**EXHIBIT10.38**

**FORGENTNETWORKS, INC.**

**INCENTIVEBONUS PLAN**

# **ARTICLEIPURPOSE**

 

The purpose of the Forgent Networks, Inc. IncentiveBonus Plan (the “Plan”) is to provide specified benefits to a select group ofEmployees and Consultants who contribute materially to the implementation,execution and success of the Company’s Patent Licensing and EnforcementProgram.  The Plan is intended to be a “bonusprogram” within the meaning of Labor Reg. § 2510.3-2(c) and, therefore, is notintended to be subject to the requirements of the Employee Retirement IncomeSecurity Act of 1974, as amended.

**ARTICLEIIDEFINITIONS**

For the purposes of the Plan, the following termsshall have the following meanings unless the context clearly indicatesotherwise:

## 2.01         “Award”shall mean the amount a Participant is awarded by the Committee under the Planfor a particular Performance Cycle.

## 2.02         “Beneficiary”shall mean the Participant’s legal beneficiary.

## 2.03         “BonusPool” shall mean, with respect to a Performance Cycle,  the total dollar amount set aside by theCompany and reserved for distribution to the Participants under the Plan withrespect to such Performance Cycle, being the amount equal to one percent (1%)of the Company’s Gross Patent Program Revenues for such Performance Cycle multipliedby the Designated Acceleration Factor for the Performance Cycle.

## 2.04         “Committee”shall mean the committee established by the Company that is responsible foradministering the Plan.  

## 2.05         “Company”shall mean the Forgent Networks, Inc. and its successors and assigns.

## 2.06         “Consultant”shall mean any third party consultant engaged by the Company, whether on a fulltime or part time basis, to assist the Company with the Company’s PatentLicensing and Enforcement Program.

## 2.07         “DesignatedAcceleration Factor” shall mean with respect to each Performance Cycle, thefollowing multiple:

| Performance Cycle | ** ** | **Designated Acceleration Factor** | ** ** |
|------------------------|------------|----------------------------------------------|------------|
| 1st                    |       | 2.0                                          |       |
| 2nd                    |       | 1.5                                          |       |
| 3rd                    |       | 1.0                                          |       |

; unless suchmultiples are otherwise amended or modified by the Committee in accordanceherewith.

2.08         “Disability” shall mean permanent andtotal inability to engage in any substantial gainful activity, even withreasonable accommodation, by reason of any medically determinable physical ormental impairment which has lasted or can be reasonably be expected to lastwithout material interruption for a period of not less than twelve (12) months,as determined in the sole discretion of the Committee.

2.09         “EffectiveDate” shall mean, for purposes of this Plan, January 1, 2006, the effectivedate of the Plan.

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2.10         “Employee” shall mean any person who isemployed by the Company, whether on a full time or part time basis, to assistthe Company with the Company’s Patent Licensing and Enforcement Program.

## 2.11         “ERISA”shall mean the Employee Retirement Income Security Act of 1974, as amended.

## 2.12         “FiscalYear” shall mean that period which begins each January 1 and ends eachfollowing December 31.

## 2.13         “Gross Patent ProgramRevenues”  shall mean the total revenuescollected by the Company from the Patent Licensing and Enforcement Programduring a particular Performance Cycle. 

## 2.14         “Participant”shall mean any Employee or Consultant who is selected to participate in thePlan by the Committee, as provided under Article III of the Plan.

## 2.15         “PatentLicensing and Enforcement Program” shall mean the Company’s ongoing generalefforts to secure license agreements with, and otherwise pursue remedialactions against and obtain recoveries from, various third parties who, in theCompany’s judgment, have historically infringed and/or are currently infringingone or more of the Company’s patents.

## 2.16         “PerformanceCycle” shall mean each full calendar year during the term hereof, beginning onJanuary 1 and ending on December 31, except where the Termination Date occursother than  on (or effective as of) theclose of business on December 31,  inwhich case, as to the final Performance Cycle only, the Performance Cycle shallbe that period of time beginning on January 1 immediately preceding theTermination Date and ending on the Termination Date.  

## 2.17         “Plan”shall mean the Company’s Incentive Bonus Plan, as set forth herein.

## 2.18         “PlanAdministrator” shall mean that individual appointed by the Committee to assistthe Committee with the administration of the Plan.

## 2.19         “Retires”shall mean the termination by an Employee of his employment with the Companyafter he attains the age of  65 years ofage.

## 2.20         “TerminationDate” shall mean the effective date of the termination of the Plan. 

## 2.21         “Terminationof Employment” shall mean a Participant’s separation from service with theCompany, voluntarily or involuntarily, for any reason other than because theParticipant Retires, suffers a Disability or dies.

# **ARTICLEIIIPERFORMANCE CYCLES**

Unless this Plan isearlier terminated by the Committee in accordance herewith, the firstPerformance Cycle will begin on the Effective Date and will end on December 31,2006; the second Performance Cycle will begin on January 1, 2007, and will endon December 31, 2007; and the third and final Performance Cycle will begin onJanuary 1, 2008 and will end on December 31, 2008. 

# **ARTICLEIVELIGIBILITY AND PARTICIPATION**

## 4.01         Eligibility and Selection.  Any Employee or Consultant is eligible toparticipate in the Plan, subject to being selected for participation by theCommittee.   At such time and from timeto time as appropriate, whether before the commencement of or during aparticular Performance Cycle, the Committee shall designate the

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## Employee(s)and/or Consultant(s) who will be Participants in the Plan for that PerformanceCycle.  An Employee’s or Consultant’sselection for participation in the Plan for a particular Performance Cycleshall be based on the current responsibilities and contributions to the Company’sPatent Licensing and Enforcement Program of the Employee or Consultant asdetermined by the Committee in its sole discretion.  The Committee may identify and designate atany time and from time to time to a new Participant during a PerformanceCycle.  

## 4.02         Limits ofParticipation.  An Employee’s orConsultant’s selection by the Committee as a Participant for one PerformanceCycle does not guarantee that such Employee or Consultant will be selected as aParticipant for any future Performance Cycle. 

## 4.03         Condition ofParticipation.  The Committee mayadopt one or more additional conditions for eligibility and/or participation,or modify its existing conditions for eligibility and participation, from timeto time as it deems appropriate in its sole discretion.

# **ARTICLEVDETERMINATION OF AWARDS**

 

## 5.01         Determinationof Awards.  As soon asadministratively practicable following the end of a Performance Cycle, theCommittee shall determine the amount of the Gross Patent Program Revenues forthe Performance Cycle just completed. Then, the Committee shall multiply one percent (1%) of that amount bythe Designated Acceleration Factor for that Performance Cycle to determine theaggregate amount of the Bonus Pool for that Performance Cycle.  Finally, the Committee shall then determinethe amounts of the individual Awards to be awarded to each of the Participantsfor that Performance Cycle.  The amountsof the individual Awards shall be determined by the Committee in its solediscretion based on the Committee’s evaluation of the relative efforts andcontributions of the respective Participants to the Patent Licensing andEnforcement Program during that Performance Cycle.  The total amount of all Awards awarded to theParticipants for a Performance Cycle will equal the aggregate amount of theBonus Pool for that Performance Cycle.

## 5.02         Termination ofEmployment During Performance Cycle. If a Participant experiences a Termination of Employment during aPerformance Cycle, such Participant’s rights under the Plan shall terminate.  The effective date of the Participant’sTermination of Employment shall be the close of business on the date of suchTermination of Employment.  TheParticipant shall not be entitled to the payment of any Award for thePerformance Cycle in which the Participant’s Termination of Employment occurs;however,  the Committee may in its solediscretion  elect to grant suchParticipant an Award on a pro-rated basis or otherwise.

## 5.03         ParticipationAfter the Beginning of a Performance Cycle. If an Employee first becomes aParticipant in the Plan after a Performance Cycle has begun, then theParticipant shall be eligible to receive an Award for the Performance Cycle inwhich the Employee became a Participant as determined by the Committee in itssole discretion.  

### 5.04         RetirementDisability or Death During a Performance Cycle.  If a Participant Retires, experiences aDisability or dies during a Performance Cycle, then the Participant shall beeligible to receive a pro-rated Award for the Performance Cycle in which theParticipant Retires, experiences a Disability or dies.  The amount of any pro-rated Award shall bedetermined by the Committee in its sole discretion.

# **ARTICLEVIDISTRIBUTION OF AWARDS**

## 6.01         Timing of Payment.  Any Award payable to a Participant or a Participant’sBeneficiary, as applicable, shall be distributed as soon as administrativelypracticable following the end of the applicable Performance Cycle.  Notwithstanding the foregoing, in no eventwill the distribution of an Award for a Performance Cycle occur more than 2 1⁄2months following the end of the applicable Performance Cycle.

## 6.02         Taxes.  Payments under the Plan are ordinary incometo the Participants.  The Company maywithhold or cause to be withheld from payments made to the Participant pursuantto Article VI any withholding or other taxes required to be withheld or paidwith respect to the payment and in such amounts as the Company

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## determinesis necessary to cover the taxes or withholding associated with the payment.

## 6.03         Obligations to theCompany.  If a Participant becomesentitled to a distribution of benefits under the Plan, and if at such time theParticipant has outstanding any debt, obligation, or other liabilityrepresenting an amount owed to the Company, then the Company may offset suchamounts owed by the Participant against the amount of benefits otherwisedistributable to the Participant.

# **ARTICLEVIITERM AND TERMINATION**

## 7.01         Term.  This Plan shall have an initial term of three(3) years, beginning on the Effective Date and expiring on December 31,2008.  The term of this Plan may beextended by the Company in its sole discretion from time to time on such termsas the Company shall determine.

## 7.02         Termination.  This Plan may be terminated by the Committeeat any time in its sole discretion.  Inthe event that this Plan is terminated during a Performance Cycle, theCommittee shall grant Awards to the Participants for such Performance Cycle inaccordance herewith based on the total amount of Gross Patent ProgramRevenues  through the Termination Date. 

# **ARTICLEVIIIADMINISTRATION**

## 8.01         Committee.  The Committee shall have the authority tomake and amend all appropriate rules and regulations for the administration ofthe Plan.  Any action with respect to theadministration of the Plan may be taken by the Committee pursuant to a meetingof the Committee duly called and held for purposes of taking any such action,or may be taken by unanimous written consent of all members of theCommittee.  When performing its dutieshereunder, the Committee shall be entitled to rely on information furnished bya Participant, the Company, or any other individual or entity that theCommittee deems appropriate.

## 8.02         Plan Administrator.  A Plan Administrator may be appointed by theCommittee to be responsible for the day-to-day administration of the Plan.  The Plan Administrator’s responsibilitieswill be established by the Committee, but may include: (i) enforcing allappropriate rules and regulations for the administration of the Plan, (ii)deciding or resolving any and all questions involving claims under the Plan,(iii) calculating benefits under the Plan, (iv) calculating any necessarywithholding amounts from benefit payments to Participants and Beneficiarieshereunder.  When performing its dutieshereunder, the Plan Administrator shall be entitled to rely on informationfurnished by a Participant or the Company.

## 8.03         Agents.  In the administration of the Plan, theCommittee or the Plan Administrator may from time to time employ agents of thePlan including actuaries, accountants, lawyers or third party administrators,and delegate duties to them to administer the Plan including acting through aduly appointed representative. 

## 8.04         Binding Effect ofDecisions.  The decision or action ofthe Committee, or the Plan Administrator with respect to any question arisingout of or in connection with the administration and application of the Plan andthe rules and regulations promulgated hereunder shall be final and conclusiveand binding upon all persons having any interest in the Plan.

## 8.05         Indemnity ofCommittee and Plan Administrator. The Company shall indemnify and hold harmless the members of theCommittee, Plan Administrator, and any Employee to whom any duties aredelegated under Article VIII of the Plan against any and all claims, losses,damages, expenses or liabilities arising from any action or failure to act withrespect to the Plan, except in the case of willful misconduct by the Committee,Plan Administrator, and Employee to whom any duties are delegated under ArticleVIII of the Plan.

## 8.06         Information.  To enable the Committee and PlanAdministrator to perform its functions, the Company shall supply full andtimely information to the Committee and Plan Administrator, as the case may be,on (i) all matters relating to the operations and performance of the Company’sPatent Licensing and Enforcement Program during each Performance Cycle, (ii)the Termination of Employment, death, retirement or Disability of any

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## Participantsduring each Performance Cycle, and (iii) any and all other matters as theCommittee or Plan Administrator may reasonably request.

# **ARTICLEIXMISCELLANEOUS**

## 9.01         Amendments.  This Plan may be amended by the Committeefrom time to time in its sole discretion, however,  no amendment during a Performance Cycle, mayreduce or otherwise adversely affect any Award to which a Participant wouldhave been entitled, without the Participant’s consent.

## 9.02         Unsecured GeneralCreditor.  Participants and theirBeneficiaries, heirs, successors and assigns shall have no legal or equitablerights, interests or claims in any property or assets of the Company.  For purposes of the payment of benefits underthe Plan, a Participant shall have no more rights than those of a generalcreditor of the Company.  The Company’sobligation under the Plan shall be that of an unfunded and unsecured promise topay money in the future.

## 9.03         Liability.  The Company’s liability for the payment of benefits shall be defined only by thePlan.  The Company shall have noobligation to a Participant under the Plan except as expressly provided in thePlan.

## 9.04         Cessation ofObligation.  Upon payment to theParticipant of all amounts due under the Plan, all responsibilities andobligations of the Company shall be fulfilled and the Participant shall have nofurther claims against the Company for further performance.

## 9.05         Nonassignability.  Neither a Participant nor any other personshall have any right to assign the amounts, if any, payable hereunder.  No part of the amounts payable shall, priorto actual payment, be subject to seizure or attachment for the payment of anydebts, judgments or other obligations of a Participant.

## 9.06         Not a Contract ofEmployment.  The terms and conditionsof the Plan shall not be deemed to constitute a contract of employment betweenthe Company and the Participant.  Suchemployment is hereby acknowledged to be, to the extent applicable, an “at will”employment relationship that can be terminated at any time for any reason, orno reason, with or without cause, and with or without notice, unless expresslyprovided in a written employment agreement. Nothing in the Plan shall be deemed to give a Participant the right tobe retained in the service of the Company or to interfere with the right of theCompany to discipline or discharge the Participant at any time.

## 9.07         FurnishingInformation.  A Participant or hisBeneficiary will cooperate with the Committee by furnishing any and allinformation requested by the Committee and take such other actions as may berequested in order to facilitate the administration of the Plan and thepayments of benefits hereunder, including but not limited to taking suchphysical examinations as the Committee may deem necessary.

## 9.08         Interpretation.  Except when otherwise indicated by thecontext, any reference to the masculine gender shall also include the femininegender and the neutral, or vice versa, and the definition of any term in thesingular shall also include the plural, or vice versa.

## 9.09         Governing Law.  The provisions of the Plan shall be construedand interpreted according to the laws of the of the State of Texas.  

## 9.10         Notice.  Any notice or filing required or permitted tobe given to the Committee under the Plan shall sent to the address below:

| Incentive Bonus Plan  Committee |
|---------------------------------|
| c/o Plan  Administrator         |
| Forgent  Networks, Inc.         |
| 108 Wild Basin  Drive           |
| Austin, TX 78746                |

 

Such notice shall be deemed given as of the date ofdelivery or, if delivery is made by mail, as of the date

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shown on the postmark on the receipt for registrationor certification.

Any notice or filingrequired or permitted to be given to a Participant under the Plan shall besufficient if in writing and hand-delivered, or sent by mail, to the last knownaddress of the Participant.

## 9.11         Successors.  The provisions of the Plan shall bind andinure to the benefit of the Company and its successors and assigns and theParticipant and the Participant’s legal Beneficiaries.

## 9.12         Severability.  In case any provision of the Plan is deemedto be prohibited by law, determined to be subject to ERISA, or creates anyobligation or liability for the Company beyond its agreement to pay thecompensation under the terms and conditions of the Plan, then such provision orprovisions shall be rendered ineffective without invalidating the remainingprovisions.

## 9.13         Incompetent.  If the Committee determines in its discretionthat a benefit under the Plan is to be paid to a minor, a person declaredincompetent or to a person incapable of handling the disposition of that person’sproperty, the Committee may direct payment of such benefit to the guardian,legal representative or person having the care and custody of such minor,incompetent or incapable person.  TheCommittee may require proof of minority, incompetence, incapacity orguardianship, as it may deem appropriate prior to distribution of thebenefit.  Any payment of a benefit shallbe a payment for the account of the Participant and the Participant’sBeneficiary, as the case may be, and shall be a complete discharge of anyliability under the Plan for such payment amount.

## 9.14         Court Order.  The Committee is authorized to comply withany court order in any action in which the Plan, Committee has been named as aparty, including any action involving a determination of the rights orinterests in a Participant’s benefits under the Plan.

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