Dr. Samueli also Resigns from the Broadcom Board of Directors
IRVINE, Calif., May 14, 2008 -- Broadcom Corporation (Nasdaq: BRCM) announced today that Chairman of the Board and Chief Technical Officer, Dr. Henry Samueli, and Senior Vice President and General Counsel, David A. Dull, have each taken leaves of absence as executive officers of Broadcom pending resolution of a civil complaint filed against them today by the U.S. Securities and Exchange Commission relating to its previously- disclosed investigation of Broadcom's historical stock option granting practices.
Also pending resolution of the civil action, Dr. Samueli has resigned as a member of the Board of Directors and as Chairman of the Board of Directors of the company. The Board has named John E. Major, an independent director of the company since January 2003, to serve as non-executive Chairman of the Board of Directors.
Mr. Major made the following statement:
"While we will not be commenting on the allegations made in the SEC's complaint against Henry and David, or against other former Broadcom employees, it is important to note that the government's charges pertain to events that occurred half a decade to nearly a decade ago."
"In mid-2003 the company significantly strengthened its equity award practices, putting into place rigorous processes for equity awards. We believe that the company's current practices are among the best anywhere. In early 2007, our Audit Committee, comprised entirely of independent directors, engaged independent counsel to determine that Broadcom's current equity granting processes are appropriate and sound and have been consistently adhered to since June 2003."
"The Board is also confident that the company has built strong teams under the office of the Chief Technical Officer (CTO) and within the Legal Department that will discharge the daily business of the company and carry forward our strategic initiatives without missing a beat."
While Dr. Samueli and Mr. Dull are on leaves of absences from their elected officer posts (CTO and Senior Vice President and General Counsel, respectively), they will continue to serve as non-officer employees of the company, reporting to President and Chief Executive Officer, Scott A. McGregor, in their areas of expertise - Dr. Samueli in technology and Mr. Dull in strategic initiatives and litigation matters. They will not be involved in matters dealing with corporate governance, the company's financial reporting or public disclosures, and will no longer have the power to bind the Company under agreements. Dr. Samueli will not be standing for re-election to the Board of Directors at the company's 2008 Annual Meeting of Shareholders.
Last month, Broadcom entered into a settlement with the SEC relating to the SEC's investigation of Broadcom's historical stock option granting practices. Without admitting or denying the SEC's allegations, Broadcom agreed to pay a civil penalty of $12 million. The U.S. District Court for the Central District of California approved the settlement at the end of April 2008, thus concluding the SEC's investigation of this matter with respect to Broadcom.
Note to Editors
Broadcom's President and Chief Executive Officer, Scott A. McGregor, joined the company in January 2005. Senior Vice President and Chief Financial Officer Eric K. Brandt joined Broadcom in March 2007.
Broadcom Corporation is a major technology innovator and global leader in semiconductors for wired and wireless communications. Broadcom(R) products enable the delivery of voice, video, data and multimedia to and throughout the home, the office and the mobile environment. We provide the industry's broadest portfolio of state-of-the-art system-on-a-chip and software solutions to manufacturers of computing and networking equipment, digital entertainment and broadband access products, and mobile devices. These solutions support our core mission: Connecting everything(R).
Broadcom is one of the world's largest fabless semiconductor companies, with 2007 revenue of $3.78 billion, and holds over 2,600 U.S. and 1,200 foreign patents, more than 7,450 additional pending patent applications, and one of the broadest intellectual property portfolios addressing both wired and wireless transmission of voice, video, data and multimedia.
Broadcom is headquartered in Irvine, Calif., and has offices and research facilities in North America, Asia and Europe. Broadcom may be contacted at +1.949.926.5000 or at http://www.broadcom.com.
Cautions Regarding Forward Looking Statements:
All statements included or incorporated by reference in this release, other than statements or characterizations of historical fact, are forward- looking statements. These forward-looking statements are based on our current expectations, estimates and projections about our business and industry, management's beliefs, and certain assumptions made by us, all of which are subject to change. Forward-looking statements can often be identified by words such as "anticipates," "expects," "intends," "plans," "predicts," "believes," "seeks," "estimates," "may," "will," "should," "would," "could," "potential," "continue," "ongoing," similar expressions, and variations or negatives of these words. Examples of such forward-looking statements include, but are not limited to, references to our ability to implement our strategic initiatives going forward. These forward-looking statements are not guarantees of future results and are subject to risks, uncertainties and assumptions that could cause our actual results to differ materially and adversely from those expressed in any forward-looking statement.
These risks and uncertainties include, but are not limited to:
- general economic and political conditions and specific conditions in the markets we address, including the continuing volatility in the technology sector and semiconductor industry, trends in the broadband communications markets in various geographic regions, including seasonality in sales of consumer products into which our products are incorporated, and possible disruption in commercial activities related to terrorist activity or armed conflict;
- the timing, rescheduling or cancellation of significant customer orders and our ability, as well as the ability of our customers, to manage inventory;
- the gain or loss of a key customer, design win or order;
- the rate at which our present and future customers and end-users adopt Broadcom's technologies and products in our target markets;
- our ability to scale our operations in response to changes in demand for our existing products and services or demand for new products requested by our customers;
- 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; our dependence on a few significant customers for a substantial portion of our revenue;
- risks and uncertainties resulting from Broadcom's recent equity award review, including potential claims and proceedings related to such matters, such as shareholder litigation and any action by the SEC, U.S. Attorney's Office or other governmental agency that could result in civil or criminal sanctions against the company and/or certain of our current or former officers, directors or employees, or other actions taken or required as a result of the review;
- intellectual property disputes and customer indemnification claims and other types of litigation risk;
- our ability to retain, recruit and hire key executives, technical personnel and other employees in the positions and numbers, with the experience and capabilities, and at the compensation levels needed to implement our business and product plans;
- the effectiveness of our expense and product cost control and reduction efforts;
- the quality of our products and any potential remediation costs; the availability and pricing of third party semiconductor foundry, assembly and test capacity and raw materials;
- the risks of producing products with new suppliers and at new fabrication and assembly and test facilities;
- problems or delays that we may face in shifting our products to smaller geometry process technologies and in achieving higher levels of design integration;
- our ability to timely and accurately predict market requirements and evolving industry standards and to identify opportunities in new markets;
- delays in the adoption and acceptance of industry standards in our target markets; changes in our product or customer mix;
- the volume of our product sales and pricing concessions on volume sales;
- 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;
- the timing of customer-industry qualification and certification of our products and the risks of non-qualification or non-certification;
- fluctuations in the manufacturing yields of our third party semiconductor foundries and other problems or delays in the fabrication, assembly, testing or delivery of our products;
- the risks and uncertainties associated with our international operations, particularly in light of terrorist activity, armed conflict or political unrest; and
- the level of orders received that can be shipped in a fiscal quarter.
Our Annual Report on Form 10-K, subsequent Quarterly Reports on Form 10-Q, recent Current Reports on Form 8-K, and other Securities and Exchange Commission filings discuss the foregoing risks as well as other important risk factors that could contribute to such differences or otherwise affect our business, results of operations and financial condition. The forward-looking statements in this release speak only as of the date they are made. We undertake no obligation to revise or update publicly any forward-looking statement, except required by law.
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SOURCE Broadcom Corporation; BRCM Corporate