The company also agreed to pay up to .5 million in the plaintiffs' legal fees and expenses. In April 2008, the Securities and Exchange Commission had also announced that Broadcom agreed to pay a million penalty in connection with options backdating charges.
Stock options give employees the right to buy shares in the future at the market price on the date a grant is approved.
Broadcom said none of the employees found to be responsible for the problems is still employed by the company.
Broadcom's option grants are the subject of a formal inquiry by the Securities and Exchange Commission and an informal inquiry by federal prosecutors.
A Broadcom spokesman did not immediately return an e-mail seeking comment.
Nicholas’ spokesman, Mark Saylor, did not return a call seeking comment.
They do affect earnings per share reported for those periods, the company said.