exv10w1w2



 




Exhibit 10.1.2




BROADCOM CORPORATION




AUTOMATIC STOCK OPTION AGREEMENT




RECITALS



     A.     The Corporation has implemented an automatic option grant program under
the Plan pursuant to which eligible non-employee members of the Board will
automatically receive special option grants at periodic intervals over their
period of Board service in order to provide such individuals with a meaningful
incentive to continue to serve as members of the Board.



     B.     Optionee is an eligible non-employee Board member, and this Agreement
is executed pursuant to, and is intended to carry out the purposes of, the Plan
in connection with the automatic grant of an option to purchase shares of
Common Stock under the Plan.



     C.     All capitalized terms in this Agreement shall have the meaning assigned
to them in the attached Appendix.



          NOW, THEREFORE, it is hereby agreed as follows:



          1. Grant of Option. The Corporation hereby grants to Optionee, as of the
Grant Date, a Non-Statutory Option to purchase up to the number of Option
Shares specified in the Grant Notice. The Option Shares shall be purchasable
from time to time during the option term specified in Paragraph 2 at the
Exercise Price.



          2. Option Term. This option shall have a term of ten (10) years measured
from the Grant Date and shall accordingly expire at the close of business on
the Expiration Date, unless sooner terminated in accordance with Paragraph 5, 6
or 7.



          3. Limited Transferability.




               (a) This option may be assigned in whole or in part during Optionee’s
lifetime to one or more members of Optionee’s family or to a trust established
for the exclusive benefit of one or more such family members or to Optionee’s
former spouse, to the extent such assignment is in connection with the
Optionee’s estate plan or pursuant to a domestic relations order. The assigned
portion shall be exercisable only by the person or persons who acquire a
proprietary interest in the option pursuant to such assignment. The terms
applicable to the assigned portion shall be the same as those in effect for
this option immediately prior to such assignment.




               (b) Should the Optionee die while holding this option, then this option
shall be transferred in accordance with Optionee’s will or the laws of
inheritance. However, Optionee may designate one or more persons as the
beneficiary or beneficiaries of this option, and this option shall, in
accordance with such designation, automatically be transferred to such

 







 




beneficiary or beneficiaries upon the Optionee’s death while holding this
option. Such beneficiary or beneficiaries shall take the transferred option
subject to all the terms and conditions of this Agreement, including (without
limitation) the limited time period during which this option may, pursuant to
Paragraph 5, be exercised following Optionee’s death.



          4. Exercisability/Vesting.




               (a) This option shall be immediately exercisable for any or all of the
Option Shares, whether or not the Option Shares are at the time vested in
accordance with the Vesting Schedule, and shall remain so exercisable until the
Expiration Date or sooner termination of the option term under Paragraph 5, 6
or 7.




               (b) Optionee shall, in accordance with the Vesting Schedule set forth in
the Grant Notice, vest in the Option Shares in one or more installments over
his or her period of Board service. The Option Shares shall, however, be
subject to accelerated vesting pursuant to the provisions of Paragraph 5, 6 or
7, but in no event shall any additional Option Shares vest following Optionee’s
cessation of service as a Board member.



          5. Cessation of Board Service. Should Optionee’s service as a Board
member cease while this option remains outstanding, then the option term
specified in Paragraph 2 shall terminate (and this option shall cease to be
outstanding) prior to the Expiration Date in accordance with the following
provisions:




               (a) Should Optionee cease to serve as a Board member for any reason (other
than death or Permanent Disability) while this option is outstanding, then the
period during which this option may be exercised shall be reduced to a twelve
(12)-month period measured from the date of such cessation of Board service,
but in no event shall this option be exercisable at any time after the
Expiration Date. During such limited period of exercisability, Optionee (or
the person or persons to whom this option is transferred pursuant to a
permitted transfer under Paragraph 3) may not exercise this option in the
aggregate for more than the number of Option Shares (if any) in which Optionee
is vested on the date of his or her cessation of Board service. Upon the
earlier of (i) the expiration of such twelve (12)-month period or (ii) the
specified Expiration Date, the option shall terminate and cease to be
exercisable with respect to any vested Option Shares for which the option has
not been exercised.




               (b) Should Optionee die during the twelve (12)-month period following his
or her cessation of Board service but while this option is outstanding, then
(i) the personal representative of Optionee’s estate or (ii) the person or
persons to whom the option is transferred pursuant to Optionee’s will or the
laws of inheritance following Optionee’s death or to whom the option is
transferred during Optionee’s lifetime pursuant to a permitted transfer under
Paragraph 3 or (iii) the designated beneficiary or beneficiaries of this option
(as the case may be) shall have the right to exercise this option for any or
all of the Option Shares in which Optionee is vested at the time of Optionee’s
cessation of Board service (less any Option Shares purchased by Optionee after
such cessation of Board service but prior to death). Any such right

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to exercise this option shall terminate, and this option shall accordingly
cease to be exercisable for such vested Option Shares, upon the earlier of (i)
the expiration of the twelve (12)-month period measured from the date of
Optionee’s cessation of Board service or (ii) the specified Expiration Date.




               (c) Should Optionee cease service as a Board member by reason of death or
Permanent Disability, then any Option Shares at the time subject to this option
but not otherwise vested shall vest in full so that this option may be
exercised for any or all of the Option Shares as fully vested shares of Common
Stock at any time prior to the earlier of (i) the expiration of the twelve
(12)-month period measured from the date of Optionee’s cessation of Board
service or (ii) the specified Expiration Date, whereupon this option shall
terminate and cease to be outstanding.




               (d) Upon Optionee’s cessation of Board service for any reason other than
death or Permanent Disability, this option shall immediately terminate and
cease to be outstanding with respect to any and all Option Shares in which
Optionee is not otherwise at that time vested in accordance with the normal
Vesting Schedule or the special vesting acceleration provisions of Paragraphs 6
and 7 below.



          6. Change in Control.




               (a) In the event of a Change in Control effected during Optionee’s period
of Board service, any Option Shares at the time subject to this option but not
otherwise vested shall automatically vest so that this option shall,
immediately prior to the specified effective date for that Change in Control,
become exercisable for all of the Option Shares as fully vested shares of
Common Stock and may be exercised for any or all of those vested shares.
Immediately following the consummation of the Change in Control, this option
shall terminate and cease to be outstanding, except to the extent assumed by
the successor corporation or its parent company or otherwise continued in
effect pursuant to the terms of the Change in Control transaction.




               (b) If this option is assumed in connection with a Change in Control or
otherwise continued in effect, then this option shall be appropriately
adjusted, immediately after such Change in Control, to apply to the number and
class of securities which would have been issuable to Optionee in consummation
of such Change in Control had the option been exercised immediately prior to
such Change in Control, and appropriate adjustments shall also be made to the
Exercise Price, provided the aggregate Exercise Price shall remain the same.
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 transaction, the successor corporation may, in connection with the
assumption of this option, substitute 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.

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          7. Hostile Take-Over.




               (a) In the event of a Hostile Take-Over effected during Optionee’s period
of Board service, any Option Shares at the time subject to this option but not
otherwise vested shall automatically vest so that this option shall,
immediately prior to the effective date of that Hostile Take-Over, become
exercisable for all of the Option Shares as fully vested shares of Common Stock
and may be exercised for any or all of those vested shares. This option shall
remain exercisable for such fully vested Option Shares until the earliest to
occur of (i) the specified Expiration Date, (ii) the sooner termination of this
option in accordance with Paragraph 5 or 6 or (iii) the surrender of this
option under Paragraph 7(b).




               (b) Optionee shall have an unconditional right, exercisable at any time
during the thirty (30)-day period immediately following the consummation of a
Hostile Take-Offer effected during his or her period of Board service, to
surrender this option to the Corporation in exchange for a cash distribution
from the Corporation in an amount equal to the excess of (i) the Take-Over
Price of the Option Shares at the time subject to the surrendered option
(whether or not those Option Shares are otherwise at the time vested) over (ii)
the aggregate Exercise Price payable for such shares. This Paragraph 7(b)
limited stock appreciation right shall in all events terminate upon the
expiration or sooner termination of the option term and may not be assigned or
transferred by Optionee, except to the extent the option is transferred in
accordance with the provisions of this Agreement.




               (c) To exercise the Paragraph 7(b) limited stock appreciation right,
Optionee must, during the applicable thirty (30)-day exercise period, provide
the Corporation with written notice of the option surrender in which there is
specified the number of Option Shares as to which the option is being
surrendered. Such notice must be accompanied by the return of Optionee’s copy
of this Agreement, together with any written amendments to such Agreement. The
cash distribution shall be paid to Optionee within five (5) business days
following such delivery date. The exercise of such limited stock appreciation
right in accordance with the terms of this Paragraph 7 has been pre-approved
pursuant to the express provisions of the Automatic Option Grant Program, and
neither the approval of the Plan Administrator nor the consent of the Board
shall be required at the time of the actual option surrender and cash
distribution. Upon receipt of the cash distribution, this option shall be
cancelled with respect to the shares subject to the surrendered option (or the
surrendered portion), and Optionee shall cease to have any further right to
acquire those Option Shares under this Agreement. The option shall, however,
remain outstanding for the balance of the Option Shares (if any) in accordance
with the terms and provisions of this Agreement, and the Corporation shall
accordingly issue a replacement stock option agreement (substantially in the
same form as this Agreement) for those remaining Option Shares.



          8. Adjustment in Option Shares. Should any change be made to the Common
Stock by reason of any stock split, stock dividend, recapitalization,
combination of shares, exchange of shares or other change affecting the
outstanding Common Stock as a class without the Corporation’s receipt of
consideration, appropriate adjustments shall be made to (i)

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the total number and/or class of securities subject to this option and
(ii) the Exercise Price in order to reflect such change and thereby preclude a
dilution or enlargement of benefits hereunder.



          9. Shareholder Rights. The holder of this option shall not have any
shareholder rights with respect to the Option Shares until such person shall
have exercised the option, paid the Exercise Price and become a holder of
record of the purchased shares.



          10. Manner of Exercising Option.




               (a) In order to exercise this option with respect to all or any part of
the Option Shares for which this option is at the time exercisable, Optionee
(or any other person or persons exercising the option) must take the following
actions:




		
	 	     (i) To the extent the option is exercised for vested Option Shares,
execute and deliver to the Corporation a Notice of Exercise for the
Option Shares for which the option is exercised or comply with such other
procedures as the Corporation may establish for notifying the Corporation
of the exercise of this option for one or more Option Shares. To the
extent this option is exercised for unvested Option Shares, execute and
deliver to the Corporation a Purchase Agreement for those unvested Option
Shares.
	 
	 	     (ii) Pay the aggregate Exercise Price for the purchased shares in
one or more of the following forms:





		
	 	     (A) cash or check made payable to the Corporation,
	 
	 	     (B) shares of Common Stock held by Optionee (or any
other person or persons exercising the option) for the
requisite period necessary to avoid a charge to the
Corporation’s earnings for financial reporting purposes and
valued at Fair Market Value on the Exercise Date, or
	 
	 	     (C) to the extent the option is exercised for vested
Option Shares, through a special sale and remittance
procedure pursuant to which Optionee (or any other person or
persons exercising the option) shall concurrently provide
irrevocable instructions (I) to a brokerage firm (reasonably
satisfactory to the Corporation for administering such
procedure) 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 (II) to the
Corporation to deliver the certificates for the



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	 	purchased shares directly to such brokerage firm in
order to complete the sale.




		
	 	     (iii) Furnish to the Corporation appropriate documentation that the
person or persons exercising the option (if other than Optionee) have the
right to exercise this option.




               (b) Except to the extent the sale and remittance procedure is utilized in
connection with the option exercise, payment of the Exercise Price must
accompany the Notice of Exercise (or the Purchase Agreement) delivered to the
Corporation in connection with the option exercise.




               (c) As soon after the Exercise Date as practical, the Corporation shall
issue to or on behalf of Optionee (or any other person or persons exercising
this option) a certificate for the purchased Option Shares, with the
appropriate legends affixed thereto. To the extent any such Option Shares are
unvested, the certificates for those Option Shares shall be endorsed with an
appropriate legend evidencing the Corporation’s repurchase rights and may be
held in escrow with the Corporation until such shares vest.




               (d) In no event may this option be exercised for any fractional shares.



          11. No Impairment of Rights. This Agreement shall not in any way affect
the right of the Corporation to adjust, reclassify, reorganize or otherwise
make changes in its capital or business structure or to merge, consolidate,
dissolve, liquidate or sell or transfer all or any part of its business or
assets. In addition, this Agreement shall not in any way be construed or
interpreted so as to affect adversely or otherwise impair the right of the
Corporation or the stockholders to remove Optionee from the Board at any time
in accordance with the provisions of applicable law.



          12. Compliance with Laws and Regulations.




               (a) The exercise of this option and the issuance of the Option Shares upon
such exercise shall be subject to compliance by the Corporation and Optionee
with all applicable requirements of law relating thereto and with all
applicable regulations of any stock exchange (or the Nasdaq National Market, if
applicable) on which the Common Stock may be listed for trading at the time of
such exercise and issuance.




               (b) The inability of the Corporation to obtain approval from any
regulatory body having authority deemed by the Corporation to be necessary to
the lawful issuance and sale of any Common Stock pursuant to this option shall
relieve the Corporation of any liability with respect to the non-issuance or
sale of the Common Stock as to which such approval shall not have been
obtained. The Corporation, however, shall use its best efforts to obtain all
such approvals.



          13. Successors and Assigns. Except to the extent otherwise provided in
Paragraph 3 or 6, the provisions of this Agreement shall inure to the benefit
of, and be binding

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upon, the Corporation and its successors and assigns and Optionee,
Optionee’s assigns, the legal representatives, heirs and legatees of Optionee’s
estate and any beneficiaries of this option designated by Optionee.



          14. Notices. Any notice required to be given or delivered to the
Corporation under the terms of this Agreement shall be in writing and addressed
to the Corporation at its principal corporate offices. Any notice required to
be given or delivered to Optionee shall be in writing and addressed to Optionee
at the address indicated below Optionee’s signature line on the Grant Notice.
All notices shall be deemed effective upon personal delivery or upon deposit in
the U.S. mail, postage prepaid and properly addressed to the party to be
notified.



          15. Construction. This Agreement and the option evidenced hereby are made
and granted pursuant to the Plan and are in all respects limited by and subject
to the terms of the Plan.



          16. Governing Law. The interpretation, performance and enforcement of
this Agreement shall be governed by the laws of the State of California without
resort to that State’s conflict-of-laws rules.



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EXHIBIT I




NOTICE OF EXERCISE



     I hereby notify Broadcom Corporation (the “Corporation”) that I elect to
purchase      shares of the Corporation’s Common Stock (the “Purchased
Shares”) at the option exercise price of
$           per share (the
“Exercise Price”) pursuant to that certain option (the “Option”) granted to me
under the Corporation’s 1998 Stock Incentive Plan (as amended and restated from
time to time) on      ,
20     .



     Concurrently with the delivery of this Exercise Notice to the Corporation,
I shall hereby pay to the Corporation the Exercise Price for the Purchased
Shares in accordance with the provisions of my agreement with the Corporation
(or other documents) evidencing the Option and shall deliver whatever
additional documents may be required by such agreement as a condition for
exercise. Alternatively, I may utilize the special broker-dealer sale and
remittance procedure specified in my agreement to effect payment of the
Exercise Price for any Purchased Shares in which I am vested at the time of
exercise of the Option.




	 	 	 
	                                                              ,
20            	 	 
	Date	 	 
	 	 	 
	 	 	 
	 	 	


	 	 	
Optionee
	 	 	 
	 	 	


	 	 	
Address:
	 	 	


	 	 	 
	 	 	


	 	 	 
	Print name in exact manner
it is to appear on the
stock certificate:	 	 
	 	 	


	 	 	 
	Address to which certificate
is to be sent, if different
from address above:	 	 
	 	 	


	 	 	 
	 	 	


	 	 	 
	Social Security Number:	 	 
	 	 	





 







 



APPENDIX



     The following definitions shall be in effect under the Agreement:



     A.     Agreement shall mean this Automatic Stock Option Agreement.



     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 representing 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 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.



     D.     Common Stock shall mean shares of the Corporation’s Class A common
stock.



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



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



     G.     Exercise Date shall mean the date on which the option shall have been
exercised in accordance with Paragraph 10 of the Agreement.



     H.     Exercise Price shall mean the exercise price per share as specified in
the Grant Notice.



     I.      Expiration Date shall mean the date on which the option expires as
specified in the Grant Notice.



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     J.     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 National
Market, then the Fair Market Value shall be the closing selling price per
share of Common Stock on the date in question, as the price is reported
by the National Association of Securities Dealers on the Nasdaq National
Market and published in 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 Stock
Exchange, then the Fair Market Value shall be the closing selling price
per share of Common Stock on the date in question on the Stock Exchange
which serves as the primary market for the Common Stock, as such price is
officially quoted in the composite tape of transactions on such exchange
and published in 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.



     K.     Grant Date shall mean the date of grant of the option as specified in
the Grant Notice.



     L.     Grant Notice shall mean the Notice of Grant of Automatic Stock Option
accompanying the Agreement, pursuant to which Optionee has been informed of the
basic terms of the option evidenced hereby.



     M.     Hostile Take-Over shall mean a change in ownership or control of the
Corporation effected through either of the following transactions:




		
	 	     (i) 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 comprised 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; or
	 
	 	     (ii) 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



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	 	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 which the
Board does not recommend such shareholders to accept.



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



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



     P.     Notice of Exercise shall mean the notice of exercise in the form of
Exhibit I.



     Q.     Option Shares shall mean the number of shares of Common Stock subject
to the option.



     R.     Optionee shall mean the person to whom the option is granted as
specified in the Grant Notice.



     S.     Permanent Disability shall mean the inability of Optionee to perform
his or her usual duties as a member of the Board by reason of any medically
determinable physical or mental impairment which is expected to result in death
or has lasted or can be expected to last for a continuous period of twelve (12)
months or more.



     T.     Plan shall mean the Corporation’s 1998 Stock Incentive Plan, as amended
and restated from time to time.



     U.     Plan Administrator shall mean the Board or any committee of the Board
which has been authorized to administer one or more elements of the Plan.



     V.     Purchase Agreement shall mean the stock purchase agreement (in form and
substance satisfactory to the Corporation) which grants the Corporation the
right to repurchase, at the Exercise Price, any and all unvested Option Shares
held by Optionee at the time of Optionee’s cessation of Board service and which
precludes the sale, transfer or other disposition of any purchased Option
Shares while those shares are unvested and subject to such repurchase right.



     W.     Stock Exchange shall mean the American Stock Exchange or the New York
Stock Exchange.



     X.      Take-Over Price shall mean the greater of (i) the Fair Market Value per
share of Common Stock on the date the option is surrendered to the Corporation
in connection with a Hostile Take-Over or, if applicable, (ii) the highest
reported price per share of Common Stock paid by the tender offeror in
effecting the Hostile Take-Over through the acquisition of such Common Stock.



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     Y.     Vesting Schedule shall mean the vesting schedule specified in the Grant
Notice, pursuant to which the Option Shares will vest in one or more
installments over the Optionee’s period of Board service, subject to
acceleration in accordance with the provisions of the Agreement.





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