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EXHIBIT 99.6
FORM OF BROADCOM CORPORATION STOCK OPTION ASSUMPTION AGREEMENT
This STOCK OPTION ASSUMPTION AGREEMENT by and between Broadcom
Corporation, a California corporation ("Broadcom") and the undersigned
individual (the "Optionee") is effective as of May 31, 2000 (this "Assumption
Agreement").
WHEREAS, the Optionee holds one or more outstanding options to
purchase shares of the common stock ("Pivotal Stock") of Pivotal Technologies
Corp., a Delaware corporation ("Pivotal"), which were granted to Optionee under
the Pivotal Technologies Corp. 1998 Stock Option Plan (the "Option Plan") and
are each evidenced by a Option Agreement(s), with any shares purchased under
such options to be subject to the terms and conditions of a Restricted Stock
Purchase Agreement.
WHEREAS, Pivotal has been acquired by Broadcom through the merger of
Pivotal with and into Broadcom (the "Merger") pursuant to the Merger Agreement
and Plan of Reorganization, dated as of May 1, 2000 (the "Merger Agreement"), by
and among Broadcom, Pivotal and, with respect to only Section 7.2 of the Merger
Agreement, Xxxxxxxx Xxxxxx, as Stockholder Representative, and U.S. Stock
Transfer Corporation, as Depositary Agent.
WHEREAS, the provisions of the Merger Agreement require Broadcom to
(i) assume the obligations of Pivotal under the Option Plan and each outstanding
option under the Option Plan at the consummation of the Merger, and (ii) issue
the holder of each such assumed option (the "Assumed Option") an agreement
evidencing the assumption of such option.
WHEREAS, pursuant to the Merger Agreement, each outstanding share of
Pivotal Stock was converted into 0.082292915 (the "Exchange Ratio") of a share
of Class B common stock, par value $0.0001 per share, of Broadcom ("Broadcom
Stock").
WHEREAS, the purpose of this Agreement is to evidence the assumption
by Broadcom of the outstanding options held by Optionee at the time of the
consummation of the Merger (the "Effective Time") and to reflect certain
adjustments to Optionee's outstanding options which have become necessary in
connection with their assumption by Broadcom.
NOW, THEREFORE, it is hereby agreed as follows:
1. The number of shares of Pivotal Stock subject to the options
outstanding under the Plan held by Optionee immediately prior to the Effective
Time (the "Pivotal Options") and the exercise price payable per share are set
forth in Exhibit A attached hereto. Broadcom hereby assumes, as of the Effective
Time, all the duties and obligations of Pivotal under the Option Plan and each
of the Pivotal Options. In connection with such assumption, the number of shares
of Broadcom Stock purchasable under each Assumed Option 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 Assumed
Option shall be as specified for that option in attached Exhibit A, and the
adjusted exercise price payable per share of Broadcom Stock under the Assumed
Option shall also be as indicated for that option in Exhibit A attached hereto.
2. The intent of the foregoing adjustments to each Assumed 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 as adjusted pursuant to this Agreement will, immediately after
the consummation of the Merger, be no less than the difference which existed,
immediately prior to the Merger, between the then aggregate fair market value of
the Pivotal Stock subject to the Pivotal Option and the aggregate exercise price
in effect at such time under the Option Agreement(s). 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
which existed under the Pivotal Option immediately prior to the Merger. Such
adjustments are also
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intended to preserve, to the extent applicable, the incentive stock option
status of the assumed Pivotal Options under Section 422 of the Internal Revenue
Code of 1986, as amended.
3. Unless the context otherwise requires, all references in the
Option Agreement(s) and, if applicable, in the Option Plan (as incorporated into
such Option Agreement(s)) shall be adjusted as follows: (i) all references to
the "Company" shall mean Broadcom, (ii) all references to "Share" shall mean
shares of Broadcom Stock, (iii) all references to "Common Stock" shall mean a
share of Broadcom Stock, (iv) all references to the "Board" shall mean the Board
of Directors of Broadcom and (v) all references to the "Committee" shall mean
the Compensation Committee of the Board.
4. The grant date and the expiration date of each Assumed Option and
all other provisions which govern either the exercise or the termination of the
Assumed Option shall remain the same as set forth in the Option Agreement(s)
applicable to that option, and the provisions of the Plan and the Option
Agreement(s) shall accordingly govern and control Optionee's rights to purchase
Broadcom Stock under the Assumed Option.
5. Pursuant to the terms of your Option Agreement(s) and the Option
Plan, your Assumed Options shall not vest or become exercisable on an
accelerated basis upon the consummation of the Merger. Accordingly, each Assumed
Option shall continue to vest and become exercisable for 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 the applicable
Option Agreement(s) 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.
6. For purposes of applying any and all provisions of the Option
Agreement(s) and/or the Option Plan relating to Optionee's status as an employee
of or a consultant to Pivotal, 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 or a consultant to Broadcom or any present or future subsidiary
of Broadcom. Accordingly, the provisions of the Option Agreement(s) governing
the termination of the Assumed Options upon Optionee's cessation of service as
an employee of or a consultant to Pivotal shall hereafter be applied on the
basis of Optionee's cessation of employee or consultant status with Broadcom or
any present or future subsidiaries of Broadcom, and each assumed Pivotal 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 or any present or future subsidiaries of
Broadcom.
7. The adjusted exercise price payable for the Broadcom Stock
subject to each Assumed Option shall be payable in any of the forms authorized
under the Option Agreement applicable to that option.
8. In order to exercise each Assumed 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 by the applicable Option Agreement.
This notice should be delivered to Broadcom at the following address:
Broadcom Corporation
00000 Xxxxx Xxxxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attention: Manager of Shareholder Services
9. Except to the extent specifically modified by this 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
Assumption Agreement.
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IN WITNESS WHEREOF, Broadcom Corporation has caused this Assumption
Agreement to be executed on its behalf by its duly authorized officer as of May
31, 2000.
BROADCOM CORPORATION
By: _____________________________
Xxxxx X. Xxxx
Vice President, General Counsel and
Secretary
ACKNOWLEDGMENT
The undersigned acknowledges receipt of the foregoing Assumption
Agreement and understands and agrees that all rights and liabilities with
respect to each of his or her Pivotal Options hereby assumed by Broadcom are as
set forth in the Option Agreement, the Option Plan, and this Assumption
Agreement.
___________________________________
Signature of Optionee
___________________________________
Printed Name
DATED:
