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EXHIBIT 99.11
BROADCOM CORPORATION
STOCK OPTION ASSUMPTION AGREEMENT
ALLAYER COMMUNICATIONS
1997 EQUITY INCENTIVE PLAN
(AS AMENDED THROUGH JUNE 2, 2000)
This STOCK OPTION ASSUMPTION AGREEMENT by and between Broadcom
Corporation, a California corporation ("Broadcom"), and the undersigned
individual ("Optionee") is effective as of December 11, 2000 (this "Assumption
Agreement").
WHEREAS, Optionee holds one or more outstanding options to purchase
shares of the common stock ("Allayer Stock") of Allayer Communications, a
California corporation ("Allayer"), which were granted to Optionee under the
Allayer Communications 1997 Equity Incentive Plan, as amended (the "Plan"), and
are each evidenced by an Option Agreement(s).
WHEREAS, Xxxxxxx has been acquired by Broadcom through the merger of
Allayer with and into Broadcom (the "Merger") pursuant to the Amended and
Restated Merger Agreement and Plan of Reorganization, dated as of September 29,
2000 (the "Merger Agreement"), by and among Broadcom and Xxxxxxx and, with
respect to Article 7 and Article 9 of the Merger Agreement only, Xxxxx-xxxxx
Xxxx, as Shareholder Agent, and U.S. Stock Transfer Corporation, as Depositary
Agent.
WHEREAS, the provisions of the Merger Agreement require Broadcom to
assume the obligations of Allayer 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
Allayer Stock was initially converted into 0.030465 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 1.16 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.
NOW, THEREFORE, it is hereby agreed as follows:
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1. The number of shares of Allayer Stock subject to the options
outstanding under the Plan held by Optionee immediately prior to the Effective
Time (the "Allayer 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 Xxxxxxx under the Plan and each of the
Allayer 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 Allayer Stock subject to the Allayer 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 Allayer 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 Allayer 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 Plan (as incorporated into such Option
Agreement(s)) and Early Exercise Stock Purchase Agreement(s) (attached to such
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, (iii) all references to the "Committee" shall
mean the Option Committee of the Board and (iv) all references to the "Escrow
Agent" shall mean the Manager of Shareholder Services of Broadcom.
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 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.
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6. For purposes of applying any and all provisions of the Option
Agreement(s) and/or the Plan relating to Optionee's continuous status as an
employee of or a consultant to Allayer, 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 Allayer 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
Allayer 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
December 11, 2000.
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 Allayer Options hereby assumed by Broadcom are as
set forth in the Option Agreement, the Plan, and this Assumption Agreement.
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Signature of Optionee
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Printed Name
DATED:
