EX-10.26 3 qcom12262021ex1026.htm EX-10.26
EXHIBIT 10.26
2022 ANNUAL CASH INCENTIVE PLAN
Performance Unit Agreement
This Award Agreement between Qualcomm Incorporated (the “Company”) and <<Executive’s Name>> (the “Executive”) evidences the grant of a Performance Unit (this “Award”) under the Qualcomm Incorporated 2016 Long-Term Incentive Plan (the “Plan”), representing a right to receive a cash payment equal to the amount determined by the HR and Compensation Committee (the “Committee”) based on performance as set forth herein.

Definitions | Capitalized terms used in this Award Agreement have the meaning specified under the Plan, except as otherwise specified herein.
Grant Date | <<DATE>>
Performance Period | The Performance Period is the Company’s 2022 fiscal year.
Amount Payable Under this Award | The amount payable under this Award, if any, will be determined by the Committee based on the Performance Award Formula set out in Attachment A, which is attached to this Award Agreement and incorporated herein by reference.
| To be eligible to receive payment with respect to this Award, your Service must be continuous from the Grant Date through the Payment Date specified below.
Payment Date | This Award shall be paid in cash no later than 30 calendar days after the Committee’s written determination of whether and the extent to which the Performance Goals set out in the Performance Award Formula have been achieved and its determination of the amount, if any, to be paid.
Repayment Policy | By executing this Award Agreement, you acknowledge that any payment made with respect to this Award is subject to (a) the Qualcomm Incorporated Incentive Compensation Repayment Policy as in effect from time to time, a copy of the current policy is attached to this Award Agreement as Attachment B and incorporated herein by reference; (b) any applicable listing standards of a national securities exchange adopted in accordance with Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (regarding recovery of erroneously awarded compensation) and any implementing rules and regulations of the U.S. Securities and Exchange Commission adopted thereunder; (c) similar rules under the laws of any other jurisdiction; and (d) any policies hereinafter adopted by the Company, all to the extent determined by the Company in its discretion to be applicable to you (collectively, the “Repayment Policy”). You hereby agree to be bound by the Repayment Policy.

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Terms of the Plan | This Award is subject to the terms and conditions of the Plan, which are incorporated herein by reference. In the event of any conflict between this Award Agreement and the terms of the Plan, then the terms of the Plan control.

QUALCOMM INCORPORATED
Name: Heather Ace
Title: Chief Human Resources Officer
Date:

I hereby acknowledge that I have read, understand, and accept the terms of this Award Agreement, the Plan, and the Repayment Policy.

EXECUTIVE
Name:
Date:

Attachments: Attachment A – Performance Award Formula
Attachment B – Incentive Compensation Repayment Policy
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ATTACHMENT A
<<Executive’s Name>>

Base Salary | Target Award Amount as a Percent of Base Salary | Target Award Amount | Maximum Award Amount (200% of Target Award Amount)
<<$>> | <<%>> | <<$>> | <<$>>

PERFORMANCE AWARD FORMULA
The amount payable under this Award, if any, will be equal to the Target Award Amount multiplied by the product of the Financial Performance Incentive Multiple times the Non-Financial Performance Incentive Modifier, with the product capped at 200%.
Financial Performance Incentive Multiple
The Financial Performance Incentive Multiple will be calculated as follows:
Financial Performance Measures Performance Targets
•2022 Adjusted Revenues: ................................................. $<<2022 Adjusted Revenues>>
•2022 Adjusted Operating Income:....................... $<<2022 Adjusted Operating Income>>
“2022 Adjusted Revenues” is determined in accordance with generally accepted accounting principles in the United States (“GAAP”), and shall be adjusted to exclude the impact of the following items:
(1)The Qualcomm Strategic Initiative (“QSI”) segment as defined in the Company’s fiscal 2021 Form 10-K.
(2)The impact of litigation settlement, arbitration and/or judgment to the extent the amount is recorded to revenues for which each event individually equals or exceeds $25 million.
(3)Contract disputes in excess of $50 million in the Performance Period (including but not limited to disputes resulting in litigation or arbitration) in which (a) a licensee withholds or fails to make royalty payments or disputes royalty payments paid, (b) attributable revenue is not recorded in GAAP revenue for the Performance Period, (c) such dispute is not resolved during the Performance Period, and (d) projected revenue from such licensee was included in determining the 2022 Adjusted Revenue Performance Target, in which event revenue for the Performance Period will be adjusted to include the amount of revenue the licensee withholds, fails to pay or disputes, or to the extent that the licensee fails to report information sufficient to determine the actual impact on revenue of the withholding, failure to make royalty payments or dispute of payment amounts, such adjustment shall be the specific amount for such licensee that was used
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in the determining the 2022 Adjusted Revenue Performance Target. It is the intent of this provision to avoid the impact of revenue disputes or the double counting of revenues, subject to the conditions set out herein.
“2022 Adjusted Operating Income” is determined in accordance with GAAP, and shall be adjusted to exclude the impact of the following items:
(1)The QSI segment as defined in the Company’s fiscal 2021 Form 10-K.
(2)Non-cash share-based compensation expense.
(3)Gains and losses driven by the revaluation of our nonqualified deferred compensation plan liabilities recognized in operating expenses.
(4)Acquisition-related items, which consist of: (a) acquired in-process research and development, (b) recognition of the step-up of inventories to fair value, (c) purchase accounting effects on property, plant and equipment for acquisitions completed in or after the second quarter of fiscal 2017, (d) amortization of intangible assets for acquisitions completed in or after the third quarter of fiscal 2011, (e) third-party acquisition and integration services costs and (f) break-up fees. These adjustments shall apply only with respect to applicable items acquired or incurred in transactions that qualify as business combinations pursuant to GAAP.
(5) The following items for which each event individually equals or exceeds $25 million:
(a)Restructuring and restructuring-related costs (in the aggregate by restructuring event), which consist of the following costs: (i) severance and benefits (including COBRA and outplacement expenses); (ii) third-party consulting and legal costs; (iii) increased security costs; (iv) acceleration of depreciation and/or amortization expense; (v) facilities and lease termination or abandonment charges; (vi) asset impairment charges and/or contract terminations; (vii) third-party business separation costs; and (viii) relocation costs as a result of an office or facility closure.
2022 Adjusted Operating Income shall not be adjusted for any such item that cannot specifically be tied to the restructuring event.
(b)Goodwill and indefinite- and long-lived asset impairments;
(c)Gain/losses on divestitures or non-revenue generating asset sales and associated third-party costs (e.g. bankers’ fees for the sale of a business); and
(d)Litigation settlement, arbitration, judgment and/or damages arising from legal or regulatory matters to the extent the amount is recorded to revenues.
(6) Contract disputes in excess of $50 million in the Performance Period (including but not limited to disputes resulting in litigation or arbitration) in which (a) a licensee withholds or fails to make royalty payments or disputes royalty payments paid, (b) attributable revenue is not recorded in GAAP revenue for the Performance Period, (c) such dispute is not resolved during the Performance Period, and (d) projected revenue from such licensee was included in determining the 2022 Adjusted Operating Income Performance Target, in which event revenue for the Performance Period will be adjusted to include the amount of revenue the licensee withholds, fails to pay or disputes, or to the extent that the licensee fails to report information sufficient to determine the actual impact on revenue of the withholding, failure to make royalty payments or dispute of payment amounts, such adjustment shall be the specific amount for such licensee that was used in the determining the 2022 Adjusted Operating Income Performance Target. It is the intent of this provision to avoid the impact
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of revenue disputes or the double counting of revenues, subject to the conditions set out herein.
(7) In the event of an acquisition during fiscal 2022 with a purchase price that is greater than $5 billion, the impact on income from such acquisition.
(8) The imposition of any excise tax on stock repurchases.
Weighted Financial Performance Ratio and Financial Performance Incentive Multiple
The Weighted Financial Performance Ratio will be based on a relative weighting of 50% to 2022 Adjusted Revenues and 50% to 2022 Adjusted Operating Income.
1.The Weighted Financial Performance Ratio for 2022 Adjusted Revenues will be the result of 0.50 multiplied by a fraction, the numerator of which is the actual 2022 Adjusted Revenues and the denominator of which is the 2022 Adjusted Revenues Performance Target stated above.
2.The Weighted Financial Performance Ratio for 2022 Adjusted Operating Income will be the result of 0.50 multiplied by a fraction, the numerator of which is the actual 2022 Adjusted Operating Income and the denominator of which is the 2022 Adjusted Operating Income Performance Target stated above.
The resulting Weighted Financial Performance Ratios for 2022 Adjusted Revenues and 2022 Adjusted Operating Income will then be summed (the sum referred to as the “Weighted Financial Performance Ratio”) and the “Financial Performance Incentive Multiple” will be calculated according to the schedule set forth below:
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Weighted Financial Performance Ratio | Financial Performance Incentive Multiple | Rate of Increase / Decrease to the Financial Performance Incentive Multiple
> 120% | 2.00 | The Financial Incentive Performance Multiple is at the maximum of 2.00 when the Weighted Financial Performance Ratio is greater than 1.20.
120% | 2.00 | For each one percent that Weighted Financial Performance Ratio exceeds the objective (100%), the Financial Performance Incentive Multiple increases by 0.05 from the target Financial Performance Incentive Multiple of 1.00 up to a Financial Performance Incentive Multiple of 2.00 when the Weighted Financial Performance Ratio is 120%.
115% | 1.75
110% | 1.50
105% | 1.25
100% | 1.00
95% | 0.75 | For each one percent that Weighted Financial Performance Ratio is less than the objective (100%), the Financial Performance Incentive Multiple decreases by 0.05 from the target Financial Performance Incentive Multiple of 1.00 to a Financial Performance Incentive Multiple of 0.00 when the Weighted Financial Performance Ratio is 80%.
90% | 0.50
85% | 0.25
80% | 0.00
< 80% | 0.00 | The Financial Performance Incentive Multiple is zero (0.00) when the Weighted Financial Performance Ratio is less than 80%.

Non-Financial Performance Incentive Modifier
The Non-Financial Performance Incentive Modifier will be evaluated based upon the following:
Non-Financial Performance Measure
•Human Capital Advancements
Non-Financial Performance Incentive Modifier
The Non-Financial Performance Incentive Modifier will be determined by the Committee in its discretion taking into consideration interim status input from Management and a final self-assessment of advancements with respect to the Non-Financial Performance Measure prepared by Management following the close of the fiscal year. Based on these inputs and related discussions, the Committee in its discretion will determine a single Non-Financial Performance Incentive Modifier which shall be applicable uniformly to the Executive and all Award participants for the Performance Period. The Non-Financial Performance Incentive Modifier may range from 0.9 to 1.1.
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ATTACHMENT B
QUALCOMM INCORPORATED
Incentive Compensation Repayment Policy
To the extent permitted by governing law, the Company will require an executive officer to repay to the Company the amount of any cash or equity incentive payment that executive officer receives to the extent that (i) the amount of such payment was based on the achievement of certain financial results that were subsequently the subject of a material restatement that occurs within twelve months of such payment, (ii) the executive officer has engaged in theft, dishonesty or intentional falsification of Company documents or records that resulted in the obligation to restate, and (iii) a lower incentive payment would have been made to the executive officer based upon the restated financial results.
Notwithstanding anything in this Policy to the contrary, an accounting judgment made in good faith and supported by reasonable interpretations of generally accepted accounting principles (“GAAP”) at the time made shall not be the basis for the Company to require any repayments under this Policy.
The executive officer’s repayment obligation under this Policy shall be in addition to, and shall in no way limit, any other remedies that the Company may have available to it, and any other actions that the Company may take, with respect to the conduct of the executive officer or in connection with the accounting restatement.
For purposes of this Policy, an “executive officer” shall be any current or former member of the Company’s executive committee and any other officers or employees of the Company as may be designated by the Company from time to time.
The interpretation and enforcement of this Policy shall be the responsibility of the HR and Compensation Committee of the Board of Directors of the Company.
This Policy shall be effective with respect to any cash or equity incentive compensation paid to an executive officer on or after September 23, 2020.
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