Irvine-based chipmaker Broadcom Corp. has outlined the terms of a preliminary settlement with a current executive and two former executives to resolve a shareholder lawsuit dealing with stock options backdating.
Cofounders Henry Nicholas and Henry Samueli have agreed to pay the company more than $50 million as part of the settlement.
Nicholas, the company’s formative chief executive who left in 2003, is set to pay nearly $27 million.
Samueli, the company’s current chief technical officer, is set to see some $24 million in unexercised stock options canceled as part of the settlement.
He’s also set to contribute $2 million to Broadcom’s corporate foundation, which was started a few years ago to provide support for educational causes that promote science, technology, engineering and math.
Former Broadcom finance chief Bill Ruehle, who left in 2006, is set to drop a separate lawsuit seeking some $26 million in damages from the company.
Ruehle earlier turned over $26 million in vested options, according to a report last week in legal newspaper the Daily Journal.
As part of the settlement, Broadcom said it is paying $25 million in legal fees and expenses to the lawyers who brought the suit.
Another $25 million from the settlement is set to go to the Broadcom Foundation.
“We are pleased to report that this long-running litigation is drawing to a close,” Chief Executive Scott McGregor said in a statement. “We are gratified that we can devote a portion of this one-time gain to the Broadcom Foundation.”
The settlement is awaiting judicial approval. The company said it expects to get the green light by the end of the second quarter.
The most recent round of fines stem from an earlier settlement, which was first struck in 2010, in which Broadcom agreed to pay some $160 million to settle the class-action suit.
The suit was brought on behalf of investors who bought or acquired Broadcom’s shares from July 21, 2005, to July 13, 2006.
In early 2007, Broadcom restated several years of financial results to reflect $2.2 billion in charges for misdated stock options.
The restatement bill was the largest of any company involved in a stock options issue.
