5/5/2003 - Broadcom Corporation (Nasdaq: BRCM) announced that it had completed a management transition that began last month when Duane R. Dickhut was named to lead its ServerWorks subsidiary.
In connection with the transition, Raju Vegesna, ServerWorks’ co-founder and former chief executive officer, and two other employees have left the company’s employ. Each has entered into a settlement agreement with Broadcom resolving and releasing respective claims of the parties. Existing applicable non-competition, non-solicitation and proprietary information obligations of the former employees remain in effect.
All other ServerWorks employees, including its other co-founders and senior management and its entire engineering team, remain with the company.
The settlement also resolves various issues and disputes raised by employees and former securities holders of ServerWorks relating to agreements entered into when Broadcom acquired ServerWorks in January 2001. The terms of the settlement are confidential.
In connection with the settlement, in the quarter ending June 30, 2003, Broadcom will incur $25 million in cash payments and expenses and record a one-time non-cash charge of $88 million reflecting the acceleration from future periods of stock-based compensation expense, most of which was previously recorded deferred compensation established upon the acquisition of ServerWorks (and based upon stock market valuations at that time).
In other ServerWorks-related matters, Broadcom will record additional non-cash charges of $41 million in the quarter ending June 30, 2003 relating to the final earnouts established in connection with the acquisition of ServerWorks.
All of the foregoing numbers are estimated and approximate.
Broadcom Corporation is the leading provider of highly integrated silicon solutions that enable broadband communications and networking of voice, video and data services. Using proprietary technologies and advanced design methodologies, Broadcom designs, develops and supplies complete system-on-a-chip solutions and related hardware and software applications for every major broadband communications market. Our diverse product portfolio includes solutions for digital cable and satellite set-top boxes; cable and DSL modems and residential gateways; high-speed transmission and switching for local, metropolitan, wide area and storage networking; home and wireless networking; cellular and terrestrial wireless communications; Voice over Internet Protocol (VoIP) gateway and telephony systems; broadband network processors; and SystemI/OTM server solutions. These technologies and products support ourcore mission: Connecting everything®.
Broadcom®, the pulse logo, Connecting everything®, ServerWorksTM, the ServerWorks logo and SystemI/OTM are trademarks of Broadcom Corporation and/or its affiliates in the United States and certain other countries.
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