Good for keeping employees'...bad for you share holders = dilution.
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Thursday April 26, 7:36 pm Eastern Time
Press Release
Broadcom Announces Employee Program for Stock Option Exchange or Supplemental Grants
IRVINE, Calif.--(BUSINESS WIRE)--April 26, 2001--Broadcom Corporation (Nasdaq: BRCM - news), the leading provider of integrated circuits enabling broadband communications, today announced a program offering voluntary stock option exchange or supplemental option grants for its employees.
``This is a significant initiative by the company intended to address the recent decline in price of Broadcom's stock and the financial impact of that decline on our employees,'' said Dr. Henry T. Nicholas III, Broadcom's President and CEO.
Under the program, employees holding options to purchase Broadcom common stock will be given the opportunity to exchange certain of their existing options, with exercise prices above a designated price per share, for new options to purchase an equal number of shares of Broadcom Class A common stock. The new options will not be granted until at least six months and one day after acceptance of the old options for exchange and cancellation. The exercise price of the new options will be the last reported trading price of Broadcom common stock on their grant date. Options for approximately 45 million shares of Broadcom common stock are expected to be eligible for participation in the program.
As an alternative, Broadcom employees will be given the opportunity to retain their existing options and receive a supplemental grant of options to acquire Broadcom Class A common stock. For those choosing this alternative, the amount of the supplemental option grant will depend on the exercise price of the holder's existing out-of-the-money options, with larger grants going to those holding higher-priced options. The exercise price of the supplemental options will be the last reported trading price of Broadcom common stock on the grant date.
``Broadcom has long been a leader in the amount of equity participation that it accords its employees,'' Nicholas said. ``We believe this has had a very positive effect on our business and financial success in the past and that it will have the same effect in the future. Broadcom's employees are true owners in Broadcom, and they understand clearly that their work and their work ethic are directly tied to the success of the company and its shareholders. With the current economic slowdown and the recent drop in the market price of many technology stocks, including Broadcom's, we believe that this is the best way to continue to retain and motivate our most important asset, our employees.''
Broadcom will be filing a tender offer document with the Securities and Exchange Commission (SEC) that provides additional information concerning the stock option exchange and supplemental option grant program. The terms and conditions of the program are subject to change prior to or during the offering period. |
