Document:

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.

A-1

 

     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

A- 2

 

		
	 	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.

A- 4exv10w2

 

Exhibit 10.2

BROADCOM CORPORATION

1999 SPECIAL STOCK OPTION PLAN

AS AMENDED AND RESTATED EFFECTIVE JULY 18, 2003

ARTICLE ONE

GENERAL

     I.     PURPOSE OF THE PLAN

          A. This 1999 Special Stock Option Plan is intended to promote the
interests of Broadcom Corporation, a California corporation, by authorizing an
additional reserve of shares of the Corporation’s common stock for issuance
through option grants to be made from time to time to individuals in the employ
or service of the Corporation or any Subsidiary who are neither officers of the
Corporation nor members of the Board and who are not otherwise Section 16
Insiders.

          B. The Plan shall become effective immediately upon adoption by the Board
on October 4, 1999.

          C. This Plan shall supplement the authorized share reserve under the
Corporation’s 1998 Stock Incentive Plan, and share issuances under this Plan
shall not reduce or otherwise affect the number of shares of the Corporation’s
Common Stock available for issuance under the 1998 Stock Incentive Plan. In
addition, share issuances under the 1998 Stock Incentive Plan shall not reduce
or otherwise affect the number of shares of the Corporation’s common stock
available for issuance under this Plan.

          D. Capitalized terms shall have the meanings assigned to such terms in the
attached Appendix.

          E. All share numbers in this July 18, 2003 restatement reflect the two
(2)-for-one (1) split of Common Stock effected on February 11, 2000.

     II.     ADMINISTRATION OF THE PLAN

          A. The Plan Administrator shall have full power and discretion (subject to
the express provisions of the Plan) to establish such rules and regulations as
it may deem appropriate for the proper administration of the Plan and to make
such determinations under, and issue such interpretations of, the provisions of
the Plan and any outstanding option grants thereunder as it may deem necessary
or advisable. Decisions of the Plan Administrator shall be final and binding
on all parties who have an interest in the Plan or any outstanding option
thereunder.

          B. The individuals serving as Plan Administrator shall serve for such
period as the Board may determine and shall be subject to removal by the Board
at any time.

 

 

          C. Service as Plan Administrator shall constitute service as a Board
member, and each Board member serving as Plan Administrator shall accordingly
be entitled to full indemnification and reimbursement as a Board member for
such service. No individual serving as Plan Administrator shall be liable for
any act or omission made in good faith with respect to the Plan or any option
granted under the Plan.

     III.     ELIGIBILITY

          A. The persons eligible to participate in the Plan shall be limited to
those Employees and independent consultants and advisors in the service of the
Corporation or any Subsidiary who are neither officers of the Corporation nor
members of the Board and who are not otherwise Section 16 Insiders at the time
of the option grant.

          B. The Plan Administrator shall have full authority to determine which
eligible individuals are to receive option grants under the Plan, the time or
times when such grants are to be made, the number of shares to be covered by
each such grant, the exercise price per share, the time or times when each
granted option is to become exercisable and the maximum term for which the
option may remain outstanding. All options granted under the Plan shall be
Non-Statutory Options.

     IV.     STOCK SUBJECT TO THE PLAN

          A. Shares of Common Stock shall be available for issuance under the Plan
and shall be drawn from either the Corporation’s authorized but unissued shares
of Common Stock or from reacquired shares of Common Stock, including shares
repurchased by the Corporation on the open market. The maximum number of
shares of Common Stock reserved for issuance over the term of the Plan shall be
limited to 1,000,000 shares, subject to adjustment from time to time in
accordance with the provisions of this Section IV.

          B. Should one or more outstanding options under this Plan expire or
terminate for any reason prior to exercise in full (including any option
cancelled in accordance with the cancellation-regrant provisions of Section III
of Article Two), then the shares subject to the portion of each option not so
exercised shall be available for subsequent issuance under the Plan. Should
the exercise price of an outstanding option under the Plan be paid with shares
of Common Stock, then the number of shares of Common Stock available for
issuance under the Plan shall be reduced by the gross number of shares for
which the option is exercised, and not by the net number of shares of Common
Stock actually issued to the holder of such option.

          C. Should any change be made to the Common Stock issuable under the Plan
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, then
appropriate adjustments shall be made to (i) the maximum number and/or class of
securities issuable under the Plan and (ii) the number and/or class of
securities and price per share in effect under each option outstanding under
the Plan. Such adjustments to the outstanding options are to be effected in a
manner which shall preclude the enlargement or dilution of rights and benefits
under such options. The adjustments determined by the Plan Administrator shall
be final, binding and conclusive.

2.

 

ARTICLE TWO

OPTION GRANT PROGRAM

     I.     OPTION TERMS

          Options granted under the Plan shall be authorized by action of the Plan
Administrator and shall be evidenced by one or more instruments in the form
approved by the Plan Administrator; provided, however, that each such
instrument shall comply with the terms and conditions specified below. All
such granted options shall be Non-Statutory Options.

          A. Exercise Price.

               1. The exercise price per share shall be fixed by the Plan Administrator
and may be equal to or less than the Fair Market Value per share of Common
Stock on the grant date.

               2. Full payment of 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:

		
	 	     a. cash or check made payable to the Corporation’s order,
	 
	 	     b. shares of Common Stock held 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. through a special sale and remittance procedure pursuant to which
the Optionee shall concurrently provide irrevocable instructions (a) to a
brokerage firm (reasonably satisfactory to the Corporation for purposes
of administering such procedure in compliance with the Corporation’s
pre-clearance/pre-notification policies) 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 income and employment taxes required to be withheld by the
Corporation by reason of such exercise and (b) to the Corporation to
deliver the certificates for the purchased shares directly to such
brokerage firm in order 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
such option. No option shall have a maximum term in excess of ten (10) years.
Options granted under the Plan may be assigned in whole or in part during the
Optionee’s lifetime to one or more members of the Optionee’s family or to a
trust established exclusively for 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

3.

 

pursuant to a domestic relations order. 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. Options granted under the Plan
shall also be assignable or transferable by will or the law of inheritance
following the Optionee’s death. Notwithstanding the foregoing, the Optionee
may also designate one or more persons as the beneficiary or beneficiaries of
his or her outstanding options under the Plan, 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.

          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:

		
	 	     a. Any option outstanding at the time of the Optionee’s cessation of
Service for any reason shall remain exercisable for such limited period
of time thereafter as shall be determined by the Plan Administrator and
set forth in the documents evidencing the option, but no such option
shall be exercisable after the expiration of the option term.
	 
	 	     b. Any option exercisable in whole or in part by the Optionee at the
time of death 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 in
accordance with the laws of descent and distribution.
	 
	 	     c. During the applicable post-Service exercise period, the option
may not be exercised in the aggregate for more than the number of shares
for which the option is exercisable on the date of the Optionee’s
cessation of Service. Upon the expiration of the applicable post-Service
exercise period or (if earlier) upon the expiration of the option term,
the option shall terminate and cease to be outstanding for any otherwise
exercisable shares for which the option has not been exercised. However,
the option shall, immediately upon the Optionee’s cessation of Service,
terminate and cease to be outstanding for any and all shares for which
the option is not otherwise at that time exercisable.
	 
	 	     d. Should the Optionee’s Service be terminated for Misconduct, then
all outstanding options held by the Optionee shall terminate immediately
and cease to be outstanding.

4.

 

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

		
	 	     a. extend the period of time for which the option is to remain
exercisable following Optionee’s cessation of Service or death from the
limited 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
	 
	 	     b. permit the option to be exercised, during the applicable
post-Service exercise period, not only with respect to the number of
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 for which the option would have become
exercisable had the Optionee continued in Service.

          D. Shareholder Rights. An Optionee shall have none of the rights of a
shareholder with respect to any option shares until such person shall have
exercised the option and paid the exercise price for the purchased shares.

     II.     CHANGE IN CONTROL/HOSTILE TAKE-OVER

          A. No option outstanding at the time of a Change in Control shall become
exercisable on an accelerated basis if and to the extent: (i) that option 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 option is replaced
with a cash incentive program of the successor corporation which preserves the
spread existing at the time of the Change in Control on the shares of Common
Stock for which the option is not otherwise at that time exercisable and
provides for subsequent payout in accordance with the same exercise schedule
applicable to those option shares or (iii) the acceleration of such option is
subject to other limitations imposed by the Plan Administrator at the time of
the option grant. However, if none of the foregoing conditions are satisfied,
then each option outstanding at the time of the Change in Control but not
otherwise exercisable for all the option shares shall automatically accelerate
so that each such option shall, immediately prior to the effective date of the
Change in Control, become exercisable for all the shares of Common Stock at the
time subject to that option and may be exercised for any or all of those shares
as fully vested shares of Common Stock.

          B. Immediately following the consummation of the Change in Control, all
outstanding options 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.

          C. Each option which is assumed in connection with a Change in Control
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
the Optionee in consummation of such Change in Control had the option been
exercised immediately prior to such Change in Control. Appropriate adjustments
to reflect such Change in Control shall also be made to (i) the number and/or
class of securities available for issuance under the Plan following the

5.

 

consummation of such Change in Control and (ii) the exercise price payable
per share under each outstanding option, provided the aggregate exercise price
payable for such securities 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,
the successor corporation may, in connection with the assumption of the
outstanding options under the Plan, 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.

          D. The Plan Administrator shall have full power and authority to grant
options under the Plan which will automatically accelerate in the event the
Optionee’s Service subsequently terminates 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 in which those options
are assumed or replaced and do not otherwise accelerate. Any options so
accelerated shall remain exercisable for fully-vested shares until the earlier
of (i) the expiration of the option term or (ii) the expiration of the one
(1)-year period measured from the effective date of the Involuntary
Termination.

          E. The Plan Administrator shall have full power and authority to grant
options under the Plan which will automatically accelerate in the event the
Optionee’s Service subsequently terminates by reason of an Involuntary
Termination within a designated period (not to exceed eighteen (18) months)
following the effective date of any Hostile Take-Over. Each option so
accelerated shall remain exercisable for fully-vested shares until the earlier
of (i) the expiration of the option term or (ii) the expiration of the one
(1)-year period measured from the effective date of the Involuntary
Termination.

          F. The grant of options under the Plan 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.     CANCELLATION AND REGRANT OF OPTIONS

     The Plan Administrator shall have the authority to effect, at any time and
from time to time, with the consent of the affected Optionees, the cancellation
of any or all outstanding options under the Plan and to grant in substitution
new options under the Plan covering the same or different numbers of shares of
Common Stock but with an exercise price per share not less than the Fair Market
Value of the Common Stock on the new grant date.

6.

 

ARTICLE THREE

MISCELLANEOUS

     I.     FINANCING

          A. The Plan Administrator may permit any Optionee to pay the option
exercise price under the Plan by delivering a full-recourse promissory note
payable in one or more installments bearing interest at a market rate and
secured by the purchased shares. In no event, however, may the maximum credit
available to the Optionee exceed the sum of (i) the aggregate option exercise
price payable for the purchased shares plus (ii) any applicable income and
employment tax liability incurred by the Optionee in connection with the option
exercise.

          B. The Plan Administrator may, in its discretion, determine that one or
more such promissory notes shall be subject to forgiveness by the Corporation
in whole or in part upon such terms as the Plan Administrator may deem
appropriate.

     II.     AMENDMENT OF THE PLAN

          The Board has complete and exclusive power and authority to amend or
modify the Plan in any or all respects whatsoever. However, no such amendment
or modification shall adversely affect rights and obligations with respect to
stock options at the time outstanding under the Plan, unless the affected
Optionees consent to such amendment.

     III.     TAX WITHHOLDING

          The Corporation’s obligation to deliver shares of Common Stock upon the
exercise of stock options under the Plan shall be subject to the satisfaction
of all applicable Federal, state and local income tax and employment tax
withholding requirements.

     IV.     EFFECTIVE DATE AND TERM OF PLAN

          A. This Plan shall become effective immediately upon approval by the Board
on October 4, 1999, and shall not be subject to shareholder approval.

          B. The Plan shall terminate upon the earliest of (i) October 3, 2009, (ii)
the date on which all shares available for issuance under the Plan shall have
been issued pursuant to the exercise of options under the Plan or (iii) the
termination of all outstanding options in connection with a Change in Control.
If the date of termination is determined under clause (i) above, then all
option grants outstanding on such date shall thereafter continue to have force
and effect in accordance with the provisions of the instruments evidencing
those grants.

          C. The Plan was amended and restated on July 18, 2003 to (i) revise the
Change in Control provisions to provide for the treatment of outstanding
options assumed in connection with a Change in Control in which the holder’s of
the Corporation’s outstanding Common Stock receive cash consideration for their
Common Stock, (ii) revise the cashless exercise provisions to permit the use of
any broker reasonably satisfactory to the Corporation for purposes of
administering such procedure, (iii) revise the promissory note provisions to
require

7.

 

           that any such loans approved by the Plan Administrator must be made
pursuant to a full-recourse promissory note bearing interest at a market rate
of interest and secured by the shares purchased and (iv) reflect the two
(2)-for-one (1) split of Common Stock effected on February 11, 2000.

     V.     USE OF PROCEEDS

          Any cash proceeds received by the Corporation from the sale of shares
pursuant to option grants under the Plan shall be used for general corporate
purposes.

     VI.     REGULATORY APPROVALS

          A. The implementation of the Plan, the granting of any option under the
Plan, and the issuance of Common Stock upon the exercise of the stock options
granted hereunder shall be subject to the Corporation’s procurement of all
approvals and permits required by regulatory authorities having jurisdiction
over the Plan, the stock options granted under it and the Common Stock issued
pursuant to it.

          B. No shares of Common Stock or other assets shall be issued or delivered
under this 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 securities exchange on which the Common Stock is then
listed for trading.

     VII.     NO EMPLOYMENT/SERVICE RIGHTS

     Nothing in the Plan shall confer upon the Optionee 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, which rights are hereby
expressly reserved by each, to terminate such person’s Service at any time for
any reason, with or without cause.

8.

 

APPENDIX

               The following definitions shall be in effect under the Plan:

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

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

		
	 	     (i) a 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) the 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.

               C. Code shall mean the United States Internal Revenue Code of 1986, as
amended.

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

               E. 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 which shall by appropriate action adopt the
Plan.

               F. 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.

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

               H. 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 such price is reported
by the National

A-1.

 

		
	 	Association of Securities Dealers on the Nasdaq National Market. 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
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.

               I. 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 which 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 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.

               J. Involuntary Termination shall mean the termination of the Service of
any individual which 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 which 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.

A-2.

 

               K. Misconduct shall mean the commission of any act of fraud, embezzlement
or dishonesty by the Optionee, any unauthorized use or disclosure by the
Optionee of confidential information or trade secrets of the Corporation (or
any Parent or Subsidiary), or any other intentional misconduct by the Optionee
adversely affecting the business or affairs of the Corporation (or any Parent
or Subsidiary) in a material manner. The foregoing definition shall not be
deemed to be inclusive of all the acts or omissions which the Corporation (or
any Parent or Subsidiary) may consider as grounds for the dismissal or
discharge of any Optionee or other person in the Service of the Corporation (or
any Parent or Subsidiary).

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

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

               N. Optionee shall mean any person to whom an option is granted under the
Plan.

               O. 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.

               P. Permanent Disability or Permanently Disabled shall mean the inability
of the Optionee to engage in any substantial gainful activity 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.

               Q. Plan shall mean the Corporation’s 1999 Special Stock Option Plan, as
set forth in this document.

               R. Plan Administrator shall mean either the Board or a committee of the
Board acting in its administrative capacity under the Plan.

               S. Plan Effective Date shall mean October 4, 1999, the date on which the
Plan was adopted by the Board.

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

               U. Service shall mean the performance of services to the Corporation (or
any Parent or Subsidiary) by any person in the capacity of an Employee or an
independent consultant or advisor, except to the extent otherwise specifically
provided in the applicable stock option agreement.

               V. Stock Exchange shall mean either the American Stock Exchange or the New
York Stock Exchange.

A-3.

 

               W. 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-4.

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