Employee Benefit Plans

9 Months Ended

Sep. 30, 2011

Employee Benefit Plans [Abstract]

Employee Benefit Plans

8. Employee Benefit Plans

Combined Incentive Plan Activity

     Activity under all stock option incentive plans is set forth below:

	Options Outstanding
						Weighted		Weighted
						Average		Average
				Exercise		Exercise		Grant-Date
	Number of			Price Range		Price		Fair Value
	Shares			per Share		per Share		per Share
	(In millions, except per share data)
Balance at December 31, 2010		78		$	0.01 - 48.63	$	27.05	$	15.05
Options granted(1)		—			45.82		45.82		11.72
Options cancelled		(2	)		0.55 - 46.01		29.22		11.91
Options exercised		(8	)		0.01 - 45.05		23.55		14.78
Balance at September 30, 2011		68		$	0.01 - 48.63	$	27.42	$	15.23

(1) Less than one million stock options were granted in the nine months ended September 30, 2011.

     Restricted stock unit activity is set forth below:

	Restricted Stock Units
	Outstanding
				Weighted
				Average
				Grant-Date
	Number of			Fair Value
	Shares			per Share
	(In millions, except per share data)
Balance at December 31, 2010		28		$	27.17
Restricted stock units granted		10			43.12
Restricted stock units cancelled		(2	)		31.81
Restricted stock units vested		(10	)		28.50
Balance at September 30, 2011		26		$	32.47

     In January 2011 the Compensation Committee adopted a Performance Restricted Stock Units Incentive Award Program, or the PRSU Program. Under the PRSU Program, and at the sole discretion of the Compensation Committee, certain of our executives will annually be designated as participants. The PRSU Program was adopted under, and all awards and grants under the program shall be pursuant to, the Broadcom Corporation 1998 Stock Incentive Plan, as amended and restated. The Compensation Committee designated the first performance cycle under the PRSU Program to be January 1, 2010 through December 31, 2010. Pursuant to the PRSU Program, a participant has the opportunity to receive grants of performance-based RSUs, or PRSUs, if the performance targets established by the Compensation Committee have been met for a performance cycle (typically, January 1 through December 31 of a subject year). In 2011 our executive officers received PRSUs, in lieu of stock options, and additionally, continued to receive time-based grants of RSUs. In 2011 we granted 0.2 million PRSUs that were based on 2010 performance targets under the PRSU Program. Under the terms of the PRSU Program, the award recipients were also awarded grants of the same number of PRSUs to be made in the subsequent two calendar years on the basis of having met the 2010 performance targets. These PRSU grants were included in both the computation of stock-based compensation expense and diluted net income per share.

     In February 2011 as part of Broadcom’s regular annual equity compensation review program, our Compensation Committee granted approximately 6 million restricted stock units.

     The per share fair values of stock options and employee stock purchase rights granted in the nine months ended September 30, 2011 in connection with stock incentive plans and rights granted in connection with the employee stock purchase plan have been estimated with the following weighted average assumptions:

	Employee
	Stock			Employee
	Purchase			Stock
	Rights			Options
Expected life (in years)		1.77			3.60
Implied Volatility		0.36			0.34
Risk-free interest rate		0.53	%		1.56	%
Expected dividend yield		0.99	%		0.80	%
Weighted average fair value	$	11.07		$	11.72

     The weighted average fair values per share of the restricted stock units granted in the nine months ended September 30, 2011 was $43.12, calculated based on the fair market value of our Class A common stock on the respective grant dates less any expected dividend yield.

Stock-Based Compensation Expense

     The following table presents details of total stock-based compensation expense that is included in each functional line item on our unaudited condensed consolidated statements of income:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2011		2010		2011		2010
	(In millions)
Cost of product revenue	$	6	$	5	$	19	$	17
Research and development		85		80		284		253
Selling, general and administrative		30		28		99		89
	$	121	$	113	$	402	$	359

     The following table presents details of unearned stock-based compensation currently estimated to be expensed in the remainder of 2011 through 2015 related to unvested share-based payment awards:

	2011		2012		2013		2014		2015		Total
	(In millions)
Unearned stock-based compensation	$	115	$	354	$	226	$	116	$	15	$	826

     The weighted-average period over which the unearned stock-based compensation is expected to be recognized is 1.4 years.

     If there are any modifications or cancellations of the underlying unvested awards, we may be required to accelerate, increase or cancel any remaining unearned stock-based compensation expense. Future stock-based compensation expense and unearned stock-based compensation will increase to the extent that we grant additional equity awards or assume unvested equity awards in connection with acquisitions.