Qualcomm 2006 Annual Report Download - page 85

qualcomm 2006 71
Matching Contribution Plan (ERMCP). The share reserve under the
2006 Plan is equal to the shares available for future grant under
the combined plans on the date the 2006 Plan was approved by
the Company’s stockholders, plus an additional 65,000,000 shares
for a total of approximately 280,192,000 shares reserved. This
share amount is automatically increased by the amount equal to
the number of shares subject to any outstanding option under a
Prior Plan that is terminated or cancelled (but not an option under
a Prior Plan that expires) following the date that the 2006 Plan was
approved by stockholders. Shares that are subject to an award
under the ERMCP and are returned to the Company because they
fail to vest will again become available for grant under the 2006
Plan. The Board of Directors of the Company may amend or termi-
nate the 2006 Plan at any time. Generally, options outstanding
vest over periods not exceeding ve years and are exercisable for
up to ten years from the grant date.
During scal 2006, the Company assumed a total of approximately
3,530,000 outstanding stock options under the Flarion Technologies,
Inc. 2000 Stock Option and Restricted Stock Purchase Plan, the
Berkana Wireless Inc. 2002 Stock Plan and 2002 Executive Stock
Plan and under the Qualphone Inc. 2004 Equity Incentive Plan
(the Assumed Plans), as amended, as a result of the acquisitions
(Note 11). The Assumed Plans were suspended on the dates of
acquisition, and no additional shares may be granted under those
plans. The Assumed Plans provided for the grant of both incentive
stock options and non-qualied stock options. Generally, options
outstanding vest over periods not exceeding four years and are
exercisable for up to ten years from the grant date.
On October 5, 2006, the Company announced a cash dividend
of $0.12 per share on the Company’s common stock, payable on
January 4, 2007 to stockholders of record as of December 7, 2006,
which will be reected in the consolidated nancial statements in
the rst quarter of scal 2007.
note 8. emPloyee stock 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 contribu-
tions based upon earnings. The Company’s contribution expense
for scal 2006, 2005 and 2004 was $33 million, $27 million and
$21 million, respectively.
Equity Compensation 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 2006 Long-Term
Incentive Plan (the 2006 Plan) was adopted during the second
quarter of scal 2006 and replaced the 2001 Stock Option Plan
and the 2001 Non-Employee Director Stock Option Plan and their
predecessor plans (the Prior Plans). The 2006 Plan provides for
the grant of incentive and nonstatutory stock options as well as
stock appreciation rights, restricted stock, restricted stock units,
performance units and shares and other stock-based awards and
will be the source of shares issued under the Executive Retirement
Information under FAS 123R for Fiscal 2006. A summary of stock option transactions for all stock option plans follows:
Average
Weighted Remaining Aggregate
Number of Average Contractual Intrinsic
Shares Exercise Term Value
(In thousands) Price (Years) (In billions)
Outstanding at September 25, 2005 202,794 $24.35
Options granted 34,977 45.69
Options assumed(1) 3,530 21.15
Options cancelled/forfeited/expired (3,057) 35.08
Options exercised (36,389) 16.71
Outstanding at September 24, 2006 201,855 $29.20 6.15 $2.2
Exercisable at September 24, 2006 121,872 $24.42 4.76 $1.8
(1) Represents activity related to options that were assumed as a result of acquisitions (Note 11).
Net stock options, after forfeitures and cancellations, granted during scal 2006, 2005 and 2004 represented 1.9%, 1.8% and 1.7% of
outstanding shares as of the beginning of each scal year, respectively. Total stock options granted during scal 2006, 2005 and 2004
represented 2.1%, 2.1% and 1.9%, respectively, of outstanding shares as of the end of each scal year.