BROADCOM CORPORATION RESTRICTED STOCK UNIT ISSUANCE AGREEMENT
Exhibit 10.18
STANDARD QUARTERLY VESTING
CEO ONLY
CEO ONLY
RECITALS
A. The Board has adopted the Plan for the purpose of retaining the services of selected
Employees and consultants and other independent advisors who provide services to the Corporation
(or any Parent or Subsidiary).
B. Participant is to render valuable services to the Corporation (or a Parent or Subsidiary),
and this Agreement is executed pursuant to, and is intended to carry out the purposes of, the Plan
in connection with the Corporation’s issuance of shares of Common Stock to the Participant under
the Stock Issuance Program.
C. All capitalized terms in this Agreement shall have the meaning assigned to them in the
attached Appendix A.
NOW, THEREFORE, it is hereby agreed as follows:
1. Grant of Restricted Stock Units. The Corporation hereby awards to the Participant,
as of the Award Date, Restricted Stock Units under the Plan. Each Restricted Stock Unit represents
the right to receive one share of Common Stock on the vesting date specified for that unit in
accordance with the express provisions of this Agreement. The number of shares of Common Stock
subject to the awarded Restricted Stock Units, the applicable vesting schedule for those shares,
the date or dates on which those vested shares shall become issuable to Participant and the
remaining terms and conditions governing the award (the “Award”) shall be as set forth in this
Agreement.
AWARD SUMMARY
Participant:
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Award Date:
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, 20 | |
Vesting Commencement Date:
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, 20 (the “Vesting Commencement Date”) | |
Number of Shares
Subject to Award:
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shares of Common Stock (the “Shares”) | |
Vesting Schedule:
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The Shares shall vest in a series of sixteen (16) successive equal quarterly installments upon the Participant’s completion of each successive three (3)-month period of Service (each date on which such three (3)-month period ends, a “Vesting Date”) over the forty-eight (48)-month period measured |
| from the Vesting Commencement Date (the “Normal Vesting Schedule”). However, the Shares may also vest in whole or in part on an accelerated basis in accordance with the provisions of Sections 3 and 5 of this Agreement. | ||
Issuance Schedule:
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Subject to Section 8 of this Agreement, each quarterly installment of Shares to which the Participant becomes entitled in accordance with the Normal Vesting Schedule shall be issued, subject to the Corporation’s collection of the applicable Withholding Taxes, on the date that installment vests in accordance with such schedule or as soon thereafter as administratively practicable, but in no event later than thirty (30) days after the applicable Vesting Date. Any Shares that vest on an accelerated basis pursuant to Section 3 or 5 of this Agreement shall be issued in accordance with the applicable provisions of such section. The Corporation shall in all instances collect the applicable Withholding Taxes with respect to the issued Shares pursuant to the procedures set forth in Section 7 of this Agreement. |
2. Limited Transferability. Prior to actual receipt of the Shares that become
issuable hereunder, the Participant may not transfer any interest in the Award or the underlying
Shares or pledge or otherwise hedge the sale of those Shares, including (without limitation) any
short sale or any acquisition or disposition of any put or call option or other instrument tied to
the value of those Shares. Any attempt by the Participant to do so will result in an immediate
forfeiture of all of the Restricted Stock Units awarded to the Participant hereunder. Any Shares
that vest hereunder but which otherwise remain unissued at the time of the Participant’s death may
be transferred pursuant to the provisions of the Participant’s will or the laws of inheritance or
to the Participant’s designated beneficiary or beneficiaries of this Award. The Participant may
also direct the Corporation to immediately re-issue the stock certificates for any Shares that in
fact vest and become issuable to Participant under the Award during his or her lifetime to one or
more designated Family Members or a trust established for the Participant and/or his or her Family
Members. The Participant may make such a beneficiary designation or certificate directive at any
time by filing the appropriate form with the Plan Administrator or its designee.
3. Cessation of Service.
(a) Except as otherwise provided in this Section 3 or Section 5 below, should the Participant
cease Service for any reason prior to a Vesting Date, then the Award shall be immediately cancelled
with respect to those unvested Shares. Participant shall thereupon cease to have any right or
entitlement to receive any Shares under those cancelled units.
(b) The Normal Vesting Schedule requires continued active Service by the Participant through
each Vesting Date as a condition to the vesting of that quarterly installment and the rights and
benefits provided under this Agreement with respect to that installment. Accordingly, if the
Participant’s Service terminates for any reason prior to an applicable quarterly Vesting Date, this
Award shall be immediately cancelled, and no further
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Restricted Stock Units shall thereafter vest. Service for only a portion of a quarterly
vesting period, even if a substantial portion, will not entitle the Participant to any
proportionate vesting for that quarter or avoid or mitigate the cancellation and forfeiture of the
Restricted Stock Units that will occur upon the termination of his Service prior to vesting in all
the Restricted Stock Units subject to this Award. Upon the cancellation of one or more Restricted
Stock Units, the Participant shall cease to have any right or entitlement to receive any Shares
under those cancelled units.
(c) The Participant also has an employment agreement with the Corporation in the form of an
amended and restated letter agreement and appendix (the “Employment Agreement”) pursuant to which
the Participant’s equity or equity-based awards from the Corporation, including this Award, may
vest in whole or in part on an accelerated basis in connection with the Participant’s cessation of
Employee status under various specified circumstances. The Employment Agreement also sets forth the
date or dates on which the shares of Common Stock subject to the awards that vest on such an
accelerated basis, including the Shares subject to this Award, are to be issued, subject to certain
required delays as set forth in the Employment Agreement. The terms and provisions of the
Employment Agreement, as they apply to this Award, are hereby incorporated by reference into this
Agreement and shall have the same force and effect as if expressly set forth in this Agreement.
(d) In the event the Participant’s Employee status terminates prior to vesting in all the
Shares due to his death or Disability, then the applicable death and Disability provisions of the
Employment Agreement shall govern the Participant’s rights and entitlements.
4. Shareholder Rights.
(a) The Restricted Stock Units subject to this Award do not impose any fiduciary obligations
upon the Corporation and create only a contractual obligation on the part of the Corporation to
issue the Shares that vest in accordance with the express terms of this Agreement. The Restricted
Stock Units shall not be treated as property or as a trust fund of any kind.
(b) Participant shall not have any shareholder rights, including voting, dividend or
liquidation rights, with respect to the Shares subject to the Award until Participant becomes the
record holder of those Shares upon their actual issuance following the Corporation’s collection of
the applicable Withholding Taxes.
(c) Except as otherwise provided in Section 6, no adjustments will made to this Award for
dividends or other shareholder distributions for which the record date is prior to the date
Participant becomes the record holder of the Shares subject to this Award.
5. Change of Control.
(a) Any Restricted Stock Units subject to this Award at the time of a Change in Control may be
assumed by the successor entity or otherwise continued in full force and effect or may be replaced
with a cash retention program of the successor entity that preserves
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the Fair Market Value (at the time of the Change in Control) of the unvested shares of Common
Stock subject to the Award and provides for the subsequent vesting and payout of that value in
accordance with the same vesting and issuance schedules applicable to the Award. In the event of
such assumption or continuation of this Award or such replacement of the Award with a cash
retention program, no accelerated vesting of the Restricted Stock Units or the underlying Shares
shall occur at the time of the Change in Control.
(b) In the event this Award is assumed or otherwise continued in effect, the Restricted Stock
Units subject to the Award shall be adjusted immediately after the consummation of the Change in
Control so as to apply to the number and class of securities into which the Shares subject to those
units immediately prior to the Change in Control would have been converted in consummation of that
Change in Control had those Shares actually been issued and outstanding at that time. To the
extent the actual holders of the outstanding Common Stock receive cash consideration for their
Common Stock in consummation of the Change in Control, the successor corporation (or parent
entity) may, in connection with the assumption or continuation of the Restricted Stock Units
subject to the Award at that time, substitute one or more shares of its own common stock with a
fair market value equal to the cash consideration paid per share of Common Stock in the Change in
Control transaction, provided the substituted common stock is readily tradable on an established
U.S. securities exchange or market.
(c) If the Participant’s Employee status continues until the Change in Control and the
Restricted Stock Units subject to this Award at the time of the Change in Control are not assumed
or otherwise continued in effect or replaced with a cash retention program in accordance with
Section 5(a), then those units will vest immediately prior to the closing of the Change in Control.
The Shares subject to those vested units shall be converted into the right to receive the same
consideration per share of Common Stock payable to the other shareholders of the Corporation in
consummation of that Change in Control, and such consideration per Share shall be distributed to
Participant upon such Change in Control or at such later time or times as the consideration is paid
to the other holders of Common Stock in connection with the Change in Control, but only to the
extent that any such delayed payments will not require the Participant to include amounts payable
in respect of the Restricted Stock Units in income under Code Section 409A.
(d) This Agreement shall not in any 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.
6. Adjustment in 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,
spin-off transaction or other change affecting the outstanding Common Stock as a class without the
Corporation’s receipt of consideration, or should the value of outstanding shares of Common Stock
be substantially reduced as a result of a spin-off transaction or an extraordinary dividend or
distribution, or should there occur any merger, consolidation or other reorganization, then
equitable adjustments shall be made by the Plan Administrator to the total number and/or class of
securities issuable pursuant to this Award. The adjustments shall be
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made by the Plan Administrator in such manner as the Plan Administrator deems appropriate to
reflect such change, and those adjustments shall be final, binding and conclusive. In the event of
a Change in Control, the provisions of Section 5 shall be controlling.
7. Issuance of Shares of Common Stock.
(a) Except as otherwise provided in Section 5(c), on any applicable date that Shares are to be
issued pursuant to this Agreement, the Corporation shall issue to or on behalf of Participant a
certificate (which may be in electronic form) for the vested shares of Common Stock to be issued on
that date.
(b) The applicable Withholding Taxes with respect to the issued Shares or any other
consideration distributed to Participant shall be collected from Participant as and when such taxes
become due. Participant may, with respect to the issued Shares, satisfy the applicable Withholding
Taxes through one or more of the following methods:
(i) The delivery of a separate check payable to the Corporation;
(ii) if and to the extent expressly authorized by the Plan Administrator at the
time, through a share withholding procedure, pursuant to which the Corporation will
automatically withhold, immediately upon the issuance of the Shares, a portion of
those Shares with a Fair Market Value (measured as of the issuance date) equal to
the amount of such Withholding Taxes (the “Share Withholding Method”); provided,
however, that the amount of any Shares so withheld shall not exceed the amount
necessary to satisfy the Corporation’s required tax withholding obligations using
the minimum statutory withholding rates for federal and state tax purposes,
including payroll taxes, that are applicable to supplemental taxable income.
Participant will be notified (either in writing or through electronic transmission)
of the time or times when the Share Withholding Method will actually be available
with respect to one or more vested Shares that become issuable under this Agreement
(such notification will also set forth the procedures authorized and established by
the Plan Administrator for such purpose);
(iii) irrevocable instructions given by Participant to a broker to remit to the
Corporation cash, in an amount equal to such Withholding Taxes, from a previously
established account Participant maintains with such broker; or
(iv) to the extent the Share Withholding Method is not otherwise available at
the time one or more vested Shares become issuable, Participant may also satisfy
the applicable Withholding Taxes with respect to those Shares through the use of
proceeds from a next day sale of the issued Shares, provided and only if (i) such a
sale is permissible under the Corporation’s xxxxxxx xxxxxxx policies governing sales
of Corporation shares and (ii) such
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transaction is not otherwise deemed to constitute a prohibited loan under
Section 402 of the Xxxxxxxx-Xxxxx Act of 2002.
(c) If any withholding event is other than the issuance of the Shares, or if the Corporation
for any reason is unable to collect the applicable Withholding Taxes with respect to the issuance
of the Shares through any of the foregoing collection procedures specified in this Section 7, then
the Corporation shall be entitled to require Participant to make a cash payment and/or to deduct
from other compensation payable to him or her the amount of such applicable Withholding Taxes.
(d) Notwithstanding the foregoing provisions of this Section 7, the employee portion of the
federal, state and local employment taxes required to be withheld by the Corporation in connection
with the vesting of the Shares or any other amounts hereunder (the “Employment Taxes”) shall in all
events be collected from the Participant no later than the last business day of the calendar year
in which the Shares or other amounts vest hereunder. Accordingly, to the extent the issuance date
for one or more vested Shares or the distribution date for such other amounts is to occur in a year
subsequent to the calendar year in which those Shares or other amounts vest hereunder, the
Participant shall, on or before the last business day of the calendar year in which the Shares or
other amounts vest, deliver to the Corporation a check payable to its order in the dollar amount
equal to the Employment Taxes required to be withheld with respect to those Shares or other
amounts. The provisions of this Section 7(d) shall be applicable only to the extent necessary to
comply with the applicable tax withholding requirements of Code Section 3121(v).
(e) Except as otherwise provided in Section 5 or Section 7(b), the settlement of all
Restricted Stock Units that vest under the Award shall be made solely in shares of Common Stock.
In no event, however, shall any fractional shares be issued. Accordingly, the total number of
shares of Common Stock to be issued at the time the Award vests shall, to the extent necessary, be
rounded down to the next whole share to avoid the issuance of a fractional share.
8. Code Section 409A Limitations. Notwithstanding any provision in this Agreement to
the contrary, should this Agreement be deemed a deferred compensation arrangement subject to
Section 409A of the Code:
- In no event shall the Shares that become issuable under this Agreement in
connection with the Participant’s cessation of Employee status be actually issued,
nor shall Participant have any right to the issuance of those Shares, prior to the
date on which the Participant incurs a Separation from Service due to that cessation
of Employee status.
- If the issuance date for the Shares (or the distribution date of any other
amounts due the Participant hereunder) is tied to the Participant’s Separation from
Service in accordance with the applicable provisions of this Agreement or the
Employment Agreement, then in no event will the Shares be issued (or such amounts be
distributed) prior to the earlier of (i) the first day of
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the seventh (7th) month following the date of such Separation from Service or
(ii) the date of Participant’s death, if Participant is deemed at the time of such
Separation from Service to be a specified employee under Section 1.409A-1(i) of the
Treasury Regulations issued under Code Section 409A, as determined by the Plan
Administrator in accordance with consistent and uniform standards applied to all
other Code Section 409A arrangements of the Corporation, and such delayed
commencement is otherwise required to avoid a prohibited distribution under Code
Section 409A(a)(2). Upon the expiration of the applicable deferral period, the
Shares shall be issued (or any other amounts due the Participant hereunder shall be
distributed) in a lump sum on the first day of the seventh (7th) month after the
date of Participant’s Separation from Service, or if earlier, the first day of the
month immediately following the date the Corporation receives proof of Participant’s
death.
In addition, it is the intent of the Corporation and the Participant that the
provisions of this Agreement comply with all applicable requirements of Section 409A of the
Code. Accordingly, to the extent there is any ambiguity as to whether one or more
provisions of this Agreement would otherwise contravene the applicable requirements or
limitations of Code Section 409A, then those provisions shall be interpreted and applied in
a manner that does not result in a violation of the applicable requirements or limitations
of Code Section 409A and the applicable Treasury Regulations thereunder.
9. Deferred Release Date. Should the applicable Restricted Stock Unit settlement date
occur during any period Participant is under investigation by the Corporation for any act or
transaction that might constitute grounds for termination for Misconduct, then those issued Shares
and/or the net proceeds from any sale or sales of those Shares during such period (the gross sale
proceeds less withholding taxes due the Corporation and broker commissions) will be held by the
Corporation in escrow until such time as the investigation is satisfactorily completed. If it is
determined that Participant has not engaged in any action or transaction that might constitute
grounds for a termination for Misconduct. then the escrowed Shares and/or funds will be released to
Participant, subject to the Corporation’s collection of all applicable Withholding Taxes not
otherwise previously collected, as soon as administratively practicable following the completion of
the investigation, but in no event later than the close of the calendar year in which such
determination is made. If it is determined that the Participant has engaged in any act or
transaction that constitutes grounds for termination for Misconduct, then Participant shall cease
to have any further right, title or interest in the escrowed Shares and/or funds, and those Shares
and funds shall be returned to the Corporation.
10. Securities Law Compliance. The Corporation shall use its reasonable commercial
efforts to assure that all Shares issued pursuant to this Agreement are registered under the
federal securities laws. However, no Shares will be issued pursuant to this Award if such issuance
would otherwise constitute a violation of any applicable federal or state securities laws or
regulations or the requirements of any Stock Exchange on which the Common Stock may then be listed.
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 of any Shares
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hereunder shall defer the Corporation’s obligation with respect to the issuance of such Shares
until such approval shall have been obtained.
11. Transfer Restriction. None of the issued Shares may be sold or transferred in
contravention of (i) any market blackout periods the Corporation may impose from time to time or
(ii) the Corporation’s xxxxxxx xxxxxxx policies to the extent applicable to you from time to time.
12. Parachute Payment. In the event the accelerated vesting and issuance of the
Shares subject to this Award would otherwise constitute a parachute payment under Code Section
280G, then the applicable parachute payment provisions of the Employment Agreement shall govern the
Participant’s rights and entitlements.
13. Notice. Any notice to be given or delivered to the Corporation relating to this
Agreement shall be in writing and addressed to the Corporation at its principal corporate offices.
Any notice to be given or delivered to Participant relating to this Agreement shall be in writing
and addressed to Participant at the address indicated below his or her signature line on the last
page of this Agreement or such other address of which Participant may later advise the Corporation
in writing. 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.
14. Successors and Assigns. The provisions of this Agreement shall inure to the
benefit of, and be binding upon, the Corporation and its successors and assigns and upon
Participant and the legal representatives, heirs and the legatees of his or her estate.
15. Construction. This Agreement and the Award 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. The
Plan Administrator shall have the discretionary authority to interpret and construe any term or
provision of the Plan or this Agreement, and such interpretation shall be binding on all persons
having an interest in the Award.
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.
17. At Will Employment. Nothing in this Agreement or the Award shall provide
Participant with any right to continue in Service for any period of specific duration or interfere
with or otherwise restrict in any way Participant’s right or the right of the Corporation to
terminate Participant’s Service at any time for any reason, with or without cause, or for no
reason.
18. Mandatory Arbitration. ANY AND ALL DISPUTES OR CONTROVERSIES BETWEEN PARTICIPANT
AND THE CORPORATION ARISING OUT OF, RELATING TO OR OTHERWISE CONNECTED WITH THIS AGREEMENT OR THE
AWARD OF RESTRICTED STOCK UNITS EVIDENCED HEREBY OR THE VALIDITY, CONSTRUCTION, PERFORMANCE OR
TERMINATION OF THIS
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AGREEMENT SHALL BE SETTLED EXCLUSIVELY BY BINDING ARBITRATION TO BE HELD IN THE COUNTY IN
WHICH PARTICIPANT IS (OR HAS MOST RECENTLY BEEN) EMPLOYED BY THE CORPORATION (OR ANY PARENT OR
SUBSIDIARY) AT THE TIME OF SUCH ARBITRATION. THE ARBITRATION PROCEEDINGS SHALL BE GOVERNED BY (i)
THE NATIONAL RULES FOR THE RESOLUTION OF EMPLOYMENT DISPUTES THEN IN EFFECT OF THE AMERICAN
ARBITRATION ASSOCIATION AND (ii) THE FEDERAL ARBITRATION ACT. THE ARBITRATOR SHALL HAVE THE SAME,
BUT NO GREATER, REMEDIAL AUTHORITY AS WOULD A COURT HEARING THE SAME DISPUTE. THE DECISION OF THE
ARBITRATOR SHALL BE FINAL, CONCLUSIVE 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; PROVIDED, HOWEVER, THAT SUCH
DECISION SHALL BE SUBJECT TO CORRECTION, CONFIRMATION OR VACATION IN ACCORDANCE WITH THE PROVISIONS
AND STANDARDS OF APPLICABLE LAW GOVERNING THE JUDICIAL REVIEW OF ARBITRATION AWARDS. THE PREVAILING
PARTY IN SUCH ARBITRATION, AS DETERMINED BY THE ARBITRATOR, AND IN ANY ENFORCEMENT OR OTHER COURT
PROCEEDINGS, SHALL BE ENTITLED, TO THE EXTENT PERMITTED BY LAW, TO REIMBURSEMENT FROM THE OTHER
PARTY FOR ALL OF THE PREVAILING PARTY’S COSTS, EXPENSES AND ATTORNEY’S FEES. HOWEVER, THE
ARBITRATOR’S COMPENSATION AND OTHER FEES AND COSTS UNIQUE TO ARBITRATION SHALL IN ALL EVENTS BE
PAID BY THE CORPORATION. JUDGMENT SHALL BE ENTERED ON THE ARBITRATOR’S DECISION IN ANY COURT
HAVING JURISDICTION OVER THE SUBJECT MATTER OF SUCH DISPUTE OR CONTROVERSY. NOTWITHSTANDING THE
FOREGOING, EITHER PARTY MAY IN AN APPROPRIATE MATTER APPLY TO A COURT PURSUANT TO CALIFORNIA CODE
OF CIVIL PROCEDURE SECTION 1281.8, OR ANY COMPARABLE STATUTORY PROVISION OR COMMON LAW PRINCIPLE,
FOR PROVISIONAL RELIEF, INCLUDING A TEMPORARY RESTRAINING ORDER OR A PRELIMINARY INJUNCTION. TO THE
EXTENT PERMITTED BY LAW, THE PROCEEDINGS AND RESULTS, INCLUDING THE ARBITRATOR’S DECISION, SHALL BE
KEPT CONFIDENTIAL.
19. Electronic Delivery. The Corporation may, in its sole discretion, decide to
deliver any document related to the Award, the Plan or future awards that may be granted under the
Plan by electronic means, and Participant hereby consents to receive such documents by electronic
delivery.
20. Remaining Terms. The remaining terms and conditions of this Award are governed by
the Plan, and this Award is also subject to all interpretations, amendments, rules and regulations
that may from time to time be adopted under the Plan. The official prospectus summarizing the
principal features of the Plan and the restricted stock units issuable under the Plan is available
for review on the Corporation’s website at xxxx://xxxxx.xxxxxxxx.xxx/xxxxx/xxxxxxx.xxxx. In the
event of any conflict between the provisions of this Agreement and those of the Plan, the
provisions of the Plan shall be
9
controlling. In the event of any conflict between the provisions of this Agreement and those
of the Employment Agreement, the provisions of the Employment Agreement shall be controlling.
Provisions of the Plan that confer discretionary authority on the Board or the Plan Administrator
do not (and shall not be deemed to) confer in Participant any rights, except to the extent such
rights are expressly set forth herein or are otherwise in the sole discretion of the Board or the
Plan Administrator expressly conferred by appropriate action after the date hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day and year first
indicated above.
| BROADCOM CORPORATION | ||||||
| By: | ||||||
| Title: | ||||||
| PARTICIPANT | ||||||
| Signature: | ||||||
| Name: | ||||||
| Address: | ||||||
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APPENDIX A
DEFINITIONS
The following definitions shall be in effect under the Agreement:
A. Agreement shall mean this Restricted Stock Unit Issuance Agreement.
B. Award shall mean the award of Restricted Stock Units made to the
Participant pursuant to the terms of this Agreement.
C. Award Date shall mean the date the Restricted Stock Units are awarded to
Participant pursuant to the Agreement and shall be the date indicated in Section 1 of the
Agreement.
D. Board shall mean the Corporation’s Board of Directors.
E. 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, consolidation or other reorganization, unless
securities representing more than fifty percent (50%) of the total combined voting
power of the outstanding securities of the successor corporation are immediately
after such transaction, beneficially owned, directly or indirectly and in
substantially the same proportion, by the persons who beneficially owned Broadcom’s
outstanding voting securities immediately prior to such transaction,
(ii) a shareholder-approved sale, transfer or other disposition of all or
substantially all of Broadcom’s assets,
(iii) the closing of any transaction or series of related transactions pursuant
to which any person or any group of persons comprising a “group” within the meaning
of Rule 13d-5(b)(1) of the 1934 Act, other than Broadcom or a person that, prior to
such transaction or series of related transactions, directly or indirectly controls,
is controlled by or is under common control with, Broadcom, becomes directly or
indirectly (whether as a result of a single acquisition or by reason of one or more
acquisitions within the twelve (12)-month period ending with the most recent
acquisition) the beneficial owner (within the meaning of Rule 13d-3 of the 1934 Act)
of securities possessing (or convertible into or exercisable for securities
possessing) more than fifty percent (50%) of the total combined voting power of
Broadcom’s securities (as measured in terms of the power to vote with respect to the
election of Board members) outstanding immediately after the consummation of such
transaction or series of related
A-1
transactions, whether the transaction or transactions involve a direct issuance
from Broadcom or the acquisition of outstanding securities held by one or more of
Broadcom’s existing shareholders, or
(iv) a change in the composition of the Board over a period of twenty-four (24)
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; provided, however, that solely for purposes of determining whether a
permissible Section 409A distribution can be made under Section 5(d) in connection
with such Change in Control event, the period for measuring a change in the
composition of the Board shall be limited to a period of twelve (12) consecutive
months or less;
Provided, however, that if this Agreement is deemed to constitute a deferred
compensation arrangement for purposes of Code Section 409A, then for purposes of any
circumstances in which a Change in Control constitutes a payment date or settlement
date with respect to the Restricted Stock Units subject hereto, including without
limitation, pursuant to Section 5(c) above, the foregoing shall only constitute a
Change in Control to the extent that such transaction(s) also constitute a “change in
control event” within the meaning of Code Section 409A.
F. Code shall mean the Internal Revenue Code of 1986, as amended.
G. Common Stock shall mean shares of the Corporation’s Class A common stock.
H. 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 that shall by appropriate action adopt the Plan.
I. 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.
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 Global Select
Market (or the Nasdaq Global Market), then the Fair Market Value shall be the
closing selling price per share of Common Stock at the close of regular trading
hours (i.e. before after-hours trading begins) on the Nasdaq Global
A-2
Select Market (or the Nasdaq Global Market) on the date in question, as such
price is reported by the Nasdaq Global Select Market (or the Nasdaq Global Market)
either as reported on the Nasdaq website (xxx.xxxxxx.xxx), or otherwise. If there is
no closing selling price for the Common Stock on the date in question, then the Fair
Market Value shall be the closing selling price on the last preceding date for which
such quotation exists.
(ii) If the Common Stock is at the time listed on any other Stock Exchange, the
then Fair Market Value shall be the closing selling price per share of Common Stock
at the close of regular hours trading (i.e., before after-hours trading begins) on
the 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, the then Fair Market Value shall
be the closing selling price on the last preceding date for which such quotation
exists.
L. Family Members shall mean, with respect to the Participant, any child,
stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, xxxxxxx,
niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or
sister-in-law.
M. Misconduct shall mean the commission of any act of fraud, embezzlement or
dishonesty by the Participant, any unauthorized use or disclosure by the Participant of
confidential information or trade secrets of the Corporation (or any Parent or Subsidiary),
or any other intentional misconduct by the Participant adversely affecting the business or
affairs of the Corporation (or any Parent or Subsidiary) in a material manner. The
foregoing definition shall not in any way preclude or restrict the right of the Corporation
(or any Parent or Subsidiary) to discharge or dismiss the Participant or any other person
in the Service of the Corporation (or any Parent or Subsidiary) for any other acts or
omissions, but such other acts or omissions shall not be deemed, for purposes of the Plan
or this Agreement, to constitute grounds for termination for Misconduct.
N. 1934 Act shall mean the Securities Exchange Act of 1934, as amended from
time to time.
O. Participant shall mean the person to whom the Award is made pursuant to
the Agreement.
P. 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.
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Q. Plan shall mean the Corporation’s 1998 Stock Incentive Plan, as amended and
restated from time to time.
R. Plan Administrator shall mean either the Board or a committee of the Board
acting in its capacity as administrator of the Plan.
S. Separation from Service shall mean a “separation from service” from the
Corporation (within the meaning of Section 409A of the Code).
T. Service shall mean the Participant’s performance of services for the
Corporation (or any Parent or Subsidiary) in the capacity of an Employee, a non-employee
member of the board of directors or a consultant or independent advisor. For purposes of
this Agreement, Participant shall be deemed to cease Service immediately upon the
occurrence of either of the following events: (i) Participant no longer performs services
in any of the foregoing capacities for the Corporation (or any Parent or Subsidiary) or
(ii) the entity for which Participant performs such services ceases to remain a Parent or
Subsidiary of the Corporation, even though Participant may subsequently continue to perform
services for that entity; provided, however, that except to the extent otherwise required
by law or expressly authorized by the Plan Administrator or by the Corporation’s written
policy on leaves of absence, no Service credit shall be given for vesting purposes for any
period during which the Participant is on a leave of absence.
U. Stock Exchange shall mean the American Stock Exchange, the Nasdaq Global or
Global Select Market or the New York Stock Exchange.
V. 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.
W. Withholding Taxes shall mean the federal, state and local income taxes and
the employee portion of the federal, state and local employment taxes required to be
withheld by the Corporation in connection with the issuance of the shares of Common Stock
to which the Participant becomes entitled under this Agreement or any other consideration
that becomes payable to Participant with respect to those shares.
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