Broadcom reaches settlement in stock options class action lawsuit

Broadcom has announced that it has agreed in principle to settle the securities class action litigation pending against the company and certain of its current and former officers and directors. The class action, relating to the company's historical stock option accounting practices, was brought on behalf of persons and entities who bought or acquired shares of Broadcom's common stock between July 21, 2005 and July 13, 2006.

Under the proposed settlement, the claims against Broadcom and its officers and directors will be dismissed with prejudice and released in exchange for a $160.5 million cash payment by Broadcom. The company expects to record the settlement amount as a one-time charge in its statement of operations for the fourth quarter of 2009. The proposed settlement remains subject to the satisfaction of various conditions, including negotiation and execution of a final stipulation of settlement, and approval by the U.S. District Court for the Central District of California following notice to members of the class.

Terms for distribution of the settlement fund to class members, less fees awarded by the court to class counsel, and other terms of the settlement will be disclosed in a notice to be sent to class members after preliminary court approval.

The company and the individual defendants have steadfastly maintained that the claims raised in the class action litigation were without merit, and have vigorously contested those claims. As part of the settlement, the company and the individual defendants continue to deny any liability or wrongdoing.

"Today's settlement brings Broadcom closer to the day when we can put the stock option cases behind us once and for all," said Scott McGregor, Broadcom's Chief Executive Officer. "We are able to reach this settlement without missing a beat because we have remained focused on engineering innovative products, growing our business and improving our financial strength."

Broadcom expects to continue to incur ongoing legal expenses on the remaining stock option matters, primarily the derivative action, until those matters are fully resolved.