The suit was filed on behalf of shareholders purchasing Broadcom's common stock, or options on such shares, between July 31, 2000 and Feb. 26, 2001. Under the proposed settlement, the class action litigation will be dismissed in exchange for an aggregate cash payment of $150 million, $40 million to be paid for by insurance carriers and the remainder by Broadcom.
Broadcom (Irvine, Calif.) expects to record its estimated portion of the settlement payment as a one-time charge for the second quarter of 2005.
"We have agreed to settle this lawsuit so that we may put this longstanding matter behind us and focus Broadcom's energies and resources on our business objectives and the many market opportunities before us," said David A. Dull, senior vice president and general counsel for Broadcom, in a statement. "We have vigorously fought these charges for over four years, and we were fully prepared to take this matter to a trial on the merits. We concluded that this settlement provides a reasonable opportunity to avoid the continuing costs and distraction of this litigation."