Summary
QUALCOMM Incorporated (QCOM) filed an 8-K report on September 16, 2010, detailing amendments to its Executive Retirement Matching Contribution Plan (ERMCP). The primary changes, effective January 1, 2011, introduce a new vesting requirement for matching contributions: eligible employees must be actively employed on the first day of the subsequent calendar year or be terminated without Cause during the year to receive that year's matching credits. This represents a shift from previous quarterly vesting and may impact executive retention and compensation realization. Further amendments, effective September 27, 2010, provide for immediate full vesting upon specific events such as death, disability, attainment of age 65, or involuntary termination without Cause (or voluntary termination for Good Reason) within 24 months of a change in control. Additionally, all matching amounts will now vest fully after two continuous years of service. The plan continues to credit matching amounts in the form of company common stock, with a revised calculation based on a 200-trading-day average stock price. These changes are important for understanding the long-term compensation structure and potential payouts for QCOM's executives.
Key Highlights
- 1QUALCOMM amended its Executive Retirement Matching Contribution Plan (ERMCP), with significant changes effective January 1, 2011.
- 2A key change requires eligible employees to be actively employed on the first day of the following calendar year (or terminated without Cause) to receive matching contributions for the current year.
- 3The method for calculating the number of company common stock shares for matching contributions has been revised, now based on a 200-trading-day average stock price.
- 4Effective September 27, 2010, matching amounts will fully vest upon death, disability, reaching age 65 while employed, or involuntary termination without Cause (or voluntary termination for Good Reason) within 24 months post-change in control.
- 5A new full vesting condition of completing two continuous years of service with the company has been introduced.
- 6Directors, unlike eligible employees, do not receive matching credits for their deferrals under the ERMCP.
- 7Cash dividends on company common stock will be credited as additional shares, subject to the same vesting and payment terms as the related matching amounts.