Exhibit 10.2


 


GOLDMAN,
SACHS & CO. | 85 BROAD STREET | NEW YORK, NEW YORK 10004 | Tel: 212 902
1000


Opening Transaction


	
  To:

  	
   

  	
  National Semiconductor Corporation 2900
  Semiconductor Drive PO Box 58090 Santa Clara, CA 95052

  
	
   

  	
   

  	
   

  
	
  A/C:

  	
   

  	
  028665040-ASB

  
	
   

  	
   

  	
   

  
	
  From:

  	
   

  	
  Goldman, Sachs & Co.

  
	
   

  	
   

  	
   

  
	
  Re:

  	
   

  	
  Collared Accelerated Stock Buyback

  
	
   

  	
   

  	
   

  
	
  Ref. No:

  	
   

  	
  As provided in the Supplemental Confirmation

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
  June 7, 2007

  



This master confirmation
(this “Master Confirmation”), dated as of June
7, 2007 is intended to set forth certain terms and provisions of certain
Transactions (each, a “Transaction”)
entered into from time to time between Goldman, Sachs & Co. (“GS&Co.”) and National Semiconductor Corporation (“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 (i) 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 and (ii) a Trade Notification in the
form of Schedule B hereto (a “Trade Notification”),
which shall reference the relevant Supplemental Confirmation and supplement,
form a part of, and be subject to such Supplemental Confirmation.  This Master Confirmation, each Supplemental
Confirmation and the related Trade Notification 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,
each Supplemental Confirmation and the related Trade Notification evidence a
complete binding agreement between Counterparty and GS&Co. as to the
subject matter and terms of each Transaction to which this Master Confirmation,
such Supplemental Confirmation and Trade Notification relate and shall
supersede all prior or contemporaneous written or oral communications with
respect thereto.


This Master Confirmation,
each Supplemental Confirmation and each Trade Notification supplement, form a
part of, and are subject to an agreement in the form of the 1992 ISDA Master
Agreement (Multicurrency-Cross Border) (the “Agreement”)
as if GS&Co. and Counterparty had executed the Agreement on the date of
this Master Confirmation (but without any Schedule except for (i) the
election of Loss and Second Method, New York law (without regard to the
conflicts of law principles) 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
replacement of the word “third” in the last line of Section 5(a)(i) with
the word “first” and (iv) the election that the “Cross Default” provisions of
Section 5(a)(vi) shall apply to Counterparty, with a “Threshold Amount” of USD
50 million).


The Transactions shall be
the sole Transactions under the Agreement. 
If there exists any ISDA Master Agreement between GS&Co. and
Counterparty or any confirmation or other agreement between GS&Co. and
Counterparty pursuant to which an ISDA Master Agreement is deemed to exist
between GS&Co. and Counterparty, then notwithstanding anything to the
contrary in such ISDA Master Agreement, such confirmation or agreement or 













any other agreement to which GS&Co. and
Counterparty are parties, the Transactions shall not be considered Transactions
under, or otherwise governed by, such existing or deemed ISDA Master Agreement.


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


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


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 and Trade Notification 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:                                                                                                                                        GS&Co.


Shares:                                                                                                                                 Common
stock, par value $0.50 per share, of Counterparty (Ticker:  NSM)


Exchange:                                                                                                                  New York Stock Exchange


Related
Exchange(s):                                                       All
Exchanges.


Prepayment\Variable


Obligation:                                                                                                           Applicable


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


Prepayment
Date:                                                                        The
date one Settlement Cycle immediately following the Trade Date (or, if such day
is not both a Currency Business Day and an Exchange Business Day, the next
following day that is both a Currency Business Day and an Exchange Business
Day).


Valuation:


Hedge
Period:                                                                                           The
period from and including the Hedge Period Start Date to and including the
Hedge Completion Date.


Hedge
Completion Date:                                    For
each Transaction, as set forth in the related Trade Notification, to be the
Exchange Business Day on which GS&Co. finishes establishing its initial
Hedge Positions in respect of such Transaction, as determined by GS&Co. in
its sole discretion, but in no event later than the Hedge Period End Date.


Hedge
Period Start Date:                                   For
each Transaction, as set forth in the related Supplemental Confirmation.


Hedge
Period End Date:                                       For
each Transaction, as set forth in the related Supplemental Confirmation.



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Hedge Period Reference


Price:                                                                                                                                         For
each Transaction, as set forth in the related Trade Notification, to be the
average of the VWAP Prices for the Exchange Business Days in the Hedge Period,
subject to Valuation Disruption below.


VWAP
Price:                                                                                                For
any Exchange Business Day, as determined by the Calculation Agent based on the
New York 10b-18 Volume Weighted Average Price per Share for 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 “NSM.N
<Equity> AQR_SEC” (or any successor thereto), or if such price is not so
reported on such Exchange Business Day for any reason, as reasonably determined
by the Calculation Agent.  For purposes of calculating the
VWAP Price, 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 Exchange Act (as defined herein) (such
trades, “Rule 10b-18 eligible transactions”).


Forward
Price:                                                                                          The
average of the VWAP Prices for the Exchange Business Days 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:                                                                  The
period from and including the first Exchange Business Day immediately following
the Hedge Completion Date to and including the Termination Date.


Termination
Date:                                                                       For
each Transaction, the Scheduled Termination Date set forth in the related
Supplemental Confirmation; provided that
GS&Co. shall have the right to designate any Exchange Business Day on or
after the First Acceleration Date to be the Termination Date (the “Accelerated Termination Date”) by
delivering notice to Counterparty of such designation prior to 11:59 p.m. New
York City time on such Exchange Business Day.


First
Acceleration Date:                                        For
each Transaction, as set forth in the related Supplemental Confirmation.


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


Notwithstanding
anything to the contrary in the Equity Definitions, to the extent that a
Disrupted Day occurs (i) in the Hedge Period or the Calculation Period, the
Calculation Agent may, in its good faith and commercially reasonable
discretion, postpone either or both of the Hedge Period End Date or the
Scheduled Termination Date, or (ii) in the Settlement Valuation Period, the
Calculation Agent may extend the Settlement Valuation Period.  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 



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shall 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 Hedge
Period Reference Price, 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 effected before the relevant Market Disruption Event
occurred and/or after the relevant Market Disruption Event ended, and the
weighting of the VWAP Price for the relevant Exchange Business Days during the
Hedge Period, 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 Hedge Period Reference Price,
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.


If
a Disrupted Day occurs during the Hedge Period, the Calculation Period or the
Settlement Valuation Period, as the case may be, and each of the nine
immediately following Scheduled Trading Days is a Disrupted Day, then the
Calculation Agent, in its good faith and commercially reasonable discretion,
may deem such ninth Scheduled Trading Day to be an Exchange Business Day that
is not a Disrupted Day and determine the VWAP Price for such ninth Scheduled
Trading Day using its good faith estimate of the value of the Shares on such
ninth Scheduled Trading Day based on the volume, historical trading patterns
and price of the Shares and such other factors as it deems appropriate.


Settlement Terms:


Physical
Settlement:                                                           Applicable;
provided that GS&Co. does not, and
shall not, make the agreement or the representations set forth in Section 9.11
of the Equity Definitions related to the restrictions imposed by applicable
securities laws with respect to any Shares delivered by GS&Co. to
Counterparty under any Transaction.


Number of Shares


to be Delivered:                                                                                  A
number of Shares equal to (a) the Prepayment Amount divided by
(b) the Forward Price minus the
Forward Price Adjustment Amount; provided that
the Number of Shares to be Delivered shall not be less than the Minimum Shares
and not greater than the Maximum Shares. 
The Number of Shares to be Delivered on the Settlement Date shall be
reduced, but not below zero, by any Shares delivered pursuant to the Initial
Share Delivery and the Minimum Share Delivery described below.


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:                                                                               The
date that is one Settlement Cycle immediately following the Termination Date.


Settlement
Currency:                                                       USD


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



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Initial Share
Delivery Date:                        The
Prepayment Date


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


Minimum Share
Delivery:                               GS&Co.
shall deliver a number of Shares equal to the excess, if any, of the Minimum
Shares over the Initial Shares on the Minimum Share Delivery Date in accordance
with Section 9.4 of the Equity Definitions, with the Minimum Share Delivery
Date deemed to be a “Settlement Date” for purposes of such Section 9.4.


Minimum Share Delivery


Date:                                                                                                                                          The
date one Settlement Cycle immediately following the Hedge Completion Date.


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


Maximum
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, an
Extraordinary Dividend shall not constitute a Potential Adjustment Event.


It shall constitute an additional Potential Adjustment
Event if the Termination Date for any Transaction is postponed pursuant to “Valuation
Disruption” above, in which case the Calculation Agent may, in its commercially
reasonable discretion, adjust any relevant terms of the such Transaction as
necessary to preserve as nearly as practicable the fair value of such
Transaction to GS&Co. prior to such postponement.


Extraordinary Dividend:                                        For any
calendar quarter occurring (in whole or in part) during the period from and
including the first day of the Hedge Period to and including the Termination
Date, 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) or (B) 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 Supplemental Confirmation


Method
of Adjustment:                                         Calculation
Agent Adjustment


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



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Tender Offer:                                                                                               Applicable;
provided that 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 or Cancellation and Payment, at the election of
GS&Co.


(b)               Share-for-Other:                                                                 Modified
Calculation Agent Adjustment or Cancellation and Payment, at the election of
GS&Co.


(c)                Share-for-Combined:                                         Modified
Calculation Agent Adjustment or Cancellation and Payment, at the election of
GS&Co.


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 American 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


(b)                                 Failure
to Deliver:                                                                                             Applicable


(c)                                  Insolvency
Filing:                                                                                           Applicable


(d)                                 Loss
of Stock Borrow:                                                                     Applicable;
provided that Sections 12.9(a)(vii) and
12.9(b)(iv) of the Equity Definitions shall be amended by deleting the words “at
a rate equal to or less than the Maximum Stock Loan Rate” and replacing them
with “at a rate of return equal to or greater than zero”.


Hedging Party:                                                                                                             GS&Co.


Additional
Termination Event(s):               Notwithstanding
anything to the contrary in the Equity Definitions, if, as a result of an
Extraordinary Event, any Transaction would be cancelled or terminated (whether
in whole or in part) pursuant to Article 12 of the Equity Definitions, an
Additional Termination Event (with such terminated Transaction(s) (or portions
thereof) being the Affected Transaction(s) and Counterparty being the sole
Affected Party) shall be deemed to occur, and, in lieu of Sections 12.7, 12.8
and 12.9 of the Equity Definitions, Section 6 of the Agreement shall apply to
such Affected Transaction(s).


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



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Non-Reliance/Agreements
and


Acknowledgements
Regarding


Hedging
Activities/Additional


Acknowledgements:                                                                                 Applicable


Transfer:                                                                                                                                                Notwithstanding
anything to the contrary in the Agreement, GS&Co. may assign, transfer and
set over all rights, title and interest, powers, privileges and remedies of
GS&Co. under any Transaction, in whole or in part, to an affiliate of
GS&Co. whose obligations are guaranteed by The Goldman Sachs Group, Inc.
without the consent of Counterparty.


GS&Co. Payment
Instructions:                           Chase
Manhattan Bank New York


For A/C Goldman, Sachs
& Co.


A/C #930-1-011483


ABA: 021-000021


Counterparty’s Contact Details


for Purpose of Giving Notice:                                   To
be provided by Counterparty


GS&Co.’s Contact Details for


Purpose of Giving Notice:                                                    Telephone
No.:                 (212) 902-8996


Facsimile No.:                      (212)
902-0112


Attention: 
Equity Operations:  Options and
Derivatives


With a copy to:


Tracey McCabe


Equity Capital Markets


One New York Plaza


New York, NY 10004


Telephone No.:              (212) 357-0428


Facsimile No.:                      (212) 902-3000


2.                                       Calculation
Agent.                                          GS&Co.


3.                                       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 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(2) thereof and the provisions of
Regulation D thereunder (“Regulation D”).  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 and (iii) the disposition of each Transaction is
restricted under this Master Confirmation, the Securities Act and state
securities laws.


4.                                       Additional
Representations, Warranties and Covenants of Counterparty.  In addition to the representations,
warranties and covenants in the Agreement, Counterparty represents, warrants
and covenants to GS&Co. 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 Securities
Exchange Act of 1934, as amended (the “Exchange Act”).



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(b)                                 It
is not entering into any Transaction (i) on the basis of, and 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, it
acknowledges that neither GS&Co. 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 FASB Statements 128, 133 as amended, or 149, 150, EITF 00-19, 01-6 or
EITF 03-6 (or any successor issue statements) or under the Financial Accounting
Standards Board’s Liabilities & Equity Project.


(e)                                  As
of (i) the date hereof and (ii) the Trade Date for each Transaction hereunder,
Counterparty is in compliance with its reporting obligations under the Exchange
Act and its most recent Annual Report on Form 10-K, together with all reports
subsequently filed by it pursuant to the Exchange Act, taken together and as
amended and supplemented to the date of this representation, do not, as of
their respective filing dates, contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading;


(f)                                    Counterparty shall report each Transaction as
required under Regulation S-K and/or Regulation S-B under the Exchange Act, as
applicable.


(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 GS&Co. 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 5
below; accordingly, Counterparty acknowledges that its delivery of such notice
must comply with the standards set forth in Section 6 below; “Regulation M Period” means, for any Transaction, the period
commencing on the first day of the Hedge Period for such Transaction and ending
on the last day of the Relevant Period (as defined below) for such Transaction,
or such earlier day as elected by GS&Co. and communicated to Counterparty
on such day. “Relevant Period”
means, for any Transaction, the period commencing on the first day of the
Calculation Period for such Transaction and ending on the last Additional
Relevant Day (as specified in the related Supplemental Confirmation) for such
Transaction (or, if later, the First Acceleration Date without regard to any
acceleration thereof pursuant to “Special Provisions Relating to Friendly
Transaction Announcements” below).


(h)                                 As
of the Trade Date, the Prepayment Date, the Initial Share Delivery Date, the
Minimum Share Delivery Date, the Settlement Date and the Second Settlement
Date, if any, 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 equal to the
Maximum Shares in compliance with the laws of the jurisdiction of Counterparty’s
incorporation.


(i)                                     Counterparty
is not and, after giving effect to any 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)                                     Counterparty
will not take any action or refrain from taking any action that would limit or
in any way adversely affect GS&Co.’s rights under the Agreement, this
Master Confirmation, any Supplemental Confirmation or any Trade Notification.


(k)                                  With
the exception of any Accelerated Stock Buyback transaction evidenced by the
confirmation dated June 7, 2007 between Counterparty and GS&Co. and
supplemental confirmations thereto, Counterparty has not and, during the Hedge
Period or Relevant Period or, if applicable, the Settlement Valuation Period
for any Transaction, will not enter into agreements similar to the Transactions
described herein where any initial hedge 



 8
 









period, calculation period, relevant period or
settlement valuation period (each however defined) in such other transaction will
overlap 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 any Hedge Period, Relevant Period or,
if applicable, any Settlement Valuation Period under this Master
Confirmation.  In the event that the
initial hedge period, relevant period, calculation period or settlement
valuation period in any other similar transaction overlaps with any Hedge
Period, Relevant Period or, if applicable, Settlement Valuation Period under
this Master Confirmation as a result of any postponement of the 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.


5.                                       Regulatory
Disruption.  In the event that
GS&Co. concludes, in its sole discretion, that it is appropriate with
respect to any legal, regulatory or self-regulatory requirements or related
policies and procedures (whether or not such requirements, policies or
procedures are imposed by law or have been voluntarily adopted by GS&Co.),
for it to refrain from purchasing Shares on any Scheduled Trading Day during
the Hedge Period, the Calculation Period or, if applicable, the Settlement
Valuation Period, GS&Co. may by written notice to Counterparty elect to
deem that a Market Disruption Event has occurred on such Scheduled Trading
Day.  The notice shall not specify, and
GS&Co. shall not otherwise communicate to Counterparty, the reason for
GS&Co.’s election.


6.                                       10b5-1 Plan.  Counterparty represents,
warrants and covenants to GS&Co. 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 10b5-1 under the Exchange Act
(“Rule 10b5-1”) 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.  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 and each Transaction entered into under this Master
Confirmation shall be interpreted to comply with the requirements of Rule
10b5-1(c).


(b)                                 Counterparty will not seek to control or
influence GS&Co.’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, GS&Co.’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, each Supplemental Confirmation and each Trade Notification
under Rule 10b5-1.


(c)                                  Counterparty
acknowledges and agrees that any amendment, modification, waiver or termination
of this Master Confirmation, the relevant Supplemental Confirmation or Trade
Notification 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 shall be made at any time at which Counterparty or any
officer, director, manager or similar person of Counterparty is aware of any
material non-public information regarding Counterparty or the Shares.


7.                                       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 GS&Co., 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)) during any Hedge Period or Relevant Period or, if applicable,
Settlement Valuation Period, except through
GS&Co; provided that
purchases effected by or for an issuer plan by an agent independent of the
issuer within the meaning of Rule 10b-18(a)(13)(ii) shall not be subject to
this Section 7.



 9
 









8.                                       Special
Provisions for Merger Transactions. 
Notwithstanding anything to the contrary herein or in the Equity
Definitions:


(a) Counterparty agrees
that it:


(i)                                     will
not during the period commencing on the Trade Date through the end of the
Relevant Period for any Transaction make, or permit to be made, any public
announcement (as defined in Rule 165(f) under the Securities Act) of any Merger
Transaction or potential Merger Transaction unless 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 (but in any event prior to the next opening of the regular trading
session on the Exchange) notify GS&Co. following any such announcement that
such announcement has been made; and


(iii)                               shall
promptly (but in any event prior to the next opening of the regular trading
session on the Exchange) provide GS&Co. 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 announcement
date that were not effected through GS&Co. or its affiliates and (ii) the
number of Shares purchased pursuant to the proviso in Rule 10b-18(b)(4) under
the Exchange Act for the three full calendar months preceding the announcement
date.  Such written notice shall be
deemed to be a certification by Counterparty to GS&Co. that such
information is true and correct.  In
addition, Counterparty shall promptly notify GS&Co. of the earlier to occur
of the completion of such transaction and the completion of the vote by target
shareholders.  Counterparty acknowledges
that any such notice may cause the terms of any Transaction to be adjusted or
such Transaction to be terminated; accordingly, Counterparty acknowledges that
its delivery of such notice must comply with the standards set forth in Section
7 above.


(b)                                 GS&Co.
in its sole discretion may (i) make adjustments to the terms of any
Transaction, including, without limitation, the Termination Date or the Forward
Price Adjustment Amount, and/or suspend the Hedge Period, Calculation Period
and/or any Settlement Valuation Period or (ii) treat the occurrence of such
public announcement as an Additional Termination Event with Counterparty as the
sole Affected Party and the Transactions hereunder as the Affected Transactions
and with the amount under Section 6(e) of the Agreement determined 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 contemplated by Rule 10b-18(a)(13)(iv) under
the Exchange Act.


9.                                       Special
Provisions for Friendly Transaction Announcements.  (a) If a Friendly Transaction Announcement
occurs on or prior to the Settlement Date for any Transaction, then the Number
of Shares to be Delivered for such Transaction shall be determined as if the
words “not less than the Minimum Shares and” and “, but not below zero,” were
deleted from the definition thereof. If a Friendly Transaction Announcement
occurs after the Trade Date, but prior to the First Acceleration Date of any
Transaction, the First Acceleration Date shall be the date of such Friendly
Transaction Announcement. If a Friendly Transaction Announcement occurs after
the Settlement Date for any Transaction or any earlier date of termination or
cancellation of such Transaction pursuant to Section 6 of the Agreement or
Article 12 of the Equity Definitions, then a second settlement of such
Transaction (a “Second Settlement”)
shall occur (notwithstanding such earlier termination or cancellation) with a
Number of Shares to be Delivered equal to the lesser of (i) zero and (ii) (x)
the Number of Shares to be Delivered determined pursuant to the immediately
preceding sentence as if such Friendly Transaction Announcement occurred prior
to such Settlement Date minus (y) the
Number of Shares to be Delivered determined pursuant to Section 1 of this
Confirmation (provided that in the case of a
Second Settlement occurring after such an early termination or cancellation, a
Number of Shares to be Delivered shall not be determined and instead a Forward
Cash Settlement Amount will be determined as provided in Annex A).  If the Number of Shares to be Delivered for
any settlement of any Transaction is a negative number, then the terms of the
Counterparty Settlement Provisions in Annex A shall apply.


(b)                                 “Friendly Transaction Announcement” means (i) an Acquisition
Transaction Announcement by Counterparty or its board of directors prior to the
last day of the Relevant Period or any earlier date of termination or
cancellation of the relevant Transaction pursuant to Section 6 of the Agreement
or Article 12 of the Equity 



 10
 









Definitions
(such date, the “Actual Termination Date”),
(ii) an announcement by Counterparty or its board of directors prior to the
date three months following the Scheduled Termination Date that an Acquisition
Transaction that is the subject of an Acquisition Transaction Announcement
occurring prior to the Actual Termination Date has been approved, agreed to,
recommended by or otherwise consented to by Counterparty or its board of
directors, or negotiated by Counterparty or any authorized representative of
Counterparty, or (iii) where Counterparty or its board of directors has a legal
obligation to make a recommendation to its shareholders in respect of any such
Acquisition Transaction prior to the date three months following the Scheduled
Termination Date, the absence of a recommendation that its shareholders reject
such transaction.


“Acquisition Transaction
Announcement” means (i) the announcement of an Acquisition
Transaction, (ii) an announcement that Counterparty or any of its subsidiaries
has entered into an agreement, a letter of intent or an understanding designed
to result in an Acquisition Transaction, (iii) the announcement of the
intention to solicit or enter into, or to explore strategic alternatives or
other similar undertaking that may include, an Acquisition Transaction, or (iv)
any other announcement that in the reasonable judgment of the Calculation Agent
may result in an Acquisition Transaction. For the avoidance of doubt,
announcements as used in the definition of Acquisition Transaction Announcement
refer to any public announcement whether made by the Issuer or a third party.


“Acquisition Transaction”
means (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 “15%” and 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) or Tender Offer, 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 and (iv)
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).


10.                                 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);


(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:


(i)                               during
the term of any Transaction, GS&Co. 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 or adjust its
hedge position with respect to such Transaction;


(ii)                            GS&Co.
and its affiliates may also be active in the market for the Shares other than in
connection with hedging activities in relation to any Transaction;



 11
 









(iii)                         GS&Co. 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 GS&Co. 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 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 GS&Co. an
option;  GS&Co. 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.


11.                                 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.


12.                                 Limitation
on Set-off.  (a) The parties agree
that upon the occurrence of an Event of Default or Termination Event with
respect to a party who is the Defaulting Party or an Affected Party (“X”), the other party (“Y”)
will have the right (but not be obliged) without prior notice to X or any other
person to set-off or apply any obligation of X owed to Y (or any Affiliate of
Y) (whether or not matured or contingent and whether or not arising under the
Agreement, and regardless of the currency, place of payment or booking office
of the obligation) against any obligation of Y (or any Affiliate of Y) owed to
X (whether or not matured or contingent and whether or not arising under the
Agreement, and regardless of the currency, place of payment or booking office
of the obligation).  Y will give notice
to the other party of any set-off effected under this Section 11.


Amounts (or the relevant
portion of such amounts) subject to set-off may be converted by Y into the
Termination Currency at the rate of exchange at which such party would be able,
acting in a reasonable manner and in good faith, to purchase the relevant
amount of such currency.  If any
obligation is unascertained, Y may in good faith estimate that obligation and
set-off in respect of the estimate, subject to the relevant party accounting to
the other when the obligation is ascertained. 
Nothing in this Section 11 shall be effective to create a charge or
other security interest.  This Section 11
shall be without prejudice and in addition to any right of set-off, combination
of accounts, lien or other right to which any party is at any time otherwise
entitled (whether by operation of law, contract or otherwise).


(b)                                 Notwithstanding
anything to the contrary in the foregoing, GS&Co. agrees not to set off or
net amounts due from Counterparty with respect to any Transaction against
amounts due from GS&Co. to Counterparty with respect to contracts or
instruments that are not Equity Contracts. 
“Equity Contract” means any
transaction or instrument that does not convey to GS&Co. rights, or the
ability to assert claims, that are senior to the rights and claims of common
stockholders in the event of Counterparty’s bankruptcy.


13.                                 Delivery
of Shares.  Notwithstanding anything
to the contrary herein, GS&Co. 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 times 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.


14.                                 Early
Termination.  In the event that 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), if either party would owe any
amount to the other party pursuant to Section 6(d)(ii) of the Agreement (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, elect to
deliver or for GS&Co. 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 



 12
 









by the Calculation Agent
(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 GS&Co., the prices at
which GS&Co. purchases Shares or Alternative Delivery Property to fulfill
its delivery obligations under this Section 14); 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. 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 and the Forward Cash Settlement Amount were zero (0) minus the Payment Amount owed by Counterparty.


15.                                 Calculations
and Payment Date upon Early Termination. 
The parties acknowledge and agree that in calculating Loss pursuant to
Section 6 of the Agreement GS&Co. may (but need not) determine losses
without reference to actual losses incurred but based on expected losses
assuming a commercially reasonable (including without limitation with regard to
reasonable legal and regulatory guidelines) risk bid were used to determine
loss to avoid awaiting the delay associated with closing out any hedge or
related trading position in a commercially reasonable manner prior to or sooner
following the designation of an Early Termination Date.  Notwithstanding anything to the contrary in
Section 6(d)(ii) of the Agreement, all amounts calculated as being due in
respect of an Early Termination Date under Section 6(e) of the Agreement will
be payable on the day that notice of the amount payable is effective; provided that if Counterparty elects to
receive Shares or Alternative Delivery Property in accordance with Section 14, such Shares or Alternative
Delivery Property shall be delivered on a date selected by GS&Co as
promptly as practicable.


16.                                 Special
Provisions for Counterparty Payments. 
The parties hereby agree that, notwithstanding anything to the contrary
herein or in the Agreement, in the event that 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 and, as a result, Counterparty owes
to GS&Co. an amount calculated under Section 6(e) of the Agreement, such
amount shall be deemed to be zero; provided that
following a Friendly Transaction Announcement, this Section 16 shall cease
to apply.


17.                                 Agreements
in Respect of Termination Amounts. 
In determining any amounts payable in respect of the termination or
cancellation of any Transaction pursuant to Section 6 of the Agreement or
Article 12 of the Equity Definitions, the Calculation Agent shall make such
determination without regard to (i) changes to costs of funding, stock loan
rates or expected dividends since the Trade Date for such Transaction, or (ii)
losses or costs incurred in connection with terminating, liquidating or
re-establishing any hedge related to such Transaction (or any gain resulting
from any of them).


18.                                 Agreement
in Respect of Adjustments.  In
determining any adjustment in respect of any Transaction pursuant to Article 11
or Article 12 of the Equity Definitions, the Calculation Agent shall make such
adjustments without regard to changes in expected dividends since the Trade
Date for such Transaction.


19.                                 Agreement
in Respect of Dividends.  For the
avoidance of doubt, if an Early Termination Date occurs in respect of any
Transaction as a result of an Additional Termination Event of the type
described in the second paragraph opposite “Additional Termination Event(s)” above,
the relevant party’s Loss for purposes of Section 6(e) of the Agreement in
respect of such Additional Termination Event shall be determined without regard
to the difference between such Extraordinary Dividend giving rise to such
Additional Termination Event and the expected dividend as of the Trade Date for
such Transaction.


20.                                 Claim
in Bankruptcy.  GS&Co.
acknowledges and agrees that this Confirmation is not intended to convey to it
rights with respect to the Transaction that are senior to the claims of common
stockholders in the event of Counterparty’s bankruptcy.


21.                                 General
Obligations Law of New York.  With
respect to each Transaction, (i) this Master Confirmation, together with the
related Supplemental Confirmation, as supplemented by the related Trade
Notification, is a “qualified financial contract”, as such term is defined in
Section 5-701(b)(2) of the General Obligations Law of New York (the “General Obligations Law”); (ii) such Trade Notification
constitutes a “confirmation in writing 



 13
 









sufficient to indicate
that a contract has been made between the parties” hereto, as set forth in
Section 5-701(b)(3)(b) of the General Obligations Law; and (iii) this Master
Confirmation, together with the related Supplemental Confirmation, constitutes
a prior “written contract” as set forth in Section 5-701(b)(1)(b) of the
General Obligations Law, and each party hereto intends and agrees to be bound
by this Master Confirmation and the related Supplemental Confirmation, as
supplemented by the Trade Notification.


22.                                 Governing
Law.  The Agreement, this Master
Confirmation, each Supplemental Confirmation, each Trade Notification and all
matters arising in connection with the Agreement, this Master
Confirmation,  each Supplemental
Confirmation and each Trade Notification 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).


23.                                 Offices.


(a)                                  The
Office of GS&Co. for each Transaction is: 
One New York Plaza, New York, New York 10004.


(b)                                 The
Office of Counterparty for each Transaction is: 
2900 Semiconductor Drive, PO Box 58090, Santa Clara, CA  95052


24.                                 Arbitration.  The Agreement, this Master Confirmation, each
Supplemental Confirmation and each Trade Notification are subject to the
following arbitration provisions:


(a)                                  All
parties to this Confirmation are giving up the right to sue each other in
court, including the right to a trial by jury, except as provided by the rules
of the arbitration forum in which a claim is filed.


(b)                                  Arbitration
awards are generally final and binding; a party’s ability to have a court
reverse or modify an arbitration award is very limited.


(c)                                  The
ability of the parties to obtain documents, witness statements and other
discovery is generally more limited in arbitration than in court proceedings.


(d)                                  The
arbitrators do not have to explain the reason(s) for their award.


(e)                                  The
panel of arbitrators will typically include a minority of arbitrators who were
or are affiliated with the securities industry, unless Counterparty is a member
of the organization sponsoring the arbitration facility, in which case all
arbitrators may be affiliated with the securities industry.


(f)                                    The
rules of some arbitration forums may impose time limits for bringing a claim in
arbitration.  In some cases, a claim that
is ineligible for arbitration may be brought in court.


(g)                                 The
rules of the arbitration forum in which the claim is filed, and any amendments
thereto, shall be incorporated into this Confirmation.


Counterparty agrees that any and
all controversies that may arise between Counterparty and GS&Co.,
including, but not limited to, those arising out of or relating to the
Agreement or any Transaction hereunder, shall be determined by arbitration
conducted before The New York Stock Exchange, Inc. (“NYSE”) or NASD Dispute
Resolution (“NASD-DR”), or, if the NYSE and NASD-DR decline to hear the matter,
before the American Arbitration Association, in accordance with their
arbitration rules then in force.  The
award of the arbitrator shall be final, and judgment upon the award rendered
may be entered in any court, state or federal, having jurisdiction.


No person shall bring a putative
or certified class action to arbitration, nor seek to enforce any pre-dispute
arbitration agreement against any person who has initiated in court a putative
class action or who is a member of a putative class who has not opted out of
the class with respect to any claims encompassed by the 



 14
 









putative class action until: (i) the class
certification is denied; (ii) the class is decertified; or (iii) Counterparty
is excluded from the class by the court.


Such forbearance to enforce an agreement to
arbitrate shall not constitute a waiver of any rights under this Confirmation
except to the extent stated herein.”


25.                                 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.



 15














Counterparty hereby
agrees (a) to check this Master Confirmation carefully and immediately upon
receipt so that errors or discrepancies can be promptly identified and
rectified and (b) to confirm that the foregoing (in the exact form provided by
GS&Co.) correctly sets forth the terms of the agreement between GS&Co.
and Counterparty with respect to any particular Transaction to which this
Master Confirmation relates, by manually signing this Master Confirmation or
this page hereof as evidence of agreement to such terms and providing the other
information requested herein and immediately returning an executed copy to
Equity Derivatives Documentation Department, Facsimile No. 212-428-1980/83.


	
   

  	
  Yours faithfully,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GOLDMAN, SACHS & CO.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Conrad Langenegger

  
	
   

  	
  Authorized
  Signatory

  
	
   

  	
   

  
	
  Agreed and Accepted By:

  	
   

  
	
   

  	
   

  
	
  NATIONAL SEMICONDUCTOR CORPORATION

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   /s/ Lewis
  Chew

  	
   

  
	
   

  	
   Name: Lewis Chew

  	
   

  
	
   

  	
   Title: Senior Vice President, Finance and

             Chief
  Financial Officer

  	
   

  



 
















SCHEDULE A



SUPPLEMENTAL CONFIRMATION


	
  To:

  	
   

  	
  National Semiconductor Corporation 

  2900 Semiconductor Drive 

  PO Box 58090 

  Santa Clara, CA 95052

  
	
   

  	
   

  	
   

  
	
  From:

  	
   

  	
  Goldman, Sachs & Co.

  
	
   

  	
   

  	
   

  
	
  Subject:

  	
   

  	
  Collared 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 Goldman, Sachs & Co. (“GS&Co.”) and National Semiconductor Corporation (“Counterparty”) (together, the “Contracting
Parties”) on the Trade Date specified below.  This Supplemental Confirmation is a binding
contract between GS&Co. 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 June 7, 2007 (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 [   ]

  
	
   

  	
   

  	
   

  
	
  Hedge Period Start Date:

  	
   

  	
  [                ]

  
	
   

  	
   

  	
   

  
	
  Hedge Period End Date:

  	
   

  	
  [                 ]

  
	
   

  	
   

  	
   

  
	
  Scheduled Termination Date:

  	
   

  	
  [                 ]

  
	
   

  	
   

  	
   

  
	
  First Acceleration Date:

  	
   

  	
  [                 ]

  
	
   

  	
   

  	
   

  
	
  Prepayment Amount:

  	
   

  	
  USD
  [                    ]

  
	
   

  	
   

  	
   

  
	
  Initial Shares:

  	
   

  	
  [                      ];
  provided that if GS&Co. is unable
  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 shall be reduced to such number of Shares that GS&Co. is able to
  so borrow or otherwise acquire.

  
	
   

  	
   

  	
   

  
	
  Minimum Shares:

  	
   

  	
  As set forth in the Trade Notification, to be a
  number of shares equal to (a) the Prepayment Amount divided by
  (b) [   ]% of the Hedge Period Reference Price.

  



 



 A-1
 









 


	
  Maximum Shares:

  	
   

  	
  As set for in the Trade Notification, to be a number
  of shares equal to (a) the Prepayment Amount divided by
  (b) [   ]% of the Hedge Period Reference Price.

  
	
   

  	
   

  	
   

  
	
  Ordinary Dividend Amount:

  	
   

  	
  For any calendar quarter, USD [   ]

  
	
   

  	
   

  	
   

  
	
  Additional Relevant Days:

  	
   

  	
  The [5] Exchange Business Days immediately following
  the Calculation Period.

  



3.             Counterparty represents and
warrants to GS&Co. 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 the four full calendar weeks
immediately preceding the Trade Date.


4.             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-2
 









Counterparty hereby agrees (a) to check this
Supplemental Confirmation carefully and immediately upon receipt so that errors
or discrepancies can be promptly identified and rectified and (b) to
confirm that the foregoing (in the exact form provided by GS&Co.) correctly
sets forth the terms of the agreement between GS&Co. and Counterparty with
respect to the Transaction to which this Supplemental Confirmation relates, by
manually signing this Supplemental Confirmation or this page hereof as evidence
of agreement to such terms and providing the other information requested herein
and immediately returning an executed copy to Equity Derivatives Documentation
Department, facsimile No. 212-428-1980/83.


	
   

  	
  Yours sincerely,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GOLDMAN, SACHS & CO.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Authorized
  Signatory

  
	
   

  	
   

  
	
  Agreed and Accepted By:

  	
   

  
	
   

  	
   

  
	
  NATIONAL SEMICONDUCTOR CORPORATION

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   Name:

  	
   

  
	
   

  	
   Title:

  	
   

  



 



 A-3















SCHEDULE B


TRADE NOTIFICATION


	
  To:

  	
   

  	
  National Semiconductor Corporation 

  2900 Semiconductor Drive 

  PO Box 58090 

  Santa Clara, CA 95052

  
	
   

  	
   

  	
   

  
	
  From:

  	
   

  	
  Goldman, Sachs & Co.

  
	
   

  	
   

  	
   

  
	
  Subject:

  	
   

  	
  Collared Accelerated Stock Buyback

  
	
   

  	
   

  	
   

  
	
  Ref. No:

  	
   

  	
  [Insert Reference No.]

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
  [Insert Date]

  



The purpose of this Trade
Notification is to notify you of certain terms in the Transaction entered into
between Goldman, Sachs & Co. (“GS&Co.”)
and  National Semiconductor
Corporation (“Counterparty”) (together, the “Contracting Parties”) on the Trade Date specified below.


This Trade
Notification supplements, forms part of, and is subject to the Supplemental
Confirmation dated as of [Insert Date of
Supplemental Confirmation] (the “Supplemental
Confirmation”) between the Contracting Parties, as amended and
supplemented from time to time.  The
Supplemental Confirmation is subject to the Master Confirmation dated as of June 7, 2007 (the “Master Confirmation”) between the Contracting Parties, as
amended and supplemented from time to time.


	
  Hedge Completion Date:

  	
   

  	
  [             ]

  
	
   

  	
   

  	
   

  
	
  Hedge Period Reference Price:

  	
   

  	
  USD [             ]

  
	
   

  	
   

  	
   

  
	
  Minimum Shares:

  	
   

  	
  [             ]

  
	
   

  	
   

  	
   

  
	
  Maximum Shares:

  	
   

  	
  [             ]

  



 


 


	
  

  	
  Yours sincerely,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GOLDMAN, SACHS & CO.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized Signatory

  



 



 B-1















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 GS&Co. in writing on the date it notifies
GS&Co. 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
earlier of (i) the Scheduled Termination Date and (ii) the Accelerated
Termination Date, as the case may be; provided
that if a Friendly Transaction Announcement occurs after the Settlement Date,
the Settlement Method Election Date for the Second Settlement shall be the date
of the Friendly Transaction Announcement.


Default Settlement
Method:                       Cash
Settlement


Forward Cash Settlement


Amount:                                                                                                                           The
Number of Shares to be Delivered multiplied
by the Settlement Price (provided that in the case of a Second
Settlement occurring after an early termination or cancellation of the relevant
Transaction pursuant to Section 6 of the Agreement or Article 12 of the Equity
Definitions, the Forward Cash Settlement Amount shall equal the lesser  of
(i) zero and (ii)(x) the Payment Amount (as defined below) that would have been
calculated for such early termination or cancellation if the words “not less
than the Minimum Shares and” and “,but not below zero,” had been deleted from
the definition of Number of Shares to be Delivered and, for purposes of “Special
Provisions for Counterparty Payments” of the Master Confirmation, the relevant
Friendly Transaction Announcement had occurred prior to such calculation, as
determined by the Calculation Agent (with an amount that would have been owed
by Counterparty expressed as a negative number for purposes of this
calculation) minus (y) the actual
Payment Amount calculated for such early termination or cancellation).


Settlement
Price:                                                                                The
average of the VWAP Prices for the Exchange Business Days in the Settlement
Valuation Period, subject to Valuation Disruption as specified in the Master
Confirmation.



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Settlement Valuation
Period:                  A
number of Scheduled Trading Days selected be GS&Co. in its reasonable
discretion, beginning on the Scheduled Trading Day immediately following the
Termination Date or, in the case of a Second Settlement, the date of the
Friendly Transaction Announcement.


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
date one Settlement Cycle following the last day of the Settlement Valuation
Period.


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 GS&Co. (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.


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 the
GS&Co. (the “Registration Statement”) shall
have been filed with, and declared effective by, the Securities and Exchange
Commission under the Securities Act 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 GS&Co., in such quantities as GS&Co. 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 satisfactory to
GS&Co.;


(c)           as of or prior the date
of delivery, GS&Co. and its agents shall have been afforded a reasonable
opportunity to conduct a due diligence investigation with respect to
Counterparty customary in scope for underwritten offerings of equity securities
and the results of such investigation are satisfactory to GS&Co., in its
discretion; and


(d)           as of the date of
delivery, an agreement (the “Underwriting Agreement”)
shall have been entered into with GS&Co. in connection with the public
resale of the Registered Settlement Shares by GS&Co. substantially similar
to underwriting agreements customary for underwritten offerings of equity
securities, in form and substance satisfactory to GS&Co., which
Underwriting Agreement shall include, without limitation, provisions
substantially similar to those contained in such underwriting agreements
relating to the indemnification of, and contribution in connection with the
liability of, GS&Co. and its affiliates.


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



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


(b)           as of or prior to the
date of delivery, GS&Co. and any potential purchaser of any such shares
from GS&Co. (or any affiliate of GS&Co. designated by GS&Co.)
identified by GS&Co. 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); and


(c)           as of the date of
delivery, Counterparty shall enter into an agreement (a “Private
Placement Agreement”) with GS&Co. (or any affiliate of
GS&Co. designated by GS&Co.) in connection with the private placement
of such shares by Counterparty to GS&Co. (or any such affiliate) and the
private resale of such shares by GS&Co. (or any such affiliate),
substantially similar to private placement purchase agreements customary for
private placements of equity securities, in form and substance commercially
reasonably satisfactory to GS&Co., which Private Placement Agreement shall
include, without limitation, provisions substantially similar to those
contained in such private placement purchase agreements relating to the
indemnification of, and contribution in connection with the liability of,
GS&Co. and its affiliates, and shall provide for the payment by
Counterparty of all fees and expenses in connection with such resale, including
all fees and expenses of counsel for GS&Co., and shall contain
representations, warranties and agreements of Counterparty reasonably necessary
or advisable to establish and maintain the availability of an exemption from
the registration requirements of the Securities Act for such resales.


5.             GS&Co., 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 GS&Co.
pursuant to paragraph 6 below commencing on the Net Share Settlement Date and
continuing until the date on which the aggregate Net Proceeds (as such term is
defined below) of such sales, as determined by GS&Co., is equal to the
Forward Cash Settlement Amount (such date, the “Final Resale
Date”).  If the proceeds of
any sale(s) made by GS&Co., the Selling Agent or any underwriter(s), net of
any 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 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 Forward Cash Settlement Amount, GS&Co. will refund, in U.S.
Dollars, such excess to Counterparty on the date that is three (3) Business
Days following the Final Resale Date, and, if any portion of the Settlement
Shares remains unsold, GS&Co. 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 paragraph 6 are less than the Forward Cash Settlement
Amount (the amount in U.S. Dollars by which the Net Proceeds are less than 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 Exchange Business
Day next succeeding the Deficiency Determination Date (the “Makewhole Notice Date”) deliver to GS&Co., through the
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)
Business Day after the Makewhole Notice Date, or (ii) deliver additional
Shares.  If Counterparty elects to
deliver to GS&Co. 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
an Exchange Business Day following the Makewhole Notice Date in such number as
the Calculation Agent reasonably believes would have a market value on that
Exchange Business Day equal to the Shortfall. 
Such Makewhole Shares shall be sold by GS&Co. 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 Forward 



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Cash Settlement Amount
then Counterparty shall, at its election, either make such cash payment or
deliver to GS&Co. 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 and
Makewhole 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,
10,000,000 Shares.  The Reserved Shares
may be increased or decreased in a Supplemental Confirmation.



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