exv10w3






Exhibit 10.3




BROADCOM CORPORATION




PERFORMANCE BONUS PLAN

(as amended and restated April 24, 2008)




     I. PURPOSES OF THE PLAN



          A. The Broadcom Corporation Performance Bonus Plan (the “Plan”) is intended to promote the
interests of Broadcom Corporation (the “Company”) and its shareholders by establishing a
compensation program to provide key employees with incentive awards tied to the achievement of
goals relating to the performance of the Company and/or the achievement of individual performance
goals.




          B. The Plan shall be in effect for the year ending December 31, 2007 and for each of the next
four (4) years through the year ending December 31, 2011. Each year for which the Plan is in
effect shall be designated a “Plan Year,” and bonuses may be earned under the Plan on the basis of
the Company’s performance for each Plan Year.




     II. PLAN ADMINISTRATION



          A. The Plan shall be administered by the Compensation Committee of the Company’s Board of
Directors. The Compensation Committee in its capacity as administrator of the Plan (the “Plan
Administrator”) shall have full power and authority (subject to the express provisions of the Plan)
to:




               (i) establish the specific performance objectives that must be attained for each Plan Year at
one or more designated levels (e.g. threshold, above-threshold, target and above-target);



               (ii) establish the maximum bonus pool to be paid in total under the Plan for each Plan Year.



               (iii) set the bonus potential for each eligible participant at each designated level of
performance; and



               (iv) approve the actual bonus (if any) to be paid to each participant.



          B. The Plan Administrator shall also have full power and authority to interpret and construe
the provisions of the Plan and adopt rules and regulations for the administration of the Plan.




          C. Decisions of the Plan Administrator shall be final and binding upon all parties who may
have an interest in the Plan or any bonus amount payable under the Plan.




 









 








III. ELIGIBILITY AND PARTICIPATION




          A. The individuals eligible to participate in the Plan shall be limited to (i) all employees
of the Company (or its subsidiaries) at the level of Director or above, provided, however, that if
one or more the Company’s executive officers who are subject to the short-swing profit liability
provisions of Section 16 of the Securities and Exchange Act of 1934, as amended (“Section 16
Officers”) is selected for participation in the Executive Officer Bonus Plan for any given Plan
Year, then such Section 16 officer(s) shall not be eligible to participate in this Plan for that
same Plan Year and (ii) any other employees of the Company (or its subsidiaries) identified by
management as key contributors to the Company’s growth and financial success and selected for
participation in the Plan, subject to the approval the Company’s Chief Executive Officer and the
Plan Administrator. All Section 16 Officers shall be eligible to participate in this Plan for the
2008 Plan Year, and for each subsequent Plan Year, the Plan Administrator shall determine which
Section 16 Officers, if any, shall participate in the Executive Officer Bonus Plan and which, if
any, shall participate in this Plan within the first ninety (90) days of that Plan Year.




          B. An individual selected for participation in the Plan shall cease to be a participant and
shall not be entitled to any bonus payment under the Plan for a given Plan Year if that participant
ceases Employee status for any reason prior to the date that bonuses for that Plan Year are paid
under the Plan (the “Distribution Date”); provided, however, that the following participants shall
receive a portion of the actual bonus to which they would otherwise have been entitled pursuant to
Articles IV and V on the basis of actual Company performance had they continued in Employee status
through the Distribution Date:





          (i) any participant who ceases Employee status prior to the Distribution Date by reason
of death or Disability;




          (ii) any participant whose Employee status terminates under circumstances that entitle
that individual to a full or pro-rata bonus pursuant to the express terms of any agreement
or arrangement to which that individual and the Company are parties; and




          (iii) any participant whose Employee status terminates under special circumstances that
warrant, in the Plan Administrator’s sole discretion, a pro-rated bonus award under the Plan
for the applicable Plan Period.



          C. For purposes of this Article III, the following definitions shall be in effect:





          (i) A participant shall be deemed to continue in “Employee” status for so long as that
individual remains in the employ of the Company or any subsidiary of the Company.




          (ii) A participant shall be deemed to have ceased Employee status by reason of a
“Disability” if such cessation of Employee status is occasioned by his or her inability to
engage in any substantial gainful activity 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 longer.



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          (iii) The “Plan Period” shall mean the period beginning with the first day of the Plan
Year and ending with the Distribution Date for the bonuses earned for that Plan Year.




          (vi) Each corporation (other than the Company) in an unbroken chain of corporations
beginning with the Company shall be considered to be a “subsidiary” of the Company, provided
that each such corporation (other than the last corporation in the unbroken chain) owns, at
the time of determination, stock possessing more than fifty percent (50%) of the total
combined voting power of all classes of stock in one of the other corporations in such
chain.



          D. A participant who is absent from active Employee status for a portion of a Plan Period by
reason of an authorized leave of absence shall not be deemed to have ceased Employee status during
the period of that leave. However, any bonus to which such participant may otherwise become
entitled under the Plan for that Plan Year may be pro-rated based on the portion of the Plan Period
during which that individual is in active working status and not on such leave of absence, unless
the Plan Administrator otherwise deems it appropriate under the circumstances to provide that
individual with a full bonus for the Plan Period.




     IV. DETERMINATION OF PERFORMANCE GOALS AND POTENTIAL BONUS AMOUNTS



          A. Participants will be eligible to receive cash awards under the Plan for each Plan Year for
which one or more performance objectives established for that Plan Year by the Plan Administrator
are attained. The Plan Administrator shall, as soon as practicable at the beginning of each Plan
Year, other than the Plan Year ending December 31, 2007, establish the specific performance
objectives for that Plan Year. In no event may a performance objective be established at a time
when there exists no substantial uncertainty as to its attainment.




          B. For the Plan Year ending December 31, 2007, the Plan Administrator shall set the applicable
performance objectives on the basis of the following measures: (i) net revenue, (ii) non-GAAP
gross margin, (iii) non-GAAP operating margin, (iv) non-GAAP earnings per share and (v) non-GAAP
free cash flow. In determining whether the non-GAAP measures under clauses (ii), (iii), (iv) and
(v) are attained, the Plan Administrator shall apply the dollar amounts that the Company reports
for those items in accordance with U.S. generally accepted accounting principles (“GAAP”), as
adjusted for certain non-cash, non-recurring, extraordinary and other items set forth in Paragraph
IV.D.




          C. For the Plan Year ending December 31, 2008, the Plan Administrator shall set the applicable
performance objectives on the basis of the following measures: (i) net revenue; (ii) non-GAAP
earnings per share and (iii) working capital, as measured by days sales outstanding and inventory
turns. In determining whether the non-GAAP measures under clauses (ii) and (iii) are attained, the
Plan Administrator shall apply the dollar amounts that the Company reports for those items in
accordance with GAAP as adjusted for certain non-cash, non-recurring, extraordinary and other items
set forth in Paragraph IV.D. Each of the three performance objectives for the 2008 Plan Year shall
be measured separately in terms of actual level of attainment and shall be weighted as follows in
determining the actual dollar amount of the total



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bonus pool: (i) the net revenue objective at 0.4, (ii) non-GAAP earnings per share objective
at 0.4 and (iii) working capital objective at 0.2.




          D. For each subsequent Plan Year during the term of the Plan, the performance objectives may
include one or more of the measures used as the 2007 or 2008 Plan Year performance objectives as
well as one or more of the following:  (i) return on total shareholder equity; (ii) net income or
operating income; (iii) earnings before interest, taxes, deprecation, amortization and stock-based
compensation costs, or operating income before depreciation and amortization; (iv) return on
assets, capital or investment; (v) market share in one or more markets; (vi) cost reduction goals;
(vii) budget comparisons; (viii) implementation or completion of projects or processes strategic or
critical to the Company’s business operations; (ix) measures of customer satisfaction; (x) 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 Company’s
revenue or profitability or expand its customer base; (xi) completion of project milestones; and
(xii) any combination of, or a specified increase in, any of the foregoing provided, however, that
for purposes of items (ii) and (vi) above (as well as items (ii), (iii), (iv) and (v) of Paragraph
IV.B and items (ii) and (iii) of Paragraph IV.C above), the Plan Administrator may, at the time the
performance objects are established, specify certain adjustments to such items as reported in
accordance with GAAP, which will exclude from the calculation of those performance objectives 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 investments, non-operating gains, 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. In addition, such performance objectives may be based upon the
attainment of specified levels of the Company’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 Company’s business groups or division thereof or any parent or
subsidiary.




          E. For each performance objective, the Plan Administrator may establish up to four (4)
designated levels of attainment: threshold, above-threshold, target and above-target levels of
attainment.




          F. The Plan Administrator shall also establish the maximum bonus pool to be paid in total
under the Plan for each designated level of performance for a Plan Year. For the Plan Year ending
December 31, 2007, the maximum bonus pool payable at each designated level of performance shall be
as follows: for performance at the threshold level, the pool shall be $0, for performance at the
above-threshold level, the pool shall be $7,550,000 for performance at the target level, the pool
shall be $15,100,000, and for performance at the above-target level the pool shall be $22,650,000.




          For the Plan Year ending December 31, 2008, the maximum bonus pool payable at each designated
level of performance shall be as follows: for performance at threshold level, the pool shall be $0,
for performance at the target level, the pool shall be $24,000,000, and for performance at the
above-target level the pool shall be $45,600,000.




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          G. The actual bonus pool for each Plan Year shall be determined by the Plan Administrator on
the basis of the Company’s actual performance relative to each of the performance objectives
established for that Plan Year; provided, however, that the Plan Administrator shall have the full
power and authority to increase or decrease the total actual bonus pool as so determined for any
Plan Year as it deems appropriate or advisable. Each performance objective shall be measured
separately in terms of actual level of attainment and shall be weighted, equally or in such other
proportion as the Plan Administrator shall determine at the time such performance objectives are
established, in determining the actual total bonus pool. For example, if five (5) performance
objectives are established and weighted equally, then each of those objectives attained at target
level will contribute to the total bonus pool for the Plan Year in an amount equal to twenty
percent (20%) of the total bonus pool payable at target level for that Plan Year, and each
objective attained at above-target level will contribute to the total bonus pool for that Plan Year
in an amount equal to twenty percent (20%) of the total bonus pool at above-target level. If the
actual level of attainment for any performance objective is between two specified levels, then the
bonus amount attributable to that performance objective shall be interpolated on a straight-line
basis. The dollar amount of the actual bonus pool shall be determined by the Plan Administrator as
soon as administratively practicable following the completion of the audit of the Company’s
financial statements for the applicable Plan Year by the Company’s independent registered public
accounting firm.




     V. INDIVIDUAL BONUS AWARDS



          A. The actual bonus award to be made to each participant who is a Section 16 Officer shall be
determined at the sole discretion of the Plan Administrator, and the actual bonus award made to
each participant ) who is not a Section 16 Officer shall be approved by the Plan Administrator,
based upon the recommendation of the Company’s management.




          B. Except as otherwise provided in Paragraphs III.B and C, no participant shall accrue any
right to receive a bonus award under the Plan unless and until that participant remains in Employee
status through the Distribution Date. Accordingly, no bonus payment shall be made to any
participant who ceases Employee status prior to the Distribution Date, provided, however, that the
provisions of Paragraph III.B and C shall govern the bonus entitlement of participants whose
Employee status terminates under the various circumstances set forth in those provisions.




          C. The Distribution Date for the individual bonus amount payable to each participant for a
particular Plan Year shall occur as soon as practicable following the completion of that Plan Year
and the Plan Administrator’s determination of the actual performance levels for that Plan Year, but
in no event shall such Distribution Date occur at any time prior to the date the Company’s
independent registered public accounting firm completes its audit of the Company’s financial
statements for that Plan Year or at any time after the last day of the calendar year immediately
succeeding such Plan Year




          D. All bonus payments shall be made in cash, subject to the Company’s collection of all
applicable federal, state and local income and employment withholding taxes.




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     VI. GENERAL PROVISIONS



          A. The Plan and all rights hereunder shall be construed, administered and governed in all
respects in accordance with the laws of the State of California without resort to its
conflict-of-laws provisions. If any provision of the Plan shall be held by a court of competent
jurisdiction to be invalid or unenforceable, the remaining provisions of the Plan shall continue in
full force and effect.




          B. Neither the action of the Company in establishing or maintaining the Plan, nor any action
taken under the Plan by the Plan Administrator, nor any provision of the Plan itself shall be
construed to grant any person the right to remain in Employee status for any period of specific
duration, and each participant shall at all times remain an Employee at-will and may accordingly be
discharged at any time, with or without cause and with or without advance notice of such discharge.




          C. Should a participant die before payment is made of the actual bonus to which he or she has
become entitled under the Plan, then that bonus shall be paid to the executor or other legal
representative of his or her estate.




          D. No participant shall have the right to transfer, alienate, pledge or encumber his or her
interest in the Plan, and such interest shall not (to the maximum permitted by law) be subject to
the claims of the participant’s creditors or to attachment, execution or other process of law.




          E. The terms and conditions of the Plan, together with the obligations and liabilities of the
Company that accrue hereunder, shall be binding upon any successor to the Company, whether by way
of merger, consolidation, reorganization or other change in ownership or control of the Company.




          F.. No amounts accrued or earned under the Plan shall actually be funded, set aside or to
otherwise segregated prior to actual payment. The obligation to pay the bonuses that actually
become due and payable under the Plan shall at all times be an unfunded and unsecured obligation of
the Company. Participants shall have the status of general creditors and shall look solely and
exclusively to the general assets of the Company for payment.




          G. Any disputes between the Company and a participant arising out of or relating to the Plan,
his or her entitlement to any bonus award hereunder or the amount or method of payment of such
award shall be settled exclusively by binding arbitration to be held in the county in which the
participant is (or has most recently been) employed by the Company (or any subsidiary) at the time
of such arbitration. The arbitration proceedings shall be governed by (i) the national rules of the
American Arbitration Association then in effect for the resolution of employment disputes and (ii)
the Federal Arbitration Act. The decision of the arbitrator shall be final and binding on the
parties to the arbitration and shall be in lieu of the rights those parties may otherwise have to a
jury trial.





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