What is the purpose of the QUALCOMM 2006 Long-Term Incentive Plan (2006 LTIP)?

The 2006 LTIP is designed to align the interests of employees, non-employee directors, and other eligible participants with those of the company's stockholders by providing stock-based financial incentives. This plan aims to foster long-term growth and success for QUALCOMM.

What types of awards can be granted under the 2006 LTIP?

The 2006 LTIP permits the award of various incentive instruments, including stock options, stock appreciation rights, restricted stock awards, restricted stock units, performance shares, performance units, deferred compensation awards, and other stock-based awards.

What significant changes were made to QUALCOMM's board structure and voting?

QUALCOMM eliminated its classified Board of Directors, meaning all directors will now be elected annually by stockholders. The company also eliminated cumulative voting in director elections, which typically allows minority shareholders to group their votes to elect a representative. These changes were approved by the Board of Directors and stockholders and were filed with an amendment to the company's Certificate of Incorporation and Restated Bylaws.

How many shares are available for the new incentive plan?

As of December 19, 2005, a maximum of 290,284,432 shares of QUALCOMM common stock were reserved for issuance under the 2006 LTIP. This number is subject to adjustments for certain corporate events like stock dividends.

QCOM 8-K: Material Agreements & Corporate Changes

Summary

QUALCOMM Incorporated (QCOM) filed an 8-K on March 13, 2006, detailing significant corporate governance and compensation plan changes approved by stockholders and the Board of Directors on March 7, 2006. The primary focus is the approval and adoption of the QUALCOMM 2006 Long-Term Incentive Plan (2006 LTIP), which replaces previous stock option plans and serves as the source for equity awards to align employee and director interests with stockholders. Additionally, the company amended its Certificate of Incorporation and Bylaws to eliminate the classified board structure and cumulative voting, simplifying director elections. For investors, the introduction of the 2006 LTIP is a key development, outlining the company's strategy for motivating and retaining key personnel through stock-based compensation. The elimination of the classified board and cumulative voting signifies a move towards a more traditional and potentially more agile corporate governance structure. These changes, particularly the incentive plan, are designed to foster long-term growth and shareholder value. The filing also discloses the immediate grant of stock options to 11 non-employee directors under the new plan.

Key Highlights

1Approval of the QUALCOMM 2006 Long-Term Incentive Plan (2006 LTIP) to replace prior stock option plans.
2The 2006 LTIP allows for various stock-based incentives including stock options, restricted stock, and performance awards.
3A maximum of 290,284,432 shares of common stock are reserved for issuance under the 2006 LTIP.
411 Non-Employee Directors were granted stock options to purchase 18,000 shares each at an exercise price of $47.24, vesting over five years.
5Elimination of the classified Board of Directors, moving to annual director elections.
6Elimination of cumulative voting in director elections.
7Board of Directors' Bylaws were amended to reflect these governance changes and authorize electronic consent.
8The filing includes several exhibits detailing the new incentive plan, grant agreements, and amended corporate documents.

QUALCOMM INC/DE 8-K Report, Material Agreement (Mar 13, 2006)

Summary

Key Highlights

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