods in
which the employee participated.     •   Termination upon death: Upon the death
of a participant, the award will be paid along with all other payouts based on
eligible earnings during the Program period. Payment will be made to legal
beneficiaries, as designated by the employee and on file with the Company.

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  6.   Right of Employment and Payment: Management and the Compensation
Committee reserves the right, at their sole discretion, to restrict
participation in the Program at any time. Participation under this Program does
not affect the employment status of the participant and does not imply continued
employment with the Company. Either participant or Company may terminate the
employment relationship at any time, for any reason, with or without cause.    
    Payments made under the Program are not an element of the participant’s
salary or base compensation (“Compensation”) and shall not be considered as part
of such Compensation in the event of severance, redundancy, resignation or any
other situation unless required by local law. The granting and receipt of
payments under the Program is voluntary and at the Compensation Committee’s sole
discretion, and does not constitute a claim for further payments regardless of
how many times such payments have previously been granted to the participant.  
  7.   Unfunded Status/Right of Assignment: No assets are reserved for this
Program and no person has a right or interest in Company assets as a result of
the existence of this Program. No right or interest in the Program may be
assigned or transferred, or subject to any lien, directly, by operation of law
or otherwise, including without limitation, bankruptcy, pledge, garnishment,
attachment, levy or other creditor’s process.     8.   Taxes: All awards payable
under the Program are taxable as ordinary income in the year of payment and
subject to applicable taxes and withholdings. Employees on a temporary
relocation are paid and taxed from their home country.     9.   Plan Amendment
or Termination: The Compensation Committee may amend or terminate this Program
at any time. While the Compensation Committee intends that any amendment or
termination would be prospective, the Compensation Committee reserves the right
to act retroactively without prior written notice to the participants.     10.  
Final Decision: The Compensation Committee will make the final determination as
to the eligibility for participation in the Program and any other applicable
terms. All decisions made by the Compensation Committee regarding this Program
shall be final.

This Program shall be governed by local laws and regulations.
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APPENDIX
Payout Examples at Target:
This example of the fiscal year end payout is based on the following
assumptions:

  •   Employed full-time during the entire fiscal year     •   Annual Eligible
Earnings in local currency is 100,000     •   Performance Multiplier is 1.5 or
150% applies     •   Bonus target is 30%     •   Corporate attainment for the
fiscal year is 100%     •   Division attainment is 100%

(Note: The example does not represent actual executive level bonus targets or
salaries)
Payment: The fiscal year end payout is made after the end of the fiscal year and
is calculated using the formula based on:

  •   Actual attainment against fiscal year Corporate and Division/Function
metrics     •   Current year performance multiplier

                                                              Payout   Payout  
Payout Metric   Weight   Threshold   Minimum   Target   Maximum
Revenue Growth
    25 %     60 %     50 %     100 %     150 %
Operating Profit
    25 %     90 %     50 %     100 %     150 %
Business Division or Function Results
    50 %   Division/ Function Specific     50 %     100 %     150 %

Payout Formula
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