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EXHIBIT 99.9
BROADCOM CORPORATION
STOCK OPTION ASSUMPTION AGREEMENT
SERVERWORKS CORPORATION
(FORMERLY KNOWN AS RELIANCE COMPUTER CORP.)
2000 LONG TERM INCENTIVE PLAN
This STOCK OPTION ASSUMPTION AGREEMENT by and between Broadcom
Corporation, a California corporation ("Broadcom"), and the undersigned
individual ("Optionee") is effective as of January 16, 2001 (this "Assumption
Agreement").
WHEREAS, Optionee holds one or more outstanding options to purchase
shares of the common stock ("ServerWorks Stock") of ServerWorks Corporation, a
Delaware corporation ("ServerWorks"), which were granted to Optionee under the
ServerWorks Corporation 2000 Long Term Incentive Plan (the "Plan"), and are each
evidenced by a Stock Option Agreement(s).
WHEREAS, ServerWorks has been acquired by Broadcom through the merger
of RCC Acquisition Corp., a Delaware corporation and wholly-owned subsidiary of
Broadcom ("Merger Sub"), with and into ServerWorks (the "Merger"), pursuant to
the Merger Agreement and Plan of Reorganization, dated as of January 5, 2001
(the "Merger Agreement"), by and among Broadcom, Merger Sub and ServerWorks and,
with respect to Article 7, Article 9 and Article 10 of the Merger Agreement
only, Anantakotiraju Xxxxxxx, as Stockholder Agent, and U.S. Stock Transfer
Corporation, as Depositary Agent.
WHEREAS, the provisions of the Merger Agreement require Broadcom to
assume the obligations of ServerWorks under the Plan and each outstanding option
under the Plan at the consummation of the Merger.
WHEREAS, Broadcom desires to issue to 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
ServerWorks Stock was initially converted into .41924314 of a share of Class A
common stock, par value $0.0001 per share, of Broadcom ("Broadcom Stock"),
subject to increase following the time of the consummation of the Merger (the
"Effective Time") pursuant to the earn-out provisions set forth in Section 1.13
of the Merger Agreement (the "Exchange Ratio").
WHEREAS, the purpose of this Agreement is to evidence the assumption by
Broadcom of the outstanding options held by Optionee at the Effective Time and
to reflect certain adjustments to Optionee's outstanding options which have
become necessary in connection with their assumption by Broadcom.
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NOW, THEREFORE, it is hereby agreed as follows:
1. The number of shares of ServerWorks Stock subject to the options
outstanding under the Plan held by Optionee immediately prior to the Effective
Time (the "ServerWorks 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 ServerWorks under the Plan and
each of the ServerWorks 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 initial
Exchange Ratio. Accordingly, the number of shares of Broadcom Stock initially
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 ServerWorks Stock subject to the ServerWorks Option and the aggregate
exercise price in effect at such time under the Stock 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 ServerWorks 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 ServerWorks
Options under Section 422 of the Internal Revenue Code of 1986, as amended.
3. Unless the context otherwise requires, all references in the
Stock Option Agreement(s) and, if applicable, in the Plan (as incorporated into
such Stock Option Agreement(s)) shall be adjusted as follows: (i) all references
to the "Company" shall mean Broadcom, (ii) all references to the "Board" shall
mean the Board of Directors of Broadcom and (iii) all references to the
"Committee" shall mean the Option 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 Stock Option
Agreement(s) applicable to that option, and the provisions of the Plan and the
Stock 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 Stock Option Agreement(s) and the
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
Stock 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.
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6. For purposes of applying any and all provisions of the Stock
Option Agreement(s) and/or the Plan relating to Optionee's continuous status as
an employee of or a consultant to ServerWorks, 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 ServerWorks, Broadcom or any
other present or future subsidiary of Broadcom. Accordingly, the provisions of
the Stock Option Agreement(s) governing the termination of the Assumed Options
upon Optionee's cessation of service as an employee of or a consultant to
ServerWorks shall hereafter be applied on the basis of Optionee's cessation of
employee or consultant status with ServerWorks, Broadcom or any other present or
future subsidiaries of Broadcom, and each assumed ServerWorks Option shall
accordingly terminate, within the designated time period in effect under the
Stock Option Agreement for that option, following such cessation of service as
an employee of or a consultant to ServerWorks, Broadcom or any other 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 Stock 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 Stock 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 Stock 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
January 16, 2001.
BROADCOM CORPORATION
By:
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Xxxxx X. Xxxx
Vice President, General Counsel
and Secretary
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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 ServerWorks Options hereby assumed by Broadcom are
as set forth in the Stock Option Agreement, the Plan, and this Assumption
Agreement.
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Signature of Optionee
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Printed Name
DATED:
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