Qualcomm Incorporated (NASDAQ: QCOM), a leading developer and innovator of Code Division Multiple Access (CDMA) and other advanced wireless technologies, today announced that its Board of Directors has amended its Stockholder Rights Agreement to extend it through September 25, 2015. In addition, the Board adjusted the exercise price of the Stockholder Rights, added a requirement that a committee of independent directors annually evaluate the Rights Agreement (a so-called "Independent Director Evaluation" provision) and made certain other technical changes.
Qualcomm's Board and Governance Committee are committed to best practices in corporate governance and the independent Governance Committee already reviews the Company's charter provisions and other anti-takeover measures annually to assure the terms are in the best interests of stockholders. The Board unanimously approved the extension of the Rights Agreement as an effective means to guard against the potential use of coercive takeover tactics designed to gain control of Qualcomm without paying full and fair value to all stockholders.
The Stockholder Rights, as amended, represent the right to purchase one one thousandth of a share of Qualcomm's Series A Junior Participating Preferred Stock at $180 per Right and become exercisable when a person or group acquires 15% or more of Qualcomm's Common Stock without prior Board approval. In that event, the Rights permit Qualcomm stockholders, other than the acquiror, to purchase Qualcomm Common Stock having a market value of twice the exercise price of the Rights, in lieu of the Preferred Stock. Alternatively, when the Rights become exercisable, the Board of Directors may authorize the issuance of one share of Qualcomm Common Stock in exchange for each Right that is then exercisable. In addition, in the event of certain business combinations, the Rights permit the purchase of the Common Stock of an acquiror at a 50% discount. Rights held by the acquiror will become null and void in each case. Prior to a person or group acquiring 15%, the Rights can be redeemed for $0.001 each by action of the Board.
To view a question and answer document related to this release, please visit www.qualcomm.com/ir/. A more complete summary of the terms of the Rights Agreement and respective definitive documents will be filed with the SEC on a Form 8-K.
