Document:

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Exhibit 10.1

QLOGIC CORPORATION

1998 EMPLOYEE STOCK PURCHASE PLAN

(Amended and Restated Effective June 9, 2005)

     This 1998 EMPLOYEE STOCK PURCHASE PLAN (the “Plan”) was established by QLOGIC CORPORATION, a
Delaware corporation, on the 9th day of April, 1998 and became effective on the
“Effective Date.” The Plan is hereby amended and restated in its entirety as set forth herein,
effective as of June 9, 2005.

ARTICLE 1

PURPOSE OF THE PLAN

     1.1 Purpose. The Company has determined that it is in its best interest to provide
incentives to attract and retain employees and to increase employee morale by providing a program
through which employees of the Company, and of such of the Company’s subsidiaries as the Company’s
Board of Directors may from time to time designate (each a “Designated Subsidiary,” and
collectively, “Designated Subsidiaries”) may acquire a proprietary interest in the Company through
the purchase of shares of the common stock of the Company (“Company Stock”). The Plan is hereby
established by the Company to permit employees to subscribe for and purchase directly from the
Company shares of the Company Stock at a discount from the market price, and to pay the purchase
price in installments by payroll deductions. The Plan is intended to qualify as an “employee stock
purchase plan” under Section 423 of the Internal Revenue Code of 1986, as amended from time to time
(the “Code”). The provisions of the Plan are to be construed in a manner consistent with the
requirements of Section 423 of the Code. The Plan is not intended to be an employee benefit plan
under the Employee Retirement Income Security Act of 1974, and therefore is not required to comply
with that Act.

ARTICLE 2

DEFINITIONS

     2.1 Administrator. “Administrator” shall refer to the committee of the Board of
Directors of the Company appointed to administer the Plan, and if no such committee has been
appointed, the term Administrator shall mean the Board of Directors.

     2.2 Company. “Company” means QLogic Corporation, and its majority-owned subsidiaries
and wholly-owned subsidiaries of its majority-owned subsidiaries, as well as any parent corporation
of QLogic Corporation.

     2.3 Compensation. “Compensation” includes salary, annual bonus/incentive, annual
profit sharing, overtime, lead premium, commissions and shift differential, but expressly excludes
other forms of compensation such as relocation, housing, car allowances, phone allowances, sign-on
bonuses and referral bonuses.

 

 

     2.4 Effective Date. “Effective Date” means November 2, 1998.

     2.5 Employee. “Employee” means each person currently employed by the Company or any
of its Designated Subsidiaries, any portion of whose income is subject to withholding of income tax
or for whom Social Security retirement contributions are made by the Company or any Designated
Subsidiary.

     2.6 Entry Date. “Entry Date” means the first day of the second month of each calendar
quarter (February 1, May 1, August 1 and November 1).

     2.7 Grant Date. “Grant Date” means the first day of each Offering Period (February 1,
May 1, August 1 and November 1) under the Plan.

     2.8 Offering Period. “Offering Period” means the three-month periods from February 1
through April 30, May 1 through July 31, August 1 through October 31, and November 1 through
January 31 of each calendar year.

     2.9 5% Owner. “5% Owner” means an Employee who, immediately after the grant of any
rights under the Plan, would own stock (within the meaning of Section 423(b)(3) of the Code)
possessing 5% or more of the total combined voting power or value of all classes of stock of the
Company. For purposes of this Section, the ownership attribution rules of Section 424(d) of the
Code shall apply, and stock which the Employee may purchase under outstanding options shall be
treated as stock owned by the Employee.

     2.10 Participant. “Participant” means an Employee who has satisfied the eligibility
requirements of Section 3.1 and has become a participant in the Plan in accordance with Section
3.2.

     2.11 Purchase Date. “Purchase Date” means the last day of each Offering Period (April
30, July 31, October 31, or January 31).

ARTICLE 3

ELIGIBILITY AND PARTICIPATION

     3.1 Eligibility. Each Employee of the Company, or any Designated Subsidiary, whose
customary employment is for more than 20 hours per week and more than five months in a calendar
year in the rendition of personal services to the Company may become a Participant in the Plan on
the Entry Date coincident with or next following the Employee’s satisfaction of the requirements of
Section 3.2.

     3.2 Participation. An Employee who has satisfied the eligibility requirements of
Section 3.1 may become a Participant in the Plan upon his completion and delivery to the
Administrator of the Company of a stock purchase agreement provided by the Company (the “Stock
Purchase Agreement”) authorizing payroll deductions. Payroll deductions for a Participant shall
commence on the Entry Date coincident with or next following the filing of the Participant’s Stock
Purchase Agreement and shall remain in effect until revoked by the Participant by the filing of a
notice of withdrawal from the Plan under Article 8 or by the filing of a new Stock Purchase
Agreement providing for a change in the Participant’s payroll deduction rate under Section 5.2.

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     3.3 Special Rules. Under no circumstances shall:

          a. an option to purchase Company Stock under the Plan be granted to a Participant if the
exercise of such option would cause the Participant to be a 5% Owner;

          b. an option to purchase Company Stock under the Plan be granted to a Participant if such
option would cause the Participant to have rights to purchase Company Stock under the Plan (and
under any other employee stock purchase plan of the Company which is qualified under Section 423 of
the Code) which accrue at a rate which exceeds $25,000 of the fair market value of the Company
Stock (determined at the time the right to purchase such Company Stock is granted, before giving
effect to any discounted purchase price under any such plan) for each calendar year in which such
right is outstanding at any time, as this rule is applied under Section 423 of the Code and the
rules and regulations promulgated thereunder; or

          c. the number of shares of Company Stock purchasable by a Participant in any calendar year
exceed 5,000 shares, subject to periodic adjustments under Section 10.4.

For purposes of the foregoing, a right to purchase Company Stock accrues when it first becomes
exercisable during the calendar year. If any amount which exceeds the limits set forth in this
Section 3.3 remains in the Participant’s Account after the exercise of the Participant’s option on
the Purchase Date, such amount shall be refunded to the Participant as soon as administratively
practicable after such date.

ARTICLE 4

OFFERING PERIODS

     4.1 Offering Periods. The Plan shall provide for Offering Periods commencing on each
Grant Date and terminating on the next following Purchase Date.

ARTICLE 5

PAYROLL DEDUCTIONS

     5.1 Participant Election. Upon completion of the Stock Purchase Agreement, each
Participant shall designate the amount of payroll deductions to be made from his or her paycheck to
purchase Company Stock under the Plan. The amount of payroll deductions shall be designated in
whole percentages of Compensation, not to exceed 10%, which percentage may be increased or
decreased from time to time in the discretion of the Administrator, but in no event shall the
maximum amount be increased to an amount in excess of 15% of Compensation. The amount so
designated upon the Stock Purchase Agreement shall be effective as of the next Grant Date and shall
continue until terminated or altered in accordance with Section 5.2 below.

     5.2 Changes in Election. Any Participant may change any election (increase or
decrease the rate of payroll deductions) under this Section one time during any Offering Period by
completing and delivering to the Administrator a new Stock Purchase Agreement setting forth the
desired change at least 15 days prior to the end of the Offering Period. A Participant may
terminate participation in the Plan at any time prior to the close of an Offering Period as
provided in Article 8.

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A Participant may also terminate payroll deductions and have accumulated deductions for the
then current Offering Period applied to the purchase of Company Stock as of the Purchase Date for
that Offering Period by completing and delivering to the Administrator a new Stock Purchase
Agreement setting forth the desired change. Any change under this Section shall become effective
on the next payroll period (to the extent practical under the Company’s payroll practices)
following the delivery of the new Stock Purchase Agreement.

     5.3 Participant Accounts. The Company shall establish and maintain a separate account
(“Account”) for each Participant. The amount of each Participant’s payroll deductions shall be
credited to his Account. No interest will be paid or allowed on amounts credited to a
Participant’s Account. All payroll deductions received by the Company under the Plan are general
corporate assets of the Company and may be used by the Company for any corporate purpose. The
Company is not obligated to segregate such payroll deductions.

ARTICLE 6

GRANT OF OPTION

     6.1 Option to Purchase Shares. On each Grant Date, each Participant shall be granted
an option to purchase at the price determined under Section 6.2 that number of shares of Company
Stock that can be purchased or issued by the Company based upon that price with the amounts held in
his Account, subject to the limits set forth in Section 3.3. In the event that there are amounts
held in a Participant’s Account that are not used to purchase Company Stock (except for amounts
required to be returned under Section 3.3), such amounts shall remain in the Participant’s Account
and shall be eligible to purchase Company Stock in any subsequent Offering Period.

     6.2 Purchase Price. The purchase price for any Offering Period shall be the lesser of:

          a. 85% of the Fair Market Value of Company Stock on the Grant Date; or

          b. 85% of the Fair Market Value of Company Stock on the Purchase Date.

     6.3 Fair Market Value. “Fair Market Value” shall mean the value of one share of
Company Stock, determined as follows:

          a. If the Company Stock is then listed or admitted to trading on the Nasdaq National Market
System or a stock exchange which reports closing sale prices, the Fair Market Value shall be the
closing sale price on the date of valuation on the Nasdaq National Market System or principal stock
exchange on which the Company Stock is then listed or admitted to trading, or, if no closing sale
price is quoted or no sale takes place on such day, then the Fair Market Value shall be the closing
sale price of the Company Stock on the Nasdaq National Market System or such exchange on the next
preceding day on which a sale occurred.

          b. If the Company Stock is not then listed or admitted to trading on the Nasdaq National
Market System or a stock exchange which reports closing sale prices, the Fair Market Value shall be
the average of the closing bid and asked prices of the Company Stock in the over-the-counter market
on the date of valuation.

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          c. If neither (a) nor (b) is applicable as of the date of valuation, then the Fair Market
Value shall be determined by the Administrator in good faith using any reasonable method of
valuation, which determination shall be conclusive and binding on all interested parties.

ARTICLE 7

PURCHASE OF STOCK

7.1 Exercise of Option.

          a. On each Purchase Date, the Participant will be deemed to exercise the option expiring on
that Purchase Date. Notwithstanding the above, a Participant may direct the Company not to
purchase Company Stock on the Purchase Date in accordance with Section 8.1, in which case any
amount in the Participant’s Account shall be refunded to the Participant as soon as
administratively practicable after such Purchase Date.

          b. Upon exercise of an option, the Plan shall purchase on behalf of each Participant the
maximum number of full shares of Company Stock subject to such option at the option price
determined under Section 6.2 above as can be purchased with the amounts held in each Participant’s
Account. Any amounts remaining in a Participant’s Account as a result of the requirement that no
fractional shares may be purchased shall be held in the Participant’s Account and carried forward
for the rest of the Offering Period or to the next Offering Period.

     7.2 Delivery of Company Stock. The time of issuance and delivery of the shares may be
postponed for such period as may be necessary to comply with the registration requirements under
the Securities Act of 1933, as amended, the listing requirements of any securities exchange on
which the Company Stock may then be listed, or the requirements under other laws or regulations
applicable to the issuance or sale of such shares.

ARTICLE 8

WITHDRAWAL

     8.1 In Service Withdrawals. At any time prior to the Purchase Date of an Offering
Period, any Participant may withdraw the amounts held in his Account by executing and delivering to
the Administrator a written notice of withdrawal on the form provided by the Company. In such a
case, the entire balance of the Participant’s Account shall be paid to the Participant, without
interest, as soon as is practicable. Upon such notification, the Participant shall cease to
participate in the Plan for the remainder of the Offering Period in which the notice is given. A
reduction in contributions to zero during any Offering Period with an instruction to hold the funds
in a Participant’s Account to purchase shares as of the Close of the Offering Period shall not be
deemed a withdrawal. Any Employee who has withdrawn under this Section shall be excluded from
participation in the Plan for the remainder of the Offering Period in which the withdrawal occurred
and the next succeeding Offering Period, but may then be reinstated as a Participant thereafter by
executing and delivering a new Stock Purchase Agreement to the Administrator.

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8.2 Termination of Employment.

          a. In the event that a Participant’s employment with the Company terminates for any reason,
the Participant shall cease to participate in the Plan on the date of termination. As soon as is
practical following the date of termination, the entire balance of the Participant’s Account shall
be paid to the Participant or his beneficiary in cash, without interest.

          b. A Participant may file a written designation of a beneficiary who is to receive any shares
of Company Stock purchased under the Plan or any cash from the Participant’s Account in the event
of his or her death subsequent to a Purchase Date, but prior to delivery of such shares and cash.
In addition, a Participant may file a written designation of a beneficiary who is to receive any
cash from the Participant’s Account under the Plan in the event of his death prior to a Purchase
Date under paragraph (a) above.

          c. Any beneficiary designation under paragraph (b) above may be changed by the Participant at
any time by written notice. In the event of the death of a Participant, the Administrator may rely
upon the most recent beneficiary designation it has on file as being the appropriate beneficiary.
In the event of the death of a Participant where no valid beneficiary designation exists or the
beneficiary has predeceased the Participant, the Administrator shall deliver any cash or shares of
Company Stock to the executor or administrator of the estate of the Participant, or if no such
executor or administrator has been appointed to the knowledge of the Administrator, the
Administrator, in its sole discretion, may deliver such shares of Company Stock or cash to the
spouse or any one or more dependents or relatives of the Participant, or if no spouse, dependent or
relative is known to the Administrator, then to such other person as the Administrator may
designate.

ARTICLE 9

PLAN ADMINISTRATION

9.1 Plan Administration.

          a. Authority to control and manage the operation and administration of the Plan shall be
vested in the Board of Directors (the “Board”) for the Company, or a committee (“Committee”)
thereof. Members of the Committee may be appointed from time to time by, and shall serve at the
pleasure of, the Board. As used herein, the term “Administrator” shall mean the Board or, with
respect to any matter as to which responsibility has been delegated to the Committee, the term
Administrator shall mean the Committee. The initial Administrator of the Plan shall be the
Compensation Committee of the Board of Directors. The Administrator shall have all powers
necessary to supervise the administration of the Plan and control its operations.

          b. In addition to any powers and authority conferred on the Administrator elsewhere in the
Plan or by law, the Administrator shall have the following powers and authority:

               (i) To designate agents to carry out responsibilities relating to the Plan;

               (ii) To administer, interpret, construe and apply this Plan and to answer all questions which
may arise or which may be raised under this Plan by a Participant, his or her beneficiary or any
other person whatsoever;

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               (iii) To establish rules and procedures from time to time for the conduct of its business and
for the administration and effectuation of its responsibilities under the Plan; and

               (iv) To perform or cause to be performed such further acts as it may deem to be necessary,
appropriate, or convenient for the operation of the Plan.

          c. Any action taken in good faith by the Administrator in the exercise of authority conferred
upon it by this Plan shall be conclusive and binding upon a Participant and his beneficiaries. All
discretionary powers conferred upon the Administrator shall be absolute.

     9.2 Limitation on Liability. No Employee of the Company nor member of the Board or
Committee shall be subject to any liability with respect to his or her duties under the Plan unless
the person acts fraudulently or in bad faith. To the extent permitted by law, the Company shall
indemnify each member of the Board or Committee, and any other Employee of the Company with duties
under the Plan who was or is a party, or is threatened to be made a party, to any threatened,
pending or completed proceeding, whether civil, criminal, administrative, or investigative, by
reason of the person’s conduct in the performance of his duties under the Plan.

ARTICLE 10

COMPANY STOCK

     10.1 Limitations on Purchase of Shares. The maximum number of shares of Company Stock
that shall be made available for sale under the Plan shall be 2,400,000 shares, subject to
adjustment under Section 10.4 below. The shares of Company Stock to be sold to Participants under
the Plan will be issued by the Company. If the total number of shares of Company Stock that would
otherwise be issuable pursuant to rights granted pursuant to Section 6.1 of the Plan at the
Purchase Date exceeds the number of shares then available under the Plan, the Administrator shall
make a pro rata allocation of the shares remaining available in as uniform and equitable manner as
is practicable. In such event, the Administrator shall give written notice of such reduction of
the number of shares to each Participant affected thereby and any unused payroll deductions shall
be returned to such Participant if necessary.

     10.2 Voting Company Stock. The Participant will have no interest or voting right in
shares to be purchased under Section 6.1 of the Plan until such shares have been purchased.

     10.3 Registration of Company Stock. Shares to be delivered to a Participant under the
Plan will be registered in the name of the Participant unless designated otherwise by the
Participant.

     10.4 Changes in Capitalization of the Company. Subject to any required action by the
stockholders of the Company, the number of shares of Company Stock covered by each right under the
Plan which has not yet been exercised and the number of shares of Company Stock which have been
authorized for issuance under the Plan but have not yet been placed under rights or which have been
returned to the Plan upon the cancellation of a right, as well as the purchase price per share of
Company Stock covered by each right under the Plan which has not yet been exercised, shall be
proportionately adjusted for any increase or decrease in the number of issued shares of Company
Stock resulting from a stock split, stock dividend, spin-off, reorganization, recapitalization,
merger, consolidation, exchange of shares or the like. Such adjustment shall be made by the
Administrator,

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whose determination in that respect shall be final, binding and conclusive. Except as
expressly provided herein, no issue by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof
shall be made with respect to, the number or price of shares of Company Stock subject to any option
granted hereunder.

     10.5 Merger of Company. In the event that the Company at any time proposes to merge
into, consolidate with or enter into any other reorganization pursuant to which the Company is not
the surviving entity (including the sale of substantially all of its assets or a “reverse” merger
in which the Company is the surviving entity), the Plan shall terminate, unless provision is made
in writing in connection with such transaction for the continuance of the Plan and for the
assumption of options theretofore granted, or the substitution for such options of new options
covering the shares of a successor corporation, with appropriate adjustments as to number and kind
of shares and prices, in which event the Plan and the options theretofore granted or the new
options substituted therefor, shall continue in the manner and under the terms so provided. If
such provision is not made in such transaction for the continuance of the Plan and the assumption
of options theretofore granted or the substitution for such options of new options covering the
shares of a successor corporation, then the Administrator shall cause written notice of the
proposed transaction to be given to the persons holding options not less than 10 days prior to the
anticipated effective date of the proposed transaction, and, concurrent with the effective date of
the proposed transaction, such options shall be exercised automatically in accordance with Section
7.1 as if such effective date were a Purchase Date of the applicable Offering Period unless a
Participant withdraws from the Plan as provided in Section 8.1.

ARTICLE 11

MISCELLANEOUS MATTERS

     11.1 Amendment and Termination. The Plan shall terminate on December 31, 2008. Since
future conditions affecting the Company cannot be anticipated or foreseen, the Company reserves the
right to amend, modify, or terminate the Plan at any time. Upon termination of the Plan, all
benefits shall become payable immediately. Notwithstanding the foregoing, no such amendment or
termination shall affect rights previously granted, nor may an amendment make any change in any
right previously granted which adversely affects the rights of any Participant. In addition, no
amendment may be made without prior approval of the stockholders of the Company if such amendment
would:

          a. Increase the number of shares of Company Stock that may be issued under the Plan;

          b. Materially modify the requirements as to eligibility for participation in the Plan; or

          c. Materially increase the benefits which accrue to Participants under the Plan.

     11.2 Stockholder Approval. The Plan was approved by stockholders on August 27, 1998.

     11.3 Benefits Not Alienable. Benefits under the Plan may not be assigned or
alienated, whether voluntarily or involuntarily. Any attempt at assignment, transfer, pledge or
other disposition

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shall be without effect, except that the Company may treat such act as an election to withdraw
funds in accordance with Article 8.

     11.4 No Enlargement of Employee Rights. This Plan is strictly a voluntary undertaking
on the part of the Company and shall not be deemed to constitute a contract between the Company and
any Employee or to be consideration for, or an inducement to, or a condition of, the employment of
any Employee. Nothing contained in the Plan shall be deemed to give the right to any Employee to
be retained in the employ of the Company or to interfere with the right of the Company to discharge
any Employee at any time.

     11.5 Governing Law. To the extent not preempted by Federal law, all legal questions
pertaining to the Plan shall be determined in accordance with the laws of the State of California.

     11.6 Non-business Days. When any act under the Plan is required to be performed on a
day that falls on a Saturday, Sunday or legal holiday, that act shall be performed on the next
succeeding day which is not a Saturday, Sunday or legal holiday. Notwithstanding the above, Fair
Market Value shall be determined in accordance with Section 6.3.

     11.7 Compliance With Securities Laws. Notwithstanding any provision of the Plan, the
Administrator shall administer the Plan in such a way to ensure that the Plan at all times complies
with any requirements of Federal Securities Laws.

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Exhibit 10.1

BROADCOM CORPORATION

2005 PERFORMANCE BONUS PLAN

     I. PURPOSES OF THE PLAN

          A. The Broadcom Corporation 2005 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 executives and other 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 Company’s fiscal year ending December 31, 2005 (the
“Plan Year”), and bonuses may be earned under the Plan on the basis of the Company’s financial
performance for such 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 performance objectives to be attained for the Plan Year in order for
participants to become entitled to bonus payments under the Plan;

               (ii) determine the actual bonus (if any) to be paid to each participant based on actual
performance relative to the established objectives for the Plan Year; and

               (iii) determine whether the bonus payments are to be made in cash, restricted stock units
(“RSUs”) covering shares of the Company’s Class A common stock (the “Common Stock”) that may vest
and become issuable over a designated service period measured from the start date of the Company’s
2006 fiscal year or that may be fully vested and issuable when awarded, or a combination of cash
and RSUs.

          B. The Plan Administrator shall also have full power and authority to interpret and construe
the provisions of the Plan, to adopt rules and regulations for the administration of the Plan and
to determine an individual’s eligibility for participation in the Plan and the amount of the actual
bonus (if any) to be paid to him or her.

          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. PARTICIPATION

          A. The individuals who shall participate in the Plan for the Plan Year shall be limited to (i)
the executive officers of the Company, (ii) all other employees of the Company (or its
subsidiaries) at the level of Director or above and (iii) any other employees of the Company

 

 

(or its subsidiaries) identified by the Company’s Chief Executive Officer as key contributors to
the Company’s growth and financial success and selected for participation in the Plan by the Plan
Administrator.

          B. A participant shall cease to participate in the Plan and shall not be entitled to any bonus
payment under the Plan if that participant ceases Employee status for any reason prior to the date
that bonuses are paid under the Plan (the “Distribution Date”); provided, however, that:

     (i) a participant who ceases Employee status prior to the Distribution Date by reason
of death or Disability may be entitled to receive a pro-rated bonus based upon the number of
days which such individual remained in active Employee status during the Plan Period (as
defined below); and

     (ii) the Plan Administrator shall have complete discretion to make individual bonus
awards under Article V of the Plan to one or more participants who terminate Employee status
for any other reason prior to the Distribution Date, when the Plan Administrator deems the
special circumstances of the participant’s termination warrant a bonus award under the Plan.

          C. For purposes of the Plan:

     (i) 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.

     (ii) 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;

     (iii) The Plan Period shall mean the period beginning with the first day of the Plan
Year and ending with the Distribution Date.

     (iv) 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 the 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, such participant’s bonus 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. BONUS POOL

          A. The Plan Administrator shall take each of the following actions during the Plan Year:

     (i) The Plan Administrator shall establish the specific performance objectives that
must be attained for the Plan Year for a bonus pool to be created under the Plan for that
year. The performance objectives may be based on one or more of the following financial
measures: (a) net revenue, (b) pro forma gross margin, (c) pro forma operating margin, (d)
pro forma earnings per share and/or (e) change in the price per share of the Common Stock
relative to the stock prices of an identified peer group.

     (ii) The Plan Administrator shall determine the bonus pool for the Plan Year. The
target bonus pool for the Plan Year shall be ten million dollars ($10,000,000). The maximum
bonus pool payable under the Plan in the event the Company exceeds each of the established
performance objectives shall be limited to fifteen million dollars ($15,000,000). The
actual dollar amount of the bonus pool to be awarded for the Plan Year shall be determined
on the basis of the Company’s actual performance relative to each of the performance
objectives established for the Plan Year. Accordingly, each performance objective shall be
measured separately in terms of actual percentage attainment and shall be weighted equally
in determining the actual size of the bonus pool. For example, if five (5) performance
objectives are established, then each objective at one hundred percent (100%) attainment
will account for twenty percent (20%) of the total target bonus pool or two million dollars
($2,000,000). No bonus pool will be established with respect any performance objective,
unless the Company attains at least a specified percentage of that objective, with such
specification to be made by the Plan Administrator at the time each performance objective is
established.

          B. In determining whether the established performance objectives based on pro forma gross
margin, pro forma operating margin and pro forma earnings per share are attained, the Plan
Administrator shall apply the dollar amounts which the Company reports for those items in
accordance with U.S. generally accepted accounting principles (“GAPP”), as adjusted for non-cash,
non-recurring, extraordinary and certain other items. 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 2005 financial statements by the Company’s independent
registered public accounting firm.

     V. INDIVIDUAL BONUS AWARDS

          A. The actual bonus award to be made to (i) each participant who is an executive officer of
the Company shall be determined at the sole discretion of the Plan Administrator and (ii) each
participant who is not an executive officer of the Company shall be determined at the discretion of
the Plan Administrator, based upon the recommendation of the Company’s management.

 

 

          B. Except as otherwise provided in this Paragraph V.B, 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 (i)
one or more participants may be entitled to a pro-rata bonus should their Employee status terminate
under circumstances which entitle them to such a pro-rata bonus pursuant to the express terms of
any other agreement or arrangement to which they and the Company are parties and (ii) the
provisions of Paragraph III.B shall govern the bonus entitlement of participants whose Employee
status terminates by reason of death, Disability or under other special circumstances identified by
the Plan Administrator.

          C. The Distribution Date for the individual bonus amount for each participant shall be as soon
as administratively practicable following the completion of the audit of the Company’s 2005
financial statements by the Company’s independent registered public accounting firm, but in no
event shall such Distribution Date be later than March 15, 2006. The payment may be made in whole
or in part in any of the following forms as determined by the Plan Administrator in its sole
discretion:

     (i) cash; and/or

     (ii) RSUs covering shares of Common Stock that will vest and become issuable in one or
more installments as the participant continues in Employee status over a designated service
period measured from the start date of the Company’s 2006 fiscal year, provided such
deferred method of payment is not otherwise deemed to result in an impermissible
distribution event under Section 409A of the Internal Revenue Code, or that will be fully
vested and issuable when awarded.

                    The payment in whatever form so authorized by the Plan Administrator shall be subject to the
Company’s collection of all applicable federal, state and local income and employment withholding
taxes, as and when those taxes become due and payable.

                    To the extent any bonus award is to be paid through RSUs covering shares of Common Stock,
those shares shall be drawn from the authorized share reserve under the Broadcom Corporation 1998
Stock Incentive Plan, as amended and restated, and shall accordingly reduce the number of shares of
Common Stock otherwise available for issuance under that plan.

     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. The Plan Administrator may at any time amend, suspend or terminate the Plan, provided such
action does not adversely affect the rights and interests of participants

 

 

accrued to date under the Plan or otherwise impair their ability to earn a bonus award based upon
the performance objectives established by the Plan Administrator for the Plan Year.

          C. 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 so as 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.

          D. 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.

          E. 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.

          F. The terms and conditions of the Plan, together with the obligations and liabilities of the
Company which 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.

          G. 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 which 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.

          H. 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.

          I. The actual performance objectives for the Plan Year, as established by the Plan
Administrator in accordance with the terms of the Plan, shall be set forth in attached Schedule I.

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