BROADCOM CORPORATION RESTRICTED STOCK UNIT ISSUANCE AGREEMENT
Exhibit 10.23
STANDARD QUARTERLY VESTING
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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, 200 | |
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 continuous Service over the forty-eight (48)-month period measured from the 5th day of , 200 (the “Normal Vesting Schedule”). The duration of the Normal Vesting Schedule may be extended in connection with certain leaves of absence or changes in |
| Employee status, as set forth in Section 4 of this Agreement. However, the Shares may also vest in whole or in part on an accelerated basis in accordance with the provisions of Sections 3 and 6 of this Agreement. | ||
Issuance Schedule:
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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 the later of (i) the close of the calendar year in which that vesting date occurs or (ii) the fifteenth day of the third calendar month following that vesting date. Any Shares that vest on an accelerated basis pursuant to Section 3 or 6 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 8 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 6 below, should the Participant
cease Service for any reason prior to vesting in one or more Shares subject to this Award, then the
Award shall be immediately cancelled with respect to those unvested Shares, and the number of
Restricted Stock Units will be reduced accordingly. 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 quarterly 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
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applicable quarterly vesting date, this Award shall be immediately cancelled pursuant to
Section 3(a), and no further 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 forfeiture of
the Restricted Stock Units that will occur upon the termination of his or her Service prior to
vesting in all the Restricted Stock Units subject to this Award.
(c) In the event the Participant’s Employee status terminates prior to vesting in all the
Shares due to his or her death or Permanent Disability, then Participant shall immediately vest in
that number of Restricted Stock Units (and the underlying Shares) determined by multiplying the
number of Restricted Stock Units that are unvested at the time of such termination of Employee
status by a fraction, the numerator of which is the number of months (rounded to the nearest whole
month) of Employee status completed by Participant, up to a maximum of forty-eight (48) months, and
the denominator of which is forty eight (48). The Shares underlying the Restricted Stock Units that
vest on such accelerated basis shall be issued on the date of such termination of Employee status
or as soon thereafter as administratively practicable, but in no event later than the earlier of
(i) the fifteenth day of the third calendar month following such date or (ii) the next scheduled
quarterly vesting date under the Normal Vesting Schedule following such termination of Employee
status.
4. Leaves of Absence/Change of Employee Status. The Participant shall not be deemed
to have ceased Service while on a leave of absence authorized by the Corporation. However, the
Participant will not be deemed to remain in active Service during the period of such leave, and the
Participant may accordingly fail to vest in one or more quarterly installments under the Normal
Vesting Schedule by reason of such absence from active Service. In such event, the Normal Vesting
Schedule for the Restricted Stock Units shall be extended by one or more quarterly periods
following the Participant’s return to active Service upon the expiration of such leave, so that the
Participant will have the opportunity to vest in those missed installments over his or her
subsequent period of continuous active Service. In addition, a change in Participant’s Employee
status from full-time to part-time may also result in a similar extension of the Normal Vesting
Schedule, to the extent such change in status results in a slower rate of vesting accrual. The
actual effect that a leave of absence or change in Employee status may have upon the Normal Vesting
Schedule and the vesting of the Restricted Stock Units subject to this Award will be determined by
the Corporation’s policies governing those subjects that are in effect at the time.
5. 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.
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(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 7, 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.
6. 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 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 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 6(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 concurrently with the distribution payable to the other holders of the
Common Stock, but in no event shall such distribution to the Participant be completed later than
the later of (i) the end of the calendar year in which such Change in Control is effected or (ii)
the fifteenth (15th) day of the third (3rd) calendar month following the effective date of that
Change in Control. Such distribution shall be subject to the Corporation’s collection of the
applicable Withholding Taxes pursuant to the provisions of Section 8.
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(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.
7. 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 and the number and/or class of securities that vest on
each vesting date pursuant to the Normal Vesting Schedule. The adjustments shall be 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 6 shall be controlling.
8. Issuance of Shares of Common Stock.
(a) Except as otherwise provided in Section 6(c), on each applicable date Shares are to be
issued pursuant to the provisions of Section 1, 3 or 6 of 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) 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
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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); or
(ii) 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
(iii) 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 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 occurs other than with respect to 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 8, 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) Except as otherwise provided in Section 6 or Section 8(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.
9. Deferred Release Date. Should the applicable issuance date for one or more Shares
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.
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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 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. Benefit Limit. 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 accelerated vesting and issuance of those Shares shall be subject to reduction to the extent
necessary to assure that the number of Shares that vest and are issued to Participant on such
accelerated basis will be limited to the greater of (i) the number of Shares that can vest and be
issued on such an accelerated basis without triggering a parachute payment under Code Section 280G
or (ii) the maximum number of Shares that can vest and be issued on such accelerated basis so as to
provide Participant with the greatest after-tax amount of such accelerated vesting and issuance of
the Shares subject to this Award after taking into account any excise tax Participant may incur
under Code Section 4999 with respect to those accelerated Shares and any other benefits or payments
to which Participant may be entitled in connection with any change in control or ownership of the
Corporation or the subsequent termination of Participant’s Employee status.
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
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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 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
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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 xxxxxxxx.xxxxxxxx.xxx/xxxxx. 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 or consolidation in which securities
possessing more than fifty percent (50%) of the total combined voting power of the
Corporation’s outstanding securities are transferred to a person or persons
different from the persons holding those securities immediately prior to such
transaction, or
(ii) a shareholder-approved sale, transfer or other disposition of all or
substantially all of the Corporation’s assets in complete liquidation or dissolution
of the Corporation, or
(iii) the acquisition, directly or indirectly by any person or related group of
persons (other than the Corporation or a person that directly or indirectly
controls, is controlled by, or is under common control with, the Corporation), of
beneficial ownership (within the meaning of Rule 13d-3 of the Securities Exchange
Act of 1934, as amended) of securities possessing more than fifty percent (50%) of
the total combined voting power of the Corporation’s outstanding securities pursuant
to a tender or exchange offer made directly to the Corporation’s shareholders.
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.
A-1
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, 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 Nasdaq Global Select Market on the date in question, as such price is
reported by the National Association of Securities Dealers. 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.
(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 Participant’s commission of any act of fraud,
embezzlement or dishonesty, 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 will 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 this
Agreement, to constitute grounds for termination for Misconduct.
A-2
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.
Q. Permanent Disability shall mean the Participant’s inability to engage in
any substantial gainful activity by reason of any medically determinable physical or mental
impairment which (i) is expected to result in death or determined to be total and permanent
by two (2) physicians selected by the Corporation or its insurers and acceptable to the
Participant or his or her legal representative and (ii) entitles the Participant to the
payment of long-term disability benefits from the Corporation’s long-term disability plan.
The process for determining Permanent Disability in accordance with the foregoing shall be
completed on a timely basis so as to allow the issuance of any Shares that vest upon the
Participant’s termination of Employee status by reason of Permanent Disability to be
effected no later than the later of (i) the close of the calendar year in which the
Participant’s Employee status terminates by reason of the physical or mental impairment
that is the subject of the determination process or (ii) the fifteenth day of the third
calendar month following such termination of Employee status.
R. Plan shall mean the Corporation’s 1998 Stock Incentive Plan, as amended and
restated from time to time.
S. Plan Administrator shall mean either the Board or a committee of the Board
acting in its capacity as administrator of the Plan.
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 the 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. 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 the Participant is on a leave of absence.
A-3
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.
A-4
