Document:

Exhibit

Form of Annual Performance Bonus Plan
For Executive Employees 

	
		
	Document: Annual Performance Bonus Plan for Executives
	Applicability:  Executive employees (Vice President, Senior Vice President, President and Chief Executive Officer (“CEO”))

	Approved:
	Effective Date:

	Amended & Restated:
	Review date:  Annual

Purpose

The purpose and scope of the Annual 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 Annual 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”)  and recommended to the Board of Directors for final approval.

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  
	Corporate performance for the Program period will be based on the

Performance        attainment of Company targets as defined for the specific fiscal year:  Targets 
are approved and recommended by the CEO and the Compensation Committee to the Company’s Board of Directors (the “Board”) for final approval. Attainment measurements and targets are maintained by Finance.

		
	Business Division
	Business Division or Function performance for the Program period will be

or Function         based on the attainment of Business Division or Function goals. Goals 
		
	Performance 
	are approved and recommended by the CEO and the Compensation Committee to the Board for final approval. Attainment measurements and targets are maintained by Finance.

    
		
	Program Award
	The Program award payout (“Program Award”) for each participant will be

		
	Determination
	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, and in respect of the CEO, the Board. In the 

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discretion of the Board, the CEO may be assigned a performance multiplier on a scale of 0.5 to 1.5. 

		
	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, or by the Board in respect of the CEO.

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, or from the Board in the case of the CEO.

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

	
							
	FY Eligible Earnings

	x
	Attainment %
	x
	Performance Multiplier
	x

	Target  Bonus %

	Eligible  Earnings Paid in Local Currency
	 
	Performance Result for   Company and Business
	 
	Individual Multiplier
	 
	Individual Bonus % Based on Job Level

	
						
	Metric
	Weight
	Threshold
	Payout
Minimum
	Payout Target
	Payout 
Maximum

	Revenue
Growth
	25%
	__%1
	50%
	100%
	150%

	Operating Profit
	25%
	__%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%

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In the event the Board elects to assign the CEO a Performance Multiplier greater than 1.0, the Board 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 Board shall determine the type and terms of any such equity award.

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.  Board approval is required if there is any change related to the CEO.

		
	2.
	Compensation Committee Discretion: The Compensation Committee will recommend and the Board 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, provided that any such modifications that affect the CEO shall be approved by the Board.

		
	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, or by the Board in respect of the CEO. The Program award will be paid in full, as soon as administratively feasible, following the end of a Program period.

		
	4.
	Termination:  Any employee (other than the CEO) may be excluded from Program participation, at any time, at the sole discretion of the Compensation Committee, and by the Board in the case of the CEO.  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.  

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	•
	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.

 
		
	6.
	Right of Employment and Payment:  Management and the Compensation Committee reserve 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, provided that any such modifications that affect the CEO shall be approved by the Board.  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, or the Board, as applicable, 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 200,000

		
	•
	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

	
													
	Metric
	Weight
	Threshold
	Payout
Minimum
	Payout Target
	Payout 
Maximum
	 

	 
	Revenue
Growth
	25%
	__%
	50%
	100%
	150%

	 
	Operating Profit
	25%
	__%
	50%
	100%
	150%

	 
	Business Division or Function Results
	

50%
	Division/      Function Specific
	

50%
	

100%
	

150%

Payout Formula

	
								
	FY Eligible Earnings

	x
	Attainment %
	x
	Performance Multiplier
	x

	Target  Bonus %

	 

	Eligible  Earnings Paid in Local Currency
	 
	Performance Result for Company and Business
	 
	Individual Multiplier
	 
	Individual Bonus % Based on Job Level
	 

	200,000
	x
	100%
	x
	150%
	x
	30%          =

	90,000 payout

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Avago TechnologiesExhibit

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

October 16, 2015

Bryan T. Ingram 
c/o Avago Technologies
1320 Ridder Park Drive
San Jose, CA 95131

RE:     Offer of Continuing Employment

Dear Bryan:

The purpose of this letter is to confirm the terms of your continuing employment with Avago Technologies U.S. Inc., an indirect subsidiary of Avago Technologies Limited (together with your employer, the “Company”).

		
	1.
	Effective as of November 2, 2015, your new title will be Senior Vice President and General Manager, Wireless Semiconductor Division reporting to me, and you hereby resign your position as Chief Operating Officer. Your annual base salary and target bonus will remain the same, and you will remain an executive of the Company. 

		
	2.
	In addition, the terms and conditions set forth in the Amended and Restated Severance Benefit Agreement by and between you and the Company, dated January 23, 2014 (the “Severance Benefits Agreement”), and the Confidential Information Agreement (as defined in the Severance Benefits Agreement) shall remain in full force and effect; provided, however, that you expressly consent to changes to your duties and responsibilities related to the matters set forth in this letter, including your new role and position, and hereby waive any right to resign for “Good Reason” in connection therewith.

		
	3.
	It is our mutual goal and desire that you remain employed by the Company as Senior Vice President and General Manager, Wireless Semiconductor Division for the entirety of the period commencing on November 2, 2015 and ending on October 31, 2017 (the “Retention Period”), provided that you continue to perform your duties satisfactorily in a manner consistent with your roles and responsibilities.  Following the Retention Period, however, you will have one time option to resign your position with the Company, to be exercised within thirty (30) days immediately following the end of the Retention Period (the “Election Period”), and, subject to the terms of this letter, receive the vesting acceleration benefits described in paragraph 4.

		
	4.
	If your employment is terminated as a result of a Covered Termination (as defined in the Severance Benefit Agreement) during the Retention Period or you affirmatively elect in writing during the Election Period to resign your employment for any reason effective as of the date of such election (the date of such termination or resignation, the “Specified Termination Date”), then each outstanding and unvested equity and equity-linked award that, pursuant to its terms vests solely based upon continued service, including, without limitation, each time-based share option and restricted share unit award and each performance option and restricted share unit award for which the performance criteria has been met as of the Specified Termination Date (each, a “Time-Based Award”), in each case, that was granted to you prior to March 15, 2015 shall automatically become vested and, if applicable, any forfeiture restrictions or rights of repurchase thereon shall immediately lapse, in each case, with respect to one-hundred percent (100%) of that number of unvested shares underlying such equity award as of the Specified Termination Date.  

In addition, if you remain available to provide limited services through the first anniversary of the Specified Termination Date or die or become permanently disabled during such time, then each Time-Based Award granted to you on March 15, 2015 and each performance option and restricted share unit award granted to you on March 15, 2015 that is subject to performance-based vesting and for which the performance criteria has been met following the Specified Termination Date but prior to the one year anniversary of the Specified Termination Date shall automatically become vested and any forfeiture restrictions thereon shall immediately lapse with respect to one-hundred percent (100%) of the number of unvested shares underlying such equity award on the one year anniversary of the Specified Termination Date; provided, however, that you will also continue to vest in all such March 15, 2015 awards in accordance with their terms during the one year period during which you are available to provide limited services to the Company.  For the purposes hereof, you will only be deemed to be available to provide limited services if you are available to provide consulting services by telephone upon reasonable prior notice in an amount not to exceed ten (10) hours during any calendar month and you refrain from engaging in any business or activity, or rendering any services or providing any advice, in each case in whatever capacity, directly or indirectly, to a competitor of the Company listed on Exhibit A.  

The Company agrees that during the period you are available to provide services following the Specified Termination Date you will not be an employee of the Company. Accordingly, you will not be subject to any blackout trading periods applicable to Company employees or otherwise unless you are in possession of material non-public information regarding the Company. You understand, however, that you will still be subject to applicable laws regarding insider trading.

You understand and agree that the distribution of shares upon vesting of your restricted share units accelerated under this paragraph will be delayed to the extent required by Section 409A of the Internal Revenue Code in accordance with your Severance Benefit Agreement. The agreements evidencing your Time-Based Awards will be deemed amended to the extent necessary to give effect to this paragraph.

		
	5.
	You will continue to be covered under the Avago Technologies Performance Bonus Plan for Executive Employees (the “APB”). If your employment is terminated as a result of a Covered Termination or you affirmatively elect in writing during the Election Period to resign your employment for any reason and the Specified Termination Date occurs after the end of the fiscal 

Bryan T. Ingram       Offer of Continuing Employment    Page 2 of 4
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

year but prior to the payment of the bonus, then you will be entitled to receive your bonus payment based upon actual performance levels as measured pursuant to the APB even if you are not an employee of the Company on the bonus payment date.  The bonus payment will be made to you on the same date that it is paid to other US based Company employees. The actual annual payout under the APB will be based on the attainment of targets which have been (or will be) set at both the Corporate and Divisional/Functional levels.

		
	6.
	The accelerated vesting benefits set forth in paragraph 4, along with any accrued but unpaid salary, bonus, benefits, vacation and expense reimbursement payable in accordance with applicable law or Company policy, are the only benefits or payments that you will receive if you affirmatively elect in writing to resign your employment with the Company during the Election Period. In order to receive the accelerated vesting benefits, you agree that you must deliver to the Company a general release of all claims against the Company and its affiliates in a form acceptable to the Company that becomes effective and irrevocable within sixty (60) days, or such shorter period of time specified by the Company, following your termination or resignation.

		
	7.
	Your continued employment will be consistent with the terms and conditions set forth in this letter and in accordance with the Company’s standard employment policies and practices. Adherence to general standards of business conduct, as well as all other applicable Avago Technologies policies and procedures, including subsequent changes, is required of all employees. This letter, the Confidential Information Agreement, the Severance Benefits Agreement and the agreements specified herein constitute our binding agreement with respect to your employment and its terms merging and superseding in their entirety all other or prior offers, agreements and communications, whether written or oral, by you and the Company relating to the terms and conditions of your employment, except as set forth above.  

The Company is committed to providing reasonable accommodations to employees with disabilities. If you need any accommodations, please let us know. 

While we look forward to a long and profitable relationship, you will be an at-will employee, which means the employment relationship may be terminated by you or us, with or without cause or prior notice. It also means that your job duties, title, responsibility, reporting level, work schedule, compensation and benefits, as well as personnel policies and procedures, may be changed at any time at the Company’s sole discretion, but subject to your right to receive benefits on the terms and conditions set forth in applicable Avago Technologies agreements, plans and policies (if applicable). Any statements or representations to the contrary should be regarded by you as ineffective. Any modification or change in your at-will employment status may only occur by way of a written agreement signed by you and the Company’s Chief Executive Officer.

If the terms and conditions of your continued employment as outlined above are acceptable, please so indicate by signing and dating this offer letter and returning it to me at your earliest convenience. By signing below, you represent that you are not relying on any promise, representation or inducement other than those contained herein and that the terms and conditions contained in this letter supersede any other representations made to you, whether verbal or written.

Bryan T. Ingram       Offer of Continuing Employment    Page 3 of 4
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

Bryan, we are all pleased that you are committing to continue your employment with Avago Technologies. Your talent and enthusiasm is important to our continuing success.

Sincerely,

/s/ Hock E. Tan
Hock E. Tan
President and CEO

*    *    *

ACCEPTANCE OF OFFER

I have read and understand this letter and agree to the terms and conditions as set forth above and further acknowledge that, except as set forth in this letter, no other promise, representation or inducement was made to me as part of my offer of continued employment with Avago Technologies U.S. Inc., an indirect subsidiary of Avago Technologies Limited.

	
		
	 

	 
	 

	/s/ Bryan T. Ingram               
	October 16, 2015

	Signature: Bryan T. Ingram 

	 

Bryan T. Ingram       Offer of Continuing Employment    Page 4 of 4
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

Exhibit A

[***]

or any of their respective affiliates.

Bryan T. Ingram                                  Offer of Continuing Employment- Exhibit A    Page 1 of 1
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

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