exv10w1






 




    Exhibit
10.1



 




    BROADCOM
    CORPORATION



 




    1998
    STOCK INCENTIVE PLAN

    (as Amended and Restated March 12, 2008)



 




    ARTICLE ONE



 



    GENERAL PROVISIONS



 


		
	
    I.  
	
    PURPOSE
    OF THE PLAN




 



    This amended and restated 1998 Stock Incentive Plan is intended
    to promote the interests of Broadcom Corporation, a California
    corporation, by providing eligible persons in the
    Corporation’s service with the opportunity to acquire a
    proprietary interest, or otherwise increase their proprietary
    interest, in the Corporation as an incentive for them to remain
    in such service.



 



    Capitalized terms not otherwise defined herein shall have the
    meanings assigned to such terms in the attached Appendix.



 



    All share numbers in this restatement have been adjusted to
    reflect all splits and dividends of the Corporation’s
    Common Stock subsequent to April 16, 1998, including the
    three-for-two stock split that was effected on February 21,
    2006 through the payment of a dividend of one additional share
    of Class A common stock for every two shares of
    Class A common stock outstanding, and one additional share
    of Class B common stock for every two shares of
    Class B common stock outstanding, as of the record date of
    February 6, 2006.



 


		
	
    II.  
	
    STRUCTURE
    OF THE PLAN




 



    A.  The Plan as hereby amended and restated is divided
    into three equity incentive programs:



 


			
	 	    • 
	
    the Discretionary Grant Program, under which eligible persons
    may, at the discretion of the Plan Administrator, be granted
    options to purchase shares of Common Stock or stock appreciation
    rights tied to the value of such Common Stock,

	 
	 	    • 
	
    the Stock Issuance Program, under which eligible persons may be
    issued shares of Common Stock pursuant to restricted stock or
    restricted stock unit awards or other stock-based awards, made
    by and at the discretion of the Plan Administrator, that vest
    upon the completion of a designated service period
    and/or the
    attainment of pre-established performance milestones, or under
    which shares of Common Stock may be issued through direct
    purchase or as a bonus for services rendered the Corporation (or
    any Parent or Subsidiary), and

	 
	 	    • 
	
    the Director Automatic Grant Program, under which Eligible
    Directors shall automatically receive restricted stock units at
    designated intervals over their period of Board service.




 



    B.  The provisions of Articles One and Five shall
    apply to all equity programs under the Plan and shall govern the
    interests of all persons under the Plan.



 




    III.  ADMINISTRATION
    OF THE PLAN



 



    A.  The Primary Committee shall have sole and
    exclusive authority to administer the Discretionary Grant and
    Stock Issuance Programs with respect to Section 16
    Insiders. Administration of the Discretionary Grant and Stock
    Issuance Programs with respect to all other persons eligible to
    participate in those programs may, at the Board’s
    discretion, be vested in the Primary Committee or a Secondary
    Committee, or the Board may retain the power to administer those
    programs with respect to all such persons. However, any
    discretionary Awards to members of the Primary Committee must be
    authorized and approved by a disinterested majority of the Board.



 



    B.  Members of the Primary Committee or any Secondary
    Committee shall serve for such period as the Board may determine
    and may be removed by the Board at any time. The Board may also
    at any time terminate the functions of any Secondary Committee
    and reassume all powers and authority previously delegated to
    such committee.



 



    C.  Each Plan Administrator shall, within the scope of
    its administrative functions under the Plan, have full power and
    authority (subject to the provisions of the Plan) to establish
    such rules and regulations as it may deem appropriate for




    

    A-1








 






    proper administration of the Discretionary Grant and Stock
    Issuance Programs and to make such determinations under, and
    issue such interpretations of, the provisions of those programs
    and any outstanding Awards thereunder as it may deem necessary
    or advisable. Decisions of the Plan Administrator within the
    scope of its administrative functions under the Plan shall be
    final and binding on all parties who have an interest in the
    Discretionary Grant and Stock Issuance Programs under its
    jurisdiction or any Award thereunder.



 



    D.  Service on the Primary Committee or the Secondary
    Committee shall constitute service as a Board member, and
    members of each such committee shall accordingly be entitled to
    full indemnification and reimbursement as Board members for
    their service on such committee. No member of the Primary
    Committee or the Secondary Committee shall be liable for any act
    or omission made in good faith with respect to the Plan or any
    Award under the Plan.



 



    E.  Administration of the Director Automatic Grant
    Program shall be self-executing in accordance with the terms of
    that program, and no Plan Administrator shall exercise any
    discretionary functions with respect to any Award under that
    program.



 


		
	
    IV.  
	
    ELIGIBILITY




 



    A.  The persons eligible to participate in the
    Discretionary Grant and Stock Issuance Programs are as follows:



 



    (i)  Employees,



 



    (ii)  non-employee members of the Board or the board
    of directors of any Parent or Subsidiary, and



 



    (iii)  consultants and other independent advisors who
    provide services to the Corporation (or any Parent or
    Subsidiary).



 



    B.  Each Plan Administrator shall, within the scope of
    its administrative jurisdiction under the Plan, have full
    authority to determine (i) with respect to Awards made
    under the Discretionary Grant Program, which eligible persons
    are to receive such Awards, the time or times when those Awards
    are to be made, the number of shares to be covered by each such
    Award, the status of any awarded option as either an Incentive
    Option or a Non-Statutory Option, the exercise price per share
    in effect for each Award (subject to the limitations set forth
    in Article Two), the time or times when each Award is to
    vest and become exercisable and the maximum term for which the
    Award is to remain outstanding, and (ii) with respect to
    Awards under the Stock Issuance Program, which eligible persons
    are to receive such Awards, the time or times when the Awards
    are to be made, the number of shares subject to each such Award,
    the vesting schedule (if any) applicable to the shares subject
    to such Award, and the cash consideration (if any) payable for
    such shares.



 



    C.  The Plan Administrator shall have the absolute
    discretion to grant options or stock appreciation rights in
    accordance with the Discretionary Grant Program and to effect
    stock issuances or other stock-based awards in accordance with
    the Stock Issuance Program.



 



    D.  Eligible Directors for purposes of the Director
    Automatic Grant Program shall be limited to members of the Board
    who are not, at the time of such determination, employees of the
    Corporation (or any Parent or Subsidiary). However, a Board
    member who has previously been in the employ of the Corporation
    (or any Parent or Subsidiary) shall not be eligible to receive
    an Award under the Director Automatic Grant Program at the time
    he or she first becomes a non-employee Board member, but shall
    be eligible to receive periodic Awards under the Director
    Automatic Grant Program while he or she continues to serve as an
    Eligible Director.



 


		
	
    V.  
	
    STOCK
    SUBJECT TO THE PLAN




 



    A.  The stock issuable under the Plan shall be shares
    of authorized but unissued or reacquired Common Stock, including
    shares repurchased by the Corporation on the open market.
    Subject to the automatic share increase provisions of
    Section V.B. of this Article One and any additional
    shares authorized by the vote of the Board and approved by the
    shareholders, as of March 12, 2008 the number of shares of
    Common Stock reserved for issuance over the term of the Plan
    shall not exceed
    443,031,259 shares.1
    To the extent any unvested shares of Common Stock outstanding
    under the Predecessor Plans as of the Original Effective Date
    are subsequently repurchased by the Corporation, at the option
    exercise price paid per share, in connection with the
    holder’s termination of Service prior to vesting in those
    shares, the


 

 


    1 The
    Common Stock issuable under the Plan shall be Class A
    Common Stock, except to the extent such stock is to be issued
    upon the exercise of outstanding options incorporated from the
    Predecessor Plans. For those options, the issuable stock shall
    be Class B Common Stock.




    

    A-2








 






    repurchased shares shall be added to the reserve of Common Stock
    available for issuance under the Plan, but in no event shall
    such addition exceed 27,000,000 shares.



 



    B.  The number of shares of Common Stock available for
    issuance under the Plan shall automatically increase on the
    first trading day of January each calendar year during the term
    of the Plan by an amount equal to four and one-half percent
    (4.5%) of the total number of shares of Class A and
    Class B Common Stock outstanding on the last trading day in
    December of the immediately preceding calendar year, but in no
    event shall any such annual increase exceed
    45,000,000 shares.



 



    C.  No one person participating in the Plan may be
    granted Awards for more than 9,000,000 shares of Common
    Stock in the aggregate per calendar year.



 



    D.  Shares of Common Stock subject to outstanding
    Awards under the Plan (including options incorporated into this
    Plan from the Predecessor Plans) shall be available for
    subsequent issuance under the Plan to the extent (i) those
    Awards expire or terminate for any reason prior to the issuance
    of the shares of Common Stock subject to those Awards or
    (ii) the Awards are cancelled in accordance with the
    cancellation-regrant provisions of Article Two. Unvested
    shares issued under the Plan and subsequently cancelled or
    repurchased by the Corporation at the original exercise or issue
    price paid per share pursuant to the Corporation’s
    repurchase rights under the Plan shall be added back to the
    number of shares of Common Stock reserved for issuance under the
    Plan and shall accordingly be available for subsequent
    reissuance under the Plan. All shares that become available for
    reissuance under the Plan, including the shares of Class B
    Common Stock subject to the outstanding options incorporated
    into this Plan from the Predecessor Plans that expire or
    terminate unexercised and any unvested shares of Class B
    Common Stock repurchased by the Corporation pursuant to its
    repurchase rights, shall be issuable solely as Class A
    Common Stock. In addition, should the exercise price of an
    option under the Plan be paid with shares of Common Stock, the
    authorized reserve of Common Stock under the Plan shall be
    reduced only by the net number of shares issued under the
    exercised stock option. Should shares of Common Stock otherwise
    issuable under the Plan be withheld by the Corporation in
    satisfaction of the withholding taxes incurred in connection
    with the issuance, exercise or vesting of an Award under the
    Plan, the number of shares of Common Stock available for
    issuance under the Plan shall be reduced only by the net number
    of shares issued with respect to that Award.



 



    E.  If any change is made to the Common Stock by
    reason of any stock split, stock dividend, recapitalization,
    combination of shares, exchange of shares, spin-off transaction
    or other change affecting the outstanding Common Stock as a
    class without the Corporation’s receipt of consideration or
    should the value of outstanding shares of Common Stock be
    substantially reduced as a result of a spin-off transaction or
    an extraordinary dividend or distribution, appropriate
    adjustments shall be made by the Plan Administrator to
    (i) the maximum number
    and/or class
    of securities issuable under the Plan, (ii) the maximum
    number
    and/or class
    of securities for which any one person may be granted Awards
    under the Plan per calendar year, (iii) the number
    and/or class
    of securities for which restricted stock unit awards are
    subsequently to be made under the Director Automatic Grant
    Program to new and continuing Eligible Directors, (iv) the
    number
    and/or class
    of securities and the exercise or base price per share (or any
    other cash consideration payable per share) in effect under each
    outstanding Award under the Discretionary Grant Program and the
    Director Automatic Grant Program, (v) the number
    and/or class
    of securities and exercise price per share in effect under each
    outstanding option incorporated into this Plan from the
    Predecessor Plans, (vi) the number
    and/or class
    of securities subject to each outstanding Award under the Stock
    Issuance Program and the cash consideration (if any) payable per
    share thereunder, (vii) the maximum number
    and/or class
    of securities by which the share reserve may increase
    automatically each calendar year pursuant to the provisions of
    Section V.B of this Article One and (viii) the
    maximum number
    and/or class
    of securities that may be added to the Plan through the
    repurchase of unvested shares issued under the Predecessor
    Plans. Similar adjustments shall be made to the number of shares
    of Class B Common Stock issuable under the Plan and the
    number of shares subject to outstanding stock options for
    Class B shares and exercise price per share in effect under
    those options in the event of any similar changes to the
    outstanding shares of Class B Common Stock. To the extent
    such adjustments are to be made to outstanding Awards, those
    adjustments shall be effected in a manner that shall preclude
    the enlargement or dilution of rights and benefits under those
    Awards. The adjustments determined by the Plan Administrator
    shall be final, binding and conclusive.




    

    A-3








 







    ARTICLE TWO



 



    DISCRETIONARY GRANT PROGRAM



 


		
	
    I.  
	
    OPTION
    TERMS




 



    Each option shall be evidenced by one or more documents in the
    form approved by the Plan Administrator; provided,
    however, that each such document shall comply with the
    terms specified below. Each document evidencing an Incentive
    Option shall, in addition, be subject to the provisions of the
    Plan applicable to such options.



 


		
	
    A.  
    
	
    Exercise
    Price.  
    




 



    1.  The exercise price per share shall be fixed by the
    Plan Administrator but shall not be less than one hundred
    percent (100%) of the Fair Market Value per share of Common
    Stock on the option grant date.



 



    2.  The exercise price shall become immediately due
    upon exercise of the option and shall be payable in one or more
    of the forms specified below:



 



    (i)  cash or check made payable to the Corporation,



 



    (ii)  shares of Common Stock valued at Fair Market
    Value on the Exercise Date and held for the period (if any)
    necessary to avoid any additional charges to the
    Corporation’s earnings for financial reporting
    purposes, or



 



    (iii)  to the extent the option is exercised for
    vested shares, through a special sale and remittance procedure
    pursuant to which the Optionee shall concurrently provide
    irrevocable instructions to (a) a brokerage firm
    (designated by the
    Corporation)1
    to effect the immediate sale of the purchased shares and remit
    to the Corporation, out of the sale proceeds available on the
    settlement date, sufficient funds to cover the aggregate
    exercise price payable for the purchased shares plus all
    applicable federal, state and local income and employment taxes
    required to be withheld by the Corporation by reason of such
    exercise and (b) the Corporation to deliver the
    certificates for the purchased shares directly to such brokerage
    firm to complete the sale.



 



    Except to the extent such sale and remittance procedure is
    utilized, payment of the exercise price for the purchased shares
    must be made on the Exercise Date.



 



    B.  Exercise and Term of
    Options.  Each option shall be exercisable at
    such time or times, during such period and for such number of
    shares as shall be determined by the Plan Administrator and set
    forth in the documents evidencing the option. However, no option
    shall have a term in excess of ten (10) years measured from
    the option grant date.



 



    C.  Effect of Termination of Service.



 



    1.  The following provisions shall govern the exercise
    of any options held by the Optionee at the time of cessation of
    Service or death:



 



    (i)  Any option outstanding at the time of the
    Optionee’s cessation of Service for any reason shall remain
    exercisable for such period of time thereafter as shall be
    determined by the Plan Administrator and set forth in the
    documents evidencing the option or as otherwise specifically
    authorized by the Plan Administrator in its sole discretion
    pursuant to an express written agreement with Optionee, but no
    such option shall be exercisable after the expiration of the
    option term.



 



    (ii)  Any option held by the Optionee at the time of
    death and exercisable in whole or in part at that time may be
    subsequently exercised by the personal representative of the
    Optionee’s estate or by the person or persons to whom the
    option is transferred pursuant to the Optionee’s will or
    the laws of inheritance or by the Optionee’s designated
    beneficiary or beneficiaries of that option.



 



    (iii)  Should the Optionee’s Service be
    terminated for Misconduct or should the Optionee otherwise
    engage in Misconduct while holding one or more outstanding
    options under this Article Two, all those options shall
    terminate immediately and cease to be outstanding.


 

 


    1 With
    respect to Section 16 Insiders, the brokerage firm need
    only be reasonably satisfactory to the Corporation for purposes
    of administering such procedure.




    

    A-4








 






    (iv)  During the applicable post-Service exercise
    period, the option may not be exercised in the aggregate for
    more than the number of vested shares for which that option is
    at the time exercisable. No additional shares shall vest under
    the option following the Optionee’s cessation of Service,
    except to the extent (if any) specifically authorized by the
    Plan Administrator in its sole discretion pursuant to an express
    written agreement with Optionee. Upon the expiration of the
    applicable exercise period or (if earlier) upon the expiration
    of the option term, the option shall terminate and cease to be
    outstanding for any shares for which the option has not been
    exercised.



 



    2.  The Plan Administrator shall have complete
    discretion, exercisable either at the time an option is granted
    or at any time while the option remains outstanding, to:



 



    (i)  extend the period of time for which the option is
    to remain exercisable following the Optionee’s cessation of
    Service from the limited exercise period otherwise in effect for
    that option to such greater period of time as the Plan
    Administrator shall deem appropriate, but in no event beyond the
    expiration of the option term, and/or



 



    (ii)  permit the option to be exercised, during the
    applicable post-Service exercise period, not only with respect
    to the number of vested shares of Common Stock for which such
    option is exercisable at the time of the Optionee’s
    cessation of Service but also with respect to one or more
    additional installments in which the Optionee would have vested
    had the Optionee continued in Service.



 



    D.  Shareholder Rights.  The
    holder of an option shall have no shareholder rights with
    respect to the shares subject to the option until such person
    shall have exercised the option, paid the exercise price for and
    become a holder of record of the purchased shares.



 



    E.  Repurchase Rights.  The
    Plan Administrator shall have the discretion to grant options
    that are exercisable for unvested shares of Common Stock. Should
    the Optionee cease Service while holding such unvested shares,
    the Corporation shall have the right to repurchase, at the
    exercise price paid per share, any or all of those unvested
    shares. The terms upon which such repurchase right shall be
    exercisable (including the period and procedure for exercise and
    the appropriate vesting schedule for the purchased shares) shall
    be established by the Plan Administrator and set forth in the
    document evidencing such repurchase right.



 



    F.  Transferability of
    Options.  The transferability of options
    granted under the Plan shall be governed by the following
    provisions:



 



    (i)  Incentive
    Options.  During the lifetime of the Optionee,
    Incentive Options shall be exercisable only by the Optionee and
    shall not be assignable or transferable other than by will or
    the laws of inheritance following the Optionee’s death.



 



    (ii)  Non-Statutory
    Options.  Non-Statutory Options shall be
    subject to the same limitation on transfer as Incentive Options,
    except that the Plan Administrator may structure one or more
    Non-Statutory Options so that the option may be assigned in
    whole or in part during the Optionee’s lifetime by gift or
    pursuant to a domestic relations order to one or more Family
    Members of the Optionee or to a trust established exclusively
    for the Optionee
    and/or one
    or more such Family Members. The assigned portion may only be
    exercised by the person or persons who acquire a proprietary
    interest in the option pursuant to the assignment. The terms
    applicable to the assigned portion shall be the same as those in
    effect for the option immediately prior to such assignment and
    shall be set forth in such documents issued to the assignee as
    the Plan Administrator may deem appropriate.



 



    (iii)  Beneficiary
    Designations.  Notwithstanding the foregoing,
    the Optionee may designate one or more persons as the
    beneficiary or beneficiaries of his or her outstanding options
    under this Article Two (whether Incentive Options or
    Non-Statutory Options), and those options shall, in accordance
    with such designation, automatically be transferred to such
    beneficiary or beneficiaries upon the Optionee’s death
    while holding those options. Such beneficiary or beneficiaries
    shall take the transferred options subject to all the terms and
    conditions of the applicable agreement evidencing each such
    transferred option, including (without limitation) the limited
    time period during which the option may be exercised following
    the Optionee’s death.



 


		
	
    II.  
	
    INCENTIVE
    OPTIONS




 



    The terms specified below, together with any additions,
    deletions or changes thereto imposed from time to time pursuant
    to the provisions of the Code governing Incentive Options, shall
    be applicable to all Incentive Options. Except as modified by
    the provisions of this Section II, all the provisions of
    Articles One, Two and Five shall be applicable to




    

    A-5








 






    Incentive Options. Options that are specifically designated as
    Non-Statutory Options when issued under the Plan shall
    not be subject to the terms of this Section II.



 



    A.  Eligibility.  Incentive
    Options may only be granted to Employees.



 



    B.  Exercise Price.  The
    exercise price per share shall not be less than one hundred
    percent (100%) of the Fair Market Value per share of Common
    Stock on the option grant date.



 



    C.  Dollar Limitation.  The
    aggregate Fair Market Value of the shares of Common Stock
    (determined as of the respective date or dates of grant) for
    which one or more options granted to any Employee under the Plan
    (or any other option plan of the Corporation or any Parent or
    Subsidiary) may for the first time become exercisable as
    Incentive Options during any one calendar year shall not exceed
    the sum of One Hundred Thousand Dollars ($100,000). To the
    extent the Employee holds two (2) or more such options that
    become exercisable for the first time in the same calendar year,
    then for purposes of the foregoing limitation on the
    exercisability of those options as Incentive Options, such
    options shall be deemed to become first exercisable in that
    calendar year on the basis of the chronological order in which
    they were granted, except to the extent otherwise provided under
    applicable law or regulation.



 



    D.  10% Shareholder.  If any
    Employee to whom an Incentive Option is granted is a 10%
    Shareholder, then the exercise price per share shall not be less
    than one hundred ten percent (110%) of the Fair Market Value per
    share of Common Stock on the option grant date, and the option
    term shall not exceed five (5) years measured from the
    option grant date.



 




    III.  STOCK
    APPRECIATION RIGHTS



 



    A.  Authority.  The Plan
    Administrator shall have full power and authority, exercisable
    in its sole discretion, to grant stock appreciation rights in
    accordance with this Section III to selected Optionees or
    other individuals eligible to receive option grants under the
    Discretionary Grant Program.



 



    B.  Types.  Two types of stock
    appreciation rights shall be authorized for issuance under this
    Section III: (i) tandem stock appreciation rights
    (“Tandem Rights”), and (ii) standalone stock
    appreciation rights (“Standalone Rights”).



 



    C.  Tandem Rights.  The
    following terms and conditions shall govern the grant and
    exercise of Tandem Rights.



 



    1.  One or more Optionees may be granted a Tandem
    Right, exercisable upon such terms and conditions as the Plan
    Administrator may establish, to elect between the exercise of
    the underlying stock option for shares of Common Stock or the
    surrender of that option in exchange for a distribution from the
    Corporation in an amount equal to the excess of (i) the
    Fair Market Value (on the option surrender date) of the number
    of shares in which the Optionee is at the time vested under the
    surrendered option (or surrendered portion thereof) over
    (ii) the aggregate exercise price payable for such vested
    shares.



 



    2.  No such option surrender shall be effective unless
    it is approved by the Plan Administrator, either at the time of
    the actual option surrender or at any earlier time. If the
    surrender is so approved, then the distribution to which the
    Optionee shall accordingly become entitled under this
    Section III may be made in shares of Common Stock valued at
    Fair Market Value on the option surrender date, in cash, or
    partly in shares and partly in cash, as the Plan Administrator
    shall in its sole discretion deem appropriate.



 



    3. If the surrender of an option is not approved by the
    Plan Administrator, then the Optionee shall retain whatever
    rights the Optionee had under the surrendered option (or
    surrendered portion thereof) on the option surrender date and
    may exercise such rights at any time prior to the later
    of (i) five (5) business days after the receipt of
    the rejection notice or (ii) the last day on which the
    option is otherwise exercisable in accordance with the terms of
    the instrument evidencing such option, but in no event may such
    rights be exercised more than ten (10) years after the date
    of the option grant.



 



    D.  Standalone Rights.  The
    following terms and conditions shall govern the grant and
    exercise of Standalone Rights under this Article Two:



 



    1.  One or more individuals eligible to participate in
    the Discretionary Grant Program may be granted a Standalone
    Right not tied to any underlying option under this Discretionary
    Grant Program. The Standalone Right shall relate to a specified
    number of shares of Common Stock and shall be exercisable upon
    such terms and conditions as the Plan Administrator may
    establish. In no event, however, may the Standalone Right have a
    maximum term in excess of ten (10) years measured from the
    grant date. Upon exercise of the Standalone Right,




    

    A-6








 






    the holder shall be entitled to receive a distribution from the
    Corporation in an amount equal to the excess of (i) the
    aggregate Fair Market Value (on the exercise date) of the shares
    of Common Stock underlying the exercised right over
    (ii) the aggregate base price in effect for those shares.



 



    2.  The number of shares of Common Stock underlying
    each Standalone Right and the base price in effect for those
    shares shall be determined by the Plan Administrator in its sole
    discretion at the time the Standalone Right is granted. In no
    event, however, may the base price per share be less than the
    Fair Market Value per underlying share of Common Stock on the
    grant date.



 



    3.  Standalone Rights shall be subject to the same
    transferability restrictions applicable to Non-Statutory Options
    and may not be transferred during the holder’s lifetime,
    except by gift or pursuant to a domestic relations order
    covering the Standalone Right as marital property to one or more
    Family Members of the holder or to a trust established
    exclusively for the holder
    and/or such
    Family Members. In addition, one or more beneficiaries may be
    designated for an outstanding Standalone Right in accordance
    with substantially the same terms and provisions as set forth in
    Section I.F of this Article Two.



 



    4.  The distribution with respect to an exercised
    Standalone Right may be made in shares of Common Stock valued at
    Fair Market Value on the exercise date, in cash, or partly in
    shares and partly in cash, as the Plan Administrator shall in
    its sole discretion deem appropriate.



 



    5.  The holder of a Standalone Right shall have no
    shareholder rights with respect to the shares subject to the
    Standalone Right unless and until such person shall have
    exercised the Standalone Right and become a holder of record of
    shares of Common Stock issued upon the exercise of such
    Standalone Right.



 



    E.  Post-Service
    Exercise.  The provisions governing the
    exercise of Tandem and Standalone Appreciation Rights following
    the cessation of the recipient’s Service or the
    recipient’s death shall be substantially the same as those
    set forth in Section I.C of this Article Two for the
    options granted under the Discretionary Grant Program.



 



    F.  Net Counting.  Upon the
    exercise of any Tandem or Standalone Right under this
    Section III, the share reserve under Section V of
    Article One shall only be reduced by the net number of
    shares actually issued by the Corporation upon such exercise,
    and not by the gross number of shares as to which such Tandem or
    Standalone Right is exercised.



 


		
	
    IV.  
	
    CHANGE IN
    CONTROL/HOSTILE TAKE-OVER




 



    A.  No Award outstanding under the Discretionary Grant
    Program at the time of a Change in Control shall vest and become
    exercisable on an accelerated basis if and to the extent that:
    (i) such Award is, in connection with the Change in
    Control, assumed by the successor corporation (or parent
    thereof) or otherwise continued in full force and effect
    pursuant to the terms of the Change in Control transaction,
    (ii) such Award is replaced with a cash retention program
    of the successor corporation that preserves the spread existing
    at the time of the Change in Control on the shares of Common
    Stock as to which the Award is not otherwise at that time vested
    and exercisable and provides for the subsequent vesting and
    payout of that spread in accordance with the same
    exercise/vesting schedule applicable to those shares, or
    (iii) the acceleration of such Award is subject to other
    limitations imposed by the Plan Administrator. However, if none
    of the foregoing conditions are satisfied, each Award
    outstanding under the Discretionary Grant Program at the time of
    the Change in Control but not otherwise vested and exercisable
    as to all the shares at the time subject to that Award shall
    automatically accelerate so that each such Award shall,
    immediately prior to the effective date of the Change in
    Control, vest and become exercisable as to all the shares of
    Common Stock at the time subject to that Award and may be
    exercised as to any or all of those shares as fully vested
    shares of Common Stock.



 



    B.  All outstanding repurchase rights under the
    Discretionary Grant Program shall also terminate automatically,
    and the shares of Common Stock subject to those terminated
    rights shall immediately vest in full, in the event of any
    Change in Control, except to the extent: (i) those
    repurchase rights are assigned to the successor corporation (or
    parent thereof) or otherwise continue in full force and effect
    pursuant to the terms of the Change in Control transaction or
    (ii) such accelerated vesting is precluded by other
    limitations imposed by the Plan Administrator.



 



    C.  Immediately following the consummation of the
    Change in Control, all outstanding Awards under the
    Discretionary Grant Program shall terminate and cease to be
    outstanding, except to the extent assumed by the successor
    corporation (or parent thereof) or otherwise expressly continued
    in full force and effect pursuant to the terms of the Change in
    Control transaction.




    

    A-7








 






    D.  Each option that is assumed in connection with a
    Change in Control or otherwise continued in effect shall be
    appropriately adjusted, immediately after such Change in
    Control, to apply to the number and class of securities that
    would have been issuable to the Optionee in consummation of such
    Change in Control had the option been exercised immediately
    prior to such Change in Control. In the event outstanding
    Standalone Rights are to be assumed in connection with a Change
    in Control transaction or otherwise continued in effect, the
    shares of Common Stock underlying each such Standalone Right
    shall be adjusted immediately after such Change in Control to
    apply to the number and class of securities into which those
    shares of Common Stock would have been converted in consummation
    of such Change in Control had those shares actually been
    outstanding at that time. Appropriate adjustments to reflect
    such Change in Control shall also be made to (i) the
    exercise price payable per share under each outstanding option,
    provided the aggregate exercise price payable for such
    securities shall remain the same, (ii) the base price per
    share in effect under each outstanding Standalone Right,
    provided the aggregate base price shall remain the same,
    (iii) the maximum number
    and/or class
    of securities available for issuance over the remaining term of
    the Plan, (iv) the maximum number
    and/or class
    of securities for which any one person may be granted Awards
    under the Plan per calendar year, (v) the maximum number
    and/or class
    of securities by which the share reserve is to increase
    automatically each calendar year pursuant to the automatic share
    increase provisions of the Plan, (vi) the number
    and/or class
    of securities for which restricted stock unit awards are
    subsequently to be made under the Director Automatic Grant
    Program to new and continuing Eligible Directors (vii) the
    number
    and/or class
    of securities subject to each outstanding Award under the Stock
    Issuance Program and the cash consideration (if any) payable per
    share thereunder, and (viii) the maximum number and class
    of securities that may be added to the Plan through the
    repurchase of unvested shares issued under the Predecessor
    Plans. To the extent the actual holders of the
    Corporation’s outstanding Common Stock receive cash
    consideration for their Common Stock in consummation of the
    Change in Control, the successor corporation may, in connection
    with the assumption or continuation of the outstanding Awards
    under the Discretionary Grant Program, substitute, for the
    securities underlying those assumed Awards, one or more shares
    of its own common stock with a fair market value equivalent to
    the cash consideration paid per share of Common Stock in such
    Change in Control transaction.



 



    E.  The Plan Administrator shall have the
    discretionary authority to structure one or more outstanding
    Awards under the Discretionary Grant Program so that those
    Awards shall, immediately prior to the effective date of a
    Change in Control or a Hostile Take-Over, vest and become
    exercisable as to all the shares at the time subject to those
    Awards and may be exercised as to any or all of those shares as
    fully vested shares of Common Stock, whether or not those Awards
    are to be assumed or otherwise continued in full force and
    effect pursuant to the express terms of such transaction. In
    addition, the Plan Administrator shall have the discretionary
    authority to structure one or more of the Corporation’s
    repurchase rights under the Discretionary Grant Program so that
    those rights shall immediately terminate at the time of such
    Change in Control or consummation of such Hostile Take-Over and
    shall not be assignable to successor corporation (or parent
    thereof), and the shares subject to those terminated rights
    shall accordingly vest in full at the time of such Change in
    Control or consummation of such Hostile Take-Over.



 



    F.  The Plan Administrator shall have full power and
    authority to structure one or more outstanding Awards under the
    Discretionary Grant Program so that those Awards shall
    immediately vest and become exercisable as to all of the shares
    at the time subject to those Awards in the event the
    Optionee’s Service is subsequently terminated by reason of
    an Involuntary Termination within a designated period (not to
    exceed eighteen (18) months) following the effective date
    of any Change in Control or a Hostile Take-Over in which those
    Awards do not otherwise vest on an accelerated basis. Any Awards
    so accelerated shall remain exercisable as to fully vested
    shares until the expiration or sooner termination of their term.
    In addition, the Plan Administrator may structure one or more of
    the Corporation’s repurchase rights under the Discretionary
    Grant Program so that those rights shall immediately terminate
    with respect to any shares held by the Optionee at the time of
    his or her Involuntary Termination, and the shares subject to
    those terminated repurchase rights shall accordingly vest in
    full at that time.



 



    G.  The portion of any Incentive Option accelerated in
    connection with a Change in Control shall remain exercisable as
    an Incentive Option only to the extent the applicable One
    Hundred Thousand Dollar ($100,000) limitation is not exceeded.
    To the extent such dollar limitation is exceeded, the
    accelerated portion of such option shall be exercisable as a
    Non-Statutory Option under the Federal tax laws.



 



    H.  Awards outstanding under the Discretionary Grant
    Program shall in no way affect the right of the Corporation to
    adjust, reclassify, reorganize or otherwise change its capital
    or business structure or to merge, consolidate, dissolve,
    liquidate or sell or transfer all or any part of its business or
    assets.




    

    A-8








 







    ARTICLE THREE



 



    STOCK ISSUANCE PROGRAM



 


		
	
    I.  
	
    STOCK
    ISSUANCE TERMS




 



    A.  Issuances.  Shares of
    Common Stock may be issued under the Stock Issuance Program
    through direct and immediate issuances without any intervening
    option grants. Each such stock issuance shall be evidenced by a
    Stock Issuance Agreement that complies with the terms specified
    below. Shares of Common Stock may also be issued under the Stock
    Issuance Program pursuant to share right awards or restricted
    stock units, awarded by and at the discretion of the Plan
    Administrator, that entitle the recipients to receive the shares
    underlying those awards or units upon the attainment of
    designated performance goals
    and/or the
    satisfaction of specified Service requirements or upon the
    expiration of a designated time period following the vesting of
    those awards or units.



 



    B.  Issue Price.



 



    1.  The price per share at which shares of Common
    Stock may be issued under the Stock Issuance Program shall be
    fixed by the Plan Administrator, but shall not be less than one
    hundred percent (100%) of the Fair Market Value per share of
    Common Stock on the issuance date.



 



    2.  Shares of Common Stock may be issued under the
    Stock Issuance Program for any of the following items of
    consideration that the Plan Administrator may deem appropriate
    in each individual instance:



 



    (i)  cash or check made payable to the Corporation;



 



    (ii)  past services rendered to the Corporation (or
    any Parent or Subsidiary); or



 



    (iii)  any other valid form of consideration
    permissible under the California Corporations Code at the time
    such shares are issued.



 



    C.  Vesting Provisions.



 



    1.  Shares of Common Stock issued under the Stock
    Issuance Program may, in the discretion of the Plan
    Administrator, be fully and immediately vested upon issuance or
    may vest in one or more installments over the Participant’s
    period of Service
    and/or upon
    attainment of specified performance objectives. The elements of
    the vesting schedule applicable to any unvested shares of Common
    Stock issued under the Stock Issuance Program shall be
    determined by the Plan Administrator and incorporated into the
    Stock Issuance Agreement. Shares of Common Stock may also be
    issued under the Stock Issuance Program pursuant to share right
    awards or restricted stock units that entitle the recipients to
    receive the shares underlying those awards
    and/or units
    upon the attainment of designated performance goals or the
    satisfaction of specified Service requirements or upon the
    expiration of a designated time period following the vesting of
    those awards or units, including (without limitation) a deferred
    distribution date following the termination of the
    Participant’s Service.



 



    2.  The Plan Administrator shall also have the
    discretionary authority, consistent with Code
    Section 162(m), to structure one or more Awards under the
    Stock Issuance Program so that the shares of Common Stock
    subject to those Awards shall vest (or vest and become issuable)
    upon the achievement of certain pre-established corporate
    performance goals based on one or more of the following
    criteria: (i) return on total shareholder equity;
    (ii) net income per share of Common Stock; (iii) net
    income or operating income; (iv) earnings before interest,
    taxes, depreciation, amortization and stock-based compensation
    costs, or operating income before depreciation and amortization;
    (v) sales or revenue targets; (vi) return on assets,
    capital or investment; (vii) cash flow; (viii) market
    share; (ix) cost reduction goals; (x) budget
    comparisons; (xi) implementation or completion of projects
    or processes strategic or critical to the Corporation’s
    business operations; (xii) measures of customer
    satisfaction; (xiii) any combination of, or a specified
    increase in, any of the foregoing; and (xiv) the formation
    of joint ventures, research and development collaborations,
    marketing or customer service collaborations, or the completion
    of other corporate transactions intended to enhance the
    Corporation’s revenue or profitability or expand its
    customer base; provided, however, that for purposes of
    items (ii), (iii), (iv) and (vii) above, the Plan
    Administrator may, at the time the Awards are made, specify
    certain adjustments to such items as reported in accordance with
    generally accepted accounting principles in the
    U.S. (“GAAP”), which will exclude from the
    calculation of those performance goals one or more of the
    following: certain charges related to acquisitions, stock-based
    compensation, employer payroll tax expense on certain stock
    option exercises, settlement costs, restructuring costs, gains
    or losses on strategic




    

    A-9








 






    investments, non-operating gains or losses, certain other
    non-cash charges, valuation allowance on deferred tax assets,
    and the related income tax effects, purchases of property and
    equipment, and any extraordinary non- recurring items as
    described in Accounting Principles Board Opinion No. 30,
    provided that such adjustments are in conformity with those
    reported by the Corporation on a non-GAAP basis. In addition,
    such performance goals may be based upon the attainment of
    specified levels of the Corporation’s performance under one
    or more of the measures described above relative to the
    performance of other entities and may also be based on the
    performance of any of the Corporation’s business groups or
    divisions thereof or any Parent or Subsidiary. Performance goals
    may include a minimum threshold level of performance below which
    no award will be earned, levels of performance at which
    specified portions of an award will be earned, and a maximum
    level of performance at which an award will be fully earned. The
    Plan Administrator may provide that, if the actual level of
    attainment for any performance objective is between two
    specified levels, the amount of the award attributable to that
    performance objective shall be interpolated on a straight-line
    basis.



 



    3.  Any new, substituted or additional securities or
    other property (including money paid other than as a regular
    cash dividend) that the Participant may have the right to
    receive with respect to the Participant’s unvested shares
    of Common Stock by reason of any stock dividend, stock split,
    recapitalization, combination of shares, exchange of shares,
    spin-off transaction or other change affecting the outstanding
    Common Stock as a class without the Corporation’s receipt
    of consideration or a substantial reduction in the value of
    outstanding shares of Common Stock as a result of a spin-off
    transaction or an extraordinary dividend or distribution, shall
    be issued subject to (i) the same vesting requirements
    applicable to the Participant’s unvested shares of Common
    Stock and (ii) such escrow arrangements as the Plan
    Administrator shall deem appropriate.



 



    4.  The Participant shall have full shareholder rights
    with respect to any shares of Common Stock issued to the
    Participant under the Stock Issuance Program, whether or not the
    Participant’s interest in those shares is vested.
    Accordingly, the Participant shall have the right to vote such
    shares and to receive any regular cash dividends paid on such
    shares. The Participant shall not have any shareholder rights
    with respect to the shares of Common Stock subject to a
    restricted stock unit or share right award until that award
    vests and the shares of Common Stock are actually issued
    thereunder. However, dividend-equivalent units may be paid or
    credited, either in cash or in actual or phantom shares of
    Common Stock, on outstanding restricted stock unit or share
    right awards, subject to such terms and conditions as the Plan
    Administrator may deem appropriate.



 



    5.  Should the Participant cease to remain in Service
    while holding one or more unvested shares of Common Stock issued
    under the Stock Issuance Program or should the performance
    objectives not be attained with respect to one or more such
    unvested shares of Common Stock, then those shares shall be
    immediately surrendered to the Corporation for cancellation, and
    the Participant shall have no further shareholder rights with
    respect to those shares. To the extent the surrendered shares
    were previously issued to the Participant for consideration paid
    in cash, cash equivalent or otherwise, the Corporation shall
    repay to the Participant the same amount and form of
    consideration as the Participant paid for the surrendered shares.



 



    6.  The Plan Administrator may in its discretion waive
    the surrender and cancellation of one or more unvested shares of
    Common Stock that would otherwise occur upon the cessation of
    the Participant’s Service or the non-attainment of the
    performance objectives applicable to those shares. Any such
    waiver shall result in the immediate vesting of the
    Participant’s interest in the shares of Common Stock as to
    which the waiver applies. Such waiver may be effected at any
    time, whether before or after the Participant’s cessation
    of Service or the attainment or non-attainment of the applicable
    performance objectives. However, no vesting requirements tied to
    the attainment of performance objectives may be waived with
    respect to shares that were intended at the time of issuance to
    qualify as performance-based compensation under Code
    Section 162(m), except in the event of the
    Participant’s Involuntary Termination or as otherwise
    provided in Section II.E of this Article Three.



 



    7.  Outstanding share right awards or restricted stock
    units under the Stock Issuance Program shall automatically
    terminate, and no shares of Common Stock shall actually be
    issued in satisfaction of those awards or units, if the
    performance goals or Service requirements established for such
    awards or units are not attained or satisfied. The Plan
    Administrator, however, shall have the discretionary authority
    to issue vested shares of Common Stock under one or more
    outstanding share right awards or restricted stock units as to
    which the designated performance goals or Service requirements
    have not been attained or satisfied. However, no vesting
    requirements tied to the attainment of performance goals may be
    waived with respect to awards or units which were at the time of
    grant intended to




    

    A-10








 






    qualify as performance-based compensation under Code
    Section 162(m), except in the event of the
    Participant’s Involuntary Termination or as otherwise
    provided in Section II.E of this Article Three.



 


		
	
    II.  
	
    CHANGE IN
    CONTROL/HOSTILE TAKE-OVER




 



    A.  All of the Corporation’s outstanding
    repurchase rights under the Stock Issuance Program shall
    terminate automatically, and all the shares of Common Stock
    subject to those terminated rights shall immediately vest in
    full, in the event of any Change in Control, except to the
    extent (i) those repurchase rights are to be assigned to
    the successor corporation (or parent thereof) or otherwise
    continued in full force and effect pursuant to the express terms
    of the Change in Control transaction or (ii) such
    accelerated vesting is precluded by other limitations imposed in
    the Stock Issuance Agreement.



 



    B.  Each outstanding Award under the Stock Issuance
    Program that is assumed in connection with a Change in Control
    or otherwise continued in effect shall be adjusted immediately
    after the consummation of that Change in Control to apply to the
    number and class of securities into which the shares of Common
    Stock subject to the Award immediately prior to the Change in
    Control would have been converted in consummation of such Change
    in Control had those shares actually been outstanding at that
    time, and appropriate adjustments shall also be made to the cash
    consideration (if any) payable per share thereunder, provided
    the aggregate amount of such consideration shall remain the
    same. If any such Award is not so assumed or otherwise continued
    in effect or replaced with a cash retention program that
    preserves the Fair Market Value of the shares underlying the
    Award at the time of the Change in Control and provides for the
    subsequent vesting and payout of that value in accordance with
    the vesting schedule in effect for the Award at the time of such
    Change in Control, such Award shall vest, and the shares of
    Common Stock subject to that Award shall be issued as
    fully-vested shares, immediately prior to the consummation of
    the Change in Control.



 



    C.  The Plan Administrator shall have the
    discretionary authority to structure one or more unvested Awards
    under the Stock Issuance Program so that the shares of Common
    Stock subject to those Awards shall automatically vest (or vest
    and become issuable) in whole or in part immediately upon the
    occurrence of a Change in Control or upon the subsequent
    termination of the Participant’s Service by reason of an
    Involuntary Termination within a designated period (not to
    exceed eighteen (18) months) following the effective date
    of that Change in Control transaction.



 



    D.  The Plan Administrator shall also have the
    discretionary authority to structure one or more unvested Awards
    under the Stock Issuance Program so that the shares of Common
    Stock subject to those Awards shall automatically vest (or vest
    and become issuable) in whole or in part immediately upon the
    occurrence of a Hostile Take-Over or upon the subsequent
    termination of the Participant’s Service by reason of an
    Involuntary Termination within a designated period (not to
    exceed eighteen (18) months) following the effective date
    of that Hostile Take-Over.



 



    E.  The Plan Administrator’s authority under
    Paragraphs C and D of this Section II shall also
    extend to any Award intended to qualify as performance-based
    compensation under Code Section 162(m), even though the
    automatic vesting of those Awards pursuant to Paragraph C
    or D of this Section II may result in their loss of
    performance-based status under Code Section 162(m).




    

    A-11








 







    ARTICLE FOUR



 



    DIRECTOR AUTOMATIC GRANT PROGRAM



 



    The provisions of the Director Automatic Grant Program set forth
    in this Article Four were amended and modified by the Board
    on February 7, 2008, subject to shareholder approval at the
    2008 Annual Meeting. Accordingly, if such shareholder approval
    is obtained, then the following terms and provisions shall
    govern the Awards made under this Director Automatic Grant
    Program, effective with the Awards made to the continuing
    non-employee Board members at the 2008 Annual Meeting. Any
    Awards made under this Director Automatic Grant Program prior to
    the February 7, 2008 amendment shall remain in full force
    and effect in accordance with the terms of the documents
    evidencing such Awards. Should such shareholder approval not be
    obtained, then the provisions of this Article Four as in
    effect immediately prior to the February 7, 2008 amendment
    shall continue in full force and effect.



 


		
	
    I.  
	
    TERMS




 



    A.  Grant Dates.  Grants under
    this amended Article Four shall be made on the dates
    specified below:



 



    1.  On the date of each annual meeting of
    shareholders, beginning with the 2008 Annual Meeting of
    Shareholders, each individual who is to continue to serve as an
    Eligible Director, whether or not that individual is standing
    for re-election to the Board at that particular annual meeting
    of shareholders, shall automatically be granted restricted stock
    units covering that number of shares of Common Stock (rounded up
    to the next whole share) determined by dividing the dollar sum
    of Three Hundred Thousand Dollars ($300,000) by the Fair Market
    Value per share of Common Stock on such date. There shall be no
    limit on the number of such annual restricted stock unit awards
    any one Eligible Director may receive over his or her period of
    Board service.



 



    2.  Each individual who commences service as an
    Eligible Director by reason of his or her election to the Board
    at an annual meeting of shareholders shall automatically be
    granted restricted stock units covering that number of shares of
    Common Stock (rounded up to the next whole share) determined by
    dividing the dollar sum of Three Hundred Thousand Dollars
    ($300,000) by the Fair Market Value per share of Common Stock on
    the date of such annual meeting.



 



    3.  Each individual who is first elected or appointed
    as an Eligible Director at any time after the date of the 2008
    Annual Meeting of Shareholders and other than as a result of his
    or her initial election to the Board at an annual meeting of
    shareholders, shall, on the date he or she commences Service as
    an Eligible Director, automatically be granted the following
    Award, provided such individual has not previously been in the
    employ of the Corporation (or any Parent or Subsidiary):



 


			
	 	    •  
	
    a restricted stock unit award covering that number of shares of
    Common Stock determined (i) first by multiplying the dollar
    sum of Three Hundred Thousand Dollars ($300,000) by a fraction
    the numerator of which is the number of months (including any
    partial month, expressed as a fraction) that will elapse between
    the date he or she commences Service as an Eligible Director and
    the first May 5th next succeeding such Service
    commencement date and the denominator of which is 12 months
    and (ii) then, by dividing the pro-rated dollar amount so
    calculated by the Fair Market Value per share on such
    commencement date.




 



    B.  Vesting of Restricted Stock Units and
    Issuance of Shares.   Each restricted stock
    unit award shall vest in a series of one or more successive
    equal quarterly installments over the period measured from the
    date of such award and ending no later than the next succeeding
    5th day of May. The quarterly vesting dates shall be the
    5th day of February, May, August and November each year,
    with the first such quarterly vesting date to be at least thirty
    (30) days after the date of the award and the final vesting
    date to be the earlier of (i) the last quarterly
    vesting date determined for such award in accordance with the
    foregoing specified dates or (ii) the day immediately
    preceding the date of the first annual meeting of shareholders
    following the date of such award. The Board member shall not
    vest in any additional restricted stock units following his or
    her cessation of service as a Board member; provided,
    however, that each restricted stock unit award held
    by an Eligible Director under the Director Automatic Grant
    Program will immediately vest in full upon his or her cessation
    of Board service by reason of death or Permanent Disability. As
    the restricted stock units under the Director Automatic Grant
    Program vest in one or more installments, the shares of Common
    Stock underlying those vested units shall be promptly issued;
    provided, however, that the Compensation Committee may
    allow one or more Eligible Directors to defer, in accordance
    with the applicable deferral election requirements in effect
    under Code Section 409A and the Treasury Regulations issued
    thereunder, the issuance of the shares beyond the applicable
    vesting date to a designated date




    

    A-12








 






    or until cessation of Board service or an earlier change in
    control event (as determined in accordance with such Treasury
    Regulations).



 


		
	
    II.  
	
    CHANGE IN
    CONTROL/HOSTILE TAKE-OVER




 



    A.  In the event of any Change in Control or Hostile
    Take-Over while the Eligible Director remains a Board member,
    the following provisions shall apply:



 


			
	 	    • 
	
    The shares of Common Stock that are at the time of such Change
    in Control or Hostile Take-Over subject to any outstanding
    restricted stock units awards made to such Director under the
    Director Automatic Grant Program shall, immediately prior to the
    effective date of the Change in Control or Hostile Take-Over,
    vest in full and be issued to such individual as soon as
    administratively practicable thereafter, but in no event later
    than fifteen (15) business days after the effective date of
    such transaction; provided, however, that should there be
    a deferral election in effect at that time for any Eligible
    Director, then the issuance of the vested shares (or any other
    securities or consideration in which those vested shares of
    Common Stock may have been converted in the Change in Control or
    Hostile Take-Over transaction) shall be issued or distributed
    solely in accordance with the permissible Code Section 409A
    payment date or event specified in that deferral election.




 



    B.  The existence of outstanding Awards under the
    Director Automatic Grant Program shall in no way affect the
    right of the Corporation to adjust, reclassify, reorganize or
    otherwise change its capital or business structure or to merge,
    consolidate, dissolve, liquidate or sell or transfer all or any
    part of its business or assets.



 




    III.  REMAINING
    TERMS



 



    The remaining terms of each restricted stock unit award under
    the Director Automatic Grant Program shall be as set forth in
    the form restricted stock unit award agreement approved by the
    Compensation Committee to evidence the Awards made under this
    Article Four.




    

    A-13








 







    ARTICLE FIVE



 



    MISCELLANEOUS



 


		
	
    I.  
	
    TAX
    WITHHOLDING




 



    A.  The Corporation’s obligation to deliver
    shares of Common Stock upon the issuance, exercise or vesting of
    Awards under the Plan shall be subject to the satisfaction of
    all applicable federal, state and local income and employment
    tax withholding requirements.



 



    B.  The Plan Administrator may, in its discretion,
    provide any or all Optionees or Participants to whom Awards are
    made under the Plan (other than the Awards made under the
    Director Automatic Grant Program) with the right to utilize
    either or both of the following methods to satisfy all or part
    of the Withholding Taxes to which those holders may become
    subject in connection with the issuance, exercise or vesting of
    those Awards.



 



    Stock Withholding:  The election to have
    the Corporation withhold, from the shares of Common Stock
    otherwise issuable upon the issuance, exercise or vesting of
    those Awards a portion of those shares with an aggregate Fair
    Market Value equal to the percentage of the Withholding Taxes
    (not to exceed one hundred percent (100%)) designated by the
    Optionee or Participant and make a cash payment equal to such
    Fair Market Value directly to the appropriate taxing authorities
    on such individual’s behalf. The shares of Common Stock so
    withheld shall not reduce the number of shares of
    Common Stock authorized for issuance under the Plan.



 



    Stock Delivery:  The election to deliver
    to the Corporation, at the time the Award is issued, exercised
    or vests, one or more shares of Common Stock previously acquired
    by such the Optionee or Participant (other than in connection
    with the issuance, exercise or vesting triggering the
    Withholding Taxes) with an aggregate Fair Market Value equal to
    the percentage of the Withholding Taxes (not to exceed one
    hundred percent (100%)) designated by such holder. The shares of
    Common Stock so delivered shall not be added to the shares of
    Common Stock authorized for issuance under the Plan.



 


		
	
    II.  
	
    SHARE
    ESCROW/LEGENDS




 



    Unvested shares issued under the Plan may, in the Plan
    Administrator’s discretion, be held in escrow by the
    Corporation until the Participant’s interest in such shares
    vests or may be issued directly to the Participant with
    restrictive legends on the certificates evidencing those
    unvested shares.



 




    III.  EFFECTIVE
    DATE AND TERM OF THE PLAN



 



    A.  The Plan became effective immediately on the
    Original Effective Date. Awards may be granted under the
    Discretionary Grant Program, the Stock Issuance Program and the
    Director Automatic Grant Program at any time on or after the
    Original Effective Date.



 



    B.  The Plan shall serve as the successor to the
    Predecessor Plans, and no further option grants or direct stock
    issuances shall be made under the Predecessor Plans after
    April 16, 1998. All options outstanding under the
    Predecessor Plans on April 16, 1998 were incorporated into
    the Plan at that time and are treated as outstanding options
    under the Plan. However, each outstanding option so incorporated
    shall continue to be governed solely by the terms of the
    documents evidencing such option, and no provision of the Plan
    shall be deemed to affect or otherwise modify the rights or
    obligations of the holders of such incorporated options with
    respect to their acquisition of shares of Common Stock.



 



    C.  One or more provisions of the Plan, including
    (without limitation) the option/vesting acceleration provisions
    of Article Two relating to Changes in Control and Hostile
    Take-Overs, may, in the Plan Administrator’s discretion, be
    extended to one or more options incorporated from the
    Predecessor Plans that do not otherwise contain such provisions.



 



    D.  The Plan was amended and restated by the Board on
    February 7, 2008 (the “February 2008
    Restatement”), subject to shareholder approval at the 2008
    Annual Meeting of Shareholders, to amend the provisions of the
    Director Automatic Grant Program, and was further amended and
    restated on March 12, 2008 to extend the term of the Plan
    and to revise the adjustments that may be made to certain
    performance criteria that may serve as vesting conditions for
    performance-based awards under the Stock Issuance Program (the
    “March 2008 Restatement” and together with the
    February 2008 Restatement, the “2008 Restatements”).
    The revisions to the Plan shall not become effective unless the
    shareholders approve the 2008 Restatements at the 2008 Annual
    Meeting of Shareholders. Should shareholder approval not be
    obtained at the 2008 Annual Meeting of Shareholders, the
    proposed revisions to the Director Automatic Grant Program,




    

    A-14








 






    the extension of the term of the Plan and the revision to the
    performance criteria under the Stock Issuance Program will not
    be implemented. The Plan will, however, continue in effect, and
    Awards will continue to be made under the Plan until all the
    shares available for issuance under the Plan have been issued
    pursuant to Awards made under the Plan.



 



    E.  The Plan shall terminate upon the earliest
    to occur of (i) March 12, 2018, (ii) the date on
    which all shares available for issuance under the Plan shall
    have been issued as fully-vested shares or (iii) the
    termination of all outstanding Awards in connection with a
    Change in Control. Should the Plan terminate March 12,
    2018, all Awards outstanding at that time shall continue to have
    force and effect in accordance with the provisions of the
    documents evidencing such Awards.



 


		
	
    IV.  
	
    AMENDMENT
    OF THE PLAN




 



    A.  The Board shall have complete and exclusive power
    and authority to amend or modify the Plan in any or all
    respects. However, no such amendment or modification shall
    adversely affect the rights and obligations with respect to
    Awards at the time outstanding under the Plan unless the
    Optionee or the Participant consents to such amendment or
    modification. In addition, shareholder approval will be required
    for any amendment to the Plan that (i) materially increases
    the number of shares of Common Stock available for issuance
    under the Plan, (ii) materially expands the class of
    individuals eligible to receive option grants or other awards
    under the Plan, (iii) materially increases the benefits
    accruing to the Optionees and Participants under the Plan or
    materially reduces the price at which shares of Common Stock may
    be issued or purchased under the Plan, (iv) materially
    extends the term of the Plan or (v) expands the types of
    awards available for issuance under the Plan.



 



    B.  Awards may be made under the Plan that involve
    shares of Common Stock in excess of the number of shares then
    available for issuance under the Plan, provided no shares shall
    actually be issued pursuant to those Awards until the number of
    shares of Common Stock available for issuance under the Plan is
    sufficiently increased either by (1) the automatic annual
    share increase provisions of Section V.B. of
    Article One or (2) shareholder approval of an
    amendment of the Plan sufficiently increasing the share reserve.
    If shareholder approval is required and is not obtained within
    twelve (12) months after the date of the first such excess
    Award, then all Awards made on the basis of such excess shares
    shall terminate and cease to be outstanding.



 


		
	
    V.  
	
    USE OF
    PROCEEDS




 



    Any cash proceeds received by the Corporation from the sale of
    shares of Common Stock under the Plan shall be used for general
    corporate purposes.



 


		
	
    VI.  
	
    REGULATORY
    APPROVALS




 



    A.  The implementation of the Plan, the grant of any
    Award and the issuance of shares of Common Stock in connection
    with the issuance, exercise or vesting of any Award made under
    the Plan shall be subject to the Corporation’s procurement
    of all approvals and permits required by regulatory authorities
    having jurisdiction over the Plan, the Awards made under the
    Plan and the shares of Common Stock issuable pursuant to those
    Awards.



 



    B.  No shares of Common Stock or other assets shall be
    issued or delivered under the Plan unless and until there shall
    have been compliance with all applicable requirements of Federal
    and state securities laws, including the filing and
    effectiveness of the
    Form S-8
    registration statement for the shares of Common Stock issuable
    under the Plan, and all applicable listing requirements of any
    stock exchange on which Common Stock is then listed for trading.



 


		
	
    VII.  
	
    NO
    EMPLOYMENT/SERVICE RIGHTS




 



    Nothing in the Plan shall confer upon the Optionee or the
    Participant any right to continue in Service for any period of
    specific duration or interfere with or otherwise restrict in any
    way the rights of the Corporation (or any Parent or Subsidiary
    employing or retaining such person) or of the Optionee or the
    Participant, which rights are hereby expressly reserved by each,
    to terminate such person’s Service at any time for any
    reason, with or without cause.




    

    A-15








 







    APPENDIX



 



    The following definitions shall be in effect under the Plan:



 



    A.  Award shall mean any of the
    following stock or stock-based awards authorized for issuance or
    grant under the Plan: stock option, stock appreciation right,
    direct stock issuance, restricted stock or restricted stock unit
    award or other stock-based award.



 



    B.  Board shall mean the
    Corporation’s Board of Directors.



 



    C.  Change in Control shall mean a
    change in ownership or control of the Corporation effected
    through any of the following transactions:



 



    (i)  a shareholder-approved merger or consolidation in
    which securities possessing more than fifty percent (50%) of the
    total combined voting power of the Corporation’s
    outstanding securities are transferred to a person or persons
    different from the persons holding those securities immediately
    prior to such transaction, or



 



    (ii)  a shareholder-approved sale, transfer or other
    disposition of all or substantially all of the
    Corporation’s assets in complete liquidation or dissolution
    of the Corporation, or



 



    (iii)  the acquisition, directly or indirectly by any
    person or related group of persons (other than the Corporation
    or a person that directly or indirectly controls, is controlled
    by, or is under common control with, the Corporation), of
    beneficial ownership (within the meaning of
    Rule 13d-3
    of the Securities Exchange Act of 1934, as amended (the
    “1934 Act”)) of securities possessing more than
    fifty percent (50%) of the total combined voting power of the
    Corporation’s outstanding securities pursuant to a tender
    or exchange offer made directly to the Corporation’s
    shareholders or pursuant to a private transaction or series of
    transactions with one or more of the Corporation’s
    shareholders.



 



    D.  Code shall mean the Internal Revenue
    Code of 1986, as amended.



 



    E.  Common Stock shall mean the
    Corporation’s Class A Common Stock.



 



    F.  Corporation shall mean Broadcom
    Corporation, a California corporation, and any corporate
    successor to all or substantially all of the assets or voting
    stock of Broadcom Corporation that shall by appropriate action
    adopt the Plan.



 



    G.  Director Automatic Grant Program
    shall mean the director automatic grant program in effect
    under Article Four of the Plan for the Eligible Directors.



 



    H.  Discretionary Grant Program shall
    mean the discretionary grant program in effect under
    Article Two of the Plan pursuant to which stock options and
    stock appreciation rights may be granted to one or more eligible
    individuals.



 



    I.  Eligible Director shall mean a Board
    member who is not, at the time of such determination, an
    employee of the Corporation (or any Parent or Subsidiary) and
    who is accordingly eligible to participate in the Director
    Automatic Grant Program in accordance with the eligibility
    provisions of Articles One and Four.



 



    J.  Employee shall mean an individual
    who is in the employ of the Corporation (or any Parent or
    Subsidiary), subject to the control and direction of the
    employer entity as to both the work to be performed and the
    manner and method of performance.



 



    K.  Exercise Date shall mean the date on
    which the Corporation shall have received written notice of the
    option exercise.



 



    L.  Fair Market Value per share of
    Common Stock on any relevant date shall be determined in
    accordance with the following provisions:



 



    (i)  If the Common Stock is at the time traded on the
    Nasdaq Global Select
    Marketsm
    (or the Nasdaq Global Market), then the Fair Market Value shall
    be the closing selling price per share of Common Stock at the
    close of regular hours trading (i.e., before
    after-hours
    trading begins) on the Nasdaq Global Select Market (or the
    Nasdaq Global Market) on the date in question, as such price is
    reported by The Wall Street Journal. If there is no closing
    selling price for the Common Stock on the date in question, then
    the Fair Market Value shall be the closing selling price on the
    last preceding date for which such quotation exists.



 



    (ii)  If the Common Stock is at the time listed on any
    other Stock Exchange, then the Fair Market Value shall be the
    closing selling price per share of Common Stock at the close of
    regular hours trading (i.e., before
    after-hours




    

    A-16








 






    trading begins) on the date in question on the Stock Exchange
    determined by the Plan Administrator to be the primary market
    for the Common Stock, as such price is officially quoted in the
    composite tape of transactions on such exchange. If there is no
    closing selling price for the Common Stock on the date in
    question, then the Fair Market Value shall be the closing
    selling price on the last preceding date for which such
    quotation exists.



 



    M.  Family Member means, with respect to
    a particular Optionee or Participant, any child, stepchild,
    grandchild, parent, stepparent, grandparent, spouse, former
    spouse, sibling, niece, nephew,
    mother-in-law,
    father-in-law,
    son-in-law,
    daughter-in-law,
    bother-in-law
    or
    sister-in-law.



 



    N.  Hostile Take-Over shall mean either
    of the following events effecting a change in control or
    ownership of the Corporation:



 



    (i)  the acquisition, directly or indirectly, by any
    person or related group of persons (other than the Corporation
    or a person that directly or indirectly controls, is controlled
    by, or is under common control with, the Corporation) of
    beneficial ownership (within the meaning of
    Rule 13d-3
    of the 1934 Act) of securities possessing more than fifty
    percent (50%) of the total combined voting power of the
    Corporation’s outstanding securities pursuant to a tender
    or exchange offer made directly to the Corporation’s
    shareholders that the Board does not recommend such shareholders
    to accept, or



 



    (ii)  a change in the composition of the Board over a
    period of thirty-six (36) consecutive months or less such
    that a majority of the Board members ceases, by reason of one or
    more contested elections for Board membership, to be composed of
    individuals who either (A) have been Board members
    continuously since the beginning of such period or (B) have
    been elected or nominated for election as Board members during
    such period by at least a majority of the Board members
    described in clause (A) who were still in office at the
    time the Board approved such election or nomination.



 



    O.  Incentive Option shall mean an
    option that satisfies the requirements of Code Section 422.



 



    P.  Involuntary Termination shall mean
    the termination of the Service of any individual that occurs by
    reason of:



 



    (i)  such individual’s involuntary dismissal or
    discharge by the Corporation for reasons other than
    Misconduct, or



 



    (ii)  such individual’s voluntary resignation
    following (A) a change in his or her position with the
    Corporation that materially reduces his or her duties and
    responsibilities or the level of management to which he or she
    reports, (B) a reduction in his or her level of
    compensation (including base salary, fringe benefits and target
    bonus under any corporate-performance-based bonus or incentive
    programs) by more than fifteen percent (15%) or (C) a
    relocation of such individual’s place of employment by more
    than fifty (50) miles, provided and only if such change,
    reduction or relocation is effected by the Corporation without
    the individual’s consent.



 



    Q.  Misconduct shall mean the commission
    of any act of fraud, embezzlement or dishonesty by the Optionee
    or Participant, any unauthorized use or disclosure by such
    person of confidential information or trade secrets of the
    Corporation (or any Parent or Subsidiary), or any other
    intentional misconduct by such person adversely affecting the
    business or affairs of the Corporation (or any Parent or
    Subsidiary) in a material manner. The foregoing definition shall
    not in any way preclude or restrict the right of the Corporation
    (or any Parent or Subsidiary) to discharge or dismiss any
    Optionee, Participant or other person in the Service of the
    Corporation (or any Parent or Subsidiary) for any other acts or
    omissions, but such other acts or omissions shall not be deemed,
    for purposes of the Plan, to constitute grounds for termination
    for Misconduct.



 



    R.  1934 Act shall mean the
    Securities Exchange Act of 1934, as amended.



 



    S.  Non-Statutory Option shall mean an
    option not intended to satisfy the requirements of Code
    Section 422.



 



    T.  Optionee shall mean any person to
    whom an option is granted under the Discretionary Grant or
    Director Automatic Grant Program.



 



    U.  Original Effective Date shall mean
    February 3, 1998.



 



    V.  Parent shall mean any corporation
    (other than the Corporation) in an unbroken chain of
    corporations ending with the Corporation, provided each
    corporation in the unbroken chain (other than the Corporation)
    owns, at the time of the determination, stock possessing fifty
    percent (50%) or more of the total combined voting power of all
    classes of stock in one of the other corporations in such chain.




    

    A-17








 






    W.  Participant shall mean any person
    who is issued shares of Common Stock or restricted stock units
    or other stock-based awards under the Stock Issuance Program,
    and any person who is issued restricted stock units under the
    Director Automatic Grant Program.



 



    X.  Permanent Disability or Permanently
    Disabled shall mean the inability of the Optionee or the
    Participant to engage in any substantial gainful activity by
    reason of any medically determinable physical or mental
    impairment which is both (i) expected to result in death or
    determined to be total and permanent by two (2) physicians
    selected by the Corporation or its insurers and acceptable to
    the Optionee or the Participant (or the Optionee’s or
    Participant’s legal representative), and (ii) to the
    extent the Optionee is eligible to participate in the
    Corporation’s long-term disability plan, entitles the
    Optionee or the Participant to the payment of long-term
    disability benefits from the Corporation’s long-term
    disability plan. The process for determining a Permanent
    Disability in accordance with the foregoing shall be completed
    no later than the later of (i) the close of
    the calendar year in which the Optionee’s or the
    Participant’s Service terminates by reason of the physical
    or mental impairment triggering the determination process or
    (ii) the fifteenth day of the third calendar month
    following such termination of Service. However, solely for
    purposes of the Director Automatic Grant Program, Permanent
    Disability or Permanently Disabled shall mean the inability of
    the Eligible Director to perform his or her usual duties as a
    Board member by reason of any medically determinable physical or
    mental impairment expected to result in death or to be of
    continuous duration of twelve (12) months or more.



 



    Y.  Plan shall mean the
    Corporation’s 1998 Stock Incentive Plan, as set forth in
    this document.



 



    Z.  Plan Administrator shall mean the
    particular entity, whether the Primary Committee, the Board or a
    Secondary Committee, which is authorized to administer the
    Discretionary Grant and Stock Issuance Programs with respect to
    one or more classes of eligible persons, to the extent such
    entity is carrying out its administrative functions under those
    programs with respect to the persons then subject to its
    jurisdiction.



 



    AA.  Predecessor Plans shall
    collectively mean the Corporation’s 1994 Amended and
    Restated Stock Option Plan and the Special Stock Option Plan, as
    in effect immediately prior to the Original Effective Date
    hereunder.



 



    BB.  Primary Committee shall mean the
    committee of two (2) or more Eligible Directors appointed
    by the Board to administer the Discretionary Grant and Stock
    Issuance Programs with respect to Section 16 Insiders.



 



    CC.  Secondary Committee shall mean a
    committee of two or more Board members appointed by the Board to
    administer the Discretionary Grant and Stock Issuance Programs
    with respect to one or more classes of eligible persons other
    than Section 16 Insiders.



 



    DD.  Section 16 Insider shall mean
    an officer or director of the Corporation subject to the
    short-swing profit liability provisions of Section 16 of
    the 1934 Act.



 



    EE.  Service shall mean the performance
    of services for the Corporation (or any Parent or Subsidiary) by
    a person in the capacity of an Employee, an Eligible Director or
    a consultant or independent advisor, except to the extent
    otherwise specifically provided in the documents evidencing the
    Award made to such person. For purposes of the Plan, an Optionee
    or Participant shall be deemed to cease Service immediately upon
    the occurrence of the either of the following events:
    (i) the Optionee or Participant no longer performs services
    in any of the foregoing capacities for the Corporation or any
    Parent or Subsidiary or (ii) the entity for which the
    Optionee or Participant is performing such services ceases to
    remain a Parent or Subsidiary of the Corporation, even though
    the Optionee or Participant may subsequently continue to perform
    services for that entity.



 



    FF.  Stock Exchange shall mean the
    American Stock Exchange, the Nasdaq Global Select Market, the
    Nasdaq Global Market or the New York Stock Exchange.



 



    GG.  Stock Issuance Agreement shall mean
    the agreement entered into by the Corporation and the
    Participant at the time of issuance of shares of Common Stock
    under the Stock Issuance Program.



 



    HH.  Stock Issuance Program shall mean
    the stock issuance program in effect under Article Three of
    the Plan.



 



    II.  Subsidiary shall mean any
    corporation (other than the Corporation) in an unbroken chain of
    corporations beginning with the Corporation, provided each
    corporation (other than the last corporation) in the unbroken
    chain owns, at the time of the determination, stock possessing
    fifty percent (50%) or more of the total combined voting power
    of all classes of stock in one of the other corporations in such
    chain.




    

    A-18








 






    JJ.  10% Shareholder shall mean the
    owner of stock (as determined under Code Section 424(d))
    possessing more than ten percent (10%) of the total combined
    voting power of all classes of stock of the Corporation (or any
    Parent or Subsidiary).



 



    KK.  Withholding Taxes shall mean the
    federal, state and local income and employment taxes to which
    the Optionee or Participant may become subject in connection
    with the issuance, exercise or vesting of the Award made to him
    or her under the Plan.




    

    A-19