EXHIBIT 10.3
SPECIAL STOCK RETENTION ADDENDUM
TO
STOCK OPTION AGREEMENT
The following provisions are hereby incorporated into, and are hereby made
a part of, that certain Stock Option Agreement (the "Option Agreement") by and
between Broadcom Corporation, a California corporation (the "Corporation"), and
________________________ ("Optionee") evidencing a stock option granted this day
to Optionee (the "Option") under the terms of the Corporation's 1998 Stock
Incentive Plan, as amended and restated (the "Plan"). The provisions of this
Addendum shall be effective immediately and shall remain effective until
November 1, 2008.
All capitalized terms in this Addendum, to the extent not otherwise defined
herein, shall have the meanings assigned to them in the Option Agreement.
SPECIAL STOCK RETENTION REQUIREMENTS
1. Following each exercise of the Option, the Optionee shall retain
ownership, either directly or indirectly through a trust, family limited
partnership or other estate planning vehicle pursuant to which Optionee remains
the beneficial owner within the meaning of Rule 13d-3 promulgated under the
Securities and Exchange Act of 1934, as amended (the "1934 Act"), of not less
than one third (1/3) of the Net Number of Shares acquired upon such exercise for
a period of at least nine (9) months measured from the date the Option is
exercised for those particular shares (the "Retention Period"). The Net Number
of Shares acquired upon each exercise of the Option shall be determined pursuant
to the following provisions:
(i) If the Exercise Price is paid in cash or cash equivalent, the Net
Number of Shares acquired upon such exercise shall be equal to the total
number of shares of Common Stock purchased with such cash or cash
equivalent less the number of those shares sold on the day of exercise to
cover the Exercise Price payable for those shares, if any, the federal,
state and local income and employment withholding taxes required to be
collected by the Corporation or otherwise payable by Optionee in connection
with such exercise, any commissions or other fees payable with respect to
such exercise and sale of the shares and any related transfer taxes.
(ii) If the Exercise Price is paid with shares of Common Stock, then
the Net Number of Shares acquired upon such exercise shall be equal to the
number of shares of Common Stock issued in excess of the number of shares
delivered in payment of the Exercise Price.
(iii) If the Exercise Price is paid through a broker-dealer sale and
remittance procedure, then the Net Number of Shares shall be equal to the
number of shares of Common Stock acquired upon such exercise less the
number of those shares sold to cover the Exercise Price payable for those
shares, the federal, state and local income and employment withholding
taxes required to be collected by the Corporation or otherwise payable by
Optionee in connection with such exercise, any commissions or other fees
payable with respect to such exercise and sale of the shares and any
related transfer taxes.
(iv) If any shares of Common Stock acquired upon the exercise of the
Option are immediately sold by Optionee or withheld by the Corporation to
satisfy the withholding tax liability attributable to such exercise, then
the shares so sold or withheld shall not be included as part of the Net
Number of Shares acquired upon such exercise.
2. Notwithstanding the foregoing, the Retention Period shall immediately
lapse, and none of the shares of Common Stock acquired under the Option shall
remain subject to the retention requirements of Paragraph 1, should Optionee
cease for any reason to be a Section 16 Insider (as defined in the Plan) or
should a Change in Control occur in which the shares of Common Stock, together
with all other outstanding shares of Common Stock, are to be exchanged for one
or more cash payments.
3. All shares of Common Stock that are subject to the retention
requirements of Paragraph 1 shall be held in escrow by the Corporation (or
otherwise designated for retention pursuant to this Addendum through any other
means reasonably satisfactory to the Corporation) until the Retention Period
lapses. Upon the expiration of such Retention Period, the certificates for any
escrowed shares held by the Corporation shall be promptly delivered to the
Optionee (or his or her successor in interest), and the shares described in
Paragraph 1 shall no longer be subject to the retention requirements of this
Addendum.
4. Any shares of Common Stock which are held in escrow (or otherwise
designated for retention) pursuant to under Paragraph 3 shall be appropriately
adjusted to reflect any stock split, stock dividend, recapitalization or other
similar transaction affecting the outstanding shares of Common Stock without the
Corporation's receipt of consideration.
5. Except to the extent modified by this Addendum, all the terms and
conditions of the Option Agreement shall continue in full force effect.
IN WITNESS WHEREOF, BROADCOM CORPORATION has caused this Addendum to be
executed by its duly-authorized officer, and Optionee has executed this
Addendum, all as of the Effective Date specified below.
Broadcom Corporation
By:
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Title:
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Optionee
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EFFECTIVE DATE: ___________, 200_
