18-03-08 Delaware Evans Complaint

James Evans v. Qualcomm, Inc., et al.
,
C.A. No. 2018-0164-, compl. (Del. Ch. Mar. 8, 2018)
EFiled: Mar 08 2018 05:57PM EST
Transaction ID 61779422
Case No. 2018-0164-
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
JAMES EVANS, on behalf of himself

and all other similarly situated
stockholders of Qualcomm
Incorporated,
Plaintiff,
C.A. No.
v.
QUALCOMM INCORPORATED,
BARBARA T. ALEXANDER,
JEFFREY W. HENDERSON,
THOMAS W. HORTON, DR. PAUL E.
JACOBS, ANN M. LIVERMORE,
HARISH MANWANI, MARK D.
MCLAUGHLIN, STEVE
MOLLENKOPF, CLARK T. RANDT,
JR., DR. FRANCISCO ROS, and
ANTHONY J. VINCIQUERRA,
Defendants.
VERIFIED CLASS ACTION COMPLAINT

Plaintiff James Evans (“Plaintiff”), by and through his undersigned counsel,
brings this Verified Class Action Complaint (the “Complaint”) individually and on
behalf of a class (the “Class”) of common stockholders of defendant Qualcomm
Incorporated (“Qualcomm” or the “Company”) as of January 8, 2018 and their
successors and assigns, other than Defendants and their affiliates, against the board
of directors of Qualcomm (the “Board”) for breaches of fiduciary duty. The
www.chancerydaily.com
James Evans v. Qualcomm, Inc., et al.,
allegations of the Complaint are based on Plaintiff’s knowledge, and on
information and belief, including the investigation of counsel and review of
publicly available information as to all other matters.
NATURE OF THE ACTION

1. This class action on behalf of Qualcomm stockholders challenges an
unprecedented attempt by incumbent directors to have the United States (“U.S.”)
federal government preclude stockholders of a Delaware corporation from electing
independent directors, including U.S. citizens, to replace incumbent Board
members. As the latest in a series of entrenchment measures, the incumbent
directors conspired with protectionist politicians to have the Committee on Foreign
Investment in the U.S. (“CFIUS”) order the last-minute postponement of the long-
scheduled March 6, 2018 annual meeting of Qualcomm stockholders (the “Annual
Meeting”), thereby preventing an election of directors that the incumbents knew
they were going to lose. On information and belief, they had CFIUS modify its
initial order to preserve a stale record date and to permit their defeated slate to
solicit proxies for an additional thirty days in an effort to reverse the outcome of
the election.
2. The incumbent Board is now seeking to have CFIUS override
Delaware law and stockholder democracy by banning six independent director
nominees nominated by Broadcom Limited (“Broadcom”) (the “Independent
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Nominees”) and entrenching the entire eleven-member incumbent Board in office
against the will of Qualcomm’s stockholders. The incumbent directors are
depriving the Qualcomm stockholders of their right to choose directors and asking
CFIUS to award them the victory.
3. All but one of the Independent Nominees, Samih Elhage (“Elhage”),
David G. Golden (“Golden”), Veronica M. Hagen (“Hagen”), Julie A. Hill
(“Hill”), John H. Kispert (“Kispert”) and Harry L. You (“You”), are apparently
U.S. citizens and the one who apparently is a citizen of another country, is not
from China. The Independent Nominees are not directors, officers or controlling
stockholders of Broadcom. They are current and/or former directors/officers of
other corporations, including other U.S. companies. Their credentials are similar
to the experience Qualcomm claims makes its nominees for outside directors
highly qualified.
4. Broadcom and the Independent Nominees have agreed that, if elected
to the Qualcomm Board, the Independent Nominees will act in accordance with
their independent judgment and Delaware law fiduciary duties to Qualcomm and
its stockholders, and that Broadcom will not dictate their decisions as Qualcomm
directors. Indeed, precedent indicates that the Independent Nominees will act in
accordance with their fiduciary duties.
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5. In the similarly contentious Airgas proxy fight, Air Products
nominated three directors to serve on the Airgas board, made similar
representations about the independence of its proposed nominees and stated that
the nominees would act in the Airgas stockholders’ best interest. Air Prods. &
Chems., Inc. v. Airgas, Inc., 16 A.3d 48, 72 (Del. Ch. 2011). After the Air
Products nominees were elected Airgas directors, they were some of the most
vocal opponents of the proposed transaction between the two companies. Id. at 89.
Yet here, even though these experienced director nominees would serve
Qualcomm and its stockholders within the well-defined parameters of Delaware
corporate law, Defendants seek to have these fine business people disqualified
simply because they were nominated by Broadcom.
6. In complete disregard of the U.S. federal-state structure, the
incumbent Board seeks a federal takeover of Delaware corporation law to ensure
their continuation in office. Broadcom holds less than 1% of Qualcomm’s
1,480,385,456 outstanding shares. If elected, the Independent Nominees will have
been put in office by Qualcomm’s public stockholders (over 90% of whom are
U.S. citizens), not Broadcom. However, the Board is asserting that CFIUS should
preclude the Qualcomm stockholders from electing independent directors of their
choice.
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7. At Defendants’ instigation, CFIUS ordered the cancellation of the
entire March 6, 2018 Annual Meeting, including stockholder votes on certificate,
bylaw and stock plan amendments, executive compensation and even selection of
Qualcomm’s independent public accountants. At the insistence of Qualcomm’s
incumbent directors, a federal committee is now deciding whether and when
stockholders of Delaware corporations are allowed to vote on state law governance
matters.
8. The Qualcomm incumbents have also violated the voting rights of
Qualcomm stockholders through materially misleading and incomplete disclosure
concerning their secret voluntary application to CFIUS, the CFIUS proceedings
and their secret lobbying efforts. Qualcomm stockholders are entitled to know that
the incumbent directors initiated and engineered proceedings to preclude any
transaction with Broadcom and the opportunity of the stockholders to vote for new
independent Qualcomm directors.
PARTIES AND RELEVANT NON-PARTIES
Plaintiff
9. Plaintiff James Evans is and at all relevant times has been a
stockholder of Qualcomm.
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Defendants
10. Defendant Dr. Paul E. Jacobs (“Jacobs”) is the Executive Chairman
and Chairman of the Board. Jacobs has been Executive Chairman and Chairman
since March 2014 and March 2009, respectively, and a director since June 2005.
Jacobs was Chief Executive Officer (“CEO”) of Qualcomm from July 2005 to
March 2014, Group President of Qualcomm Wireless & Internet from July 2001 to
July 2005, and an Executive Vice President from February 2000 to July 2005.
Since 2014, Jacobs has received over $80 million in compensation and benefits
from the Company.
11. Defendant Steve Mollenkopf (“Mollenkopf”) is Qualcomm’s CEO
and a director of Qualcomm. Mollenkopf has been Qualcomm’s CEO since March
2014 and a director since December 2013. Mollenkopf was CEO-elect and
President of Qualcomm from December 2013 to March 2014 and President and
Chief Operating Officer (“COO”) from November 2011 to December 2013.
Mollenkopf was Executive Vice President and Group President from September
2010 to November 2011, Executive Vice President and President of Qualcomm
CDMA Technologies from August 2008 to September 2010. Mollenkopf joined
Qualcomm in 1994. Since 2014, Mollenkopf has received over $90 million in
compensation and benefits from the Company.
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12. Defendant Barbara T. Alexander (“Alexander”) has served as a
Qualcomm director since July 2006 and is the Chair of the Compensation
Committee.
13. Defendant Jeffrey W. Henderson (“Henderson”) has served as a
Qualcomm director since January 2016.
14. Defendant Thomas W. Horton (“Horton”) has served as a Qualcomm
director since December 2008. Horton is the Presiding Director of the Board and a
member of the Governance Committee.
15. Defendant Ann M. Livermore (“Livermore”) has served as a
Qualcomm director since October 2016.
16. Defendant Harish Manwani (“Manwani”) has served as a Qualcomm
director since May 2014 and is a member of the Compensation Committee.
17. Defendant Mark D. McLaughlin (“McLaughlin”) has served as a
Qualcomm director since July 2015 and is a member of the Compensation
Committee.
18. Defendant Clark T. Randt, Jr. (“Randt”) has served as a Qualcomm
director since October 2013 and is the Chair of the Governance Committee.
19. Defendant Dr. Francisco Ros (“Ros”) has served as a Qualcomm
director since December 2010 and is a member of the Governance Committee.
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Ros was a senior director of business development at Qualcomm from July 2003 to
April 2004.
20. Defendant Anthony J. Vinciquerra (“Vinciquerra”) has served as a
Qualcomm director since 2015.
21. Defendants Jacobs, Mollenkopf, Alexander, Henderson, Horton,
Livermore, Manwani, McLaughlin, Randt, Ros and Vinciquerra are collectively
referred to herein as the “Director Defendants.” The non-employee directors of
Qualcomm receive a $100,000 annual retainer ($120,000 for foreign directors) in
cash or deferred stock units, additional retainers for service as the Presiding
Director or committee chairs, meeting fees for committee meetings and $200,000
annually in deferred stock units. Though the outside directors all receive in excess
of $300,000 per year in compensation from Qualcomm, the Board considers them
“independent.”
22. Defendant Qualcomm is a corporation organized and existing under
the laws of the State of Delaware, with its principal executive offices located at
5775 Morehouse Drive, San Diego, California 92121. Qualcomm develops and
commercializes technologies and products used in mobile devices and other
wireless products, including network equipment, broadband gateway equipment
and consumer electronic devices. Shares of Qualcomm’s common stock trade on
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the NASDAQ Global Select Market under the symbol “QCOM.” As of January 8,
2018, Qualcomm had 1,480,385,450 shares of common stock outstanding.
Broadcom and the Independent Nominees
23. Non-party Broadcom is a corporation organized and existing under
the laws of the Republic of Singapore, with co-headquarters in Yishun, Singapore
and San Jose, California. Broadcom is a designer, developer and supplier of
semiconductor devices. Ninety percent of Broadcom’s stockholders are U.S.
citizens. Hock Tan (“Tan”), Broadcom’s CEO, is a U.S. citizen. On November 2,
2017, Broadcom announced that it intended to re-domicile as a Delaware
corporation. On February 23, 2018, Broadcom filed Amendment 1 to its Form S-4
Registration Statement/prospectus for shares of Broadcom Limited, a Delaware
corporation, that will be issued to redomicile Broadcom to Delaware. Broadcom
expected to become a Delaware corporation in May 2018 or shortly thereafter.
Defendants, however, caused CFIUS to require 5 days’ notice before Broadcom
takes any action toward redomestication, thereby halting the process of Broadcom
becoming a Delaware entity. As of January 5, 2018, Broadcom and its affiliates
owned less than a million (or 0.069%) of Qualcomm’s nearly 1.5 billion
outstanding shares.
24. Non-party Elhage is an Independent Nominee. Elhage has extensive
experience with large technology companies. From 2012 to May 2017, Elhage
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held various executive positions at Nokia Corporation (“Nokia”), a $26 billion
communications, information technology and consumer electronics company
headquartered in Finland that trades on the New York Stock Exchange. Elhage’s
positions at Nokia included serving as: (i) President of the Mobile Business Group
from 2016 to May 2017; (ii) Chief Financial Officer (“CFO”) and COO of Nokia
subsidiary Nokia Siemens Networks from 2012 to 2015; and, (iii) as CFO and
COO of Nokia subsidiary Nokia Networks from 2012 to 2013. At Nokia, Elhage
was a driving force behind Nokia’s acquisition and integration of Alcatel-Lucent
Corporation (“A-L”), a French company. Prior to Nokia, Elhage served in various
positions from 1998 to 2010 at Nortel Networks Corporation (“Nortel”), a
telecommunications and data networking manufacturer located in Canada. At
Nortel, Elhage served as President of the Carrier Voice and Applications division
from 2008 to 2010 and in various other leadership positions from 1998 to 2008.
Elhage also has board experience that includes having served as director at A-L
from 2016 to April 2017 and Quickplay Media Inc., a private corporation located
in Canada, from 2012 to 2016. In 2016, 2015 and 2014, Elhage earned
approximately $5 million, $3 million and $3.6 million, respectively, at Nokia. This
excludes the income he received from his board service at A-L and Quickplay
Media, Inc. Elhage holds bachelor’s degrees from the University of Ottawa and a
Master’s degree from the Ecole Polytechnique de Montreal.
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25. Non-party Golden is an Independent Nominee and a U.S. citizen.
Golden has extensive experience serving on the boards of public Delaware
corporations, including multi-billion dollar companies. Since 2015, Golden has
served as a director of Barnes & Noble Education, Inc., a Delaware corporation
headquartered in New Jersey. Golden previously served as a director of: (i)
Blackbaud, Inc., a $4.9 billion Delaware corporation and cloud software company
headquartered in South Carolina, from 2010 to 2017; (ii) Everyday Health, Inc.,
formerly a Delaware corporation headquartered in New York, from 2009 until its
sale in 2016; and, (iii) Barnes & Noble, Inc., a Delaware corporation headquartered
in New York, from 2010 until 2015. Golden also currently serves on the boards of
several private companies and is a member of the Advisory Board of Partners for
Growth, L.P., a leading venture lending firm located in San Francisco, California.
Golden also has extensive financial services experience, including as Managing
Partner at Revolution Ventures, a venture fund headquartered in San Francisco,
California, since 2013; a Partner and Executive Vice President at Revolution LLC
(“Revolution”), a private investment company organized by AOL co-founder Steve
Case and headquartered in Washington D.C., from 2006 to 2012; and, as Executive
Chairman at Code Advisors, a private investment bank in San Francisco, from its
founding in 2010 through 2012. In 2017 and 2016, Golden received $219,999 and
$194,992 in director fees for his service on the board of Barnes & Noble
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Education, Inc. It is reasonable to infer that Golden’s income was materially
greater as a result of his role as Managing Partner at Revolution Ventures. Prior to
Revolution, Golden spent 18 years, including five years as Vice Chairman, with
J.P. Morgan Securities. Golden also has legal experience, including working as an
associate from 1984 through 1987 at the law firm of Davis Polk & Wardwell and a
law clerk for the Honorable Charles M. Merrill of the U.S. Court of Appeals for
the Ninth Circuit. Golden received an A.B. from Harvard University and a J.D.
from Harvard Law School, where he was an editor of the Harvard Law Review.
26. Non-party Hagen is an Independent Nominee and a U.S. citizen.
Hagen has extensive board experience on large-cap public companies, including
serving as a director of Newmont Mining Corporation, a $20 billion Delaware
corporation headquartered in Colorado, since 2005; the Southern Company, a $44
billion Delaware corporation headquartered in Georgia, since 2008, including as
lead independent director from 2014 to 2016; and American Water Works
Company, Inc., a $14 billion Delaware corporation headquartered in New Jersey,
since 2016. In 2016, Hagen received a total of $780,110 in director fees for her
service on the boards of Newmont Mining Corporation, the Southern Company
and American Water Works Company. In 2015 and 2014, Hagen received a total
of $560,264 and $518,453 in director fees from Newmont Mining Corporation and
the Southern Company, respectively. Hagen’s professional experience includes
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managing companies as part of the senior management team. Hagen served as the
President and CEO of Polymer Group, Inc., a leading global producer and marketer
of specialty materials located in South Carolina, from 2007 to 2013, as President
and CEO of Sappi Fine Paper, a division of the South African based global paper
products leader, Sappi Limited and multiple positions at Alcoa Corporation, a
metals engineering and manufacturing company incorporated in Delaware and
headquartered in Pennsylvania, including Vice President, Chief Customer Officer
and business unit president. Hagen holds a bachelor’s degree from the University
of Southern California.
27. Non-party Hill is an Independent Nominee and a U.S. citizen. Hill
has extensive experience serving on the board of large-cap companies and
Delaware corporations, including serving as a director of Anthem, Inc., an Indiana
corporation headquartered in Indiana and one of the largest health benefits
companies in the U.S., since 2004; WellPoint Health Networks Inc., an $80 billion
U.S. health insurer, since 1994; Lend Lease, Ltd., a $7 billion multinational
construction, property and infrastructure company headquartered in Australia, from
2006 to 2012; Resources Connection, Inc., a multinational business consulting firm
incorporated in Delaware and headquartered in California, from 2003 to 2006;
and, Holcim US, the U.S. subsidiary of Holcim Limited, a supplier of cements and
aggregates, from 2003 to 2007. Hill has also been a trustee of the Lord Abbett
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Family of Mutual Funds, the oldest U.S. mutual fund management firm with $100
billion currently under management, since 2004. In addition, Hill chairs the Board
of Trustees of the University of California at Irvine and serves on the University’s
Paul Merage School of Business Dean’s Advisory Council and Center for Real
Estate Advisory Board, the Foundation Board, the Social Ecology School’s Dean’s
Leadership Council, the School of Medicine’s Dean’s Advisory Board, the Law
School Board, and the Center for Digital Transformation Board. Hill has owned
The Hill Company, an investment, consulting and advisory company, since 2002.
In each of 2016, 2015 and 2014, Hill received more than $300,000 in director fees
from her board service at Anthem. Hill’s income was materially greater than this
during these years, as this amount excludes the income Hill received from her
services at Wellpoint Health Networks Inc., Lord Abbett and the University of
California at Irvine and her ownership of The Hill Company. Hill holds a B.A.
from the University of California Los Angeles and a master’s degree from the
University of Georgia.
28. Non-party Kispert is an Independent Nominee and a U.S. citizen.
Kispert has board experience on public companies, including Delaware
corporations, and technology companies. Kispert served as a director of Gigamon
Inc., a provider of network traffic visibility solutions incorporated in Delaware and
headquartered in California, since 2013; Barracuda Networks, Inc., a security,
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networking and data storage company incorporated in Delaware and located in
California in 2016; TriNet Group, Inc., a $3 billion cloud-based professional
employer organization incorporated in Delaware and headquartered in California,
from 2014 to 2017; Extreme Networks, Inc., a network hardware company
incorporated in Delaware and headquartered in California, from 2012 until 2017,
including as Chairman from 2015 to 2017; Cypress Semiconductor Corporation
(“Cypress”), a $6 billion semiconductor and electronics manufacturer incorporated
in Delaware and headquartered in California, from 2015 until 2016; and, Spansion,
Inc. (“Spansion”), a Delaware corporation headquartered in California and a
manufacturer of flash memory products, from February 2009 until March 2015.
Kispert also has professional experience running companies, including technology
companies. Kispert has served as a Managing Partner of Black Diamond Ventures,
a venture capital firm located in Los Gatos, California, since March 2016, and as
President and CEO of Spansion from February 2009 until March 2015, when
Spansion completed its merger with Cypress. In 2016, Kispert earned nearly $1.4
million in director fees from his board service at Gigamon Inc., Barracuda
Networks, Inc., TriNet Group, Inc., Extreme Networks, Inc. and Cypress
Semiconductor Corporation. In 2015, Kispert received over $700,000 from his
board service at Gigamon Inc., Trinet Group, Inc. and Extreme Networks, Inc.
These income figures exclude the amount he received as Managing Partner of
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Black Diamond Ventures. Kispert holds a B.A. from Grinnell College and an
M.B.A. from the University of California, Los Angeles.
29. Non-party You is an Independent Nominee and a U.S. citizen. You
has extensive experience running large technology companies. Since 2016, You
has been the President, CFO and director of GTY Technology Holdings Inc., a
public blank check company incorporated in the Cayman Islands and
headquartered in Nevada that focuses on the technology industry, including
software and services. From 2008 to 2016, You served as the Executive Vice
President in the Office of the Chairman of EMC Corporation (“EMC”), an
information infrastructure solutions company incorporated in Massachusetts and
headquartered in Massachusetts until EMC’s merger with Denali Holdings,
Inc. From 2005 to 2007, You was CEO of BearingPoint Inc., a leading IT and
management consultancy firm incorporated in Delaware and headquartered in
Virginia. He also served as BearingPoint’s Interim CFO from 2005 to 2006. From
2004 to 2005, You served as Executive Vice President and CFO of Oracle
Corporation (“Oracle”), a global information technology provider incorporated in
Delaware and headquartered in California, and helped begin Oracle’s acquisition
run with the takeovers of Peoplesoft, Inc. and Retek in 2005. From 2001 to 2004,
You served as CFO of Accenture Ltd., a global management consulting and
professional services company incorporated and headquartered in Bermuda. You
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also spent 14 years in the financial services industry, including as a managing
director in the Investment Banking Division of Morgan Stanley, where he headed
the Computer and Business Services Group. You’s board experience includes
serving as a director of Korn/Ferry International, a $2.4 billion global executive
recruiting company incorporated in Delaware and headquartered in California,
from 2004 to 2016, and Oracle Japan. You has been a trustee of the U.S. Olympic
Committee Foundation since 2016. In 2016, You received over $3.4 million in
connection with the merger of EMC Corporation and Denali Holdings, Inc. Since
co-founding GTY Technology Holdings, Inc. in 2016, You has received 13.68
million shares of EMC, which as of March 6, 2018, has an equity value of over
$136 million. You holds a B.A. from Harvard College and an M.A. from Yale
University.
BACKGROUND
Qualcomm Entertains Strategic Opportunities

to Improve Its Financial Performance
30. Qualcomm stockholders’ investment in the Company has suffered in
recent years. Since closing at a high of $81.32 per share on April 17, 2014,
Qualcomm’s stock price collapsed almost 50% to close at a low of $42.96 on
February 10, 2016.
31. On April 14, 2016, Kenneth Y. Hao (“Hao”), a Broadcom director and
Managing Partner and Managing Director at Silver Lake Partners (“Silver Lake”),
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approached Mollenkopf and Qualcomm CFO George S. Davis (“Davis”) about a
potential transaction between Qualcomm and Broadcom. Qualcomm and
Broadcom subsequently held an introductory meeting, on August 4, 2016,
regarding a potential business combination. Discussions continued in September
2016, but the parties did not discuss specific terms or pricing and, thereafter,
discussions stalled for reasons Qualcomm has not disclosed. However, because of
Broadcom’s interest, the Director Defendants embarked on a series of defensive
maneuvers.
32. First, Qualcomm turned its attention to an acquisition of Dutch chip-
maker NXP Semiconductor N.V. (“NXP”). On October 27, 2016, Qualcomm
announced that it entered into a Purchase Agreement with NXP pursuant to which
Qualcomm would acquire NXP in a tender offer (the “Tender Offer”) for $110 per
NXP share (the “NXP Transaction”). The Tender Offer was conditioned on the
tender of at least 95% of the outstanding shares of NXP or, if certain NXP
shareholder approvals were obtained, the tender of at least 80% of the outstanding
shares of NXP.
33. The announcement did little to improve the Company’s stock price,
which closed at $70.09 per share following the announcement of the NXP
Transaction. Over the next 12 months, the Company’s stock price steadily
declined.
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34. As the stock price fell, the Board revised its director and officer
compensation and Qualcomm’s governance documents. In particular, on
September 21, 2017, the Compensation Committee adopted the 2018 Director
Compensation Plan to establish additional compensation to be paid to
nonemployee directors. The plan became effective on January 1, 2018 and ensures
that the Qualcomm directors will receive their annual retainer of $100,000 for the
calendar year in cash or deferred stock units ($120,000 for non-U.S. resident
directors) in addition to $200,000 worth of deferred stock units for their service on
the Board. The plan also ensures that the Presiding Director and committee chairs
will be paid additional yearly retainers ranging from $15,000 to $35,000 and
meeting fees for committee meetings. Also, on September 21, 2017, the
Compensation Committee granted millions of dollars’ worth of restricted stock
units to the Company’s named executive officers with the exception of Mollenkopf
and Jacobs because the Compensation Committee previously front-loaded their
awards, granting each of them five years’ worth of restricted stock units in 2014.
35. On October 9, 2017, the Board passed a resolution amending the
Company’s bylaws which purportedly will impact the super majority voting
requirements for the removal of directors without cause, bylaw amendments,
certain charter amendments and certain transactions with interested stockholders.
The Qualcomm Board has not disclosed the text of the proposed bylaw
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amendments but asserts that these amendments will become effective upon the
filing of a proposed amended charter, if approved by Qualcomm’s stockholders at
the Annual Meeting.
Broadcom Makes an Offer to the Board to Acquire

Qualcomm at a Substantial Premium, which the Board Rejects
36. By November 2, 2017, Qualcomm’s stock price had fallen to $54.84,
over 20% below the trading price of the Company’s stock upon the announcement
of the NXP Transaction. The next day, rumors began circulating in the media that
Broadcom was planning to unveil a bid to acquire Qualcomm. Reuters noted that
the “bid comes as Broadcom plans to move its headquarters to the United States
from Singapore . . . [and] as Qualcomm is trying to close its pending $38-billion
acquisition of NXP Semiconductors NV . . . .”1 Reuters further noted that
Broadcom planned to complete its re-domiciliation “before completing any
Qualcomm deal, avoiding scrutiny by the Committee on Foreign Investment in the
United States . . . .”2 Upon those reports, Qualcomm’s stock price jumped nearly
13%, from a closing price of $54.84 on November 2, 2017 to $61.81 on November
3, 2017.
1
Liana B. Baker and Greg Roumeliotis, Broadcom plans record tech deal with
Qualcomm bid: sources, Reuters (Nov. 3, 2017).
2
Id.
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37. On November 6, 2017, Broadcom publicly made a proposal to the
Board to acquire all of the outstanding shares of Qualcomm (the “Proposed
Transaction”) for $70 per share, consisting of $60 in cash and $10 per share in
Broadcom stock (the “Initial Proposal”). The Initial Proposal represented a 28%
premium over the unaffected price of Qualcomm stock on November 2, 2017 and a
33% premium to the Company’s unaffected 30-day volume-weighted average price
(“VWAP”) of $52.71 calculated as of November 2, 2017. Broadcom stated that
the Initial Proposal stood regardless of whether Qualcomm consummated or
terminated the NXP Transaction at $110 per share.
38. After only one week of deliberation, on November 13, 2017,
Qualcomm issued a press release announcing that the Board unanimously rejected
the Initial Proposal. According to Horton, the Presiding Director of the Board,
“the Board has concluded that [the Initial Proposal] dramatically undervalues
Qualcomm and comes with significant regulatory uncertainty.” The press release
did not elaborate on what Horton meant by “significant regulatory uncertainty.”
39. Later that day, Broadcom issued a press release announcing that it
“remains fully committed to pursuing its acquisition of Qualcomm . . . .”
Broadcom CEO Tan emphasized Broadcom’s “strong preference to engage
cooperatively with Qualcomm’s Board of Directors and management team.”
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40. On November 16, 2017, Qualcomm filed with the SEC a Form 8-K
scheduling the Annual Meeting for March 6, 2018.
41. Meanwhile, Qualcomm was encountering difficulties gaining traction
with NXP stockholders for the Tender Offer. As of November 16, 2017, only
2.4% of NXP shares had been validly tendered (and not withdrawn) in connection
with the NXP Transaction. The next day, Qualcomm extended the offering period
of the Tender Offer from November 17, 2017 to December 15, 2017.
42. On November 22, 2017, Reuters reported that, “following
consultation with several of Qualcomm’s top shareholders,” Broadcom was
considering raising its offer to acquire Qualcomm by offering more Broadcom
stock in connection with the Proposed Transaction.3 Reuters noted that Broadcom
had made “several requests for a meeting with Qualcomm since it unveiled its offer
on Nov. 6,” but that “Qualcomm has so far rejected these meeting requests . . . .”4
Broadcom Launches a Proxy Contest after Qualcomm

Refuses to Meet to Discuss a Possible Transaction
43. In light of Qualcomm’s stonewalling, on December 4, 2017,
Broadcom issued a press release announcing that it had notified Qualcomm of its
intention to (i) nominate a slate of 11 directors for election to the Board to replace
3
Liana B. Baker and Greg Roumeliotis, Broadcom considering sweetened
Qualcomm bid: sources, Reuters (Nov. 22, 2017).
4
Id.
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the incumbent directors, and (ii) present other unspecified proposals for
consideration at the Annual Meeting. Broadcom also provided notice of its
intention to nominate four alternate nominees in the event that (i) Qualcomm
increased the size of the Board, (ii) Qualcomm took action to disqualify
Broadcom’s original designees, or (iii) any of Broadcom’s original nominees were
unable or unwilling to serve as a director of Qualcomm.
44. According to Broadcom CEO Tan:
We have heard from many Qualcomm stockholders who have

expressed their desire for Qualcomm to engage with us. We also
continue to receive positive feedback from customers and, having had
initial meetings with certain relevant antitrust authorities, remain
confident that any regulatory requirements necessary to complete a
combination will be met in a timely manner. Although we are taking
this step, it remains our strong preference to engage in a constructive
dialogue with Qualcomm. We have repeatedly attempted to engage
with Qualcomm, and despite stockholder and customer support for the
transaction, Qualcomm has ignored those opportunities. The
nominations give Qualcomm stockholders an opportunity to voice
their disappointment with Qualcomm’s directors and their refusal to
engage in discussions with us. In light of the significant value our
proposal provides for Qualcomm stockholders, we believe Qualcomm
stockholders would be better served by new independent, highly
qualified nominees who are committed to maximizing value and
acting in the best interests of Qualcomm stockholders.
45. Later that day, Qualcomm issued a press release confirming receipt of
Broadcom’s slate of director nominees. Despite refusing to meet with Broadcom,
Qualcomm assailed Broadcom for asking Qualcomm’s stockholders to vote on a
transaction “which could not be completed for well over a year, if ever, given the
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regulatory issues, [and] the absence of commitments by Broadcom to resolve those
issues . . . .” The press release also took issue with the purported “uncertainty
surrounding [Broadcom’s] transition from Singapore to the United States.”
46. On December 7, 2017, Broadcom held an earnings conference call
regarding its financial performance for the fourth fiscal quarter and fiscal year
ended October 29, 2017. During the earnings call, Broadcom rebutted
Qualcomm’s accusations regarding the redomestication, noting that Broadcom was
“confident that [its] shareholders will support this move . . . .” Broadcom also
reiterated its “strong preference to engage in a constructive dialogue with
Qualcomm” on a proposed transaction, and expressed Broadcom’s “confiden[ce]
that any regulatory requirements necessary to complete a combination will be met
in a timely manner.”
47. On December 11, 2017, Broadcom issued a press release announcing
that it filed a premerger notification under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976 with the U.S. Department of Justice Antitrust Division
and the Federal Trade Commission in connection with the Proposed Transaction.
48. While Broadcom stood ready and committed to complete a premium
transaction with Qualcomm, Qualcomm’s troubles with the NXP Transaction
worsened. On December 11, 2017, NXP stockholder Elliot Advisors (UK)
Limited (“Elliott”) publicly advocated its position that NXP was worth $135 per
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share, or $25 more than the $110 per share transaction price. That same day,
Qualcomm issued a press release stating that “Elliott’s value assertion for NXP is
unsupportable and is clearly nothing more than an attempt to advance its own self-
serving agenda. We remain fully committed to closing the acquisition of NXP and
believe that the agreed-upon price of $110 is full and fair.” (Emphasis added).
49. On December 15, 2017, Qualcomm extended the offering period of its
Tender Offer from December 15, 2017 to January 12, 2018. Qualcomm also
disclosed that only 1.9% of the outstanding NXP common shares had been
tendered and not withdrawn.
Qualcomm’s Board Rejects Broadcom’s

Independent Nominees and Takes Further Defensive Measures
50. On December 20, 2017, the Board, following the recommendation of
its Governance Committee, unanimously determined not to nominate any of the 11
director nominees proposed by Broadcom.
51. Also, on December 20, 2017, the Board, upon the unanimous
recommendation of the Compensation Committee, unanimously approved the
adoption the Qualcomm Incorporated Non-Executive Officer Change in Control
Severance Plan (the “Severance Plan”). The Severance Plan broadly defines
“employee” to include “any regular, full-time employee or part-time employee
(who is regularly scheduled to work at least twenty (20) hours per week) . . . .” As
noted by Bloomberg, the Severance Plan provides that employees will be eligible
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for severance under a broad range of conditions, such as being fired “without
cause” or if they choose to leave for “good reason,” such as “a material reduction
in their salary or a move of their main workplace to a location more than 50 miles
away.”5 While severance payments are determined based on “salary, rank and
tenure . . . . [t]he amounts would range from at least four weeks of salary for lower-
ranking workers to at least 52 weeks of salary for senior vice presidents . . . .
Senior employees would also get pro-rated annual bonuses.”
52. The Severance Plan is an entrenching defensive measure.
Qualcomm’s 8-K admits it was passed in contemplation of “a change in control of
the Company, and the uncertainty it creates . . . .” Consequently, the Severance
Plan defines the “Company” to mean “Qualcomm Incorporated and any successor
thereto or, if applicable, the ultimate parent of any such successor.” (Emphasis
added). As Bloomberg observed, “[t]he [Severance Plan] would make it more
expensive for an acquirer to make sweeping changes to the structure of the
organization—something Broadcom Chief Executive Officer Hock Tan would
likely pursue if the transaction is completed.”6 Given the size of Qualcomm and its
employment of approximately 33,800 full-time, part-time and temporary
employees, these severance costs will be substantial, and will further increase in
5
Alex Barinka, Qualcomm Workers Would Get Payouts If Broadcom Shakes
Things Up, Bloomberg Technology (Jan. 10, 2018).
6
Id.
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the event the NXP Transaction concludes prior to Broadcom’s acquisition of
Qualcomm.7
53. Also on December 20, 2017, the Qualcomm Board, upon the
unanimous recommendations of the Compensation Committee, unanimously
approved amendments to the Qualcomm Incorporated 2016 Long-Term Incentive
Plan and the Qualcomm Incorporated 2006 Long-Term Incentive Plan (together,
the “LTIPs”) which call for increased compensation for LTIPs participants—
including members of the Board—in the event a majority of the incumbent
directors are not reelected. Specifically, the amendment to the LTIPs (the “LTIP
Amendment”) provides that:
[A] “Change in Control” shall occur in the event that individuals

who, as of December 20, 2017, constitute the Board (the “Incumbent
Board”) cease for any reason to constitute at least a majority of the
Board; provided, however, that any individual becoming a director
subsequent to December 20, 2017 whose election, or nomination for
election by the Company’s shareholders, was approved by a vote of at
least a majority of the directors then comprising the Incumbent Board
shall be considered as though such individual were a member of the
Incumbent Board . . . .
The LTIPs provide for the acceleration of the exercisability and vesting of awards
granted under the LTIPs in the event of a termination upon a Change of Control.
54. Thus, in the face of Broadcom’s proxy fight, the Qualcomm Board
took defensive measures that would ensure a payday for certain employees and
7
According to a Form 6-K filed by NXP with the SEC on March 2, 2018, NXP
“has 30,000 employees in more than 30 countries . . . .”
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incumbent Qualcomm directors in the event that (i) the Independent Nominees
replaced incumbent Qualcomm directors and terminated the employment of certain
Qualcomm officers and/or (ii) following Qualcomm stockholders’ determination
that Broadcom’s offer was a superior alternative to the NXP Transaction or
Qualcomm as a standalone company, certain incumbent directors and officers were
terminated. The Qualcomm proxy issued in advance of the Annual Meeting values
Jacobs’ and Mollenkopf’s Change of Control payments at $22,029,134 and
$20,634,358, respectively.
The Proxy Contest Continues
55. On January 5, 2018, Broadcom mailed a definitive proxy statement to
Qualcomm’s stockholders (the “Broadcom Proxy”) soliciting Qualcomm
stockholders to elect 11 independent nominees to the Qualcomm Board at the
Annual Meeting. As the Broadcom Proxy indicates, none of the 11 nominees are
employed by, affiliated with, or have any material relationship with Broadcom,
Qualcomm or their respective subsidiaries.
56. The Broadcom Proxy further provides:
Each of the Broadcom Nominees has specifically acknowledged that

there is not, and cannot be, any agreement between such Broadcom
Nominee and Broadcom regarding the decisions such Broadcom
Nominee will make as a director of Qualcomm. Accordingly, we
expect that the Broadcom Nominees will exercise their independent
judgment in all matters before the Qualcomm Board in accordance
with their fiduciary duties to Qualcomm and the Qualcomm
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stockholders and applicable law, including with respect to the

Proposed Transaction. . . .
57. The Broadcom Proxy includes the Form of Nomination Agreement
executed by the independent nominees. It also discloses that Broadcom nominated
the independent nominees because the Board refused to engage with Broadcom in
its $70 per share acquisition proposal, despite Broadcom’s repeated efforts to enter
into negotiations. The Broadcom Proxy provides that Broadcom expects that the
independent nominees, if elected, will engage with Broadcom in good faith and in
the best interests of Qualcomm’s stockholders.
58. Broadcom also solicited Qualcomm’s stockholders to approve
amendments to Qualcomm’s bylaws to undo any bylaw amendment adopted
without stockholder approval up to and including the date of the Annual Meeting
that changes the bylaws in any way from the version that was publicly filed with
the SEC on July 15, 2016.
59. On January 5, 2018, Qualcomm issued its competing definitive proxy
statement for the Annual Meeting (the “Qualcomm Proxy”), confirming the
Annual Meeting for March 6, 2018.
60. On January 12, 2018, Qualcomm announced yet another extension of
the expiration of the NXP Tender Offer from January 12 to February 9, 2018.
Qualcomm also disclosed that, as of January 11, the number of NXP’s outstanding
shares validly tendered (and not withdrawn) had further decreased to 1.7%.
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61. On January 23, 2018, Qualcomm filed a Schedule 14A with the SEC
and sent a letter to stockholders expressing the Qualcomm Board’s view that
Broadcom’s offer undervalued Qualcomm relative to Qualcomm’s value as a
standalone entity and identifying concerns about the risk that the proposed
transaction would not obtain the required regulatory approvals.
Broadcom Materially Improves Its Acquisition

Proposal, which Qualcomm Rejects Outright
62. On February 2, 2018, a representative of Broadcom contacted
Qualcomm to offer terms for an improved acquisition proposal. Qualcomm did not
respond. Also, on February 2, 2018, Broadcom’s financial and legal advisors
contacted Qualcomm’s financial and legal advisors to provide terms for an
improved acquisition proposal. Qualcomm’s financial advisor, Goldman Sachs &
Co. LLC (“Goldman”), stated it would need to speak with Qualcomm, but
Broadcom did not hear back from Goldman, and Qualcomm did not otherwise
respond.
63. Accordingly, on February 5, 2018, Broadcom sent a letter to the
Board outlining the terms of its improved proposal, which included increasing the
Proposed Transaction consideration to $82 per Qualcomm share, consisting of $60
per share in cash and $22 per share in Broadcom stock. Broadcom’s improved
proposal was a 56% premium to Qualcomm’s 30-day VWAP, and a 50% premium
to Qualcomm’s unaffected trading price of $54.84 on November 2, 2017—i.e., the
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last trading day prior to media speculation regarding the Potential Transaction. In
its letter, Broadcom wrote, “[w]e believe any responsible board would engage with
us, without further delay, to turn this proposal into an executed definitive
agreement.”
64. According to proxy advisor Glass, Lewis & Co. (“Glass Lewis”),
Broadcom’s increased bid ranked among the top decile of premiums paid in
announced transactions greater than $25 billion since 2001 (excluding financially
distressed targets). Indeed, Qualcomm’s stock has traded above $82 per share on
only three days during the Company’s 26+ year history as a public company.
65. Broadcom’s improved proposal also addressed Qualcomm’s purported
regulatory concerns. Broadcom included a “ticking fee” providing for an increase
in the cash consideration if the Proposed Transaction is not consummated one year
after executing a definitive agreement and a “reverse termination fee” payable to
Qualcomm stockholders if the Proposed Transaction is not consummated because
of Broadcom’s inability to obtain required regulatory approvals. Broadcom also
expressed its willingness to agree to a regulatory efforts provision and to invite
Qualcomm Chairman Jacobs and a second Qualcomm director to join the board of
the post-transaction entity. Broadcom conditioned its proposal on (i) Qualcomm
acquiring NXP on the currently disclosed terms of $110 per NXP share; and (ii)
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Qualcomm not delaying or adjourning its Annual Meeting past March 6, 2018.
The Qualcomm Board took steps to defeat both conditions.
66. Also, on February 5, 2018, Broadcom filed a Schedule 14A with the
SEC again addressing Qualcomm’s purported concerns about the Proposed
Transaction’s regulatory risks. Among other things, Broadcom stated that in
Qualcomm’s January 16, 2018 investor presentation regarding the Proposed
Transaction, Qualcomm identified:
only one [issue] that is a clear-cut antitrust hurdle, and that’s with
respect to the Wi-Fi networking processors. But this is not a problem
for the transaction because Broadcom has always understood that it
would need to sell that part of Qualcomm, and that’s Broadcom’s
plan. In fact, Broadcom has already begun advising the antitrust
regulators that it intends to divest that business. There shouldn’t be
any problem selling it, because it’s a valuable business and Broadcom
is quite experienced in divesting businesses, so that overlap—the most
serious antitrust issue in this deal—won’t be a problem.
67. Broadcom also issued a public letter to its employees on February 5,
2018 in which Broadcom wrote: “It is clear from our discussion with investors and
customers of both Broadcom and Qualcomm that there is overwhelming support
for Qualcomm to engage with us immediately regarding this transaction.”8
8
See, e.g., Kevin O’Leary, Shark Tank, CNBC (Feb. 5, 2018) (“There are many
shareholders, including me, who think Qualcomm is very poorly managed. I
would like adult supervision to come in from Broadcom . . . .”).
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68. In contrast with its non-response to Broadcom’s outreach on February
2, Qualcomm promptly issued a press release confirming its receipt of the revised
proposal, which the Qualcomm Board stated it would consider and assess.
69. On February 8, 2018, before meeting or speaking with Broadcom
about the specific terms of Broadcom’s improved proposal (i.e., the amount of the
reverse termination fee), Qualcomm rejected Broadcom’s $82 per share proposal
but indicated the Board would nevertheless meet with Broadcom.
70. Broadcom reached out to Qualcomm on February 9, 2018 to schedule
a meeting on February 10 or February 11, but Qualcomm stated that it was unable
to meet until at least February 13. Undeterred by the Board’s delay, Broadcom
provided Qualcomm with a proposed merger agreement providing for an $8 billion
regulatory reverse termination fee and a 6% per annum regulatory ticking fee on
the cash portion of the merger consideration (net of dividends). Broadcom also
publicly filed a copy of the draft merger agreement with the SEC.
71. Also on February 9, 2018, Qualcomm announced the extension of the
expiration of the Tender Offer on the NXP Transaction from February 9 to
February 23, 2018. As of February 8, only 1.5% of NXP’s outstanding shares had
been validly tendered (and not withdrawn). Thus, as Broadcom continued its
efforts to provide Qualcomm stockholders with a premium transaction, the Board’s
preferred deal with NXP continued to slip out of reach at the agreed-upon price.
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Broadcom Continues to Pursue Qualcomm
72. Broadcom continued to pursue the Proposed Transaction despite
Qualcomm’s reluctance to engage with Broadcom. On February 11, 2018,
Broadcom entered into a commitment letter with a group of twelve (12) financial
institutions for up to $100 billion in debt financing, including a $5 billion
revolving credit facility and bridge financing. Broadcom also secured $6 billion of
convertible note financing from investment funds affiliated with Silver Lake,
Kohlberg Kravis Roberts & Co. L.P. and CVC Capital Partners Advisory (U.S.)
Inc. On February 12, Broadcom announced that it secured financing commitments
sufficient to fully fund the $60 per share component of Broadcom’s proposal and
post-closing working capital needs, including restructuring activities. Thus,
Broadcom eliminated any purported concern about its ability to finance the cash
portion of its acquisition proposal – one of the Qualcomm Board’s early critiques
of Broadcom’s proposal.
73. Also, on February 12, 2018, Broadcom filed another Schedule 14A
with the SEC addressing Qualcomm’s purported concerns about the regulatory
risks of the Proposed Transaction. Broadcom stated:
Qualcomm’s management is trying to hide behind a smokescreen of

unspecified “regulatory risk.” It consists mostly of general statements
about antitrust risks inherent in any deal between competitors, not
about this deal in these markets. . . . The most important point anyone
needs to know about antitrust risk in this deal is that the vast majority
of Broadcom’s and Qualcomm’s businesses do not raise any antitrust
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issues at all . . . for defensive purposes, Qualcomm is making more of

those issues than anyone seeking to maximize value for Qualcomm
shareholders would.
(Emphasis added).
74. Qualcomm’s defensive and feigned concern over the regulatory issues
facing the Proposed Transaction pale in comparison to the regulatory issues
plaguing Qualcomm. Since early 2017, Qualcomm has been embroiled in a bitter,
multi-country legal dispute with one of its largest and most important customers,
Apple Inc. (“Apple”), over accusations that Qualcomm overcharged Apple for the
use of its technology. The damages in the Apple dispute total over $1 billion. In
addition to the Apple dispute, Qualcomm has drawn the ire of regulators across the
globe who have accused the Company of anti-competitive trade practices. In
January 2018, the European Commission fined Qualcomm $1.2 billion in
connection with a scheme by which Qualcomm promised Apple payments and
other remuneration if Apple only used the Company’s technology. The
Company’s trade practices have also subjected it to fines of $927 million by the
Korean Fair Trade Commission and $778 million by the Taiwan Fair Trade
Commission in fiscal year 2017. In addition, Qualcomm is currently defending a
lawsuit filed by the U.S. Federal Trade Commission.
75. On February 13, 2018, Broadcom issued a proxy supplement
soliciting Qualcomm stockholders to vote for just six nominees—Independent
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Nominees Elhage, Golden, Hagen, Hill, Kispert and You. Broadcom explained in
a press release that day that it reduced the number of its nominees in recognition of
Qualcomm stockholders’ desire “for appropriate continuity on the Qualcomm
board. . . .”
76. On February 14, 2018, Qualcomm and Broadcom finally met. At the
meeting, Broadcom stated that its $82 offer was its “best and final” proposal and
reiterated its intent to seek to replace a majority of the Qualcomm Board.
77. Two days later, Qualcomm Chairman Jacobs stated that Broadcom’s
proposal remained unacceptable because it undervalued Qualcomm.
78. On February 16, 2018, proxy advisors Institutional Shareholder
Services (“ISS”) issued a report questioning the Board’s commitment to
maximizing value for Qualcomm stockholders given “the tenor of [the Board’s]
engagement leading up to the present . . . .” ISS then warned Qualcomm’s
stockholders that the Qualcomm Board could use the NXP Transaction as a
defensive measure. ISS noted that while the NXP Transaction “will doubtfully get
done at $110 since NXP continues to trade around $117[,] . . . the Qualcomm
board [] does not want to be perceived by shareholders as overpaying for NXP,
making it seem like an imprudent defensive acquisition.”
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Qualcomm Raises Its Price to Acquire NXP
79. On February 20, 2018—despite having stated just two months prior
that the $110 per share tender offer for NXP was “full and fair”—Qualcomm and
NXP entered into an amendment to the Purchase Agreement (the “Amended
Purchase Agreement”) which increased the Tender Offer consideration from $110
per share to $127.50 per share and reduced the minimum number of NXP shares
required to tender in order to consummate the NXP Transaction to 70% of all
outstanding NXP shares. Qualcomm also announced that 28% of NXP
shareholders, including Elliott, entered into tender and support agreements to
tender their shares at the increased Tender Offer price.
80. Broadcom criticized the Qualcomm Board for executing the Amended
Purchase Agreement. Broadcom noted that: (i) Qualcomm previously stated that
$110 per NXP shares was a “full and fair” price; (ii) Qualcomm did not have
approval of the Ministry of Commerce (“MOFCOM”) of the Government of China
(which was among Qualcomm’s criticisms of the Proposed Transaction); and (iii)
the Amended Purchase Agreement (a) transferred $4.10 per share—approximately
$6.2 billion—from Qualcomm stockholders; and (b) demonstrated Qualcomn’s
disregard for its fiduciary duty to maximize value for Qualcomm’s stockholders.
Broadcom further criticized Qualcomm for failing to responsibly engage with
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Broadcom regarding its value-maximizing offer and the terms of the NXP
Transaction.
81. Also, on February 20, 2018, Glass Lewis issued its recommendation
regarding the Annual Meeting in which Glass Lewis characterized the timing of
the Amended Purchase Agreement as “questionable.” Glass Lewis recommended
that Qualcomm stockholders vote “AGAINST” the Qualcomm directors and
“FOR” all of the Independent Nominees at the Annual Meeting. Glass Lewis
explained that the Board’s behavior in dragging its feet through the Broadcom
negotiations suggested that the Board was unwilling to engage in substantive, good
faith negotiations and “should concern shareholders” such that “a change in the
composition of the board is warranted.”
82. Glass Lewis further reasoned:
Reconstituting the Qualcomm board would go a long way to ensuring

shareholders have a fully informed opinion regarding the prospects of
the Company as compared to the attractiveness and risks of a potential
Broadcom deal, in our view.
83. On February 21, 2018, Broadcom re-affirmed its commitment to
acquire Qualcomm. In light of the drastic and unwarranted increase in the
consideration being offered to NXP stockholders in the defensive acquisition,
Broadcom lowered its acquisition proposal to $79 per Qualcomm share (consisting
of $57 in cash and $22 in Broadcom stock). Thus, not only did the Amended
Purchase Agreement divert $4.10 per share from Qualcomm stockholders, but it
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also resulted in a $3 per share reduction in the price Qualcomm stockholders could
receive in the Proposed Transaction. Even at $79 per share, however, the Proposed
Transaction consideration is a 44% premium to the unaffected $54.84 closing price
of Qualcomm stock on November 2, 2017.
84. Broadcom’s proposed terms under the draft merger agreement
remained the same, including the $8 billion reverse termination fee. The proposed
merger agreement, however, would account for an automatic increase of $3 in cash
per Qualcomm share, or a total of $82 per Qualcomm share, in the event the NXP
Transaction was not consummated.
85. Broadcom, meanwhile, continued to publicly address the Qualcomm
Board’s purported regulatory concerns regarding the Proposed Transaction. On
February 22, 2018, Broadcom filed a Schedule 14A with the SEC reporting that, as
of that date, Broadcom (i) committed to divest two main areas of product
overlap—Qualcomm’s Wi-Fi Networking Processors and RF Front End (RFFE)
chip businesses (which Qualcomm stated otherwise posed antitrust concerns); (ii)
agreed to take any other actions required by regulatory agencies with respect to
Qualcomm’s other businesses and assets subject to the “Material Adverse Effect”
standard; (iii) was working on an anticipated second request from the U.S. Federal
Trade Commission; and, (iv) met with MOFCOM in China and started a pre-filing
consultation process. Broadcom further indicated that it remained confident in its
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ability to complete the Proposed Transaction within approximately twelve (12)
months following the signing of a definitive agreement.
Defendants’ Secret Scheme to Have CFIUS Bar Any Transaction with

Broadcom and Award Them Victory in the Proxy Contest
86. Facing likely defeat in the proxy contest based on the votes
Qualcomm was receiving as the Annual Meeting approached, Defendants
determined they would seek to preclude the Qualcomm stockholders from any
potential premium transaction with Broadcom and ensure themselves a victory in
the proxy contest by disqualifying the Independent Nominees. On January 29,
2018, Defendants secretly filed a voluntary unilateral notice for CFIUS to review
Broadcom’s solicitation of proxies. Defendants still have not released their secret
letter or provided a full and fair summary of its contents to the Qualcomm
stockholders. Indeed, Defendants’ proxy materials filed after January 29, 2018 do
not mention the letter or their subsequent communications with CFIUS and various
members of the U.S. Congress. A reasonable Qualcomm stockholder would want
to know the contents of these communications in evaluating the credibility of the
incumbent directors and deciding whether to reelect those directors. A reasonable
stockholder would want to know that the incumbent directors were seeking to take
the decision of who should be the directors of Qualcomm out of the hands of the
Qualcomm stockholders and place that decision into the hands of a committee of
political appointees from various federal agencies presided over by the politically
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appointed Secretary of the Treasury and including the Secretaries of Defense,
Homeland Security, Energy, State and Commerce and other political appointees.
87. To turn the decision of who should be Qualcomm directors into even
more of a political football, Defendants then enlisted various U.S. Senators and
Representatives to pressure CFIUS into barring any transaction with Broadcom
and eliminating the competing slate of Independent Nominees. In the tradition of
totalitarian states that purport to have elections, Defendants are using political
pressure and government power to force the opposition slate out of the contest.
88. On February 22, 2018, Duncan Hunter of the U.S. House of
Representatives (“Representative Hunter” or “Hunter”), 50th District, California,
wrote to President Donald J. Trump requesting that he direct CFIUS to investigate
the national security implications of Broadcom’s proposed acquisition of
Qualcomm and “block” any sale pending a full investigation. Representative
Hunter made a similar appeal to the Secretary of Defense by letter dated March 1,
2018, highlighting the upcoming director vote.
89. As one commentator noted:
Qualcomm may not have had to directly ask for a CFIUS review,
however, because some friends reportedly did it for the company.
According to recent reports, Sen. John Cornyn, R-Texas, and Rep.
Duncan Hunter, R-Calif., sent letters requesting the review.
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Qualcomm’s political action committee has donated $15,000 or more

to each politician. . . .9
Qualcomm presumably leveraged its financial support of the embattled
Representative Hunter to incite opposition to the Proposed Transaction and the
Independent Nominees.
90. Representative Hunter is currently in need of allies with power,
connections and capital given the ongoing federal criminal investigation into
whether he improperly diverted hundreds of thousands of dollars in campaign
funds for personal use. His campaign expenditures came under scrutiny in April
2016 when The San Diego Union-Tribune questioned thousands of dollars in
expenditures by his campaign for video games and school tuition, leading to
complaints and government investigations. In February 2017, federal investigators
executed a search warrant for the offices of Hunter’s campaign treasurer seeking
evidence relating to the improper expenditures, as well as a possible fraud scheme
involving the video game purchases and the falsification of documents. Since
April 2016, Hunter has reimbursed his campaign for more than $60,000 in
expenses for, among other things, video games, oral surgery, groceries, garage
door repair, family vacations, surfing equipment, dance recital trips, school
9
Therese Poletti, Qualcomm was losing in takeover battle with Broadcom, then the
government stepped in, Marketwatch.com (March 5, 2018).
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lunches, school tuition and school uniforms, which he claimed were personal,
mistaken or lacking documentation.
91. On February 26, 2018, U.S. Senator John Cornyn wrote to Treasury
Secretary Steven Mnuchin, expounding upon the protectionist rhetoric advanced a
few days prior by Representative Hunter and urging CFIUS to act prior to the
scheduled vote. Six additional members of Congress joined Senator Cornyn’s
request in a separate March 1, 2018 letter to Secretary Mnuchin claiming that
“Broadcom will acquire control of Qualcomm at the latter’s stockholder meeting
on March 6.” On February 28, 2018, Congressman Scott Peters, who received
financial support from Qualcomm’s political action committee in 2017, wrote to
the Treasury Secretary demanding that CFIUS prevent “the Chinese company
Broadcom Limited” from acquiring Qualcomm and prevent “[p]enetration of
Qualcomm’s Board of Directors by Chinese nationals or allies.”
92. Of course, none of the letters in this orchestrated campaign mention
the right of Qualcomm stockholders to decide the composition of the Qualcomm
Board. Instead, the March 1, 2018 letter asserts that CFIUS can “review proxy
contests” and disqualify the Independent Nominees “because the proposed change
of directors represents an attempt to take control of the company.” In other words,
CFIUS, not the Qualcomm stockholders, is to decide that there should be no
change of directors at Qualcomm, thereby entrenching the incumbents.
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93. The Congressional letters disregard Broadcom’s predominately
American board and stockholder base. They emphasize Broadcom’s connections
to China but fail to acknowledge Qualcomm’s long-standing relationship with and
investments in China.
94. Qualcomm has been successfully investing in China for more than
fourteen years and has made substantial investments in recent years. In March 8,
2018 proxy solicitation materials, Broadcom highlights just a few of Qualcomm’s
substantial investments in China including Qualcomm’s (i) assistance in the
Chinese government’s development of drones, artificial intelligence, mobile
technology and supercomputers; (ii) work with Chinese companies like Huawei to
break into overseas markets and to develop multinational brands; and (iii) $150
million investment in Chinese startup companies.
95. Broadcom identified some, but not all, of the joint ventures and
strategic partnerships between Qualcomm and Chinese companies. For example,
in January 2016, Qualcomm executives (including Mollenkopf and Derek Aberle,
Qualcomm’s then-President) and officials from the People’s Government of
Guizhou Province unveiled a $280 million joint venture, which was majority
owned by the Guizhou provincial government’s investment arm. Qualcomm also
announced that it would establish an investment company in Guizhou that will
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serve as a vehicle for future investments in China. Describing Qualcomm’s long-
term Chinese investment strategy, Aberle indicated:
The actions announced today are important steps for Qualcomm as we

deepen our level of cooperation with, and investment in, China. We
have worked actively with our partners in China for more than 20
years; however, the strategic cooperation with Guizhou represents a
significant increase in our collaboration in China. . . . We are not only
providing investment capital, but we also are licensing our server
technology to the joint venture and assisting with R&D process and
implementation expertise; this underscores our commitment as a
strategic partner in China.
Demonstrating China’s importance to Qualcomm, Qualcomm receives 65% of its
total revenues from China.
Qualcomm Continues to Rebuff Broadcom
96. On February 23, 2018, Qualcomm and Broadcom met. Broadcom
stated that its $79 per share proposal was its best and final proposal. According to
Broadcom, at the meeting, “Qualcomm refused to confirm that it will hold its
previously scheduled stockholder vote on March 6.” Indeed, Qualcomm was
actively seeking governmental intervention to delay the vote.
97. On February 26, 2018, Qualcomm Chairman Jacobs sent a letter to
Broadcom CEO Tan in connection with the parties’ February 23 meeting. Jacobs’
letter stated that Broadcom’s proposal, including its prior $82 per share proposal,
materially undervalued Qualcomm. Qualcomm, however, proposed that next steps
include, among other things, mutual due diligence and entering into a non-
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disclosure agreement (“NDA”) in order to address Qualcomm’s purported
concerns regarding regulatory issues and other terms of the merger agreement.
Qualcomm also sent a draft NDA to Broadcom.
98. Broadcom criticized Qualcomm’s “comprehensive proposal” as an
effort to delay the March 6, 2018 Annual Meeting. Broadcom stated that its
proposal
has never been conditioned on due diligence and Broadcom continues

to be prepared to move forward immediately, without diligence. In
short, there is no cause to delay the Qualcomm annual meeting.
Broadcom would be happy to provide confirmatory reverse due
diligence upon an agreement on all material terms, including price, as
is customary.
Qualcomm Cancels the Election of Directors

and Other Annual Meeting Votes
99. Defendants’ scheme to have the federal government save them from
losing the election contest worked. On March 4, 2018, CFIUS issued an Interim
Order (the “Order”), which is essentially an injunction against the Annual Meeting,
including the election of directors. Section 1.1 of the Order provides that (i) the
March 6 Annual Meeting is to be “delayed” for 30 days (presumably to allow more
time to issue an injunction permanently barring the election of the Independent
Nominees); (ii) the acceptance or counting of any votes or proxies for Qualcomm
directors must stop; and (iii) no action may be taken to complete the election of
directors. Section 1.2 of the Order prohibits Qualcomm and the Board from
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accepting or taking any action in furtherance of accepting Broadcom’s proposed
merger agreement or any other proposed merger, acquisition or takeover agreement
with Broadcom. CFIUS essentially entered an injunction forbidding a Delaware
corporation from holding its annual meeting as scheduled, prohibiting its
stockholders from voting and requiring that Qualcomm’s incumbent Board remain
in office. It appears that now all incumbent boards need to do to avoid electoral
defeats is scream “China” and the federal government will mandate that they
remain in office.
100. Section 2.4 of the Order provides that the Order can be modified in
writing by CFIUS, including upon written request from Qualcomm. The Order
initially delayed the Annual Meeting and precluded the further acceptance or
counting of proxies. However, Defendants did not want (i) the meeting postponed,
which would require a change in the record date, or (ii) the acceptance and
counting of proxies to stop. The incumbent directors were losing and wanted 30
more days to solicit proxies from additional stockholders and superseding proxies
from stockholders who had already voted for the Independent Nominees. They
also wanted to keep the stale January 8, 2018 record date. CFIUS promptly
modified the Order to require that the March 6, 2018 Annual Meeting be opened
but then adjourned for 30 days without any substantive action, while deleting the
provision freezing the acceptance and counting of proxies (the “Modified Order”).
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This tracked Defendants’ public statements concerning what they intended to do at
the Annual Meeting. Thus, CFIUS (presumably at Defendants’ urging) changed its
Order to provide that, rather than be postponed 30 days, the Annual Meeting would
be opened on March 6 and then adjourned for 30 days, thereby allowing the
incumbent directors to keep the old record date. The Order was also modified to
allow the incumbent directors to solicit proxies for another 30 days in an effort to
reverse their defeat. The Defendants have provided no disclosure to the
Qualcomm stockholders concerning their role in the modification of the Order or
the reasons for that modification.
101. Of course, the CFIUS Order and Modified Order did not restrict the
incumbent directors, whom CFIUS required to remain in office, from taking
further defensive measures, such as proceeding with the NXP Transaction. These
one-sided orders gave the incumbent directors a 30 day do-over of the proxy
contest they had lost and 30 more days to deploy further defensive measures. The
CFIUS Modified Order gives the incumbents 30 days to use the orders from
CFIUS as a weapon to coerce stockholders to vote for them because otherwise
CFIUS may just declare the incumbents as winners by default. In short, the weight
of the federal government has been thrown in favor of the incumbent slate in a
proxy contest for a Delaware corporation.
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102. Apparently the only bases for CFIUS preventing the Independent
Nominees from being elected were that they were nominated by Broadcom and
received $100,000 from Broadcom under their Nomination Agreement. The
$100,000 is far less than the over $300,000 in compensation the incumbent
directors bestowed on themselves. Moreover, the Nomination Agreement
provides:
Each of us recognizes that should you be elected to the Board of

Directors of the Target, all of your activities and decisions as a
director will be governed by applicable law and subject to your
fiduciary duty to the Target and to the stockholders of the Target and,
as a result, that there is and can be, no agreement between you and the
Company that governs the decisions that you will make as a director
of the Target. You agree that, if elected, you will exercise your
independent judgment in all matters before the Target Board of
Directors in accordance with your fiduciary duties.
However, state law fiduciary duties were simply disregarded in the effort to have
the federal government favor the incumbent directors.
103. Following its receipt of the Order and Modified Order, on March 5,
2018, Qualcomm announced that it would “delay its Annual Meeting of
Stockholders and election of directors for at least 30 days so that CFIUS can fully
investigate [Broadcom’s] proposal to acquire Qualcomm . . . .” (Emphasis added).
Qualcomm then announced on March 5, 2018 that to implement the March 4, 2018
Order:
. . . the 2018 Annual Meeting of Stockholders will be opened on March

6, 2018 at 8 a.m. Pacific Time and immediately adjourned to April 5,
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2018. There will be no voting or other matters conducted at the

meeting.
Defendants also said stockholders could “change their vote.”
104. In a separate “employee communication,” Defendants told
Qualcomm’s employees:
This delay extends the stockholder voting period so you will likely
continue receiving communications soliciting your vote. If you
haven’t already voted, it remains critically important that you vote only
on the WHITE proxy card to support Qualcomm’s highly-qualified
Board and discard any blue proxy materials you receive from
Broadcom.
105. It appears that CFIUS modified its Order to conform with
Qualcomm’s plan to keep the record date, solicit additional proxies and try to
change existing votes during the federal injunction. Of course, Defendants are
taking full advantage of having had the federal government extend the game and
change the rules to favor the incumbent directors. Defendants are now seeking to
have the federal government decide the contest by throwing the Independent
Nominees out of the game.
106. While Defendants have claimed they were attempting in good faith to
engage with Broadcom, a March 5, 2018 letter from CFIUS confirms they were in
fact seeking not only to have the federal government preclude any transaction with
Broadcom, but also to preclude any election of directors other than the incumbents.
According to the March 5, 2018 letter of Aimen N. Mir of the Department of the
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Treasury announcing the CFIUS Order, Qualcomm initiated the CFIUS review that
led to the Order:
CFIUS’s assessment thus far includes its review of the information

submitted by Qualcomm in its unilateral voluntary notice on January
29, 2018, the parties’ responses to questions posed about the potential
transaction during the interim period, and the information provided in
our multiple phone calls, emails, and meetings with representatives of
both Qualcomm and Broadcom. In addition, our assessment includes
the review of letters to CFIUS submitted by Broadcom on February
21, 2018 and March 2, 2018.
The March 5 letter adopts Qualcomm’s self-serving descriptions of its business and
its importance and makes findings concerning Qualcomm’s status as a “trusted
company” important to national security. Contrary to the March 5 letter, neither
the Order nor the later Modified Order “preserve the status quo between Broadcom
and Qualcomm.” Those orders instead enable the incumbent directors to snatch
victory from the jaws of defeat through government intervention. The March 5
letter gives every indication that CFIUS has already determined the matter against
Broadcom based on letters from Qualcomm and protectionist politicians. The
interests of Qualcomm’s stockholders were given no consideration. Defendants
will now use the CFIUS letter to convince stockholders to change their votes.
107. News of the Order reached the market by the early morning of March
5, 2018, but Qualcomm did not publicly confirm receipt of the Order until a few
minutes prior to market close that day. By close of trading the next day, after
Qualcomm also released a copy of CFIUS’s March 5, 2018 letter and the Modified
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Order, Qualcomm’s stock closed at $62.14 – $2.60 lower than the $64.96 closing
price of Qualcomm stock on March 2, 2018. Nearly $4 billion of Qualcomm’s
market capitalization had been erased.
108. The CFIUS Orders were an extremely odd move by the U.S.
regulatory body. As one former CFIUS member, Mario Mancuso, explained:
“This is Halley’s comet unusual.”10 Indeed, CFIUS usually only intervenes in
transactions where a foreign entity is set to purchase a controlling stake in a U.S.
company.11 It rarely reviews mergers before companies have entered into binding
agreements, and to Plaintiff’s knowledge, has never intervened to stop a proxy
contest for control over a board.12 As one DealBook article explained: “[CFIUS]
typically works behind closed doors and reviews deals only after they are
announced.”13
109. Absent Qualcomm’s campaign soliciting CFIUS intervention, the
Proposed Transaction may have never attracted the regulatory body’s serious
10
Kate O’Keefe, Stue Woo, and Ted Greenwald, U.S. Government Intervenes in
Broadcom’s Bid for Qualcomm, Wall Street Journal (March 5, 2018).
11
Koh Gui Quing,Sonam Rai, U.S. security panel deals major blow to Broadcom’s
bid for Qualcomm, Reuters (March 5, 2018).
12
Therese Poletti, Qualcomm was losing in takeover battle with Broadcom, then
the government stepped in, Marketwatch.com (March 5, 2018).
13
Alan Rappeport, Cecilia Kang, and Chad Bray, Trump Administration Stalls
Largest Tech Merger in New Sign of Protectionism, DealBook.com (March 5,
2018).
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interest. Broadcom is incorporated in Singapore and conducts much of its
operations in the U.S.14 Its corporate headquarters are already in San Jose,
California. Ninety percent of Broadcom’s board of directors and senior
management team, including Broadcom CEO Tan, are American. U.S. investors
own 90% of Broadcom’s stock. In fact, Broadcom and Qualcomm share a
comparable base of significant institutional stockholders that are primarily based in
the U.S.
110. Prior to the public announcement of Broadcom’s bid for Qualcomm,
Broadcom CEO Tan announced, in a White House press conference (alongside
President Trump), that Broadcom would take action to re-domicile as a Delaware
corporation. President Trump personally hailed the announcement as a sign that
the U.S. business climate was improving. He further exalted Broadcom as “one of
the really great, great companies,” noting that Broadcom employs more than 7,500
workers across the U.S.15 According to Broadcom, it plans to re-domicile “no later
than May 6” – a move that would remove the transaction from the CFIUS’s
14
In its SEC filings, Qualcomm only discloses four companies that it believes
constitute “significant subsidiaries” within the meaning of Item 601(b)(21)(ii) of
Regulation S-K. Two of those four subsidiaries (Qualcomm Global Trading Pte.
Ltd. and Qualcomm Asia Pacific Pte. Ltd.) are incorporated in Singapore.
15
Trump announces semiconductor company with Lehigh Valley operations
moving headquarters to U.S., The Morning Call (Nov. 2, 2017).
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regulatory purview. However, the Order requires Broadcom to give five days’
notice before taking any action toward redomiciliation in the U.S.
111. Broadcom publicly denounced Qualcomm’s actions to procure
unnecessary and unwarranted CFIUS intervention in the proxy contest. In a
Schedule 14A it filed with the SEC on March 5, 2018, Broadcom emphasized that
Qualcomm failed to mention its secret requests for CFIUS review at its February
14 or February 23, 2018 meeting with Broadcom, or during any other
conversations. Broadcom further characterized Qualcomm’s behavior as a
“blatant, desperate act by Qualcomm to entrench its incumbent board of directors
and prevent its own stockholders from voting for Broadcom’s independent director
nominees.” More importantly, while soliciting proxies, the Qualcomm directors
failed to disclose their clandestine efforts to preclude Qualcomm stockholders from
voting for the Independent Nominees.
112. CFIUS’s belated intervention, however, came at an opportune time for
Qualcomm’s incumbent directors, because a majority of the Board was about to be
voted out of office by the Qualcomm stockholders. According to Bloomberg
News, Qualcomm stockholder T. Rowe Price Group Inc. (“T. Rowe Price”), which
holds approximately 2.31% of Qualcomm’s outstanding shares, voted for all six
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Independent Nominees.16 A commentator noted that delaying the Annual Meeting
would give the Board, among other things, an opportunity to change T. Rowe
Price’s vote.17
113. According to a March 5, 2018 Bloomberg article, titled “Broadcom Is
on Course to Win Majority of Qualcomm Board Seats”:
Broadcom Ltd. is on course to win all six of the seats it’s seeking on
Qualcomm Inc.’s board, giving it a majority to push forward with its
hostile takeover even as a U.S. government panel forced a delay of the
final tally. . . .
Based on a count of more than half of the votes already cast,

Broadcom would win a majority of Qualcomm’s board seats,
according to information obtained by Bloomberg. If that result holds
up when the final vote takes place, Broadcom would have a mandate
to overturn Qualcomm management’s opposition to the $117 billion
deal. . . .
114. As of March 5, 2018, Qualcomm CEO Mollenkopf had received the
second-lowest number of votes among the combined 17 nominees from both sides,
indicating that he would personally lose a seat on the Board. Likewise, according
to Bloomberg, “Chairman Paul Jacobs, son of the company’s founder, is also at
16
Ian King and Ed Hammond, Qualcomm Holder T.Rowe Price Said to Have
Voted Broadcom Slate, Bloomberg News (March 5, 2018).
17
Id.
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risk of being replaced, depriving Qualcomm’s management of any representation
on the board.”18
115. In addition to extending and skewing the proxy contest, the Modified
Order creates an unlevel playing field which allows the incumbent Board time to
close the NXP Transaction while the stockholders are prevented from voting them
out of office. On March 5, 2018, Qualcomm announced an extension of the NXP
Tender Offer from March 6 to March 9, 2018. Qualcomm further disclosed that
only 10.5% of NXP’s outstanding shares had been validly tendered (and not
withdrawn), such that Qualcomm could not yet close the NXP Transaction. Thus,
had the Annual Meeting taken place that day, Qualcomm stockholders would have
had the opportunity to elect the Independent Nominees and oust a majority of the
Board to thwart or revise the NXP Transaction.
116. In sum, the Qualcomm incumbents, and their allies in Congress
appear to be converting a democratic stockholder meeting into a totalitarian one-
party election where the opposition slate is outlawed. It appears corporate
democracy is now dead in the U.S. and the federal government, not stockholders,
will determine who will serve as directors of Delaware corporations.
18
Ed Hammond and Ian King, Broadcom Said on Track for Qualcomm Majority
Amid Vote Delay, Bloomberg News Enterprise (March 5, 2018).
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Qualcomm Issued Materially Incomplete and Misleading Disclosures
117. Qualcomm repeatedly issued materially misleading and incomplete
disclosure to Qualcomm stockholders in connection with the Annual Meeting by
failing to disclose the Board’s efforts to secure CFIUS review of any transaction
with Broadcom and an injunction preventing the election of the Independent
Nominees.
118. Qualcomm’s proxy statement did not discuss CFIUS or indicate that
the Company was actively trying to have CFIUS delay or preclude election of the
Independent Nominees and prevent any transaction with Broadcom. Though filing
various additional 14A materials, Qualcomm did not disclose its January 29, 2018
request or other communications with CFIUS or members of Congress. In
considering the Qualcomm incumbent directors’ requests for their votes, the
Qualcomm stockholders would consider it important to know that those directors
were actively seeking to have CFIUS prevent the stockholders from voting for
Independent Nominees and from selling their shares to Broadcom.
119. Qualcomm’s failure to disclose its CFIUS request also rendered other
disclosures materially misleading. For example, on February 26, 2018, Qualcomm
filed a Schedule 14A stating that Qualcomm “has repeatedly attempted to engage
with Broadcom on issues including price, including at meetings on February 14
and February 23 . . . Qualcomm made a comprehensive proposal . . . in order to
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clear the way for a price discussion with Broadcom.” On March 1, 2018,
Qualcomm filed a Schedule 14A with the SEC similarly stating that the Board “has
repeatedly and genuinely attempted to engage with Broadcom....” These assertions
are materially false and misleading without the further disclosure of Qualcomm’s
voluntary and unilateral January 29, 2018 request to CFIUS, and the further
communications with CFIUS and members of Congress.
120. Thus, stockholders have been misled to believe that the Board
members up for re-election have been engaged in good faith negotiations to
improve or otherwise secure better terms in a deal with Broadcom, when, in fact,
the Board has been engaged in a lengthy campaign to have U.S. regulators scuttle
any chances for a deal with Broadcom and even to prevent the stockholders from
voting for anyone nominated by Broadcom, no matter whether they are
independent and a U.S. citizen.
121. Defendants also failed to disclose their role in the modification of the
Order and the reasons for and effects of the modification. The Qualcomm
stockholders are entitled to know whether and how the incumbent directors have
changed the rules for the proxy contest. They are also entitled to know about
Defendants continuing communications with CFIUS, including any efforts to
convince CFIUS to bar the Independent Nominees and/or enjoin any transaction
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with Broadcom. These matters affect the stockholders’ basic rights under
Delaware law to vote their stock and sell their shares.
CLASS ACTION ALLEGATIONS

122. Plaintiff brings this action pursuant to Rule 23 of the Rules of the
Court of Chancery, individually and on behalf of all other holders of Qualcomm
common stock on January 8, 2018 and their successors and assigns (except
Defendants herein and any person(s), firm, trust, corporation or other entity related
to or affiliated with them and their successors in interest) who are or will be
threatened with injury arising from Defendants’ wrongful actions, as more fully
described herein.
123. This action is properly maintainable as a class action.
124. The Class is so numerous that joinder of all members is impracticable.
The Company has hundreds or thousands of stockholders who are scattered
throughout the U.S. As of January 8, 2018, there were 1,480,385,450 shares of
Qualcomm common stock outstanding.
125. There are questions of law and fact common to the Class including,
inter alia, whether:
(a) The Director Defendants breached their fiduciary duties;
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(b) Plaintiff and the other members of the Class are being and will
continue to be injured by the wrongful conduct alleged herein and, if so, what is
the proper remedy and/or measure of damages; and
(c) Plaintiff and the other members of the Class will be irreparably
harmed by Defendants’ conduct.
126. Plaintiff is committed to prosecuting the action and has retained
competent counsel experienced in litigation of this nature. Plaintiff’s claims are
typical of the claims of the other members of the Class, and Plaintiff has the same
interests as the other members of the Class. Plaintiff is an adequate representative
of the Class.
127. The prosecution of separate actions by individual members of the
Class would create the risk of inconsistent or varying adjudications with respect to
individual members of the Class, which would establish incompatible standards of
conduct for Defendants, or adjudications with respect to individual members of the
Class, which would as a practical matter be disjunctive of the interests of the other
members not parties to the adjudications, or substantially impair or impede their
ability to protect their interests.
128. In addition, the Director Defendants are acting and refuse to act on
grounds generally applicable to the Class, thereby making appropriate final
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injunctive relief or corresponding declaratory relief requested with respect to the
Class as a whole.
COUNT I
Breach of Fiduciary Duty by the Director Defendants (Defensive Measures)

129. Plaintiff repeats and realleges the allegations above as if fully set forth
herein.
130. As incumbent directors facing a proxy contest, the Director
Defendants had a positional conflict because of their personal interest in the
outcome of the election. The realities of decision-making in that context
undermine the actions of target directors who may act in their own interests.
Moreover, the Qualcomm stockholders had a right to vote and the directors took
actions that have intruded on the stockholders’ decision-making. Therefore, the
Director Defendants’ conduct is subject to enhanced scrutiny.
131. With respect to defensive measures, the Director Defendants, as
Qualcomm’s incumbent directors, bear the burden of persuasion to show that their
motivations were proper and not selfish and their actions were reasonable in
relation to a legitimate objective. They must show that in taking defensive actions,
they had reasonable grounds for believing that a danger to corporate policy and
effectiveness existed and that the response selected was reasonable in relation to
the threat posed.
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132. The Director Defendants breached their duty of loyalty by engaging in
a series of defensive measures for the primary purpose of entrenching themselves
in office. Their motivations were selfish and improper. The defensive measures,
individually and collectively, were not reasonable in relation to any legitimate
threat to corporate policy and effectiveness.
133. The defensive measures the Director Defendants employed include:
(a) the September 21, 2017 adoption of the 2018 Director
Compensation Plan to establish compensation to be paid to nonemployee directors
effective January 1, 2018, which ensures that the incumbents are compensated on
terms of their choosing;
(b) the December 20, 2017 adoption of a Severance Plan that
makes it substantially more expensive for an acquirer, like Broadcom, to make
changes to Qualcomm’s organizational structure;
(c) the December 20, 2017 approval of amendments to the LTIPs
that call for increased compensation for participants—including members of the
incumbent Board—in the event that the Director Defendants no longer constitute a
majority of the Board;
(d) the February 20, 2018 decision to cause Qualcomm to enter into
the Amended Purchase Agreement for the NXP Transaction, which increased the
Tender Offer consideration from $110 per share to $127.50 per share and reduced
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the minimum number of NXP shares required to tender in order to consummate the
NXP Transaction to 70% of all outstanding NXP shares;
(e) the voluntary and unilateral January 29, 2018 request for
CFIUS to preclude any transaction with Broadcom and delay the Annual Meeting
and other communications with CFIUS;
(f) the efforts to enlist various members of Congress to accelerate
CFIUS’ review of the Proposed Transaction and the proxy contest in advance of
the March 6, 2018 Annual Meeting to ensure that the meeting would not be held;
and
(g) the apparent requests that CFIUS modify its original Order
cancelling the March 6, 2018 Annual Meeting so that Defendants could preserve
the record date and solicit votes for the incumbent Board.
134. The defensive measures, individually and collectively, are a breach of
the duty of loyalty. The Court should declare defensive measures that provided
financial benefits to the Director Defendants invalid and void and require the
repayment and cancellation of any financial benefits. The Court should enjoin
Defendants from further defensive measures.
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COUNT II
Breach of Fiduciary Duty by the Director Defendants

(Precluding Transaction and Proxy Contest)
herein.
136. Incumbent directors who face a proxy contest have a structural and
situational conflict because their own director seats are at risk. Maintaining a
proper balance in the allocation of power between the stockholders and directors
requires that the stockholders have an unimpeded right to vote effectively in an
election of directors. Because Delaware law embraces a republican model which
gives directors substantial managerial power, it is vital that the stockholders have a
genuine and fair opportunity to elect new directors. Board actions designed to
interfere with or impede the effective exercise of corporate democracy by
shareholders require careful judicial review, especially in an election of directors.
137. The Director Defendants did not just take defensive actions against a
potential transaction with Broadcom. By seeking an order from CFIUS and
modification of the Order, they pursued a nuclear option not only to preclude any
transaction with Broadcom, but also to preclude the Qualcomm stockholders from
voting on the Independent Nominees in a contested election of directors. The
Director Defendants manipulated the election machinery by obtaining an
injunction against an election they were losing and a Modified Order that permits
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them to redo the election while seeking federal disqualification of the opposing
slate. Thus, their intent is to disenfranchise the stockholders by director action that
had the effect of coercing the stockholders into voting for the incumbent slate as
the only available alternative, rather than having free choice to vote for directors.
The Directors Defendants’ action was preclusive and coercive of stockholder
choice. Therefore, the Director Defendants have the burden of demonstrating a
compelling justification for their actions as a condition precedent to any judicial
consideration of reasonableness and proportionality.
138. The Director Defendants’ action in seeking the Order from CFIUS
enjoining the March 6, 2018 election of directors and a modification of that Order
plainly affected an election of directors. The Defendant Directors succeeded in
their attempt to prevent the Qualcomm stockholders’ ability to vote in a manner
contrary to the will of the incumbent directors and to replace incumbent directors
in a contested election. They asserted to CFIUS that the contested election touched
on matters of corporate control.
139. The Director Defendants bear the heavy burden of establishing a
compelling justification for their actions in seeking an order preventing an election
of directors and precluding the full and fair vote on March 6, 2018. They also bear
that same burden with regard to the Modified Order allowing them to keep the
record date and to solicit proxies for an additional 30 days in an effort to overturn
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the vote that should have occurred on March 6. Finally, they must prove a
compelling justification for their continuing efforts to preclude a proxy contest,
prevent a free election and have CFIUS order that the incumbent directors cannot
be replaced by the Independent Nominees and that the Independent Nominees are
ineligible to be directors of Qualcomm.
140. The Director Defendants cannot justify their actions by contending
that the Qualcomm stockholders were voting for the Independent Nominees out of
ignorance or some mistaken belief about what course is in their best interest. The
Director Defendants’ actions were not reasonable because they were premised on
the notion that they know better than the Qualcomm stockholders about who
should be on the Qualcomm Board.
141. The Director Defendants cannot use supposed concerns about
regulatory approval of a possible transaction with Broadcom as a compelling
justification for tilting the proxy contest playing field and preventing the March 6,
2018 vote for directors. An election of the Independent Nominees is an election of
directors; it is not approval of a transaction with Broadcom. The Independent
Nominees would be duty-bound as directors to act in the best interests of
Qualcomm and its stockholders. In contrast, the Director Defendants have
breached their fiduciary duties by seeking to deprive the stockholders of their right
to choose directors of Qualcomm.
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142. The Director Defendants’ efforts to prevent the March 6, 2018 vote
were directed to thwarting the will of a majority of the Qualcomm stockholders.
The Director Defendants’ actions are intended to be preclusive by making a
successful proxy contest unattainable. Indeed, they are seeking to preclude any
proxy contest at all by Broadcom. They are asking CFIUS to preclude the
stockholders from making the Independent Nominees a new Board majority. The
Director Defendants’ actions were not a sufficiently tailored means to a legitimate
end.
143. The Court should invalidate any purported election of the incumbent
directors. It should direct that proxies and other documents relating to the votes
that should have occurred on March 6, 2018 be preserved so that it can be
determined what the vote would have been had Defendants not held the polls open
for another 30 days. The Court should grant such other equitable relief as is
necessary to remedy Defendants’ wrongful hijacking of the election of directors.
COUNT III
Breach of Fiduciary Duty by the Director Defendants (Disclosure)
herein.
145. In order to preserve themselves in office, the Director Defendants
breached their fiduciary duty of loyalty by deliberately withholding material
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information from the Qualcomm stockholders including the January 29, 2018 letter
and other communications with CFIUS and members of Congress and other
information on their efforts to preclude (i) any transaction with Broadcom, (ii) the
proxy contest and (iii) the election of the Independent Nominees. They have also
made misleading partial disclosures including their supposed willingness to engage
with Broadcom. Finally, they have not disclosed their role in the modification of
the Order to allow them to keep the record date and solicit proxies for another 30
days.
146. The Court should enjoin Defendants from further solicitation of
proxies until they have made full and accurate disclosure.
Lack of Adequate Remedy/Irreparable Harm
147. Plaintiff has no adequate remedy at law. Qualcomm’s stockholders
have been prevented from expressing their voting rights by electing directors at the
March 6, 2018 Annual Meeting. The Director Defendants continue their efforts to
pre-order the results of the Annual Meeting by having the Independent Nominees
barred from serving as Qualcomm directors. Therefore, they have inflicted
irreparable injury by depriving stockholders of their right to vote. The Director
Defendants inflicted, and seek to further inflict, harm to the corporate electoral
process, including the right of Qualcomm’s stockholders to a meaningful exercise
of their voting franchise and to a fair proxy contest with an informed electorate. In
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4813-5622-4095, v. 1
contrast, the risk that the Qualcomm stockholders may elect directors who the
incumbents disfavor is no harm at all because the incumbent directors have no
vested right to remain in office and will suffer no harm if they are defeated.
PRAYER FOR RELIEF

WHEREFORE, Plaintiff demands judgment that:
A. Because the Director Defendants breached their fiduciary
duties, any purported election of any of the incumbent directors
is invalid and void;
B. The proxies and other documents relating to the votes that
should have occurred on March 6, 2018 are to be preserved.
C. The election of directors and other votes be determined as of
March 6, 2018, if possible;
D. An injunction is issued against any further defensive measures,
any further efforts to prevent a full and fair vote of the
stockholders and any further solicitation of proxies by
Defendants until they make full disclosure;
E. If the Independent Nominees are precluded from standing for
election, an injunction precluding any election of Qualcomm
directors or other votes at the Annual Meeting until there has
been a new record date, full disclosure and the stockholders
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4813-5622-4095, v. 1
have had a full and fair opportunity to nominate and vote for
alternative directors;
F. If the Annual Meeting is not held on April 5, 2018, a prompt
annual meeting is required under 8 Del. C. § 211 and a new
record date should be set under 8 Del. C. § 213;
G. Defendants must disgorge any improper financial benefits they
received as a result of the defensive measures they employed
and any prospective or potential benefits are void and
cancelled;
H. Damages are awarded to the Class and against the Director
Defendants for their breach of duty of loyalty, including for the
billions of dollars the stockholders have lost because of the
Director Defendants’ deliberate entrenching and dishonest
misconduct resulting in the loss of a transaction with
Broadcom;
I. Certification of the Class;
J. An award of attorneys fees and expenses for Plaintiff; and
K. Such other and further relief as the Court deems just and
equitable.
-70-
4813-5622-4095, v. 1
Dated: March 8, 2018 PRICKETT, JONES & ELLIOTT, P.A.
OF COUNSEL: /s/ Michael Hanrahan

Michael Hanrahan (#941)
KESSLER TOPAZ MELTZER Paul A. Fioravanti, Jr. (#3808)
& CHECK, LLP Corinne Elise Amato (#4982)
Lee D. Rudy Eric J. Juray (#5765)
Michael C. Wagner 1310 N. King Street
Stacey A. Greenspan Wilmington, Delaware 19801
Christopher M. Windover (302) 888-6500
280 King of Prussia Road
Radnor, Pennsylvania 19087 Counsel for Plaintiff
(610) 667-7706
-71-
4813-5622-4095, v. 1

18-03-08 Delaware Evans Complaint

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18-03-08 Delaware Evans Complaint

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James Evans v. Qualcomm, Inc., et al.

JAMES EVANS, on behalf of himself

VERIFIED CLASS ACTION COMPLAINT

behalf of a class (the “Class”) of common stockholders of defendant Qualcomm

Incorporated (“Qualcomm” or the “Company”) as of January 8, 2018 and their

of directors of Qualcomm (the “Board”) for breaches of fiduciary duty. The

allegations of the Complaint are based on Plaintiff’s knowledge, and on

information and belief, including the investigation of counsel and review of

publicly available information as to all other matters.

NATURE OF THE ACTION

unprecedented attempt by incumbent directors to have the United States (“U.S.”)

federal government preclude stockholders of a Delaware corporation from electing

independent directors, including U.S. citizens, to replace incumbent Board

members. As the latest in a series of entrenchment measures, the incumbent

directors conspired with protectionist politicians to have the Committee on Foreign

scheduled March 6, 2018 annual meeting of Qualcomm stockholders (the “Annual

Meeting”), thereby preventing an election of directors that the incumbents knew

2. The incumbent Board is now seeking to have CFIUS override

Delaware law and stockholder democracy by banning six independent director

nominees nominated by Broadcom Limited (“Broadcom”) (the “Independent

Nominees”) and entrenching the entire eleven-member incumbent Board in office

against the will of Qualcomm’s stockholders. The incumbent directors are

CFIUS to award them the victory.

3. All but one of the Independent Nominees, Samih Elhage (“Elhage”),

David G. Golden (“Golden”), Veronica M. Hagen (“Hagen”), Julie A. Hill

stockholders of Broadcom. They are current and/or former directors/officers of

4. Broadcom and the Independent Nominees have agreed that, if elected

accordance with their fiduciary duties.

5. In the similarly contentious Airgas proxy fight, Air Products

nominated three directors to serve on the Airgas board, made similar

Qualcomm and its stockholders within the well-defined parameters of Delaware

simply because they were nominated by Broadcom.

6. In complete disregard of the U.S. federal-state structure, the

incumbent Board seeks a federal takeover of Delaware corporation law to ensure

their continuation in office. Broadcom holds less than 1% of Qualcomm’s

1,480,385,456 outstanding shares. If elected, the Independent Nominees will have

preclude the Qualcomm stockholders from electing independent directors of their

7. At Defendants’ instigation, CFIUS ordered the cancellation of the

entire March 6, 2018 Annual Meeting, including stockholder votes on certificate,

Qualcomm’s independent public accountants. At the insistence of Qualcomm’s

incumbent directors, a federal committee is now deciding whether and when

stockholders of Delaware corporations are allowed to vote on state law governance

8. The Qualcomm incumbents have also violated the voting rights of

Qualcomm stockholders through materially misleading and incomplete disclosure

concerning their secret voluntary application to CFIUS, the CFIUS proceedings

the incumbent directors initiated and engineered proceedings to preclude any

independent Qualcomm directors.

PARTIES AND RELEVANT NON-PARTIES

9. Plaintiff James Evans is and at all relevant times has been a

10. Defendant Dr. Paul E. Jacobs (“Jacobs”) is the Executive Chairman

from the Company.

11. Defendant Steve Mollenkopf (“Mollenkopf”) is Qualcomm’s CEO

Chief Operating Officer (“COO”) from November 2011 to December 2013.

2010 to November 2011, Executive Vice President and President of Qualcomm

CDMA Technologies from August 2008 to September 2010. Mollenkopf joined

compensation and benefits from the Company.

12. Defendant Barbara T. Alexander (“Alexander”) has served as a

13. Defendant Jeffrey W. Henderson (“Henderson”) has served as a

Qualcomm director since January 2016.

14. Defendant Thomas W. Horton (“Horton”) has served as a Qualcomm

member of the Governance Committee.

15. Defendant Ann M. Livermore (“Livermore”) has served as a

Qualcomm director since October 2016.

16. Defendant Harish Manwani (“Manwani”) has served as a Qualcomm