IRVINE, Calif. -- Broadcom Corporation (Nasdaq: BRCM - News) today announced that it had completed a management transition that began last month when Duane R. Dickhut was named to lead its ServerWorks subsidiary.

In connection with the transition, Raju Vegesna, ServerWorks' co-founder and former chief executive officer, and two other employees have left the company's employ. Each has entered into a settlement agreement with Broadcom 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.

All other ServerWorks employees, including its other co-founders and 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 in January 2001. The terms of the settlement are confidential.

In connection with the settlement, in the quarter ending June 30, 2003, Broadcom will incur $25 million in cash payments and expenses and record a one-time non-cash charge of $88 million reflecting the acceleration from future periods of stock-based compensation expense, most of which was previously recorded deferred compensation established upon the acquisition of ServerWorks (and based upon stock market valuations at that time).

In other ServerWorks-related matters, Broadcom will record additional non- cash charges of $41 million in the quarter ending June 30, 2003 relating to the final earnouts established in connection with the acquisition of ServerWorks.

Broadcom Corp.

ServerWorks Corp.