<PAGE> 1
EXHIBIT 99.16
BROADCOM CORPORATION
STOCK OPTION ASSUMPTION AGREEMENT
PUYALLUP INTEGRATED CIRCUIT COMPANY
1996 STOCK OPTION PLAN
This STOCK OPTION ASSUMPTION AGREEMENT by and between Broadcom
Corporation, a California corporation ("Broadcom"), and the undersigned
individual ("Optionee") is effective as of September __, 2000 (this "Assumption
Agreement").
WHEREAS, Optionee holds one or more outstanding options to purchase
shares of the common stock ("Picco Stock") of Puyallup Integrated Circuit
Company, a Washington corporation ("Picco"), which were granted to Optionee
under the Puyallup 1996 Stock Option Plan (the "Option Plan") and are each
evidenced by a Stock Option Agreement(s), with any shares purchased under such
options to be subject to the terms and conditions of a Stock Purchase Agreement.
WHEREAS, Picco has been acquired by Broadcom through the merger of
Picco with and into Broadcom (the "Merger") pursuant to the Merger Agreement and
Plan of Reorganization, dated as of July 18, 2000 (the "Merger Agreement"), by
and among Broadcom and Picco and, with respect to Section 7.2 of the Merger
Agreement only, Eric Hall, as Shareholder Agent, and U.S. Stock Transfer
Corporation, as Depositary Agent.
WHEREAS, the provisions of the Merger Agreement require Broadcom to
assume the obligations of Picco under the Option Plan and each outstanding
option under the Option Plan at the consummation of the Merger.
WHEREAS, Broadcom desires to issue to the holder of each such assumed
option (the "Assumed Option") an agreement evidencing the assumption of such
option.
WHEREAS, pursuant to the Merger Agreement, each outstanding share of
Picco Stock was converted into 3.301 (the "Exchange Ratio") shares of Class A
common stock, par value $0.0001 per share, of Broadcom ("Broadcom Stock").
WHEREAS, the purpose of this Agreement is to evidence the assumption by
Broadcom of the outstanding options held by Optionee at the time of the
consummation of the Merger (the "Effective Time") and to reflect certain
adjustments to Optionee's outstanding options which have become necessary in
connection with their assumption by Broadcom.
NOW, THEREFORE, it is hereby agreed as follows:
1. The number of shares of Picco Stock subject to the options
outstanding under the Option Plan held by Optionee immediately prior to the
Effective Time (the "Picco Options") and the exercise price payable per share
are set forth in Exhibit A attached hereto. Broadcom
<PAGE> 2
hereby assumes, as of the Effective Time, all the duties and obligations of
Picco under the Option Plan and each of the Picco Options. In connection with
such assumption, the number of shares of Broadcom Stock purchasable under each
Assumed Option and the exercise price payable thereunder have been adjusted to
reflect the Exchange Ratio. Accordingly, the number of shares of Broadcom Stock
subject to each Assumed Option shall be as specified for that option in attached
Exhibit A, and the adjusted exercise price payable per share of Broadcom Stock
under the Assumed Option shall also be as indicated for that option in Exhibit A
attached hereto.
2. The intent of the foregoing adjustments to each Assumed Option is to
assure that the difference between the aggregate fair market value of the shares
of Broadcom Stock purchasable under each such option and the aggregate exercise
price as adjusted pursuant to this Agreement will, immediately after the
consummation of the Merger, be no less than the difference which existed,
immediately prior to the Merger, between the then aggregate fair market value of
the Picco Stock subject to the Picco Option and the aggregate exercise price in
effect at such time under the Option Agreement(s). Such adjustments are also
intended to preserve, immediately after the Merger, on a per share basis, the
same ratio of exercise price per option share to fair market value per share
which existed under the Picco Option immediately prior to the Merger. Such
adjustments are also intended to preserve, to the extent applicable, the
incentive stock option status of the assumed Picco Options under Section 422 of
the Internal Revenue Code of 1986, as amended.
3. Unless the context otherwise requires, all references in the Option
Agreement(s) and, if applicable, in the Option Plan (as incorporated into such
Option Agreement(s)) shall be adjusted as follows: (i) all references to the
"Company" shall mean Broadcom, (ii) all references to "Shares" shall mean shares
of Broadcom Stock, (iii) all references to the "Board of Directors" shall mean
the Board of Directors of Broadcom and (iv) all references to the "committee"
shall mean the Option Committee of the Board.
4. The grant date and the expiration date of each Assumed Option and
all other provisions which govern either the exercise or the termination of the
Assumed Option shall remain the same as set forth in the Option Agreement(s)
applicable to that option, and the provisions of the Option Plan and the Option
Agreement(s) shall accordingly govern and control Optionee's rights to purchase
Broadcom Stock under the Assumed Option.
5. Pursuant to the terms of your Option Agreement(s) and the Option
Plan, your Assumed Options shall not vest or become exercisable on an
accelerated basis upon the consummation of the Merger. Accordingly, each Assumed
Option shall continue to vest and become exercisable for unvested shares of
Broadcom Stock subject to that option on the same terms and in accordance with
the same installment vesting schedule as those in effect under the applicable
Option Agreement(s) immediately prior to the Effective Time; provided, however,
that the number of shares of Broadcom Stock subject to each such installment
shall be adjusted to reflect the Exchange Ratio.
6. For purposes of applying any and all provisions of the Option
Agreement(s) and/or the Option Plan relating to Optionee's status as an employee
of or a consultant to Picco, Optionee shall be deemed to continue in such status
as an employee or a consultant for so long as Optionee renders services as an
employee or a consultant to Broadcom or any present or future
2
<PAGE> 3
subsidiary of Broadcom. Accordingly, the provisions of the Option Agreement(s)
governing the termination of the Assumed Options upon Optionee's cessation of
service as an employee of or a consultant to Picco shall hereafter be applied on
the basis of Optionee's cessation of employee or consultant status with Broadcom
or any present or future subsidiaries of Broadcom, and each assumed Picco Option
shall accordingly terminate, within the designated time period in effect under
the Option Agreement for that option, following such cessation of service as an
employee of or a consultant to Broadcom or any present or future subsidiaries of
Broadcom.
7. The adjusted exercise price payable for the Broadcom Stock subject
to each Assumed Option shall be payable in any of the forms authorized under the
Option Agreement applicable to that option.
8. In order to exercise each Assumed Option, Optionee must deliver to
Broadcom a written notice of exercise in which the number of shares of Broadcom
Stock to be purchased thereunder must be indicated. The exercise notice must be
accompanied by payment of the adjusted exercise price payable for the purchased
shares of Broadcom Stock or must specify the arrangement for the payment of the
purchase price as permitted by the applicable Option Agreement. This notice
should be delivered to Broadcom at the following address:
Broadcom Corporation
16215 Alton Parkway
Irvine, California 92618
Attention: Manager of Shareholder Services
9. Except to the extent specifically modified by this Assumption
Agreement, all of the terms and conditions of each Option Agreement as in effect
immediately prior to the Merger shall continue in full force and effect and
shall not in any way be amended, revised or otherwise affected by this
Assumption Agreement.
3
<PAGE> 4
IN WITNESS WHEREOF, Broadcom Corporation has caused this Assumption
Agreement to be executed on its behalf by its duly authorized officer as of
September __, 2000.
BROADCOM CORPORATION
By:
--------------------------------
David A. Dull
Vice President, General Counsel
and Secretary
4
<PAGE> 5
ACKNOWLEDGMENT
The undersigned acknowledges receipt of the foregoing Assumption
Agreement and understands and agrees that all rights and liabilities with
respect to each of his or her Picco Options hereby assumed by Broadcom are as
set forth in the Option Agreement, the Option Plan, and this Assumption
Agreement.
-----------------------------------
Signature of Optionee
-----------------------------------
Printed Name
DATED:
5
