Qualcomm 2002 Annual Report Download - page 75

designated 1,500,000 shares of preferred stock as Series A Junior Participating
Preferred Stock and reserved such shares for issuance upon exercise of the Preferred
Share Purchase Rights. At September 30, 2002 and 2001, no shares of preferred stock
were outstanding.
PREFERRED SHARE PURCHASE RIGHTS PLAN
During fiscal 1996, the Board of Directors implemented a Preferred Share
Purchase Rights Plan (Rights Plan) to protect stockholders’ rights in the event of a
proposed takeover of the Company. Under the Rights Plan, the Company declared a
dividend of one preferred share purchase right (a Right) for each share of the
Company’s common stock outstanding. Pursuant to the Rights Plan, each Right enti-
tles the registered holder to purchase from the Company a one one-hundredth share
of Series A Junior Participating Preferred Stock, $0.0001 par value per share, at a
purchase price of $250. In November 1999, the Rights Plan was amended to provide
that the purchase price be set at $400. The Rights are exercisable only if a person or
group (an Acquiring Person) acquires beneficial ownership of 15% or more of the
Company’s outstanding shares of common stock. Upon exercise, holders, other than
an Acquiring Person, will have the right, subject to termination, to receive the
Company’s common stock or other securities, cash or other assets having a market
value, as defined, equal to twice such purchase price. The Rights, which expire on
September 25, 2005, are redeemable in whole, but not in part, at the Company’s
option at any time for a price of $0.005 per Right.
NOTE 10. EMPLOYEE BENEFIT PLANS
EMPLOYEE SAVINGS AND RETIREMENT PLAN
The Company has a 401(k) plan that allows eligible employees to contribute up to
50% of their eligible compensation, subject to annual limits. The Company matches
a portion of the employee contributions and may, at its discretion, make additional
contributions based upon earnings. The Company’s contribution expense for fiscal
2002, 2001 and 2000 was $20 million, $19 million and $17 million, respectively.
STOCK OPTION PLANS
The Board of Directors may grant options to selected employees, directors and
consultants to the Company to purchase shares of the Company’s common stock at
a price not less than the fair market value of the stock at the date of grant. The 2001
Stock Option Plan (the 2001 Plan) was adopted and replaced the 1991 Stock Option
Plan (the 1991 Plan), which expired in August 2001. Options granted under the 1991
Plan remain outstanding until exercised or cancelled. The shares reserved under the
2001 Plan are equal to the number of shares available for future grant under the 1991
Plan on the date the 2001 Plan was approved by the Company’s stockholders. At that
date, 50,541,570 shares were available for future grants under the 2001 Plan. This
share amount is automatically increased by the amount equal to the number of
shares subject to any outstanding option under the 1991 Plan that expires or is
terminated or cancelled following the date that the 2001 Plan was approved by stock-
holders. The Board of Directors of the Company may terminate the 2001 Plan at
any time. The 2001 Plan provides for the grant of both incentive stock options and
non-qualified stock options. Generally, options outstanding vest over periods not
exceeding six years and are exercisable for up to ten years from the grant date. At
September 30, 2002, options for 65,799,000 shares under both plans were exercisable
at prices ranging from $2.19 to $172.38 for an aggregate exercise price of $1,212 million.
The Company has adopted the 2001 Non-Employee Directors’ Stock Option Plan
(the 2001 Directors’ Plan), which replaces the 1998 Non-Employee Directors’ Stock
Option Plan (the 1998 Directors’ Plan). Options granted under the 1998 Directors’ Plan
remain outstanding until exercised or cancelled. The shares reserved under the 2001
Directors’ Plan are equal to the number of shares available for future grant under the
1998 Directors’ Plan on the date the 2001 Directors’ Plan was approved by the
Company’s stockholders. At that date, 2,050,000 shares were available for future
grants under the 2001 Directors’ Plan. This share amount is automatically increased
by the amount equal to the number of shares subject to any outstanding option under
the 1998 Directors’ Plan that expires or is terminated or cancelled following the date
that the 2001 Directors’ Plan was approved by stockholders. The Board of Directors
of the Company may terminate the 2001 Directors’ Plan at any time. This plan pro-
vides for non-qualified stock options to be granted to non-employee directors at fair
market value, vesting over periods not exceeding five years and are exercisable for up
to ten years from the grant date. At September 30, 2002, options for 2,832,000 shares
under both plans were exercisable at prices ranging from $2.78 to $133.00 per share
for an aggregate exercise price of $24 million.
In March 2000, the Company assumed 1,560,000 outstanding stock options under
the SnapTrack, Inc. 1995 Stock Option Plan (the SnapTrack Plan), as amended with
respect to the acquisition. The SnapTrack Plan expired on the date of acquisition, and
no additional shares may be granted under that plan. The SnapTrack Plan provided
for the grant of both incentive stock options and non-qualified stock options.
Generally, options outstanding vest over periods not exceeding four years and are
exercisable for up to ten years from the grant date. At September 30, 2002, options
for 307,000 shares were exercisable at prices ranging from $0.13 to $5.26 for an
aggregate exercise price of $0.5 million.
QUALCOMM 2002 ANNUAL REPORT PAGE 73