Exhibit 10.38

 

logo [g20140221214805969296.jpg]

 

 

 

December 4, 2013

 

To:

Polycom, Inc.

 

 

Attn:

Walt Boileau

 

Telephone:

408-586-4233

 

Facsimile:

408-586-6021

 

 

 

From

JPMorgan Chase Bank, National Association

 

 

P.O. Box 161

 

 

60 Victoria Embankment

 

 

London EC4Y 0JP

 

 

England

 

 

 

Re:

Issuer Forward Repurchase Transaction

Ladies and Gentlemen:

The purpose of this communication (this “Confirmation”) is to confirm the terms
and conditions of the Transaction entered into between J.P. Morgan Securities
LLC (“JPMS”), as agent for JPMorgan Chase Bank, National Association, London
Branch (“Dealer”) and Polycom, Inc. (“Counterparty”) on the Trade Date specified
below (the “Transaction”).  The terms of the Transaction shall be set forth in
this Confirmation.  This Confirmation shall constitute a “Confirmation” as
referred to in the ISDA Master Agreement specified below.

1.       This Confirmation is subject to, and incorporates, the definitions and
provisions of the 2006 ISDA Definitions (including the Annex thereto) (the “2006
Definitions”) and the definitions and provisions of the 2002 ISDA Equity
Derivatives Definitions (the “Equity Definitions”, and together with the 2006
Definitions, the “Definitions”), in each case as published by the International
Swaps and Derivatives Association, Inc. (“ISDA”).  In the event of any
inconsistency between the 2006 Definitions and the Equity Definitions, the
Equity Definitions will govern.  

This Confirmation evidences a complete and binding agreement between Dealer and
Counterparty as to the terms of the Transaction to which this Confirmation
relates.  This Confirmation shall be subject to an agreement (the “Agreement”)
in the form of the 2002 ISDA Master Agreement (the “ISDA Form”) as if Dealer and
Counterparty had executed an agreement in such form (without any Schedule but
with the elections set forth in this Confirmation) except for (i) the election
that subparagraph (ii) of Section 2(c) will not apply to the Transactions, and
(ii) the election that the “Cross Default” provisions of Section 5(a)(vi) shall
apply to Dealer, with a “Threshold Amount” of 3% of shareholders’ equity for
Dealer (provided that (a) the phrase “or becoming capable at such time of being
declared” shall be deleted from clause (1) of such Section 5(a)(vi) of the
Agreement and (b) the following sentence shall be added to the end
thereof:  “Notwithstanding the foregoing, a default under subsection (2) hereof
shall not constitute an Event of Default if (i) the default was caused solely by
error or omission of an administrative or operational nature; (ii) funds were
available to enable the party to make the payment when due; and (iii) the
payment is made within two Local Business Days of such party’s receipt of
written notice of its failure to pay.”).  The Transaction shall be the only
Transaction under the Agreement. “Other ASR Transaction” shall mean the
accelerated share repurchase transaction of even date herewith between the
Counterparty and Barclays Bank PLC.

All provisions contained in, or incorporated by reference to, the Agreement will
govern this Confirmation except as expressly modified herein.  In the event of
any inconsistency between this Confirmation and either the Definitions or the
Agreement, this Confirmation shall govern.  The Transaction is a Share Forward
Transaction within the meaning set forth in the Equity Definitions.

JPMorgan Chase Bank, National Association
Organised under the laws of the United States as a National Banking Association.
Main Office 1111 Polaris Parkway, Columbus, Ohio 43240
Registered as a branch in England & Wales branch No. BR000746
Registered Branch Office 25 Bank Street, Canary Wharf, London, E14 5JP
Authorised and regulated by the Financial Services Authority

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

General Terms:

 

 

Trade Date:

December 4, 2013

 

Seller:

Dealer

 

Buyer:

Counterparty

 

Shares:

 

The common stock of Counterparty, par value USD 0.0005 per share (Ticker Symbol:
“PLCM”)

 

Prepayment:

 

Applicable

 

Prepayment Amount:

 

As provided in Annex B to this Confirmation.

 

Prepayment Date:

 

The first Exchange Business Day following the Trade Date

 

Exchange:

 

Nasdaq Global Select Market

 

Related Exchange(s):

 

The primary U.S. exchange on which options or futures are traded

 

Relevant Day:

 

Each day listed in Annex B and every second Scheduled Trading Day after the last
day so listed, in each case that occurs prior to the completion of all payments
and deliveries under the Transaction.

 

Calculation Agent:

 

Dealer; provided that all determinations made by the Calculation Agent shall be
made in good faith and in a commercially reasonable manner. Following any
calculation by the Calculation Agent hereunder, upon a prior written request by
Counterparty, the Calculation Agent will provide to Counterparty by e-mail to
the e-mail address provided by Counterparty in such a prior written request a
report (in a commonly used file format for the storage and manipulation of
financial data) displaying in reasonable detail the basis for such calculation;
and provided further that no transferee of the Transaction in accordance with
the terms of this Confirmation shall act as Calculation Agent with respect to
such transferred Transaction without the prior consent of Counterparty, such
consent not to be unreasonably withheld. Calculation Agent shall not be
obligated to disclose any proprietary models or proprietary information used by
it for such determination or calculation. Notwithstanding anything to the
contrary in this Confirmation, the Calculation Agent shall not adjust the dates
identified as Relevant Days in Annex B of this Confirmation.

 

Valuation Terms:

 

 

Averaging Dates:

 

Each of the consecutive Relevant Days commencing on, and including, the Relevant
Day immediately following the Trade Date and ending on, and including, the Final
Averaging Date.

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Final Averaging Date:

 

The Scheduled Final Averaging Date; provided that in no event shall the
Scheduled Final Averaging Date be postponed to a date later than the Final
Termination Date (as provided in Annex B to this Confirmation); provided,
further that Dealer shall have the right, in its absolute discretion, at any
time to accelerate the Final Averaging Date, in whole or in part to the extent
that any such acceleration in part is equal to or in excess of 25% of the
Prepayment Amount (except any such acceleration in part may be less than 25% of
the Prepayment Amount if such acceleration in part is the final acceleration
resulting in the Final Averaging Date), to any Relevant Day that is on or after
the Scheduled Earliest Acceleration Date by written notice to Counterparty no
later than 8:00 P.M., New York City time, on the Relevant Day immediately
following the accelerated Final Averaging Date.

 

 

In the case of any acceleration of the Final Averaging Date in part (a “Partial
Acceleration”), Dealer shall specify in its written notice to Counterparty
accelerating the Final Averaging Date the corresponding percentage of the
Prepayment Amount that is subject to valuation on the related Valuation Date,
and Calculation Agent shall adjust the Number of Shares to be Delivered,
Prepayment Amount and Settlement Price as it deems appropriate, in a
commercially reasonable manner, in order to take into account the occurrence of
such Partial Acceleration (including cumulative adjustments to take into account
all Partial Accelerations that occur during the term of the Transaction).

 

Scheduled Final Averaging Date:

 

As provided in Annex B to this Confirmation.

 

Final Termination Date:

 

As provided in Annex B to this Confirmation.

 

Scheduled Earliest Acceleration Date:

 

As provided in Annex B to this Confirmation.

 

Valuation Date:

 

The Final Averaging Date.

 

Averaging Date Disruption:

 

Modified Postponement, provided that notwithstanding anything to the contrary in
the Equity Definitions, if a Market Disruption Event occurs on any Averaging
Date, the Calculation Agent may in a good faith commercially reasonable manner,
if appropriate in light of market conditions or regulatory considerations: (i)
postpone the Scheduled Final Averaging Date to the next Relevant Day that is not
already an Averaging Date in accordance with Modified Postponement (as modified
herein) provided that in no event shall the Scheduled Final Averaging Date be
postponed to a date later than the Final Termination Date (as provided in Annex
B to this Confirmation) and/or (ii) determine that such Averaging Date is a
Disrupted Day only in part, in which case the Calculation Agent shall (x)
determine the VWAP Price for such Disrupted Day based on Rule 10b-18 eligible
transactions in the Shares on such Disrupted Day taking into account the nature
and duration of such Market Disruption Event and (y) determine the Settlement
Price based on an appropriately weighted average instead of the arithmetic
average described under “Settlement Price” below; provided, however that, any
Market Disruption Event due to a Regulatory Disruption shall be a Disrupted Day
in full. Any Relevant Day on which, as of the date hereof, the Exchange is
scheduled to close prior to its normal close of trading shall be deemed not to
be a Relevant Day; if a closure of the Exchange prior to its normal close of
trading on any Relevant Day is scheduled following the date hereof, then such
Relevant Day shall be deemed to be a Disrupted Day in full. Section 6.6(a) of
the Equity Definitions is hereby amended by (A) adding the words “based on,
among other things, the volume, historical trading patterns and price of the
shares” at the end of Section 6.6(a)(ii)(B) of the Equity Definitions and
(B) replacing replacing the word “shall” in the fifth line thereof with the word
“may,” and by deleting clause (i) thereof, and Section 6.7(c)(iii)(A) of the
Equity Definitions is hereby amended by replacing the word “shall” in the sixth
and eighth line thereof with the word “may.”

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Market Disruption Events:

 

Section 6.3(a) of the Equity Definitions is hereby amended (A) by deleting the
words “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” in clause (ii) thereof, and (B) by replacing the words “or
(iii) an Early Closure.” therein with “(iii) an Early Closure, or (iv) a
Regulatory Disruption.”

 

 

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:

 

Any event that Dealer, in its good faith commercially reasonable discretion, and
based on advice of legal counsel determines makes it appropriate in light of any
legal, regulatory or self-regulatory requirements or related policies and
procedures (provided that such requirements, policies or procedures relate to
legal or regulatory issues and are generally applicable in similar situations
and applied in a consistent manner to similar transactions) for Dealer to
refrain from or decrease any market activity in connection with the Transaction.
Dealer shall notify Counterparty as soon as reasonably practicable that a
Regulatory Disruption has occurred and the Averaging Dates affected by it.

 

Settlement Terms:

 

 

Initial Share Delivery:

 

On the Initial Share Delivery Date, Dealer shall deliver to Counterparty the
Initial Shares.

 

Initial Share Delivery Date:

 

The first Relevant Day following the Trade Date.

 

Initial Shares:

 

As provided in Annex B to this Confirmation.

 

Settlement Date:

 

The date that falls one Settlement Cycle following the Valuation Date; provided
that if the Number of Shares to be Delivered is a negative number, the
Settlement Date shall be an Exchange Business Day not to exceed five (5)
Scheduled Trading Days immediately following the Valuation Date.

 

Settlement:

 

On the Settlement Date, Dealer shall deliver to Counterparty the Number of
Shares to be Delivered, if a positive number. If the Number of Shares to be
Delivered is a negative number, the Counterparty Settlement Provisions in Annex
A shall apply.

 

Number of Shares to be Delivered:

 

A number of Shares equal to (a) the Prepayment Amount divided by (b) (i) the
Settlement Price minus (ii) the Discount; provided that the Number of Shares to
be Delivered as so determined shall be reduced by the number of Shares delivered
on the Initial Share Delivery Date.

 

Settlement Price:

 

The arithmetic average of the VWAP Prices for all Averaging Dates.

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VWAP Price:

 

For any Averaging Date, the Rule 10b-18 dollar volume weighted average price per
Share for such day based on transactions executed during such day, as reported
on Bloomberg Page “PLCM.Q <Equity> AQR SEC” (or any successor thereto)
(excluding (i) trades that do not settle regular way, (ii) opening (regular way)
reported trades in the consolidated system on such Averaging Date, (iii) trades
that occur in the last ten minutes before the scheduled close of trading on the
Exchange on such Averaging Date and ten minutes before the scheduled close of
the primary trading in the market where the trade is effected, and (iv) trades
on such Averaging Date 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 good faith by the Calculation Agent) or, in the event such price
is not so reported on such day for any reason or is manifestly incorrect, as
reasonably determined in good faith by the Calculation Agent using a volume
weighted method.

 

Discount:

 

As provided in Annex B to this Confirmation.

 

Excess Dividend Amount:

 

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

 

Other Applicable Provisions:

 

To the extent either party is obligated to deliver Shares hereunder, the
provisions of the last sentence of Section 9.2 and Sections 9.8, 9.9, 9.10, 9.11
(except that the Representation and Agreement contained in Section 9.11 of the
Equity Definitions shall be modified by excluding any representations therein
relating to restrictions, obligations, limitations or requirements under
applicable securities laws arising as a result of the fact that Counterparty is
the issuer of the Shares) and 9.12 of the Equity Definitions will be applicable
as if “Physical Settlement” applied to the Transaction.

 

Dividends:

 

 

Dividend:

 

Any dividend or distribution on the Shares with an ex-dividend date occurring
during the period from and including the Trade Date to and including the Final
Averaging Date other than any dividend or distribution of the type described in
Section 11.2(e)(i) or Section 11.2(e)(ii)(A) of the Equity Definitions.

 

Share Adjustments:

 

 

Method of Adjustment:

 

Calculation Agent Adjustment; provided that (i) a Dividend shall not be a
Potential Adjustment Event and (ii) the Amendments to Equity Definitions set
forth in Section 10(h)(ii) herein shall not be applicable to a Potential
Adjustment Event defined in Sections 11.2(e)(i), 11.2(e)(ii)(A) and 11.2(e)(iii)
of the Equity Definitions; provided further that the repurchase of Shares
pursuant to the Other ASR Transaction shall not constitute a Potential
Adjustment Event. The Calculation Agent shall not adjust any of the dates
identified as Relevant Days in Annex B.

 

 

It shall constitute an additional Potential Adjustment Event if the Scheduled
Final Averaging Date is postponed pursuant to “Averaging Date Disruption” above,
in which case the Calculation Agent may, in its commercially reasonable
discretion, adjust any relevant terms of the Transaction as the Calculation
Agent determines in a good faith commercially reasonable manner appropriate to
account for the economic effect on the Transaction of such postponement;
provided that it shall not constitute an additional Potential Adjustment Event
if the Scheduled Final Averaging Date is postponed pursuant to an “Averaging
Date Disruption” above solely due to policies and procedures implemented by
Dealer.

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Extraordinary Events:

 

 

Consequences of Merger Events:

 

 

(a) Share-for-Share:

Modified Calculation Agent Adjustment

 

(b) Share-for-Other:

Cancellation and Payment

 

(c) Share-for-Combined:

Cancellation and Payment

 

Tender Offer:

 

Applicable; provided that the definition of “Tender Offer” in Section 12.1 of
the Equity Definitions will be amended by replacing the phrase “greater than 10%
and less than 100% of the outstanding voting shares of the Issuer” in the third
and fourth line thereof with “(a) greater than 10% and less than 100% of the
outstanding Shares of the Issuer in the event that such Tender Offer is being
made by the Issuer or any subsidiary thereof or (b) greater than 15% and less
than 100% of the outstanding Shares of the Issuer in the event that such Tender
Offer is being made by any entity or person other than the Issuer or any
subsidiary thereof”.

 

Consequences of Tender Offers:

 

 

(a) Share-for-Share:

 

Modified Calculation Agent Adjustment

 

(b) Share-for-Other:

 

Modified Calculation Agent Adjustment

 

(c) Share-for-Combined:

 

Modified Calculation Agent Adjustment

 

Composition of Combined Consideration:

 

Not Applicable

 

Consequences of Announcement Events:

 

Modified Calculation Agent Adjustment as set forth in Section 12.3(d) of the
Equity Definitions; provided that references to “Tender Offer” shall be replaced
by references to “Announcement Event” and references to “Tender Offer Date”
shall be replaced by references to “Announcement Date.” An Announcement Event
shall be an “Extraordinary Event” for purposes of the Equity Definitions, to
which Article 12 of the Equity Definitions is applicable.

 

Announcement Event:

 

The occurrence of an Announcement Date in respect of a potential Acquisition
Transaction (as defined in Section 9 below).

 

Announcement Date:

 

The date of the first public announcement in relation to an Acquisition
Transaction, or any publicly announced change or amendment to the announcement
giving rise to an Announcement Date.

 

Provisions applicable to Merger Events and Tender Offers:

 

The consequences set forth opposite “Consequences of Merger Events” and
“Consequences of Tender Offers” above shall apply regardless of whether a
particular Merger Event or Tender Offer relates to an Announcement Date for
which an adjustment has been made pursuant to Consequences of Announcement
Events, without duplication of any such adjustment.

 

New Shares:

 

In the definition of New Shares in Section 12.1(i) of the Equity Definitions,
the text in clause (i) thereof shall be deleted in its entirety (including the
word “and” following such clause (i)) and replaced with “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)”.

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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
shall also constitute a Delisting if the Exchange is located in the United
States and the Shares are not immediately re-listed, re-traded or re-quoted on
any of the New York Stock Exchange, The NASDAQ Global Market or The NASDAQ
Global Select 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 announcement or statement of the formal or
informal interpretation” and (ii) immediately following the word “Transaction”
in clause (X) thereof, adding the phrase “in the manner contemplated by the
Hedging Party on the Trade Date”

 

Failure to Deliver:

 

Applicable

 

Insolvency Filing:

 

Applicable

 

Hedging Disruption:

 

Applicable

 

Increased Cost of Hedging:

Applicable

 

 

Loss of Stock Borrow:

 

Applicable

 

Maximum Stock Loan Rate:

 

As provided in Annex B to this Confirmation.

 

Increased Cost of Stock Borrow:

 

Applicable

 

Initial Stock Loan Rate:

 

As provided in Annex B to this Confirmation.

 

Hedging Party:

 

For all applicable Potential Adjustment Events and Extraordinary Events, Dealer

 

Determining Party:

 

For all Extraordinary Events, Dealer

 

Non-Reliance:

 

Applicable

 

Agreements and Acknowledgments Regarding Hedging Activities:

 

Applicable

 

Additional Acknowledgments:

 

Applicable

 

3.       Account Details:

 

 

(a)  Account for payments to
Counterparty:

 

To be provided upon request

 

(b) Account for payments to Dealer:

 

To be provided upon request

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4.       Offices:

 

(a)        The Office of Counterparty for the Transaction is: Counterparty is
not a Multibranch Party

(b)       The Office of Dealer for the Transaction is: London

 

 

 

JPMorgan Chase Bank, National Association

 

 

London Branch

  

 

 

 

P.O. Box 161

  

 

 

 

60 Victoria Embankment

  

 

 

 

London EC4Y 0JP

  

 

 

 

England

  

 

 

5.Notices: For purposes of this Confirmation:

 

(a)  Address for notices or communications to Counterparty:

 

Polycom, Inc.

 

 

  

 

 

Attn:

 

 

Walt Boileau

  

 

Telephone:

 

408-586-4233

  

 

Facsimile:

 

408-586-6021

  

 

 

(b) Address for notices or communications to Dealer:

 

JPMorgan Chase Bank, National Association

  

 

EDG Marketing Support

 

 

  

 

Email:   edg_notices@jpmorgan.com

  

 

edg_special_equities_notices@jpmorgan.com

  

 

 

With a copy to:

 

 

 

  

 

Attention:

 

Brian Lehman

  

 

Title:

 

Managing Director

  

 

Telephone No:

 

(212) 622-6451

  

 

Email Address:

 

brian.d.lehman@jpmorgan.com

 

 

 

6.       Additional Provisions Relating to Transactions in the Shares.

(a)    Counterparty acknowledges and agrees that the Initial Shares delivered on
the Initial Share Delivery Date may be sold short to Counterparty. Counterparty
further acknowledges and agrees that Dealer may, during (i) the period from the
date hereof to the Valuation Date or, if later, the Scheduled Earliest
Acceleration Date without regard to any adjustment thereof pursuant to “Special
Provisions regarding Transaction Announcements” below, and (ii) the period from
and including the first Settlement Valuation Date to and including the last
Settlement Valuation Date, if any (together, the “Relevant Period”), purchase
Shares in connection with the Transaction, which Shares may be used to cover all
or a portion of such short sale or may be delivered to Counterparty.  Such
purchases will be conducted independently of Counterparty. The timing of such
purchases by Dealer, the number of Shares purchased by Dealer on any day, the
price paid per Share pursuant to such purchases and the manner in which such
purchases are made, including without limitation whether such purchases are made
on any securities exchange or privately, shall be within the absolute discretion
of Dealer.  It is the intent of the parties that the Transaction comply with the
requirements of Rule 10b5-1(c)(1)(i)(B) of the Securities Exchange Act of 1934,
as amended (the “Exchange Act”), and the parties agree that this Confirmation
shall be interpreted to comply with the requirements of Rule 10b5-1(c), and
Counterparty shall not take any 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 Dealer effects any purchases of Shares in connection with the
Transaction, (B) during the period beginning on (but excluding) the date of this
Confirmation and ending on (and including) the last day of the Relevant Period,
neither Counterparty nor its officers or employees shall, directly or
indirectly, communicate any information regarding Counterparty or the Shares to
any employee of Dealer or its

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Affiliates responsible for trading the Shares in connection with the
transactions contemplated hereby, (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 promulgated under the Exchange Act 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.  For the avoidance of doubt, the parties
hereto acknowledge that entry into any Other ASR Transaction shall not fall
within the ambit of the previous sentence.    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) under the
Exchange Act.  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 under
the Exchange Act, 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 nonpublic information regarding Counterparty or the
Shares.

(b)    Counterparty agrees that neither Counterparty nor any of its Affiliates
or agents shall take any action that would cause the Shares to be subject to a
“restricted period” (as defined under Regulation M) under the Exchange Act)
(other than securities or activities excepted from Regulation M by reasons of
Rules 101(b) and (c) and 102(b), (c) and (d) under the Exchange Act) at any time
during any Relevant Period for any Transaction unless Counterparty has provided
written notice to Dealer of such restricted period not later than the Scheduled
Trading Day immediately preceding the first day of such “restricted period”;
Counterparty acknowledges that any such notice may cause a Disrupted Day to
occur pursuant to this Confirmation; accordingly, Counterparty acknowledges that
its delivery of such notice must comply with the standards set forth in this
Confirmation.

(c)    Counterparty shall, at least one day prior to the first day of the
Relevant Period, notify Dealer of the total number of Shares purchased in Rule
10b-18 purchases of blocks pursuant to the once-a-week block exception contained
in Rule 10b-18(b)(4) by or for Counterparty or any of its affiliated purchasers
during each of the four calendar weeks preceding the first day of the Relevant
Period and during the calendar week in which the first day of the Relevant
Period occurs (“Rule 10b-18 purchase”, “blocks” and “affiliated purchaser” each
being used as defined in Rule 10b-18).

(d)    During the Relevant Period, Counterparty shall (i) notify Dealer prior to
the opening of trading in the Shares on any day on which Counterparty makes, or
expects to be made, any public announcement (as defined in Rule 165(f) under the
Securities Act of 1933, as amended (the “Securities Act”)) of any merger,
acquisition, or similar transaction involving a recapitalization relating to
Counterparty (other than any such transaction in which the consideration
consists solely of cash and there is no valuation period), (ii) promptly notify
Dealer following any such announcement that such announcement has been made, and
(iii) promptly deliver to Dealer following the making of any such announcement a
certificate indicating (A) Counterparty’s average daily Rule 10b-18 purchases
(as defined in Rule 10b-18) during the three full calendar months preceding the
date of the announcement of such transaction and (B) Counterparty’s block
purchases (as defined in Rule 10b-18) effected pursuant to paragraph (b)(4) of
Rule 10b-18 during the three full calendar months preceding the date of the
announcement of such transaction.  In addition, Counterparty shall promptly
notify Dealer of the earlier to occur of the completion of such transaction and
the completion of the vote by target shareholders.  Counterparty acknowledges
that any such public announcement may result in a Regulatory Disruption and may
cause the Relevant Period to be suspended.  Accordingly, Counterparty
acknowledges that its actions in relation to any such announcement or
transaction must comply with the standards set forth in Section 6(a) above.

(e)    Without the prior written consent of Dealer, other than in connection
with the Other ASR Transaction, the Counterparty shall not, and shall cause its
Affiliates and affiliated purchasers (each as defined in Rule 10b-18) not to,
directly or indirectly (including, without limitation, by means of a
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 depository share) or
any security convertible into or exchangeable for Shares during the Relevant
Period; provided that this Section 6 shall not (i) limit the Counterparty’s
ability, pursuant to its employee incentive plan or dividend reinvestment
program, to re-acquire Shares in connection with the related equity
transactions, (ii) limit Counterparty’s ability to withhold shares to cover 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 compensation
policies 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 Counterparty, and in connection with any such purchase
Counterparty will be deemed to represent to Dealer that such purchase does not
constitute a “Rule 10b-18 Purchase” (as defined in Rule 10b-18) (any such
incentive or compensatory plan, program or policy of Counterparty, a
“Compensatory Plan”).  

(f)    Dealer has policies and procedures reasonably designed to ensure that
purchases of Shares in connection with this Transaction are consistent with the
anti-manipulation provisions of the Exchange Act by taking into account, among
other things, the historical trading patterns of the Shares, the Scheduled Final
Averaging Date, the Scheduled Earliest Acceleration Date and other relevant
factors.

 

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7.       Representations, Warranties and Agreements.  

(a)    In addition to the representations, warranties and agreements in the
Agreement and those contained elsewhere herein, Counterparty represents and
warrants to and for the benefit of, and agrees with, Dealer as follows:

(i)    As of the Trade Date, and as of the date of any election by Counterparty
of the Share Termination Alternative under (and as defined in) Section 10(a)
below, (A) none of Counterparty and its officers and directors is aware of any
material nonpublic information regarding Counterparty or the Shares and (B) all
reports and other documents filed by Counterparty with the Securities and
Exchange Commission pursuant to the Exchange Act when considered as a whole
(with the more recent such reports and documents deemed to amend inconsistent
statements contained in any earlier such reports and documents), do not contain
any untrue statement of a material fact or any omission of a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances in which they were made, not misleading.

(ii)    Without limiting the generality of Section 13.1 of the Equity
Definitions, Counterparty acknowledges that Dealer is not making any
representations or warranties or taking any position or expressing any view 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, or 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.

(iii)    Without limiting the generality of Section 3(a)(iii) of the Agreement,
the Transaction will not violate Rule 13e-1 or Rule 13e-4 under the Exchange
Act.

(iv)    Prior to the Trade Date, Counterparty shall deliver to Dealer a
resolution of Counterparty’s board of directors authorizing the Transaction and
such other certificate or certificates as Dealer shall reasonably
request.  Counterparty has publicly disclosed its intention to institute a
program for the acquisition of Shares.

(v)    Counterparty is not entering into this Confirmation to create actual or
apparent trading activity in the Shares (or any security convertible into or
exchangeable for Shares) or to manipulate the price of the Shares (or any
security convertible into or exchangeable for Shares) or otherwise in violation
of the Exchange Act, and will not engage in any other securities or derivative
transaction to such ends.  

(vi)    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.

(vii)    On the Trade Date, the Prepayment Date, the Initial Share Delivery Date
and the Settlement Date, Counterparty is not, or will not be, “insolvent” (as
such term is defined under Section 101(32) of the U.S. Bankruptcy Code (Title 11
of the United States Code) (the “Bankruptcy Code”)) and Counterparty would be
able to purchase the Shares hereunder in compliance with the corporate laws of
the jurisdiction of its incorporation.

(viii)    No state or local (including non-U.S. jurisdictions) law, rule,
regulation or regulatory order applicable to the Shares 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 Dealer or its affiliates owning or holding (however defined) Shares
other than any such law, rule, regulation or order that applies (A) to the
beneficially ownership of Shares under the Exchange Act or (B) solely as a
result of the business, identity, place of business or jurisdiction of
organization of Dealer or any such affiliate.

(ix)    Counterparty shall not declare or pay any Dividend (as defined above) to
holders of record as of any date occurring prior to the Settlement Date or, if
the provisions of Annex A apply, the Cash Settlement Payment Date other than the
dividend of any rights to holders of Shares pursuant to an adoption by
Counterparty of a stockholder rights plan during the term of the Transaction;
provided that, any triggering or other event that results in such rights
becoming separated or distributed shall constitute a Dividend (as defined
above).

(x)    Counterparty understands no obligations of Dealer to it hereunder will be
entitled to the benefit of deposit insurance and that such obligations will not
be guaranteed by any affiliate of Dealer or any governmental agency.

(xi)    Counterparty (A) is capable of evaluating investment risks
independently, both in general and with regard to all transactions and
investment strategies involving a security or securities; (B) 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 (C) has total assets of at least USD 50,000,000 as of the date
hereof.

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(b)    Each of Dealer and Counterparty agrees and represents that it is an
“eligible contract participant” as defined in Section 1a(18) of the U.S.
Commodity Exchange Act, as amended.

(c)    Counterparty acknowledges that the offer and sale of the Transaction to
it is intended to be exempt from registration under the Securities Act, by
virtue of Section 4(2) thereof.  Accordingly, Counterparty represents and
warrants to Dealer that (i) it has the financial ability to bear the economic
risk of its investment in the Transaction and is able to bear a total loss of
its investment, (ii) it is an “accredited investor” as that term is defined in
Regulation D as promulgated under the Securities Act, (iii) it is entering into
the Transaction for its own account and without a view to the distribution or
resale thereof, and (iv) the assignment, transfer or other disposition of the
Transaction has not been and will not be registered under the Securities Act and
is restricted under this Confirmation, the Securities Act and state securities
laws.

(d)    Counterparty agrees and acknowledges that Dealer is a “financial
institution,”  “swap participant” and “financial participant” within the meaning
of Sections 101(22), 101(53C) and 101(22A) of the Bankruptcy Code.  The parties
hereto further agree and acknowledge that it is the intent of the parties that
(A) this Confirmation is (i) 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,” within the meaning of Section 546 of
the Bankruptcy Code and (ii) a “swap agreement,” as such term is defined in
Section 101(53B) 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 “transfer,” as such term is defined in Section 101(54) of
the Bankruptcy Code and a “payment or other transfer of property” within the
meaning of Sections 362 and 546 of the Bankruptcy Code, and (B) Dealer is
entitled to the protections afforded by, among other sections, Sections
362(b)(6), 362(b)(17), 362(o), 546(e), 546(g), 548(d)(2), 555, 560 and 561 of
the Bankruptcy Code.

8.       Agreements and Acknowledgements Regarding Hedging.

Counterparty acknowledges and agrees that:

(a)    During the Relevant Period, Dealer and its Affiliates may buy or sell
Shares or other securities or buy or sell options or futures contracts or enter
into swaps or other derivative securities in order to adjust its hedge position
with respect to the Transaction;  

(b)    Dealer and its Affiliates also may be active in the market for Shares
other than in connection with hedging activities in relation to the Transaction;

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

(d)    Any market activities of Dealer and its Affiliates with respect to Shares
may affect the market price and volatility of Shares, as well as the Settlement
Price and/or the VWAP Price, each in a manner that may be adverse to
Counterparty.

9.       Special Provisions regarding Transaction Announcements.

(a)    If a Transaction Announcement occurs on or prior to the Settlement Date,
the Calculation Agent may adjust the Discount as the Calculation Agent
reasonably determines in a good faith manner that it is appropriate to account
for the economic effect of the Transaction Announcement.  If a Transaction
Announcement occurs after the Trade Date but prior to the Scheduled Earliest
Acceleration Date, the Scheduled Earliest Acceleration Date shall be adjusted to
be the date of such Transaction Announcement.

(b)    “Transaction Announcement” means (i) the announcement of an Acquisition
Transaction, (ii) an announcement that Counterparty or any of its subsidiaries
has entered into an agreement, a letter of intent or an understanding to enter
into an Acquisition Transaction, (iii) the announcement by Counterparty of
Counterparty’s intention to solicit or enter into, or to explore strategic
alternatives or other similar undertaking that may include, an Acquisition
Transaction, or (iv) the announcement by a bona fide person of such person’s
intention to pursue an Acquisition Transaction that in the good faith
commercially reasonable judgment of the Calculation Agent may result in an
Acquisition Transaction; provided that the Calculation Agent shall in good faith
determine whether any such person is a bona fide person. For the avoidance of
doubt, announcements as used in this definition of Transaction Announcement
refer to any public announcement whether made by the Issuer or a bona fide
person.

“Acquisition Transaction” means (i) any Merger Event (and for purposes of this
definition the definition of Merger Event shall be read with the references
therein to “100%” being replaced by “15%” and to “50%” by “85%” and as if the
clause beginning immediately following the definition of Reverse Merger therein
to the end of such definition were deleted) or Tender Offer, or any other
transaction involving the merger of Counterparty with or into any third party,
(ii) the sale or transfer of all or substantially all of

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the assets of Counterparty, (iii) a recapitalization, reclassification, binding
share exchange or other similar transaction, (iv) any acquisition, lease,
exchange, transfer, disposition (including by way of spin-off or distribution)
of assets (including any capital stock or other ownership interests in
subsidiaries) or other similar event by Counterparty or any of its subsidiaries
where the aggregate consideration transferable or receivable by or to
Counterparty or its subsidiaries exceeds 15% of the market capitalization of
Counterparty and (v) any transaction in which Counterparty or its board of
directors has a legal obligation to make a recommendation to its shareholders in
respect of such transaction (whether pursuant to Rule 14e-2 under the Exchange
Act or otherwise).

10.     Other Provisions.

(a)    Alternative Calculations and Payment on Early Termination and on Certain
Extraordinary Events.  If either party would owe the other party any amount
pursuant to Sections 12.2, 12.3, 12.6, 12.7 or 12.9 of the Equity Definitions or
pursuant to Section 6(d)(ii) of the Agreement (a “Payment Obligation”),
Counterparty shall have the right, in its sole discretion, to satisfy or to
require Dealer to satisfy, as the case may be, any such Payment Obligation, in
whole or in part, by the Share Termination Alternative (as defined below) by
giving irrevocable telephonic notice to Dealer, confirmed in writing within one
Scheduled Trading Day, no later than 9:30 A.M. New York City time on the Merger
Date, Tender Offer Date, Announcement Date, Early Termination Date or date of
cancellation or termination in respect of an Extraordinary Event, as applicable
(“Notice of Share Termination”); provided that if Dealer would owe Counterparty
the Payment Obligation and Counterparty does not elect to require Dealer to
satisfy such Payment Obligation by the Share Termination Alternative in whole,
Dealer shall have the right, in its sole discretion, to elect to satisfy any
portion of such Payment Obligation that Counterparty has not so elected by the
Share Termination Alternative, notwithstanding Counterparty’s failure to elect
or election to the contrary; and provided further that Counterparty shall not
have the right to so elect (but, for the avoidance of doubt, Dealer shall have
the right to so elect) in any event in which the holders of Shares underlying
contract also would receive 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.  Upon such
Notice of Share Termination, the following provisions shall apply on the
Scheduled Trading Day immediately following the Merger Date, Tender Offer Date,
Announcement Date, Early Termination Date or date of cancellation or termination
in respect of an Extraordinary Event, as applicable, with respect to the Payment
Obligation or such portion of the Payment Obligation for which the Share
Termination Alternative has been elected (the “Applicable Portion”):

Share Termination Alternative:

  

Applicable and means, if delivery pursuant to the Share Termination Alternative
is owed by Dealer, that Dealer shall deliver to Counterparty the Share
Termination Delivery Property on the date on which the Payment Obligation would
otherwise be due pursuant to Section 12.7 or 12.9 of the Equity Definitions or
Section 6(d)(ii) of the Agreement, as applicable, or such later date as the
Calculation Agent may reasonably determine (the “Share Termination Payment
Date”), in satisfaction of the Payment Obligation or the Applicable Portion, as
the case may be. If delivery pursuant to the Share Termination Alternative is
owed by Counterparty, paragraphs 2 through 5 of Annex A shall apply as if such
delivery were a settlement of the Transaction to which Net Share Settlement (as
defined in Annex A) applied, the Cash Settlement Payment Date were the Early
Termination Date, the Forward Cash Settlement Amount were zero (0) minus the
Payment Obligation (or the Applicable Portion, as the case may be) owed by
Counterparty, and “Shares” as used in Annex A were replaced by “Share
Termination Delivery Units.”

 

 

 

Share Termination Delivery Property:

  

A number of Share Termination Delivery Units, as calculated by the Calculation
Agent, equal to the Payment Obligation (or the Applicable Portion, as the case
may be) divided by the Share Termination Unit Price.  The Calculation Agent
shall adjust the Share Termination Delivery Property by replacing any fractional
portion of a security therein with an amount of cash equal to the value of such
fractional security based on the values used to calculate the Share Termination
Unit Price.

 

 

 

Share Termination Unit Price:

  

The value of property contained in one Share Termination Delivery Unit on the
date such Share Termination Delivery Units are to be delivered as Share
Termination Delivery Property, as determined by the Calculation Agent in its
discretion by commercially reasonable means and notified by the Calculation
Agent to the parties at the time of notification of the Payment Obligation.

 

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Share Termination Delivery Unit:

  

In the case of a Termination Event, Event of Default, Delisting or Additional
Disruption Event, one Share or, in the case of an Insolvency, Nationalization,
Merger Event or Tender Offer, one Share or 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 Insolvency, Nationalization,
Merger Event or Tender Offer. If such Insolvency, Nationalization, Merger Event
or Tender Offer 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.

 

 

 

Failure to Deliver:

  

Applicable

 

 

 

Other applicable provisions:

  

If Share Termination Alternative is applicable, the provisions of Sections 9.8,
9.9, 9.10, 9.11 (except that the Representation and Agreement contained in
Section 9.11 of the Equity Definitions shall be modified by excluding any
representations therein relating to restrictions, obligations, limitations or
requirements under applicable securities laws arising as a result of the fact
that Counterparty is the issuer of the Shares or any portion of the Share
Termination Delivery Units) and 9.12 of the Equity Definitions will be
applicable as if “Physical Settlement” applied to the Transaction, except that
all references to “Shares” shall be read as references to “Share Termination
Delivery Units”.

(b)    Equity Rights.  Dealer acknowledges and agrees that this Confirmation is
not intended to convey to it rights with respect to the Transaction that are
senior to the claims of common stockholders in the event of Counterparty’s
bankruptcy.  For the avoidance of doubt, the parties agree that the preceding
sentence shall not apply at any time other than during Counterparty’s bankruptcy
to any claim arising as a result of a breach by Counterparty of any of its
obligations under this Confirmation or the Agreement.  For the avoidance of
doubt, the parties acknowledge that this Confirmation is not secured by any
collateral that would otherwise secure the obligations of Counterparty herein
under or pursuant to any other agreement.

(c)    Indemnification.  In the event that Dealer or the Calculation Agent or
any of their Affiliates becomes involved in any capacity in any action,
proceeding or investigation brought by or against any person in connection with
any matter referred to in this Confirmation, Counterparty shall indemnify and
hold Dealer or the Calculation Agent or such Affiliate harmless against any
losses, claims, damages or liabilities to which Dealer or the Calculation Agent
or such Affiliate may become subject in connection with any such action,
proceeding or investigation, except to the extent that any losses and expenses
result from the willful misconduct, gross negligence or bad faith of Dealer or
the Calculation Agent or such Affiliate.  If for any reason the foregoing
indemnification is unavailable to Dealer or the Calculation Agent or such
Affiliate or insufficient to hold it harmless, then Counterparty shall
contribute to the amount paid or payable by Dealer or the Calculation Agent or
such Affiliate as a result of such losses, claims, damages or liabilities (i) in
such proportion as is appropriate to reflect the relative benefits received by
Counterparty on the one hand and Dealer or the Calculation Agent or such
Affiliate on the other hand in the matters contemplated by this Confirmation or
(ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits received by Counterparty on the one hand and Dealer or the
Calculation Agent or such Affiliate on the other hand in the matters
contemplated by this Confirmation but also the relative fault of Counterparty
and Dealer or the Calculation Agent or such Affiliate with respect to such
losses, claims, damages or liabilities and any other relevant equitable
considerations.  The relative benefits received by Counterparty, on the one
hand, and Dealer or the Calculation Agent or such Affiliate, on the other hand,
shall be in the same proportion as the Prepayment Amount bears to the customary
brokerage commission for share repurchases multiplied by the Initial Shares. The
reimbursement, indemnity and contribution obligations of Counterparty under this
Section 10(c) shall be in addition to any liability that Counterparty may
otherwise have, shall extend upon the same terms and conditions to the partners,
directors, officers, agents, employees and controlling persons (if any), as the
case may be, of Dealer or the Calculation Agent and their Affiliates and shall
be binding upon and inure to the benefit of any successors, assigns, heirs and
personal representatives of Counterparty, Dealer or the Calculation Agent, any
such Affiliate and any such person.  Counterparty also agrees that neither
Dealer, the Calculation Agent nor any of such Affiliates, partners, directors,
officers, agents, employees or controlling persons shall have any liability to
Counterparty for or in connection with any matter referred to in this
Confirmation except to the extent that any losses, claims, damages, liabilities
or expenses incurred by Counterparty result from the willful misconduct, gross
negligence or bad faith of Dealer or the Calculation Agent or a breach by Dealer
or the Calculation Agent of any of its covenants or obligations hereunder.  The
foregoing provisions shall survive any termination or completion of the
Transaction.

(d)    Staggered Settlement.  If Dealer would owe Counterparty any Shares
pursuant to the “Settlement Terms” above, Dealer may, by notice to Counterparty
on or prior to the Settlement Date (a “Nominal Settlement Date”), elect to
deliver the 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, Dealer 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 “Settlement Terms” above
among the Staggered Settlement Dates or delivery times; and (ii) the aggregate

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number of Shares that Dealer will deliver to Counterparty hereunder on all such
Staggered Settlement Dates and delivery times will equal the number of Shares
that Dealer would otherwise be required to deliver on such Nominal Settlement
Date; provided that in no event shall any Staggered Settlement Date be postponed
to a date later than the Final Termination Date; provided further that in no
event shall any Staggered Settlement reduce the Number of Shares that Dealer is
obligated to deliver to Counterparty under this Transaction.

(e)    Adjustments.  For the avoidance of doubt, whenever the Calculation Agent
is called upon to make an adjustment pursuant to the terms of this Confirmation
or the Definitions to take into account the effect of an event, the Calculation
Agent shall make such adjustment by reference to the effect of such event on the
Hedging Party, assuming that the Hedging Party maintains a commercially
reasonable hedge position.

(f)    Transfer and Assignment.  Dealer may transfer and assign (“Transfer”) all
rights, title and interest, powers, privileges and remedies of Dealer under any
Transaction, in whole or in part, to (i) any of its Affiliates with a credit
rating that is not lower than the credit rating of the Dealer immediately prior
to the time of such proposed transfer or (ii) an Affiliate of Dealer
(“Transferee”) whose obligations are guaranteed by the Guarantor without the
consent of Counterparty; provided that the Dealer provides prior written notice
of such proposed Transfer to Counterparty prior to any such transfer.

(g)    Additional Termination Event.  It shall constitute an Additional
Termination Event with respect to which the Transaction is the sole Affected
Transaction and Counterparty is the sole Affected Party and Dealer shall be the
party entitled to designate an Early Termination Date pursuant to Section 6(b)
of the Agreement if, at any time during the Relevant Period, the price per Share
on the Exchange, as determined by the Calculation Agent, is at or below the
Threshold Price (as provided in Annex B to this Confirmation).

(h)    Amendments to Equity Definitions.  The following amendments shall be made
to the Equity Definitions:

(i)    Section 11.2(a) of the Equity Definitions is hereby amended by deleting
the words “a diluting or concentrative effect on the theoretical value of the
relevant Shares” and replacing them with the words “an economic effect on the
relevant Transaction”;

(ii)    The first sentence of Section 11.2(c) of the Equity Definitions, prior
to clause (A) thereof, is hereby amended to read as follows: ‘(c) If
“Calculation Agent Adjustment” is specified as the Method of Adjustment in the
related Confirmation of a Share Option Transaction or Share Forward Transaction,
then following the announcement or occurrence of any Potential Adjustment Event,
the Calculation Agent will determine whether such Potential Adjustment Event has
an economic effect on the Transaction and, if so, will (i) make appropriate
adjustment(s), if any, to any one or more of:’ and the portion of such sentence
immediately preceding clause (ii) thereof is hereby amended by deleting the
words “diluting or concentrative” and the words “(provided that no adjustments
will be made to account solely for changes in volatility, expected dividends,
stock loan rate or liquidity relative to the relevant Shares)” and replacing
such latter phrase with the words “(and, for the avoidance of doubt, adjustments
may be made to account solely for changes in volatility, stock loan rate or
liquidity relative to the relevant Shares)”;

(iii)    Section 11.2(e)(vii) of the Equity Definitions is hereby amended by
deleting the words “diluting or concentrative effect on the theoretical value of
the relevant Shares” and replacing them with the words “economic effect on the
relevant Transaction”;

(iv)    Section 12.6(a)(ii) of the Equity Definitions is hereby amended by (1)
deleting from the fourth line thereof the word “or” after the word “official”
and inserting a comma therefor, and (2) deleting the semi-colon at the end of
subsection (B) thereof and inserting the following words therefor “or (C) at
Dealer’s option, the occurrence of any of the events specified in Section
5(a)(vii) (1) through (9) of the ISDA Master Agreement with respect to that
issuer”;

(v)    Section 12.9(b)(iv) of the Equity Definitions is hereby amended by (A)
deleting (1) subsection (A) in its entirety, (2) the phrase “or (B)” following
subsection (A) and (3) the phrase “in each case” in subsection (B); and (B)
deleting the phrase “neither the Non-Hedging Party nor the Lending Party lends
Shares in the amount of the Hedging Shares or” in the penultimate sentence; and

(vi)    Section 12.9(b)(v) of the Equity Definitions is hereby amended by (A)
adding the word “or” immediately before subsection “(B)” and deleting the comma
at the end of subsection (A); and (B)(1) deleting subsection (C) in its
entirety, (2) deleting the word “or” immediately preceding subsection (C) and
(3) replacing in the penultimate sentence the words “either party” with “the
Hedging Party” and (4) deleting clause (X) in the final sentence.

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(i)    No Netting and Set-off.  Each party waives any and all rights it may have
to set off obligations arising under the Agreement and the Transaction against
other obligations between the parties, whether arising under any other
agreement, applicable law or otherwise.

(j)    Disclosure.  Effective from the date of commencement of discussions
concerning the Transaction, Counterparty and each of its employees,
representatives, or other agents may disclose to any and all persons, 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 to Counterparty relating to such tax treatment and tax structure.

(k)    Designation by Dealer.  Notwithstanding any other provision in this
Confirmation to the contrary requiring or allowing Dealer to purchase, sell,
receive or deliver any Shares or other securities to or from Counterparty,
Dealer (the “Designator”) may designate any of its Affiliates (the “Designee”)
to deliver or take delivery, as the case may be, and otherwise perform its
obligations to deliver, if any, or take delivery of, as the case may be, any
such Shares or other securities in respect of the Transaction, and the Designee
may assume such obligations, if any; provided however that in no event shall any
such designation shall not relieve the Designator of any of its obligations
hereunder. Notwithstanding the previous sentence, if the Designee shall have
performed the obligations, if any, of the Designator hereunder, then the
Designator shall be discharged of its obligations, if any, to Counterparty to
the extent of such performance.

(l)    Termination Currency.  The Termination Currency shall be USD.

(m)    Matters Relating to Agent.  Each party agrees and acknowledges that (a)
JPMS, an Affiliate of Dealer, has acted solely as agent and not as principal
with respect to this Master Confirmation and each Transaction and (b) JPMS has
no obligation or liability, by way of guaranty, endorsement or otherwise, in any
manner in respect of any Transaction (including, if applicable, in respect of
the settlement thereof).  Each party agrees it will look solely to the other
party (or any guarantor in respect thereof) for performance of such other
party’s obligations under any Transaction.  JPMS is authorized to act as agent
for Dealer.

(n)    Waiver of Trial by Jury.  Each of Counterparty and DEALer hereby
irrevocably waives (on its own behalf and, to the extent permitted by applicable
law, on behalf of its stockholders) all right to trial by jury in any action,
proceeding or counterclaim (whether based on contract, tort or otherwise)
arising out of or relating to the Transaction or the actions of Dealer or its
affiliates in the negotiation, performance or enforcement hereof.

(o)    Governing Law; Jurisdiction.  THIS CONFIRMATION AND ANY CLAIM,
CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS CONFIRMATION SHALL BE
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.  THE PARTIES HERETO IRREVOCABLY
SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND
THE UNITED STATES COURT FOR THE SOUTHERN DISTRICT OF NEW YORK IN CONNECTION WITH
ALL MATTERS RELATING HERETO AND WAIVE ANY OBJECTION TO THE LAYING OF VENUE IN,
AND ANY CLAIM OF INCONVENIENT FORUM WITH RESPECT TO, THESE COURTS.

(p)    Wall Street Transparency and Accountability Act.  In connection with
Section 739 of the Wall Street Transparency and Accountability Act of 2010
(“WSTAA”), the parties hereby agree that neither the enactment of WSTAA or any
regulation under the WSTAA, nor any requirement under WSTAA or an amendment made
by WSTAA, nor any similar legal certainty provision in any legislation enacted,
or rule or regulation promulgated, on or after the date of this Confirmation,
shall limit or otherwise impair either party’s otherwise applicable rights to
terminate, renegotiate, modify, amend or supplement this Confirmation or the
Agreement, as applicable, arising from a termination event, force majeure,
illegality, increased costs, regulatory change or similar event under any Trade
Notification, any Supplemental Confirmation, this Master Confirmation, the
Equity Definitions incorporated herein, or the Agreement (including, without
limitation, rights arising from Change in Law, Loss of Stock Borrow, Increased
Cost of Stock Borrow, Hedging Disruption, Increased Cost of Hedging, or
Illegality).

 

 

 

15

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Exhibit 10.38

 

logo [g20140221214805969296.jpg]

 

Please confirm your agreement to be bound by the terms stated herein by
executing the copy of this Confirmation enclosed for that purpose and returning
it to us by mail or facsimile transmission to the address for Notices indicated
above.

Yours sincerely,

 

J.P. MORGAN SECURITIES LLC, as agent for JPMorgan Chase Bank, National
Association

 

 

By:

 

/s/ Brian D. Lehman

 

Name:

 

Brian D. Lehman

Title: Managing Director

 

Confirmed as of the date first above written:

 

POLYCOM, INC.

 

 

By:

 

/s/ Eric Brown

Name:

 

Eric Brown

Title: COO & CFO

 

JPMorgan Chase Bank, National Association
Organised under the laws of the United States as a National Banking Association.
Main Office 1111 Polaris Parkway, Columbus, Ohio 43240
Registered as a branch in England & Wales branch No. BR000746
Registered Branch Office 25 Bank Street, Canary Wharf, London, E14 5JP
Authorised and regulated by the Financial Services Authority