Broadcom Corp. today announced that it has completed a management transition and settlement that began last month when Duane R. Dickhut was named to lead its ServerWorks subsidiary.

Broadcom announced in late March that it would replace the head of the subsidiary, Raju Vegesna, who co-founded the unit and was CEO when Broadcom acquired it in 2001. Citing disagreements over strategy, Broadcom replaced Vegesna with Dickhut, leader of its broadband processor unit.

In connection with the transition, Broadcom said that two other employees have left the company, but did not release their positions.

Each of the three have reportedly entered into a settlement agreement with the broadband-company 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, according to Broadcom.

All other ServerWorks employees, including its other co-founders, 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. The terms of the settlement were not disclosed.

In connection with the settlement, Broadcom will incur $25 million in cash payments and expenses and record a one-time non-cash charge of $88 million in Q2 to reflect the acceleration from future periods of stock-based compensation expense, most of which was previously recorded deferred compensation established upon the acquisition of ServerWorks.

In other ServerWorks-related matters, Broadcom will record additional non-cash charges of $41 million in Q2 relating to the final earn outs established in connection with the acquisition of ServerWorks.

By: DocMemory
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