Exhibit 10.2

 

EXECUTION VERSION

 

Opening Transaction

 

To:

Qualcomm Incorporated
5775 Morehouse Drive
San Diego, California 92121-1714

 

 

A/C:

TBD

 

 

From:

Citibank, N.A.

 

 

Re:

Accelerated Stock Buyback

 

 

Ref. No:

As provided in the Supplemental Confirmation

 

 

Date:

September 12, 2018

 

This master confirmation (this “Master Confirmation”), dated as of September 12,
2018, is intended to set forth certain terms and provisions of certain
Transactions (each, a “Transaction”) entered into from time to time between
Citibank, N.A. (“Dealer”) and Qualcomm Incorporated (“Counterparty”).  This
Master Confirmation, taken alone, is neither a commitment by either party to
enter into any Transaction nor evidence of a Transaction.  The additional terms
of any particular Transaction shall be set forth in a Supplemental Confirmation
in the form of Schedule A hereto (a “Supplemental Confirmation”), which shall
reference this Master Confirmation and supplement, form a part of, and be
subject to this Master Confirmation.  This Master Confirmation and each
Supplemental Confirmation together shall constitute a “Confirmation” as referred
to in the Agreement specified below.

 

The definitions and provisions contained in the 2002 ISDA Equity Derivatives
Definitions (the “Equity Definitions”), as published by the International Swaps
and Derivatives Association, Inc., are incorporated into this Master
Confirmation.  This Master Confirmation and each Supplemental Confirmation
evidence a complete binding agreement between Counterparty and Dealer as to the
subject matter and terms of each Transaction to which this Master Confirmation
and such Supplemental Confirmation relate and shall supersede all prior or
contemporaneous written or oral communications with respect thereto.

 

This Master Confirmation and each Supplemental Confirmation supplement, form a
part of, and are subject to an agreement in the form of the ISDA 2002 Master
Agreement (the “Agreement”) as if Dealer and Counterparty had executed the
Agreement on the date of this Master Confirmation (but without any Schedule
except for (i) the election of New York law (without reference to its choice of
laws doctrine other than Title 14 of Article 5 of the New York General
Obligations Law) as the governing law and US Dollars (“USD”) as the Termination
Currency, (ii) the election that subparagraph (ii) of Section 2(c) will not
apply to the Transactions, (iii) the election that the “Cross Default”
provisions of Section 5(a)(vi) of the Agreement shall apply with respect to
Counterparty and Dealer, with a “Threshold Amount” of USD 400,000,000 applicable
to Counterparty and a “Threshold Amount” of 3% of the shareholders’ equity of
Citigroup Inc. applicable to Dealer (provided that, as to both Counterparty and
Dealer (a) the phrase “, or becoming capable at such time of being declared,”
shall be deleted from clause (1) of such Section 5(a)(vi) of the Agreement,
(b) “Specified Indebtedness” shall have the meaning specified in Section 14 of
the Agreement, except that such term shall not include obligations in respect of
deposits received in the ordinary course of Dealer’s banking business and
(c) the following sentence shall be added to the end of Section 5(a)(vi) of the
Agreement: “Notwithstanding the foregoing, an Event of Default shall not occur
under either (1) or (2) above if (a) the event or condition referred to in
(1) or the failure to pay referred to in (2) is caused by an error or omission
of an administrative or operational nature, (b) funds were available to such
party to enable it to make the relevant payment when due, and (c) such payment
is made within three Local Business Days after notice of such failure is given
by such party.”), (iv) for purposes of Section 3(f) of the Agreement, Dealer
makes the following representation: it is a U.S. person for U.S. federal income
tax purposes, and it is a national banking association organized under the laws
of the United States

 

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of America, (v) for purposes of Section 3(f) of the Agreement, Counterparty
makes the following representation:  it is a U.S. person for U.S. federal income
tax purposes, it is a corporation for U.S. federal income tax purposes organized
under the laws of the State of Delaware, and its taxpayer identification number
is 95-3685934, (vi) for the purposes of Section 4(a)(i) and (ii) of the
Agreement, Dealer agrees to deliver a complete and accurate U.S. Internal
Revenue Service Form W-9 and Counterparty agrees to deliver a complete and
accurate U.S. Internal Revenue Service Form W-9, in each case upon execution of
this Agreement, promptly upon reasonable demand by the other party, and promptly
upon learning that any such form previously provided has become obsolete or
incorrect and (vii) the reference in Section 2(d)(i)(4)(B) of the Agreement to
Section 3(f) thereof shall be deemed to include a reference to Section 4(a) of
this Master Confirmation).

 

The Transactions shall be the sole Transactions under the Agreement.  If there
exists any ISDA Master Agreement between Dealer and Counterparty or any
confirmation or other agreement between Dealer and Counterparty pursuant to
which an ISDA Master Agreement is deemed to exist between Dealer and
Counterparty, then notwithstanding anything to the contrary in such ISDA Master
Agreement, such confirmation or agreement or any other agreement to which Dealer
and Counterparty are parties, the Transactions shall not be considered
Transactions under, or otherwise governed by, such existing or deemed ISDA
Master Agreement, no obligation with respect to a Transaction shall give rise,
directly or indirectly, to any “Obligation” (as defined therein) for purposes of
any Credit Support Annex forming a part of any such existing or deemed ISDA
Master Agreement, and the occurrence of any Event of Default or Termination
Event under the Agreement with respect to either party or any Transaction shall
not, by itself, give rise to any right or obligation under any such other
agreement or deemed agreement.  Notwithstanding anything to the contrary in any
other agreement between the parties or their Affiliates, the Transactions shall
not be “Specified Transactions” (or similarly treated) under any other agreement
between the parties or their Affiliates.

 

All provisions contained or incorporated by reference in the Agreement shall
govern this Master Confirmation and each Supplemental Confirmation except as
expressly modified herein or in the related Supplemental Confirmation.

 

If, in relation to any Transaction to which this Master Confirmation and a
Supplemental Confirmation relate, there is any inconsistency between the
Agreement, this Master Confirmation, any Supplemental Confirmation and the
Equity Definitions, the following will prevail for purposes of such Transaction
in the order of precedence indicated: (i) such Supplemental Confirmation;
(ii) this Master Confirmation; (iii) the Equity Definitions; and (iv) the
Agreement.

 

1.                                      Each Transaction constitutes a Share
Forward Transaction for the purposes of the Equity Definitions.  Set forth below
are the terms and conditions that, together with the terms and conditions set
forth in the Supplemental Confirmation relating to any Transaction, shall govern
such Transaction.

 

General Terms:

 

Trade Date:

For each Transaction, as set forth in the related Supplemental Confirmation.

 

 

Buyer:

Counterparty

 

 

Seller:

Dealer

 

 

Shares:

Common stock, par value USD 0.0001 per share, of Counterparty (Ticker: QCOM)

 

 

Exchange:

NASDAQ Global Select Market

 

 

Related Exchange(s):

All Exchanges

 

 

Prepayment\Variable Obligation:

Applicable

 

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Prepayment Amount:

For each Transaction, as set forth in the related Supplemental Confirmation.

 

 

Prepayment Date:

For each Transaction, as set forth in the related Supplemental Confirmation.

 

 

Designated OMR Threshold:

6% of the ADTV (as defined in Rule 10b-18(a)(1)) applicable on any Calculation
Date in total with respect to all Transactions hereunder.

 

Valuation:

 

VWAP Price:

For any Exchange Business Day, the volume-weighted average price per Share for
Rule 10b-18 eligible transactions in the Shares during the time period
corresponding to the regular trading session (including any extensions thereof)
of the Exchange on such Exchange Business Day (without regard to pre-open or
after-hours trading outside of such regular trading session for such Exchange
Business Day), as published by Bloomberg at 4:15 p.m. New York time (or 15
minutes following the end of any extension of the regular trading session) on
such Exchange Business Day, on Bloomberg page “QCOM US <Equity> AQR_SEC” (or any
successor thereto), or if such price is not so reported on such Exchange
Business Day for any reason or is, in the Calculation Agent’s good faith,
commercially reasonable judgment, manifestly erroneous, such VWAP Price shall be
such volume-weighted average price as determined by the Calculation Agent in
good faith and in a commercially reasonable manner. For purposes of calculating
the VWAP Price for such Exchange Business Day, the Calculation Agent will
include only those trades that are reported during the period of time during
which Counterparty could purchase its own shares under Rule 10b-18(b)(2) and are
effected pursuant to the conditions of Rule 10b-18(b)(3), each under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”) (such trades,
“Rule 10b-18 eligible transactions”).

 

 

Forward Price:

The average of the VWAP Prices for the Calculation Dates in the Calculation
Period, subject to “Valuation Disruption” below.

 

 

Forward Price Adjustment Amount:

For each Transaction, as set forth in the related Supplemental Confirmation.

 

 

Calculation Period:

For each Transaction, the period from and including the Calculation Period Start
Date to and including the Termination Date.

 

 

Calculation Period Start Date:

For each Transaction, as set forth in the related Supplemental Confirmation.

 

 

Termination Date:

For each Transaction, the Scheduled Termination Date for such Transaction.

 

 

Calculation Dates:

For each Transaction, any date that is (i) both an Exchange Business Day and is
set forth as a Calculation Date in the related Supplemental Confirmation and
(ii) every third Scheduled Trading Day following the last Calculation Date set
forth in such Supplemental Confirmation, subject to the limitations set forth in
“Valuation Disruption” below.

 

 

Scheduled Termination Date:

For each Transaction, as set forth in the related Supplemental Confirmation,
subject to postponement as provided in “Valuation Disruption” below.

 

 

Valuation Disruption:

The definition of “Market Disruption Event” in Section 6.3(a) of the Equity
Definitions is hereby amended by deleting the words “at any time during the
one-hour period that ends at the relevant Valuation Time, Latest Exercise Time,
Knock-in Valuation Time or Knock-out Valuation Time, as

 

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the case may be” and inserting the words “at any time on any Scheduled Trading
Day during the Calculation Period or Settlement Valuation Period” after the word
“material,” in the third line thereof.

 

 

 

Section 6.3(d) of the Equity Definitions is hereby amended by deleting the
remainder of the provision following the term “Scheduled Closing Time” in the
fourth line thereof.

 

 

 

Notwithstanding anything to the contrary in the Equity Definitions, to the
extent that a Disrupted Day occurs (i) on a Scheduled Trading Day that is
scheduled to be a Calculation Date for such Transaction, the Calculation Agent
may, in its good faith and commercially reasonable judgment, postpone the
Scheduled Termination Date by up to one Calculation Date for each Disrupted Day,
or (ii) in the Settlement Valuation Period (as defined in Annex A), the
Calculation Agent may extend the Settlement Valuation Period by up to one
Calculation Date for each Disrupted Day. If any such Disrupted Day is a
Disrupted Day because of a Market Disruption Event (or a deemed Market
Disruption Event as provided herein), the Calculation Agent shall in its
commercially reasonable judgment determine whether (i) such Disrupted Day is a
Disrupted Day in full, in which case the VWAP Price for such Disrupted Day shall
not be included for purposes of determining the Forward Price or the Settlement
Price, as the case may be, or (ii) such Disrupted Day is a Disrupted Day only in
part, in which case the VWAP Price for such Disrupted Day shall be determined by
the Calculation Agent based on Rule 10b-18 eligible transactions in the Shares
on such Disrupted Day taking into account the nature and duration of the
relevant Market Disruption Event, and the weighting of the VWAP Price for the
relevant Calculation Dates during the Calculation Period or the Settlement
Valuation Period, as the case may be, shall be adjusted in a commercially
reasonable manner by the Calculation Agent for purposes of determining the
Forward Price or the Settlement Price, as the case may be, with such adjustments
based on, among other factors, the duration of any Market Disruption Event and
the volume, historical trading patterns and price of the Shares. Any Exchange
Business Day on which, as of the date hereof, the Exchange is scheduled to close
prior to its normal close of trading shall be deemed not to be an Exchange
Business Day; if a closure of the Exchange prior to its normal close of trading
on any Exchange Business Day is scheduled following the date hereof, then such
Exchange Business Day shall be deemed to be a Disrupted Day in full. If a
Disrupted Day is due to a Regulatory Disruption, then such Scheduled Trading Day
shall be deemed to be a Disrupted Day in full if the circumstances set forth in
the last sentence of Section 7 of this Master Confirmation are applicable.

 

 

 

If a Disrupted Day occurs on a Scheduled Trading Day scheduled to be a
Calculation Date during the Calculation Period or the Settlement Valuation
Period, as the case may be, and each of the five immediately following scheduled
Calculation Dates is a Disrupted Day, then the Calculation Agent may, in its
good faith and commercially reasonable judgment (i) deem such fifth scheduled
Calculation Date to be an Exchange Business Day that is not a Disrupted Day and
(ii) determine the VWAP Price for such fifth scheduled Calculation Date using
its good faith estimate of the value of the Shares on such fifth scheduled
Calculation Date based on the volume, historical trading patterns and price of
the Shares.

 

 

 

The Calculation Agent shall notify the parties of the occurrence of any
Disrupted Day as promptly as practicable, and shall notify Counterparty of

 

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any determination pursuant to these Valuation Disruption provisions no later
than the Exchange Business Day immediately following the last consecutive
affected Calculation Date.

 

Settlement Terms:

 

Settlement Procedures:

For each Transaction, if the Number of Shares to be Delivered for such
Transaction is positive, Physical Settlement shall be applicable to such
Transaction; provided that the “Representation and Agreement” contained in
Section 9.11 of the Equity Definitions shall be modified by excluding any
representations therein relating to restrictions, obligations, limitations or
requirements under applicable securities laws arising as a result of the fact
that Buyer is the Issuer of the Shares. If the Number of Shares to be Delivered
is negative, then the Counterparty Settlement Provisions in Annex A shall apply.

 

 

Number of Shares to be Delivered:

A number of Shares equal to (x)(a) the Prepayment Amount divided by (b) the
Divisor Amount minus (y) the number of Initial Shares.

 

 

Divisor Amount:

The greater of (i) the Forward Price minus the Forward Price Adjustment Amount
and (ii) USD 10.00.

 

 

Excess Dividend Amount:

For the avoidance of doubt, all references to the Excess Dividend Amount shall
be deleted from Section 9.2(a)(iii) of the Equity Definitions.

 

 

Settlement Date:

For each Transaction, if the Number of Shares to be Delivered is positive, the
date that is one Settlement Cycle immediately following the Termination Date for
such Transaction.

 

 

Settlement Currency:

USD

 

 

Initial Share Delivery:

For each Transaction, Dealer shall deliver a number of Shares equal to the
Initial Shares for such Transaction to Counterparty on the Initial Share
Delivery Date for such Transaction in accordance with Section 9.4 of the Equity
Definitions, with such Initial Share Delivery Date deemed to be a “Settlement
Date” for purposes of such Section 9.4.

 

 

Initial Share Delivery Date:

For each Transaction, as set forth in the related Supplemental Confirmation.

 

 

Initial Shares:

For each Transaction, as set forth in the related Supplemental Confirmation.

 

Share Adjustments:

 

Potential Adjustment Event:

Notwithstanding anything to the contrary in Section 11.2(e) of the Equity
Definitions, (i) an Extraordinary Dividend shall not constitute a Potential
Adjustment Event; (ii) none of the Transactions pursuant to this Master
Confirmation, any Other Specified Repurchase Agreement(s) or any Permitted OMR
Transaction (as defined below) shall constitute a Potential Adjustment Event and
(iii) no Excluded Transaction Announcement (as defined below) shall constitute a
Potential Adjustment Event.

 

 

 

It shall constitute an additional Potential Adjustment Event if the Scheduled
Termination Date for any Transaction is postponed pursuant to “Valuation
Disruption” above, in which case the Calculation Agent may, in its good faith,
commercially reasonable judgment, adjust any relevant terms of any such
Transaction as necessary to account for the economic effect on such

 

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Transaction of such postponement; provided that the Calculation Agent shall not
change the designation of any Calculation Date.

 

 

Extraordinary Dividend:

For any calendar quarter, any dividend or distribution on the Shares with an
ex-dividend date occurring during such calendar quarter (other than any dividend
or distribution of the type described in Section 11.2(e)(i) or
Section 11.2(e)(ii)(A) of the Equity Definitions) (a “Dividend”) the amount or
value of which (as determined by the Calculation Agent), when aggregated with
the amount or value (as determined by the Calculation Agent) of any and all
previous Dividends with ex-dividend dates occurring in the same calendar
quarter, exceeds the Ordinary Dividend Amount.

 

 

Ordinary Dividend Amount:

For each Transaction, as set forth in the related Supplemental Confirmation

 

 

Method of Adjustment:

Calculation Agent Adjustment

 

 

Early Ordinary Dividend Payment:

For each Transaction, if an ex-dividend date for any Dividend that is not an
Extraordinary Dividend occurs during any calendar quarter occurring (in whole or
in part) during the Relevant Dividend Period (as defined below) for such
Transaction and is prior to the Scheduled Ex-Dividend Date for such Transaction
for such calendar quarter, the Calculation Agent shall in good faith and in a
commercially reasonable manner make such adjustment to the exercise, settlement,
payment or any other terms of the relevant Transaction as the Calculation Agent
determines appropriate to account for the economic effect on such Transaction of
such event.

 

 

Scheduled Ex-Dividend Dates:

For each Transaction for each calendar quarter, as set forth in the related
Supplemental Confirmation.

 

 

Relevant Dividend Period:

The period from and including the Calculation Period Start Date to and including
the Relevant Dividend Period End Date.

 

 

Relevant Dividend Period End Date:

If the Number of Shares to be Delivered is negative, the last day of the
Settlement Valuation Period; otherwise, the Termination Date.

 

Extraordinary Events:

 

Consequences of Merger Events:

 

(a)

 

Share-for-Share:

 

Modified Calculation Agent Adjustment

 

 

 

 

 

(b)

 

Share-for-Other:

 

Cancellation and Payment

 

 

 

 

 

(c)

 

Share-for-Combined:

 

Component Adjustment

 

Tender Offer:

Applicable; provided that (a) Section 12.1(d) of the Equity Definitions shall be
amended by replacing “10%” in the third line thereof with “20%”,
(b) Section 12.1(l) of the Equity Definitions shall be amended (i) by deleting
the parenthetical in the fifth line thereof, (ii) by replacing “that” in the
fifth line thereof with “whether or not such announcement” and (iii) by adding
immediately after the words “Tender Offer” in the fifth line thereof “provided,
that in the commercially reasonable judgment of the Calculation Agent such
announcement is reasonably likely to result in the Tender Offer, and any
publicly announced material change or material amendment to such an announcement
(including the announcement of an abandonment of such

 

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intention)” and (c) Sections 12.3(a) and 12.3(d) of the Equity Definitions shall
each be amended by replacing each occurrence of the words “Tender Offer Date” by
“Announcement Date.”

 

Consequences of Tender Offers:

 

(a)

 

Share-for-Share:

 

Modified Calculation Agent Adjustment

 

 

 

 

 

(b)

 

Share-for-Other:

 

Modified Calculation Agent Adjustment

 

 

 

 

 

(c)

 

Share-for-Combined:

 

Modified Calculation Agent Adjustment

 

Limitations as to Certain Adjustments:

For the avoidance of doubt, any adjustments to the terms of any Transaction and
any determination of any amounts due upon termination of any Transaction
hereunder (including, without limitation, as a result of a Merger Event, Tender
Offer, Acquisition Transaction or Merger Transaction, or any announcements with
respect to any of the foregoing) shall be made without duplication in respect of
any prior adjustment hereunder (including, without limitation, any prior
adjustment pursuant to Sections 10 and 11 below).

 

 

Nationalization, Insolvency or Delisting:

Cancellation and Payment; provided that in addition to the provisions of
Section 12.6(a)(iii) of the Equity Definitions, it shall also constitute a
Delisting if the Exchange is located in the United States and the Shares are not
immediately re-listed, re-traded or re-quoted on any of the New York Stock
Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or their
respective successors); if the Shares are immediately re-listed, re-traded or
re-quoted on any such exchange or quotation system, such exchange or quotation
system shall be deemed to be the Exchange.

 

Additional Disruption Events:

 

(a)                   Change in Law:

Applicable; provided that Section 12.9(a)(ii) of the Equity Definitions is
hereby amended by (i) replacing the phrase “the interpretation” in the third
line thereof with the phrase “, or public announcement of, the formal or
informal interpretation”, (ii) replacing the word “Shares” where it appears in
clause (X) thereof with the words “Hedge Position” and (iii) immediately
following the word “Transaction” in clause (X) thereof, adding the phrase “in
the manner contemplated by the Hedging Party on the Trade Date”; provided
further that (i) any determination as to whether (A) the adoption of or any
change in any applicable law or regulation (including, for the avoidance of
doubt and without limitation, (x) any tax law or (y) adoption or promulgation of
new regulations authorized or mandated by existing statute) or (B) the
promulgation of or any change in the interpretation by any court, tribunal or
regulatory authority with competent jurisdiction of any applicable law or
regulation (including any action taken by a taxing authority), in each case,
constitutes a “Change in Law” shall be made without regard to Section 739 of the
Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 or any similar
legal certainty provision in any legislation enacted, or rule or regulation
promulgated, on or after the Trade Date, and (ii) Section 12.9(a)(ii) of the
Equity Definitions is hereby amended by replacing the parenthetical beginning
after the word “regulation” in the second line thereof with the words
“(including, for the avoidance of doubt and without limitation, (x) any tax law
or (y) adoption or promulgation of new regulations authorized or mandated by
existing statute)”. Notwithstanding anything to the

 

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contrary in the Equity Definitions, a Change in Law described in clause (Y) of
Section 12.9(a)(ii) of the Equity Definitions shall not constitute a Change in
Law and instead shall constitute an Increased Cost of Hedging as described in
Section 12.9(a)(vi) of the Equity Definitions.

 

 

(b)                   Failure to Deliver:

Applicable

 

 

(c)                    Insolvency Filing:

Applicable

 

 

(d)                   Hedging Disruption:

Not Applicable

 

 

(e)                    Increased Cost of Hedging:

Not Applicable, except as set forth in the last sentence under the caption
“Change in Law” above.

 

 

(f)                     Loss of Stock Borrow:

Applicable

 

 

Maximum Stock Loan Rate:

200 basis points per annum

 

 

(g)                    Increased Cost of Stock Borrow:

Applicable

 

 

Initial Stock Loan Rate:

25 basis points per annum

 

 

Hedging Party:

For all applicable events, Dealer, acting in accordance with the requirements of
Section 3 of this Master Confirmation.

 

 

Determining Party:

For all applicable events, Dealer, acting in accordance with the requirements of
Section 3 of this Master Confirmation.

 

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Additional Termination Event:

The declaration by the Issuer of any Extraordinary Dividend, the ex-dividend
date for which occurs or is reasonably expected to occur, as determined by the
Calculation Agent, during the Relevant Dividend Period, will constitute an
Additional Termination Event, with Counterparty as the sole Affected Party and
all Transactions hereunder as the Affected Transactions.

 

 

Non-Reliance/Agreements and Acknowledgements Regarding Hedging
Activities/Additional Acknowledgements:

Applicable

 

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Transfer:

Notwithstanding anything to the contrary in the Agreement, Dealer may, without
the consent of Counterparty, assign, transfer and set over all rights, title and
interest, powers, privileges and remedies of Dealer under any Transaction, in
whole or in part, to an affiliate of Dealer that is wholly-owned, directly or
indirectly, by Citigroup Inc. whose obligations are guaranteed by Citigroup Inc.
pursuant to an unconditional guarantee of Citigroup Inc. relating to the
obligations of Dealer under the Agreement and the Transactions and otherwise in
form and substance consistent with industry norms for guarantees by financial
institutions of derivative transactions entered into by their affiliates;
provided that (i) the senior unsecured debt rating by at least one of Moody’s
Investors Services, Inc. or Standard & Poors Inc. (the “Credit Rating”) of such
affiliate (or its guarantor under a guaranty meeting the requirements of this
paragraph) is equal to or higher than the Credit Rating of Dealer, (ii) such
affiliate assumes, in a written agreement satisfactory to and for the benefit of
Counterparty, the obligations of Dealer hereunder in respect thereof, (iii) no
Event of Default, Potential Event of Default or Termination Event with respect
to which Dealer is the Defaulting Party or an Affected Party, as the case may
be, exists or would result therefrom, (iv) no Additional Disruption Event or
other event giving rise to a right or responsibility to terminate or cancel the
Transaction or to make an adjustment to the terms of the Transaction would
result therefrom, (v) at the time of such assignment or transfer, Counterparty
would not, as a result of such assignment or transfer, reasonably be expected at
any time either (A) to be required to pay (including a payment in kind) to
Dealer or such Transferee an amount in respect of an Indemnifiable Tax greater
than the amount Counterparty would have been required to pay to Dealer in the
absence of such transfer or (B) to receive a payment (including a payment in
kind) from which an amount is required to be deducted or withheld for or on
account of a Tax as to which no additional amount is required to be paid,
(vi) Dealer shall have caused the transferee to make such Payee Tax
Representations and to provide such tax documentation as may be reasonably
requested by Counterparty to permit Counterparty to determine that the transfer
complies with the requirements of clause (v) in this paragraph,
(vii) Counterparty would not, at the time and as a result of such transfer or
assignment, reasonably be expected to become subject to any registration,
qualification, reporting or other requirement under applicable law or regulation
to which it would not otherwise have been subject absent such transfer or
assignment and (viii) Dealer shall be responsible for commercially reasonable
fees and actual, documented out-of-pocket expenses, including commercially
reasonable fees and actual, documented out-of-pocket expenses of external
counsel, incurred by Counterparty in connection with any transfer or potential
transfer by Dealer.

 

 

 

Notwithstanding any other provision in this Confirmation to the contrary
requiring or allowing Dealer to purchase, sell, receive or deliver any Shares or
other securities, or make or receive any payment in cash, to or from
Counterparty, Dealer may designate any of its affiliates that are wholly-owned,
directly or indirectly, by Citigroup Inc. to purchase, sell, receive or deliver
such Shares or other securities, or to make or receive such payment in cash, and
otherwise to perform Dealer’s obligations in respect of the Transaction and any
such designee may assume such obligations; provided that Dealer shall be
discharged of its obligations to Counterparty only to the extent of any such
performance by such affiliate.

 

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Dealer Payment Instructions:

 

Bank: Citibank NA New York
BIC: CITIUS33 (or ABA: 021000089)
F/O: Citibank New York
A/C: 00167679
Ref: NY Swap Operations

 

 

 

Counterparty’s Contact Details for

 

 

Purpose of Giving Notice:

 

Qualcomm Incorporated
5775 Morehouse Drive
San Diego, California 92121-1714
Attention: David Wise, Treasurer
Telephone: 858-651-0295
Email: dwise@qualcomm.com

 

 

 

 

 

With a copy to:

 

 

 

 

 

Attention: Brian Blanchett
Telephone: 858-651-7696
Email: bblanche@qualcomm.com

 

 

 

 

 

And email notification to the following address: treasury.ecm@qualcomm.com

 

 

 

Dealer’s Contact Details for Purpose of Giving Notice:

 

Citibank, N.A.
388 Greenwich Street, 6th Floor
New York, New York 10013
Attention: Equity Derivatives
Telephone: (212) 723-7219
Email: robert.g.leonard@citi.com;
peter.barna@citi.com;
eric.natelson@citi.com;
theodore.finkelstein@citi.com;
eg.us.corporates.middle.office@citi.com;
dustin.c.sheppard@citi.com

 

2.                                                                                                       
Calculation Agent.  Dealer, acting in accordance with the requirements of
Section 3 of this Master Confirmation; provided that, following the occurrence
of an Event of Default pursuant to Section 5(a)(vii) of the Agreement with
respect to which Dealer is a Defaulting Party, Counterparty shall have the right
to designate a nationally recognized third-party dealer in over-the-counter
corporate equity derivatives to act as the Calculation Agent with respect to the
Transactions under this Master Confirmation.

 

3.                                                                                                       
Calculation Agent, Hedging Party and Determining Party.  Following any
adjustment, determination or calculation by the Calculation Agent, the Hedging
Party or the Determining Party hereunder upon a written request by Counterparty,
the Calculation Agent, the Hedging Party or the Determining Party, as the case
may be, will promptly (but in any event no later than five (5) Exchange Business
Days following receipt of such written request by such party) provide to
Counterparty by e-mail to the e-mail address provided by Counterparty in such
written request a report (in a commonly used file format for the storage and
manipulation of financial data) displaying in commercially reasonable detail the
basis for such adjustment, determination or calculation, as the case may be, it
being understood that the Calculation Agent, the Hedging Party or the
Determining Party, as the case may be, shall not be obligated to disclose any
proprietary or confidential models or any other information that may be
proprietary or

 

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confidential, in each case, used by the Calculation Agent, the Hedging Party or
the Determining Party, as the case may be, for such adjustment, determination or
calculation.

 

Whenever the Calculation Agent, the Hedging Party or the Determining Party is
required to act, to make any determination, or to exercise judgment or
discretion in any way with respect to any Transaction hereunder, it will do so
in good faith and in a commercially reasonable manner, and to the extent the
Calculation Agent, the Hedging Party or the Determining Party makes any
judgment, calculation, adjustment or determination, or exercises its discretion
to take into account the effect of an event on the Transaction, it shall do so
based on the assumption that the Hedging Party maintains a commercially
reasonable Hedge Position at the time of such event.  Notwithstanding anything
to the contrary in the Equity Definitions, this Master Confirmation or any
Supplemental Confirmation, none of the Calculation Agent , the Hedging Party,
the Determining Party or the Dealer shall change the dates identified as
Calculation Dates in the relevant Supplemental Confirmation for any Transaction.

 

4.                                                                                                       
Additional Mutual Representations, Warranties and Covenants of Each Party.  In
addition to the representations, warranties and covenants in the Agreement, each
party represents, warrants and covenants to the other party that:

 

(a)                                 Eligible Contract Participant.  It is an
“eligible contract participant”, as defined in the U.S. Commodity Exchange Act
(as amended), and is entering into each Transaction hereunder as principal (and
not as agent or in any other capacity, fiduciary or otherwise) and not for the
benefit of any third party.

 

(b)                                 Accredited Investor.  Each party
acknowledges that the offer and sale of each Transaction to it is intended to be
exempt from registration under the Securities Act of 1933, as amended (the
“Securities Act”), by virtue of Section 4(a)(2) thereof.  Accordingly, each
party represents and warrants to the other that (i) it has the financial ability
to bear the economic risk of its investment in each Transaction and is able to
bear a total loss of its investment, (ii) it is an “accredited investor” as that
term is defined under Regulation D under the Securities Act and (iii) the
disposition of each Transaction is restricted under this Master Confirmation,
the Securities Act and state securities laws.

 

5.                                      Additional Representations, Warranties
and Covenants of Counterparty.  In addition to the representations, warranties
and covenants in the Agreement, Counterparty represents, warrants and covenants
to Dealer that:

 

(a)                                 The purchase or writing of each Transaction
and the transactions contemplated hereby will not violate Rule 13e-1 or
Rule 13e-4 under the Exchange Act.

 

(b)                                 It is not entering into each Transaction
(i) on the basis of, and as of the Trade Date for such Transaction is not aware
of, any material non-public information with respect to the Shares, (ii) in
anticipation of, in connection with, or to facilitate, a distribution of its
securities, a self tender offer or a third-party tender offer, or (iii) to
create actual or apparent trading activity in the Shares (or any security
convertible into or exchangeable for the Shares) or to raise or depress or
otherwise manipulate the price of the Shares (or any security convertible into
or exchangeable for the Shares).

 

(c)                                  Each Transaction is being entered into
pursuant to a publicly disclosed Share buy-back program and its Board of
Directors has approved the use of derivatives to effect the Share buy-back
program.

 

(d)                                 Without limiting the generality of
Section 13.1 of the Equity Definitions, Counterparty acknowledges that neither
Dealer nor any of its affiliates is making any representations or warranties or
taking any position or expressing any view with respect to the treatment of any
Transaction under any accounting standards including ASC Topic 260, Earnings Per
Share, ASC Topic 815, Derivatives and Hedging, or ASC Topic 480, Distinguishing
Liabilities from Equity and ASC 815-40, Derivatives and Hedging — Contracts in
Entity’s Own Equity.

 

(e)                                  As of the Trade Date for each Transaction
hereunder, Counterparty is in compliance in all material respects with its
reporting obligations under the Exchange Act.

 

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(f)                                   Counterparty shall report each Transaction
as required under the Exchange Act and the rules and regulations thereunder.

 

(g)                                  The Shares are not, and Counterparty will
not cause the Shares to be, subject to a “restricted period” (as defined in
Regulation M promulgated under the Exchange Act) at any time during any
Regulation M Period (as defined below) for any Transaction unless Counterparty
has provided written notice to Dealer of such restricted period not later than
the Scheduled Trading Day immediately preceding the first day of such
“restricted period”; Counterparty acknowledges that any such notice may cause a
Disrupted Day to occur pursuant to Section 7 below; accordingly, Counterparty
acknowledges that its delivery of such notice must comply with the standards set
forth in Section 8 below; “Regulation M Period” means, for any Transaction,
(i) the Relevant Period (as defined below) and (ii) the Settlement Valuation
Period, if any, for such Transaction. “Relevant Period” means, for any
Transaction, the period commencing on the Trade Date for such Transaction and
ending on the Scheduled Termination Date.

 

(h)                                 As of the Trade Date, the Prepayment Date,
the Initial Share Delivery Date and the Settlement Date for each Transaction,
Counterparty is not “insolvent” (as such term is defined under Section 101(32)
of the U.S. Bankruptcy Code (Title 11 of the United States Code) (the
“Bankruptcy Code”)) and Counterparty would be able to purchase a number of
Shares with a value equal to the Prepayment Amount in compliance with the laws
of the jurisdiction of Counterparty’s incorporation.

 

(i)                                     Counterparty is not and, after giving
effect to each Transaction, will not be, required to register as an “investment
company” as such term is defined in the Investment Company Act of 1940, as
amended.

 

(j)                                    [omitted]

 

(k)                                 Counterparty has not entered into and will
not enter into agreements similar to the Transactions described herein where the
relevant calculation or valuation dates in any initial hedge period, calculation
period, relevant period or settlement valuation period (each however defined) in
such other transaction will coincide at any time (including as a result of
extensions in such initial hedge period, calculation period, relevant period or
settlement valuation period as provided in the relevant agreements) with the
Calculation Dates in any Relevant Period or, if applicable, any Settlement
Valuation Period under this Master Confirmation.  In the event that any relevant
calculation or valuation dates in any initial hedge period, relevant period,
calculation period or settlement valuation period in any other similar
transaction coincides with any Calculation Dates in any Relevant Period or, if
applicable, Settlement Valuation Period under this Master Confirmation as a
result of any postponement of the Scheduled Termination Date or extension of the
Settlement Valuation Period pursuant to “Valuation Disruption” above,
Counterparty shall promptly amend such transaction to avoid any such overlap. 
For the avoidance of doubt, nothing in this Section 5(k) shall prohibit or apply
to the Permitted Purchases (as defined below).

 

6.                                      Additional Representations of Dealer. 
In addition to the representations, warranties and covenants in the Agreement,
Dealer represents, warrants and covenants to Counterparty that:

 

(a)                                                   Dealer shall use
commercially reasonable efforts, during the Calculation Period and any
Settlement Valuation Period for any Transaction, to make all purchases of Shares
in connection with such Transaction in a manner that would comply with the
limitations set forth in clauses (b)(1), (b)(2), (b)(3) and (b)(4) and (c) of
Rule 10b-18, as if such rule were applicable to such purchases and taking into
account any applicable Securities and Exchange Commission no-action letters as
appropriate, and subject to any delays between the execution and reporting of a
trade of the Shares on the Exchange and other circumstances beyond Dealer’s
control; provided that, during the Calculation Period, the foregoing agreement
shall not apply to purchases made to dynamically hedge for Dealer’s own account
or the account of its affiliate(s) the optionality arising under a Transaction
(including, for the avoidance of doubt, timing optionality); and provided
further that, without limiting the generality of the first sentence of this
Section 6(a), Dealer shall not be responsible for any failure to comply with
Rule 10b-18(b)(3) to the extent any transaction that was executed (or deemed to
be executed) by or on behalf of Counterparty or an “affiliated purchaser” (as
defined under Rule 10b-18) pursuant to a separate agreement is not deemed to be
an “independent bid” or an “independent transaction” for purposes of
Rule 10b-18(b)(3).

 

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(b)                                                   In connection with each
Transaction, Dealer has not, at any time prior to execution of the Confirmation
for such Transaction, discussed any offsetting transaction(s) in respect of such
Transaction with any third party.

 

(c)                                                    Dealer has implemented
policies and procedures, taking into consideration the nature of its business,
reasonably designed to ensure that individuals making investment decisions
related to any Transaction do not have access to material nonpublic information
regarding Counterparty or the Shares.

 

7.                                      Regulatory Disruption.  In the event
that Dealer concludes, in its good faith, commercially reasonable judgment and
based on the advice of counsel, that it is appropriate with respect to (x) any
legal, regulatory or self-regulatory requirements or (y) any related policies
and procedures similarly applicable to accelerated share repurchase transactions
and consistently applied (whether or not such requirements, policies or
procedures are imposed by law or have been voluntarily adopted by Dealer), for
it to refrain from or decrease any market activity on any Scheduled Trading Day
or Days during the Calculation Period or, if applicable, the Settlement
Valuation Period, Dealer may by written notice to Counterparty elect to deem
that a Market Disruption Event has occurred and will be continuing on such
Scheduled Trading Day or Days. If Dealer determines that a Market Disruption
Event has occurred on any such Scheduled Trading Day solely pursuant to clause
(y) above and solely with respect to policies or procedures voluntarily adopted
by Dealer, such Scheduled Trading Day shall be a Disrupted Day in full, and not
a Disrupted Day only in part.

 

8.                                      10b5-1 Plan.  Counterparty represents,
warrants and covenants to Dealer that:

 

(a)                                                   Counterparty is entering
into this Master Confirmation and each Transaction hereunder in good faith and
not as part of a plan or scheme to evade the prohibitions of Rule 10b-5 under
the Exchange Act (“Rule 10b-5”) or any other antifraud or anti-manipulation
provisions of the federal or applicable state securities laws and that it has
not entered into or altered and will not enter into or alter any corresponding
or hedging transaction or position with respect to the Shares.  For the
avoidance of doubt, neither the entry into the Other Specified Repurchase
Agreement nor the Permitted OMR Transactions shall fall within the ambit of the
previous sentence.  Counterparty acknowledges that it is the intent of the
parties that each Transaction entered into under this Master Confirmation comply
with the requirements of paragraphs (c)(1)(i)(A) and (B) of Rule 10b5-1 under
the Exchange Act (“Rule 10b5-1”) and each Transaction entered into under this
Master Confirmation shall be interpreted to comply with the requirements of
Rule 10b5-1(c). “Other Specified Repurchase Agreements” means, collectively, 
the transactions entered by Counterparty with other dealers substantially
contemporaneously with the Transactions hereunder, each  with terms
substantially similar to the terms of a Transaction hereunder, except for
calculation dates that do not coincide with any Calculation Dates hereunder.

 

(b)                                                   During the Calculation
Period and the Settlement Valuation Period, if any, for any Transaction and in
connection with the delivery of any Alternative Delivery Units for any
Transaction, Dealer (or its agent or Affiliate) may effect transactions in
Shares in connection with such Transaction. The timing of such transactions by
Dealer, the price paid or received per Share pursuant to such transactions and
the manner in which such transactions are made, including, without limitation,
whether such transactions are made on any securities exchange or privately,
shall be within the sole judgment of Dealer. Counterparty acknowledges and
agrees that all such transactions shall be made in Dealer’s sole judgment and
for Dealer’s own account.

 

(c)                                                    Counterparty will not
seek to control or influence Dealer’s decision to make any “purchases or sales”
(within the meaning of Rule 10b5-1(c)(1)(i)(B)(3)) under any Transaction entered
into under this Master Confirmation, including, without limitation, Dealer’s
decision to enter into any hedging transactions.  Counterparty represents and
warrants that it has consulted with its own advisors as to the legal aspects of
its adoption and implementation of this Master Confirmation and each
Supplemental Confirmation under Rule 10b5-1.

 

(d)                                                   Counterparty acknowledges
and agrees that any amendment, modification, waiver or termination of this
Master Confirmation or the relevant Supplemental Confirmation must be effected
in accordance with the requirements for the amendment or termination of a “plan”
as defined in Rule 10b5-1(c).  Without limiting the generality of the foregoing,
any such amendment, modification, waiver or termination shall be made in good
faith and not as part of a plan or scheme to evade the prohibitions of
Rule 10b-5, and no such amendment, modification or waiver

 

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shall be made at any time at which Counterparty or any officer or director of
Counterparty is aware of any material non-public information regarding
Counterparty or the Shares.

 

9.                                      Counterparty Purchases.  Counterparty
(or any “affiliated purchaser” as defined in Rule 10b-18 under the Exchange Act
(“Rule 10b-18”)) shall not, without the prior written consent of Dealer,
directly or indirectly purchase any Shares (including by means of a derivative
instrument), listed contracts on the Shares or securities that are convertible
into, or exchangeable or exercisable for Shares (including, without limitation,
any Rule 10b-18 purchases of blocks (as defined in Rule 10b-18)) on any
Calculation Date during any Relevant Period or, if applicable, Settlement
Valuation Period, except through Dealer or pursuant to the Permitted OMR
Transactions or any Other Specified Repurchase Agreements.

 

Notwithstanding the immediately preceding paragraph or anything herein to the
contrary  Counterparty may purchase Shares (i) on any Calculation Date pursuant
to any one or more Rule 10b5-1 repurchase plans and Rule 10b-18 repurchase
arrangements, in each case entered into with Dealer or an Affiliate of
Dealer (each, a “Dealer Permitted OMR Transaction”), so long as, on any
Calculation Date, purchases under all Dealer Permitted OMR Transactions do not
in the aggregate exceed the Designated OMR Threshold specified herein for such
Transaction on such Calculation Date; provided, however, for the avoidance of
doubt, on any Exchange Business Day that is not a Calculation Date but is a
calculation date under any Other Specified Repurchase Agreement, Counterparty
may purchase Shares pursuant to any Rule 10b5-1 repurchase plans or
Rule 10b-18 repurchase arrangements in each case entered into with one or more
of the counterparties to any Other Specified Repurchase Agreements or an
affiliate of each such counterparty  (each such plan or arrangement,
a “Counterparty Permitted OMR Transaction” and, together with any Dealer
Permitted OMR Transaction, a “Permitted OMR Transaction”), so long as, on any
such calculation date, purchases under all Counterparty Permitted OMR
Transactions do not in the aggregate exceed the Designated OMR Threshold on such
Exchange Business Day; (ii) an agent independent of Counterparty may purchase
Shares on behalf of an issuer plan sponsored by Counterparty or any affiliate in
accordance with the requirements of Section 10b-18(a)(13)(ii) under the Exchange
Act (with “issuer plan” and “agent independent of Counterparty” each being used
herein as defined in Rule 10b-18), (iii) Counterparty or any “affiliated
purchaser” may purchase Shares in (x) unsolicited transactions or (y) privately
negotiated (off-market) transactions, in each case, that are not and are not
reasonably likely to result in “Rule 10b-18 purchases” (as defined in
Rule 10b-18), in each case, without Dealer’s consent, and (iv) Counterparty may
repurchase Shares from holders of awards granted under Counterparty’s equity
incentive plans for the purpose of paying the tax withholding obligations
arising from the vesting of, or paying the exercise price in connection with the
exercise of, or reacquiring Shares as a result of the forfeiture of, any such
awards (collectively, (i) through (iv) referred to herein as the “Permitted
Purchases”).

 

10.                               Special Provisions for Merger Transactions. 
Notwithstanding anything to the contrary in the Equity Definitions:

 

(a)                                 Counterparty agrees that it:

 

(i)                                     will not during the period commencing on
the Trade Date for a Transaction through the last day of the Relevant Period or,
if applicable, the Settlement Valuation Period for a Transaction (x) make any
public announcement (as defined in Rule 165(f) under the Securities Act) of any
Merger Transaction (as defined below) (any such announcement, a “Public
Announcement”) or (y) to the extent within Counterparty’s commercially
reasonable control,  permit any other party to make a Public Announcement,
unless, in each case, such  Public Announcement is made prior to the opening or
after the close of the regular trading session on the Exchange for the Shares;

 

(ii)                                  shall, promptly following any Public
Announcement (but in any event prior to the next opening of the regular trading
session on the Exchange), notify Dealer of such Public Announcement; and

 

(iii)                               shall promptly (but in any event prior to
the next opening of the regular trading session on the Exchange) provide Dealer
with written notice specifying (i) Counterparty’s average daily Rule 10b-18
Purchases (as defined in Rule 10b-18) during the three full calendar months
immediately preceding the date of the Public Announcement that were not effected
through Dealer or its affiliates and (ii) the number of

 

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Shares purchased pursuant to the proviso in Rule 10b-18(b)(4) under the Exchange
Act for the three full calendar months preceding the date of such Public
Announcement.  Such written notice shall be deemed to be a certification by
Counterparty to Dealer that such information is true and correct.  In addition,
Counterparty shall promptly notify Dealer of the earlier to occur of the
completion of the relevant Merger Transaction and the completion of the vote by
target shareholders.

 

(b)                                 Counterparty acknowledges that a Public
Announcement  (whether made by Counterparty or a third party) or delivery of a
notice to Dealer with respect thereto may cause the terms of any Transaction to
be adjusted or such Transaction to be terminated, in each case in accordance
with the terms of this Master Confirmation and the relevant Supplemental
Confirmation; accordingly, Counterparty acknowledges that in making any Public
Announcement, it must comply with the standards set forth in Section 8 above.

 

(c)                                  Upon the occurrence of a Public
Announcement, Calculation Agent, acting in good faith and in a commercially
reasonable manner, may (i) make commercially reasonable adjustments to the terms
of any Transaction (other than changing the designation of any Calculation
Date), including the Scheduled Termination Date or the Forward Price Adjustment
Amount, and may suspend the Calculation Period and/or any Settlement Valuation
Period or (ii) if the Calculation Agent determines that no adjustment that it
could make under the foregoing clause (i) will produce a commercially reasonable
result, treat the occurrence of such Public Announcement as an Extraordinary
Event to which Cancellation and Payment in accordance with Section 12.7 of the
Equity Definitions applies with the Cancellation Amount determined in accordance
with Section 12.8 of the Equity Definitions and taking into account the fact
that the Calculation Period or Settlement Valuation Period, as the case may be,
had fewer Scheduled Trading Days than originally anticipated.

 

“Merger Transaction” means,  any merger, acquisition or similar transaction
involving a recapitalization (as referred to in Rule 10b-18(a)(13)(iv) under the
Exchange Act as such rule is applicable with respect to purchases of Shares by
or on behalf of Counterparty and its “affiliated purchasers” (as defined in
Rule 10b-18)  and after giving effect to the exclusions from such reference in
clauses (A) and (B) of Rule 10b-18(a)(13)(iv)).

 

11.                               Special Provisions for Acquisition Transaction
Announcements.   (a) If an Acquisition Transaction Announcement occurs on or
prior to the Settlement Date for any Transaction, then the Calculation Agent,
acting in good faith and in a commercially reasonable manner,  may make such
adjustments to the exercise, settlement, payment or any other terms of such
Transaction as the Calculation Agent determines appropriate, at such time or at
multiple times as the Calculation Agent determines appropriate, to account for
the economic effect on such Transaction of such Acquisition Transaction
Announcement (including adjustments to account for changes in volatility,
expected dividends, stock loan rate and liquidity relevant to the Shares or to
such Transaction); provided, however, that such adjustments, including
adjustments to the Forward Price Adjustment Amount, shall in all respects be
subject to the “Limitations as to Certain Adjustments” set forth under
Extraordinary Events in Section 1 of this Master Confirmation.

 

(b)                                 “Acquisition Transaction Announcement”
means, subject in each case to the proviso at the end of this sentence, (i) the
announcement of an Acquisition Transaction by Counterparty, any of its
subsidiaries or any other party that is expected to be a party to such
Acquisition Transaction, (ii) an announcement that Counterparty or any of its
subsidiaries has entered into an agreement or a letter of intent designed to
result in an Acquisition Transaction, by Counterparty, any of its subsidiaries
or any other party that is expected to be a party to such Acquisition
Transaction,  (iii) the announcement by Counterparty of the intention to solicit
or enter into, or to explore strategic alternatives that include an Acquisition
Transaction, (iv) the first report by a Credible Press Organization (as defined
below) of an Acquisition Transaction where such report is confirmed within
thirty (30) calendar days by an announcement by Counterparty, any of its
subsidiaries or any other party that is expected to be a party to such
Acquisition Transaction (it being understood that upon such confirmation the
Acquisition Transaction Announcement shall be deemed to have occurred on the
date of such report by a Credible Press Organization) or (v) any announcement by
Counterparty, any of its subsidiaries or any other party that is expected to be
a party to such Acquisition Transaction of any material change or material
amendment to any previous Acquisition Transaction Announcement (including any
announcement of the abandonment of any such previously announced Acquisition
Transaction, agreement, letter of intent, understanding or intention); provided,
however, that no Excluded Transaction Announcement (as defined below),
individually or collectively with any other Excluded Transaction Announcement,
shall be considered an Acquisition Transaction Announcement, a Public
Announcement or a Potential Adjustment Event, and the provisions

 

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of Sections 10 and 11 of this Master Confirmation and Articles 11 and 12 of the
Equity Definitions shall not apply with respect to any Excluded Transaction
Announcements.  For purposes of this Section 11, a “Credible Press Organization”
shall mean the print and web publications of The Wall Street Journal, The New
York Times, the Financial Times, Reuters or Bloomberg.

 

(c)                                  “Acquisition Transaction” means, subject in
each case to the proviso at the end of this sentence, (i) any Merger Event (for
purposes of this definition the definition of Merger Event shall be read with
the references therein to “100%” being replaced by “30%” and references to “50%”
by “75%” and without reference to the clause beginning immediately following the
definition of Reverse Merger therein to the end of such definition), Tender
Offer or Merger Transaction or any other transaction involving the merger of
Counterparty with or into any third party, (ii) the sale or transfer of all or
substantially all of the assets of Counterparty, (iii) a recapitalization,
reclassification, binding share exchange or other similar transaction with
respect to Counterparty, (iv) any acquisition by Counterparty or any of its
subsidiaries where the aggregate consideration transferable by Counterparty or
its subsidiaries exceeds 30% of the market capitalization of Counterparty
(measured as of the date of announcement), (v) any lease, exchange, transfer,
disposition (including by way of spin-off or distribution) of assets (including
any capital stock or other ownership interests in subsidiaries) or other similar
event by Counterparty or any of its subsidiaries where the aggregate
consideration transferable or receivable by or to Counterparty or its
subsidiaries exceeds 30% of the market capitalization of Counterparty (measured
as of the date of announcement) and (vi) any transaction in which Counterparty
or its board of directors has a legal obligation to make a recommendation to its
shareholders in respect of such transaction (whether pursuant to Rule 14e-2
under the Exchange Act or otherwise); provided, however, that  no Excluded
Transaction Announcement (as defined below), individually or collectively with
any other Excluded Transaction Announcement, shall be deemed an Acquisition
Transaction Announcement or a Potential Adjustment Event, and the provisions of
Sections 10 and  11 of this Master Confirmation and Articles 11 and 12 of the
Equity Definitions shall not apply with respect to  Excluded Transaction
Announcements.

 

(d)                                 “Excluded Transaction Announcement” means
the occurrence of, or any announcement by any person regarding the status of, or
developments as to (x) the ongoing disputes between Counterparty or any of its
subsidiaries, on the one hand, and Apple Inc. or any of its subsidiaries
(individually and collectively, “Apple”), or  licensees of Counterparty that are
contract manufacturers for Apple, on the other hand, or (y) any litigation
related to or arising out of any such disputes, in each case as such litigation
is described in Counterparty’s most recent Exchange Act filings.

 

12.                               Acknowledgments.  (a) The parties hereto
intend for:

 

(i)             each Transaction to be a “securities contract” as defined in
Section 741(7) of the Bankruptcy Code, a “swap agreement” as defined in
Section 101(53B) of the Bankruptcy Code and a “forward contract” as defined in
Section 101(25) of the Bankruptcy Code, and the parties hereto to be entitled to
the protections afforded by, among other Sections, Sections 362(b)(6),
362(b)(17), 362(b)(27), 362(o), 546(e), 546(g), 546(j), 555, 556, 560 and 561 of
the Bankruptcy Code;

 

(ii)          the Agreement to be a “master netting agreement” as defined in
Section 101(38A) of the Bankruptcy Code;

 

(iii)       a party’s right to liquidate, terminate or accelerate any
Transaction, net out or offset termination values or payment amounts, and to
exercise any other remedies upon the occurrence of any Event of Default or
Termination Event under the Agreement with respect to the other party or any
Extraordinary Event that results in the termination or cancellation of any
Transaction to constitute a “contractual right” (as defined in the Bankruptcy
Code); and

 

(iv)      all payments for, under or in connection with each Transaction, all
payments for the Shares (including, for the avoidance of doubt, payment of the
Prepayment Amount) and the transfer of such Shares to constitute “settlement
payments” and “transfers” (as defined in the Bankruptcy Code).

 

(b)                           Counterparty acknowledges that:

 

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(i)                    during the term of any Transaction, Dealer and its
affiliates may buy or sell Shares or other securities or buy or sell options or
futures contracts or enter into swaps or other derivative securities in order to
establish, adjust or unwind its hedge position with respect to such Transaction;

 

(ii)                 Dealer and its affiliates may also be active in the market
for the Shares and derivatives linked to the Shares other than in connection
with hedging activities in relation to any Transaction, including acting as
agent or as principal and for its own account or on behalf of customers;

 

(iii)              Dealer shall make its own determination as to whether, when
or in what manner any hedging or market activities in Counterparty’s securities
shall be conducted and shall do so in a manner that it deems appropriate to
hedge its price and market risk with respect to the Forward Price and the VWAP
Price;

 

(iv)             any market activities of Dealer and its affiliates with respect
to the Shares may affect the market price and volatility of the Shares, as well
as the Forward Price and the VWAP Price, each in a manner that may be adverse to
Counterparty; and

 

(v)                each Transaction is a derivatives transaction in which it has
granted Dealer an option;  Dealer may purchase shares for its own account at an
average price that may be greater than, or less than, the price paid by
Counterparty under the terms of the related Transaction.

 

(c)                            Counterparty:

 

(i)                   is an “institutional account” as defined in FINRA
Rule 4512(c);

 

(ii)                 is capable of evaluating investment risks independently,
both in general and with regard to all transactions and investment strategies
involving a security or securities, and will exercise independent judgment in
evaluating the recommendations of Dealer or its associated persons; and

 

(iii)              will notify Dealer if any of the statements contained in
clause (i) or (ii) of this Section 12(c) ceases to be true.

 

13.                               Credit Support Documents.  The parties hereto
acknowledge that no Transaction hereunder is secured by any collateral that
would otherwise secure the obligations of Counterparty herein or pursuant to the
Agreement.

 

14.                               No Netting or Setoff.  Obligations under any
Transaction shall not be netted, recouped or set off (including pursuant to
Section 6 of the Agreement) against any other obligations of the parties,
whether arising under the Agreement, this Master Confirmation or any
Supplemental Confirmation, or under any other agreement between the parties
hereto, by operation of law or otherwise, and no other obligations of the
parties shall be netted, recouped or set off (including pursuant to Section 6 of
the Agreement) against obligations under any Transaction, whether arising under
the Agreement, this Master Confirmation or any Supplemental Confirmation, or
under any other agreement between the parties hereto, by operation of law or
otherwise, and each party hereby waives any such right of setoff, netting or
recoupment.

 

15.                               Delivery of Shares.  Notwithstanding anything
to the contrary herein, Dealer may, by prior notice to Counterparty, satisfy its
obligation to deliver any Shares or other securities on any date due (an
“Original Delivery Date”) by making separate deliveries of Shares or such
securities, as the case may be, at more than one time on or prior to such
Original Delivery Date, so long as the aggregate number of Shares and other
securities so delivered on or prior to such Original Delivery Date is equal to
the number required to be delivered on such Original Delivery Date; provided
that such separate deliveries shall have no effect on the payment obligations of
Counterparty or the timing thereof.

 

16.                               Early Termination.  In the event that (a) an
Early Termination Date (whether as a result of an Event of Default or a
Termination Event) occurs or is designated with respect to any Transaction
(except as a result of a Merger Event in which the consideration or proceeds to
be paid to holders of Shares consists solely of cash), or (b) any Transaction

 

18

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is canceled or terminated upon the occurrence of an Extraordinary Event,  if
either party would owe to the other party any amount pursuant to
Section 6(d)(ii) of the Agreement or any Cancellation Amount pursuant to
Article 12 of the Equity Definitions  (any such amount, a “Payment Amount”),
then, in lieu of any payment of such Payment Amount, Counterparty may, no later
than the Early Termination Date or the date on which such Transaction is
terminated or canceled, elect to deliver or for Dealer to deliver, as the case
may be, to the other party a number of Shares (or, in the case of a Merger
Event, a number of units, each comprising the number or amount of the securities
or property that a hypothetical holder of one Share would receive in such Merger
Event (each such unit, an “Alternative Delivery Unit” and, the securities or
property comprising such unit, “Alternative Delivery Property”)) with a value
equal to the Payment Amount, as determined by the Calculation Agent in good
faith and in a commercially reasonable manner over a commercially reasonable
period of time (and the parties agree that, in making such determination of
value, the Calculation Agent may take into account a number of factors,
including the market price of the Shares or Alternative Delivery Property on the
date of early termination and, if such delivery is made by Dealer, the prices at
which Dealer purchases Shares or Alternative Delivery Property on any
Calculation Date to fulfill its delivery obligations under this Section 16);
provided that in determining the composition of any Alternative Delivery Unit,
if the relevant Merger Event involves a choice of consideration to be received
by holders, such holder shall be deemed to have elected to receive the maximum
possible amount of cash; and provided further that Counterparty may make such
election only if Counterparty represents and warrants to Dealer in writing on
the date it notifies Dealer of such election that, as of such date, Counterparty
is not aware of any material non-public information concerning the Shares and is
making such election in good faith and not as part of a plan or scheme to evade
compliance with the federal securities laws. If such delivery is made by
Counterparty, paragraphs 2 through 7 of Annex A shall apply as if such delivery
were a settlement of the Transaction to which Net Share Settlement applied, the
Cash Settlement Payment Date were the Early Termination Date or the date of
early cancellation or termination, as the case may be, and the Forward Cash
Settlement Amount were equal to zero (0) minus the Payment Amount owed by
Counterparty.  For the avoidance of doubt, with respect to any Payment Amount,
the provisions of Article 12 of the Equity Definitions, or the provisions of
Section 6(d)(ii) of the Agreement, as the case may be, shall apply unless
Counterparty validly elects for the provisions of this Section 16 relating to
the delivery of Shares or Alternative Delivery Units, as the case may be, to
apply to any Payment Amount.

 

17.                               Calculations and Payment Date upon Early
Termination.  The parties acknowledge and agree that in calculating (a) the
Close-Out Amount pursuant to Section 6 of the Agreement and (b) the amount due
upon cancellation or termination of any Transaction (whether in whole or in
part) pursuant to Article 12 of the Equity Definitions as a result of an
Extraordinary Event, Dealer shall, notwithstanding the definition of Divisor
Amount,  determine such amount on the basis of a Divisor Amount equal to the
Forward Price minus the Forward Price Adjustment Amount, and Dealer may (but
need not) determine such amount based on (i) a commercially reasonable
(including without limitation with regard to commercially reasonable legal and
regulatory guidelines and taking into account the existence and size, at such
time, of the Other Specified Repurchase Agreement) risk bid or (ii) the price at
which one or more market participants would offer to sell to Dealer a block of
shares of Common Stock equal in number to a commercially reasonable hedge
position in relation to the Transaction.  Notwithstanding anything to the
contrary herein or in Section 6(d)(ii) of the Agreement or in the Equity
Definitions, all amounts calculated as being due in respect of an Early
Termination Date under Section 6(e) of the Agreement or other termination or
cancellation of a Transaction hereunder will be payable on the Business Day
immediately following the Business Day on which notice of the amount payable is
effective; provided that if Counterparty elects to receive Shares or Alternative
Delivery Property in accordance with Section 16, such Shares or Alternative
Delivery Property shall be delivered as promptly thereafter as practicable.

 

18.                               [Reserved]

 

19.                               Automatic Termination Provisions. 
Notwithstanding anything to the contrary in Section 6 of the Agreement, if a
Termination Price is specified in any Supplemental Confirmation, then an
Additional Termination Event with Counterparty as the sole Affected Party and
the Transaction to which such Supplemental Confirmation relates as the sole
Affected Transaction will automatically occur without any notice or action by
Dealer or Counterparty if, on two consecutive Exchange Business Days, the price
of the Shares on the Exchange at any time during the regular trading session
(including any extensions thereof) of the Exchange (without regard to pre-open
or after hours trading outside of such regular trading session for each such
Exchange Business Day) falls below such Termination Price, and the

 

19

--------------------------------------------------------------------------------

 

Exchange Business Day immediately following such second consecutive Exchange
Business Day will be the “Early Termination Date” for such Transaction.

 

20.                               Delivery of Cash.  For the avoidance of doubt,
nothing in this Master Confirmation shall be interpreted as requiring
Counterparty to deliver cash in respect of the settlement of the Transactions
contemplated by this Master Confirmation following payment by Counterparty of
the relevant Prepayment Amount, except in circumstances where the required cash
settlement thereof is permitted for classification of the contract as equity by
ASC 815-40, Derivatives and Hedging — Contracts in Entity’s Own Equity, as in
effect on the relevant Trade Date (including, without limitation, where
Counterparty so elects to deliver cash or fails timely to elect to deliver
Shares or Alternative Delivery Property in respect of the settlement of such
Transactions).

 

21.                               Claim in Bankruptcy.  Dealer acknowledges and
agrees that this Confirmation is not intended to convey to it rights with
respect to the Transactions that are senior to the claims of common stockholders
in the event of Counterparty’s bankruptcy.

 

22.                               Governing Law.  The Agreement, this Master
Confirmation, each Supplemental Confirmation and all matters arising in
connection with the Agreement, this Master Confirmation and each Supplemental
Confirmation shall be governed by, and construed and enforced in accordance
with, the laws of the State of New York (without reference to its choice of laws
doctrine other than Title 14 of Article 5 of the New York General Obligations
Law).

 

23.                               Illegality.  The parties agree that, for the
avoidance of doubt, for purposes of Section 5(b)(i) of the Agreement, “any
applicable law” shall include the Dodd-Frank Wall Street Reform and Consumer
Protection Act of 2010, any rules and regulations promulgated thereunder and any
similar law or regulation, without regard to Section 739 of the Dodd-Frank Wall
Street Reform and Consumer Protection Act of 2010 or any similar legal certainty
provision in any legislation enacted, or rule or regulation promulgated, on or
after the Trade Date, and the consequences specified in the Agreement, including
without limitation, the consequences specified in Section 6 of the Agreement,
shall apply to any Illegality arising from any such act, rule or regulation.

 

24.                               Offices.

 

(a)                                 The Office of Dealer for each Transaction
is:  New York.

 

(b)                                 The Office of Counterparty for each
Transaction is: 5775 Morehouse Drive, San Diego, California 92121-1714.

 

25.                               Waiver of Jury Trial. EACH PARTY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO THE AGREEMENT, THIS MASTER CONFIRMATION, ANY SUPPLEMENTAL CONFIRMATION, ANY
TRADE NOTIFICATION, ANY TRANSACTION HEREUNDER AND/OR ALL MATTERS ARISING IN
CONNECTION WITH THE AGREEMENT, THIS MASTER CONFIRMATION, ANY SUPPLEMENTAL
CONFIRMATION, ANY TRADE NOTIFICATION AND/OR ANY TRANSACTION HEREUNDER.  EACH
PARTY (I) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE OTHER PARTY
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF SUCH A SUIT, ACTION OR PROCEEDING, SEEK TO ENFORCE THE FOREGOING WAIVER
AND (II) ACKNOWLEDGES THAT IT AND THE OTHER PARTY HAVE BEEN INDUCED TO ENTER
INTO THE TRANSACTIONS, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
AND CERTIFICATIONS PROVIDED HEREIN.

 

26.                               Submission to Jurisdiction. Section 13(b) of
the Agreement is deleted in its entirety and replaced by the following:

 

20

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“Each party hereby irrevocably and unconditionally submits for itself and its
property in any suit, legal action or proceeding relating to this Agreement
and/or any Transaction, or for recognition and enforcement of any judgment in
respect thereof, (each, “Proceedings”) to the exclusive jurisdiction of the
Supreme Court of the State of New York, sitting in New York County, the courts
of the United States of America for the Southern District of New York and
appellate courts from any thereof. Nothing in the Master Confirmation, any
Supplemental Confirmation or this Agreement precludes either party from bringing
Proceedings in any other jurisdiction if (A) the courts of the State of New York
or the United States of America for the Southern District of New York lack
jurisdiction over the parties or the subject matter of the Proceedings or
declines to accept the Proceedings on the grounds of lacking such jurisdiction;
(B) the Proceedings are commenced by a party for the purpose of enforcing
against the other party’s property, assets or estate any decision or judgment
rendered by any court in which Proceedings may be brought as provided hereunder;
(C) the Proceedings are commenced to appeal any such court’s decision or
judgment to any higher court with competent appellate jurisdiction over that
court’s decisions or judgments if that higher court is located outside the State
of New York or Borough of Manhattan, such as a federal court of appeals or the
U.S. Supreme Court; or (D) any suit, action or proceeding has been commenced in
another jurisdiction by or against the other party or against its property,
assets or estate and, in order to exercise or protect its rights, interests or
remedies under this Agreement, the Master Confirmation or any Supplemental
Confirmation, the party (1) joins, files a claim, or takes any other action, in
any such suit, action or proceeding, or (2) otherwise commences any Proceeding
in that other jurisdiction as the result of that other suit, action or
proceeding having commenced in that other jurisdiction.”

 

27.                               Counterparts.  This Master Confirmation may be
executed in any number of counterparts, all of which shall constitute one and
the same instrument, and any party hereto may execute this Master Confirmation
by signing and delivering one or more counterparts.

 

28.                               Tax Protocols. The parties agree that the
principles, definitions and provisions contained in (i) the Attachment to the
“2012 ISDA FATCA Protocol” and (ii) the Attachment to the “ISDA 2015
Section 871(m) Protocol”, in each case as published by the International Swaps
and Derivatives Association, Inc., are incorporated into and apply to this
Agreement as if set forth in full herein, mutatis mutandis.

 

21

--------------------------------------------------------------------------------

 

Please confirm that the foregoing correctly sets forth the terms of the
agreement between Dealer and Counterparty with respect to any particular
Transaction to which this Master Confirmation relates, by executing one original
copy of this Master Confirmation and returning such copy to Dealer and retaining
the other original copy bearing the signature of Dealer for your records.

 

 

Yours faithfully,

 

 

 

 

 

CITIBANK, N.A.

 

 

 

 

 

By:

/s/ Peter Barna

 

 

Name: Peter Barna

 

 

Title:   Managing Director

 

22

--------------------------------------------------------------------------------

 

Agreed and Accepted By:

 

 

 

QUALCOMM INCORPORATED

 

 

 

 

 

By:

/s/ George S. Davis

 

 

Name: George S. Davis

 

 

Title: Executive Vice President and Chief Financial Officer

 

 

23

--------------------------------------------------------------------------------

 

SCHEDULE A

 

FORM OF SUPPLEMENTAL CONFIRMATION

 

 

To:

 

Qualcomm Incorporated
5775 Morehouse Drive
San Diego, California 92121-1714

 

 

 

From:

 

Citibank, N.A.

 

 

 

Subject:

 

Accelerated Stock Buyback

 

 

 

Ref. No:

 

[Insert Reference No.]

 

 

 

Date:

 

[Insert Date]

 

The purpose of this Supplemental Confirmation is to confirm the terms and
conditions of the Transaction entered into between Citibank, N.A. (“Dealer”) and
Qualcomm Incorporated (“Counterparty”) (together, the “Contracting Parties”) on
the Trade Date specified below.  This Supplemental Confirmation is a binding
contract between Dealer and Counterparty as of the relevant Trade Date for the
Transaction referenced below.

 

1.                                      This Supplemental Confirmation
supplements, forms part of, and is subject to the Master Confirmation dated as
of September 12, 2018 (the “Master Confirmation”) between the Contracting
Parties, as amended and supplemented from time to time.  All provisions
contained in the Master Confirmation govern this Supplemental Confirmation
except as expressly modified below.

 

2.                                      The terms of the Transaction to which
this Supplemental Confirmation relates are as follows:

 

Trade Date:

 

[         ]

 

 

 

Forward Price Adjustment Amount:

 

USD [   ]

 

 

 

Calculation Period Start Date:

 

[         ]

 

 

 

Scheduled Termination Date:

 

[         ]

 

 

 

Prepayment Amount:

 

USD [         ]

 

 

 

Prepayment Date:

 

[         ]

 

A-1

--------------------------------------------------------------------------------

 

Initial Shares:

 

[     ] Shares; provided that if, in connection with the Transaction, Dealer is
unable after using good faith and commercially reasonable efforts to borrow or
otherwise acquire a number of Shares equal to the Initial Shares for delivery to
Counterparty on the Initial Share Delivery Date, the Initial Shares delivered on
the Initial Share Delivery Date shall be reduced to such number of Shares that
Dealer is able to so borrow or otherwise acquire; and provided further that
(i) if the Initial Shares are reduced as provided in the preceding proviso, then
Dealer shall continue to use commercially reasonable efforts promptly to borrow
or otherwise acquire an additional number of Shares equal to the shortfall in
the Initial Shares delivered on the Initial Share Delivery Date and shall
deliver such additional Shares as promptly as practicable, and all Shares so
delivered shall be considered Initial Shares, (ii) if fewer than the original
number of Initial Shares are so delivered in the aggregate on or prior to the
tenth Exchange Business Day following the Initial Share Delivery Date,
Counterparty may, by notice to Dealer on any Exchange Business Day on or prior
to the twentieth Exchange Business Day following the Initial Share Delivery
Date, elect that (A) the Prepayment Amount be reduced by an amount equal to
(x)(I) [ · ] minus (II) the aggregate number of Initial Shares so delivered on
or prior to such Exchange Business Day multiplied by (y) USD [$· ] divided by
(z) [·], in which case Dealer shall not be required to deliver additional Shares
as Initial Shares pursuant to clause (i) of this further proviso following such
notice, and (B) Dealer shall return to Counterparty on such Exchange Business
Day the amount by which the Prepayment Amount is so reduced and
(iii) Counterparty may make the election set forth in clause (ii) of this
further proviso only if Counterparty represents and warrants to Dealer in
writing on the date it notifies Dealer of such election that, as of such date,
Counterparty is not aware of any material non-public information concerning the
Shares and is making such election in good faith and not as part of a plan or
scheme to evade compliance with the federal securities laws. For the avoidance
of doubt, in using such commercially reasonable efforts, Dealer shall act in
good faith and in accordance with its then current policies, practices and
procedures (including without limitation any policies, practices or procedures
relating to counterparty risk, market risk, reputational risk, credit,
documentation, legal, regulatory capital, compliance and collateral), and shall
not be required to enter into any securities lending transaction or transact
with any potential securities lender if such transaction would not be in
accordance with such policies, practices and procedures.

 

 

 

Initial Share Delivery Date:

 

[         ]

 

 

 

Ordinary Dividend Amount:

 

For any calendar quarter, USD [         ] per Share

 

 

 

Scheduled Ex-Dividend Dates:

 

[         ]

 

 

 

Termination Price:

 

USD [     ] per Share

 

A-2

--------------------------------------------------------------------------------

 

3.                                      Calculation Dates:

 

1.

 

2.

 

3.

 

 

 

 

 

 

 

4.

 

5.

 

6.

 

 

 

 

 

 

 

7.

 

8.

 

9.

 

 

 

 

 

 

 

10.

 

11.

 

12.

 

 

 

 

 

 

 

13.

 

14.

 

15.

 

 

 

 

 

 

 

16.

 

17.

 

18.

 

 

 

 

 

 

 

19.

 

20.

 

21.

 

 

 

 

 

 

 

22.

 

23.

 

24.

 

 

 

 

 

 

 

25.

 

26.

 

27.

 

 

 

 

 

 

 

28.

 

29.

 

30.

 

 

 

 

 

 

 

31.

 

32.

 

33.

 

 

 

 

 

 

 

34.

 

35.

 

36.

 

 

 

 

 

 

 

37.

 

38.

 

39.

 

 

 

 

 

 

 

40.

 

41.

 

42.

 

 

 

 

 

 

 

43.

 

44.

 

45.

 

 

 

 

 

 

 

46.

 

47.

 

48.

 

 

 

 

 

 

 

49.

 

50.

 

51.

 

 

 

 

 

 

 

52.

 

53.

 

54.

 

 

 

 

 

 

 

55.

 

56.

 

57.

 

 

 

 

 

 

 

58.

 

59.

 

60.

 

 

 

 

 

 

 

61.

 

62.

 

63.

 

 

 

 

 

 

 

64.

 

65.

 

66.

 

 

 

 

 

 

 

67.

 

68.

 

69.

 

 

 

 

 

 

 

70.

 

71.

 

72.

 

 

 

 

 

 

 

73.

 

74.

 

75.

 

 

 

 

 

 

 

76.

 

77.

 

78.

 

 

 

 

 

 

 

79.

 

80.

 

81.

 

 

 

 

 

 

 

82.

 

83.

 

84.

 

 

A-3

--------------------------------------------------------------------------------

 

4.                                      Counterparty represents and warrants to
Dealer that neither it nor any “affiliated purchaser” (as defined in Rule 10b-18
under the Exchange Act) has made any purchases of blocks pursuant to the proviso
in Rule 10b-18(b)(4) under the Exchange Act during either (i) the four full
calendar weeks immediately preceding the Trade Date or (ii) during the calendar
week in which the Trade Date occurs.

 

5.                                      This Supplemental Confirmation may be
executed in any number of counterparts, all of which shall constitute one and
the same instrument, and any party hereto may execute this Supplemental
Confirmation by signing and delivering one or more counterparts.

 

A-4

--------------------------------------------------------------------------------

 

Please confirm that the foregoing correctly sets forth the terms of the
agreement between Dealer and Counterparty with respect to the Transaction to
which this Supplemental Confirmation relates, by executing one original copy of
this Supplemental Confirmation and returning such copy to Dealer and retaining
the other original copy bearing the signature of Dealer for your records.

 

 

Yours sincerely,

 

 

 

CITIBANK, N.A.

 

 

 

By:

 

 

 

Authorized Signatory

 

[Signature Page to Supplemental Confirmation]

 

--------------------------------------------------------------------------------

 

Agreed and Accepted By:

 

 

 

QUALCOMM INCORPORATED

 

 

 

By:

 

 

 

Name: George S. Davis

 

 

Title: Executive Vice President and Chief Financial Officer

 

 

4

--------------------------------------------------------------------------------

 

ANNEX A

 

COUNTERPARTY SETTLEMENT PROVISIONS

 

1.                                      The following Counterparty Settlement
Provisions shall apply to the extent indicated under the Master Confirmation:

 

Settlement Currency:

 

USD

 

 

 

Settlement Method Election:

 

Applicable; provided that (i) Section 7.1 of the Equity Definitions is hereby
amended by deleting the word “Physical” in the sixth line thereof and replacing
it with the words “Net Share” and (ii) the Electing Party may make a settlement
method election only if the Electing Party represents and warrants to Dealer in
writing on the date it notifies Dealer of its election that, as of such date,
the Electing Party is not aware of any material non-public information
concerning Counterparty or the Shares and is electing the settlement method in
good faith and not as part of a plan or scheme to evade compliance with the
federal securities laws.

 

 

 

Electing Party:

 

Counterparty

 

 

 

Settlement Method Election Date:

 

The Scheduled Termination Date.

 

 

 

Default Settlement Method:

 

Cash Settlement

 

 

 

Forward Cash Settlement Amount:

 

An amount equal to the Number of Shares to be Delivered multiplied by the
Settlement Price.

 

 

 

Settlement Price:

 

An amount equal to the average of the VWAP Prices for the Calculation Dates in
the Settlement Valuation Period, subject to Valuation Disruption as specified in
the Master Confirmation.

 

 

 

Settlement Valuation Period:

 

A number of Calculation Dates selected by Dealer in its commercially reasonable
discretion, beginning on the Calculation Date immediately following the earlier
of (i) the Scheduled Termination Date or (ii) the Calculation Date immediately
following the Termination Date. Dealer shall notify Counterparty of the last
Calculation Date of the Settlement Valuation Period on or prior to the Exchange
Business Day immediately following such last Calculation Date.

 

 

 

Cash Settlement:

 

If Cash Settlement is applicable, then Buyer shall pay to Seller the absolute
value of the Forward Cash Settlement Amount on the Cash Settlement Payment Date.

 

 

 

Cash Settlement Payment Date:

 

The later of (x) the Exchange Business Day immediately following the last day of
the Settlement Valuation Period and (y) the earlier of the Exchange Business Day
immediately

 

--------------------------------------------------------------------------------

 

 

 

following the date of Counterparty’s Settlement Method Election and the
Settlement Method Election Date.

 

 

 

Net Share Settlement Procedures:

 

If Net Share Settlement is applicable, Net Share Settlement shall be made in
accordance with paragraphs 2 through 7 below.

 

2.                                      Net Share Settlement shall be made by
delivery on the Cash Settlement Payment Date of a number of Shares satisfying
the conditions set forth in paragraph 3 below (the “Registered Settlement
Shares”), or a number of Shares not satisfying such conditions (the
“Unregistered Settlement Shares”), in either case with a value equal to the
absolute value of the Forward Cash Settlement Amount, with such Shares’ value
based on the value thereof to Dealer (which value shall, in the case of
Unregistered Settlement Shares, take into account a commercially reasonable
illiquidity discount), in each case as determined by the Calculation Agent;
provided that if Counterparty, in its good faith determination, is prohibited by
law or contract from disclosing all material non-public information known to
Counterparty concerning Counterparty and the Shares to any potential purchasers
of such Settlement Shares (or the board of directors of Counterparty determines
in good faith that public disclosure of such material non-public information at
such time is not otherwise required and would reasonably be expected to
materially adversely affect Counterparty or materially adversely affect or
materially adversely interfere with any bona fide material financing of
Counterparty or any material transaction under consideration by Counterparty),
then the sale of such Settlement Shares shall not be required to commence or may
be suspended until Counterparty is able to disclose such information (including
without such adverse effect, as applicable), provided that Counterparty shall,
no later than the date that is two weeks following the Cash Settlement Payment
Date, either (x) disclose all such information (to the extent then still
constituting material non-public information) to potential purchasers of such
Settlement Shares reasonably identified by Dealer in order to permit such sale
of such Settlement Shares to commence or continue or (y) elect for Cash
Settlement to instead apply, in which case the Cash Settlement Payment Date
shall be deemed to be the date of such election.

 

3.                                      Counterparty may only deliver Registered
Settlement Shares pursuant to paragraph 2 above if:

 

(a)                                 a registration statement covering public
resale of the Registered Settlement Shares by Dealer (the “Registration
Statement”) shall have been filed with the Securities and Exchange Commission
under the Securities Act and been declared or otherwise become effective on or
prior to the date of delivery, and no stop order shall be in effect with respect
to the Registration Statement; a printed prospectus relating to the Registered
Settlement Shares (including any prospectus supplement thereto, the
“Prospectus”) shall have been delivered to Dealer, in such quantities as Dealer
shall reasonably have requested, on or prior to the date of delivery;

 

(b)                                 the form and content of the Registration
Statement and the Prospectus (including, without limitation, any sections
describing the plan of distribution) shall be reasonably satisfactory to Dealer;

 

(c)                                  as of or prior to the date of delivery,
Dealer and its agents shall have been afforded a commercially reasonable
opportunity to conduct a due diligence investigation with respect to
Counterparty customary in scope for underwritten offerings of similar size of
equity securities of issuers comparable to Counterparty under like circumstances
and the results of such investigation are satisfactory to Dealer, in its
discretion; and

 

(d)                                 as of the date of delivery, an agreement
(the “Underwriting Agreement”) shall have been entered into with Dealer in
connection with the public resale of the Registered Settlement Shares by Dealer
substantially similar to underwriting agreements customary for underwritten
offerings of similar size of equity securities of issuers comparable to
Counterparty under like circumstances, in form and substance reasonably
satisfactory to Dealer, which Underwriting Agreement shall include, without
limitation, provisions substantially similar to those contained in such
underwriting agreements relating, without limitation, to the mutual
indemnification of, and contribution in connection with the liability of the
parties and the provision of customary opinions, accountants’ comfort letters
and lawyers’ negative assurance letters.

 

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4.                                      If Counterparty delivers Unregistered
Settlement Shares pursuant to paragraph 2 above:

 

(a)                                 all Unregistered Settlement Shares shall be
delivered to Dealer (or any affiliate of Dealer designated by Dealer) pursuant
to the exemption from the registration requirements of the Securities Act
provided by Section 4(a)(2) thereof;

 

(b)                                 as of or prior to the date of delivery,
Dealer and any potential purchaser of any such shares from Dealer (or any
affiliate of Dealer designated by Dealer) identified by Dealer shall be afforded
a commercially reasonable opportunity to conduct a due diligence investigation
with respect to Counterparty customary in scope for private placements of equity
securities (including, without limitation, the right to have made available to
them for inspection all financial and other records, pertinent corporate
documents and other information reasonably requested by them); provided that
prior to receiving or being granted access to any such information, any such
potential purchaser may be required by Counterparty to enter into a customary
nondisclosure agreement with Counterparty in respect of any such due diligence
investigation;

 

(c)                                  as of the date of delivery, Counterparty
shall enter into an agreement (a “Private Placement Agreement”) with Dealer (or
any affiliate of Dealer designated by Dealer) in connection with the private
placement of such shares by Counterparty to Dealer (or any such affiliate) and
the private resale of such shares by Dealer (or any such affiliate),
substantially similar to private placement purchase agreements customary for
private placements of similar size of equity securities of issuers comparable to
Counterparty under like circumstances, in form and substance commercially
reasonably satisfactory to Dealer, which Private Placement Agreement shall
include, without limitation, provisions substantially similar to those contained
in such private placement purchase agreements relating, without limitation, to
the mutual indemnification of, and contribution in connection with the liability
of the parties, and the provision of customary opinions, accountants’ comfort
letters and lawyers’ negative assurance letters, and shall provide for the
payment by Counterparty of all commercially reasonable and documented out of
pocket fees and expenses paid to third parties in connection with such resale,
including all fees and expenses of one counsel for Dealer, and shall contain
representations, warranties, covenants and agreements of the parties reasonably
necessary or advisable to establish and maintain the availability of an
exemption from the registration requirements of the Securities Act for such
resales; and

 

(d)                                 in connection with the private placement of
such shares by Counterparty to Dealer (or any such affiliate) and the private
resale of such shares by Dealer (or any such affiliate), Counterparty shall, if
so requested by Dealer, prepare, in cooperation with Dealer, a private placement
memorandum in form and substance reasonably satisfactory to Dealer.

 

5.                                      Dealer, itself or through an affiliate
(the “Selling Agent”) or any underwriter(s), will sell all, or such lesser
portion as may be required hereunder, of the Registered Settlement Shares or
Unregistered Settlement Shares and any Makewhole Shares (as defined below)
(together, the “Settlement Shares”) delivered by Counterparty to Dealer pursuant
to paragraph 6 below commencing on the Cash Settlement Payment Date and
continuing until the date on which the aggregate Net Proceeds (as such term is
defined below) of such sales, as determined by Dealer, is equal to the absolute
value of the Forward Cash Settlement Amount (such date, the “Final Resale
Date”).  If the proceeds of any sale(s) made by Dealer, the Selling Agent or any
underwriter(s), net of any commercially reasonable and documented fees and
commissions (including, without limitation, underwriting or placement fees)
customary for similar transactions under the circumstances at the time of the
offering, together with commercially reasonable and documented carrying charges
and expenses incurred in connection with the offer and sale of the Shares
(including, but without limitation to, the covering of any over-allotment or
short position (syndicate or otherwise)) (the “Net Proceeds”) exceed the
absolute value of the Forward Cash Settlement Amount, Dealer will refund, in
USD, such excess to Counterparty on the date that is three (3) Currency Business
Days following the Final Resale Date, and, if any portion of the Settlement
Shares remains unsold, Dealer shall return to Counterparty on that date such
unsold Shares.

 

6.                                      If the Calculation Agent determines that
the Net Proceeds received from the sale of the Registered Settlement Shares or
Unregistered Settlement Shares or any Makewhole Shares, if any, pursuant to this

 

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paragraph 6 are less than the absolute value of the Forward Cash Settlement
Amount (the amount in USD by which the Net Proceeds are less than the absolute
value of the Forward Cash Settlement Amount being the “Shortfall” and the date
on which such determination is made, the “Deficiency Determination Date”),
Counterparty shall on the Calculation Date next succeeding the Deficiency
Determination Date (the “Makewhole Notice Date”) deliver to Dealer, through the
Selling Agent, a notice of Counterparty’s election that Counterparty shall
either (i) pay an amount in cash equal to the Shortfall on the day that is one
(1) Currency Business Day after the Makewhole Notice Date, or (ii) deliver
additional Shares.  If Counterparty elects to deliver to Dealer additional
Shares, then Counterparty shall deliver additional Shares in compliance with the
terms and conditions of paragraph 3 or paragraph 4 above, as the case may be
(the “Makewhole Shares”), on the first Clearance System Business Day which is
also a Calculation Date following the Makewhole Notice Date in such number as
the Calculation Agent reasonably believes in its commercially reasonable
discretion would have a market value on that Calculation Date equal to the
Shortfall.  Such Makewhole Shares shall be sold by Dealer in accordance with the
provisions above; provided that if the sum of the Net Proceeds from the sale of
the originally delivered Shares and the Net Proceeds from the sale of any
Makewhole Shares is less than the absolute value of the Forward Cash Settlement
Amount then Counterparty shall, at its election, either make such cash payment
or deliver to Dealer further Makewhole Shares until such Shortfall has been
reduced to zero.

 

7.                                      Notwithstanding the foregoing, in no
event shall the aggregate number of Settlement Shares be greater than the
Reserved Shares minus the amount of any Shares actually delivered by
Counterparty under any other Transaction(s) under this Master Confirmation (the
result of such calculation, the “Capped Number”).  Counterparty represents and
warrants (which shall be deemed to be repeated on each day that a Transaction is
outstanding) that the Capped Number is equal to or less than the number of
Shares determined according to the following formula:

 

A – B

 

Where             A = the number of authorized but unissued shares of the
Counterparty that are not reserved for future issuance on the date of the
determination of the Capped Number; and

 

B = the maximum number of Shares required to be delivered to third parties if
Counterparty elected Net Share Settlement of all transactions in the Shares
(other than Transactions in the Shares under this Master Confirmation) with all
third parties that are then currently outstanding and unexercised.

 

“Reserved Shares” means initially, 148,664,344 Shares.  The Reserved Shares may
be increased or decreased as agreed by the parties in a Supplemental
Confirmation.

 

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