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QUALCOMM INC/DE
FORM 10-K
(Annual Report)
Filed 11/04/15 for the Period Ending 09/27/15
Address 5775 MOREHOUSE DR
SAN DIEGO, CA 92121
Telephone 8585871121
CIK 0000804328
Symbol QCOM
SIC Code
3663 - Radio and Television Broadcasting and Communications Equipment
Industry Semiconductors
Sector Technology
Fiscal Year 09/25
http://www.edgar-online.com
© Copyright 2015, EDGAR Online, Inc. All Rights Reserved.
Distribution and use of this document restricted under EDGAR Online, Inc. Terms of Use.

Table of contents

  • Page 1
    QUALCOMM INC/DE FORM 10-K (Annual Report) Filed 11/04/15 for the Period Ending 09/27/15 Address Telephone CIK Symbol SIC Code Industry Sector Fiscal Year 5775 MOREHOUSE DR SAN DIEGO, CA 92121 8585871121 0000804328 QCOM 3663 - Radio and Television Broadcasting and Communications Equipment ...

  • Page 2
    ... transition period from to . Commission file number 0-19528 QUALCOMM Incorporated (Exact name of registrant as specified in its charter) Delaware (State or other jurisdiction of incorporation or organization) 5775 Morehouse Drive San Diego, California (Address of principal executive offices...

  • Page 3
    ...common equity held by non-affiliates of the registrant at March 29, 2015 (the last business day of the registrant's most recently completed second fiscal quarter) was $109,303,248,283 , based upon the closing price of the registrant's common stock on that date as reported on the NASDAQ Global Select...

  • Page 4
    ... Statements and Supplementary Data Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Controls and Procedures Other Information PART III Directors, Executive Officers and Corporate Governance Executive Compensation Security Ownership of Certain Beneficial Owners...

  • Page 5
    ... of Qualcomm Incorporated, registered in the United States and other countries. MuLTEfire and Qualcomm Haven are trademarks of Qualcomm Incorporated. CSR is a trademark of Qualcomm Technologies International, Ltd., registered in the United States and other countries. Other products and brand names...

  • Page 6
    ...Access), of which GSM (Global System for Mobile Communications) is the primary commercial form, are the primary digital technologies currently used to transmit a wireless device user's voice or data over radio waves using a public cellular wireless network. We also develop and commercialize a number...

  • Page 7
    ... technology dimensions, including connectivity, application processors, camera, audio, video, location, radio frequencies and sensors. As a result, the smartphone has, in many ways, supplanted the personal computer as the go-to device for email, web browsing, music, gaming and social networking...

  • Page 8
    ...-based technologies deployed around the world, in particular CDMA2000, EV-DO (Evolution Data Optimized), WCDMA (Wideband CDMA) and TD-SCDMA (Time Division-Synchronous CDMA) (deployed exclusively in China). CDMA-based technologies provide vastly improved capacity for voice and low-rate data services...

  • Page 9
    ... 860 million global 3G/4G multimode connections worldwide, representing approximately 12% of total cellular connections. According to the Global mobile Suppliers Association (GSA), as of October 2015, more than 650 wireless operators have commercially deployed or started testing LTE. In addition...

  • Page 10
    ... Technology Licensing), and our QSI (Qualcomm Strategic Initiatives) reportable segment makes strategic investments. Revenues in fiscal 2015 , 2014 and 2013 for our reportable segments were as follows (in millions, except percentage data): 2015 As a percent of total 2014 As a percent of total 2013...

  • Page 11
    ...providing voice and data communications, as well as multimedia applications and global positioning functions. In addition, our Snapdragon processors provide advanced application and graphics processing capabilities. Because of our experience in designing and developing CDMA- and OFDMA-based products...

  • Page 12
    ... plug-in end user data modem cards, certain embedded modules for incorporation into end user products, infrastructure equipment required to establish and operate a network and equipment to test networks and subscriber units. QTL licensing revenues include license fees and royalties based on sales by...

  • Page 13
    ... 3-mode LTE-TDD devices), in each case using a royalty base of 65% of the net selling price. Separate and apart from licensing manufacturers of wireless devices and network equipment, we have entered into certain arrangements with competitors of our QCT segment, such as Broadcom and MediaTek...

  • Page 14
    ... quarter of fiscal 2015, we announced a Strategic Realignment Plan designed to improve execution, enhance financial performance and drive profitable growth as we work to create sustainable long-term value for stockholders. The core elements of this plan include (a) right-sizing our cost structure...

  • Page 15
    ... communications networks around the world. Our research and development team has a demonstrated track record of innovation in voice and data communication technologies and application processor technology, among others. Our research and development expenditures in fiscal 2015 , 2014 and 2013 totaled...

  • Page 16
    ... marketing programs, such as marketing development funds with our customers. Our Corporate Marketing department provides company information on our Internet site and through other channels regarding our products, strategies and technology to industry analysts and media. Competition Competition faced...

  • Page 17
    ... an increase of approximately 2,400 employees as a result of acquisitions, partially offset by a decrease of approximately 700 employees related to businesses that we exited in fiscal 2015. During the fourth quarter of fiscal 2015, we announced a Strategic Realignment Plan under which we expect to...

  • Page 18
    ... Annual Report, including our financial statements and the related notes. Risks Related to Our Businesses Our revenues depend on commercial network deployments, expansions and upgrades of CDMA, OFDMA and other communications technologies, our customers' and licensees' sales of products and services...

  • Page 19
    ...front end, central, graphics and/or other processors, camera and connectivity) and with smaller geometry process technologies that drive performance; develop and offer integrated circuit products at competitive cost and price points to effectively cover both emerging and developed geographic regions...

  • Page 20
    ...technology evolution, including expansion of our LTE-based single mode licensing program, and continue to innovate and introduce 4G turnkey, integrated products and services that differentiate us from our competition; be a leader serving original equipment manufacturers, high level operating systems...

  • Page 21
    ... incorporate open source software elements and operate in an open source environment, which, under certain open source licenses, may offer accessibility to a portion of a product's source code and may expose related intellectual property to adverse licensing conditions. Licensing of such software...

  • Page 22
    ... Annual Report in "Notes to Consolidated Financial Statements, Note 7. Commitments and Contingencies." The unfavorable resolution of one or more of these matters could have a material adverse effect on our business, results of operations, financial condition and/or cash flows. Depending on the type...

  • Page 23
    ... that the European Union will adopt a unitary patent system in the next few years that may broadly impact that region's patent regime. We cannot predict with certainty the long-term effects of any potential changes. In addition, we cannot be certain that the laws and policies of any country or the...

  • Page 24
    ...on material terms and/or conditions of new license agreements that are acceptable to us with companies that are currently unlicensed, particularly in China. Further, the royalty rates for single mode 4G products are generally lower than our royalty rates for 3G and 3G/4G multimode products have been...

  • Page 25
    ... industry segments by leveraging our existing technical and business expertise and/or through acquisitions. Our recent investment initiatives relate to, among others, products for the connected home and the Internet of Things; automotive; networking; mobile computing; small cells and addressing the...

  • Page 26
    ... our QCT segment are primarily located in Asia. The following could have an adverse effect on our ability to meet customer demands and/or negatively impact our revenues, business operations, profitability and/or cash flows a reduction, interruption, delay or limitation in our product supply sources...

  • Page 27
    ... several years after the date of the investment, if at all. Our acquisitions or strategic investments may not generate financial returns or result in increased adoption or continued use of our technologies, products or services. In some cases, we may be required to consolidate or record our share of...

  • Page 28
    ... business, QCT, and a reduction to our annual share-based compensation grants in fiscal 2016. We expect these cost reduction initiatives to be fully implemented by the end of fiscal 2016. Additional information regarding our Strategic Realignment Plan is provided in this Annual Report in...

  • Page 29
    ... revenues. A decline in global economic conditions or a slow-down in economic growth, particularly in geographic regions with high concentrations of wireless voice and data users, could have adverse, wide-ranging effects on demand for our products and for the products and services of our customers...

  • Page 30
    ... our information technology systems. Potential tax liabilities could adversely affect our results of operations. We are subject to income taxes in the United States and numerous foreign jurisdictions, including Singapore where our QCT segment's non-United States headquarters is located. Significant...

  • Page 31
    ... Countries 0.1 2.9 3.0 Total 5.0 5.2 10.2 4.9 2.3 7.2 Our headquarters as well as certain research and development, manufacturing and network management hub operations are located in San Diego, California. Additionally, our QCT segment's non-United States headquarters is located...

  • Page 32
    ...based compensation plans and plan activity for fiscal 2015 , 2014 and 2013 is provided in this Annual Report in "Notes to Consolidated Financial Statements, Note 5. Employee Benefit Plans" and additional information regarding our share-based compensation plans for fiscal 2015 is provided in our 2016...

  • Page 33
    .... Statement of Operations Data: Revenues Operating income Income from continuing operations Discontinued operations, net of income taxes Net income attributable to Qualcomm Years Ended (1) September 27, 2015 September 28, 2014 September 29, 2013 September 30, 2012 September 25, 2011...

  • Page 34
    ...fourth quarter of fiscal 2015, we announced a Strategic Realignment Plan designed to improve execution, enhance financial performance and drive profitable growth as we work to create sustainable long-term value for stockholders. During fiscal 2015, we recorded restructuring and restructuring-related...

  • Page 35
    ... Information." Our Business and Operating Segments We design, manufacture, have manufactured on our behalf and market digital communications products and services based on CDMA, OFDMA and other technologies. We derive revenues principally from sales of integrated circuit products and licensing...

  • Page 36
    ...licensees report their sales made during the fourth calendar quarter. We have also experienced fluctuations in revenues due to the timing of conversions and expansions of 3G and 3G/4G networks by wireless operators and the timing of launches of flagship wireless devices that incorporate our products...

  • Page 37
    ... average and range of selling prices of 3G/4G devices. In the fourth quarter of fiscal 2015, we announced a Strategic Realignment Plan designed to improve execution, enhance financial performance and drive profitable growth as we work to create sustainable long-term value for stockholders. The core...

  • Page 38
    ... requires us to use assumptions to estimate future cash flows including those related to total addressable market, pricing and share forecasts, competition, technology obsolescence, future tax rates and discount rates. Our estimate of the fair value of certain assets may differ materially from that...

  • Page 39
    .... Our QCT segment's non-United States headquarters is located in Singapore. We obtained tax incentives in Singapore that commenced in March 2012, including a tax exemption for the first five years, provided that we meet specified employment and incentive criteria, and as a result of expiration of...

  • Page 40
    ... need for such earnings outside of the United States, we would have to adjust the income tax provision in the period we make such determination. Results of Operations Revenues (in millions) Equipment and services Licensing Year Ended 2015 vs. 2014 Change 2014 vs. 2013 Change 1,637 (16...

  • Page 41
    ... in employee-related expenses. The decrease in employee-related expenses and a portion of the decrease in share-based compensation in fiscal 2014 were due to the sale of our Omnitracs division during fiscal 2014. Other expenses in fiscal 2015 were attributable to a $975 million charge resulting from...

  • Page 42
    ... tax credit generated through December 31, 2014, the date on which the credit expired, and a $61 million tax benefit as a result of a favorable tax audit settlement with the Internal Revenue Service related to Qualcomm Atheros, Inc.'s pre-acquisition 2010 and 2011 tax returns. The effective tax rate...

  • Page 43
    ... Earnings (loss) before taxes. QCT Segment. QCT results of operations in fiscal 2015 were negatively impacted by the effects of a shift in share among our customers within the premium tier, which reduced our sales of integrated Snapdragon processors and skewed our product mix towards lower-margin...

  • Page 44
    ... were $5.5 billion during fiscal 2015 and 2014 , and we expect to continue to invest heavily in research and development for new technologies, applications and services for voice and data communications, primarily in the wireless industry. Cash outflows for capital expenditures were $994 million...

  • Page 45
    ... Annual Report in "Notes to Consolidated Financial Statements, Note 6. Debt." Capital Return Program. The following table summarizes stock repurchases and dividends paid during fiscal 2015, 2014 and 2013 (in millions, except pershare amounts): 2015 2014 2013 Shares Stock Repurchase...

  • Page 46
    ... by fiscal period for our outstanding contractual obligations at September 27, 2015 (in millions): Beyond 2020 No Expiration Date - - 3 - 5 8 Purchase obligations (1) Operating lease obligations Equity funding and financing commitments (2) Long-term debt Other long-term liabilities (3)(4) Total...

  • Page 47
    ... and commercial paper program is provided in this Annual Report in "Notes to Consolidated Financial Statements, Note 1. The Company and Its Significant Accounting Policies" and "Notes to Consolidated Financial Statements, Note 6. Debt." Interest Rate Risk - Investment Portfolio. We invest a portion...

  • Page 48
    ... in this Annual Report in "Notes to Consolidated Financial Statements, Note 1. The Company and Its Significant Accounting Policies." At September 27, 2015 , our net asset related to foreign currency option and forward contracts designated as hedges of foreign currency risk (on royalties earned from...

  • Page 49
    ...over financial reporting during the fourth quarter of fiscal 2015 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Item 9B. Other Information None. Part III Item 10. Directors, Executive Officers and Corporate Governance The...

  • Page 50
    ... Date of First Filing 10/15/2014 4/18/2012 9/30/2015 7/11/2012 5/21/2015 Exhibit Number 2.1 3.1 3.2 3.4 4.1 Filed Herewith Qualcomm Global Trading Pte. Ltd. Rule 2.7 Announcement, Recommended Cash Acquisition of CSR plc by Restated Certificate of Incorporation...

  • Page 51
    ... Communications, Inc. Equity Plans. (1) Form of Grant Notices and Global Employee Stock Option Agreement under the 2006 Long-Term Incentive Plan. (1) Form of Grant Notices and Global Employee Restricted Stock Unit Agreement under the 2006 Long-Term Incentive Plan. (1) 2006 Long-Term...

  • Page 52
    ... Compensation Plan, as amended, effective January 1, 2016. (1) Amendment to 2006 Long-Term Incentive Plan, as amended and restated. (1) Form of Annual Cash Incentive Plan Performance Unit Agreements. (1) Amended and Restated QUALCOMM Incorporated 2001 Employee Stock Purchase Plan...

  • Page 53
    .... 101.DEF XBRL Taxonomy Extension Definition Linkbase. Form File No./ Film No. Date of First Filing Exhibit Number Filed Herewith X X X X (1) Indicates management contract or compensatory plan or arrangement required to be identified pursuant to Item 15...

  • Page 54
    ... Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. November 4, 2015 52 By /s/ Steve Mollenkopf Steve Mollenkopf Chief Executive Officer QUALCOMM Incorporated

  • Page 55
    ... Murphy Title Date Chief Executive Officer and Director (Principal Executive Officer) Executive Vice President and Chief Financial Officer (Principal Financial Officer) Senior Vice President and Chief Accounting Officer (Principal Accounting Officer November 4, 2015...

  • Page 56
    ... of QUALCOMM Incorporated and its subsidiaries at September 27, 2015 and September 28, 2014 and the results of their operations and their cash flows for each of the three years in the period ended September 27, 2015 in conformity with accounting principles generally accepted in the United States...

  • Page 57
    QUALCOMM Incorporated CONSOLIDATED BALANCE SHEETS (In millions, except per share data) September 27, 2015 ASSETS Current assets: Cash and cash equivalents Marketable securities Accounts receivable, net Inventories Deferred tax assets Other current assets Total current assets Marketable securities ...

  • Page 58
    QUALCOMM Incorporated CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except per share data) Year Ended September 27, 2015 Revenues: Equipment and services Licensing Total revenues Costs and expenses: Cost of equipment and services revenues Research and development Selling, general and ...

  • Page 59
    ... comprehensive loss Total comprehensive income Comprehensive loss attributable to noncontrolling interests Comprehensive income attributable to Qualcomm See accompanying notes. $ $ September 27, 2015 5,268 Year Ended $ September 28, 2014 7,964 1 1 $ September 29, 2013 6,845 (20...

  • Page 60
    ...of long-term debt Proceeds from issuance of common stock Repurchases and retirements of common stock Dividends paid Incremental tax benefits from share-based compensation Other items, net Net cash used by financing activities Changes in cash and cash equivalents held for sale Effect of exchange rate...

  • Page 61
    F-5

  • Page 62
    ... 29, 2013 Total comprehensive income (1) Common stock issued under employee benefit plans and the related tax benefits Repurchases and retirements of common stock Share-based compensation Tax withholdings related to vesting of share-based payments Dividends Other Balance at September 28, 2014 Total...

  • Page 63
    ... of integrated circuits and system software based on CDMA (Code Division Multiple Access), OFDMA (Orthogonal Frequency Division Multiple Access) and other technologies for use in voice and data communications, networking, application processing, multimedia and global positioning system products to...

  • Page 64
    ... the interest rate swap agreements are classified as cash flows from operating activities in the consolidated statements of cash flows. At September 27, 2015 , the aggregate fair value of the Company's interest rate swaps related to its long-term debt of $32 million was recorded in total assets. The...

  • Page 65
    ...2015 and September 28, 2014 , the fair values of these derivative instruments recorded in total assets and in total liabilities were negligible. Gross Notional Amounts: The gross notional amounts of the Company's interest rate, foreign currency and investment portfolio derivatives by instrument type...

  • Page 66
    ... based on observable or unobservable inputs. The fair value of highly rated mortgage- and asset-backed securities is derived from the use of matrix pricing (prices for similar securities) or, in some cases, cash flow pricing models with observable inputs, such as contractual terms, maturity, credit...

  • Page 67
    ... asset group. Long-lived assets to be disposed of by sale are reported at the lower of their carrying amounts or their estimated fair values less costs to sell and are not depreciated. Revenue Recognition. The Company derives revenues principally from sales of integrated circuit products, licensing...

  • Page 68
    ... revenues is concentrated with a small number of customers/licensees of the Company ' s QCT and QTL segments. Revenues related to the products of two companies comprised 20% and 25% of total consolidated revenues in fiscal 2015 , compared to 28% and 21% in fiscal 2014 and 24% and 19% in fiscal 2013...

  • Page 69
    ... to net cash used by financing activities in the consolidated statements of cash flows to reflect the incremental tax benefits from stock options exercised and restricted stock units and other share-based awards that vested in those periods. Legal Proceedings. The Company is currently involved in...

  • Page 70
    ... gross book values of property under capital leases included in buildings and improvements were negligible at September 27, 2015 and September 28, 2014 , respectively. Goodwill and Other Intangible Assets. The Company allocates goodwill to its reporting units for annual impairment testing purposes...

  • Page 71
    ... millions): September 27, 2015 Weighted-average amortization period (years) 5 $ 8 10 4 10 $ September 28, 2014 Weighted-average amortization period (years) 14 9 11 6 11 Wireless spectrum Marketing-related Technology-based Customer-related $ Gross Carrying Amount Accumulated...

  • Page 72
    ... fiscal 2015 and fiscal 2014 , respectively, were recorded in investment income, net (Note 2). Reclassifications from accumulated other comprehensive income related to derivative instruments of $26 million for fiscal 2014 were recorded in revenues, cost of equipment and services revenues, research...

  • Page 73
    ... of losses on debt securities recognized in other comprehensive income were $23 million in fiscal 2015 and were negligible in fiscal 2014 and 2013. Note 3. Income Taxes The components of the income tax provision for continuing operations were as follows (in millions): Current (benefit) provision...

  • Page 74
    ... 31, 2014, the date on which the credit expired, and a $61 million tax benefit as a result of a favorable tax audit settlement with the Internal Revenue Service (IRS). The Company's QCT segment ' s non-United States headquarters is located in Singapore. The Company has obtained tax incentives in...

  • Page 75
    QUALCOMM Incorporated NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The Company had deferred tax assets and deferred tax liabilities as follows (in millions): Unearned revenues Unused tax credits Unrealized losses on marketable securities Share-based compensation Accrued liabilities and reserves ...

  • Page 76
    ...fiscal 2015 primarily resulted from a favorable tax audit settlement with the IRS related to Qualcomm Atheros, Inc.'s pre-acquisition 2010 and 2011 tax returns, which was partially offset by an increase related to the CSR acquisition (Note 9). The decrease in unrecognized tax benefits in fiscal 2014...

  • Page 77
    ... the employee contributions and may, at its discretion, make additional contributions based upon earnings. The Company's contribution expense was $81 million , $77 million and $70 million in fiscal 2015 , 2014 and 2013 , respectively. Equity Compensation Plans. The 2006 Long-Term Incentive Plan (the...

  • Page 78
    ... option exercise, the Company issues new shares of stock. The total tax benefits realized, including the excess tax benefits, related to share-based awards was $437 million , $690 million and $659 million during fiscal 2015 , 2014 and 2013 , respectively. Employee Stock Purchase Plan. The Company...

  • Page 79
    ... 2019. Cash interest paid related to the Company's commercial paper program and long-term debt was $8 million during fiscal 2015. There were no such amounts paid in fiscal 2014. Note 7. Commitments and Contingencies Legal Proceedings. ParkerVision, Inc. v. QUALCOMM Incorporated : On July 20, 2011...

  • Page 80
    ... of the seven asserted graphics processing patents as well as a cease and desist order preventing the Company from carrying out commercial activities within the United States related to such products. In the District of Delaware complaint, Nvidia is seeking an award of damages for the infringement...

  • Page 81
    ...of the EU competition rules and will continue to cooperate with the Commission. Securities and Exchange Commission (SEC) Formal Order of Private Investigation and Department of Justice Investigation : On September 8, 2010, the Company was notified by the SEC's Los Angeles Regional office of a formal...

  • Page 82
    ... companies or agencies. Based on the facts currently known, the Company believes the aggregate monetary value of the benefits in question to be less than $250,000, excluding employment compensation. On March 13, 2014, the Company received a Wells Notice from the SEC's Los Angeles Regional Office...

  • Page 83
    ... Licensing), and its QSI (Qualcomm Strategic Initiatives) reportable segment makes strategic investments and includes revenues and related costs associated with development contracts with an equity method investee . The Company also has nonreportable segments, including its small cells, data center...

  • Page 84
    ...,672 The Company reports revenues from external customers by country based on the location to which its products or services are delivered, which for QCT is generally the country in which its customers manufacture their products, or for licensing revenues, the invoiced addresses of its licensees...

  • Page 85
    ...and technologies for the automotive, consumer and voice and music categories. The acquisition complements the Company's current offerings by adding products, channels and customers in the growth categories of the Internet of Things and automotive infotainment. CSR was integrated into the QCT segment...

  • Page 86
    ... and related tax effects (in millions): Revenues Net income attributable to Qualcomm $ 2015 (unaudited) 2014 27,282 7,730 25,939 $ 5,157 During fiscal 2015, the Company acquired four other businesses for total cash consideration of $405 million , net of cash acquired. Technology-based...

  • Page 87
    ... QCT and nonreportable segments, respectively. Note 10. Strategic Realignment Plan On July 22, 2015 , the Company announced a Strategic Realignment Plan designed to improve execution, enhance financial performance and drive profitable growth as the Company works to create sustainable long-term value...

  • Page 88
    ... assets that are written down to fair value when they are held for sale or determined to be impaired. During fiscal 2015 , 2014 and 2013 , the Company updated the business plans and related internal forecasts related to certain of the Company's businesses, resulting in impairment charges to write...

  • Page 89
    ... government-related securities Corporate bonds and notes Mortgage- and asset-backed and auction rate securities Equity and preferred securities and equity funds Debt funds Total available-for-sale Fair value option: Debt fund Total marketable securities $ September 27, 2015 Current 320...

  • Page 90
    QUALCOMM Incorporated NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Available-for-sale securities were comprised as follows (in millions): September 27, 2015 Equity securities Debt securities (including debt funds Equity securities Debt securities (including debt funds) Cost Unrealized Gains ...

  • Page 91
    ... a fair statement of the results of the interim periods. The table below presents quarterly data for fiscal 2015 and 2014 (in millions, except per share data): 2015 (1) Revenues Operating income Income from continuing operations Net income Net income attributable to Qualcomm 1st Quarter 2nd...

  • Page 92
    SCHEDULE II QUALCOMM INCORPORATED VALUATION AND QUALIFYING ACCOUNTS (In millions) Charged (Credited) to Costs and Expenses Year ended September 27, 2015 Allowances: - trade receivables - notes receivable Valuation allowance on deferred tax assets Balance at Beginning of Period 5 4...

  • Page 93
    ...Date>>, is made by and between Qualcomm Incorporated, a Delaware corporation (the " Company "), and (the " Indemnitee "). RECITALS A. The Company is aware that competent and experienced persons are increasingly reluctant to serve as directors, officers or agents of corporations...

  • Page 94
    ...subject to the Company's trading window without being subject to Section 16. (b) Expenses . For purposes of this Agreement, "expenses" include all outâ€'ofâ€'pocket costs of any type or nature whatsoever (including, without limitation, all attorneys' fees and related disbursements), actually and...

  • Page 95
    ... such agreement exists), in the capacity Indemnitee currently serves as an agent of the Company, so long as he or she is duly appointed or elected and qualified in accordance with the applicable provisions of the Bylaws of the Company or any subsidiary of the Company or until such time as he or she...

  • Page 96
    ... to the Company by a court of competent jurisdiction unless and only to the extent that the court in which such proceeding was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably...

  • Page 97
    ... result of such proceeding in accordance with the terms of such policies. (c) In the event the Company ...notice, approval of such counsel by the Indemnitee and the retention of such counsel by the Company, the Company will not be liable to the Indemnitee under this Agreement for any fees of counsel...

  • Page 98
    ... to enable the Company effectively to bring suit to enforce such rights. 11. Survival of Rights . (a) All agreements and obligations of the Company contained herein shall continue during the period Indemnitee is an agent of the Company and shall continue thereafter so long as Indemnitee shall...

  • Page 99
    .... 15. Notice . All notices, requests, demands and other communications under this ...day after the mailing date: (a) If to the Indemnitee, at the address indicated on the signature page hereto; (b) If to the Company, to Qualcomm Incorporated, Inc. 5775 Morehouse Drive San Diego California...

  • Page 100
    16. Governing Law . This Agreement shall be governed exclusively by and construed according to the laws of the State of Delaware as applied to contracts between Delaware residents entered into and to be performed entirely within Delaware. 7

  • Page 101
    ... into this Indemnity Agreement effective as of the date first above written. Qualcomm Incorporated: By: Title: INDEMNITEE: Address: c/o Qualcomm Incorporated 5775 Morehouse Dr. San Diego, CA 92121-1714 SIGNATURE PAGE...

  • Page 102
    ... NOTICE Qualcomm Incorporated (the "Company"), pursuant to its 2006 Long-Term Incentive Plan (the "Plan") hereby grants to the Participant named below the number of Performance Stock Units set forth below, each of which is a bookkeeping entry representing the equivalent in value of one (1) share...

  • Page 103
    ...you a Performance Stock Unit Award with respect to the number of shares of the Company's common stock (" Stock ") indicated in the Grant Notice. Capitalized terms not explicitly defined in this Agreement but defined in the Qualcomm Incorporated 2006 Long-Term Incentive Plan (the " Plan ") shall have...

  • Page 104
    ... is negative for the Performance Period, then the maximum number of shares of Stock that shall be issued to you by the Company on the date specified in Section 2.1 will be equal to the Number of Performance Stock Units specified in the Grant Notice. Likewise, if your Service terminates in the first...

  • Page 105
    ... in full effective as of the date on which your Service terminates, but the number of shares of Stock that shall be issued to you by the Company under this Agreement shall be prorated and paid as follows. The Company shall issue to you, within 30 days after the end of the Measurement Period during...

  • Page 106
    ..., in any benefit or compensation plans and programs, including, but not limited to, the Participating Company Group's life, disability, health, dental, medical, savings, profit sharing, stock purchase and retirement plans, if any, in which you were participating immediately prior to the date of the...

  • Page 107
    ... Shares Earned originally subject to this Performance Stock Unit Award, except that any fractional shares attributable to Dividend Equivalents will be paid in cash within thirty (30) days following the date of payment of the Shares Earned and/or Target Shares Earned based on the Fair Market Value...

  • Page 108
    ... Performance Stock Unit Award, so long as your Service has not terminated prior to the date of the Change in Control, shall be accelerated, effective as of the date ten (10) days prior to the date of the Change in Control, and the number of shares of Stock that shall be issued to you by the Company...

  • Page 109
    ..., end of service payments, bonuses, long-service awards, pension or retirement or welfare benefits or similar payments and in no event should be considered as compensation for, or relating in any way to, past services for the Company, the Employer or any Participating Company; (h) the future value...

  • Page 110
    ...Plan, or your acquisition or sale of the underlying shares of Stock; you are hereby advised to consult with your own personal tax, legal and financial advisors regarding your participation in the Plan before taking any action related to the Plan. 15. Applicable Law. This Agreement shall be governed...

  • Page 111
    thereunder, (b) similar rules under the laws of any other jurisdiction and (c) any policies adopted by the Company to implement such requirements, all to the extent determined by the Company in its discretion to be applicable to you. U.S. PSU-EX-A8 9-29-13

  • Page 112
    ...PLAN EXECUTIVE PERFORMANCE STOCK UNIT AWARD GRANT NOTICE Qualcomm Incorporated (the " Company "), pursuant to its 2006 Long-Term Incentive Plan (the " Plan "), hereby grants to you, the Participant named below, a Performance Stock Unit Award (the " Award ") subject to all of the terms and conditions...

  • Page 113
    QUALCOMM INCORPORATED 2006 LONG-TERM INCENTIVE PLAN EXECUTIVE PERFORMANCE STOCK UNIT AWARD AGREEMENT Qualcomm Incorporated (the " Company ") has granted this Performance Stock Unit Award (this " Award ") to you, the Participant named in the Executive Performance Stock Unit Award Grant Notice (the " ...

  • Page 114
    ..., in any benefit or compensation plans and programs, including, but not limited to, the Participating Company Group's life, disability, health, dental, medical, savings, profit sharing, stock purchase and retirement plans, if any, in which you were participating immediately prior to the date of the...

  • Page 115
    ...to the product of (1) the sum of (a) the RTSR Shares Earned and (b) the ROIC Shares Earned determined pursuant to this Attachment 1 except that the Performance Period for this determination will be the period beginning on September 25, 2015, and ending on the last day of the Company's fiscal year in...

  • Page 116
    ...of Stock and/or cash from the payment of this Award; (c) arranging for the sale of shares of Stock payable in connection with this Award (on your behalf and at your direction which you authorize by accepting this Award); or (d) any other method allowed by the Plan or applicable law. If your Employer...

  • Page 117
    ...the product of (a) the number of your shares as of the corresponding dividend record date (including any shares previously credited as a result of prior payments of Dividend Equivalents) and (b) the per-share cash dividend paid on the dividend payment date, by (2) the per-share Fair Market Value (as...

  • Page 118
    ... the Company, with such designation taking effect upon your death. All rights with respect to the Performance Stock Units shall be exercisable during your lifetime only by you or your guardian or legal representative. Prior to actual payment of any shares of Stock pursuant to this Award, this Award...

  • Page 119
    ... end of service payments, bonuses, long-service awards, pension or retirement or welfare benefits or similar payments and in no event should be considered as compensation for, or relating in any way to, past services for the Company, the Employer or any Participating Company; (h) the future value...

  • Page 120
    ... Plan, or your acquisition or sale of the underlying shares of Stock; you are hereby advised to consult with your own personal tax, legal and financial advisors regarding your participation in the Plan before taking any action related to the Plan. 15. APPLICABLE LAW. This Agreement shall be governed...

  • Page 121
    ... electronically the Grant Notice to the Company or to such third party involved in administering the Plan as the Company may designate from time to time. Such means of electronic delivery may include but do not necessarily include the delivery of a link to a Company intranet or the internet site...

  • Page 122
    ... of the Internal Revenue Code of 1986, as amended (the " Code ") and the regulations thereunder.. " Performance Period " means the period specified in the Grant Notice. " TSR " means total shareholder return as determined by dividing (i) the sum of (A) the Ending Period Average Price minus the...

  • Page 123
    ...the contrary, if the Company's TSR is negative for the Performance Period, then the RTSR Shares Earned will be equal to the lesser of (a) the number of RTSR Shares (if any) determined without regard to this Limitation on Amount of Payment, or (b) the Target RTSR Shares specified in the Grant Notice.

  • Page 124
    ... tax impact of the following items: (1) The Qualcomm Strategic Initiative ("QSI") segment as defined in the Company's fiscal 2015 Form 10-K; (2) Acquisition-related items, which consist of: (a) Acquired in-process research and development, (b) Recognition of the step-up of inventories to fair value...

  • Page 125
    ... $10 million that are unrelated to the fiscal year in which they are recorded, but only with respect to tax items relating to one or more tax years ending before the beginning of the Performance Period. (4) In the event of an acquisition with a purchase price that is greater than $5 billion, solely...

  • Page 126
    ...means «target number» percent. LIMITATION ON ADJUSTMENTS. No adjustments shall be made in the calculation of Adjusted Debt, Adjusted GAAP Equity, Adjusted GAAP Operating Income or Adjusted GAAP Tax Rate which would preclude the payment of ROIC Shares Earned from satisfying the requirements of Code...

  • Page 127
    ... data) Year Ended September 27, 2015 September 28, 2014 September 29, 2013 September 30, 2012 Earnings: September 25, 2011 6,519 $ 137 6 - 8,788 $ 35 - - 8,823 $ Income from continuing operations before income taxes and income (losses) from equity...

  • Page 128
    ... Qualcomm Global Trading Pte. Ltd. Qualcomm CDMA Technologies Asia-Pacific Pte. Ltd. Qualcomm Asia Pacific Pte. Ltd. Qualcomm Atheros, Inc. Qualcomm Technologies International, Ltd. State or Other Jurisdiction of Incorporation Delaware Singapore Singapore Singapore Delaware United Kingdom The names...

  • Page 129
    ... of QUALCOMM Incorporated of our report dated November 4, 2015 relating to the consolidated financial statements, the financial statement schedule and the effectiveness of internal control over financial reporting, which appears in this Form 10-K. /s/ PricewaterhouseCoopers LLP San Diego, California...

  • Page 130
    ... financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; The registrant's other certifying officer and...

  • Page 131
    ... financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; The registrant's other certifying officer and...

  • Page 132
    ... SECTION 1350) In connection with the accompanying Annual Report of QUALCOMM Incorporated (the "Company") on Form 10-K for the fiscal year ended September 27, 2015 (the "Report"), I, Steve Mollenkopf, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted...

  • Page 133
    ... Securities Exchange Act of 1934; and The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Dated: November 4, 2015 /s/ George S. Davis George S. Davis Executive Vice President and Chief Financial Officer