1
EXHIBIT 99.6
BROADCOM CORPORATION
STOCK ISSUANCE AGREEMENT
AGREEMENT made this _______ day of _______________ 19_____, by and
between Broadcom Corporation, a California corporation, and
_________________________________, a Participant in the Corporation's 1998 Stock
Incentive Plan.
All capitalized terms in this Agreement shall have the meaning assigned
to them in this Agreement or in the attached Appendix.
A. PURCHASE OF SHARES
1. PURCHASE. Participant hereby purchases shares of Common Stock (the
"Purchased Shares") pursuant to the provisions of the Stock Issuance Program at
the purchase price of $______ per share (the "Purchase Price").
2. PAYMENT. Concurrently with the delivery of this Agreement to the
Corporation, Participant shall pay the Purchase Price for the Purchased Shares
in cash or check payable to the Corporation and shall deliver a duly-executed
blank Assignment Separate from Certificate (in the form attached hereto as
Exhibit I) with respect to the Purchased Shares.
3. SHAREHOLDER RIGHTS. Until such time as the Corporation exercises the
Repurchase Right, Participant (or any successor in interest) shall have all the
rights of a shareholder (including voting, dividend and liquidation rights) with
respect to the Purchased Shares, subject, however, to the transfer restrictions
of this Agreement.
4. ESCROW. The Corporation shall have the right to hold the Purchased
Shares in escrow until those shares have vested in accordance with the Vesting
Schedule.
5. COMPLIANCE WITH LAW. Under no circumstances shall shares of Common
Stock or other assets be issued or delivered to Participant pursuant to the
provisions of this Agreement unless, in the opinion of counsel for the
Corporation or its successors, there shall have been compliance with all
applicable requirements of Federal and state securities laws, all applicable
listing requirements of any stock exchange (or the Nasdaq National Market, if
applicable) on which the Common Stock is at the time listed for trading and all
other requirements of law or of any regulatory bodies having jurisdiction over
such issuance and delivery.
B. TRANSFER RESTRICTIONS
1. RESTRICTION ON TRANSFER. Except for any Permitted Transfer,
Participant shall not transfer, assign, encumber or otherwise dispose of any of
the Purchased Shares which are subject to the Repurchase Right.
2
2. RESTRICTIVE LEGEND. The stock certificate for the Purchased Shares
shall be endorsed with the following restrictive legend:
"The shares represented by this certificate are unvested and
subject to certain repurchase rights granted to the Corporation and
accordingly may not be sold, assigned, transferred, encumbered, or in any
manner disposed of except in conformity with the terms of a written
agreement dated , 199 between the Corporation and the registered
holder of the shares (or the predecessor in interest to the shares). A copy
of such agreement is maintained at the Corporation's principal corporate
offices."
3. TRANSFEREE OBLIGATIONS. Each person (other than the Corporation)
to whom the Purchased Shares are transferred by means of a Permitted
Transfer must, as a condition precedent to the validity of such transfer,
acknowledge in writing to the Corporation that such person is bound by the
provisions of this Agreement and that the transferred shares are subject to
the Repurchase Right to the same extent such shares would be so subject if
retained by Participant.
C. REPURCHASE RIGHT
1. GRANT. The Corporation is hereby granted the right (the
"Repurchase Right"), exercisable at any time during the ninety (90)-day
period following the date Participant ceases for any reason to remain in
Service, to repurchase at the Purchase Price all or any portion of the
Purchased Shares in which Participant is not, at the time of his or her
cessation of Service, vested in accordance with the Vesting Schedule or the
special vesting acceleration provisions of Paragraph C.5 of this Agreement
(such shares to be hereinafter referred to as the "Unvested Shares").
2. EXERCISE OF THE REPURCHASE RIGHT. The Repurchase Right shall be
exercisable by written notice delivered to each Owner of the Unvested
Shares prior to the expiration of the ninety (90)-day exercise period. The
notice shall indicate the number of Unvested Shares to be repurchased and
the date on which the repurchase is to be effected, such date to be not
more than thirty (30) days after the date of such notice. The certificates
representing the Unvested Shares to be repurchased shall be delivered to
the Corporation on or before the close of business on the date specified
for the repurchase. Concurrently with the receipt of such stock
certificates, the Corporation shall pay to Owner, in cash or cash
equivalent (including the cancellation of any purchase-money indebtedness),
an amount equal to the Purchase Price previously paid for the Unvested
Shares to be repurchased from Owner.
3. TERMINATION OF THE REPURCHASE RIGHT. The Repurchase Right shall
terminate with respect to any Unvested Shares for which it is not timely
exercised under Paragraph C.2. In addition, the Repurchase Right shall
terminate and cease to be exercisable with respect to any and all Purchased
Shares in which Participant vests in accordance with the following Vesting
Schedule:
2.
3
(i) Upon Participant's completion of one (1) year of
Service measured from ______________, 199__, Participant shall acquire
a vested interest in, and the Repurchase Right shall lapse with
respect to, twenty-five percent (25%) of the Purchased Shares.
(ii) Participant shall acquire a vested interest in,
and the Repurchase Right shall lapse with respect to, the remaining
Purchased Shares in a series of thirty six (36) successive equal
monthly installments upon Participant's completion of each additional
month of Service over the thirty-six (36)-month period measured from
the initial vesting date under subparagraph (i) above.
4. RECAPITALIZATION. Any new, substituted or additional securities
or other property (including cash paid other than as a regular cash
dividend) which is by reason of any Recapitalization distributed with
respect to the Purchased Shares shall be immediately subject to the
Repurchase Right and any escrow requirements hereunder, but only to the
extent the Purchased Shares are at the time covered by such right or escrow
requirements. Appropriate adjustments to reflect such distribution shall be
made to the number and/or class of securities subject to this Agreement and
to the price per share to be paid upon the exercise of the Repurchase Right
in order to reflect the effect of any such Recapitalization upon the
Corporation's capital structure; provided, however, that the aggregate
purchase price shall remain the same.
5. CHANGE IN CONTROL.
(a) Immediately prior to the consummation of any Change in Control,
the Repurchase Right shall automatically lapse in its entirety and the Purchased
Shares shall vest in full, except to the extent the Repurchase Right is to
continue in full force and effect pursuant to the terms of the Change in Control
transaction.
(b) To the extent the Repurchase Right remains in force and effect
following a Change in Control, such right shall be assigned to any successor
corporation (or parent thereof) in the Change in Control transaction and shall
apply to the new capital stock or other property (including any cash payments)
received in exchange for the Purchased Shares in consummation of the Change in
Control, but only to the extent the Purchased Shares are at the time covered by
such right. Appropriate adjustments shall be made to the price per share payable
upon exercise of the Repurchase Right to reflect the effect of the Change in
Control upon the Corporation's capital structure; provided, however, that the
aggregate purchase price shall remain the same. The new securities or other
property (including cash payments) issued or distributed with respect to the
Purchased Shares in consummation of the Change in Control shall immediately be
deposited in escrow with the Corporation (or the successor entity) and shall not
be released from escrow until Participant vests in such securities or other
property in accordance with the same Vesting Schedule in effect for the
Purchased Shares.
3.
4
(c) The Repurchase Right may also be subject to termination in whole
or in part on an accelerated basis, and the Purchased Shares subject to
immediate vesting, in accordance with the terms of any special Addendum attached
to this Agreement.
D. SPECIAL TAX ELECTION
1. SECTION 83(b) ELECTION. Under Code Section 83, the excess of the fair
market value of the Purchased Shares on the date any forfeiture restrictions
applicable to such shares lapse over the Purchase Price paid for such shares
will be reportable as ordinary income on the lapse date. For this purpose, the
term "forfeiture restrictions" includes the right of the Corporation to
repurchase the Purchased Shares pursuant to the Repurchase Right. Participant
may elect under Code Section 83(b) to be taxed at the time the Purchased Shares
are acquired, rather than when and as such Purchased Shares cease to be subject
to such forfeiture restrictions. Such election must be filed with the Internal
Revenue Service within thirty (30) days after the date of this Agreement. Even
if the fair market value of the Purchased Shares on the date of this Agreement
equals the Purchase Price paid (and thus no tax is payable), the election must
be made to avoid adverse tax consequences in the future. THE FORM FOR MAKING
THIS ELECTION IS ATTACHED AS EXHIBIT II HERETO. PARTICIPANT UNDERSTANDS THAT
FAILURE TO MAKE THIS FILING WITHIN THE APPLICABLE THIRTY (30)-DAY PERIOD WILL
RESULT IN THE RECOGNITION OF ORDINARY INCOME AS THE FORFEITURE RESTRICTIONS
LAPSE.
2. FILING RESPONSIBILITY. PARTICIPANT ACKNOWLEDGES THAT IT IS
PARTICIPANT'S SOLE RESPONSIBILITY, AND NOT THE CORPORATION'S, TO FILE A TIMELY
ELECTION UNDER CODE SECTION 83(b), EVEN IF PARTICIPANT REQUESTS THE CORPORATION
OR ITS REPRESENTATIVES TO MAKE THIS FILING ON HIS OR HER BEHALF.
E. GENERAL PROVISIONS
1. ASSIGNMENT. The Corporation may assign the Repurchase Right to any
person or entity selected by the Board, including (without limitation) one or
more shareholders of the Corporation.
2. NO EMPLOYMENT OR SERVICE CONTRACT. Nothing in this Agreement or in the
Plan shall confer upon Participant any right to continue in Service for any
period of specific duration or interfere with or otherwise restrict in any way
the rights of the Corporation (or any Parent or Subsidiary employing or
retaining Participant) or of Participant, which rights are hereby expressly
reserved by each, to terminate Participant's Service at any time for any reason,
with or without cause.
3. NOTICES. Any notice required to be given under this Agreement shall be
in writing and shall be deemed effective upon personal delivery or upon deposit
in the U.S. mail, registered or certified, postage prepaid and properly
addressed to the party entitled to such notice at the address indicated below
such party's signature line on this Agreement or at such other
4.
5
address as such party may designate by ten (10) days advance written notice
under this paragraph to all other parties to this Agreement.
4. NO WAIVER. The failure of the Corporation in any instance to exercise
the Repurchase Right shall not constitute a waiver of any other repurchase
rights that may subsequently arise under the provisions of this Agreement or any
other agreement between the Corporation and Participant. No waiver of any breach
or condition of this Agreement shall be deemed to be a waiver of any other or
subsequent breach or condition, whether of like or different nature.
5. CANCELLATION OF SHARES. If the Corporation shall make available, at
the time and place and in the amount and form provided in this Agreement, the
consideration for the Purchased Shares to be repurchased in accordance with the
provisions of this Agreement, then from and after such time, the person from
whom such shares are to be repurchased shall no longer have any rights as a
holder of such shares (other than the right to receive payment of such
consideration in accordance with this Agreement). Such shares shall be deemed
purchased in accordance with the applicable provisions hereof, and the
Corporation shall be deemed the owner and holder of such shares, whether or not
the certificates therefor have been delivered as required by this Agreement.
6. PARTICIPANT UNDERTAKING. Participant hereby agrees to take whatever
additional action and execute whatever additional documents the Corporation may
deem necessary or advisable in order to carry out or effect one or more of the
obligations or restrictions imposed on either Participant or the Purchased
Shares pursuant to the provisions of this Agreement.
7. AGREEMENT IS ENTIRE CONTRACT. This Agreement constitutes the entire
contract between the parties hereto with regard to the subject matter hereof.
This Agreement is made pursuant to the provisions of the Plan and shall in all
respects be construed in conformity with the terms of the Plan.
8. GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of California without resort to that
State's conflict-of-laws rules.
9. COUNTERPARTS. This Agreement may be executed in counterparts, each of
which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.
10. 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, Participant's assigns and the legal
representatives, heirs and legatees of Participant's estate, whether or not any
such person shall have become a party to this Agreement and have agreed in
writing to join herein and be bound by the terms hereof.
5.
6
IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and year first indicated above.
BROADCOM CORPORATION
By:_________________________________
Title:______________________________
Address:____________________________
____________________________________
____________________________________
PARTICIPANT
Address:____________________________
____________________________________
6.
7
SPOUSAL ACKNOWLEDGMENT
The undersigned spouse of the Participant has read and hereby approves
the foregoing Stock Issuance Agreement. In consideration of the Corporation's
granting the Participant the right to acquire the Purchased Shares in accordance
with the terms of such Agreement, the undersigned hereby agrees to be
irrevocably bound by all the terms of such Agreement, including (without
limitation) the right of the Corporation (or its assigns) to purchase any
Purchased Shares in which the Participant is not vested at the time of his or
her termination of Service.
____________________________________
PARTICIPANT'S SPOUSE
Address:____________________________
____________________________________
7.
8
EXHIBIT I
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED _____________ hereby sell(s), assign(s) and
transfer(s) unto Broadcom Corporation (the "Corporation"),______________ ( )
shares of the Common Stock of the Corporation standing in his or her name on the
books of the Corporation represented by Certificate No. ________________
herewith and do(es) hereby irrevocably constitute and appoint
___________________ Attorney to transfer the said stock on the books of the
Corporation with full power of substitution in the premises.
Dated:_________________
Signature___________________________
INSTRUCTION: Please do not fill in any blanks other than the signature
line. Please sign exactly as you would like your name to appear on the
issued stock certificate. The purpose of this assignment is to enable the
Corporation to exercise the Repurchase Right without requiring additional
signatures on the part of Participant.
9
EXHIBIT II
SECTION 83(b) TAX ELECTION
This statement is being made under Section 83(b) of the Internal Revenue Code,
pursuant to Treas. Reg. Section 1.83-2.
(1) The taxpayer who performed the services is:
Name:
Address:
Taxpayer Ident. No.:
(2) The property with respect to which the election is being made is _______
shares of the common ___________ stock of Broadcom Corporation.
(3) The property was issued on __________, 199__. _____________
(4) The taxable year in which the election is being made is the calendar year
199__.
(5) The property is subject to a repurchase right pursuant to which the
issuer has the right to acquire the property at the original purchase
price if for any reason taxpayer's employment with the issuer is
terminated. The issuer's repurchase right lapses in a series of
installments over a four (4)-year period ending on ___________.
(6) The fair market value at the time of transfer (determined without regard
to any restriction other than a restriction which by its terms will never
lapse) is $_________ per share.
(7) The amount paid for such property is $___________ per share. ____________
(8) A copy of this statement was furnished to Broadcom Corporation for whom
taxpayer rendered the services underlying the transfer of property.
(9) This statement is executed on ___________, 199__. _______________________
__________________________________ ____________________________________
Spouse (if any) Taxpayer
This election must be filed with the Internal Revenue Service Center with which
taxpayer files his or her Federal income tax returns and must be made within
thirty (30) days after the execution date of the Stock Purchase Agreement. This
filing should be made by registered or certified mail, return receipt requested.
Optionee must retain two (2) copies of the completed form for filing with his or
her Federal and state tax returns for the current tax year and an additional
copy for his or her records.
10
APPENDIX
The following definitions shall be in effect under the Agreement:
A. AGREEMENT shall mean this Stock Issuance Agreement.
B. BOARD shall mean the Corporation's Board of Directors.
C. COMMON STOCK shall mean the Corporation's Class A common stock.
D. CODE shall mean the Internal Revenue Code of 1986, as amended.
E. CHANGE IN CONTROL shall mean a change in ownership or control of the
Corporation affected through any of the following transactions:
(i) a 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) the 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 0000 Xxx) of securities
possessing more than fifty percent (50%) of the total combined voting
power of the Corporation's outstanding securities pursuant to a tender
offer or exchange offer made directly to the Corporation's
shareholders.
F. CORPORATION shall mean Broadcom Corporation, a California
corporation.
G. OWNER shall mean Participant and all subsequent holders of the
Purchased Shares who derive their chain of ownership through a Permitted
Transfer from Participant.
H. 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.
I. PARTICIPANT shall mean the person to whom the Purchased Shares
are issued under the Stock Issuance Program.
A-1.
11
J. PERMITTED TRANSFER shall mean (i) a gratuitous transfer of the
Purchased Shares, provided and only if Participant obtains the
Corporation's prior written consent to such transfer, (ii) a transfer of
title to the Purchased Shares effected pursuant to Participant's will or
the laws of intestate succession following Participant's death or (iii) a
transfer to the Corporation in pledge as security for any purchase-money
indebtedness incurred by Participant in connection with the acquisition of
the Purchased Shares.
K. PLAN shall mean the Corporation's 1998 Stock Incentive Plan.
L. PLAN ADMINISTRATOR shall mean either the Board or a committee of
Board acting in its administrative capacity under the Plan.
M. PURCHASE PRICE shall have the meaning assigned to such term in
Paragraph A.1.
N. PURCHASED SHARES shall have the meaning assigned to such term in
Paragraph A.1.
O. RECAPITALIZATION shall mean any stock split, stock dividend,
recapitalization, combination of shares, exchange of shares or other change
affecting the outstanding Common Stock as a class without the Corporation's
receipt of consideration.
P. REPURCHASE RIGHT shall mean the right granted to the Corporation
in accordance with Article C.
Q. SERVICE shall mean Participant's performance of services for the
Corporation (or any Parent or Subsidiary) in the capacity of an employee,
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, a
non-employee member of the board of directors or a consultant.
R. STOCK ISSUANCE PROGRAM shall mean the Stock Issuance Program
under the Plan.
S. 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.
T. VESTING SCHEDULE shall mean the vesting schedule specified in
Paragraph C.3, subject to the special vesting acceleration provisions of
Paragraph C.5.
U. UNVESTED SHARES shall have the meaning assigned to such term in
Paragraph C.1.
A-2.
