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EXHIBIT 99.18
BROADCOM CORPORATION
STOCK OPTION ASSUMPTION AGREEMENT
BLUESTEEL NETWORKS, INC.
1999 STOCK INCENTIVE PLAN
STOCK OPTION ASSUMPTION AGREEMENT effective as of the 1st day
of March, 2000 by Broadcom Corporation, a California corporation ("Broadcom").
WHEREAS, the undersigned individual ("Optionee") holds one or
more outstanding options to purchase shares of the Common Stock of BlueSteel
Networks, Inc., a Delaware corporation ("BlueSteel"), which were granted to
Optionee under the BlueSteel Networks, Inc. 1999 Stock Incentive Plan (the
"Plan") and are each evidenced by the following agreement between BlueSteel and
Optionee: a Stock Option Agreement (the "Option Agreement").
WHEREAS, BlueSteel has been acquired by Broadcom through the
merger (the "Merger") of BlueSteel with and into Broadcom, pursuant to the
Merger Agreement and Plan of Reorganization dated as of January 16, 2000 by and
between Broadcom and BlueSteel (the "Reorganization Agreement").
WHEREAS, the provisions of the Reorganization Agreement
require Broadcom to assume all obligations of BlueSteel under all outstanding
options under the Plan at the consummation of the Merger and to issue to the
holder of each outstanding option an agreement evidencing the assumption of such
option.
WHEREAS, pursuant to the provisions of the Reorganization
Agreement, the exchange ratio (the "Exchange Ratio") in effect for the Merger is
.04331554 of a share of Broadcom Class B Common Stock ("Broadcom Stock") for
each outstanding share of BlueSteel Common Stock ("BlueSteel Stock").
WHEREAS, this Stock Option Assumption Agreement is effective
as of the consummation of the Merger (the "Effective Time") in order to reflect
certain adjustments to Optionee's outstanding options under the Plan which have
become necessary by reason of the assumption of those options by Broadcom in
connection with the Merger.
NOW, THEREFORE, it is hereby agreed as follows:
1. The number of shares of BlueSteel Stock subject to the
options outstanding under the Plan held by Optionee immediately prior to the
Effective Time (the "BlueSteel Options") and the exercise price payable per
share are set forth in Exhibit(s) A hereto. Broadcom hereby assumes, as of the
Effective Time, all the duties and obligations of BlueSteel under each
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of the BlueSteel Options. In connection with such assumption, the number of
shares of Broadcom Stock purchasable under each BlueSteel Option hereby assumed
and the exercise price payable thereunder have been adjusted to reflect the
Exchange Ratio. Accordingly, the number of shares of Broadcom Stock subject to
each BlueSteel Option hereby assumed shall be as specified for that option in
attached Exhibit(s) A, and the adjusted exercise price payable per share of
Broadcom Stock under the assumed BlueSteel Option shall also be as indicated for
that option in attached Exhibit(s) A.
2. The intent of the foregoing adjustments to each assumed
BlueSteel Option is to assure that the difference between the aggregate fair
market value of the shares of Broadcom Stock purchasable under each such option
and the aggregate exercise price of such shares as adjusted pursuant to this
Agreement will, immediately after the consummation of the Merger, be not less
than the difference which existed, immediately prior to the Merger, between the
then aggregate fair market value of the BlueSteel Stock subject to the BlueSteel
Option and the aggregate exercise price of such shares in effect at such time
under the Option Agreement. Such adjustments are also intended to preserve,
immediately after the Merger, on a per share basis, the same ratio of exercise
price per option share to fair market value per share as that which existed
under the BlueSteel Option immediately prior to the Merger. Such adjustments are
also intended to preserve, to the extent applicable, the Incentive Stock Option
status of the assumed BlueSteel Options under Section 422 of the Internal
Revenue Code of 1986, as amended.
3. The following provisions shall govern each BlueSteel Option
hereby assumed by Broadcom:
(a) Unless the context otherwise requires,
all references in each Option Agreement and in the Plan (as
incorporated into such Option Agreement) (i) to the "Company"
shall mean Broadcom, (ii) to "Common Stock" shall mean
Broadcom Stock, (iii) to the "Board" shall mean the Board of
Directors of Broadcom and (iv) to the "Committee" shall mean
the Option Committee of the Board of Directors of Broadcom.
(b) The grant date and the expiration date
of each assumed BlueSteel Option and all other provisions
which govern either the exercise or the termination of the
assumed BlueSteel Option shall remain the same as set forth in
the Option Agreement applicable to that option, and the
provisions of the Option Agreement shall accordingly govern
and control Optionee's rights under this Stock Option
Assumption Agreement to purchase Broadcom Stock.
(c) Pursuant to the terms of the Option
Agreement, none of your options assumed by Broadcom in
connection with the transaction will terminate and cease to be
outstanding upon the consummation of the Merger. Each
BlueSteel Option shall be assumed by Broadcom as of the
Effective Time. Each such assumed BlueSteel Option shall
thereafter continue to vest for any remaining unvested shares
of Broadcom Stock subject to that option on the same terms and
in accordance with the same installment vesting schedule as
those in effect under
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the applicable Option Agreement immediately prior to the
Effective Time; provided, however, that the number of shares
of Broadcom Stock subject to each such installment shall be
adjusted to reflect the Exchange Ratio.
(d) For purposes of applying any and all
provisions of the Option Agreement and the Plan relating to
Optionee's status as an employee of or a consultant to
BlueSteel, Optionee shall be deemed to continue in such status
as an employee or a consultant for so long as Optionee renders
services as an employee of or a consultant to Broadcom or any
present or future Broadcom subsidiary. Accordingly, the
provisions of the Option Agreement governing the termination
of the assumed BlueSteel Options upon Optionee's cessation of
service as an employee of or a consultant to BlueSteel shall
hereafter be applied on the basis of Optionee's cessation of
employee or consultant status with Broadcom and its
subsidiaries, and each assumed BlueSteel Option shall
accordingly terminate, within the designated time period in
effect under the Option Agreement for that option, following
such cessation of service as an employee of or a consultant to
Broadcom and its subsidiaries.
(e) The adjusted exercise price payable for
the Broadcom Stock subject to each assumed BlueSteel Option
shall be payable in any of the forms authorized under the
Option Agreement applicable to that option. For purposes of
determining the holding period of any shares of Broadcom Stock
delivered in payment of such adjusted exercise price, the
period for which such shares were held as BlueSteel Stock
prior to the Merger shall be included.
(f) In order to exercise each assumed
BlueSteel Option, Optionee must deliver to Broadcom a written
notice of exercise in which the number of shares of Broadcom
Stock to be purchased thereunder must be indicated. The
exercise notice must be accompanied by payment of the adjusted
exercise price payable for the purchased shares of Broadcom
Stock or must specify the arrangement for the payment of the
purchase price as permitted in Section 8 of the Plan. This
notice should be delivered to Broadcom at the following
address:
Broadcom Corporation
00000 Xxxxx Xxxxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attention: Manager of Shareholder Services
4. Except to the extent specifically
modified by this Stock Option Assumption Agreement, all of the
terms and conditions of each Option Agreement as in effect
immediately prior to the Merger shall continue in full force
and effect and shall not in any way be amended, revised or
otherwise affected by this Stock Option Assumption Agreement.
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IN WITNESS WHEREOF, Broadcom has caused this Stock Option
Assumption Agreement to be executed on its behalf by its duly-authorized officer
as of the 1st day of March, 2000.
BROADCOM CORPORATION
By:______________________________________
Xxxxx X. Xxxx, Esq.
Vice President, General Counsel and Secretary
ACKNOWLEDGMENT
The undersigned acknowledges receipt of the foregoing Stock
Option Assumption Agreement and understands and agrees that all rights and
liabilities with respect to each of his or her BlueSteel Options hereby assumed
by Broadcom are as set forth in the Option Agreement, the Plan and this Stock
Option Assumption Agreement.
DATED: __________________, 2000
_____________________________________
SIGNATURE OF OPTIONEE
_____________________________________
PRINT NAME
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