Exhibit 10.1

THE USE OF THE FOLLOWING NOTATION IN THIS EXHIBIT INDICATES THAT A CONFIDENTIAL
PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND
THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION: [****]

 

     

Barclays Bank PLC

5 The North Colonnade

Canary Wharf, London E14 4BB

Facsimile:+44(20)77736461

Telephone: +44 (20) 777 36810

 

c/o Barclays Capital Inc.

as Agent for Barclays Bank PLC

745 Seventh Ave

New York, NY 10019

 

DATE:    August 26, 2012 TO:    AOL Inc. Attention:    Arthur T. Minson
Facsimile:    +1 703 466 9097 Telephone:    +1 212 206 5004 Email:   
Arthur.Minson@teamaol.com FROM:    Barclays Capital Inc., acting as Agent for
Barclays Bank PLC TELEPHONE:    +1 212 412 4000 SUBJECT:    Share Repurchase
Transaction

The purpose of this letter agreement (this “Confirmation”) is to confirm the
terms and conditions of the Transaction entered into between Barclays Bank PLC
(“Barclays”), through its agent Barclays Capital Inc. (the “Agent”), and AOL
Inc. (“Counterparty”) on the Trade Date specified below (the “Transaction”).
This Confirmation constitutes a “Confirmation” as referred to in the Agreement
specified below. Barclays Bank PLC is not a member of the Securities Investor
Protection Corporation (“SIPC”). Barclays is regulated by the Financial Services
Authority.

The definitions and provisions contained in the 2002 ISDA Equity Derivatives
Definitions (the “Equity Definitions”), as published by the International Swaps
and Derivatives Association, Inc., are incorporated into this Confirmation. In
the event of any inconsistency between the Equity Definitions and this
Confirmation, this Confirmation shall govern. For purposes of the Equity
Definitions, the Transaction shall be deemed to be a Share Forward Transaction.

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Each party is hereby advised, and each such party acknowledges, that the other
party has engaged in, or refrained from engaging in, substantial financial
transactions and has taken other material actions in reliance upon the parties’
entry into the Transaction to which this Confirmation relates on the terms and
conditions set forth below.

1. This Confirmation evidences a complete and binding agreement between Barclays
and Counterparty as to the terms of the Transaction to which this Confirmation
relates. This Confirmation shall supplement, form a part of and be subject to an
agreement in the form of the ISDA 1992 Master Agreement (Multicurrency – Cross
Border) (the “Agreement”) as if Barclays and Counterparty had executed an
agreement in such form (without any Schedule and with such other elections set
forth in this Confirmation) on the Trade Date. In the event of any inconsistency
between provisions of the Agreement and this Confirmation, this Confirmation
will prevail for the purpose of the Transaction. The parties hereby agree that
no transaction other than the Transaction to which this Confirmation relates
shall be governed by the Agreement.

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

 

General Terms:    Trade Date:    August 27, 2012 Seller:    Barclays Buyer:   
Counterparty Shares:    The Common Stock, $0.01 par value per share of
Counterparty (Ticker symbol “AOL”). Prepayment:    Applicable Prepayment Amount:
   As specified in Schedule A Prepayment Date:    Three Exchange Business Days
following the Trade Date. Additional Payment:    Counterparty shall pay to
Barclays an amount equal to the Additional Payment as specified in Schedule A on
the Prepayment Date. Initial Shares:    As specified in Schedule A. Initial
Share Delivery:    Barclays shall deliver a number of Shares equal to the
Initial Shares to Counterparty on the Initial Share Delivery Date in accordance
with Section 9.4 of the Equity Definitions, with the Initial Share Delivery Date
being deemed to be a “Settlement Date” for purpose of such Section 9.4. Initial
Share Delivery Date:    Three Exchange Business Days following the Trade Date.
Initial Hedge Period:    The period (the “Initial Hedge Period”) commencing on,
and including, the Scheduled Trading Day immediately following the Trade Date
and ending on, and including the

 

2

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Scheduled Trading Day on which Barclays completes the purchase of a number of
Shares (the “Hedge Shares”) necessary to establish its initial hedge position
with respect to the Transaction (such date, the “Hedge Period End Date”);
provided, that if, on any Scheduled Trading Day, the Hedging Price (calculated
as if such Scheduled Trading Day were the last day in the Initial Hedge Period)
is equal to or greater than USD [****] on such Scheduled Trading Day and each of
the nine immediately preceding Scheduled Trading Days during the Initial Hedge
Period (a “Hedging Price Termination”), the Transaction shall be terminated and
Barclays shall promptly (but in no event later than the Scheduled Trading Day
immediately following such 10th consecutive Scheduled Trading Day (the “Hedging
Price Termination Date”)) provide written notice to Counterparty of such Hedging
Price Termination.

 

Upon a Hedging Price Termination (i) if the number of Hedge Shares purchased by
Barclays during the period beginning on, and including, the first Scheduled
Trading Day of the Initial Hedge Period and ending on, and including, the
Hedging Price Termination Date is greater than the Initial Shares, Barclays
shall deliver to Counterparty on the third Exchange Business Day immediately
following the Hedging Price Termination Date the excess of such number of Hedge
Shares over the Initial Shares and (ii) Barclays shall pay to Counterparty on
the third Exchange Business Day immediately following, if clause (i) above is
applicable, the Hedging Price Termination Date, or otherwise, the last Scheduled
Trading Day of the Termination Purchase Period an amount in USD (the “Refund
Amount”) equal to (A) (1) the Prepayment Amount, plus (2) the Additional
Payment, minus (B) (1) the aggregate purchase price paid by Barclays in respect
of the Hedge Shares purchased by Barclays during the period beginning on, and
including, the first Scheduled Trading Day of the Initial Hedge Period and
ending on, and including, the Hedging Price Termination Date, plus (2) if, and
only if, the number of Hedge Shares purchased by Barclays during the period
beginning on, and including, the first Scheduled Trading Day of the Initial
Hedge Period and ending on, and including, the Hedging Price Termination Date is
less than the number of Initial Shares, the product of (1) the excess of the
Initial Shares over such number of Hedge Shares, multiplied by (2) the volume
weighted average price at which Barclays purchases Shares in connection with the
Transaction during the Termination Purchase Period; provided, that in lieu of
payment of an amount in USD equal

 

3

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to the Refund Amount by Barclays to Counterparty, Counterparty shall have the
right, in its sole discretion, to require Barclays to satisfy its obligation to
pay the Refund Amount to Counterparty by delivering Shares to Counterparty (in
which case Section 5(o) shall apply as if the Refund Amount were a Payment
Obligation owed by Barclays to Counterparty); provided further, that if the
Refund Amount is less than zero, Barclays shall not make any payment to
Counterparty, and Section 5(o) shall apply as if the absolute value of the
Refund Amount were a Payment Obligation owed by Counterparty to Barclays.

 

The “Termination Purchase Period” means the number of consecutive Scheduled
Trading Days immediately following the Hedging Price Termination Date,
determined by Barclays in its commercially reasonable discretion, required to
complete the purchase of the number of Shares equal to the Initial Shares minus
the number of Hedge Shares purchased by Barclays during the period beginning on,
and including, the first Scheduled Trading Day of the Initial Hedge Period and
ending on, and including, the Hedging Price Termination Date.

 

On the first Scheduled Trading Day immediately following the Hedge Period End
Date, Barclays shall provide written notice (the “Confirmation Pricing
Supplement”) to Counterparty in substantially the form attached hereto as
Exhibit A, of the Hedging Price, Adjusted Hedging Price, Discount, Maximum
Shares, Minimum Shares, Maximum Maturity Date, Minimum Maturity Date and first
day of the Trading Period. Upon receipt of the Confirmation Pricing Supplement,
Counterparty shall promptly execute and return the Confirmation Pricing
Supplement to Barclays; provided, that Counterparty’s failure to so execute and
return the Confirmation Pricing Supplement shall not affect the binding nature
of the Confirmation Pricing Supplement, and the terms set forth therein, if
accurately determined pursuant to the terms of this Confirmation (including
Schedule A hereto), shall be binding on Counterparty to the same extent, and
with the same force and effect, as if Counterparty had executed a written
version of the Confirmation Pricing Supplement. Upon the reasonable request of
Counterparty from time to time, Barclays shall promptly provide Counterparty
with notice of the Hedging Price (as defined below), calculated as if the date
on which Counterparty makes such request were the last Scheduled Trading Day
during the Initial Hedge Period.

 

4

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   Counterparty acknowledges its responsibilities under applicable securities
laws, and in particular Section 9 and Section 10(b) of the Exchange Act (as
defined below) and the rules and regulations thereunder, in respect of the
provisions set forth in the four immediately preceding paragraphs. Hedging
Price:    The volume weighted average price at which Barclays purchases Shares
to establish its initial hedge position with respect to the Transaction during
the Initial Hedge Period. For the avoidance of doubt, the parties hereto agree
and acknowledge that Barclays may execute Rule 10b-18 block purchases to
establish all or a portion of its initial hedge position with respect to the
Transaction during the Initial Hedge Period. Barclays agrees that it shall
purchase Hedge Shares in a commercially reasonable manner, including using good
faith efforts to purchase Shares during the Initial Hedge Period in connection
with the Transaction in a manner designed not to unnecessarily increase the
price of the Shares. Exchange:    The New York Stock Exchange Related
Exchange(s):    All Exchanges Calculation Agent:    Barclays; provided, that
following the occurrence of an Event of Default pursuant to Section 5(a)(vii) of
the Agreement with respect to which Barclays is the Defaulting Party,
Counterparty shall have the right to designate a nationally recognized
third-party dealer in over-the-counter corporate equity derivatives to act as
the Calculation Agent during the period when such Event of Default is
continuing. Following any determination, calculation or adjustment by the
Calculation Agent hereunder, the Calculation Agent will, upon request, provide
to Counterparty promptly following such request a report (in a commonly used
file format for storage and manipulation of financial data but without
disclosing any proprietary models of the Calculation Agent or other information
that may be proprietary or subject to contractual, legal or regulatory
obligations to not disclose such information) displaying in reasonable detail
the basis for such determination, calculation or adjustment, as the case may be.
Valuation:    Trading Period:    The period of consecutive Scheduled Trading
Days from, and including, the first Scheduled Trading Day following the Hedge
Period End Date to, and including, the Maximum Maturity Date, as specified in
Schedule A; provided, that Barclays may designate any Scheduled Trading Day on
or

 

5

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   after the Minimum Maturity Date (as specified in Schedule A) and prior to the
Maximum Maturity Date as the last Scheduled Trading Day of the Trading Period.
Barclays shall notify Counterparty of any designation made pursuant to this
provision on or prior to the Scheduled Trading Day immediately following such
designated day. Market Disruption Event:   

Section 6.3(a) of the Equity Definitions shall be amended by deleting the words
“at any time during the one hour period that ends at the relevant Valuation
Time, Latest Exercise Time, Knock-in Valuation Time or Knock-out Valuation Time,
as the case may be” and replacing them with the words “at any time during the
regular trading session on the Exchange, without regard to after hours or any
other trading outside of the regular trading session hours”, by amending and
restating clause (a)(iii) thereof in its entirety to read as follows: “(iii) an
Early Closure that the Calculation Agent determines is material,” and by adding
the words “or (iv) a Regulatory Disruption” after clause (a)(iii) as restated
above.

 

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

Regulatory Disruption:    A “Regulatory Disruption” shall occur if Barclays
determines in its reasonable discretion based on advice of counsel that it is
appropriate in light of legal, regulatory or self-regulatory requirements or
related policies or procedures (provided, that such requirements, policies or
procedures relate to legal or regulatory issues and are generally applicable in
similar situations and applied to the Transaction in a non-discriminatory
manner) for Barclays to refrain from all or any part of the market activity in
which it would otherwise engage in connection with the Transaction. Disrupted
Day:    The definition of “Disrupted Day” in Section 6.4 of the Equity
Definitions shall be amended by adding the following sentence after the first
sentence: “A Scheduled Trading Day on which a Related Exchange fails to open
during its regular trading session will not be a Disrupted Day if the
Calculation Agent determines that such failure will not have a material impact
on Barclays’s ability to unwind any hedging transactions related to the
Transaction”. Consequence of Disrupted Days:    Notwithstanding anything to the
contrary in the Equity Definitions, to the extent that a Disrupted Day occurs
during the Trading Period, the Calculation Agent may postpone the Maximum
Maturity Date and/or the Minimum Maturity Date by no more than one Scheduled
Trading Day for each

 

6

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   Disrupted Day. If any Disrupted Day occurs during the Initial Hedge Period or
the Trading Period, the Calculation Agent shall determine whether (i) such
Disrupted Day is a Disrupted Day in whole, in which case the 10b-18 VWAP for
such Disrupted Day shall not be included for purposes of determining the Hedging
Price, if such Disrupted Day occurs during the Initial Hedge Period, or the
Forward Price, if such Disrupted Day occurs during the Trading Period, or (ii)
such Disrupted Day is a Disrupted Day only in part, in which case the 10b-18
VWAP for such Disrupted Day shall be determined by the Calculation Agent based
on Rule 10b-18 eligible transactions in the Shares on such Disrupted Day
effected before the relevant Market Disruption Event (if any) occurred and/or
after the relevant Market Disruption Event (if any) ended, and the Hedging
Price, if such Disrupted Date occurs during the Initial Hedge Period, or the
Forward Price, if such Disrupted Date occurs during the Trading Period, shall be
determined by the Calculation Agent in a commercially reasonable manner on the
basis of the nature and duration of the relevant Market Disruption Event. Any
day on which the Exchange is scheduled to close prior to its normal closing time
shall be considered a Disrupted Day in whole. All determinations by the
Calculation Agent to modify the Hedge Period or the Trading Period or any other
adjustment as specified herein, including as a result of a deemed Disrupted Day
or Days pursuant to Section 5, shall be communicated to Counterparty promptly
following such determination or adjustment, as the case may be. Valuation Time:
   Scheduled Closing Time; provided, that if the principal trading session is
extended, the Calculation Agent shall determine the Valuation Time in its
reasonable discretion. Valuation Date:    The last Scheduled Trading Day of the
Trading Period. Settlement Terms:    Settlement Method Election:    Applicable
with respect to the settlement of the Number of Shares to be Delivered, with
Counterparty as the Electing Party (and, for the avoidance of doubt, not
applicable with respect to the Initial Share Delivery, Interim Share Delivery or
Supplemental Share Delivery); provided, that if Counterparty elects Cash
Settlement in whole or in part, on the date of such election, Counterparty shall
be deemed to have repeated as of such date the representation set forth in
Section 5(p) below and shall represent and warrant that Counterparty is making
such election in good faith and not as part of a plan or scheme to evade
compliance with the federal securities laws.

 

7

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   If Counterparty elects for Physical Settlement of the Transaction in part but
not in whole, in its notice of Settlement Election, Counterparty shall specify
the portion (as a percentage, the “Physical Settlement Percentage”) of the
Transaction in respect of which Physical Settlement shall be applicable and the
portion (as a percentage, which shall be equal to 100%, minus the Physical
Settlement Percentage) of the Transaction in respect of which Cash Settlement
shall be applicable. Following any such election, the provisions opposite the
caption “Physical Settlement” below shall apply to the portion of the
Transaction in respect of which Physical Settlement is applicable (as specified
by Counterparty in its notice of Settlement Election) and the provisions
opposite the caption “Cash Settlement” below shall apply to the portion of the
Transaction in respect of which Cash Settlement is applicable (as specified by
Counterparty in its notice of Settlement Election). For the avoidance of doubt,
Counterparty may elect Physical Settlement in whole (and not in part). Default
Settlement Method:    Physical Settlement. For the avoidance of doubt,
Counterparty shall not be required to make any election pursuant to the terms of
Settlement Method Election above on or prior to the Settlement Method Election
Date, but if Counterparty does not make such election, Physical Settlement shall
be deemed to apply in accordance with the terms hereof. Settlement Method
Election Date:    (A) If the Number of Shares to be Delivered is a positive
number, the first Scheduled Trading Day immediately following the date that
is six months following the earlier of (i) notice of the designation of the
final day of the Trading Period or (ii) the Maximum Maturity Date, and (B) if
the Number of Shares to be Delivered is a negative number, the first Scheduled
Trading Day immediately following the earlier of (i) notice of the designation
of the final day of the Trading Period or (ii) the Maximum Maturity Date.
Physical Settlement:   

If the Number of Shares to be Delivered is a positive number and Counterparty
has not validly elected Cash Settlement pursuant to the provisions opposite the
caption “Settlement Method Election” above on or prior to the Settlement Method
Election Date, Barclays shall deliver to Counterparty on the Settlement Date the
Number of Shares to be Delivered.

 

If the Number of Shares to be Delivered is a negative number and Counterparty
has not validly elected Cash Settlement

 

8

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   pursuant to the provisions opposite the caption “Settlement Method Election”
above on or prior to the Settlement Method Election Date, Counterparty shall
deliver to Barclays the absolute value of such number subject to “Physical
Settlement by Counterparty” and Section 5(h) below. Section 9.11 of the Equity
Definitions is hereby modified by excluding any representations therein relating
to restrictions, obligations, limitations or requirements under applicable
securities laws arising as a result of the fact that Counterparty is the Issuer
of the Shares or the fact that any certificates representing such Shares contain
a restrictive legend. Forward Price:    The amount equal to (i) the arithmetic
average of the 10b-18 VWAPs for all Exchange Business Days in the Trading Period
(subject to “Consequence of Disrupted Days” above) (the “Average 10b-18 VWAP”),
minus (ii) the Discount, as specified in Schedule A; provided, that unless a
Cancellation Event (as defined below) has occurred prior to the first Scheduled
Trading Day immediately following the Fixed Amount Adjustment Date (as specified
in Schedule A), on the first Scheduled Trading Day following the Fixed Amount
Adjustment Date, the 10b-18 VWAP for each Exchange Business Day during the
Trading Period that occurs prior to the Fixed Amount Adjustment Date (subject to
“Consequence of Disrupted Days” above) shall be reduced by the Fixed Amount (as
specified in Schedule A) 10b-18 VWAP:    (A) For any Scheduled Trading Day that
is not a Disrupted Day, the volume-weighted average price at which the Shares
trade as reported in the composite transactions for all United States securities
exchanges on which such Shares are traded (or, if applicable, any successor
Exchange), excluding (i) trades that do not settle regular way, (ii) opening
(regular way) reported trades in the consolidated system on such Scheduled
Trading Day, (iii) trades that occur in the last ten minutes before the
scheduled close of trading on the Exchange on such Scheduled Trading Day and ten
minutes before the scheduled close of the primary trading in the market where
the trade is effected, and (iv) trades on such Scheduled Trading Day that do not
satisfy the requirements of Rule 10b-18(b)(3) of the Securities Exchange Act of
1934, as amended (the “Exchange Act”), as determined in by the Calculation Agent
in accordance with the immediately succeeding sentence, or (B) for any Scheduled
Trading Day that is a Disrupted Day, an amount determined in good faith and in a
commercially reasonable manner by the Calculation Agent as the 10b-18 VWAP
pursuant to “Consequence of

 

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   Disrupted Days” above. For purposes of determining the 10b-18 VWAP on any
Schedule Trading Day as set forth in clause (A) of the immediately preceding
sentence, the Calculation Agent shall refer to the Bloomberg Page “AOL <Equity>
AQR SEC” (or any successor thereto), as published by Bloomberg at 4:15 p.m. New
York time (or 15 minutes following the end of any extension of the regular
trading session); provided, that if, on any Scheduled Trading Day, such price is
not so reported for any reason or the Calculation Agent reasonably determines
that such price is not consistent with the description of such price in clause
(A) of the immediately preceding sentence, the Calculation Agent shall determine
the 10b-18 VWAP in good faith and in a commercially reasonable manner. Number of
Shares to be Delivered:    A number of Shares equal to the difference between
(i) the Share Amount minus (ii) the number of Shares previously delivered
pursuant to Initial Share Delivery, Interim Share Delivery, Supplemental Share
Delivery and any Shares delivered pursuant to Section 5(n); provided, that a
number of Shares less than a whole number shall be rounded upward. Share Amount:
   The quotient of the Prepayment Amount divided by the Forward Price; provided,
that if such quotient is (i) greater than the Maximum Shares, the Share Amount
shall equal the Maximum Shares, and (ii) less than the Minimum Shares, the Share
Amount shall equal the Minimum Shares. Settlement Date:    Unless otherwise
provided under the heading Physical Settlement by Counterparty or Section 5(h),
(a) if the Number of Shares to be Delivered is a positive number, the third
Exchange Business Day immediately following the later of (i) the last Scheduled
Trading Day of the Trading Period and (ii) the date that Counterparty validly
makes (or is deemed to have made) a Settlement Method Election and (b) if the
Number of Shares to be Delivered is a negative number, the third Exchange
Business Day immediately following the last Scheduled Trading Day of the Trading
Period. Minimum Shares:    As specified in Schedule A. Interim Shares:    As
specified in Schedule A. Interim Share Delivery:    Barclays shall deliver to
Counterparty on the Interim Share Delivery Date a number of Shares equal to the
Interim Shares. Such delivery shall be in accordance with Section 9.4 of the
Equity Definitions, with the Interim Share Delivery Date being deemed to be a
“Settlement Date” for purpose of such Section 9.4.

 

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Interim Share Delivery Date:    The third Exchange Business Day immediately
following the Hedge Period End Date. Supplemental Share Delivery    Barclays
shall deliver to Counterparty on the Supplemental Share Delivery Date, the
excess, if any, of (i) the Minimum Shares over (ii) the number of the Initial
Shares plus the number of Interim Shares plus any Shares delivered pursuant to
Section 5(n), reduced by the portion of such number of shares not then held by
Barclays that Barclays determines in its commercially reasonable discretion is
not available in the stock loan market at a cost less than or equal to the
Initial Stock Loan Rate. Such delivery shall be in accordance with Section 9.4
of the Equity Definitions, with the Supplemental Share Delivery Date being
deemed to be a “Settlement Date” for purpose of such Section 9.4. Supplemental
Share Delivery Date:    The fifth Exchange Business Day immediately following
the Fixed Amount Adjustment Date. Maximum Shares:    As specified in Schedule A.
Physical Settlement by Counterparty:   

If the Number of Shares to be Delivered is a negative number and Counterparty
elects or is deemed to elect for Physical Settlement by Counterparty to apply,
Section 5(h) shall apply and Counterparty shall have the right to elect that the
shares delivered (“Physical Settlement Shares”) (and any Make-Whole Shares, as
such term is defined below) shall be (i) fully registered, freely tradable and
free and clear of any lien, charge, claim or other encumbrance (“Free Shares”)
with such election being conditional upon the agreement between Barclays and
Counterparty of reasonable and customary underwriting terms including but not
limited to indemnification and contribution and due diligence (the “Underwriting
Agreement”), or (ii) unregistered Shares (“Restricted Shares”). No fractional
Shares shall be delivered in connection with Physical Settlement by
Counterparty, and the value of any fractional Share otherwise deliverable shall
be rounded up to the nearest whole Share.

 

(a) If Counterparty elects to deliver Free Shares, Counterparty shall deliver a
number of Free Shares equal to the absolute value of the Number of Shares to be
Delivered on the Settlement Date.

 

(b) If Counterparty elects to deliver Restricted Shares, Counterparty shall
deliver to Barclays an initial number of Restricted Shares on the Cash
Settlement Date (as defined in Section 5(g)(i) below) as determined by the
following formula:

 

 s 

 p 

 

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where,

 

s = the absolute value of the Cash Settlement Amount (as defined in Section 5(g)
below); and

 

p = the price per Share equal to the fair market value per Share as determined
by the Calculation Agent in a commercially reasonable manner.

 

On the Cash Settlement Date a balance (the “Settlement Balance”) shall be
established with an initial balance equal to the absolute value of the Cash
Settlement Amount. Following the sale of the Physical Settlement Shares by
Barclays, which shall be completed in a commercially reasonable period of time,
the Settlement Balance shall be reduced by an amount equal to the aggregate
proceeds (net of any brokerage and underwriting commissions and fees, including
any customary private placement fees, all of which are commercially reasonable)
received by Barclays upon the sale of the Physical Settlement Shares. If
following the sale of some but not all of the Physical Settlement Shares the
Settlement Balance has been reduced to zero, no additional Physical Settlement
Shares shall be sold by Barclays and Barclays shall redeliver to Counterparty
any remaining Physical Settlement Shares. If following the sale of the Physical
Settlement Shares the Settlement Balance has not been reduced to zero, then
Counterparty shall (i) promptly deliver to Barclays an additional number of
Restricted Shares (the “Make-Whole Shares”) equal to (x) the Settlement Balance
as of such date divided by (y) the price per Restricted Share equal to the fair
market value per Restricted Share as determined by the Calculation Agent in a
commercially reasonable manner (the “Make-Whole Price”) or (ii) promptly deliver
to Barclays cash in an amount equal to the then remaining Settlement Balance.
This provision shall be applied successively until the Settlement Balance is
reduced to zero.

Cash Settlement:    Applicable if Counterparty has validly elected Cash
Settlement pursuant to the provisions opposite the caption “Settlement Method
Election” above on or prior to the Settlement Method Election Date, in which
case Section 5(g) below shall apply.

 

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Settlement Currency:    USD Adjustments:    Method of Adjustment:    Calculation
Agent Adjustment; provided, that the Equity Definitions shall be amended by (i)
deleting Section 11.2(e)(iii) and (ii) replacing the words “diluting or
concentrative” in Sections 11.2(a), 11.2(c) (in two instances) and 11.2(e)(vii)
with the word “economic” and by adding the words “or the Transaction” after the
words “theoretical value of the relevant Shares” in Section 11.2(a), 11.2(c) and
11.2(e)(vii); provided further, that adjustments may be made to account for
changes in volatility, stock loan rate and liquidity relative to the relevant
Shares. Each of Counterparty and Barclays acknowledges and agrees that the
adoption of any tax asset protection plan or similar agreement disclosed to
Barclays on or prior to the Trade Date (the “Tax Asset Protection Plan”) shall
not constitute a Potential Adjustment Event, it being understood and agreed by
each of Counterparty and Barclays that any subsequent separation of such rights,
the occurrence of any triggering event permitting the exercise of some or all
such rights, or any similar event shall constitute a Potential Adjustment Event.
Extraordinary Events:    New Shares:    Section 12.1(i) of the Equity
Definitions is hereby amended by deleting the text in clause (i) in its entirety
and replacing it with the phrase “publicly quoted, traded or listed on any of
the New York Stock Exchange, the NASDAQ Global Select Market or the NASDAQ
Global Market (or their respective successors) and”. Share-for-Share:    The
definition of “Share-for-Share” set forth in Section 12.1(f) of the Equity
Definitions is hereby amended by the deletion of the parenthetical in clause (i)
thereof. Cancellation and Payment (Calculation Agent Determination):    Sections
12.2(e) and 12.3(d) and the first paragraph of Section 12.7(b) of the Equity
Definitions shall be amended by inserting the words “or Share Forward
Transaction” after the words “Option Transaction” in each place where such words
appear therein. Section 12.7(c) shall be deleted from the Equity Definitions,
and each reference in the Equity Definitions to “Section 12.7(c)” shall be
replaced with a reference to “Section 12.7(b)”. Consequence of Merger Events:   

Share-for-Share:

   Modified Calculation Agent Adjustment.

 

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Share-for-Other:

   Cancellation and Payment (Calculation Agent Determination).

Share-for-Combined:

   Cancellation and Payment (Calculation Agent Determination); provided, that
Barclays may elect Component Adjustment. Consequence of Tender Offers:    Tender
Offer:    Applicable

Share-for-Share:

   Modified Calculation Agent Adjustment.

Share-for-Other:

   Modified Calculation Agent Adjustment.

Share-for-Combined:

   Modified Calculation Agent Adjustment. Modified Calculation Agent Adjustment:
   For greater certainty, the definition of “Modified Calculation Agent
Adjustment” in Sections 12.2 and 12.3 of the Equity Definitions shall be amended
by (i) adding the following italicized language after the stipulated
parenthetical provision: “(including adjustments to account for changes in
volatility, stock loan rate or liquidity relevant to the Shares or to the
Transaction, but excluding adjustments to account for changes in expected
dividends) from the Exchange Business Day immediately preceding the Announcement
Date or the Determination Date, as applicable, to the first Exchange Business
Day immediately following the Merger Date (Section 12.2) or Tender Offer Date
(Section 12.3).” and (ii) deleting the phrase “expected dividends,” from such
stipulated parenthetical provision. Announcement Date:    The definition of
“Announcement Date” in Section 12.1 of the Equity Definitions shall be amended
by (i) replacing the word “leads to the” in the third and the fifth lines
thereof with the words “, if completed, would lead to a”; (ii) replacing the
words “voting shares” in the fifth line thereof with the word “Shares”; (iii)
inserting the words “by any entity” after the word “announcement” in the second
and the fourth lines thereof; (iv) replacing the words “a firm” with the word
“any” in the second and fourth lines thereof; (v) inserting the words “or to
explore the possibility of engaging in” after the words “engage in” in the
second line thereto; and (vi) inserting the words “or to explore the possibility
of purchasing or otherwise obtaining” after the word “obtain” in the fourth line
thereto. Announcement Event:    If an Announcement Event has occurred, the
Calculation Agent shall have the right to determine the economic effect of the
Announcement Event on the theoretical value of the Transaction (including
without limitation any change in

 

14

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   volatility, stock loan rate or liquidity relevant to the Shares or to the
Transaction) (i) at a time that it deems appropriate, from the Announcement Date
to the date of such determination (the “Determination Date”), and (ii) on the
Valuation Date or on a date on which a payment amount is determined pursuant to
Sections 12.7 or 12.8 of the Equity Definitions, from the Exchange Business Day
immediately preceding the Announcement Date or the Determination Date, as
applicable, to the Valuation Date or the date on which a payment amount is
determined pursuant to Sections 12.7 or 12.8 of the Equity Definitions. If any
such economic effect is material, the Calculation Agent will adjust the terms of
the Transaction to reflect such economic effect; provided, that the reference in
Section 12.8(a) of the Equity Definitions to “Extraordinary Event” shall be
replaced for this purpose with a reference to “Announcement Event.”
“Announcement Event” shall mean the occurrence of the Announcement Date of a
Merger Event or Tender Offer or of a potential Merger Event or potential Tender
Offer. Composition of Combined Consideration:    Not Applicable; provided, that
notwithstanding Sections 12.5(b) and 12.1(f) of the Equity Definitions, to the
extent that the composition of the consideration for the relevant Shares
pursuant to a Tender Offer or Merger Event could be elected by an actual holder
of the Shares, the Calculation Agent will, in its sole discretion, determine
such composition. Nationalization, Insolvency or Delisting:    Cancellation and
Payment (Calculation Agent Determination); provided, that in addition to the
provisions of Section 12.6(a)(iii) of the Equity Definitions, it will also
constitute a Delisting if the Exchange is located in the United States and the
Shares are not immediately re-listed, re-traded or re-quoted on any of the New
York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market
(or their respective successors); if the Shares are immediately re-listed,
re-traded or re-quoted on any such exchange or quotation system, such exchange
or quotation system shall thereafter be deemed to be the Exchange. Additional
Disruption Events:   

Change in Law:

   Applicable; provided, that Section 12.9(a)(ii) of the Equity Definitions is
hereby amended by (i) replacing the phrase “the interpretation” in the third
line thereof with the phrase “, or public announcement of, the formal or
informal interpretation”; (ii) replacing the word “Shares” where it appears in
clause (X) thereof with the words “Hedge Position”; and (iii) immediately
following the word

 

15

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“Transaction” in clause (X) thereof, adding the phrase “in the manner
contemplated by Barclays on the Trade Date (unless another commercially
reasonable manner of holding, acquiring or disposing of Shares relating to such
Transaction is reasonably available to Barclays that has not become illegal and
would not result in a material increase in cost to Barclays in performing its
obligations under the Transaction)”; and provided further, that Barclays shall
not terminate the Transaction for a Change in Law referred to in clause (Y) of
Section 12.9(a)(ii) of the Equity Definitions except to the extent it is
exercising its right to terminate transactions as a result of a “Change in Law”
event with respect to other similarly situated customers in respect of similar
transactions.

 

The parties agree that, for the avoidance of doubt, for purposes of Section
12.9(a)(ii) of the Equity Definitions, “any applicable law or regulation”, and
for purposes of Section 5(b)(i) of the Agreement, “any applicable law”, shall
include the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010,
any rules and regulations promulgated thereunder and any similar law or
regulation (collectively, the “Wall Street Act”), and the consequences specified
in Section 12.9(b)(i) of the Equity Definitions and Section 6 of the Agreement
shall apply to any Change in Law or Illegality, as the case may be, arising from
any such act, rule or regulation. The parties hereby agree that Section
12.9(a)(ii)(Y) of the Equity Definitions shall be applicable to any additional
capital charges or other regulatory capital requirements imposed in connection
with the Wall Street Act, if they result in a materially increased cost to
Barclays in performing its obligations under the Transaction. The foregoing
constitutes a specific reservation for purposes of the Wall Street Act.

Failure to Deliver:

   Not Applicable.

Insolvency Filing:

   Applicable; provided, that the definition of “Insolvency Filing” in
Section 12.9 of the Equity Definitions shall be amended by deleting the clause
“provided that such proceedings instituted or petitions presented by creditors
and not consented to by the Issuer shall not be deemed an Insolvency Filing” at
the end of such definition and replacing it with the following: “; or it has
instituted against it a proceeding seeking a judgment of insolvency or
bankruptcy or any other relief under any bankruptcy or insolvency law or other
similar law affecting creditors’ rights, or a petition is presented for its
winding-up or liquidation by a creditor and such proceeding is not dismissed,
discharged, stayed or restrained in each case within 15 days of the institution
or presentation thereof.”

 

16

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   Section 12.9(b)(i) of the Equity Definitions is hereby amended by adding the
following sentence at the end thereof: “If neither party elects to terminate the
Transaction in respect of an Insolvency Filing, the Calculation Agent may adjust
the terms of the Transaction upon the occurrence of such an event pursuant to
Modified Calculation Agent Adjustment (as if such event were a Tender Offer).”

Hedging Disruption:

  

Applicable; provided, that Section 12.9(a)(v) of the Equity Definitions is
hereby modified by inserting the following sentence at the end of such Section:

 

“Such inability described in phrases (A) or (B) above shall not constitute a
“Hedging Disruption” unless such inability will result in continued performance
by the Hedging Party under the Transaction being commercially unreasonable or
commercially impracticable.”

Loss of Stock Borrow:

  

Applicable; provided, that Sections 12.9(a)(vii) and 12.9(b)(iv) of the Equity
Definitions are amended by deleting the words “at a rate equal to or less than
the Maximum Stock Loan Rate” and replacing it with the words “at a Borrow Cost
equal to or less than the Maximum Stock Loan Rate”.

 

For purposes of Section 12.9 of the Equity Definitions, all references to
“Hedging Shares” shall be deemed to be references to Barclays’s short position
in respect of the Transaction.

Borrow Cost:

   The cost to borrow the relevant Shares that would be incurred by a third
party market participant borrowing such Shares, as determined by the Calculation
Agent on the relevant date of determination. Such costs shall include (a) the
spread below FED-FUNDS that would be earned on collateral posted in connection
with such borrowed Shares, net of any costs or fees, and (b) any stock loan
borrow fee that would be payable for such Shares, expressed as fixed rate per
annum.

Maximum Stock Loan Rate:

   200 basis points.

Increased Cost of Stock Borrow:

   Applicable; provided, that (a) Section 12.9(a)(viii) of the Equity
Definitions shall be amended by deleting “rate to borrow Shares” and replacing
it with “Borrow Cost” and (b) Section 12.9(b)(v) of the Equity Definitions shall
be amended by (i) adding the word “or” immediately before the phrase “(B)”, (ii)
deleting subsection (C) in its entirety, (iii) replacing “either party” in the
penultimate sentence with “the

 

17

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   Hedging Party”, and (iv) replacing the word “rate” in clauses (X) and (Y) of
the final sentence therein with the words “Borrow Cost”.

Initial Stock Loan Rate:

   30 basis points, as adjusted by the Calculation Agent to reflect any
subsequent Price Adjustment due to an Increased Cost of Stock Borrow.

FED FUNDS:

   For any day, the rate set forth for such day opposite the caption “Federal
funds”, as such rate is displayed on the page “FedsOpen <Index> <GO>” on the
BLOOMBERG Professional Service, or any successor page; provided, that if no rate
appears for any day on such page, the rate for the immediately preceding day for
which a rate does so appear shall be used for such day.

Hedging Party:

   Barclays or an affiliate of Barclays that is involved in the hedging of the
Transaction for all applicable Additional Disruption Events. Determining Party:
   Barclays for all applicable Extraordinary Events. Acknowledgments:   
Non-Reliance:    Applicable. Agreements and Acknowledgments Regarding Hedging
Activities:    Applicable. Additional Acknowledgments:    Applicable.

3. Mutual Representations, Warranties and Agreements.

In addition to the representations, warranties and agreements in the Agreement
and those contained elsewhere herein, each of Barclays and Counterparty
represents and warrants to, and agrees with, the other party that:

 

  (a) Commodity Exchange Act. It is an “eligible contract participant” within
the meaning of Section 1a(18) of the U.S. Commodity Exchange Act, as amended
(the “CEA”). The Transaction has been subject to individual negotiation by the
parties. The Transaction has not been executed or traded on a “trading facility”
as defined in Section 1a(51) of the CEA;

 

  (b) Securities Act. It is a “qualified institutional buyer” as defined in Rule
144A under the Securities Act of 1933, as amended (the “Securities Act”), or an
“accredited investor” as defined in Section 2(a)(15)(ii) of the Securities Act;
and

 

  (c) ERISA. The assets used in the Transaction (1) are not assets of any “plan”
(as such term is defined in Section 4975 of the U.S. Internal Revenue Code (the
“Code”)) subject to Section 4975 of the Code or any “employee benefit plan” (as
such term is defined in Section 3(3) of the U.S. Employee Retirement Income
Security Act of 1974, as amended (“ERISA”)) subject to Title I of ERISA, and
(2) do not constitute “plan assets” within the meaning of Department of Labor
Regulation 2510.3-101, 29 CFR Section 2510-3-101.

 

18

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4. Representations, Warranties and Agreements of Counterparty.

In addition to the representations and warranties in the Agreement and those
contained elsewhere herein, Counterparty further represents, warrants and agrees
that:

 

  (a) Counterparty’s entry into and performance of the Transaction, including
the repurchase of Shares by Counterparty hereunder, will comply in all material
respects with (i) all laws and regulations applicable to it (including, without
limitation, the Securities Act and the Exchange Act, and the regulations
promulgated thereunder) and (ii) all contractual obligations of Counterparty;

 

  (b) Counterparty shall promptly provide written notice to Barclays upon
obtaining knowledge of the occurrence of any event that would constitute an
Event of Default, a Potential Event of Default, a Potential Adjustment Event, a
Merger Event or any other Extraordinary Event; provided, however, that should
Counterparty be in possession of material non-public information regarding
Counterparty, Counterparty shall not communicate such information to Barclays;

 

  (c) (A) Counterparty is acting for its own account, and it has made its own
independent decisions to enter into the Transaction and as to whether the
Transaction is appropriate or proper for it based upon its own judgment and upon
advice from such advisers as it has deemed necessary, (B) Counterparty is not
relying on any communication (written or oral) of Barclays or any of its
affiliates as investment advice or as a recommendation to enter into the
Transaction (it being understood that information and explanations related to
the terms and conditions of the Transaction shall not be considered investment
advice or a recommendation to enter into the Transaction) and (C) no
communication (written or oral) received from Barclays or any of its affiliates
shall be deemed to be an assurance or guarantee as to the expected results of
the Transaction;

 

  (d) Counterparty has (and shall at all times during the Transaction have) the
capacity and authority to invest directly in the Shares underlying the
Transaction and has not entered into the Transaction with the intent to avoid
any regulatory filings;

 

  (e) Counterparty’s financial condition is such that it has no need for
liquidity with respect to its investment in the Transaction and no need to
dispose of any portion thereof to satisfy any existing or contemplated
undertaking or indebtedness;

 

  (f) Counterparty’s investments in and liabilities in respect of the
Transaction, which it understands are not readily marketable, are not
disproportionate to its net worth, and Counterparty is able to bear any loss in
connection with the Transaction, including the loss of its entire investment in
the Transaction;

 

  (g) Counterparty is not as of the Trade Date, and shall not be after giving
effect to the transactions contemplated hereby, “insolvent” (as such term is
defined in Section 101(32) of the U.S. Bankruptcy Code (Title 11 of the United
States Code) (the “Bankruptcy Code”)) and Counterparty would be able to purchase
the number of Shares underlying with the Transaction in compliance with the laws
of the jurisdiction of Counterparty’s incorporation or organization;

 

19

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  (h) the Transaction, and any repurchase of the Shares by Counterparty in
connection with the Transaction, is pursuant to a publicly announced Share
repurchase program that has been approved by Counterparty’s board of directors
(a copy of such approval to be provided to Barclays upon request), including
approval of consummating such repurchase through a transaction in the nature of
the Transaction, and any such repurchase pursuant to the Transaction has been,
or shall if so required be, publicly disclosed in its periodic filings under the
Exchange Act and its financial statements and notes thereto;

 

  (i) Counterparty understands, agrees and acknowledges that Barclays has no
obligation or intention to register the Transaction under the Securities Act,
any state securities law or other applicable federal securities law;

 

  (j) (A) each of Counterparty’s filings under the Securities Act, the Exchange
Act, or other applicable securities laws that are required to be filed have been
filed and (B) as of the respective dates thereof and as of the Trade Date (or
such other date on which such representation is made), such filings when
considered as a whole (with the more recent such filings deemed to amend
inconsistent statements contained in any earlier such filings) do not contain
any misstatement of a material fact or omit any material fact required to be
stated therein or necessary to make the statements made therein, in the light of
the circumstances under which they were made, not misleading;

 

  (k) Counterparty is not, and after giving effect to the transactions
contemplated hereby will not be, required to register as an “investment company”
as such term is defined in the Investment Company Act of 1940, as amended;

 

  (l) Counterparty understands, agrees and acknowledges that no obligations of
Barclays to it hereunder shall be entitled to the benefit of deposit insurance
and that such obligations shall not be guaranteed by any affiliate of Barclays
or any governmental agency;

 

  (m) without limiting the generality of Section 13.1 of the Equity Definitions,
Counterparty acknowledges that Barclays is not making any representations or
warranties with respect to the treatment of the Transaction under any accounting
standards, including ASC Topic 260, Earnings Per Share, ASC Topic 815,
Derivatives and Hedging, ASC Topic 480, Distinguishing Liabilities from Equity
and ASC 815-40, Derivatives and Hedging – Contracts in Entity’s Own Equity (or
any successor issue statements) or under FASB’s Liabilities & Equity Project;

 

  (n) Counterparty is not entering into the Transaction for the purpose of
(i) creating actual or apparent trading activity in the Shares (or any security
convertible into or exchangeable for the Shares) or (ii) raising or depressing
or otherwise manipulating the price of the Shares (or any security convertible
into or exchangeable for the Shares);

 

  (o) Counterparty has not entered into any obligation that would contractually
limit it from effecting settlement under the Transaction and it agrees not to
enter into any such obligation during the term of the Transaction;

 

20

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  (p) to Counterparty’s knowledge, no state or local (including non-U.S.
jurisdictions, other than the United Kingdom or any jurisdiction therein) law,
rule, regulation or regulatory order applicable to the Shares (not including
laws, rules, regulations or regulatory orders of any jurisdiction that are
applicable solely as a result of Barclays’ and/or its affiliates’ activities,
assets or businesses other than Barclays’ activities in respect of the
Transaction) would give rise to any reporting, consent, registration or other
requirement (including without limitation a requirement to obtain prior approval
from any person or entity) as a result of Barclays or its affiliates owning or
holding (however defined) Shares in connection with the Transaction; and

 

  (q) Counterparty (i) is capable of evaluating investment risks independently,
both in general and with regard to all transactions and investment strategies
involving a security or securities; (ii) will exercise independent judgment in
evaluating the recommendations of any broker-dealer or its associated persons,
unless it has otherwise notified the broker-dealer in writing; and (iii) has
total assets of at least $50 million as of the date hereof.

5. Other Provisions:

 

  (a) Method of Delivery. Whenever delivery of funds or other assets is required
hereunder by or to Counterparty, such delivery shall be effected through Agent.
In addition, all notices, demands and communications of any kind relating to the
Transaction between Barclays and Counterparty shall be transmitted exclusively
through Agent.

 

  (b) Rule 10b-18.

 

  (i) During the Initial Hedge Period (other than purchases made by Barclays as
part of its dynamic adjustment of its hedge of the options embedded in the
Transaction or that Barclays reasonably believes are attributable solely to
Barclays), the Cash Settlement Pricing Period (as defined below), if any, and
the Termination Purchase Period, if any, and with respect to any purchases
executed as a result of an occurrence of an Additional Termination Event,
Barclays agrees to use commercially reasonable efforts to make all purchases of
Shares in a manner that would comply with the limitations set forth in clauses
(b)(1), (b)(2), (b)(3), (b)(4) and (c) of Rule 10b-18 under the Securities
Exchange Act of 1934 (“Rule 10b-18”), as if such rule was applicable to such
purchases.

 

  (ii) Except as disclosed to Barclays in writing prior to the Trade Date,
Counterparty represents and warrants to Barclays that it has not made any
purchases of blocks by or for itself or any of its Affiliated Purchasers
pursuant to the one block purchase per week exception in Rule 10b-18(b)(4) under
the Exchange Act during each of the four calendar weeks preceding such date
(“Rule 10b-18 purchase,” “blocks” and “Affiliated Purchaser”, each as defined in
Rule 10b-18).

 

  (iii)

Counterparty agrees that it (A) will not, on any day during the Initial Hedge
Period, the Trading Period, any Cash Settlement Pricing Period and any
Termination Purchase Period, make, or permit to be made, any public announcement
(as defined in Rule 165(f) under the Securities Act) of any Merger Transaction
or potential Merger Transaction unless such public announcement is made prior to
the opening or after the close of the regular trading session on the Exchange
for the Shares; (B) shall promptly (but in any event prior to the next opening
of the regular trading session on the Exchange) notify Barclays following any
such announcement that such announcement has been made; and

 

21

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  (C) shall promptly (but in any event prior to the next opening of the regular
trading session on the Exchange) provide Barclays with written notice specifying
(i) Counterparty’s average daily Rule 10b-18 Purchases (as defined in Rule
10b-18) during the three full calendar months immediately preceding the
announcement date that were not effected through Barclays or its affiliates and
(ii) the number of Shares purchased pursuant to the proviso in Rule 10b-18(b)(4)
under the Exchange Act for the three full calendar months preceding the
announcement date. Such written notice shall be deemed to be a certification by
Counterparty to Barclays that such information is true and correct. In addition,
Counterparty shall promptly notify Barclays of the earlier to occur of the
completion of such transaction and the completion of the vote by target
shareholders. “Merger Transaction” means any merger, acquisition or similar
transaction involving a recapitalization as contemplated by Rule
10b-18(a)(13)(iv) under the Exchange Act.

 

  (c) Rule 10b5-1. It is the intent of the parties that the Transaction comply
with the requirements of Rule 10b5-1(c)(1)(i)(B) of the Exchange Act (“Rule
10b5-1”), and the parties agree that this Confirmation shall be interpreted to
comply with the requirements of Rule 10b5-1(c), and Counterparty shall take no
action that results in the Transaction not so complying with such requirements.
Without limiting the generality of the preceding sentence, Counterparty
acknowledges and agrees that (A) Counterparty does not have, and shall not
attempt to exercise, any influence over how, when or whether Barclays effects
any purchases in connection with the Transaction, (B) during the Initial Hedge
Period, the Trading Period, any Cash Settlement Pricing Period and any
Termination Purchase Period, neither Counterparty nor its officers or employees
shall, directly or indirectly, communicate any information regarding
Counterparty or the Shares to any employee of Barclays or its affiliates who is
directly involved with the hedging of and trading with respect to the
Transaction, it being agreed that the Permissible Contacts (as specified in
Schedule A) are not directly involved with such activities, (C) Counterparty is
entering into the Transaction in good faith and not as part of a plan or scheme
to evade compliance with federal securities laws including, without limitation,
Rule 10b-5 and (D) Counterparty will not alter or deviate from this Confirmation
or enter into or alter a corresponding hedging transaction with respect to the
Shares. Counterparty also acknowledges and agrees that any amendment,
modification, waiver or termination of this Confirmation must be effected in
accordance with the requirements for the amendment or termination of a “plan” as
defined in Rule 10b5-1(c). Without limiting the generality of the foregoing, any
such amendment, modification, waiver or termination shall be made in good faith
and not as part of a plan or scheme to evade the prohibitions of Rule 10b-5 and
no such amendment, modification or waiver shall be made at any time at which
Counterparty or any officer or director of Counterparty is aware of any material
non-public information regarding Counterparty or the Shares.

 

  (d)

Company Purchases. Without the prior written consent of Barclays and except for
purchases that are not solicited by or on behalf of Counterparty, its affiliates
or affiliated purchasers (each as defined in Rule 10b-18 of the Exchange Act) or
purchases executed by Barclays or an Affiliate of Barclays, Counterparty shall
not purchase, and shall cause its affiliates or affiliated purchasers not to
directly or indirectly (including, without limitation, by means of any
cash-settled or other derivative instrument) purchase, offer to purchase, place
any bid or limit order that would effect a purchase of, or commence any tender
offer relating to, any Shares (or an equivalent interest, including a unit of
beneficial interest in a trust or limited partnership or a

 

22

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  depository share) or any security convertible into or exchangeable or
exercisable for Shares during the Initial Hedge Period, the Trading Period, any
Cash Settlement Pricing Period and any Termination Purchase Period; provided,
that this Section 5(d) shall not (i) limit Counterparty’s ability, pursuant to
its employee incentive plans, to re-acquire Shares in connection with the
related equity transactions; (ii) limit Counterparty’s ability to withhold
shares to cover exercise price and/or tax liabilities associated with such
equity transactions; or (iii) limit Counterparty’s ability to grant stock and
options to “affiliated purchasers” (as defined in Rule 10b-18) or the ability of
such affiliated purchasers to acquire such stock or options, in connection with
the Counterparty’s compensatory plans for directors, officers and employees or
any agreements with respect to the compensation of directors, officers or
employees of any entities that are acquisition targets of Issuer, so long as, in
the case of clause (i), (ii) or (iii) of this sentence, any such re-acquisition,
withholding, grant, acquisition or other purchase does not constitute a “Rule
10b-18 Purchase” (as defined in Rule 10b-18).

 

  (e) Regulation M. Counterparty is not on the date hereof, engaged in a
distribution, as such term is used in Regulation M under the Exchange Act, of
any securities of Counterparty, other than a distribution meeting the
requirements of the exception set forth in Section 102(b)(7) of Regulation M
under the Exchange Act. Counterparty shall not, until the later of the
Settlement Date or the final Cash Settlement Date (as defined below), if
applicable, engage in any such distribution.

 

  (f) Additional Termination Event.

 

  (i) Notwithstanding any other provision hereof, an “Additional Termination
Event” shall occur and Counterparty shall be the sole Affected Party pursuant to
such Additional Termination Event if on any day occurring after the Trade Date
and on or prior to the last Scheduled Trading Day in the Trading Period
(1) Counterparty declares a distribution, issue or dividend to existing holders
of the Shares with an ex-dividend date on or prior to the Valuation Date of
(i) a cash distribution, issue or dividend (other than a cash dividend in an
amount per Share equal to the Fixed Amount (as specified in Schedule A)),
(ii) securities or share capital of another issuer acquired or owned (directly
or indirectly) by Counterparty as a result of a spin-off or other similar
transaction or (iii) any other type of securities (other than Shares, which may
constitute a Potential Adjustment Event), rights or warrants or other assets, in
any case for payment (cash or other consideration) at less than the prevailing
market price as determined by Barclays (not including the adoption of the Tax
Asset Protection Plan, it being understood and agreed by the parties that any
subsequent separation of the rights thereunder, the occurrence of any triggering
event permitting the exercise of some or all such rights, or any similar event
may constitute an “Additional Termination Event”); or (2) Counterparty declares
a cash distribution, issue or dividend to existing holders of the Shares with an
ex-dividend date on or prior to the Valuation Date that is different than the
Fixed Amount Adjustment Date specified in Schedule A.

 

  (ii)

Notwithstanding any other provision hereof, if, prior to the first Exchange
Business Day immediately following the Fixed Amount Adjustment Date (as
specified in Schedule A), any event occurs that requires (subject to
Section 5(o) below) the payment of any amount in connection with the Transaction
pursuant to Sections 12.2, 12.3, 12.6, 12.7 or 12.9 of the Equity Definitions or
Section 6(d)(ii) of the Agreement (any such transaction or

 

23

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  event, including an Additional Termination Event pursuant to Section 5(f)(i),
a “Cancellation Event”), all references in the Confirmation to the Adjusted
Hedging Price shall be deemed to be references to the Hedging Price, which
means, for the avoidance of doubt, that no adjustments shall be made in this
Confirmation to reflect the Fixed Amount.

 

  (g) Cash Settlement. (i) If Cash Settlement applies and the Number of Shares
to be Delivered is a negative number (i.e., the Counterparty owes value to
Barclays), Counterparty may elect to pay to Barclays on each Cash Settlement
Date an amount in cash equal to the Cash Settlement Amount for such Cash
Settlement Date; provided, that Counterparty on the date of such election
provides the representation contained in Section 5(p) below. “Cash Settlement
Date” shall mean the third Currency Business Day immediately following each
Exchange Business Day on which Barclays delivers to Counterparty a Hedge
Repurchase Notice. For purposes of this Section 5(g)(i), “Cash Settlement
Amount” shall mean, with respect to each Cash Settlement Date, the product of
(i) the number of Hedge Repurchase Shares, as specified in the applicable Hedge
Repurchase Notice, multiplied by (ii) the volume weighted average price at which
Barclays purchased such Shares on the Scheduled Trading Day related to such Cash
Settlement Date, which purchases shall be conducted by Barclays in a
commercially reasonable manner. “Cash Settlement Pricing Period” shall mean the
period commencing on the third Scheduled Trading Day immediately following the
last Scheduled Trading Day of the Trading Period and ending on the Exchange
Business Day on which Barclays completes the purchase of a number of shares
equal to the absolute value of the Number of Shares to be Delivered (each such
Share, a “Hedge Repurchase Share”). With respect to each Scheduled Trading Day
during the Cash Settlement Pricing Period, Barclays shall deliver a notice (each
such notice, a “Hedge Repurchase Notice”) to the Counterparty of the number of
Hedge Repurchase Shares purchased by Barclays on such Scheduled Trading Day.

(ii) If Cash Settlement applies and the Number of Shares to be Delivered is a
positive number (i.e., Barclays owes value to the Counterparty), Barclays shall
deliver to the Counterparty the Cash Settlement Amount on the third Exchange
Business Day immediately following the date on which Barclays generates
aggregate net cash proceeds equal to the Cash Settlement Amount pursuant to the
provisions set forth below. For purposes of this Section 5(g)(ii) “Cash
Settlement Amount” shall mean the actual price that Barclays receives for
selling the Number of Shares to be Delivered (net of any brokerage or other
commercially reasonable commissions), which sales shall be conducted by Barclays
in a commercially reasonable manner beginning on the second Exchange Business
Day immediately following the later of (i) the third Scheduled Trading Day
immediately following the last Scheduled Trading Day of the Trading Period and
(ii) the date on which Counterparty validly elects Cash Settlement pursuant to
the provisions opposite the caption “Settlement Method Election” above. In
connection with any Cash Settlement for which the Number of Shares to be
Delivered is positive, Counterparty shall, at its election, either (X) in order
to allow Barclays to sell the Number of Shares to be Delivered in a registered
offering, make available to Barclays an effective registration statement under
the Securities Act and (A) enter into an agreement, in form and substance
reasonably satisfactory to Barclays, substantially in the form of an
underwriting agreement for a registered offering, (B) use its reasonable best
efforts to provide accountant’s “comfort” letters customary in form for
registered offerings of equity securities, (C) provide disclosure opinions of
nationally

 

24

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recognized outside counsel to Counterparty reasonably acceptable to Barclays,
(D) provide other customary opinions, certificates and closing documents
customary in form for registered offerings of equity securities and (E) afford
Barclays a reasonable opportunity to conduct a due diligence investigation with
respect to Counterparty customary in scope for underwritten offerings of equity
securities (provided, however, that if Barclays, in its sole reasonable
discretion, is not satisfied with access to due diligence materials, the results
of its due diligence investigation, or the procedures and documentation for the
registered offering referred to above, then clause (Y) of this Section 5(g)(ii)
shall apply at the election of Counterparty); or (Y) in order to allow Barclays
to sell the Number of Shares to be Delivered in a private placement, enter into
and comply with a private placement agreement substantially similar to private
placement purchase agreements customary for private placements of equity
securities, in form and substance satisfactory to Barclays.

 

  (h) Share Delivery Conditions. If Physical Settlement by Counterparty applies,
Counterparty may deliver Free Shares in respect of its settlement obligations
only if the following conditions have been satisfied (the “Registration
Provisions”): (i) a registration statement (“Registration Statement”) (which may
be a shelf registration statement filed pursuant to Rule 415 under the
Securities Act) covering public resale by Barclays (or an affiliate thereof) of
any Shares delivered by Counterparty to Barclays under such Physical Settlement
by Counterparty (“Settlement Shares”) shall have been filed with, and declared
effective by, the Securities and Exchange Commission no later than one Scheduled
Trading Day prior to the Settlement Date and such registration statement
continues to be in effect at all times to and including the date that Barclays
or its affiliate(s) has fully and finally sold any Settlement Shares hereunder,
(ii) the contents of such registration statement and of any prospectus
supplement to the prospectus included therein (including, without limitation,
any sections describing the plan of distribution) shall be reasonably
satisfactory to Barclays, (iii) Barclays shall have been afforded a reasonable
opportunity to conduct a due diligence investigation with respect to
Counterparty customary in scope for transactions pursuant to which Barclays (or
an affiliate thereof) acts as an underwriter of equity securities of similar
size and the results of such investigation are satisfactory to Barclays, in its
discretion, and (iv) as of the Settlement Date, an agreement between Barclays
and Counterparty of reasonable and customary underwriting terms including but
not limited to indemnification and contribution and due diligence (the
“Underwriting Agreement”) shall have been entered into with Barclays in
connection with the public resale of the Settlement Shares by Barclays (or an
affiliate thereof). Notwithstanding the foregoing, if Counterparty elects for
Physical Settlement by Counterparty to apply and Counterparty delivers
Restricted Shares in respect of its settlement obligation, Barclays shall
attempt to sell the Settlement Shares, if any, pursuant to an exemption from
registration under the Securities Act by soliciting bids from interested parties
in a manner exempt from registration.

Counterparty agrees that any Registration Statement it files for purposes of
Physical Settlement by Counterparty pursuant to the provisions above, at the
time the same becomes effective, will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein to
make the statements therein not misleading. Counterparty represents that any
prospectus delivered to Barclays in connection with sales made under the
Registration Statement (as such prospectus may be supplemented from time to
time) will not include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.

 

25

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For the avoidance of doubt, nothing in this clause (h) shall prevent or impact
the ability of the Counterparty to deliver Restricted Shares as set forth in
clause (b) under “Physical Settlement by Counterparty” above.

 

  (i) Transfer or Assignment. Counterparty may not transfer or assign any of its
rights or obligations under the Transaction or the Agreement without the prior
written consent of Barclays. Notwithstanding any provision of the Agreement to
the contrary, Barclays may, subject to applicable law, freely transfer and
assign all of its rights and obligations under the Transaction and the Agreement
without the consent of Counterparty to any affiliate of Barclays whose
obligations hereunder are guaranteed by Barclays, or to any third party with a
rating (or whose guarantor has a rating) for its long term, unsecured and
unsubordinated indebtedness of A- or better by Standard & Poor’s Ratings
Services or its successor (“S&P”), or A3 or better by Moody’s Investors Service,
Inc. or its successor (“Moody’s”) or, if either S&P or Moody’s ceases to rate
such debt, at least an equivalent rating or better by a substitute rating agency
mutually agreed by Counterparty and Barclays; provided, that Counterparty will
not, as a result of such transfer, be required under the Agreement or this
Confirmation to (i) pay to the transferee or assignee an amount greater than the
amount that it would have been required to pay to Barclays in the absence of
such transfer or assignment or (ii) receive from the transferee or assignee an
amount less than the amount that Counterparty would have received from Barclays
in the absence of such transfer or assignment, in each case based on the
circumstances in effect on the date of such transfer.

 

  (j)

Excess Ownership. If at any time (1) the Equity Percentage exceeds 9.0% or
(2) Barclays, Barclays Group (as defined below) or any person whose ownership
position would be aggregated with that of Barclays or Barclays Group (Barclays,
Barclays Group or any such person, a “Barclays Person”) under any law, rule,
regulation, regulatory order or organizational documents or contracts of
Counterparty that are, in each case, applicable to ownership of Shares (other
than Section 13 of the Exchange Act, “Applicable Limitations”), owns,
beneficially owns, constructively owns, controls, holds the power to vote or
otherwise meets a relevant definition of ownership in excess of a number of
Shares equal to (x) the minimum number of Shares that could reasonably be
expected to give rise to reporting or registration obligations or other
requirements (including obtaining prior approval from any person or entity) of a
Barclays Person, or could reasonably be expected have a material adverse effect
on a Barclays Person as a result of an action or actions taken by Counterparty,
under any Applicable Limitation, as determined by Barclays, in its reasonable
discretion, minus (y) 1.0% of the number of Shares outstanding on the date of
determination (either such condition described in clause (1) or (2), an “Excess
Ownership Position”), Barclays may designate any Scheduled Trading Day as an
Early Termination Date with respect to a portion (the “Terminated Portion”) of
the Transaction, such that an Excess Ownership Position no longer exists. In the
event that Barclays so designates an Early Termination Date with respect to a
portion of the Transaction, a payment shall be made pursuant to Section 6 of the
Agreement as if (x) an Early Termination Date had been designated in respect of
a Transaction having terms identical to the Transaction and a Number of Shares
equal to the Terminated Portion, (y) Counterparty shall be the sole Affected
Party with respect to such partial termination and (z) such Transaction shall be
the only Terminated Transaction (and, for the avoidance of doubt, the provisions
of Section 5(o) shall apply to any amount that is payable by Barclays to
Counterparty pursuant to this sentence). The “Equity Percentage” as of any day
is the fraction, expressed as a percentage, (A) the numerator

 

26

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  of which is the number of Shares that Barclays and any of its affiliates
subject to aggregation with Barclays, for purposes of the “beneficial ownership”
test under Section 13 of the Exchange Act, and all persons who may form a
“group” (within the meaning of Rule 13d-5(b)(1) under the Exchange Act) with
Barclays (“Barclays Group”), beneficially own (within the meaning of Section 13
of the Exchange Act) on such day and (B) the denominator of which is the number
of Shares outstanding on such day.

Barclays shall use commercially reasonable efforts to avoid the occurrence of an
Excess Ownership Position, subject to compliance with all applicable legal,
regulatory or self-regulatory requirements or related policies or procedures
(provided, that such requirements, policies or procedures relate to legal or
regulatory issues and are generally applicable in similar situations and applied
to the Transaction in a non-discriminatory manner).

Notwithstanding any other provision in this Confirmation to the contrary
requiring or allowing Barclays to purchase, sell, receive or deliver any Shares
or other securities to or from Counterparty, Barclays may designate any of its
affiliates to purchase, sell, receive or deliver such Shares or other securities
and otherwise to perform Barclays’ obligations in respect of the Transaction and
any such designee may assume such obligations. Barclays shall be discharged of
its obligations to Counterparty to the extent of any such performance.

 

  (k) Role of Agent. Each of Barclays and Counterparty acknowledges to and
agrees with the other party hereto and to and with the Agent that (i) the Agent
is acting as agent for Barclays under the Transaction pursuant to instructions
from such party, (ii) the Agent is not a principal or party to the Transaction,
and may transfer its rights and obligations with respect to the Transaction,
(iii) the Agent shall have no responsibility, obligation or liability, by way of
issuance, guaranty, endorsement or otherwise in any manner with respect to the
performance of either party under the Transaction, (iv) Barclays and the Agent
have not given, and Counterparty is not relying (for purposes of making any
investment decision or otherwise) upon, any statements, opinions or
representations (whether written or oral) of Barclays or the Agent, other than
the representations expressly set forth in this Confirmation or the Agreement,
and (v) each party agrees to proceed solely against the other party, and not the
Agent, to collect or recover any money or securities owed to it in connection
with the Transaction. Each party hereto acknowledges and agrees that the Agent
is an intended third party beneficiary hereunder. Counterparty acknowledges that
the Agent is an affiliate of Barclays. Counterparty acknowledges that the Agent
is an affiliate of Barclays. Barclays will be acting for its own account in
respect of this Confirmation and the Transaction contemplated hereunder.

 

  (l) Regulatory Provisions. The time of dealing for the Transaction will be
confirmed by Barclays upon written request by Counterparty. The Agent will
furnish to Counterparty upon written request a statement as to the source and
amount of any remuneration received or to be received by the Agent in connection
with the Transaction.

 

  (m)

Netting and Setoff. Obligations under the Transaction shall not be netted,
recouped or set off (including pursuant to Section 6 of the Agreement) against
any other obligations of the parties, whether arising under the Agreement, this
Confirmation, under any other agreement between the parties hereto, by operation
of law or otherwise, and no other obligations of the parties shall be netted,
recouped or set off (including pursuant to Section 6 of the Agreement) against
obligations under the Transaction, whether arising under the Agreement, this
Confirmation,

 

27

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  under any other agreement between the parties hereto, by operation of law or
otherwise, and each party hereby waives any such right of setoff, netting or
recoupment; provided, that both parties agree that subparagraph (ii) of
Section 2(c) of the Agreement shall apply to the Transaction, except that upon
the occurrence of an Event of Default or Termination Event with respect to a
party who is the Defaulting Party or the Affected Party (“X”), the other party
(“Y”) will have the right (but not be obliged) without prior notice to X or any
other person to set-off or apply any obligation of X under the Transaction owed
to Y (or any Affiliate of Y) (whether or not matured or contingent and whether
or not arising under the Agreement, and regardless of the currency, place of
payment or booking office of the obligation) against any obligation of Y (or any
Affiliate of Y) under an Equity Contract owed to X (whether or not matured or
contingent and whether or not arising under the Agreement, and regardless of the
currency, place of payment or booking office of the obligation). Y will give
notice to the other party of any set-off effected under this Section 5(m).
“Equity Contract” shall mean for purposes of this Section 5(m).any transaction
relating to Shares between X and Y (or any Affiliate of Y) that qualifies as
‘equity’ under applicable accounting rules. Amounts (or the relevant portion of
such amounts) subject to set-off may be converted by Y into the Termination
Currency at the rate of exchange at which such party would be able, acting in a
reasonable manner and in good faith, to purchase the relevant amount of such
currency. If any obligation is unascertained, Y may in good faith estimate that
obligation and set-off in respect of the estimate, subject to the relevant party
accounting to the other when the obligation is ascertained. Nothing in this
Section 5(m) shall be effective to create a charge or other security interest.

 

  (n) Staggered Settlement. Barclays may, by notice to Counterparty on or prior
to any Settlement Date (a “Nominal Settlement Date”), elect to deliver any
Shares deliverable on such Nominal Settlement Date on two or more dates (each, a
“Staggered Settlement Date”) or at two or more times on the Nominal Settlement
Date as follows: (i) in such notice, Barclays will specify to Counterparty the
related Staggered Settlement Dates (each of which will be on or prior to such
Nominal Settlement Date) or delivery times and how it will allocate the Shares
it is required to deliver under the applicable settlement method above among the
Staggered Settlement Dates or delivery times; and (ii) the aggregate number of
Shares that Barclays will deliver to Counterparty hereunder on all such
Staggered Settlement Dates and delivery times will equal the number of Shares
that Barclays would otherwise be required to deliver on such Nominal Settlement
Date.

 

  (o)

Alternative Calculations and Counterparty Payment on Early Termination and on
Certain Extraordinary Events. If Barclays owes Counterparty or if Counterparty
owes Barclays any amount in connection with the Transaction (i) pursuant to
Sections 12.2, 12.3, 12.6, 12.7 or 12.9 of the Equity Definitions or
(ii) pursuant to Section 6(d)(ii) of the Agreement (a “Payment Obligation”), any
such Payment Obligation shall be satisfied by delivery of Termination Delivery
Units (as defined below) unless Counterparty gives irrevocable telephonic notice
to Barclays, confirmed in writing within one Scheduled Trading Day, no later
than noon New York time on the Early Termination Date or other date the
Transaction is cancelled or terminated, that Barclays will be required to
satisfy, or Counterparty will satisfy, as the case may be, such Payment
Obligation in cash (“Notice of Barclays/Counterparty Termination Cash Payment”);
provided, that if Counterparty elects to require Barclays to satisfy its Payment
Obligation in cash, Barclays shall have the right, in its sole discretion, to
elect to satisfy its Payment Obligation by delivery of Termination Delivery
Units, notwithstanding Counterparty’s

 

28

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  election to the contrary; provided further, that Barclays shall have the right
to deem that Counterparty has given a Notice of Barclays/Counterparty
Termination Cash Payment in the event of (i) an Insolvency, a Nationalization or
a Merger Event, in each case, in which the consideration or proceeds to be paid
to holders of Shares consists solely of cash or (ii) an Event of Default in
which Counterparty is the Defaulting Party or a Termination Event in which
Counterparty is the Affected Party, which Event of Default or Termination Event
resulted from an event or events within Counterparty’s control. If Counterparty
has not given (nor deemed to have given) a Notice of Barclays/Counterparty
Termination Cash Payment, then within a commercially reasonable period of time
following the relevant Early Termination Date or other relevant date on which
the Transaction is cancelled or terminated, as the case may be, Barclays shall
deliver to Counterparty or Counterparty shall deliver to Barclays, as the case
may be, a number of Termination Delivery Units having a fair market value equal
to the amount of such Payment Obligation (such number of Termination Delivery
Units to be delivered to be determined by the Calculation Agent as the number of
whole Termination Delivery Units that could be sold or purchased, as the case
may be, over a commercially reasonable period of time to generate cash proceeds
or with an amount of cash, as the case may be, equal to such Payment Obligation
(net of any brokerage fees (in the case of a delivery by Barclays to
Counterparty) or underwriting commissions and fees, including any customary
private placement fees (in the case of a delivery by Counterparty to Barclays),
all of which are commercially reasonable)). For the avoidance of doubt, if
Counterparty has given (or is deemed to have given) a Notice of
Barclays/Counterparty Termination Cash Payment, the provisions set forth in
Sections 12.2, 12.3, 12.6, 12.7 or 12.9 of the Equity Definitions or
Section 6(d)(ii) of the Agreement, as the case may be, shall apply in lieu of
the provisions set forth in this Section 5(o). If the provisions set forth in
this Section 5(o) are applicable, the provisions of Sections 9.8, 9.9, 9.10,
9.11 (modified as described above) and 9.12 of the Equity Definitions shall be
applicable, except that all references to “Shares” shall be read as references
to “Termination Delivery Units.” “Termination Delivery Units” means in the case
of a Termination Event, Event of Default or Delisting, one Share or, in the case
of Nationalization, Insolvency, Tender Offer or Merger Event, a unit consisting
of the number or amount of each type of property received by a holder of one
Share (without consideration of any requirement to pay cash or other
consideration in lieu of fractional amounts of any securities) in such
Nationalization, Insolvency, Tender Offer or Merger Event; provided, that if
such Nationalization, Insolvency, Tender Offer or Merger Event involves a choice
of consideration to be received by holders, such holder shall be deemed to have
elected to receive the maximum possible amount of cash.

 

  (p) No Material Non-Public Information. On the Trade Date and each day
pursuant to the terms hereof on which this representation is repeated or deemed
repeated, Counterparty represents and warrants to Barclays that none of
Counterparty and its officers and directors is aware of any material non-public
information concerning Counterparty or the Shares. “Material” information for
these purposes is any information to which an investor would reasonably attach
importance in reaching a decision to buy, sell or hold Shares.

 

  (q)

Maximum Number of Shares. The number of Shares that may be issued under any
settlement by Counterparty pursuant to this Confirmation, the Definitions or the
Agreement will be limited to the total Shares authorized but not outstanding,
reduced by the total amount of contingently issuable Shares. In any event, the
number of Shares issuable by Counterparty at settlement shall not exceed
10,000,000 Shares. If the number of Shares to be issued at settlement by
Counterparty

 

29

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  exceeds the limit in the first sentence of this provision, Counterparty will
use its commercially reasonable best efforts to obtain all necessary approvals
to issue additional Shares to enable it to satisfy all obligations hereunder.

 

  (r) Tax Disclosure. Notwithstanding anything to the contrary herein, in the
Equity Definitions or in the Agreement, and notwithstanding any express or
implied claims of exclusivity or proprietary rights, the parties (and each of
their employees, representatives or other agents) are authorized to disclose to
any and all persons, beginning immediately upon commencement of their
discussions and without limitation of any kind, the tax treatment and tax
structure of the Transaction, and all materials of any kind (including opinions
or other tax analyses) that are provided by either party to the other relating
to such tax treatment and tax structure.

 

  (s) Status of Claims in Bankruptcy. Barclays acknowledges and agrees that this
Confirmation is not intended to convey to Barclays rights with respect to the
Transaction that are senior to the claims of common stockholders of Counterparty
in any U.S. bankruptcy proceedings of Counterparty; provided, that nothing
herein shall limit or shall be deemed to limit Barclays’ right to pursue
remedies in the event of a breach by Counterparty of its obligations and
agreements with respect to the Transaction; provided further, that nothing in
this Section 5(s) shall limit or shall be deemed to limit Barclays’ rights in
respect of any transactions other than the Transaction.

 

  (t) No Collateral. Notwithstanding any provision of this Confirmation, the
Agreement, Equity Definitions or any other agreement between the parties to the
contrary, the obligations of Counterparty under the Transaction are not secured
by any collateral.

 

  (u) Securities Contract. The parties hereto agree and acknowledge that
Barclays is one or more of a “financial institution” and “financial participant”
within the meaning of Sections 101(22) and 101(22A) of the Bankruptcy Code. The
parties hereto further agree and acknowledge (A) that this Confirmation is a
“securities contract,” as such term is defined in Section 741(7) of the
Bankruptcy Code, with respect to which each payment and delivery hereunder or in
connection herewith is a “termination value,” “payment amount” or “other
transfer obligation” within the meaning of Section 362 of the Bankruptcy Code
and a “settlement payment” (as such term is defined in Section 741(8) of the
Bankruptcy Code) or a “transfer” within the meaning of Section 546 of the
Bankruptcy Code and (B) that Barclays is entitled to the protections afforded
by, among other sections, Section 362(b)(6), 362(b)(27), 362(o), 546(e), 546(j),
548(d)(2), 555 and 561 of the Bankruptcy Code.

 

  (v) Payments on Early Termination. The parties hereto agree that for the
Transaction, for the purposes of Section 6(e) of the Agreement, Loss and Second
Method will apply. The Termination Currency shall be USD. Notwithstanding
anything to the contrary herein, in no event will any adjustment be made or
consideration be paid as a result of an Extraordinary Dividend declared by
Counterparty. “Extraordinary Dividend” for these purposes shall mean any
dividend or distribution on the Shares.

 

  (w)

Binding Contract. This Confirmation, as supplemented by the Confirmation Pricing
Supplement, is a “qualified financial contract”, as such term is defined in
Section 5-701(b)(2) of the General Obligations Law of New York (the “General
Obligations Law”); (ii) the Confirmation Pricing Supplement constitutes a
“confirmation in writing sufficient to indicate that a contract has been made
between the parties” hereto, as set forth in Section 5-701(b)(3)(b)

 

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  of the General Obligations Law; and (iii) this Confirmation constitutes a
prior “written contract” as set forth in Section 5-701(b)(1)(b) of the General
Obligations Law, and each party hereto intends and agrees to be bound by this
Confirmation, as supplemented by the Confirmation Pricing Supplement. Barclays
and Counterparty further agree and acknowledge that this Confirmation, as
supplemented by the Confirmation Pricing Supplement, constitutes a contract “for
the sale or purchase of a security”, as set forth in Section 8-113 of the
Uniform Commercial Code of New York.

 

  (x) Right to Extend. Barclays may postpone any potential Valuation Date or
postpone or extend any other date of valuation or delivery with respect to some
or all of the relevant Shares, if Barclays determines, in its reasonable
discretion, that such postponement or extension is reasonably necessary or
appropriate to preserve, based on advice of counsel, Barclays’ hedging or hedge
unwind activity hereunder in light of existing liquidity conditions (including
but not limited to the liquidity in the stock borrow market) or to enable
Barclays to effect purchases or sale of Shares in connection with its hedging,
hedge unwind or settlement activity hereunder in a manner that would, if
Barclays were Issuer or an affiliated purchaser of Issuer, be in compliance with
applicable legal, regulatory or self-regulatory requirements, or with related
policies and procedures applicable to Barclays; provided, that such
requirements, policies or procedures relate to legal or regulatory issues and
are generally applicable in similar situations and applied to the Transaction in
a non-discriminatory manner.

 

  (y) Governing Law. The law of the State of New York (without reference to
choice of law doctrine).

 

  (y) Waiver of Jury Trial. Each party waives, to the fullest extent permitted
by applicable law, any right it may have to a trial by jury in respect of any
suit, action or proceeding relating to the Transaction. Each party (i) certifies
that no representative, agent or attorney of the other party has represented,
expressly or otherwise, that such other party would not, in the event of such a
suit, action or proceeding, seek to enforce the foregoing waiver and
(ii) acknowledges that it and the other party have been induced to enter into
the Transaction, as applicable, by, among other things, the mutual waivers and
certifications provided herein.

 

  (z) Part 2(b) of the ISDA Schedule – Payee Representation:

For the purpose of Section 3(f) of this Agreement, Counterparty makes the
following representation to Barclays:

Counterparty is a corporation established under the laws of the State of
Delaware and is a U.S. person (as that term is defined in Section 7701(a)(30) of
the Code).

For the purpose of Section 3(f) of this Agreement, Barclays makes the following
representation to Counterparty:

(A) Each payment received or to be received by it in connection with this
Agreement is effectively connected with its conduct of a trade or business
within the United States; and

 

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(B) It is a “foreign person” (as that term is used in Section 1.6041-4(a)(4) of
the United States Treasury Regulations) for United States federal income tax
purposes.

 

  (aa) Part 3(a) of the ISDA Schedule – Tax Forms:

Party Required to Deliver Document

 

          

Form/Document/Certificate

    

Date by which to be Delivered

  Counterparty      A complete and duly executed United States Internal Revenue
Service Form W-9 (or successor thereto).      (i) Upon execution and delivery of
this Agreement; (ii) promptly upon reasonable demand by Barclays; and (iii)
promptly upon learning that any such Form previously provided by Counterparty
has become obsolete or incorrect.   Barclays      A complete and duly executed
United States Internal Revenue Service Form W-8ECI (or successor thereto).     
(i) Upon execution and delivery of this Agreement; and (ii) promptly upon
learning that any such Form previously provided by Barclays has become obsolete
or incorrect.

6. Account Details:

 

  (a) Account for payments to Counterparty:

AOL Inc.

ABA: [****]

Acct: AOL Inc.

Acct No.: [****]

Account for delivery of Shares to Counterparty: To Be Provided.

 

  (b) Account for payments to Barclays:

Bank: Barclays Bank plc NY

ABA# [****]

BIC: [****]

Acct: [****]

Beneficiary: [****]

Ref: [****]

 

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7. Offices:

The Office of Counterparty for the Transaction is: Inapplicable, Counterparty is
not a Multibranch Party.

The Office of Barclays for the Transaction is: Inapplicable, Barclays is not a
Multibranch Party.

8. Notices:

For purposes of this Confirmation:

 

  (a) Address for notices or communications to Counterparty:

AOL Inc.

Attention: Arthur T. Minson, Chief Operating Officer and Acting Chief Financial
Officer

Telephone No.: +1 212 206 5004

Facsimile No.: +1 703 466 9097

with a copy to:

Attention: Julie Jacobs, Executive Vice President, General Counsel and Secretary

Telephone No.: +1 703 265 1080

Facsimile No.: +1 703 466 9093

 

  (b) Address for notices or communications to Barclays:

 

Barclays Bank PLC

c/o Barclays Capital Inc.

745 Seventh Ave.

New York, NY 10019

Attn:

   Paul Robinson

Telephone:

   (+1) 212-526-0111

Facsimile:

   (+1) 917-522-0458

This Confirmation may be executed in several counterparts, each of which shall
be deemed an original but all of which together shall constitute one and the
same instrument.

 

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Counterparty hereby agrees to check this Confirmation and to confirm that the
foregoing correctly sets forth the terms of the Transaction by signing in the
space provided below and returning to Barclays a facsimile of the fully-executed
Confirmation to Barclays at (+1) 917-522-0458. Originals shall be provided for
your execution upon your request.

 

Very truly yours, BARCLAYS CAPITAL INC., acting solely as Agent in connection
with the Transaction By:  

/s/ Bryan C. Spencer

  Name: Bryan C. Spencer   Title: Authorized Signatory Accepted and confirmed as
of the Trade Date: AOL INC. By:  

/s/ Arthur T. Minson

  Name:   Title:

 

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SCHEDULE A

For the purposes of the Transaction, the following terms shall have the
following values/meanings:

 

1. Prepayment Amount:    USD 600,000,000 2. Additional Payment:    USD
54,060,000 3. Maximum Maturity Date:    [****] 4. Minimum Maturity Date:   
[****] 5. Discount:    An amount in USD equal to [****] 6. Initial Shares:   
4,000,000 7. Interim Shares    The lesser of (x) 6,500,000 and (y) the Minimum
Shares, minus the Initial Shares. 8. Minimum Shares:    The number of Shares
equal to the quotient of (i) the Prepayment Amount, divided by (ii) [****]% of
the Adjusted Hedging Price. 9. Maximum Shares:    The number of Shares equal to
the quotient of (i) the Prepayment Amount, divided by (ii) [****]% of the
Adjusted Hedging Price. 10. Fixed Amount:   

USD 5.15

11. Fixed Amount Adjustment Date:   

November 30, 2012

12. Permissible Contacts:    Paul Robinson, Stephen Roti, Marcus Weickel, Bo
Diamond, Alexander Mielke, Joseph Valenti, Sandhya Murali, Scott Levy, Philipp
Becker, Matthew Danton, Anna Shearer or any other person identified by any of
the foregoing or any member of the Barclays legal department in writing after
the Trade Date.

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EXHIBIT A

CONFIRMATION PRICING SUPPLEMENT

This Confirmation Pricing Supplement is the Confirmation Pricing Supplement
referred to in the Confirmation dated as of August 26, 2012 between Barclays
Bank PLC and AOL Inc.

For all purposes under the Confirmation, the following terms of the Confirmation
shall be as specified below:

 

1.    Hedging Price:      USD [    ] 2.    Adjusted Hedging Price:      Hedging
Price, minus the Fixed Amount 3.    Maximum Maturity Date:      [DATE] 4.   
Minimum Maturity Date:      [DATE] 5.    Discount:      USD [    ] 5.    Maximum
Shares:      [     ] 6.    Minimum Shares:      [     ] 7.   
First day of Trading Period:      [     ]

Please acknowledge the foregoing by signing this Confirmation Pricing Supplement
and returning a copy to us at facsimile number 646-885-9546 (United States of
America), Attention: Documentation.

Yours Sincerely,

 

BARCLAYS CAPITAL INC., acting solely as Agent in connection with the Transaction
By:  

 

  Name:   Title: AOL INC. By:  

 

  Name:   Title: