What are the key changes to Qualcomm's proxy access rules?

Qualcomm has modified its proxy access rules to make it easier for stockholders to nominate directors. The maximum number of stockholder nominees is now the greater of two or 20% of the Board. Several restrictive clauses have been removed, including those that penalized nominees who didn't receive enough votes, or where a nominee was elected, and the provision where a nominee also being nominated by the board counted against the stockholder limit.

What is the new 'Exclusive Forum Provision' and why was it implemented?

The new Exclusive Forum Provision designates the Court of Chancery in the State of Delaware (or other Delaware courts if necessary) as the sole and exclusive forum for derivative actions, breach of fiduciary duty claims, actions arising under Delaware corporate law or the company's charter/bylaws, claims governed by the internal affairs doctrine, and 'internal corporate claims'. Qualcomm implemented this to reduce costly and duplicative multi-forum litigation and to ensure that relevant legal matters are handled by courts experienced in Delaware corporate law.

How do these changes impact an individual shareholder's ability to nominate a director?

These changes generally make it more favorable for shareholders to nominate directors. The removal of certain penalties and the adjustment to the number of nominees allowed mean that the process is less likely to be burdensome or prohibitive for shareholders meeting the ownership and holding period requirements.

Are there any costs associated with these bylaw changes?

The filing does not explicitly detail direct costs to shareholders. However, the company states the exclusive forum provision is intended to reduce the possibility of 'costly and duplicative multi-forum litigation' for the company, which could indirectly benefit shareholders through more efficient operations and reduced legal expenses.

QCOM 8-K: Corporate Changes

Summary

Qualcomm Incorporated (QCOM) announced significant amendments to its bylaws on July 11, 2016, primarily concerning its proxy access provisions and the adoption of an exclusive forum for litigation. These changes, made after consultation with institutional stockholders, aim to improve corporate governance and streamline legal proceedings. The modifications to the proxy access rules are designed to make it easier for stockholders to nominate directors. Key changes include an adjustment to the maximum number of director nominees and the removal of certain restrictions that previously penalized stockholders whose nominees were elected or did not receive a minimum level of support. The adoption of an exclusive forum provision designates Delaware courts as the primary venue for specific types of corporate legal actions, intended to reduce litigation costs and ensure consistent application of Delaware corporate law.

Key Highlights

1Qualcomm amended its bylaws on July 11, 2016, following input from institutional investors.
2Proxy access provisions were modified to allow stockholders to nominate directors under more favorable terms.
3The maximum number of stockholder nominees has been adjusted to be the greater of two or 20% of the Board.
4Restrictions related to stockholder nominees not receiving sufficient support or being elected have been removed.
5A new 'Exclusive Forum Provision' was added, designating Delaware courts as the sole venue for certain corporate litigation.
6This exclusive forum provision is intended to reduce multi-forum litigation and ensure specialized legal expertise.
7The company believes these changes are in the best interests of the Company and its stockholders.

QUALCOMM INC/DE 8-K Report, Bylaw Amendment (Jul 15, 2016)

Summary

Key Highlights

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