(Mark One) | ||
þ
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the fiscal
year ended December 31, 2010
|
||
or
|
||
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the transition period
from
to
|
California | 33-0480482 | |
(State or Other Jurisdiction
of Incorporation or Organization) |
(I.R.S. Employer
Identification No.) |
Title of Class | Name of Exchange on Which Registered | |
Class A Common Stock, $0.0001 par value
|
The Nasdaq Stock Market LLC
(Nasdaq Global Select Market) |
Large accelerated filer þ | Accelerated filer o | Non-accelerated filer o | Smaller reporting company o |
© 2011 Broadcom Corporation. All rights reserved. | This Annual Report on Form 10-K is printed on recycled paper. |
Item 1. | Business |
| Broadband Communications (Solutions for the Home) Highly integrated solutions for the connected home, including set-top-boxes and media servers, residential gateways, home networking, femtocells, high definition TV platforms, Blu-ray Disc ® players and digital video recorders (DVRs). | |
| Mobile & Wireless (Solutions for the Hand) Low-power, high-performance and highly integrated solutions powering the mobile ecosystem, including Wi-Fi and Bluetooth, cellular modems, personal navigation and global positioning, near field communications, multimedia and application processing, and mobile power management solutions. | |
| Infrastructure & Networking (Solutions for Infrastructure) Highly integrated solutions to carriers, service providers, enterprises, small-to-medium businesses and data centers for network infrastructure needs, including switches and physical layer (PHY) devices for local, metropolitan, wide area and storage networking; switch fabric solutions; and high-speed controllers. |
Net Revenue: $6.818 billion
|
Net Revenue: $4.490 billion | Net Revenue: $4.658 billion |
2
Products Incorporating Our Solutions | Broadcom Solutions | |||||
Broadband Communications
(Solutions for the Home) |
Modems (cable, xPON, femtocell and DSL) and Residential
Gateways
Cable Modem Termination Systems (CMTS) and Central Office DSLAM Solutions Digital Cable, Digital Transport Adapter, Direct Broadcast Satellite, Terrestrial and IP Set-Top Boxes Digital Television Blu-ray Disc Players and Recorders Home Networking Solutions (including Powerline Networking) |
Cable modem SoCs
Femtocell SoCs MPEG/AVC/VC-1 encoders and transcoders xDSL, PON and cable modem customer premises equipment and central office solutions Powerline Networking SoCs Digital cable, DBS, Terrestrial and IP set-top box integrated receiver demodulators HDTV and SDTV SoCs Blu-ray Disc SoCs |
||||
3
Products Incorporating Our Solutions | Broadcom Solutions | |||||
Mobile & Wireless
(Solutions for the Hand) |
Cellular phones
Wireless-enabled tablets, laptops, netbooks, and desktop computers Wireless home routers and gateways Printers Cellular and WiMax data cards MiFi Mobile Hotspots VoIP phones Handheld media devices Personal navigation devices Home gaming systems Home entertainment systems |
Wi-Fi
®
SoCs
Bluetooth ® SoCs Wireless Connectivity Combo chips GPS SoCs EDGE, 3G (UMTS and HSPA) and 4G (LTE and WiMAX ® ) baseband solutions Multimedia processors Applications processors Power management units VoIP SoCs Mobile TV SoCs NFC tags |
||||
4
5
Products Incorporating Our Solutions | Broadcom Solutions | |||||
Infrastructure & Networking
(Solutions for Infrastructure) |
Service provider metro equipment
3G/4G wireless infrastructures and wireless access points Switches, hubs and routers Servers Workstations Desktop and notebook computers Network interface cards LAN on motherboard applications Optical networks and dense wave division multiplexing applications Virtual private networks and security appliances |
Ethernet copper transceivers
Ethernet controllers Ethernet switches Backplane and Optical front-end physical layer devices Security processors and adapters Broadband processors |
||||
| Our service provider switch portfolio enables carrier/service provider networks to support a large number of services in the wireless backhaul, access, aggregation and core of their networks. | |
| Our Data Center portfolio provides high capacity, low latency switching silicon that supports advanced protocols around virtualization and multi-pathing. In addition, our SAND Ethernet switching fabric technologies provide the ability to build highly scalable flat networks supporting tens of thousands of servers. | |
| Our family of SMB Ethernet switch products are designed to support lower power modes and comply with industry standards around energy efficient Ethernet. We also offer a family of Layer 2 managed switches designed specifically for the service provider market in Asia to deliver high bandwidth content, such as multimedia, to densely populated residential and commercial buildings. |
6
| Alcatel | |
| Apple | |
| Cisco | |
| Dell | |
| EchoStar | |
| Hewlett-Packard | |
| Huawei Technologies | |
| LG | |
| Motorola | |
| Netgear | |
| Nintendo | |
| Nokia | |
| Pace | |
| Samsung | |
| Technicolor |
7
| Taiwan Semiconductor Manufacturing Corporation in Taiwan, | |
| GlobalFoundries, Inc. (formerly Chartered Semiconductor Manufacturing) in Singapore, | |
| Semiconductor Manufacturing International Corporation in China; and | |
| United Microelectronics Corporation in Singapore and Taiwan. |
8
| United Test and Assembly Center in Singapore, China and Thailand (test, assembly and packaging), | |
| Advanced Semiconductor Engineering (ASE) in China and Taiwan (test, assembly and packaging), | |
| Siliconware Precision in Taiwan (test only), | |
| Amkor in Korea, Philippines and China (assembly and packaging only), | |
| Signetics in Korea (assembly and packaging only), | |
| STATSChipPAC in Singapore, Korea, Malaysia and China (assembly and packaging only), |
9
| product quality and reputation | |
| product capabilities | |
| level of integration | |
| engineering execution | |
| reliability | |
| price | |
| time-to-market | |
| market presence | |
| standards compliance | |
| system cost | |
| intellectual property | |
| customer interface and support |
10
Item 1A. | Risk Factors |
11
| agreements with our customers typically do not require them to purchase a minimum quantity of our products; and | |
| our customers can stop incorporating our products into their own products with limited notice to us and suffer little or no penalty. |
12
| changes in economic conditions in the markets we address, including the continuing volatility in the technology sector and semiconductor industry; | |
| seasonality in sales of consumer and enterprise products in which our products are incorporated; | |
| our dependence on a few significant customers and/or design wins for a substantial portion of our revenue; | |
| timing, rescheduling or cancellation of significant customer orders and our ability, as well as the ability of our customers, to manage inventory; | |
| changes in customer product needs and market acceptance of our products; | |
| the impact of the Internal Revenue Service review of certain of our income and employment tax returns; and | |
| competitive pressures and other factors such as the qualification, availability and pricing of competing products and technologies and the resulting effects on sales and pricing of our products. |
| delays in the timing and successful integration of an acquired companys technologies; | |
| the loss of key personnel; | |
| lower gross margins and other financial challenges; and | |
| becoming subject to intellectual property or other litigation. |
13
14
15
| effectively identify and capitalize upon opportunities in new markets; | |
| timely complete and introduce new integrated products; | |
| transition our semiconductor products to increasingly smaller line width geometries; | |
| license any desired third party technology or intellectual property rights; | |
| obtain sufficient foundry capacity and packaging materials; and | |
| qualify and obtain industry interoperability certification of our products. |
16
| political, social and economic instability; | |
| exposure to different business practices and legal standards, particularly with respect to intellectual property; | |
| continuation of overseas conflicts and the risk of terrorist attacks and resulting heightened security; | |
| the imposition of governmental controls and restrictions and unexpected changes in regulatory requirements; | |
| nationalization of business and blocking of cash flows; | |
| changes in taxation and tariffs; and | |
| difficulties in staffing and managing international operations. |
17
| a lack of guaranteed wafer supply and higher wafer prices; | |
| the limited availability of, or potential delays in obtaining access to, key process technologies; and | |
| the location of foundries in regions that are subject to earthquakes, tsunamis and other natural disasters. |
18
| our views on potential future capital requirements for investments in acquisitions and the funding of our research and development; | |
| stock repurchase programs; | |
| changes in federal and state income tax laws or corporate laws; and | |
| changes to our business model. |
Item 1B. | Unresolved Staff Comments |
Item 2. | Properties |
19
Item 3. | Legal Proceedings |
Item 4. | (Removed and Reserved) |
20
29
F-22
Item 5.
Market
for Registrants Common Equity, Related Stockholder Matters
and Issuer Purchases of Equity Securities
High
Low
$
47.00
$
34.34
38.47
29.90
36.94
29.05
34.30
26.40
$
32.29
$
25.76
31.20
23.01
27.56
19.11
21.49
15.31
21
Table of Contents
AMONG BROADCOM CORPORATION, THE S & P 500 INDEX,
THE NASDAQ COMPOSITE INDEX AND THE PHLX SEMICONDUCTOR
INDEX
22
Table of Contents
Approximate Dollar
Total Number of
Value of Shares
Total Number
Average
Shares Purchased
That May yet be
of Shares
Price
as Part of Publicly
Purchased under
Period
Purchased
per Share
Announced Plan
the Plan
(In thousands)
(In thousands)
(In thousands)
$
140
44.13
140
140
$
44.13
140
$
23
Table of Contents
Item 6.
Selected
Consolidated Financial Data
Year Ended December 31,
2010
2009
2008
2007
2006
(In thousands, except per share data)
$
6,589,270
$
4,272,726
$
4,485,239
$
3,739,312
$
3,667,818
206,696
170,611
22,353
46,986
172,886
37,083
6,818,319
4,490,323
4,658,125
3,776,395
3,667,818
3,284,213
2,210,559
2,213,015
1,832,178
1,795,565
1,762,323
1,534,918
1,497,668
1,348,508
1,117,014
590,572
479,362
543,117
492,737
504,012
27,570
14,548
3,392
1,027
2,347
19,045
18,895
171,593
1,500
52,625
118,468
15,810
111
7,501
(1,000
)
42,400
15,470
5,200
50,000
5,736,459
4,434,251
4,485,995
3,691,420
3,424,138
1,081,860
56,072
172,130
84,975
243,680
9,032
13,901
52,201
131,069
118,997
6,428
2,218
(2,016
)
3,412
3,964
1,097,320
72,191
222,315
219,456
366,641
15,520
6,930
7,521
6,114
(12,400
)
$
1,081,800
$
65,261
$
214,794
$
213,342
$
379,041
$
2.13
$
0.13
$
0.42
$
0.39
$
0.69
$
1.99
$
0.13
$
0.41
$
0.37
$
0.64
December 31,
2010
2009
2008
2007
2006
(In thousands)
$
4,058,381
$
2,367,990
$
1,898,122
$
2,403,652
$
2,801,598
2,912,311
1,765,982
2,034,110
2,323,716
2,673,087
2,042,937
1,480,541
1,341,201
1,423,328
1,214,174
7,944,310
5,127,242
4,393,265
4,838,193
4,876,766
5,826,089
3,891,846
3,607,067
4,036,148
4,191,666
(1)
Includes income relating to the
Qualcomm Agreement that was entered into with Qualcomm in April
2009. See Overview section in Item 7.
Managements Discussion and Analysis of Financial
Condition and Results of Operations
and Notes 1 and 2
to Consolidated Financial Statements for a further discussion,
included in Part IV, Item 15 of this Report.
(2)
Includes royalties of
$19.0 million, $149.2 million and $31.8 million
in 2009, 2008 and 2007, respectively, received pursuant to a
patent license agreement that was entered into with Verizon
Wireless in July 2007, which was completed in March 2009. See
Note 2 of Notes to Consolidated Financial Statements.
(3)
Includes stock-based compensation
expense resulting from stock options and restricted stock units
we issued or assumed in acquisitions. See Note 9 of Notes
to Consolidated Financial Statements.
(4)
See Notes 1 and 2 of Notes to
Consolidated Financial Statements for an explanation of the
calculation of net income per share.
24
Table of Contents
Year Ended December 31,
2010
2009
2008
2007
2006
(In thousands)
50.2
%
48.3
%
50.7
%
51.0
%
51.0
%
51.8
50.8
52.5
51.5
51.0
25
Table of Contents
Item 7.
Managements
Discussion and Analysis of Financial Condition and Results of
Operations
Broadband Communications (Solutions for the Home)
Highly integrated solutions for the connected home,
including set-top-boxes and media servers, residential gateways,
home networking, femtocells, high definition TV platforms,
Blu-ray Disc players and digital video recorders (DVRs).
Mobile & Wireless (Solutions for the
Hand)
Low-power, high-performance and highly
integrated solutions powering the mobile ecosystem, including
Wi-Fi and Bluetooth, cellular modems, personal navigation and
global positioning, near field communications, multimedia and
application processing, and mobile power management solutions.
Infrastructure & Networking (Solutions for
Infrastructure)
Highly integrated solutions to
carriers, service providers, enterprises,
small-to-medium
businesses and data centers for network infrastructure needs,
including switches and physical layer (PHY) devices for local,
metropolitan, wide area and storage networking; switch fabric
solutions; and high-speed controllers.
Recognized
Scheduled to be Recognized
2008
2009
2010
2011
2012
2013
Thereafter
Total
(In thousands)
$
$
170,611
$
206,695
$
206,695
$
186,012
$
86,400
$
$
856,413
149,232
18,968
168,200
$
149,232
$
189,579
$
206,695
$
206,695
$
186,012
$
86,400
$
$
1,024,613
26
Table of Contents
Our cash and cash equivalents and marketable securities were
$4.058 billion at December 31, 2010, compared with
$2.368 billion at December 31, 2009. We generated cash
flow from operations of $1.371 billion in 2010.
In January 2010 our Board of Directors adopted a dividend policy
pursuant to which we intend to pay quarterly cash dividends to
holders of our Class A and Class B common stock. We
paid $163.4 million in dividends in 2010.
In February 2010, as part of Broadcoms regular annual
equity compensation review program, our Compensation Committee
granted 10.1 million shares subject to equity awards, which
included 2.2 million employee stock options and
7.9 million restricted stock units. At the date of grant,
the amount of unearned stock-based compensation expense
associated with these awards was $247.6 million and was
estimated to be expensed from 2010 through 2014.
In February 2010 we announced that our Board of Directors had
authorized an evergreen share repurchase program intended to
offset the dilution associated with our stock incentive plans.
Under this program we repurchased 3.9 million shares of our
Class A common stock at a weighted average price of $32.32
per share in 2010. We repurchased an additional
5.2 million shares of our Class A common stock at a
weighted average price of $29.75, which completed our share
repurchase program announced in July 2008.
In March 2010 we acquired Teknovus, Inc., or Teknovus, a leading
supplier of Ethernet Passive Optical Network chipsets and
software for approximately $109.3 million, exclusive of
$9.2 million of cash acquired. We also assumed
$14.6 million of debt which was subsequently repaid.
In July 2010 we acquired Innovision Research &
Technology PLC, or Innovision, a near-field communication, or
NFC, technology company for $49.8 million, exclusive of
$1.8 million of cash acquired.
In November 2010 we completed a private offering of
$300 million aggregate principal amount of
1.500% Senior Notes due 2013 and $400 million
aggregate principal amount of 2.375% Senior Notes due 2015.
We also entered into a $500 million credit facility
agreement. We did not draw on our credit facility in 2010.
27
Table of Contents
In November 2010 we acquired Percello Ltd., or Percello, a
company that develops femtocell SoC solutions for
$84.6 million, exclusive of $1.7 million of cash
acquired. We may be required to pay up to $12.0 million in
additional consideration to former Percello shareholders if
certain revenue levels are achieved by the former Percello
entity in 2011. The purchase price includes a liability of
$0.1 million, which represents the estimated acquisition
date fair value of the additional consideration payable to
former Percello shareholders. We also issued 0.1 million
restricted stock units to certain former employees of Percello
who became employees of Broadcom upon the closing. The
restricted stock units had a fair value of $3.1 million, of
which $0.2 million was recorded as goodwill, and
$2.9 million will be recognized as stock-based compensation
expense over the next four years.
In November 2010 we acquired Beceem Communications, Inc., or
Beceem, a company that develops SoC solutions for LTE and WiMAX
4G connectivity for $301.8 million, exclusive of
$11.8 million of cash acquired. We assumed Beceems
equity plan and subsequently issued 0.8 million Broadcom
stock options. The stock options had a fair value of
$22.6 million, of which $0.7 million was recorded as
goodwill and $21.9 million will be recognized as
stock-based compensation expense over the next three years.
In December 2010 we acquired Gigle Networks Inc., or Gigle, a
company that develops SoC solutions for home networking over
power lines for $75.8 million, exclusive of
$1.4 million of cash acquired. We may be required to pay up
to $8.0 million in additional consideration to former Gigle
shareholders if certain revenue levels are achieved by the
former Gigle entity in 2011. The purchase price includes a
liability of $0.9 million, which represents the estimated
acquisition date fair value of the additional consideration
payable to former Gigle shareholders. We issued restricted stock
units to certain former employees of Gigle who became employees
of Broadcom upon the closing. The restricted stock units had a
fair value of $1.1 million, of which $0.1 million was
recorded as goodwill, and $1.0 million will be recognized
as stock-based compensation expense over the next three years.
We also issued employee stock options with a fair value of
$0.7 million which will be recognized as stock-based
compensation expense over the next three years.
Reportable Segments
Broadband
Mobile &
Infrastructure &
All
Communications
Wireless
Networking
Other
Consolidated
(In thousands)
$
2,134,373
$
2,889,226
$
1,587,775
$
206,945
$
6,818,319
446,556
526,177
578,182
(469,055
)
1,081,860
$
1,525,193
$
1,719,998
$
1,055,553
$
189,579
$
4,490,323
180,392
116,882
287,837
(529,039
)
56,072
$
1,722,671
$
1,528,178
$
1,258,044
$
149,232
$
4,658,125
383,582
33,974
390,293
(635,719
)
172,130
28
Table of Contents
Included in the All
Other category:
Year Ended December 31,
2010
2009
2008
(In thousands)
$
206,945
$
189,579
$
149,232
$
483,024
$
496,347
$
509,374
58,594
30,744
19,249
9,644
9,225
2,161
19,045
18,895
171,593
52,625
118,468
15,810
111
7,501
(1,000
)
42,400
50,000
12,541
4,866
3,966
40,416
(17,428
)
21,398
$
676,000
$
718,618
$
784,951
$
(469,055
)
$
(529,039
)
$
(635,719
)
volume of product sales and corresponding gross margin;
required levels of research and development and other operating
costs;
stock-based compensation expense;
licensing and income from intellectual property;
deferral of revenue under multiple-element arrangements;
amortization of purchased intangible assets;
cash-based incentive compensation expense;
litigation costs and insurance recoveries, including our
directors and officers insurance settlement;
settlement costs or gains;
adjustments to tax reserves and the results of income tax audits;
the loss of interest income resulting from lower average
interest rates and investment balance reductions resulting from
expenditures on repurchases of our Class A common stock,
dividends and acquisitions of businesses;
impairment of goodwill and other long-lived assets;
charitable contributions;
other-than-temporary
impairment of marketable securities and strategic investments;
restructuring costs or reversals thereof; and
gain (loss) on strategic investments.
Table of Contents
Net Revenue.
We recognize product revenue when
all of the following criteria are met: (i) persuasive
evidence of an arrangement exists, (ii) delivery has
occurred, (iii) our price to the customer is fixed or
determinable and (iv) collection of the resulting accounts
receivable is reasonably assured. These criteria are usually met
at the time of product shipment. However, we do not recognize
revenue when any significant obligations remain. Customer
purchase orders
and/or
contracts are generally used to determine the existence of an
arrangement. Shipping documents are used to verify product
delivery. We assess whether a price is fixed or determinable
based upon the payment terms associated with the transaction and
whether the sales price is subject to refund or adjustment. We
assess the collectibility of our accounts receivable based
primarily upon the creditworthiness of the customer as
determined by credit checks and analysis, as well as the
customers payment history.
30
Table of Contents
Income from the Qualcomm Agreement.
The
Qualcomm Agreement as discussed above, is a multiple element
arrangement. We allocated the amount to be received under the
Qualcomm Agreement amongst several elements. A gain from the
settlement of litigation was immediately recognized and
approximated the value of awards determined by the United States
District Court for the Central District of California. The
remaining consideration was predominantly associated with the
transfer of current and future intellectual property rights, as
well as the settlement of all other outstanding litigation, and
is being recognized over the four year performance period as a
single unit of accounting.
Sales Returns, Pricing Adjustments and Allowance for Doubtful
Accounts.
We record reductions of revenue for
estimated product returns and pricing adjustments, such as
competitive pricing programs and rebates, in the same period
that the related revenue is recorded. The amount of these
reductions is based on historical sales returns, analysis of
credit memo data, specific criteria included in rebate
agreements, and other factors known at the time. We accrue 100%
of potential rebates at the time of sale and do not apply a
breakage factor. We reverse the accrual of unclaimed rebate
amounts as specific rebate programs contractually end and when
we believe unclaimed rebates are no longer subject to payment
and will not be paid. Thus the reversal of unclaimed rebates may
have a positive impact on our net revenue and net income in
subsequent periods. Additional reductions of revenue would
result if actual product returns or pricing adjustments exceed
our estimates. We also maintain an allowance for doubtful
accounts for estimated losses resulting from the inability of
customers to make required payments. If the financial condition
of any customer were to deteriorate, resulting in an impairment
of its ability to make payments, additional allowances could be
required.
Inventory Write-Downs and Warranty
Reserves.
We write down the carrying value of our
inventory to net realizable value for estimated obsolescence or
unmarketable inventory in an amount equal to the difference
between the cost of inventory and its estimated realizable value
based upon assumptions about future demand and market
conditions. If actual demand and market conditions are less
favorable than those projected by management, additional
inventory write-downs could be required. Under the hubbing
arrangements that we maintain with certain customers, we own
inventory that is physically located in a customers or
third partys warehouse. As a result, our ability to
effectively manage inventory levels may be
31
Table of Contents
impaired, which would cause our total inventory turns to
decrease. In that event, our expenses associated with excess and
obsolete inventory could increase and our cash flow could be
negatively impacted. Our products typically carry a one to three
year warranty. We establish reserves for estimated product
warranty costs at the time revenue is recognized. Although we
engage in extensive product quality programs and processes, our
warranty obligation has been and may in the future be affected
by product failure rates, product recalls, repair or field
replacement costs and additional development costs incurred in
correcting any product failure, as well as possible claims for
consequential costs. Should actual product failure rates, use of
materials or service delivery costs differ from our estimates,
additional warranty reserves could be required. In that event,
our product gross margins would be reduced.
Stock-Based Compensation Expense.
All
share-based payments, including grants of stock options,
restricted stock units and employee stock purchase rights, are
recognized in our financial statements based upon their
respective grant date fair values. The fair value of each
employee stock option and employee stock purchase right is
estimated on the date of grant using an option pricing model
that meets certain requirements. We currently use the
Black-Scholes option pricing model to estimate the fair value of
our stock options and stock purchase rights. Although we utilize
the Black-Scholes model, which meets established requirements,
the fair values generated by the model may not be indicative of
the actual fair values of our equity awards as it does not
consider certain factors important to those awards to employees,
such as continued employment and periodic vesting requirements
as well as limited transferability. The determination of the
fair value of share-based payment awards utilizing the
Black-Scholes model is affected by our stock price and a number
of assumptions, including expected volatility, expected life,
risk-free interest rate and expected dividends. We use the
implied volatility for traded options on our stock as the
expected volatility assumption required in the Black-Scholes
model. Our selection of the implied volatility approach is based
on the availability of data regarding actively traded options on
our stock as we believe that implied volatility is more
representative of fair value than historical volatility. The
expected life of the stock options is based on historical and
other economic data trended into the future. The risk-free
interest rate assumption is based on observed interest rates
appropriate for the expected terms of our stock options and
stock purchase rights. Prior to 2010, our dividend yield
assumption excluded dividend payouts. In 2010 we began to pay
quarterly dividends and included that assumption in our fair
value calculations. The fair value of our restricted stock units
is based on the closing market price of our Class A common
stock on the date of grant less our expected dividend yield. We
evaluate the assumptions used to value stock awards on a
quarterly basis. If factors change and we employ different
assumptions, stock-based compensation expense may differ
significantly from what we have recorded in the past. If there
are any modifications or cancellations of the underlying
unvested securities, we may be required to accelerate, increase
or cancel any remaining unearned stock-based compensation
expense. To the extent that we grant additional equity
securities to employees or we assume unvested securities in
connection with any acquisitions, our stock-based compensation
expense will be increased by the additional unearned
compensation resulting from those additional grants or
acquisitions.
Goodwill and Purchased Intangible
Assets.
Goodwill is recorded as the difference,
if any, between the aggregate consideration paid for an
acquisition and the fair value of the acquired net tangible and
intangible assets. Effective January 1, 2009 in-process
research and development, or IPR&D, and defensive assets
acquired are capitalized. Prior to 2009 IPR&D was expensed
immediately. The amounts and useful lives assigned to intangible
assets acquired, other than goodwill, impact the amount and
timing of future amortization thereof. The value of our
intangible assets, including goodwill, could be impacted by
future adverse changes such as: (i) any future declines in
our operating results, (ii) a decline in the valuation of
technology company stocks, including the valuation of our common
stock, (iii) a significant slowdown in the worldwide
economy or the semiconductor industry, (iv) any failure to
meet the performance projections included in our forecasts of
future operating results or (v) the abandonment of any of
our acquired in-process research and development projects. We
evaluate these assets, including purchased intangible assets
deemed to have indefinite lives, on an annual basis in the
fourth quarter or more frequently if we believe indicators of
impairment exist. In our annual impairment review, we primarily
use the income approach methodology of valuation that includes
the discounted cash flow method as well as other generally
accepted valuation methodologies to determine the fair value of
our intangible assets. Significant management
32
Table of Contents
judgment is required in the forecasts of future operating
results that are used in the discounted cash flow method of
valuation. It is possible, however, that the plans may change
and estimates used may prove to be inaccurate. If our actual
results, or the plans and estimates used in future impairment
analyses, are lower than the original estimates used to assess
the recoverability of these assets, we could incur additional
impairment charges.
Deferred Taxes and Uncertain Tax Positions.
We
utilize the asset and liability method of accounting for income
taxes. We record a valuation allowance to reduce our deferred
tax assets to the amount that we believe is more likely than not
to be realized. In assessing the need for a valuation allowance,
we consider all positive and negative evidence, including
scheduled reversals of deferred tax liabilities, projected
future taxable income, tax planning strategies, and recent
financial performance. Forming a conclusion that a valuation
allowance is not required is difficult when there is negative
evidence such as cumulative losses in recent years. As a result
of our cumulative losses in the U.S. and certain foreign
jurisdictions, our U.S. tax losses after tax deductions for
stock-based compensation, and the full utilization of our loss
carryback opportunities, we have concluded that a full valuation
allowance against our net deferred tax assets is appropriate in
the U.S. and certain foreign jurisdictions. In certain
other foreign jurisdictions where we do not have cumulative
losses, we record valuation allowances to reduce our net
deferred tax assets to the amount we believe is more likely than
not to be realized. In the future, if we realize a deferred tax
asset that currently carries a valuation allowance, we may
record a reduction of income tax expense in the period of such
realization. Income tax positions must meet a
more-likely-than-not recognition threshold to be recognized.
Income tax positions that previously failed to meet the
more-likely-than-not threshold are recognized in the first
subsequent financial reporting period in which that threshold is
met. Previously recognized tax positions that no longer meet the
more-likely-than-not threshold are derecognized in the first
subsequent financial reporting period in which that threshold is
no longer met. As a multinational corporation, we are subject to
taxation in many jurisdictions, and the calculation of our tax
liabilities involves dealing with uncertainties in the
application of complex tax laws and regulations in various
taxing jurisdictions. If we ultimately determine that the
payment of these liabilities will be unnecessary, we reverse the
liability and recognize a tax benefit during the period in which
we determine the liability no longer applies. Conversely, we
record additional tax charges in a period in which we determine
that a recorded tax liability is less than we expect the
ultimate assessment to be. The application of tax laws and
regulations is subject to legal and factual interpretation,
judgment and uncertainty. Tax laws and regulations themselves
are subject to change as a result of changes in fiscal policy,
changes in legislation, the evolution of regulations and court
rulings. Therefore, the actual liability for U.S. or
foreign taxes may be materially different from our estimates,
which could result in the need to record additional tax
liabilities or potentially reverse previously recorded tax
liabilities.
Litigation and Settlement Costs.
We are
involved in disputes, litigation and other legal proceedings. We
prosecute and defend these matters aggressively. However, there
are many uncertainties associated with any litigation, and we
cannot assure you that these actions or other third party claims
against us will be resolved without costly litigation
and/or
substantial settlement costs. In addition, the resolution of
intellectual property litigation may require us to pay damages
for past infringement or to obtain a license under the other
partys intellectual property rights that could require
one-time license fees or running royalties, which could
adversely impact product gross margins in future periods, or
could prevent us from manufacturing or selling some of our
products or limit or restrict the type of work that employees
involved in such litigation may perform for Broadcom. If any of
those events were to occur, our business, financial condition
and results of operations could be materially and adversely
affected. We record a liability when it is probable that a loss
has been incurred and the amount is reasonably estimable. There
is significant judgment required in both the probability
determination and as to whether an exposure can be reasonably
estimated. However, the outcomes of legal proceedings
and/or
our
ability to settle disputes on terms acceptable to us are subject
to significant uncertainty. Should we choose to pay significant
sums in settling a dispute or should material legal matters be
resolved against the Company, the operating results of a
particular reporting period could be materially adversely
affected.
33
Table of Contents
Year Ended December 31,
2010
2009
2008
96.7
%
95.2
%
96.3
%
3.0
3.8
0.3
1.0
3.7
100.0
%
100.0
%
100.0
%
48.2
49.2
47.5
25.7
34.2
32.1
8.7
10.7
11.7
0.4
0.3
0.1
0.3
0.4
3.7
0.8
2.7
0.3
0.2
0.9
1.1
84.1
98.8
96.3
15.9
1.2
3.7
0.1
0.3
1.1
0.1
0.1
16.1
1.6
4.8
0.2
0.1
0.2
15.9
%
1.5
%
4.6
%
Year Ended December 31,
2010
2009
2008
50.2
%
48.3
%
50.7
%
51.8
50.8
52.5
Year Ended December 31,
2010
2009
2008
0.3
%
0.5
%
0.5
%
5.0
7.8
7.7
1.7
2.7
2.7
34
Table of Contents
Year Ended December 31,
2010
2009
% of Net
% of Net
Increase
%
Amount
Revenue
Amount
Revenue
(Decrease)
Change
(In thousands, except percentages)
$
6,589,270
96.7
%
$
4,272,726
95.2
%
$
2,316,544
54.2
%
206,696
3.0
170,611
3.8
36,085
21.2
22,353
0.3
46,986
1.0
(24,633
)
(52.4
)
$
6,818,319
100.0
%
$
4,490,323
100.0
%
$
2,327,996
51.8
$
3,284,213
48.2
%
$
2,210,559
49.2
%
$
1,073,654
48.6
50.2
%
48.3
%
1.9
%
51.8
%
50.8
%
1.0
%
Three Months Ended
December 31, 2010
September 30, 2010
% of Net
% of Net
Increase
%
Amount
Revenue
Amount
Revenue
(Decrease)
Change
(In thousands, except percentages)
$
1,889,139
97.1
%
$
1,748,692
96.8
%
$
140,447
8.0
%
51,674
2.7
51,674
2.9
4,742
0.2
5,651
0.3
(909
)
(16.1
)
$
1,945,555
100.0
%
$
1,806,017
100.0
%
$
139,538
7.7
$
955,711
49.1
%
$
871,951
48.3
%
$
83,760
9.6
49.4
%
50.1
%
(0.7
)%
50.9
%
51.7
%
(0.8
)%
(1)
Includes stock-based compensation
expense resulting from stock options, stock purchase rights and
restricted stock units we issued or assumed in acquisitions. For
a further discussion of stock-based compensation expense, see
the section entitled Stock-Based Compensation
Expense below.
35
Table of Contents
Year Ended December 31,
2010
2009
% of Net
% of Net
%
Amount
Revenue
Amount
Revenue
Increase
Change
(In thousands, except percentages)
$
2,134,373
31.3
%
$
1,525,193
34.0
%
$
609,180
39.9
%
2,889,226
42.4
1,719,998
38.3
1,169,228
68.0
1,587,775
23.3
1,055,553
23.5
532,222
50.4
206,945
3.0
189,579
4.2
17,366
9.2
$
6,818,319
100.0
%
$
4,490,323
100.0
%
$
2,327,996
51.8
(1)
Includes (i) income relating
to the Qualcomm Agreement that was entered into in April 2009,
(ii) royalties received pursuant to a patent license
agreement that was entered into with Verizon Wireless in July
2007 which was completed in March 2009 and (iii) other
revenue from certain patent agreements, each previously reported
in our Mobile & Wireless reportable segment. See
Notes 1 and 2 of Notes to Consolidated Financial Statements.
Three Months Ended
December 31,
September 30,
2010
2010
% of Net
% of Net
%
Amount
Revenue
Amount
Revenue
Increase
Change
(In thousands, except percentages)
$
576,966
29.7
%
$
561,519
31.1
%
$
15,447
2.8
%
907,484
46.7
797,395
44.2
110,089
13.8
409,431
20.9
395,429
21.8
14,002
3.5
51,674
2.7
51,674
2.9
$
1,945,555
100.0
%
$
1,806,017
100.0
%
$
139,538
7.7
(1)
Includes income relating to the
Qualcomm Agreement that was entered into with Qualcomm in April
2009 that was previously reported in our Mobile &
Wireless reportable segment. See discussion above in the
Overview section and Notes 1 and 2 of Notes to
Consolidated Financial Statements.
36
Table of Contents
2011
2012
2013
Thereafter
Total
(In thousands)
$
206,695
$
186,012
$
86,400
$
$
479,107
Year Ended December 31,
2010
2009
2008
77.6
%
78.8
%
83.6
%
22.4
21.2
16.4
100.0
%
100.0
%
100.0
%
(1)
Includes 7.8%, 7.1% and 6.1% of
product sales maintained under hubbing arrangements with certain
of our customers in 2010, 2009 and 2008, respectively.
(2)
Includes 7.9%, 8.1% and 4.4% of
product sales maintained under fulfillment distributor
arrangements in 2010, 2009 and 2008, respectively.
Year Ended December 31,
2010
2009
2008
11.1
%
*
*
10.0
10.3
%
*
38.9
34.6
35.8
%
*
Less than 10% of net revenue.
Year Ended December 31,
2010
2009
2008
30.4
%
28.3
%
29.5
%
26.0
24.8
27.9
36.8
37.6
29.3
2.4
2.7
2.8
1.6
1.4
2.3
97.2
%
94.8
%
91.8
%
37
Table of Contents
general economic and specific conditions in the markets we
address, including the continuing volatility in the technology
sector and semiconductor industry, trends in the wired and
wireless communications markets in various geographic regions,
including seasonality in sales of consumer products into which
our products are incorporated;
the timing, rescheduling or cancellation of significant customer
orders and our ability, as well as the ability of our customers
and distributors, to manage inventory;
the timing of our distributors shipments to their
customers or when products are taken by our customers under
hubbing arrangements;
our ability to specify, develop or acquire, complete, introduce,
market and transition to volume production new products and
technologies in a cost effective and timely manner;
the rate at which our present and future customers and end-users
adopt/ramp our products and technologies;
the qualification, availability and pricing of competing
products and technologies and the resulting effects on sales and
pricing of our products; and
the availability of credit and financing, which may lead certain
of our customers to reduce their level of purchases or to seek
credit or other accommodations from us.
our product mix and volume of product sales (including sales to
high volume customers);
the positions of our products in their respective life cycles;
introduction of products with lower margins;
the effects of competition;
38
Table of Contents
the effects of competitive pricing programs and rebates;
provisions for excess and obsolete inventories and their
relationship to demand volatility;
manufacturing cost efficiencies and inefficiencies;
fluctuations in direct product costs such as silicon wafer costs
and assembly, packaging and testing costs, and other fixed costs;
our ability to create cost advantages through successful
integration and convergence;
our ability to advance to the next technology node faster than
our competitors;
licensing royalties payable by us;
product warranty costs;
fair value of acquired tangible and intangible assets;
amortization of acquired inventory valuation
step-up; and
reversals of unclaimed rebates and warranty reserves.
Year Ended December 31,
2010
2009
% of Net
% of Net
Increase
%
Amount
Revenue
Amount
Revenue
(Decrease)
Change
(In thousands, except percentages)
$
928,956
13.6
%
$
770,112
17.2
%
$
158,844
20.6
%
341,733
5.0
351,884
7.8
(10,151
)
(2.9
)
273,682
4.0
211,494
4.7
62,188
29.4
217,952
3.1
201,428
4.5
16,524
8.2
$
1,762,323
25.7
%
$
1,534,918
34.2
%
$
227,405
14.8
(1)
Includes stock-based compensation
expense resulting from stock options, stock purchase rights and
restricted stock units we issued or assumed in acquisitions. For
a further discussion of stock-based compensation expense, see
the section entitled Stock-Based Compensation
Expense below.
39
Table of Contents
Year Ended December 31,
2010
2009
% of Net
% of Net
Increase
%
Amount
Revenue
Amount
Revenue
(Decrease)
Change
(In thousands, except percentages)
$
240,176
3.5
%
$
194,336
4.3
%
$
45,840
23.6
%
118,789
1.7
119,918
2.7
(1,129
)
(0.9
)
139,795
2.1
110,205
2.5
29,590
26.8
91,812
1.4
54,903
1.2
36,909
67.2
$
590,572
8.7
%
$
479,362
10.7
%
$
111,210
23.2
(1)
Includes stock-based compensation
expense resulting from stock options, stock purchase rights and
restricted stock units we issued or assumed in acquisitions. For
a further discussion of stock-based compensation expense, see
the section entitled Stock-Based Compensation
Expense below.
Year Ended December 31,
2010
2009
% of Net
% of Net
%
Amount
Revenue
Amount
Revenue
(Decrease)
Change
(In thousands, except percentages)
$
22,502
0.3
%
$
24,545
0.5
%
$
(2,043
)
(8.3
)%
341,733
5.0
351,884
7.8
(10,151
)
(2.9
)
118,789
1.7
119,918
2.7
(1,129
)
(0.9
)
$
483,024
7.0
%
$
496,347
11.0
%
$
(13,323
)
(2.7
)
40
Table of Contents
2011
2012
2013
2014
Thereafter
Total
(In thousands)
$
420,700
$
252,097
$
129,556
$
23,329
$
$
825,682
Year Ended December 31,
2010
2009
% of Net
% of Net
%
Amount
Revenue
Amount
Revenue
Increase
Change
(In thousands, except percentages)
$
31,024
0.5
%
$
16,196
0.4
%
$
14,828
91.6
%
27,570
0.4
14,548
0.3
13,022
89.5
$
58,594
0.9
%
$
30,744
0.7
%
$
27,850
90.6
Purchased Intangible Assets Amortization by Year
2011
2012
2013
2014
2015
Thereafter
Total
(In thousands)
$
58,508
$
71,915
$
62,917
$
48,462
$
29,101
$
37,251
$
308,154
27,810
10,057
3,359
3,376
3,444
9,640
57,686
$
86,318
$
81,972
$
66,276
$
51,838
$
32,545
$
46,891
$
365,840
41
Table of Contents
Valuation Assumptions
2010
2009
2008
12.0% - 17.7%
12.0% - 17.5%
15.0% - 17.0%
4.0%
4.0%
4.0% - 5.0%
17.0%
17.0%
10.0%
3.4%
4.0%
4.3%
1.26 - 1.52
1.24 - 1.69
1.83 - 2.50
42
Table of Contents
43
Table of Contents
Weighted
Average
Average
Risk
Estimated
Estimated
Estimated
Adjusted
Percent
Time to
Cost to
Discount
Company Acquired
Development Projects
Complete
Complete
Complete
Rate
IPR&D
(In years)
(In millions)
(In millions)
Powerline Communication Solutions
12
%
1.4
$
9.9
18
%
$
4.8
LTE/Femtocell solutions
10
%
3.2
$
10.2
17
%
$
10.1
LTE/WiMAX
51
%
1.1
$
32.3
22
%
$
29.3
Ethernet Passive Optical Network (EPON) chipsets and software
11
%
0.9
$
19.3
26
%
$
10.6
High-density switching line card solutions
85
%
1.0
$
1.9
21
%
$
50.4
Blu-ray application
49
%
1.0
$
4.3
20
%
$
10.9
Xilleon product line
82
%
1.0
$
6.9
24
%
$
31.5
Year Ended December 31,
2010
2009
% of Net
% of Net
Increase
%
Amount
Revenue
Amount
Revenue
(Decrease)
Change
(In thousands, except percentages)
$
9,032
0.1
%
$
13,901
0.3
%
$
(4,869
)
(35.0
)%
6,428
0.1
2,218
0.1
4,210
189.8
44
Table of Contents
Year Ended December 31,
2010
2009
% of Net
% of Net
%
Amount
Revenue
Amount
Revenue
Increase
Change
(In thousands, except percentages)
$
15,520
0.2
%
$
6,930
0.1
%
$
8,590
124.0
%
45
Table of Contents
46
Table of Contents
Year Ended December 31,
2009
2008
% of Net
% of Net
Increase
%
Amount
Revenue
Amount
Revenue
(Decrease)
Change
(In thousands, except percentages)
$
4,272,726
95.2
%
$
4,485,239
96.3
%
$
(212,513
)
(4.7
)%
170,611
3.8
170,611
46,986
1.0
172,886
3.7
(125,900
)
(72.8
)
$
4,490,323
100.0
%
$
4,658,125
100.0
%
$
(167,802
)
(3.6
)
$
2,210,559
49.2
%
$
2,213,015
47.5
%
$
(2,456
)
(0.1
)
48.3
%
50.7
%
(2.4
)%
50.8
%
52.5
%
(1.7
)%
Three Months Ended
December 31, 2009
September 30, 2009
% of Net
% of Net
Increase
%
Amount
Revenue
Amount
Revenue
(Decrease)
Change
(In thousands, except percentages)
$
1,283,434
95.6
%
$
1,194,745
95.3
%
$
88,689
7.4
%
51,674
3.8
51,674
4.1
7,638
0.6
7,778
0.6
(140
)
(1.8
)
$
1,342,746
100.0
%
$
1,254,197
100.0
%
$
88,549
7.1
$
630,259
46.9
%
$
615,349
49.1
%
$
14,910
2.4
50.9
%
48.5
%
2.4
%
53.1
%
50.9
%
2.2
%
(1)
Includes stock-based compensation
expense resulting from stock options, stock purchase rights and
restricted stock units we issued or assumed in acquisitions. For
a further discussion of stock-based compensation expense, see
the section entitled Stock-Based Compensation
Expense below.
Year Ended December 31,
2009
2008
% of Net
% of Net
Increase
%
Amount
Revenue
Amount
Revenue
(Decrease)
Change
(In thousands, except percentages)
$
1,525,193
34.0
%
$
1,722,671
37.0
%
$
(197,478
)
(11.5
)%
1,719,998
38.3
1,528,178
32.8
191,820
12.6
1,055,553
23.5
1,258,044
27.0
(202,491
)
(16.1
)
189,579
4.2
149,232
3.2
40,347
27.0
$
4,490,323
100.0
%
$
4,658,125
100.0
%
$
(167,802
)
(3.6
)
47
Table of Contents
(1)
Includes (i) income relating
to the Qualcomm Agreement that was entered into with Qualcomm in
April 2009 and (ii) royalties received pursuant to a patent
license agreement that was entered into with Verizon Wireless in
July 2007 which was completed in March 2009, each previously
reported in our Mobile & Wireless reportable segment.
See discussion above in the Overview section and
Notes 1 and 2 of Notes to Consolidated Financial Statements.
Three Months Ended
December 31,
September 30,
2009
2009
% of Net
% of Net
Increase
%
Amount
Revenue
Amount
Revenue
(Decrease)
Change
(In thousands, except percentages)
$
449,233
33.5
%
$
394,863
31.5
%
$
54,370
13.8
%
502,037
37.4
520,613
41.5
(18,576
)
(3.6
)
339,802
25.3
287,047
22.9
52,755
18.4
51,674
3.8
51,674
4.1
$
1,342,746
100.0
%
$
1,254,197
100.0
%
$
88,549
7.1
(1)
Includes income relating to the
Qualcomm Agreement that was entered into with Qualcomm in April
2009 that was previously reported in our Mobile &
Wireless reportable segment. See discussion above in the
Overview section and Notes 1 and 2 of Notes to
Consolidated Financial Statements.
48
Table of Contents
Year Ended December 31,
2009
2008
% of Net
% of Net
Increase
%
Amount
Revenue
Amount
Revenue
(Decrease)
Change
(In thousands, except percentages)
$
770,112
17.2
%
$
719,922
15.5
%
$
50,190
7.0
%
351,884
7.8
358,018
7.7
(6,134
)
(1.7
)
211,494
4.7
211,928
4.5
(434
)
(0.2
)
201,428
4.5
207,800
4.4
(6,372
)
(3.1
)
$
1,534,918
34.2
%
$
1,497,668
32.1
%
$
37,250
2.5
Year Ended December 31,
2009
2008
% of Net
% of Net
%
Amount
Revenue
Amount
Revenue
Decrease
Change
(In thousands, except percentages)
$
194,336
4.3
%
$
198,411
4.3
%
$
(4,075
)
(2.1
)%
119,918
2.7
126,359
2.7
(6,441
)
(5.1
)
110,205
2.5
141,369
3.0
(31,164
)
(22.0
)
54,903
1.2
76,978
1.7
(22,075
)
(28.7
)
$
479,362
10.7
%
$
543,117
11.7
%
$
(63,755
)
(11.7
)
49
Table of Contents
Year Ended December 31,
2009
2008
(In thousands)
$
24,545
$
24,997
351,884
358,018
119,918
126,359
$
496,347
$
509,374
11.1
%
10.9
%
Year Ended
December 31,
2009
2008
(In thousands)
$
16,196
$
15,857
14,548
3,392
$
30,744
$
19,249
50
Table of Contents
Year Ended December 31,
2009
2008
% of Net
% of Net
Increase
%
Amount
Revenue
Amount
Revenue
(Decrease)
Change
(In thousands, except percentages)
$
13,901
0.3
%
$
52,201
1.1
%
$
(38,300
)
(73.4
)%
2,218
0.1
(2,016
)
4,234
(210.0
)
51
Table of Contents
Year Ended December 31,
2009
2008
% of Net
% of Net
%
Amount
Revenue
Amount
Revenue
(Decrease)
Change
(In thousands, except percentages)
$
6,930
0.1
%
$
7,521
0.2
%
$
(591
)
(7.9
)%
52
Table of Contents
53
Table of Contents
(1)
Includes settlement costs of
$48.8 million and an impairment of long-lived assets charge
of $17.3 million.
(2)
Includes settlement costs of
$175.7 million, net of a $63.2 million recovery of
legal expenses .
(3)
Includes impairment of long-lived
assets of $11.3 million, net settlement gains of
$58.4 million and a charitable contribution of
$50.0 million.
54
Table of Contents
55
Table of Contents
December 31,
2010
2009
Increase
(In thousands)
$
2,912,311
$
1,765,982
$
1,146,329
$
1,622,423
$
1,397,093
$
225,330
1,035,252
532,281
502,971
1,400,706
438,616
962,090
$
4,058,381
$
2,367,990
$
1,690,391
(1)
Included in working capital.
Year Ended December 31,
2010
2009
2008
(In thousands)
$
1,370,826
$
986,893
$
919,615
(2,178,033
)
(501,357
)
(745,382
)
1,032,537
(279,088
)
(1,170,160
)
$
225,330
$
206,448
$
(995,927
)
$
1,397,093
$
1,190,645
$
2,186,572
$
1,622,423
$
1,397,093
$
1,190,645
Days sales outstanding increased from 35 days to
38 days driven primarily by a variation in revenue
linearity, as a larger percentage of our sales occurred in the
last month of the quarter ended December 31, 2010 as
compared to the last month of the quarter ended
December 31, 2009.
56
Table of Contents
Inventory days on hand increased from 52 days to
57 days due to our decision to increase inventory on hand
to meet the anticipated growth in the demand for our products
primarily in our Mobile & Wireless reportable segment.
Accounts payable days outstanding decreased from 63 to
58 days resulting primarily from the timing of inventory
purchases and vendor payments.
57
Table of Contents
December 31,
2010
2009
Increase
(In thousands)
$
300,000
$
$
300,000
400,000
400,000
$
700,000
$
$
700,000
58
Table of Contents
Payment Obligations by Year
2011
2012
2013
2014
2015
Thereafter
Total
(In thousands)
$
130,788
$
91,639
$
76,084
$
66,012
$
63,623
$
169,657
$
597,803
567,169
567,169
121,751
18,357
12,701
12,699
12,700
12,609
190,817
300,000
400,000
700,000
$
819,708
$
109,996
$
388,785
$
78,711
$
476,323
$
182,266
$
2,055,789
59
Table of Contents
general economic and specific conditions in the markets we
address, including the continuing volatility in the technology
sector and semiconductor industry, trends in the wired and
wireless communications markets in various geographic regions,
including seasonality in sales of consumer products into which
our products are incorporated;
acquisitions of businesses, assets, products or technologies;
the unavailability of credit and financing, which may lead
certain of our customers to reduce their levels of purchases or
to seek credit or other accommodations from us;
litigation expenses, settlements and judgments;
the overall levels of sales of our semiconductor products,
licensing revenue, income from the Qualcomm Agreement and
product gross margins;
our business, product, capital expenditure and research and
development plans, and product and technology roadmaps;
the market acceptance of our products;
repurchases of our Class A common stock;
payment of cash dividends;
required levels of research and development and other operating
costs;
volume price discounts and customer rebates;
intellectual property disputes, customer indemnification claims
and other types of litigation risks;
the levels of inventory and accounts receivable that we maintain;
licensing royalties payable by us;
changes in our compensation policies;
the issuance of restricted stock units and the related cash
payments we make for withholding taxes due from employees;
capital improvements for new and existing facilities;
technological advances;
our competitors responses to our products and our
anticipation of and responses to their products;
our relationships with suppliers and customers;
the availability and cost of sufficient foundry, assembly and
test capacity and packaging materials; and
the level of exercises of stock options and stock purchases
under our employee stock purchase plan.
60
Table of Contents
Item 7A.
Quantitative
and Qualitative Disclosures about Market Risk
Item 8.
Financial
Statements and Supplementary Data
61
Table of Contents
Item 9.
Changes
in and Disagreements with Accountants on Accounting and
Financial Disclosure
Item 9A.
Controls
and Procedures
62
Table of Contents
Item 9B.
Other
Information
Item 10.
Directors,
Executive Officers and Corporate Governance
Item 11.
Executive
Compensation
Item 12.
Security
Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters
Item 13.
Certain
Relationships and Related Transactions, and Director
Independence
Item 14.
Principal
Accounting Fees and Services
63
Table of Contents
Item 15.
Exhibits,
Financial Statement Schedules
Page
F-1
F-3
F-4
F-5
F-6
F-7
Page
S-1
64
Table of Contents
F-1
Table of Contents
F-2
Table of Contents
(In thousands, except par value)
December 31,
2010
2009
$
1,622,423
$
1,397,093
1,035,252
532,281
819,629
508,627
597,955
362,428
108,248
113,903
4,183,507
2,914,332
266,297
229,317
1,400,706
438,616
1,677,097
1,329,614
365,840
150,927
50,863
64,436
$
7,944,310
$
5,127,242
$
604,383
$
437,353
207,607
190,315
55,116
87,388
404,090
433,294
1,271,196
1,148,350
696,978
1,039
608
149,008
86,438
484,732 in 2010 and 438,557 in 2009
48
44
53,967 in 2010 and 56,999 in 2009
6
6
11,994,357
11,153,060
(6,177,269
)
(7,259,069
)
8,947
(2,195
)
5,826,089
3,891,846
$
7,944,310
$
5,127,242
F-3
Table of Contents
(In thousands, except per share
data)
Year Ended December 31,
2010
2009
2008
$
6,589,270
$
4,272,726
$
4,485,239
206,696
170,611
22,353
46,986
172,886
6,818,319
4,490,323
4,658,125
3,284,213
2,210,559
2,213,015
1,762,323
1,534,918
1,497,668
590,572
479,362
543,117
27,570
14,548
3,392
19,045
18,895
171,593
52,625
118,468
15,810
111
7,501
(1,000
)
42,400
50,000
5,736,459
4,434,251
4,485,995
1,081,860
56,072
172,130
9,032
13,901
52,201
6,428
2,218
(2,016
)
1,097,320
72,191
222,315
15,520
6,930
7,521
$
1,081,800
$
65,261
$
214,794
$
2.13
$
0.13
$
0.42
$
1.99
$
0.13
$
0.41
508,444
494,038
512,648
544,612
512,645
524,208
$
0.32
$
$
Years Ended December 31,
2010
2009
2008
(In thousands)
$
22,502
$
24,545
$
24,997
341,733
351,884
358,018
118,789
119,918
126,359
F-4
Table of Contents
(In thousands)
Accumulated
Other
Additional
Comprehensive
Total
Common Stock
Paid-In
Accumulated
Income
Shareholders
Shares
Amount
Capital
Deficit
(Loss)
Equity
537,258
$
54
$
11,576,042
$
(7,539,124
)
$
(824
)
$
4,036,148
12,573
1
34,059
34,060
4,413
78,720
78,720
(65,226
)
(6
)
(1,267,880
)
(1,267,886
)
509,374
509,374
5,213
5,213
(3,356
)
(3,356
)
214,794
214,794
216,651
489,018
49
10,930,315
(7,324,330
)
1,033
3,607,067
15,680
1
59,054
59,055
5,858
85,491
85,491
(15,000
)
(421,869
)
(421,869
)
500,069
500,069
(4,624
)
(4,624
)
1,396
1,396
65,261
65,261
62,033
495,556
50
11,153,060
(7,259,069
)
(2,195
)
3,891,846
46,104
4
709,576
709,580
6,166
93,771
93,771
(9,127
)
(281,642
)
(281,642
)
(163,432
)
(163,432
)
483,024
483,024
(4,049
)
(4,049
)
15,191
15,191
1,081,800
1,081,800
1,092,942
538,699
$
54
$
11,994,357
$
(6,177,269
)
$
8,947
$
5,826,089
F-5
Table of Contents
(In thousands)
Year Ended December 31,
2010
2009
2008
$
1,081,800
$
65,261
$
214,794
78,732
74,435
78,236
121,341
159,790
224,244
361,683
336,557
285,130
58,594
30,744
19,249
19,045
18,895
171,593
42,400
(2,490
)
4,266
(313
)
(1,944
)
(1,000
)
(1,046
)
1,781
(286,681
)
(131,656
)
(3,294
)
(208,095
)
12,013
(112,173
)
26,821
8,714
(11,273
)
145,808
122,985
616
(31,841
)
71,760
(7,736
)
(122,306
)
170,500
(2,000
)
128,728
49,885
14,782
1,370,826
986,893
919,615
(108,924
)
(66,570
)
(82,808
)
(599,479
)
(165,258
)
(170,541
)
(3,510
)
(2,000
)
(355
)
(2,933,715
)
(1,138,681
)
(1,115,704
)
1,467,595
871,152
624,026
(2,178,033
)
(501,357
)
(745,382
)
691,393
(280,336
)
(421,869
)
(1,283,952
)
(163,432
)
(14,560
)
936,326
227,209
171,853
(136,854
)
(84,428
)
(58,061
)
1,032,537
(279,088
)
(1,170,160
)
225,330
206,448
(995,927
)
1,397,093
1,190,645
2,186,572
$
1,622,423
$
1,397,093
$
1,190,645
$
15,484
$
16,747
$
9,799
F-6
Table of Contents
December 31, 2010
1.
Summary
of Significant Accounting Policies
F-7
Table of Contents
F-8
Table of Contents
F-9
Table of Contents
F-10
Table of Contents
F-11
Table of Contents
F-12
Table of Contents
F-13
Table of Contents
2.
Supplemental
Financial Information
Year Ended December 31,
2010
2009
2008
77.6
%
78.8
%
83.6
%
22.4
21.2
16.4
100.0
%
100.0
%
100.0
%
(1)
Includes 7.8%, 7.1% and 6.1% of
product sales maintained under hubbing arrangements with certain
of our customers in 2010, 2009 and 2008, respectively.
(2)
Includes 7.9%, 8.1% and 4.4% of
product sales maintained under fulfillment distributor
arrangements in 2010, 2009 and 2008, respectively.
F-14
Table of Contents
December 31,
2010
2009
(In thousands)
$
279,405
$
157,148
318,550
205,280
$
597,955
$
362,428
December 31,
Useful Life
2010
2009
(In years)
(In thousands)
1 to 10
$
173,025
$
163,302
3 to 7
28,746
26,382
3 to 5
313,194
235,142
2 to 4
141,827
122,213
N/A
13,908
6,666
670,700
553,705
(404,403
)
(324,388
)
$
266,297
$
229,317
Reportable Segments
Broadband
Mobile &
Infrastructure &
Communications
Wireless
Networking
Consolidated
(In thousands)
$
483,781
$
802,269
$
1,822,500
$
3,108,550
(543,198
)
(1,286,109
)
(1,829,307
)
$
483,781
$
259,071
$
536,391
$
1,279,243
1,389
51,123
52,512
(2,141
)
(2,141
)
$
483,029
$
259,071
$
587,514
$
1,329,614
110,825
188,381
35,760
334,966
1,025
1,025
(4
)
(4
)
$
594,879
$
447,452
$
623,270
$
1,665,601
11,496
$
1,677,097
F-15
Table of Contents
December 31,
December 31,
2010
2009
Accumulated
Accumulated
Amortization &
Amortization &
Gross
Impairments
Net
Gross
Impairments
Net
(In thousands)
$
485,234
$
(240,312
)
$
244,922
$
278,297
$
(207,517
)
$
70,780
55,640
55,640
50,860
50,860
154,155
(101,547
)
52,608
107,366
(79,212
)
28,154
9,836
(8,272
)
1,564
3,736
(3,736
)
10,842
(8,728
)
2,114
9,214
(8,081
)
1,133
$
715,707
$
(358,859
)
$
356,848
$
449,473
$
(298,546
)
$
150,927
8,992
$
$
365,840
$
150,927
(1)
In 2010 we recorded an impairment
charge to developed technology of $1.8 million. Included in
accumulated amortization in 2009 is an impairment charge of
$16.1 million related to the acquisition of the DTV
Business of AMD. The primary factor contributing to these
impairment charges was the continued reduction in our revenue
outlook for the acquired assets. In 2010, $50.9 million of
IPR&D projects were completed and reclassified to developed
technology and will be amortized to cost of product revenue over
the expected benefit period.
Year Ended December 31,
2010
2009
2008
(In thousands)
$
31,024
$
16,196
$
15,857
27,570
14,548
3,392
$
58,594
$
30,744
$
19,249
Purchased Intangible Assets Amortization by Year
2011
2012
2013
2014
2015
Thereafter
Total
(In thousands)
$
58,508
$
71,915
$
62,917
$
48,462
$
29,101
$
37,251
$
308,154
27,810
10,057
3,359
3,376
3,444
9,640
57,686
$
86,318
$
81,972
$
66,276
$
51,838
$
32,545
$
46,891
$
365,840
F-16
Table of Contents
December 31,
2010
2009
(In thousands)
$
270,288
$
162,212
16,557
176,707
27,576
36,739
13,859
13,854
13,275
10,430
1,328
62,535
32,024
$
404,090
$
433,294
December 31,
2010
2009
(In thousands)
$
39,339
$
32,931
29,142
24,919
34,674
22,722
37,844
8,009
5,866
$
149,008
$
86,438
Year Ended
December 31,
2010
2009
(In thousands)
$
162,212
$
125,058
526,053
311,687
(4,438
)
(10,479
)
(413,539
)
(264,054
)
$
270,288
$
162,212
Year Ended December 31,
2010
2009
(In thousands)
$
10,430
$
11,473
7,565
4,561
(4,720
)
(5,604
)
$
13,275
$
10,430
F-17
Table of Contents
Year Ended December 31,
2010
2009
2008
(In thousands, except per share data)
$
1,081,800
$
65,261
$
214,794
508,450
494,114
512,741
(6
)
(76
)
(93
)
508,444
494,038
512,648
3
31
4
36,165
18,576
11,556
544,612
512,645
524,208
$
2.13
$
0.13
$
0.42
$
1.99
$
0.13
$
0.41
F-18
Table of Contents
2011
2012
2013
Thereafter
Total
(In thousands)
$
206,695
$
186,012
$
86,400
$
$
479,107
3.
Business
Combinations
F-19
Table of Contents
F-20
Table of Contents
2010
2009
2008
Acquisitions
Acquisitions
Acquisitions
(In thousands)
$
26,214
$
27,799
$
299
24,321
4,660
13
27,433
8,335
22,620
4,614
1,458
5,806
5,711
833
4,381
4,776
156
1,492
335,987
52,512
43,891
266,234
135,788
77,000
695,290
231,541
155,502
(14,154
)
(1,691
)
(34
)
(7,866
)
(2,889
)
(1,496
)
(14,560
)
(15,351
)
(29,429
)
(746
)
(2,541
)
(13,703
)
(65,634
)
(34,009
)
(4,817
)
$
629,656
$
197,532
$
150,685
F-21
Table of Contents
Useful
2010
2009
2008
Life
Acquisitions
Acquisitions
Acquisitions
(In years)
(In thousands)
1 - 15
$
156,076
$
57,628
$
1,900
2 - 10
55,641
50,860
42,400
1 - 7
46,789
27,000
31,100
1 - 5
7,728
300
1,600
$
266,234
$
135,788
$
77,000
Table of Contents
Weighted
Average
Average
Risk
Estimated
Estimated
Estimated
Adjusted
Percent
Time to
Cost to
Discount
Company Acquired
Development Projects
Complete
Complete
Complete
Rate
IPR&D
(In years)
(In millions)
(In millions)
Powerline Communication
Solutions
12
%
1.4
$
9.9
18
%
$
4.8
LTE/Femtocell solutions
10
%
3.2
$
10.2
17
%
$
10.1
LTE/WiMAX
51
%
1.1
$
32.3
22
%
$
29.3
Ethernet Passive Optical
Network (EPON) chipsets
and software
11
%
0.9
$
19.3
26
%
$
10.6
High-density switching line
card solutions
85
%
1.0
$
1.9
21
%
$
50.4
Blu-ray application
49
%
1.0
$
4.3
20
%
$
10.9
Xilleon product line
82
%
1.0
$
6.9
24
%
$
31.5
F-23
Table of Contents
Year Ended
December 31,
2010
2009
(In thousands, except per share data)
$
6,928,660
$
4,601,339
$
1,006,147
$
(28,563
)
$
1.98
$
(0.06
)
$
1.85
$
(0.06
)
4.
Cash,
Cash Equivalents and Marketable Securities
Short-Term
Long-Term
Cash and
Marketable
Marketable
Cash Equivalents
Securities
Securities
Total
(In thousands)
$
102,862
$
$
$
102,862
455,242
455,242
414,503
414,503
4,099
586,165
1,359,591
1,949,855
419,415
363,229
782,644
85,858
41,115
126,973
226,302
226,302
$
1,622,423
$
1,035,252
$
1,400,706
$
4,058,381
$
74,044
$
$
$
74,044
571,959
571,959
515,930
515,930
521,022
436,518
957,540
79,988
79,988
11,259
2,098
13,357
155,172
155,172
$
1,397,093
$
532,281
$
438,616
$
2,367,990
F-24
Table of Contents
Gross
Gross
Unrealized
Unrealized
Cost
Gains
Losses
Fair Value
(In thousands)
$
1,953,312
$
1,637
$
(5,094
)
$
1,949,855
782,638
9
(3
)
782,644
126,982
108
(117
)
126,973
$
2,862,932
$
1,754
$
(5,214
)
$
2,859,472
$
956,944
$
724
$
(128
)
$
957,540
79,988
79,988
13,364
5
(12
)
13,357
$
1,050,296
$
729
$
(140
)
$
1,050,885
Level 1
Level 2
Level 3
Fair Value
(In thousands)
$
102,862
$
$
$
102,862
455,242
455,242
414,503
414,503
1,949,855
1,949,855
782,644
782,644
19,832
107,141
126,973
226,302
226,302
$
3,168,596
$
889,785
$
$
4,058,381
$
74,044
$
$
$
74,044
571,959
571,959
515,930
515,930
957,540
957,540
79,988
79,988
5,077
8,280
13,357
155,172
155,172
$
2,279,722
$
88,268
$
$
2,367,990
F-25
Table of Contents
5.
Income
Taxes
Year Ended December 31,
2010
2009
2008
(In thousands)
$
229,142
$
(365,563
)
$
(424,374
)
868,178
437,754
646,689
$
1,097,320
$
72,191
$
222,315
Year Ended December 31,
2010
2009
2008
(In thousands)
$
384,062
$
25,266
$
77,810
20,779
(90,029
)
(39,226
)
(45,087
)
51,802
120,049
(494,821
)
(269,555
)
(138,721
)
(137,467
)
(80,724
)
39,653
82,091
491,240
19,964
(91
)
12,976
$
15,520
$
6,930
$
7,521
F-26
Table of Contents
Year Ended December 31,
2010
2009
2008
(In thousands)
$
(3,690
)
$
(1,607
)
$
(2,966
)
(2,714
)
(250
)
606
20,752
14,202
11,649
14,348
12,345
9,289
1,172
(5,415
)
(1,768
)
1,172
(5,415
)
(1,768
)
$
15,520
$
6,930
$
7,521
December 31,
2010
2009
(In thousands)
$
760,440
$
615,242
43,883
53,667
132,766
145,563
496,179
333,909
61,401
116,818
122,591
120,633
98,421
66,293
1,715,681
1,452,125
(1,620,580
)
(1,434,029
)
95,101
18,096
(111,769
)
(29,287
)
$
(16,668
)
$
(11,191
)
F-27
Table of Contents
F-28
Table of Contents
Year Ended December 31,
2010
2009
2008
(In thousands)
$
400,782
$
21,176
$
21,600
38,921
6,708
3,222
(2,968
)
(4,027
)
(3,646
)
(249,258
)
376,925
$
187,477
$
400,782
$
21,176
F-29
Table of Contents
F-30
Table of Contents
6.
Long-Term
Debt
December 31,
2010
Effective
Amount
Rate
(In thousands)
$
300,000
1.605
%
400,000
2.494
%
700,000
(3,022
)
$
696,978
F-31
Table of Contents
7.
Commitments
and Other Contractual Obligations
Payment Obligations by Year
2011
2012
2013
2014
2015
Thereafter
Total
(In thousands)
$
130,788
$
91,639
$
76,084
$
66,012
$
63,623
$
169,657
$
597,803
567,169
567,169
121,751
18,357
12,701
12,699
12,700
12,609
190,817
300,000
400,000
700,000
$
819,708
$
109,996
$
388,785
$
78,711
$
476,323
$
182,266
$
2,055,789
F-32
Table of Contents
8.
Shareholders
Equity
F-33
Table of Contents
9.
Employee
Benefit Plans
F-34
Table of Contents
Options Outstanding
Weighted
Weighted
Average
Average
Exercise
Exercise
Grant-Date
Number of
Price Range
Price
Fair Value
Shares
per Share
per Share
per Share
(In thousands)
126,142
$
.01 - 81.50
$
24.96
$
15.81
7,229
14.90 - 28.75
25.81
10.19
(4,423
)
.01 - 78.92
30.45
11.43
(6,678
)
.01 - 28.30
13.80
15.29
122,270
.01 - 81.50
25.42
15.66
2,733
17.83 - 29.07
23.26
10.91
(3,643
)
.01 - 48.63
31.12
15.71
(7,954
)
.01 - 31.08
17.93
13.23
113,406
.01 - 81.50
25.71
15.71
2,756
29.39 - 42.34
29.64
9.43
849
0.55 - 41.57
14.26
25.76
(1,316
)
.01 - 81.50
36.47
15.24
(37,477
)
.01 - 44.99
22.56
16.88
78,218
$
.01 - 48.63
$
27.05
$
15.05
F-35
Table of Contents
Restricted Stock Units
Outstanding
Weighted
Average
Grant-Date
Number of
Fair Value
Shares
per Share
(In thousands)
17,053
$
33.50
20,537
24.39
(1,446
)
30.56
(8,522
)
30.93
27,622
27.61
13,738
24.06
(1,442
)
24.51
(11,225
)
28.84
28,693
25.58
12,713
30.91
(1,190
)
26.04
(12,471
)
27.44
27,745
$
27.17
Year Ended December 31,
2010
2009
2008
(In thousands)
$
22,502
$
24,545
$
24,997
341,733
351,884
358,018
118,789
119,918
126,359
$
483,024
$
496,347
$
509,374
2011
2012
2013
2014
Thereafter
Total
(In thousands)
$
420,700
$
252,097
$
129,556
$
23,329
$
$
825,682
F-36
Table of Contents
Employee Stock Options
Employee Stock Purchase Rights
2010
2009
2008
2010
2009
2008
4.08
4.98
4.23
1.23
0.92
1.78
0.39
0.53
0.45
0.39
0.53
0.53
1.61
%
1.83
%
2.88
%
0.25
%
0.46
%
1.96
%
1.00
%
0.00
%
0.00
%
0.76
%
0.00
%
0.00
%
$
13.47
$
10.91
$
10.19
$
11.83
$
7.39
$
8.91
Number of Shares
(In thousands)
78,218
89,129
11,116
27,745
206,208
10.
Goodwill
and Long-Lived Assets
F-37
Table of Contents
Valuation Assumptions
2010
2009
2008
12.0% - 17.7%
12.0% - 17.5%
15.0% - 17.0%
4.0%
4.0%
4.0% - 5.0%
17.0%
17.0%
10.0%
3.4%
4.0%
4.3%
1.26 - 1.52
1.24 - 1.69
1.83 - 2.50
F-38
Table of Contents
11.
Settlement
Costs, Net
12.
Litigation
F-39
Table of Contents
F-40
Table of Contents
F-41
Table of Contents
F-42
Table of Contents
F-43
Table of Contents
F-44
Table of Contents
13.
Business
Enterprise Segments, Significant Customer, Supplier and
Geographical Information
F-45
Table of Contents
Reportable Segments
Broadband
Mobile &
Infrastructure &
All
Communications
Wireless
Networking
Other
Consolidated
(In thousands)
$
2,134,373
$
2,889,226
$
1,587,775
$
206,945
$
6,818,319
446,556
526,177
578,182
(469,055
)
1,081,860
$
1,525,193
$
1,719,998
$
1,055,553
$
189,579
$
4,490,323
180,392
116,882
287,837
(529,039
)
56,072
$
1,722,671
$
1,528,178
$
1,258,044
$
149,232
$
4,658,125
383,582
33,974
390,293
(635,719
)
172,130
Included in the All
Other category:
Year Ended December 31,
2010
2009
2008
(In thousands)
$
206,945
$
189,579
$
149,232
$
483,024
$
496,347
$
509,374
58,594
30,744
19,249
9,644
9,225
2,161
19,045
18,895
171,593
52,625
118,468
15,810
111
7,501
(1,000
)
42,400
50,000
12,541
4,866
3,966
40,416
(17,428
)
21,398
$
676,000
$
718,618
$
784,951
$
(469,055
)
$
(529,039
)
$
(635,719
)
F-46
Table of Contents
Year Ended December 31,
2010
2009
2008
11.1
%
*
*
10.0
10.3
%
*
38.9
34.6
35.8
%
*
Less than 10% of net revenue.
Year Ended December 31,
2010
2009
2008
30.4
%
28.3
%
29.5
%
26.0
24.8
27.9
36.8
37.6
29.3
2.4
2.7
2.8
1.6
1.4
2.3
97.2
%
94.8
%
91.8
%
14.
Quarterly
Financial Data
(Unaudited)
F-47
Table of Contents
(1)
Includes settlement costs of
$48.8 million and an impairment of long-lived assets charge
of $17.3 million.
(2)
Includes settlement costs of
$175.7 million, net of a $63.2 million recovery of
legal expenses.
(3)
Includes impairment of long-lived
assets of $11.3 million, net settlement gains of
$58.4 million and a charitable contribution of
$50.0 million.
15.
Subsequent
Events
F-48
Table of Contents
Where Located
Exhibit
Exhibit
Filed
Number
Description
Form
File No.
No.
Filing Date
Herewith
3
.1
Second Amended and Restated Articles of Incorporation filed with
the California Secretary of State on June 8, 2006
8-K
000-
23993
3.1
08/10/2006
3
.4
Bylaws as amended through December 21, 2007
8-K
000-
23993
3.1
12/21/2007
4
.1
Indenture, dated November 1, 2010, between the registrant
and Wilmington Trust FSB
8-K
000-
23993
4.1
11/01/2010
4
.2
Supplemental Indenture, dated November 1, 2010, between the
registrant and Wilmington Trust FSB, including the forms of
Broadcoms 1.500% Senior Notes due 2013 and
2.375% Senior Notes due 2015.
8-K
000-
23993
4.2
11/01/2010
4
.3
Registration Rights Agreement, dated as of November 1,
2010, among the registrant, Merrill Lynch, Pierce,
Fenner & Smith Incorporated and J.P. Morgan
Securities LLC.
8-K
000-
23993
4.3
11/01/2010
10
.1*
Performance Bonus Plan (as amended and restated March 5,
2010)
8-K
000-
23993
99.1
03/09/2010
10
.2*
Letter Agreement between the registrant and Scott A. McGregor
dated October 25, 2004
10-K/A
000-
23993
10.4
01/23/2007
10
.3*
Fourth Amendment dated August 9, 2010 to Letter Agreement
between the registrant and Scott A. McGregor
10-Q
000-
23993
10.1
10/26/2010
10
.4*
Letter Agreement between the registrant and Eric K. Brandt dated
March 11, 2007
10-Q
000-
23993
10.1
05/01/2007
10
.5*
Third Amendment dated August 9, 2010 to Letter Agreement
between the registrant and Eric K. Brandt
10-Q
000-
23993
10.2
10/26/2010
10
.6*
Form of Revised Letter Agreement for Change in Control Severance
Benefit Program dated August 9, 2010 between the registrant
and each of the following executive officers: Scott A. Bibaud,
Neil Kim, Thomas F. Lagatta, Daniel A. Marotta, and
Robert A. Rango
10-Q
000-
23993
10.5
10/26/2010
10
.7*
Revised Letter Agreement for Change in Control Severance Benefit
Program dated August 9, 2010 between the registrant and
Robert L. Tirva
10-Q
000-
23993
10.6
10/26/2010
10
.8*
Letter Agreement between the registrant and Arthur Chong dated
October 27, 2008
10-K
000-
23993
10.11
02/04/2009
10
.9*
Amendment dated August 9, 2010 to Letter Agreement between
the registrant and Arthur Chong
10-Q
000-
23993
10.3
10/26/2010
10
.10*
Letter Agreement between the registrant and Rajiv Ramaswami
dated January 8, 2010
10-Q
000-
23993
10.1
04/27/2010
10
.11*
Amendment dated August 9, 2010 to Letter Agreement between
the registrant and Rajiv Ramaswami
10-Q
000-
23993
10.4
10/26/2010
Table of Contents
Where Located
Exhibit
Exhibit
Filed
Number
Description
Form
File No.
No.
Filing Date
Herewith
10
.12*
Severance Benefit Plan for Vice Presidents and Above and Summary
Plan Description effective June 1, 2010
8-K
000-
23993
10.1
05/07/2010
10
.13*
Stock Option Amendment Agreement between the registrant and
Thomas F. Lagatta dated December 29, 2006
10-K
000-
23993
10.10
02/20/2007
10
.14*
1998 Stock Incentive Plan, as amended and restated
November 11, 2010
X
10
.15*
1998 Stock Incentive Plan form of Notice of Grant of Stock
Option for executive officers
10-K
000-
23993
10.17
02/04/2009
10
.16*
1998 Stock Incentive Plan form of Stock Option Agreement for
executive officers
10-K
000-
23993
10.21
02/04/2009
10
.17*
1998 Stock Incentive Plan form of Automatic Stock Option
Agreement for Non-Employee Directors (under prior Director
Automatic Grant Program)
10-Q
000-
23993
10.2
11/09/2004
10
.18*
1998 Stock Incentive Plan form of Restricted Stock Unit Issuance
Agreement for Scott A. McGregor
X
10
.19*
1998 Stock Incentive Plan form of Restricted Stock Unit Issuance
Agreement for executive officers other than Scott A. McGregor
X
10
.20*
1998 Stock Incentive Plan form of Restricted Stock Unit Issuance
Agreement for executive officers (for RSUs governed by the
Special RSU Program)
X
10
.21*
1998 Stock Incentive Plan form of Restricted Stock Unit Issuance
Agreement for
Non-Employee
Directors (Annual Award)
10-K
000-
23993
10.29
02/04/2009
10
.22*
1998 Stock Incentive Plan form of Restricted Stock Unit Issuance
Agreement for
Non-Employee
Directors (Pro-rated Awards)
10-K
000-
23993
10.30
02/04/2009
10
.23*
1998 Stock Incentive Plan form of Restricted Stock Unit Award
Agreement for
Non-Employee
Directors (Initial Awards under prior Director Automatic Grant
Program)
10-Q
000-
23993
10.3
05/04/2005
10
.24
1999 Special Stock Option Plan (as amended and restated
July 18, 2003)
10-Q
000-
23993
10.2
08/11/2003
10
.25
1999 Special Stock Option Plan form of Notice of Grant of Stock
Option
S-8
333-
93457
99.2
12/22/1999
10
.26
1999 Special Stock Option Plan form of Stock Option Agreement
10-Q
000-
23993
10.2.1
08/11/2003
10
.27*
Form of Indemnification Agreement for Directors, Elected
Officers and certain employees or agents of the registrant
8-K
000-
23993
10.1
06/24/2008
10
.28*
Restricted Stock Units Incentive Award Program
8-K
000-
23993
10.1
01/20/2011
10
.29*
Restricted Stock Unit Incentive Award Program Form
of Award Letter
8-K
000-
23993
10.2
01/20/2011
10
.30
Settlement and Patent License and
Non-Assert
Agreement by and between Qualcomm Incorporated and the registrant
8-K/A
000-
23993
10.1
07/23/2009
Table of Contents
Where Located
Exhibit
Exhibit
Filed
Number
Description
Form
File No.
No.
Filing Date
Herewith
10
.31
Credit Agreement, dated as of November 19, 2010, among the
registrant, Bank of America, N.A. and the other lenders party
thereto.
8-K
000-
23993
10.1
11/22/2010
10
.32
Lease Agreement dated February 1, 2000 between Conejo
Valley Development Corporation and the registrant
10-K
000-
23993
10.17
03/19/2002
10
.33
First Amendment dated July 1, 2009 to Lease Agreement dated
February 1, 2000 between Conejo Valley Development
Corporation and the registrant.
10-K
000-
23993
10.30
02/03/2010
10
.34
Lease Agreement dated May 18, 2000 between M-D Downtown
Sunnyvale, LLC and the registrant
10-K
000-
23993
10.21
03/31/2003
10
.35
Amendment dated September 30, 2005 to Lease Agreement dated
May 18, 2000 between M-D Downtown Sunnyvale, LLC and the
registrant
10-K
000-
23993
10.43
02/04/2009
10
.36
Second Amendment dated October 15, 2010 to Lease Agreement
dated May 18, 2000 between M-D Downtown Sunnyvale, LLC and
the registrant
X
10
.37
Lease Agreement dated December 17, 2004 between Irvine
Commercial Property Company and the registrant
10-K
000-
23993
10.38
03/01/2005
10
.38
First Amendment, Second Amendment, and Third Amendment dated
June 7, 2005, April 9, 2007 and April 9, 2007,
respectively, to Lease dated December 17, 2004 between
Irvine Commercial Property Company LLC and the registrant
10-Q
000-
23993
10.2
10/24/2007
10
.39
Fourth Amendment dated November 19, 2007 to Lease dated
December 17, 2004 between Irvine Commercial Property
Company LLC and the registrant
10-K
000-
23993
10.43
01/28/2008
10
.40
Lease Agreement dated October 31, 2007 between Irvine
Commercial Property Company LLC and the registrant
10-K
000-
23993
10.44
01/28/2008
10
.41
First Amendment dated November 12, 2008 to Lease Agreement
dated October 31, 2007 between Irvine Commercial Property
Company LLC and the registrant
10-K
000-
23993
10.49
02/04/2009
10
.42
Second Amendment, Third Amendment, and Fourth Amendment dated
July 30, 2010, September 14, 2010 and
November 15, 2010, respectively, to Lease Agreement dated
October 31, 2007 between Irvine Commercial Property Company
LLC and the registrant
X
16
.1
Letter from Ernst & Young LLP to the Securities and
Exchange Commission dated March 18, 2008
8-K
000-
23993
16.1
03/18/2008
21
.1
Subsidiaries of the Company
X
23
.1
Consent of KPMG LLP
X
Table of Contents
Where Located
Exhibit
Exhibit
Filed
Number
Description
Form
File No.
No.
Filing Date
Herewith
31
.1
Certification of the Chief Executive Officer, as required
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
X
31
.2
Certification of the Chief Financial Officer, as required
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
X
32
.1
Certifications of the Chief Executive Officer and Chief
Financial Officer, as required pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002
X
*
A contract, compensatory plan or
arrangement in which directors or executive officers are
eligible to participate.
Confidential treatment has
previously been granted by the SEC for certain portions of the
referenced exhibit pursuant to Rule 406 under the
Securities Act.
Table of Contents
By:
Signature
Title
Date
President and Chief Executive Officer and Director (Principal
Executive Officer)
February 2, 2011
Executive Vice President and Chief Financial Officer (Principal
Financial Officer)
February 2, 2011
Senior Vice President, Corporate Controller and Principal
Accounting Officer
February 2, 2011
Director
February 2, 2011
Director
February 2, 2011
Director
February 2, 2011
Chairman of the Board
February 2, 2011
Director
February 2, 2011
Director
February 2, 2011
Director
February 2, 2011
Table of Contents
BROADCOM CORPORATION
Balance at
Charged (Credited)
Charged to
Balance at
Beginning of
to Costs and
Other
End of
Description
Year
Expenses
Accounts
(a)
Deductions
Year
(In thousands)
$
6,787
$
1,859
$
785
$
(155
)
$
9,276
3,628
30,564
(20,638
)
13,554
1,328
424
(1,752
)
$
11,743
$
32,847
$
785
$
(22,545
)
$
22,830
$
5,354
$
1,561
$
$
(128
)
$
6,787
4,273
22,773
(23,418
)
3,628
4,179
13,167
(16,018
)
1,328
$
13,806
$
37,501
$
$
(39,564
)
$
11,743
$
5,472
$
143
$
$
(261
)
$
5,354
3,245
22,327
(21,299
)
4,273
7,457
(1,000
)
(2,278
)
4,179
$
16,174
$
21,470
$
$
(23,838
)
$
13,806
(a)
Amounts represent balances acquired
through acquisitions.
S-1
Table of Contents
Where Located
Exhibit
Exhibit
Filed
Number
Description
Form
File No.
No.
Filing Date
Herewith
3
.1
Second Amended and Restated Articles of Incorporation filed with
the California Secretary of State on June 8, 2006
8-K
000-
23993
3.1
08/10/2006
3
.4
Bylaws as amended through December 21, 2007
8-K
000-
23993
3.1
12/21/2007
4
.1
Indenture, dated November 1, 2010, between the registrant
and Wilmington Trust FSB
8-K
000-
23993
4.1
11/01/2010
4
.2
Supplemental Indenture, dated November 1, 2010, between the
registrant and Wilmington Trust FSB, including the forms of
Broadcoms 1.500% Senior Notes due 2013 and
2.375% Senior Notes due 2015.
8-K
000-
23993
4.2
11/01/2010
4
.3
Registration Rights Agreement, dated as of November 1,
2010, among the registrant, Merrill Lynch, Pierce,
Fenner & Smith Incorporated and J.P. Morgan
Securities LLC.
8-K
000-
23993
4.3
11/01/2010
10
.1*
Performance Bonus Plan (as amended and restated March 5,
2010)
8-K
000-
23993
99.1
03/09/2010
10
.2*
Letter Agreement between the registrant and Scott A. McGregor
dated October 25, 2004
10-K/A
000-
23993
10.4
01/23/2007
10
.3*
Fourth Amendment dated August 9, 2010 to Letter Agreement
between the registrant and Scott A. McGregor
10-Q
000-
23993
10.1
10/26/2010
10
.4*
Letter Agreement between the registrant and Eric K. Brandt dated
March 11, 2007
10-Q
000-
23993
10.1
05/01/2007
10
.5*
Third Amendment dated August 9, 2010 to Letter Agreement
between the registrant and Eric K. Brandt
10-Q
000-
23993
10.2
10/26/2010
10
.6*
Form of Revised Letter Agreement for Change in Control Severance
Benefit Program dated August 9, 2010 between the registrant
and each of the following executive officers: Scott A. Bibaud,
Neil Kim, Thomas F. Lagatta, Daniel A. Marotta, and Robert
A. Rango
10-Q
000-
23993
10.5
10/26/2010
10
.7*
Revised Letter Agreement for Change in Control Severance Benefit
Program dated August 9, 2010 between the registrant and
Robert L. Tirva
10-Q
000-
23993
10.6
10/26/2010
10
.8*
Letter Agreement between the registrant and Arthur Chong dated
October 27, 2008
10-K
000-
23993
10.11
02/04/2009
10
.9*
Amendment dated August 9, 2010 to Letter Agreement between
the registrant and Arthur Chong
10-Q
000-
23993
10.3
10/26/2010
10
.10*
Letter Agreement between the registrant and Rajiv Ramaswami
dated January 8, 2010
10-Q
000-
23993
10.1
04/27/2010
10
.11*
Amendment dated August 9, 2010 to Letter Agreement between
the registrant and Rajiv Ramaswami
10-Q
000-
23993
10.4
10/26/2010
Table of Contents
Where Located
Exhibit
Exhibit
Filed
Number
Description
Form
File No.
No.
Filing Date
Herewith
10
.12*
Severance Benefit Plan for Vice Presidents and Above and Summary
Plan Description effective June 1, 2010
8-K
000-
23993
10.1
05/07/2010
10
.13*
Stock Option Amendment Agreement between the registrant and
Thomas F. Lagatta dated December 29, 2006
10-K
000-
23993
10.10
02/20/2007
10
.14*
1998 Stock Incentive Plan, as amended and restated
November 11, 2010
X
10
.15*
1998 Stock Incentive Plan form of Notice of Grant of Stock
Option for executive officers
10-K
000-
23993
10.17
02/04/2009
10
.16*
1998 Stock Incentive Plan form of Stock Option Agreement for
executive officers
10-K
000-
23993
10.21
02/04/2009
10
.17*
1998 Stock Incentive Plan form of Automatic Stock Option
Agreement for Non-Employee Directors (under prior Director
Automatic Grant Program)
10-Q
000-
23993
10.2
11/09/2004
10
.18*
1998 Stock Incentive Plan form of Restricted Stock Unit Issuance
Agreement for Scott A. McGregor
X
10
.19*
1998 Stock Incentive Plan form of Restricted Stock Unit Issuance
Agreement for executive officers other than Scott A. McGregor
X
10
.20*
1998 Stock Incentive Plan form of Restricted Stock Unit Issuance
Agreement for executive officers (for RSUs governed by the
Special RSU Program)
X
10
.21*
1998 Stock Incentive Plan form of Restricted Stock Unit Issuance
Agreement for
Non-Employee
Directors (Annual Award)
10-K
000-
23993
10.29
02/04/2009
10
.22*
1998 Stock Incentive Plan form of Restricted Stock Unit Issuance
Agreement for
Non-Employee
Directors (Pro-rated Awards)
10-K
000-
23993
10.30
02/04/2009
10
.23*
1998 Stock Incentive Plan form of Restricted Stock Unit Award
Agreement for
Non-Employee
Directors (Initial Awards under prior Director Automatic Grant
Program)
10-Q
000-
23993
10.3
05/04/2005
10
.24
1999 Special Stock Option Plan (as amended and restated
July 18, 2003)
10-Q
000-
23993
10.2
08/11/2003
10
.25
1999 Special Stock Option Plan form of Notice of Grant of Stock
Option
S-8
333-
93457
99.2
12/22/1999
10
.26
1999 Special Stock Option Plan form of Stock Option Agreement
10-Q
000-
23993
10.2.1
08/11/2003
10
.27*
Form of Indemnification Agreement for Directors, Elected
Officers and certain employees or agents of the registrant
8-K
000-
23993
10.1
06/24/2008
10
.28*
Restricted Stock Units Incentive Award Program
8-K
000-
23993
10.1
01/20/2011
10
.29*
Restricted Stock Unit Incentive Award Program Form
of Award Letter
8-K
000-
23993
10.2
01/20/2011
10
.30
Settlement and Patent License and
Non-Assert
Agreement by and between Qualcomm Incorporated and the registrant
8-K/A
000-
23993
10.1
07/23/2009
Table of Contents
Where Located
Exhibit
Exhibit
Filed
Number
Description
Form
File No.
No.
Filing Date
Herewith
10
.31
Credit Agreement, dated as of November 19, 2010, among the
registrant, Bank of America, N.A. and the other lenders party
thereto.
8-K
000-
23993
10.1
11/22/2010
10
.32
Lease Agreement dated February 1, 2000 between Conejo
Valley Development Corporation and the registrant
10-K
000-
23993
10.17
03/19/2002
10
.33
First Amendment dated July 1, 2009 to Lease Agreement dated
February 1, 2000 between Conejo Valley Development
Corporation and the registrant.
10-K
000-
23993
10.30
02/03/2010
10
.34
Lease Agreement dated May 18, 2000 between M-D Downtown
Sunnyvale, LLC and the registrant
10-K
000-
23993
10.21
03/31/2003
10
.35
Amendment dated September 30, 2005 to Lease Agreement dated
May 18, 2000 between M-D Downtown Sunnyvale, LLC and the
registrant
10-K
000-
23993
10.43
02/04/2009
10
.36
Second Amendment dated October 15, 2010 to Lease Agreement
dated May 18, 2000 between M-D Downtown Sunnyvale, LLC and
the registrant
X
10
.37
Lease Agreement dated December 17, 2004 between Irvine
Commercial Property Company and the registrant
10-K
000-
23993
10.38
03/01/2005
10
.38
First Amendment, Second Amendment, and Third Amendment dated
June 7, 2005, April 9, 2007 and April 9, 2007,
respectively, to Lease dated December 17, 2004 between
Irvine Commercial Property Company LLC and the registrant
10-Q
000-
23993
10.2
10/24/2007
10
.39
Fourth Amendment dated November 19, 2007 to Lease dated
December 17, 2004 between Irvine Commercial Property
Company LLC and the registrant
10-K
000-
23993
10.43
01/28/2008
10
.40
Lease Agreement dated October 31, 2007 between Irvine
Commercial Property Company LLC and the registrant
10-K
000-
23993
10.44
01/28/2008
10
.41
First Amendment dated November 12, 2008 to Lease Agreement
dated October 31, 2007 between Irvine Commercial Property
Company LLC and the registrant
10-K
000-
23993
10.49
02/04/2009
10
.42
Second Amendment, Third Amendment, and Fourth Amendment dated
July 30, 2010, September 14, 2010 and
November 15, 2010, respectively, to Lease Agreement dated
October 31, 2007 between Irvine Commercial Property Company
LLC and the registrant
X
16
.1
Letter from Ernst & Young LLP to the Securities and
Exchange Commission dated March 18, 2008
8-K
000-
23993
16.1
03/18/2008
21
.1
Subsidiaries of the Company
X
23
.1
Consent of KPMG LLP
X
Table of Contents
Where Located
Exhibit
Exhibit
Filed
Number
Description
Form
File No.
No.
Filing Date
Herewith
31
.1
Certification of the Chief Executive Officer, as required
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
X
31
.2
Certification of the Chief Financial Officer, as required
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
X
32
.1
Certifications of the Chief Executive Officer and Chief
Financial Officer, as required pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002
X
*
A contract, compensatory plan or
arrangement in which directors or executive officers are
eligible to participate.
Confidential treatment has
previously been granted by the SEC for certain portions of the
referenced exhibit pursuant to Rule 406 under the
Securities Act.
| the Discretionary Grant Program, under which eligible persons may, at the discretion of the Plan Administrator, be granted options to purchase shares of Common Stock or stock appreciation rights tied to the value of such Common Stock, | ||
| the Stock Issuance Program, under which eligible persons may be issued shares of Common Stock pursuant to restricted stock or restricted stock unit awards or other stock-based awards, made by and at the discretion of the Plan Administrator, that vest upon the completion of a designated service period and/or the attainment of pre-established performance milestones, or under which shares of Common Stock may be issued through direct purchase or as a bonus for services rendered the Corporation (or any Parent or Subsidiary), and | ||
| the Director Automatic Grant Program, under which Eligible Directors shall automatically receive restricted stock units at designated intervals over their period of Board service. |
1
2
1 | The Common Stock issuable under the Plan shall be Class A Common Stock, except to the extent such stock is to be issued upon the exercise of outstanding options incorporated from the Predecessor Plans. For those options, the issuable stock shall be Class B Common Stock. |
3
4
1 | With respect to Section 16 Insiders, the brokerage firm need only be reasonably satisfactory to the Corporation for purposes of administering such procedure. |
5
1. | The following provisions shall govern the exercise of any options held by the Optionee at the time of cessation of Service or death: |
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Participant
:
|
||
|
||
Award Date
:
|
, 20 | |
|
||
Vesting Commencement Date
:
|
, 20 (the Vesting Commencement Date) | |
|
||
Number of Shares
Subject to Award
:
|
shares of Common Stock (the Shares) | |
|
||
Vesting Schedule
:
|
The Shares shall vest in a series of sixteen (16) successive equal quarterly installments upon the Participants completion of each successive three (3)-month period of Service (each date on which such three (3)-month period ends, a Vesting Date) over the forty-eight (48)-month period measured |
|
from the Vesting Commencement Date (the Normal Vesting Schedule). However, the Shares may also vest in whole or in part on an accelerated basis in accordance with the provisions of Sections 3 and 5 of this Agreement. | |
|
||
Issuance Schedule
:
|
Subject to Section 8 of this Agreement, each quarterly installment of Shares to which the Participant becomes entitled in accordance with the Normal Vesting Schedule shall be issued, subject to the Corporations 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 thirty (30) days after the applicable Vesting Date. Any Shares that vest on an accelerated basis pursuant to Section 3 or 5 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 7 of this Agreement. |
2
3
4
5
6
7
8
9
BROADCOM CORPORATION | ||||||
|
||||||
|
By: | |||||
|
||||||
|
||||||
|
Title: | |||||
|
||||||
|
||||||
PARTICIPANT | ||||||
|
||||||
|
Signature: | |||||
|
||||||
|
||||||
|
Name: | |||||
|
||||||
|
||||||
|
Address: | |||||
|
||||||
|
||||||
|
||||||
|
10
A-1
A-2
A-3
A-4
Participant:
|
_____________________________ | |
|
||
Award Date:
|
______________________, 20____ | |
|
||
Vesting
Commencement Date:
|
______________________, 20___ (the Vesting Commencement Date) | |
|
||
Number of Shares
Subject to Award:
|
______________ shares of Common Stock (the Shares) | |
Vesting Schedule:
|
The Shares shall vest in a series of sixteen (16) successive equal quarterly installments upon the Participants completion of each successive three (3)-month period of continuous Service (each date on which such three (3)-month period ends, a Vesting Date) over the forty-eight (48)-month |
|
period measured from the Vesting Commencement Date (the Normal Vesting Schedule). 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. 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 and subject to the limitations contained in Section 4 of this Agreement. | |
|
||
Issuance
Schedule:
|
Subject to Section 9 of this Agreement, each quarterly installment of Shares to which the Participant becomes entitled in accordance with the Normal Vesting Schedule shall be issued, subject to the Corporations 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 thirty (30) days after the applicable Vesting Date. Any Restricted Stock Units 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
3
4
5
6
7
8
9
10
BROADCOM CORPORATION | ||
|
||
By:
|
||
|
||
|
||
Title:
|
||
|
||
|
||
PARTICIPANT | ||
|
||
Signature:
|
||
|
||
|
||
Name:
|
||
|
||
|
||
Address:
|
||
|
||
|
||
|
||
|
11
A-1
A-2
A-3
A-4
Participant:
|
________________________________ | |
|
||
Award Date:
|
______________________, 20___ | |
|
||
Vesting Commencement Date
|
______________________, 20___ (the Vesting Commencement Date) | |
|
||
Number of Shares
Subject to Award:
|
______________ shares of Common Stock (the Shares) | |
|
||
Vesting Schedule:
|
The Shares shall vest upon the Participants continuation in Service through the end of the three (3)-year period measured from the Vesting Commencement Date (the Required Service Period). However, the Shares may vest in whole or in part on an accelerated basis in accordance |
1
|
with the provisions of Sections 3 and 6 of this Agreement. The Required Service Period may also be extended in connection with certain leaves of absence or changes in Employee status, as set forth and subject to the limitations contained in Section 4 of this Agreement. | |
|
||
Issuance Schedule:
|
Subject to the delayed issuance provisions of Section 9 of this Agreement (to the extent applicable), the Shares to which the Participant becomes entitled upon continuation in Service through the completion of the Required Service Period shall be issued upon the completion of such period or as soon thereafter as administratively practicable, but in no event later than thirty (30) days after the completion of such period. Any Restricted Stock Units which vest on an accelerated basis pursuant to Section 3 or 6 of this Agreement shall be settled 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
3
4
5
6
7
8
9
10
11
BROADCOM CORPORATION | ||||||
|
||||||
|
By: | |||||
|
|
|||||
|
Title: | |||||
|
|
|||||
|
||||||
PARTICIPANT | ||||||
|
||||||
|
Signature: | |||||
|
|
|||||
|
Name: | |||||
|
|
|||||
|
Address: | |||||
|
|
|||||
|
||||||
|
|
12
A-1
A-2
A-3
A-4
A-5
190 Mathilda Place | ||
[Broadcom Corporation] |
Monthly Base Rental | ||||||||||||
Rate per Rentable | ||||||||||||
Period | Per Annum | Per Month | Square Foot | |||||||||
September 1, 2010 August 31, 2011
|
$ | 3,750,570.00 | $ | 312,547.50 | $ | 2.50 | ||||||
September 1, 2011 August 31, 2012
|
$ | 3,870,588.24 | $ | 322,549.02 | $ | 2.58 | ||||||
September 1, 2012 August 31, 2013
|
$ | 4,290,652.08 | $ | 357,554.34 | $ | 2.86 | ||||||
September 1,
2013 August 31, 2014
|
$ | 4,410,670.32 | $ | 367,555.86 | $ | 2.94 | ||||||
September 1, 2014 August 31, 2015
|
$ | 4,530,688.56 | $ | 377,557.38 | $ | 3.02 | ||||||
September 1, 2015 August 31, 2016
|
$ | 4,665,709.08 | $ | 388,809.09 | $ | 3.11 | ||||||
September 1, 2016 August 31, 2017
|
$ | 4,800,729.60 | $ | 400,060.80 | $ | 3.20 | ||||||
September 1, 2017 August 31, 2018
|
$ | 4,920,747.84 | $ | 410,062.32 | $ | 3.28 | ||||||
September 1, 2018 August 31, 2019
|
$ | 5,070,770.64 | $ | 422,564.22 | $ | 3.38 | ||||||
September 1, 2019 August 31, 2020
|
$ | 5,205,791.16 | $ | 433,815.93 | $ | 3.47 | ||||||
September 1,
2020
Extended Expiration Date
|
$ | 5,355,813.96 | $ | 446,317.83 | $ | 3.57 |
190 Mathilda Place | ||||
[Broadcom Corporation] |
-2-
190 Mathilda Place | ||||
[Broadcom Corporation] |
-3-
190 Mathilda Place | ||||
[Broadcom Corporation] |
-4-
190 Mathilda Place | ||||
[Broadcom Corporation] |
-5-
190 Mathilda Place | ||||
[Broadcom Corporation] |
-6-
190 Mathilda Place | ||||
[Broadcom Corporation] |
-7-
190 Mathilda Place | ||||
[Broadcom Corporation] |
-8-
190 Mathilda Place | ||||
[Broadcom Corporation] |
-9-
190 Mathilda Place | ||||
[Broadcom Corporation] |
-10-
190 Mathilda Place | ||||
[Broadcom Corporation] |
-11-
190 Mathilda Place | ||||
[Broadcom Corporation] |
-12-
190 Mathilda Place | ||||
[Broadcom Corporation] |
-13-
190 Mathilda Place | ||||
[Broadcom Corporation] |
-14-
190 Mathilda Place | ||||
[Broadcom Corporation] |
-15-
LANDLORD | TENANT | |||||||
|
||||||||
SPF MATHILDA, LLC, | BROADCOM CORPORATION, | |||||||
a Delaware limited liability company | a California corporation | |||||||
|
||||||||
By:
Name: |
/s/ Steve M. Zaun
|
By:
Name: |
/s/ Ken
Venner 10-18-10
|
|||||
Title:
|
Vice President | Title: | Executive Vice President and Chief | |||||
|
Information Officer | |||||||
|
||||||||
|
By:
Name: |
/s/ Eric Brandt
|
||||||
|
Title: | Executive Vice President and Chief | ||||||
|
Financial Officer |
190 Mathilda Place | ||||
[Broadcom Corporation] |
-16-
2
3
4
5
6
7
LANDLORD: | TENANT: | |||||||||
|
||||||||||
THE IRVINE COMPANY LLC | BROADCOM CORPORATION, | |||||||||
a Delaware limited liability company | a California corporation | |||||||||
|
||||||||||
By:
|
/s/ Douglas G. Holte
|
By: |
/s/ Kenneth E. Venner
|
|||||||
Douglas
G. Holte, President
|
Kenneth E. Venner, Senior Vice President,
|
|||||||||
Office Properties
|
Corporate Services and CIO
|
|||||||||
|
||||||||||
By:
|
/s/ Holly McManus
|
By: |
/s/ Eric K. Brandt
|
|||||||
Holly McManus
|
Eric K. Brandt, Executive Vice President
|
|||||||||
Vice President, Operations
|
and Chief Financial Officer
|
|||||||||
Office Properties
|
8
RE:
|
Lease Amendment | Broadcom Corporation | ||
|
5251 California, Suite 250 | |||
|
Irvine, California 92617 |
1
2
3
4
5
6
LANDLORD: | TENANT: | |||||||||||||||
|
||||||||||||||||
THE IRVINE COMPANY LLC | BROADCOM CORPORATION, | |||||||||||||||
a Delaware limited liability company | a California corporation | |||||||||||||||
|
||||||||||||||||
By:
|
/s/ Leslie A. Corea | By: | /s/ Kenneth E. Venner 9/10/10 | |||||||||||||
|
|
|
||||||||||||||
|
Senior Vice President, | Corporate Services and CIO | ||||||||||||||
|
On behalf of the Office of the Chairman | |||||||||||||||
|
||||||||||||||||
By:
|
/s/ Douglas G. Holte | By: | /s/ Eric K. Brandt | |||||||||||||
|
|
|
||||||||||||||
|
Office Properties | and Chief Financial Officer |
7
1
I. | ARCHITECTURAL AND CONSTRUCTION PROCEDURES. |
A. | Subsequent to the date of this Amendment, Landlord shall approve a preliminary plan prepared by Beck and Martin, Architects (Tenants Architect ) for the 5231 California Tenant Improvements and for the 5241 California Tenant Improvements (individually, a Preliminary Plan, and collectively, the Preliminary Plans ) in accordance with Paragraph I.B below. The Preliminary Plan shall include Landlords building standard tenant improvements, materials and specifications for the Project and certain changes and/or additions to the building standards (as such modified building standard specifications were previously incorporated into the Tenant Improvements made by Tenant in the 5211 California Premises) which are reasonably approved by Landlord for the Tenant Improvement Work and noted or shown on the approved Preliminary Plans (collectively, Building Standard Improvements ). Except for the construction and/or installation of certain similar Landlord approved tenant improvements previously constructed and/or installed in the Premises, any subsequent addition to or variation from Building Standard Improvements incorporated into the Tenant Improvements Work which is not indicated on the applicable Preliminary Plan agreed upon by Landlord and Tenant pursuant to Paragraph I.B below is herein referred to as a Non-Standard Improvement . Except as provided in Paragraph I.D below, Tenant shall have no obligation to demolish, remove or alter any of the Building Standard Improvements or any other Tenant Improvements (except for Non-Standard Improvements approved by Landlord in the Preliminary Plans and required to be removed as a condition of Tenants effective surrender of the Premises) upon the expiration or earlier termination of the Lease. Notwithstanding the foregoing, Tenant shall be required to remove at the expiration or earlier termination of the Lease, any security related equipment installed by or on behalf of Tenant in the Premises and the Building including, but not limited to, turnstyles. | ||
B. | Landlord shall not withhold or condition its consent to the Preliminary Plans unless, and then only to the extent, a Design Problem exists. A Design Problem will be deemed to exist if the change or addition or improvement to the 5231 California Building, the 5241 California Building or Premises (i) does not comply with Applicable Laws, (ii) would have an adverse effect on the Building Structure, (iii) |
1
would have an adverse effect on the Building Systems, (iv) would affect the exterior appearance of the 5231 California Building or the 5241 California Building, (v) would cause Landlord to incur increased costs to operate or manage the 5231 California Building or the 5241 California Building and Tenant does not agree to pay for such increased costs, or (vi) would alter or replace the mechanical systems serving the 5231 California Building or the 5241 California Building, including without limitation, the HVAC and life-safety systems, the ceiling grid and/or the lighting and plumbing systems serving the 5231 California Building or the 5241 California Building (individually and collectively, a Design Problem ); provided, however, that in connection with the systems described in Subsection (vi) above, notwithstanding anything to the contrary in the Lease, Landlords sole rights with respect to such a Design Problem shall be to advise Tenant, at the time of Landlords approval of such alteration or replacement of such systems(s), whether or not Tenant shall be required to restore such system(s) with the Building Standard Improvements prior to the Expiration Date. Landlord shall have five (5) business days from the receipt of the Preliminary Plan(s) from Tenant to approve or disapprove such proposed Preliminary Plan. Should Landlord disapprove the Preliminary Plan, such disapproval shall be accompanied by specific reasons for disapproval specifying why a Design Problem exists and a detailed list of requested revisions. Any revision so reasonably requested by Landlord shall be incorporated into a revised Preliminary Plan by Tenants Architect. Tenants Architect shall submit a revised Preliminary Plan (as same has been modified as herein provided to eliminate or correct any Design Problem) to Landlord for approval, which shall not be withheld or conditioned by Landlord except to the extent necessary to eliminate any Design Problems, within five (5) business days following submission by Tenants Architect with this procedure being repeated until the Preliminary Plan has been approved by Landlord. | |||
C. | Tenants Architect shall prepare and shall deliver to Landlord working drawings and specifications (Working Drawings and Specifications ) based on the approved Preliminary Plan, in a form which is complete enough to allow subcontractors to bid on the work and to obtain all applicable permits, and which drawings may be completed in phases if phased construction of the Tenant Improvement Work is determined by Landlord and Tenant to be the most cost effective means of construction without delaying the completion of the Tenant Improvement Work. The Working Drawings and Specifications shall be prepared by Tenants Architect in accordance with all laws, permits and ordinances, and shall be compatible with Landlords CADD system. Landlord shall have five (5) business days from the receipt thereof to approve or disapprove the Working Drawings and Specifications (or any applicable phase thereof submitted by Tenant). In no event shall Landlord withhold or condition its approval, except for items not consistent with the approved Preliminary Plan and which create a Design Problem. Should Landlord disapprove the Working Drawings and Specifications, such disapproval shall be accompanied by specific reasons for disapproval specifying the inconsistencies with the approved Preliminary Plan and/or why a Design Problem exists and a detailed list of requested revisions. Any revision so reasonably requested by Landlord shall be incorporated by Tenants Architect into a revised set of Working Drawings and Specifications to the extent necessary to eliminate or correct any inconsistencies with the approved Preliminary Plan or any Design Problems, with this procedure being repeated until the Landlord has approved the Working Drawings and Specifications. | ||
D. | To the extent a Design Problem does not exist, Landlord shall consent in writing to Tenants request for a revision to the Working Drawings and Specifications ( Change ), including any modification of a Standard Improvement to a Non-Standard Improvement in the applicable Preliminary Plan or any other modification of the Working Drawings and Specifications, if requested in writing by Tenant. In addition, Landlord agrees that it shall not withhold its consent to Tenants requested Changes to previously approved Non-Standard Improvements, unless such requested Change to the Non-Standard Improvements creates a Design Problem. All Standard Tenant Improvements and Non-Standard Improvements which are permanently affixed to the Premises shall become the property of Landlord at the end of the Lease Term and |
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shall be surrendered with the Premises at the end of the Term; except that Landlord may, by notice to Tenant given concurrently with the approval of the Working Drawings and Specifications, require Tenant to either remove all or any of the Tenant Improvements which constitute a Design Problem, to restore the applicable mechanical system(s) in which a Design Problem exists with the applicable Building Standard Improvements and to repair any damage to the Premises or the Common Area arising from such restoration and removal, or to reimburse Landlord for the reasonable cost of such removal, repair and replacement within thirty (30) days following invoicing by Landlord. Any such removals, repairs and replacements by Tenant shall be completed by the Expiration Date, or sooner termination of this Lease. | |||
E. | Landlord shall submit the Working Drawings and Specifications to a bidding process involving KPRS, Roel Construction and at least one other licensed and reputable general contractor mutually agreed upon by Landlord and Tenant, who shall submit bids to construct the Tenant Improvements as set forth on, and in accordance with, the Working Drawings and Specifications. If requested by Landlord, all bidders shall seek bids from those HVAC, mechanical, electrical and plumbing engineers listed on Schedule 2 to this Work Letter (the Pre-Approved Engineers ), provided that the fees charged by the Pre-Approved Engineers shall be commercially reasonable. Landlord shall, within one (1) business day of receipt of the bids, provide copies of the bid responses to Tenant. After adjustments, in consultation with Landlord, for any inconsistent assumptions to reflect an apples to apples comparison, Tenant shall select the qualified bidder as general contractor (the TI Contractor ) and the bid so selected shall be referred to as the Bid Amount . The TI Contractor so selected by Tenant shall be retained by Landlord to assist Tenant and Tenants Architect in value engineering the Working Drawings and Specifications as hereinafter provided. | ||
F. | Following Landlords retention of the TI Contractor, Tenant may coordinate value engineering of the Working Drawings and Specifications by the Tenants Architect, the TI Contractor and one or more of its subcontractors, and based on such value engineering efforts, Tenants Architect prepare and submit proposed final construction drawings and specifications (the Final Drawings and Specifications ) to Landlord for Landlords approval. Landlord shall have five (5) business days from the receipt thereof to approve or disapprove such Final Drawings and Specifications. In no event shall Landlord withhold or condition its approval, except for items not consistent with the approved Working Drawings and Specifications and which create a Design Problem. Should Landlord disapprove the proposed Final Drawings and Specifications, such disapproval shall be accompanied by specific reasons for disapproval specifying the inconsistencies with the approved Working Drawings and Specifications and/or why a Design Problem exists and a detailed list of requested revisions. Any revision so reasonably requested by Landlord shall be incorporated by Tenants Architect into the Final Drawings and Specifications to the extent necessary to eliminate or correct any inconsistencies with the approved Working Drawings and Specifications or any Design Problems, with this procedure being repeated until the Landlord has approved the Final Drawings and Specifications. Tenants Architect shall submit a complete set of approved Final Drawings and Specifications (as same may have been modified as herein provided to incorporate Landlords suggested revisions) to the City of Irvine for all applicable building permits necessary to allow the TI Contractor to commence and fully complete the construction of the Tenant Improvements (the Permits ), and, in connection therewith, Landlord shall coordinate with Tenant in order to allow Tenant, at its option, to take part in all phases of the permitting process. No material changes, modifications or alterations in the Final Drawings and Specifications may be made during the permitting process without the prior written consent of both Landlord and Tenant, which consent may not be unreasonably withheld, conditioned or delayed by either of them. | ||
G. | Notwithstanding anything to the contrary herein or in the Lease, the costs associated with any ADA or other code compliance requirements of the Permits for upgrades or |
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alterations to the exterior Common Areas of the Project (including, without limitation, the Projects parking facility and all points of access into the 5241 California Building and the 5231 California Building) shall not be included in the cost of the Tenant Improvement Work (Code Compliance Work ). Landlord shall be responsible for performing any Code Compliance Work that is imposed as a condition to Tenants ability to obtain the Permit for the construction of the Tenant Improvements, except where such requirements are imposed due to the unique nature of the Tenant Improvements or Change requested by Tenant (as opposed to general office improvements), in which case Tenant shall be responsible for the cost of any such Code Compliance Work as part of the Completion Cost. | |||
H. | Within fifteen (15) days following the Landlords and Tenants final mutual approval of the Final Drawings and Specifications (as evidenced by their written acknowledgment thereof), Tenant and the TI Contractor shall complete their negotiation of the Final Cost Proposal and Landlord shall provide Tenant with a reasonably detailed line item summary of the items of Completion Cost incurred by Landlord prior to entering into the TI Contract (the Design Period Costs ). For purposes of this Work Letter, the Final Cost Proposal shall consist of the final negotiated bid from the TI Contractor approved by Tenant. Following receipt of the approved Final Cost Proposal and the Over-Allowance Amount (as defined in Section II.D below) from Tenant, Landlord shall enter into a lump sum or fixed price construction contract with the TI Contractor for construction of the Tenant Improvements for a cost of work not to exceed the Final Cost Proposal approved by Tenant (the TI Contract ), and shall commence the construction of the Tenant Improvements. Tenant shall have no obligation to pay for, nor shall any portion of the Landlords Contribution be paid for, the cost of any completion or performance bond relating to (nor any similar security for) the Tenant Improvement Work. | ||
I. | The TI Contract shall contain, at a minimum, terms and provisions requiring that TI Contractor name Tenant as an additional insured on TI Contractors commercial general liability insurance policy and naming Tenant as an additional indemnitee with the same rights of the owner set forth in any indemnity contained therein, and as a third-party beneficiary with respect to any warranties contained therein; provided, however that Tenant will not interfere with Landlords enforcement of any such warranties during Landlords one (1) year warranty period as as long as Landlord is diligently pursuing enforcement of any such warranty. The TI Contract shall also require, to the extent negotiable, that Tenant be named as third-party beneficiaries under all construction and equipment warranties (including without limitation, any mechanical, electrical and plumbing equipment installed as part of the Tenant Improvements, which Landlord shall endeavor to obtain for a minimum warranty term of ten (10) years from the date of Substantial Completion of the Tenant Improvements as shall be directed by Tenant, with the right to enforce such warranties directly against the obligor named therein. The cost of causing the construction and equipment warranties to have terms in excess of one (1) year shall be at Tenants sole cost and expense; provided, however, that Tenant shall have sole discretion with respect to the decision to obtain any warranty exceeding a term of one (1) year if Tenant is to be liable for the cost thereof. | ||
J. | As part of the cost of the Tenant Improvement Work, Landlord shall carry (or shall require the TI Contractor to carry) Builders All Risk insurance in an amount not less than the replacement cost of the Tenant Improvements, which shall cover the restoration of the Tenant Improvements in the event of any construction period casualty. Landlords failure to maintain (or to cause the TI Contractor to maintain) such insurance shall not affect Landlords obligation to complete the Tenant Improvement Work, nor result in Tenants obligation to incur any additional cost for the Tenant Improvements, which shall be completed without any increase in the Over-Allowance Amount payable by Tenant due to Landlords failure to so maintain such insurance. The TI Contractor and each of its subcontractors shall comply with Landlords requirements as generally imposed on third party |
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contractors, including without limitation all insurance coverage requirements and the obligation to furnish appropriate certificates of insurance to Landlord, prior to commencement of construction or the Tenant Improvement Work. | |||
K. | A construction schedule shall be incorporated into the TI Contract approved by Tenant (the Construction Schedule ), which shall include a period of at least ten (10) days prior to Substantial Completion for Tenants access to the 5231 California Premises in order to perform the Tenants Fit-Out Work (as defined in Section III.A below); and any updated Construction Schedule shall be provided to Tenant promptly following any construction meeting where a material change to such schedule is approved, and weekly progress updates shall be supplied during the construction of the Tenant Improvements. | ||
L. | Prior to Substantial Completion (as defined in Section I.M below) of the Tenant Improvement Work, Landlord shall notify the TI Contractor, Tenant and Tenants Architect of the date and time of the inspection of the Tenant Improvement Work for purposes of determining whether the Tenant Improvement Work is Substantially Complete. Such scheduled date and time for the walk-through is referred to herein as the Walk-Through Date. Landlord, Tenant, Tenants Architect and the TI Contractor, shall meet at the 5231 California Premises or at the 5231 California Premises, as applicable, on the Walk-Through Date to determine whether the Tenant Improvement Work is Substantially Complete. If Tenants Representative is not available on the Walk-Through Date, Tenant shall notify Landlord of the same, in writing, at least two (2) days prior to the Walk-Through Date, in which case, the parties shall coordinate another date and time for the walk-through. Both Landlord and Tenant shall have the right to attend the walk-through inspections. If during the walk-through inspection of 5231 California Premises or the 5241 California Premises, Landlord and Tenant agree that the Tenant Improvement Work is Substantially Complete therein, then within two (2) business days following the Walk-Through Date associated with such walk-through inspection: (a) Landlord shall provide Tenant with a written list of those items of the Tenant Improvement Work that are in need of repair, or that have yet to be completed (the Punch List ); provided, however, that any Punch List items shall be minor in nature, shall not materially impair Tenants use or occupancy of the 5231 California Premises or the 5241 California Premises, as applicable, and shall, in any case, be reasonably capable of completion within thirty (30) days after the applicable Walk-Through Date. Should Tenant disagree with any items on (or excluded from) the Punch List, Tenant shall notify Landlord, in writing, within two (2) business days following receipt of the proposed Punch List from Landlord, of such disagreement and Tenants proposed changes to the Punch List. If the parties are unable to agree upon the Punch List scope of work, then any such disagreement shall be resolved in accordance with Section IV of this Work Letter. | ||
M. | Upon Substantial Completion of the Tenant Improvement Work, Landlord shall cause to be provided to Tenant (i) as-built drawings of the Tenant Improvements signed by the Tenants Architect, (ii) the final Punch List signed by Landlord, Tenant and the TI Contractor, (iii) the Required Certificate (as defined below) for the 5231 California Premises or the 5241 California Premises, as applicable, and (iv) those other items indicated on Schedule 3 to this Work Letter (collectively, the Close-Out Package ). For purposes of this Work Letter and the Amendment to which it is attached, the Tenant Improvement Work shall be Substantially Complete, and Substantial Completion of the Tenant Improvement Work shall occur, upon the completion of construction of the Tenant Improvements in accordance with the Approved Working Drawings, with the exception of any minor Punch List items (which do not materially affect Tenants use and occupancy of the 5231 California Premises or of the 5241 California Premises, as applicable), and as evidenced by a temporary certificate of occupancy or its legal equivalent for the 5231 California Premises or for the 5241 California Premises, as applicable, to the extent required by the City of Irvine (the Required Certificate ). |
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N. | Landlord shall cause the Tenant Improvement Work to be prosecuted at all times in accordance with all state, federal and local laws, regulations and ordinances, including without limitation all OSHA and other safety laws, the Americans with Disabilities Act ( ADA ) and all applicable governmental permit and code requirements. The Tenant Improvement Work shall be subject to inspection at all times by Tenant and its representatives. | ||
O. | Tenant hereby designates Hector Hershberger (949-926-5348) (Tenants Representative ) as its representative and authorized agent for the purpose of receiving notices, approving submittals and issuing requests for Changes, and Landlord shall be entitled to rely upon authorizations and directives of such person(s) as if given directly by Tenant. Tenant may amend the designation of its construction representative(s) at any time upon delivery of written notice to Landlord. | ||
P. | Tenant and Landlord shall hold regular meetings at a reasonable time (but in no event to be required more often than weekly), with the Tenants Architect and the TI Contractor regarding the progress of the preparation of Final Drawings and Specifications, the Final Cost Proposal and the construction of the Tenant Improvements, which shall be held at the 5231 California Premises during the construction of the Tenant Improvements, or as otherwise mutually agreed by Landlord and Tenant. Tenants Representative shall receive prior notice of, and shall have the right to attend, all such meetings. In addition, minutes shall be taken at all such meetings by Tenants Architect, and a copy of which minutes shall be promptly delivered by Tenants Architect to Tenant. One such meeting each month shall include the review of Contractors current request for payment. |
II. | COST OF THE TENANT IMPROVEMENTS WORK |
A. | Landlord shall provide to Tenant a tenant improvement allowance in the amount of One Million Three Hundred Forty-Six Thousand One Hundred Twelve Dollars ($ 1,346,112.00) (the Landlords 5231 California Contribution ), based on $27.65 per usable square foot of the 5231 California Premises, towards the Completion Cost (as hereinafter defined) of the 5231 California Tenant Improvements, with any excess cost of the 5231 California Tenant Improvements to be borne solely by Tenant. If the actual Completion Cost of the 5231 California Tenant Improvements is less than the maximum amount provided for the Landlords 5231 California Contribution, then such savings shall inure to the benefit of Landlord and Tenant shall not be entitled to any credit or debit. Landlord shall cause the TI Contractor to construct the 5231 California Tenant Improvements in a good and workmanlike manner substantially in accordance with the approved Working Drawings and Specifications therefor, and substantially in accordance with the approved Construction Schedule included in the TI Contract, subject only to Tenant Delays and any events of force majeure. Subject to Tenants payment obligations contained in Section II.D below, Landlord shall construct and complete the Tenant Improvement Work free of any mechanics and/or material-mens liens. | ||
B. | Landlord shall provide to Tenant a tenant improvement allowance in the amount of One Million One Hundred Ninety-Four Thousand Seven Hundred Five Dollars ($1,194,705.00) (the Landlords 5241 California Contribution ), based on $24.54 per usable square foot of the 5241 California Premises, towards the Completion Cost (as hereinafter defined) of the 5241 California Tenant Improvements, with any excess cost of the 5241 California Tenant Improvements to be borne solely by Tenant. If the actual Completion Cost of the 5241 California Tenant Improvements is less than the maximum amount provided for the Landlords 5241 California Contribution, then such savings shall inure to the benefit of Landlord and Tenant shall not be entitled to any credit or debit. Landlord shall cause the TI Contractor to construct the 5241 California Tenant Improvements in a good and workmanlike manner substantially in accordance with the approved Working Drawings and |
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Specifications therefor, and substantially in accordance with the approved Construction Schedule included in the TI Contract, subject only to Tenant Delays and any events of force majeure. Subject to Tenants payment obligations contained in Section II.D below, Landlord shall construct and complete the Tenant Improvement Work free of any mechanics and/or material-mens liens. | |||
C. | The Completion Cost shall mean the sum of the following costs incurred by Landlord toward the design, permitting and construction of the 5231 California Tenant Improvements and the 5241 California Tenant Improvements in accordance with the approved Working Drawings and Specifications therefor, including but not limited to the following: (i) payments made by Landlord to Tenants Architect (and any amount paid by Landlord to Tenant to reimburse Tenant for payments made to Tenants Architect) to prepare the Preliminary Plan, the Working Drawings and Specifications, and the Final Drawings and Specifications (and any revisions thereto), including Tenants Architects participation in any value engineering activities and in the design of any Changes requested by Tenant; (ii) the cost of any changes to the Final Drawings and Specifications required for the permits; (iii) payments made to the TI Contractor in accordance with the terms and conditions of the TI Contract and this Work Letter, for the construction of the Tenant Improvements, and all materials incorporated into the Tenant Improvement Work, including any work performed by the TI Contractor pursuant to any Change Orders requested by Tenant (the TI Construction Costs ); (iv) TI Contractors profit and overhead, general conditions and insurance costs included in the TI Contract; (v) payments made to engineers, contractors, subcontractors and other third party consultants in the design and performance of the Tenant Improvement Work; (vi) permit fees and other sums paid to governmental agencies as required by or for the Permits; (vii) the Landlords Construction Supervision Fee (as hereinafter defined); (viii) the cost of Tenants security and cabling systems, in an amount not to exceed $2.50 per rentable square feet of the Premises; (ix) to the extent not obtained by the TI Contractor as part of the TI Construction Costs, the Builders Risk Insurance premium (as defined in Section I.I above); and (x) any sales and use taxes associated with any of the foregoing costs of the Tenant Improvement Work. Landlord shall receive a construction supervision fee for managing the work of the Tenant Improvements in the amount of two and one-half percent (2 1 / 2 %) of the costs described in Subsections (ii) through (iv) above (the Construction Management Fee ). | ||
D. | Subject to the terms and conditions of this Work letter, Tenant shall be obligated to pay Landlord for any excess of the Completion Cost over the Landlords Contribution (the Over-Allowance Amount ). When Tenant delivers the Final Cost Proposal to Landlord pursuant to Section I.H above, Tenant shall also deliver to Landlord the Over-Allowance Amount based on the Final Cost Proposal. Any increases in the Over-Allowance Amount resulting from any Changes requested or approved in advance by Tenant shall be delivered to Landlord within fifteen (15) days of Tenants receipt of an invoice for such portion of the Over-Allowance Amount from Landlord. Any unpaid remainder of the Over-Allowance Amount shall be due and payable within fifteen (15) days of Tenants receipt of an invoice for such portion of the Over-Allowance Amount, which invoice shall not be delivered by Landlord until all Punch List work associated with the Tenant Improvements is completed. |
III. | TENANTS FIT-OUT WORK AND TENANT DELAYS |
A. | Provided that Tenant and its agents do not interfere with the TI Contractors work in the either the 5231 California Premises or in the 5241 California Premises, Landlord shall allow Tenant access to the 5231 California Premises and the 5241 California Premises as soon as is reasonably practicable, up to forty-five (45) days prior to the Substantial Completion of the Tenant Improvement Work therein, for the purpose of Tenants installation of Tenants equipment and fixtures (including Tenants data and telephone cabling); and Landlord shall cause the TI Contractor to provide Tenant with reasonable access to the 5231 California Premises and the 5241 California |
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Premises at least ten (10) days prior to Substantial Completion of the Tenant Improvement Work therein for the purpose of Tenants installation of Tenants furniture, trade fixtures and computer, telephone and office equipment (the Tenants Fit-Out Work ). Prior to Tenants entry into the Premises as permitted by the terms of this Section III.A, Tenant shall submit a schedule to Landlord and the TI Contractor, for their approval (not to be unreasonably withheld, and subject to their reasonable cooperation in accommodating such access), which schedule shall detail the timing and purpose of Tenants entry. Tenant shall hold Landlord harmless from and indemnify, protect and defend Landlord against any loss or damage to the Building or the Tenant Improvements, and against injury to any persons, caused by Tenants actions pursuant to this Section III.A. Landlord shall provide Tenant with reasonable access to and use of the elevators of the 5231 California Building and the 5241 California Building for the purpose of giving Tenant reasonable access for performing the Tenants Fit Out Work on the second floor thereof. | |||
B. | Except as provided in this Section III.B, the Commencement Date for the 5231 California Premises shall occur as set forth in Section III.C(1) of this Amendment. To the extent there shall be a delay or there are delays in the Substantial Completion of the 5231 California Tenant Improvements or in the occurrence of any of the other conditions precedent to the Commencement Date for the 5231 California Premises, as set forth in this Amendment, as a direct or indirect, result of: |
then such delay or delays shall be known collectively as Tenant Delays ; provided, however, Tenant Delays shall not include any such delays to the extent caused by Landlord or Landlords agents. In the event of any such Tenant Delays, then |
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IV. | DISPUTE RESOLUTION |
A. | All claims or disputes between Landlord and Tenant arising out of, or relating to, this Work Letter shall be decided by the JAMS/ENDISPUTE ( JAMS ), or its successor, with such arbitration to be held in Orange County, California, unless the parties mutually agree otherwise. Within 10 business days following submission to JAMS, JAMS shall designate three arbitrators and each party may, within 5 business days thereafter, veto one of the three persons so designated. If two different designated arbitrators have been vetoed, the third arbitrator shall hear and decide the matter. If less than 2 arbitrators are timely vetoed, JAMS shall select a single arbitrator from the non-vetoed arbitrators originally designated by JAMS, who shall hear and decide the matter. Any arbitration pursuant to this section shall be decided within 30 days of submission to JAMS. The decision of the arbitrator shall be final and binding on the parties. All costs associated with the arbitration shall be awarded to the prevailing party as determined by the arbitrator. | ||
B. | Notice of the demand for arbitration by either party to the Work Letter shall be filed in writing with the other party to the Work Letter and with JAMS and shall be made within a reasonable time after the dispute has arisen. The award rendered by the arbitrator shall be final, and judgment may be entered upon it in accordance with applicable law in any court having jurisdiction thereof. Except by written consent of the person or entity sought to be joined, no arbitration arising out of or relating to this Work Letter shall include, by consolidation, joinder or in any other manner, any person or entity not a party to the Work Letter unless (1) such person or entity is substantially involved in a common question of fact or law, (2) the presence of such person or entity is required if complete relief is to be accorded in the arbitration, or (3) the interest or responsibility of such person or entity in the matter is not insubstantial. | ||
C. | The agreement herein among the parties to arbitrate shall be specifically enforceable under prevailing law. The agreement to arbitrate hereunder shall apply only to disputes arising out of, or relating to, this Work Letter, and shall not apply to other matters of dispute under the Lease except as may be expressly provided in the Lease. |
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project name, location
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PAR #, date
general contractor name
general contractor contact info
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Broadcom Corporation
5300 California Avenue
Irvine, California 92619
RE: Lease Amendment
Broadcom Corporation
5231 California, Suite 100
Irvine, California 92617
Michael S. Hodges
Senior Leasing Director
Lic. 01027655
The Irvine Realty Company
As agent for Landlord
:kb
(5251 California Suite 150)
5231 California Premises approximately 53,840 rentable square feet
5241 California Premises approximately 53,840 rentable square feet
5251 California Premises approximately 14,336 rentable square feet
5251 California Expansion Space approximately 2,021 rentable square feet
LANDLORD:
TENANT:
THE IRVINE COMPANY LLC
a Delaware limited liability company
BROADCOM CORPORATION,
a California corporation
/s/ Steven M. Case
By
/s/ Kenneth E. Venner
Steven M. Case
Executive Vice President
Office Properties
Kenneth E. Venner, Senior Vice President
Corporate Services and CIO
/s/ Holly McManus
By
/s/ Eric K. Brandt
Holly McManus, Vice President
Operations, Office Properties
Eric K. Brandt, Executive Vice President
and Chief Financial Officer
First Floor
State or Other Jurisdiction of | ||||
Name of Entity
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Incorporation or Organization | |||
Broadcom International Limited
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Cayman Islands | |||
Broadcom Singapore Pte Ltd.
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Singapore | |||
Broadcom Asia Distribution Pte Ltd.
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Singapore | |||
ServerWorks Corporation
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Delaware | |||
ServerWorks International Ltd.
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Cayman Islands |
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/s/ Scott A. McGregor | |
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Scott A. McGregor | |
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President and Chief Executive Office | |
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(Principal Executive Officer) |
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/s/ Eric K. Brandt | |
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Eric K. Brandt | |
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Executive Vice President and
Chief Financial Officer (Principal Financial Officer) |
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/s/ Scott A. McGregor | |
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Scott A. McGregor | |
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Chief Executive Officer |
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/s/ Eric K. Brandt | |
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||
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Eric K. Brandt | |
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Chief Financial Officer |