In April 1995, the Company adopted the 1995 Stock Option Plan (the “Option Plan”). The Option Plan, as amended from time to time, had 383.4 million common shares reserved for issuance thereunder as of January 30, 2021. Options granted under the Option Plan generally have a term of 10 years and generally must be issued at prices equal to the fair market value of the stock on the date of grant. The Company can also grant stock awards, which may be subject to vesting. Further, the Company can grant restricted stock unit (“RSU”) awards. RSU awards are denominated in shares of stock, but may be settled in cash or shares upon vesting, as determined by the Company at the time of grant. Awards under the Option Plan generally vest over 3 to 4 years.

Equity awards granted under the Option Plan include time-based RSUs as well as RSUs that vest based on the achievement of performance-based criteria i.e. Company financial goals (“Financial Performance RSU”), or based on achievement of market-based goals i.e. relative total shareholder return (“TSR RSUs”), or stock price goals (“Value Creation Awards” or “VCA RSUs”).

Prior to fiscal year 2020, the Company granted Financial Performance RSUs to each of its executive officers when they joined the Company, and as an annual refresh grant to all executive officers and other Vice Presidents in April of each fiscal year. The Financial Performance RSUs had a three-year service requirement. The number of shares to be earned could be 0% to 200% of target and was based on the achievement of certain financial operating metrics to be measured as of the end of the second fiscal year of the three-year vesting term. Shares granted under these Financial Performance RSUs are reported in the table presented below as “Performance-Based” based on 100% expected achievement.

In addition, the Company grants TSR RSUs to its executive officers that newly join the Company, and as an annual refresh grant to all executive officers and other Vice Presidents, usually in April of each fiscal year. Prior to fiscal year 2020, TSR RSUs were measured based on stock performance as compared to that of companies on the Philadelphia Semiconductor Sector over a performance period defined in the award. The number of shares to be earned can be 0% to 150% of target and is based on the achievement of performance objectives relating to relative total shareholder return of the Company’s common shares. Beginning in fiscal year 2020, the S&P 500 Index serves as the benchmark index. The TSR RSUs have a three year service vesting requirement. The number of shares to be earned can be 0% to 200% of target and is based on the achievement of performance objectives relating to relative total shareholder return of the Company's common shares. These TSR RSUs are reported in the table presented below as “Market-Based” awards based on 100% expected achievement.

In fiscal year 2020, the Company issued Value Creation Awards that are based on achievement of the Company's stock price target over a specified performance period, also referred to as VCA RSUs. The VCA RSU will be earned if the Company's average closing trading stock price over 100-calendar days equals or exceeds a certain target price. 100% of the award will vest on the 1-year anniversary of the achievement. The grant will be forfeited if the market-based condition is not achieved. These VCA RSUs are reported in the table presented below as “Market-Based” awards based on 100% expected achievement. As of January 30, 2021, the performance metrics have been achieved. The awards will vest on the 1-year anniversary of the achievement in November 2021.

In December 2017, the Company’s Executive Compensation Committee approved a deferred stock program, whereby executives of the Company have the option, beginning in 2018, to defer the settlement of time-based and performance-based restricted stock units granted under the Option Plan to a future date. A deferral election is irrevocable after the annual submission deadline. The shares of common stock underlying the deferred grants will be distributed at the earliest of the employee’s specified future settlement date, not to be earlier than 2023, or upon separation from service, a change in control, or death or disability. As of January 30, 2021, no grants have been subject to a deferral election.

Following the Cavium acquisition and in accordance with the Cavium merger agreement, certain outstanding options to purchase shares of Cavium common stock and certain restricted stock units with respect to Cavium common stock, each granted under Cavium 2016 Equity Incentive Plan (“Cavium 2016 EIP”), Cavium 2007 Equity Incentive Plan (“Cavium 2007 EIP”) and QLogic 2005 Performance Incentive Plan, as assumed by Cavium effective August 16, 2016 (“QLogic 2005 Plan”), (and collectively, with the Cavium 2016 EIP and the Cavium 2007 EIP, the “Cavium Plans”), were assumed by the Company and converted into options to purchase common shares of the Company and restricted stock units with respect to common shares of the Company, respectively. The Company filed a registration statement on July 6, 2018 to register 15,824,555 common shares of the Company, issuable under the Cavium Plans, comprised of 2,535,940 common shares issuable pursuant to outstanding but unexercised options under the Cavium Plans and 13,288,615 common shares issuable pursuant to outstanding unvested restricted stock units under the Cavium Plans.

The Cavium 2016 EIP was adopted by Cavium on June 15, 2016 and was intended as the successor to and continuation of Cavium 2007 EIP. The Cavium 2016 EIP provided for the grant of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance stock awards, performance cash awards and other stock awards, which may be granted to employees, directors and consultants. Awards under the Cavium 2016 EIP generally vest over four years and expire seven to ten years from the date of grant. Following the effective date, no additional awards were granted under the Cavium 2007 EIP.

Cavium adopted the Cavium 2007 EIP in May 2007 upon completion of its initial public offering. The Cavium 2007 EIP provided for the grant of incentive stock options, non-statutory stock options, restricted stock awards, restricted stock unit awards, stock appreciation rights, performance stock awards, and other forms of equity compensation and performance cash awards, all of which may be granted to employees (including officers), directors, and consultants or affiliates. Awards granted under the Cavium 2007 EIP vest at the rate specified by the plan administrator, for stock options, typically with 1/8th of the shares vesting six months after the date of grant and 1/48th of the shares vesting monthly thereafter over the next three and one half years and for restricted stock unit awards typically with quarterly vesting over four years. Awards expire seven to ten years from the date of grant.

The QLogic 2005 Plan was assumed and registered by Cavium upon its completion of acquisition of QLogic Corporation on August 16, 2016. The QLogic 2005 Plan provided for the issuance of restricted stock unit awards, incentive and non-qualified stock options, and other stock-based incentive awards. Restricted stock unit awards granted pursuant to the QLogic 2005 Plan to employees subject to a service condition generally vest over four years from the date of grant. Stock options granted pursuant to the QLogic 2005 Plan to employees have ten-year terms and generally vest over four years from the date of grant.

The awards under the Cavium Plans assumed by the Company in the Cavium acquisition were measured at the acquisition date based on the estimated fair value of $357.1 million. A portion of that fair value, $68.9 million, which represented the pre-acquisition service provided by employees to Cavium, was included in the total consideration transferred as part of the acquisition. As of the acquisition date, the remaining portion of the fair value of those awards was $288.2 million, representing post-acquisition share-based compensation expense that will be recognized as these employees provide service over the remaining vesting periods.

In accordance with the Aquantia merger agreement, certain outstanding options to purchase shares of Aquantia common stock and certain restricted stock units with respect to Aquantia common stock, each granted under Aquantia 2017 Equity Incentive Plan (“Aquantia 2017 EIP”), Aquantia 2015 Equity Incentive Plan (“Aquantia 2015 EIP”) and Aquantia 2004 Equity Incentive Plan (“Aquantia 2004 EIP”), the “Aquantia Plans” were assumed by the Company and converted into options to purchase common shares of the Company and restricted stock units with respect to common shares of the Company, respectively. The Company filed a registration statement on September 19, 2019 to register 2,128,823 common shares of the Company, issuable under the Aquantia plans, comprised of 805,965 common shares issuable pursuant to outstanding but unexercised options under the Aquantia Plans and 1,322,858 common shares issuable pursuant to outstanding unvested restricted stock units under the Aquantia Plans.

The awards under the Aquantia Plans assumed by the Company in the Aquantia acquisition were measured at the acquisition date based on the estimated fair value of $54.1 million. A portion of that fair value, $21.5 million, which represented the pre-acquisition service provided by employees to Aquantia, was included in the total consideration transferred as part of the acquisition. As of the acquisition date, the remaining portion of the fair value of those awards was $32.6 million, representing post-acquisition share-based compensation expense that will be recognized as these employees provide service over the remaining vesting periods.

In September 2016, the Company’s Board of Directors approved the termination of the 2007 Directors’ Stock Incentive Plan, (“2007 Director Plan”) that was initially adopted in October 2007, and it approved a new Outside Director Equity Compensation Policy that governs the grant of equity awards to non-employee directors under the Option Plan. At the annual general meeting of shareholders held in June 2015, the shareholders approved an amendment to the Option Plan to enable a full range of awards to be granted to non-employee directors. Under the newly amended Outside Director Compensation Policy, each outside director, upon appointment to fill a vacancy on the board or in connection with election at an annual meeting of shareholders, will be granted an RSU award under the Option Plan for a number of shares with an aggregate fair market value equal to $235,000 on the grant date. In no event shall an outside director be awarded an annual RSU award for more than 20,000 shares. The RSU award vests 100% on the earlier of the date of the next annual general meeting of shareholders or the one-year anniversary of the date of grant.

Under the 2000 Employee Stock Purchase Plan, as amended and restated on October 31, 2011 (the “ESPP”), participants purchase the Company’s stock using payroll deductions, which may not exceed 15% of their total cash compensation. Pursuant to the terms of the current ESPP, the “look-back” period for the stock purchase price is 24 months. Offering and purchase periods begin on December 8 and June 8 of each year. Participants enrolled in a 24-month offering period will continue in that offering period until the earlier of the end of the offering period or the reset of the offering period. A reset occurs if the fair market value of the Company’s common shares on any purchase date is less than it was on the first day of the offering period. Participants in a 24-month offering period will be granted the right to purchase common shares at a price per share that is 85% of the lesser of the fair market value of the shares at (i) the participant’s entry date into the two-year offering period or (ii) the end of each six-month purchase period within the offering period.

Under the ESPP, a total of 5.0 million shares were issued in fiscal 2021 at a weighted-average price of $14.36 per share, a total of 5.2 million shares were issued in fiscal 2020 at a weighted-average price of $13.25 per share, and a total of 3.2 million shares were issued in fiscal 2019 at a weighted-average price of $15.08 per share. As of January 30, 2021, there was $55.9 million of unamortized compensation cost related to the ESPP.


	Year Ended
	January 30, 2021		February 1, 2020		February 2, 2019

Cost of goods sold	$	16,320	$	13,759	$	12,024
Research and development	150,867		157,054		108,762
Selling, general and administrative	74,352		71,996		77,309






Total share-based compensation	$	241,539	$	242,809	$	198,095


	Time-Based			Performance-Based				Market-Based				Total
	Number of Shares	Weighted- Average Grant Date Fair Value		Number of Shares		Weighted- Average Grant Date Fair Value		Number of Shares		Weighted- Average Grant Date Fair Value		Number of Shares	Weighted- Average Grant Date Fair Value




Balance at February 3, 2018	10,289	$	13.84	672		$	14.25	921		$	13.14	11,882	$	13.81
Assumed upon acquisition [4]	13,289	$	21.02	—		$	—	—		$	—	13,289	$	21.02
Granted	7,453	$	19.95	340	[1]	$	21.12	351	[1]	$	21.36	8,144	$	20.06
Vested	(8,827)	$	16.30	—		$	—	(30)		$	13.08	(8,857)	$	16.28
Canceled/Forfeited	(3,159)	$	19.64	(64)		$	16.29	(64)		$	16.52	(3,287)	$	19.51
Balance at February 2, 2019	19,045	$	19.15	948		$	16.58	1,178		$	15.40	21,171	$	18.82
Assumed upon acquisition [4]	1,341	$	25.61	—		$	—	—		$	—	1,341	$	25.61
Granted	9,340	$	23.36	288	[2]	$	13.90	3,621	[3]	$	15.39	13,249	$	20.98
Vested	(10,781)	$	20.01	(576)		$	13.90	(713)		$	11.62	(12,070)	$	19.23
Canceled/Forfeited	(3,661)	$	20.57	(149)		$	17.86	(173)		$	21.12	(3,983)	$	20.49
Balance at February 1, 2020	15,284	$	21.34	511		$	17.71	3,913		$	15.83	19,708	$	20.15

Granted	7,437	$	26.18	143	[2]	$	14.13	989	[3]	$	33.35	8,569	$	26.80
Vested	(9,287)	$	21.28	(390)		$	14.11	(328)		$	14.60	(10,005)	$	20.79
Canceled/Forfeited	(2,090)	$	22.89	(4)		$	21.32	(296)		$	18.86	(2,390)	$	22.39
Balance at January 30, 2021	11,344	$	24.27	260		$	21.06	4,278		$	19.77	15,882	$	23.00

The aggregate intrinsic value of restricted stock units expected to vest as of January 30, 2021 was $817.3 million. The number of restricted stock units that are expected to vest is 15.9 million shares. The Company’s closing stock price of $51.46 as reported on the Nasdaq Global Select Market as of January 30, 2021 was used to calculate the aggregate intrinsic value for the restricted stock units.

As of January 30, 2021, unamortized compensation expense related to restricted stock units was $293.7 million. The unamortized compensation expense for restricted stock units will be amortized on a straight-line basis and is expected to be recognized over a weighted-average period of 1.62 years.



	Number of Shares	Weighted- Average Exercise Price








Balance at February 3, 2018	11,772	$	12.36
Assumed upon acquisition*	3,026	$	11.85
Granted	—	$	—
Exercised	(4,812)	$	10.93
Canceled/Forfeited	(362)	$	13.64
Balance at February 2, 2019	9,624	$	12.87
Assumed upon acquisition*	808	$	9.20
Granted	—	$	—
Exercised	(6,178)	$	12.67
Canceled/Forfeited	(37)	$	13.57
Balance at February 1, 2020	4,217	$	12.44

Granted	—	$	—
Exercised	(1,301)	$	11.63
Canceled/Forfeited	(21)	$	12.88
Balance at January 30, 2021	2,895	$	12.81
Vested or expected to vest at January 30, 2021	2,895

For stock options vested and expected to vest at January 30, 2021, the aggregate intrinsic value was $111.9 million. For stock options exercisable at January 30, 2021, the aggregate intrinsic value was $111.0 million. The aggregate intrinsic value of stock options exercised during fiscal 2021, 2021 and 2020 was $25.1 million, $70.5 million and $40.6 million, respectively. The Company’s closing stock price of $51.46 as reported on the Nasdaq Global Select Market as of January 30, 2021 was used to calculate the aggregate intrinsic value for all in-the-money options.


				Outstanding Options				Exercisable Options
Range of Exercise Prices				Number of Shares (in thousands)	Weighted- Average Remaining Contractual Term (in years)	Weighted- Average Exercise Price		Number of Shares (in thousands)	Weighted- Average Exercise Price
$	3.89	$	10.31	319	3.95	$	9.06	319	$	9.06
$	10.76	$	10.76	897	2.25	$	10.76	897	$	10.76
$	10.89	$	14.35	893	3.87	$	13.55	874	$	13.55
$	14.45	$	15.87	651	2.67	$	15.64	651	$	15.64
$	15.91	$	22.27	134	3.40	$	16.67	129	$	16.60
Total				2,894	3.08	$	12.81	2,870	$	12.79


	Year Ended
	January 30, 2021			February 1, 2020			February 2, 2019
Employee Stock Purchase Plan:
Estimated fair value	$	15.12		$	7.06		$	4.91
Expected volatility	48		%	35		%	33		%
Expected term (in years)	1.2			1.2			1.2
Risk-free interest rate	0.1		%	1.8		%	2.6		%
Expected dividend yield	0.6		%	1.0		%	1.4		%


	Year Ended
	January 30, 2021		February 1, 2020		February 2, 2019
Total Shareholder Return Awards:
Expected term (in years)	3.0		3.0		2.9
Expected volatility	40	%	32	%	35	%
Average correlation coefficient of peer companies	0.7		0.5		0.5
Risk-free interest rate	0.2	%	2.4	%	2.5	%
Expected dividend yield	0.9	%	1.0	%	1.1	%

The Company sponsors a 401(k) savings and investment plan that allows eligible U.S. employees to participate by making pre-tax contributions to the 401(k) plan ranging from 1% to 75% of eligible earnings subject to a required annual limit. The Company currently matches 100% of the first 4% of the employee’s contribution and 50% of the next 2%, up to a $4,000 maximum contribution effective from January 1, 2018, and up to a $5,000 maximum contribution effective from January 1, 2021. The Company made matching contributions to employees of $11.1 million in fiscal 2021, $11.0 million in fiscal 2020 and $8.6 million in fiscal 2019. As of January 30, 2021, the 401(k) plan offers a variety of investment alternatives, representing different asset classes. Employees may not invest in the Company’s common shares through the 401(k) plan.