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EXHIBIT 10.2
SEPARATION AGREEMENT AND RELEASE OF ALL CLAIMS
This Separation Agreement and Release of All Claims (the
"AGREEMENT") is
made by and between Andrew J. Pease ("Executive") and Broadcom
Corporation, a
California corporation (the "Company"), effective as of June 1,
2006.
RECITALS
A. Executive is the Company's Senior Vice President, Global
Sales.
B. Executive and
the Company mutually desire to end Executive's
employment by the Company and to enter into a consulting
relationship for a
limited period of time following the termination of Executive's
employment.
AGREEMENTS
Based upon the foregoing, and in consideration of the mutual
promises
contained in this Agreement, Executive and the Company (for its
benefit and the
benefit of the other Company Parties as defined below) agree as
follows:
1. Employment Status. Executive hereby resigns as Senior Vice
President,
Global Sales effective June 1, 2006 and his status in such position
shall end
effective that date. Executive shall continue full time employment
with the
Company (but not in the status of an officer) until June 30, 2006
(June 30, 2006
is referred to herein as the "Termination Date"). Following the
Termination
Date, Executive will be engaged as a consultant under the
provisions of Section
2 hereof and Appendix A attached hereto ("Appendix A").
2. Engagement as a Consultant.
2.1 Executive and Company agree that Company will engage
Executive as a consultant from the Termination Date until October
28, 2007
(unless earlier terminated) (the "Consulting Period") on the terms
and
conditions set forth in this Section 2 and in Appendix A. During
the Consulting
Period, the Company may share with Executive confidential
information about its
business, including without limitation trade secrets, technology
and product
roadmaps, legal theories, litigation strategies, and other
technical, financial
business and legal information. Executive and the Company agree
that Executive's
rendering services, without the Company's consent, to any entity
that the
Company reasonably and in good faith determines is competitive with
the Company
(a "Competitor"), would conflict with Executive's duties as a
consultant.
Therefore, during the Consulting Period, Executive will not,
without the
Company's written consent, render services to any Competitor (any
such rendering
of services is referred to herein as "Prohibited Employment"). The
parties shall
abide by the procedure set forth in Appendix A to determine whether
any proposed
employment by Executive would constitute Prohibited Employment. If
Executive
engages in Prohibited Employment prior to October 28, 2007, the
Consulting
Period shall immediately terminate. Subject to the restrictions set
forth
herein, Executive may render services to an entity other than a
Competitor
during the Consulting Period, and may, with the written consent of
the Company,
render services to a Competitor during the Consulting Period (each,
"Permitted
Employment"). Engagement in Permitted Employment
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shall not cause the Consulting Period to cease. Executive may
terminate the
Consulting Period at any time prior to October 28, 2007 by
providing written
notice of termination to the Company.
2.2 Commencing on the Termination Date and continuing until the
earlier of (i) June 30, 2007, or (ii) the early termination of the
Consulting
Period under Section 2.1, and subject to Executive's continued
compliance with
all of the terms and conditions of this Agreement: (a) Executive
shall be paid
consulting fees at the annual rate of Two Hundred Fifty Thousand
Dollars
($250,000), less appropriate withholdings, payable in accordance
with the
Company's regular payroll practices, and (b) Executive shall
continue to receive
life insurance and long-term disability insurance offered to the
Company's
employees generally on the same terms as all other executive
employees.
2.3 Executive shall continue to be covered by the Company's
medical, dental and vision benefits until June 30, 2007. Coverage
of Executive
pursuant to the continued coverage requirements of section 601 et.
seq. of the
Employee Retirement Income Security Act of 1974, as amended
(commonly known as
"COBRA coverage") shall commence July 1, 2007. The Company shall
pay the cost of
Executive's COBRA coverage until June 30, 2008, and Executive shall
be
responsible for the cost of such coverage commencing July 1, 2008
and continuing
until COBRA coverage ceases. Notwithstanding the foregoing, if the
Executive
engages in either Prohibited Employment or Permitted Employment
before July 1,
2008, (i) any remaining obligation of the Company to provide health
benefit
coverage (other than any COBRA coverage then required) shall
immediately cease,
and (ii) the Company's obligation to pay the cost of COBRA coverage
shall
immediately cease.
2.4 Unless the Executive engages in Prohibited Employment, if
permitted under the terms of the Company's 401(k) plan, Executive
will be
eligible to continue participation in such plan until June 30, 2007
and be
eligible for allocation of the 2006 Company matching contribution
under such
plan.
2.5 Executive shall not accrue any other benefits including
without limitation, vacation, flexible spending, leave entitlement,
severance or
other compensation after the Termination Date.
2.6 If the Executive has not engaged in Prohibited Employment
on
or before the date the Company pays bonuses to other executives of
the Company
with respect to services in 2006 (generally expected to occur in
the first
quarter of 2007), on that date the Company shall pay Executive a
pro-rated bonus
equal to the product of (i) $100,000 times (ii) a fraction, the
numerator of
which is the number of days in 2006 prior to the Termination Date,
and the
denominator of which is 365. No bonus shall be payable with respect
to any
period accruing after the Termination Date.
2.7 Until the earlier of (i) the last day of the Consulting
Period, or (ii) the "Applicable Equity Vesting Date," as defined
below,
Executive will be deemed to be in the continued service of the
Company for
purposes of vesting in awards of options to purchase shares of the
Company's
common stock or restricted stock units that were in existence as of
the
Termination Date (collectively, the "Outstanding Awards") and
provided to
Executive pursuant to any plan of the Company or any stock option
agreement or
restricted stock unit award
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agreement between Executive and the Company (collectively, the
"Equity
Agreements"). Therefore, in accordance with the terms of the
applicable Equity
Agreements, the Outstanding Awards will continue to vest (to the
extent not
previously vested) until the Applicable Equity Vesting Date (but in
no event
beyond the maximum term of the particular option or restricted
stock unit, as
applicable). On the earlier of (x) the last day of the Consulting
Period, or (y)
October 28, 2007, Executive will be deemed to have incurred a
separation from
service for purposes of each Outstanding Award, and Outstanding
Awards that are
vested stock options will remain exercisable for the period of time
following
such date provided for in the applicable Equity Agreement
(generally an
additional ninety (90) days). The "Applicable Equity Vesting Date"
shall mean
(A) with respect to the December, 2003 option grant made to
Executive, October
28, 2007, and (B) with respect to all other Outstanding Awards,
June 30, 2007.
In addition, Executive relinquishes his Section 16 status when he
ceases to be
an officer of the Company on June 1, 2006 and will be removed from
the Company's
Blackout List ninety (90) days after the Termination Date.
Notwithstanding
Executive's removal from the Blackout List, throughout the term of
this
Agreement, Executive may continue to be subject to special blackout
windows
provided that the Company determines in good faith that Executive
possesses
material inside information at that time.
2.8 The Company shall have grounds for termination of the
Company's obligations under this Agreement ("Termination Grounds")
if Executive
(a) violates in any material respect the terms and conditions of
Section 2.9,
Section 4.1, Section 5, Section 9, Appendix A or the
Confidentiality and
Inventions Assignment Agreement attached as Appendix B, and such
violation is
not curable or Executive fails to promptly cure such violation
after written
notice from the Company, or (b) engages in Prohibited Employment.
If the Company
believes in good faith that Termination Grounds exist, then the
Company shall
provide a written notice to Executive setting forth a brief
description of the
Termination Grounds it believes exist. If such Termination Grounds
are curable
by Executive, then Executive shall have 15 days from the date of
such notice to
cure such Termination Grounds. Upon the expiration of such 15-day
period (if
such Termination Grounds are curable and have not been cured), or
upon providing
written notice of Termination Grounds that are not curable, the
Company may
immediately suspend (i) the payment of any consulting fees, (ii)
vesting of any
then unvested stock options and restricted stock unit awards, and
(iii) the
exercisability of stock options (subject to the post-termination
exercise
period, if applicable, as set forth the in each applicable Equity
Agreement).
Such suspensions shall be subject to the arbitration procedure set
forth in
Section 10.1. If the arbitrator determines that Termination Grounds
exist, then
the Company's obligation to make the suspended payments and provide
the
suspended benefits shall terminate without further payment to
Executive, and the
Consulting Period shall be deemed to have ended as of the date of
the
suspension. If the arbitrator determines that Termination Grounds
do not exist,
then the suspension shall be lifted and the suspended payments and
benefits
shall be paid or provided to Executive.
2.9 Following the end of the Consulting Period (regardless of
whether the Consulting Period terminated early), upon the
reasonable requests of
the Company made from time-to-time, the Executive will provide the
Company with
information in the Executive's possession as well as reasonable
assistance
regarding any business or legal issues where Executive's knowledge
may be
relevant.
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3. Separate Payment of Vacation. The parties recognize that, apart
from
this Agreement and except for the payment of accrued but unused
vacation pay,
the Company is not obligated to provide Executive with any of the
benefits set
forth hereunder. Executive will be paid for all accrued but unused
vacation,
without regard to his execution of this Agreement, on or before the
Termination
Date.
4. Confidentiality Agreement and Disclosure by Company.
4.1 Executive agrees to continue to abide by the terms and
provisions of the Confidentiality and Invention Assignment
Agreement dated July
10, 2003 signed by Executive (the "Confidentiality Agreement"), a
copy of which
is attached as Appendix B to this Agreement. Nothing in this
Agreement shall
affect the scope, enforceability, term or any other provision of
the
Confidentiality Agreement.
4.2 The Company and Executive agree that the Company may
disclose the existence, terms or provisions of, or any other
information
concerning, this Agreement to the extent the Company determines in
its sole
judgment that disclosure is required by law or is or otherwise
appropriate.
5. Mutual Non-Disparagement. During the Consulting Period and for
one
year after the end of the Consulting Period: (a) Executive agrees
that he will
not disparage the Company or any past or present (as of the time
any statement
is made) officer, director or employee of the Company or otherwise
make
statements -- whether or not such statements are thought to be (or
are) true,
and whether or not such statements are made publicly, privately,
subject to
confidentiality obligations or otherwise -- which could tend to
harm or injure
the personal or business reputation or business, of the Company or
of any past
or present officer, director or employee of the Company, and
whether or not such
statements are made to any present or former employee or director
of the Company
or to someone outside of the Company. The Company agrees that it
will instruct
its "named executive officers," as defined in 17 CFR 229.402(a)(3)
to not,
during the Consulting Period and for one year after the end of the
Consulting
Period, disparage Executive or otherwise make statements -- whether
or not such
statements are thought to be (or are) true, and whether or not such
statements
are made publicly, privately, subject to confidentiality
obligations, or
otherwise -- which could tend to harm or injure the personal or
business
reputation, or business, of Executive, and whether or not such
statements are
made to any present or former employee or director of the Company
or to someone
outside of the Company.
Without limiting the generality of this Section 5, in response to
any
inquiries or in connection with any explanation of the reasons for
the end of
Executive's employment with the Company, the parties agree that the
Company may
provide a response substantially as follows: "The Company's policy
is to just
confirm the date of hire, date of termination, positions held and
salary, bonus
and options (without disclosing the number of options)" and the
Company may then
provide the foregoing information if requested. If asked, the
Company will also
confirm Executive's engagement as a consultant with the Company and
his current
salary and benefits. After the end of his employment, the Company
may also state
that Executive resigned and voluntarily ended his employment with
the Company.
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6. Release and Waiver.
6.1 Release of Company Parties. Except for the obligations of
the Company as provided in this Agreement, Executive, on behalf of
himself and
his successors, heirs, assigns, related individuals and entities
(if any),
hereby fully and forever releases and discharges Company and any of
its parent
corporations, subsidiaries (whether or not wholly-owned),
brother-sister
corporations, and all other affiliated, related, predecessor or
successor
corporations and entities, and each of their respective present and
former
officers, representatives, administrators, accountants,
attorneys,
investigators, insurers, partners, associates, successors and
assigns, in any
and all capacities (including but not limited to the fiduciary,
representative
or individual capacity of any released person or entity), and any
entity owned
by or affiliated with any of the foregoing (each a "Company Party"
and together,
the "Company Parties") from, and covenants not to sue or otherwise
institute or
cause to be instituted any legal or administrative proceedings
against the
Company or Company Parties with respect to, any matter arising out
of or
relating to Executive's employment, or the termination thereof, or
any acts of
the Company or any Company Party, including, without limitation,
any claims and
causes of action against the Company or any Company Party that
relate to conduct
occurring before and up to the date of this Agreement. Moreover,
Executive
releases, acquits and discharges the Company and the Company
Parties from any
and all rights, actions, claims, demands, costs and expenses
(including but not
limited to attorneys fees), contracts, allegations, liabilities,
obligations,
debts, damages and causes of action, whether known, suspected or
unknown, fixed
or contingent, apparent or concealed, which Executive had or now
has or may
claim to have had by reason of any matter or thing at any time up
to and
including the date Executive executes this Agreement. The
foregoing
notwithstanding, this release shall not extend to claims for
indemnification
permitted under common law, the Company's Bylaws or Articles of
Incorporation or
the Indemnification Agreement dated June 28, 2003 between Executive
and the
Company (the "Indemnification Agreement"), provided, however, that
Executive
shall notify the Company in writing within fifteen (15) days of
receipt of
notice of any claim subject to such indemnification.
6.2 Acknowledgement and Waiver. Executive understands and
agrees
that he is waiving any rights he may have had, now has, or in the
future may
have, to pursue any and all remedies available to him individually
or on behalf
of others to any claims based on, arising out of, or related to
Executive's
employment with, or the termination of Executive's employment with,
the Company,
including but not limited to any claims arising from rights under
federal,
state, and local laws relating to the regulation of federal or
state tax
payments or accounting; federal, state or local laws that prohibit
harassment or
discrimination on the basis of race, national origin, religion,
sex, gender,
age, marital status, bankruptcy status, disability, perceived
disability,
ancestry, sexual orientation, family and medical leave, or any
other form of
harassment or discrimination or related cause of action (including
but not
limited to failure to maintain environment free from harassment
and
retaliation); laws such as workers' compensation laws, which
provide rights and
remedies for injuries sustained in the workplace; statutory or
common law claims
of any kind, including but not limited to, contract, tort, and
property rights,
unfair business practices, breach of contract, breach of
implied-in-fact
contract, breach of the implied covenant of good faith and fair
dealing,
tortious interference with contract or current or prospective
econo
