Document:

exhibit102.htm

 

CONFIDENTIAL TREATMENT REQUESTED BY RADIOSHACK CORPORATION

 

Confidential material has been separately filed with the Securities and Exchange Commission under an application for confidential treatment.  Terms for which confidential treatment has been requested have been omitted and marked with bracketed asterisks [***].

 

 

August 23, 2010

	
To:

	
RadioShack Corporation

	
  

	
300 Radioshack Circle

	
  

 

	
Fort Worth, TX 76102

Attn:        Mark Barfield

      Vice President & Treasurer

      MS CF3-255

Telephone:     817-415-3738

Facsimile:      817-415-2638

 

	
From

	
Wells Fargo Securities, LLC

	
  

	
solely as agent of Wells Fargo Bank, National Association

	
  

	
375 Park Avenue

	
  

	
New York, NY 10152

Attn:       Structured Derivatives Documentation

Telephone:    212-214-6101

Facsimile:     212-214-5913

 

 

	
Re:

	
Issuer Forward Repurchase Transaction

	
  

	
(Transaction Reference Number: 8118745)

 

Ladies and Gentlemen:

 

The purpose of this communication (this “Confirmation”) is to confirm the terms and conditions of the Transaction entered into between Wells Fargo Bank, National Association (“Dealer”), represented by Wells Fargo Securities, LLC (“Agent”), as its agent, and RadioShack Corporation (“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 2000 ISDA Definitions (including the Annex thereto) (the “2000 Definitions”) and the definitions and provisions of the 2002 ISDA Equity Derivatives Definitions (the “Equity Definitions”, and together with the 2000 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 2000 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). The Transaction shall be the only Transaction under the Agreement.

 

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.

 

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

 

General Terms:

 

	
  

	
Trade Date:

	
August 23, 2010

 

  

  

  

	
  

	
Seller:

	
Dealer

 

	
  

	
Buyer:

	
Counterparty

 

	
  

	
Shares:

	
The common stock of Counterparty, par value USD 1.00 per share (Ticker symbol: “RSH”)

 

	
  

	
Prepayment:

	
Applicable

 

	
  

	
Prepayment Amount:

	
As provided in Annex B to this Confirmation.

 

	
  

	
Prepayment Date:

	
The first Exchange Business Day following the Trade Date

 

	
  

	
Exchange:

	
The New York Stock Exchange

 

	
  

	
Related Exchange(s):

	
All Exchanges

 

	
  

	
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 or, if later, the completion of all purchases by Dealer referred to in Section 8(b), subject to adjustment pursuant to “Averaging Date Disruption” below.

 

	
  

	
Calculation Agent:

	
Dealer; provided that, upon receipt of written request from Counterparty, Calculation Agent shall promptly (but in no event later than within seven Scheduled Trading Days from the receipt of such request) provide Counterparty with a written explanation describing in reasonable detail any calculation, adjustment or determination made by it (including any quotations, market data or information from internal sources used in making such calculations, but without disclosing Dealer’s proprietary models).

 

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.

 

	
  

	
Final Averaging Date:

	
The Scheduled Final Averaging Date; provided that Dealer shall have the right, in its absolute discretion, at any time to accelerate 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 7:00 P.M., New York City time, on such accelerated Final Averaging Date.

 

	
  

	
Scheduled Final Averaging

	
  

	
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, respectively, the Calculation Agent may, if reasonably necessary in light of market conditions or regulatory considerations, take any or all of the following actions in good faith and in a commercially reasonable manner: (i) postpone the Scheduled Final Averaging

 

  

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Date to the next Relevant Day that is not already an Averaging Date, in accordance with Modified Postponement (as modified herein) 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.  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 adding at the end of clause (B) thereof the words “based on the volume, historical trading patterns and price of the Shares.

 

	
  

	
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 (i) replacing the words “Exchange Business Day” in the first line thereof with “Relevant Day” and (ii) 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 discretion, determines, based on advice of counsel, makes it reasonably necessary with regard to any legal, regulatory or self-regulatory requirements or related policies and procedures for Dealer to refrain from or decrease any market activity in connection with the Transaction. Dealer shall notify Counterparty as soon as reasonably practicable but no later than the second Business Day following such Regulatory Disruption 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 a number of Shares equal to the Initial Shares.

 

	
  

	
Initial Share Delivery Date:

	
August 24, 2010

 

	
  

	
Initial Shares:

	
As provided in Annex B to this Confirmation.

 

	
  

	
Settlement Date:

	
The date that falls one Settlement Cycle 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

 

  

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	 	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 Settlement Price Adjustment Amount; 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 Adjustment

	
  

	
Amount:

	
As provided in Annex B to this Confirmation.

 

	
  

	
Settlement Price:

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

 

	
  

	
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 “RSH.N <Equity> AQR SEC” (or any successor thereto) or, in the event such price is not so reported on such day for any reason or is manifestly incorrect, as reasonably determined by the Calculation Agent using a volume weighted method.

 

	
  

	
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 solely 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 other than any dividend or distribution of the type described in Sections 11.2(e)(i), 11.2(e)(ii)(A) or 11.2(e)(ii)(B) of the Equity Definitions.

 

Share Adjustments:

 

	
  

	
Method of Adjustment:

	
Calculation Agent Adjustment; provided that neither the declaration or payment of Dividends nor a repurchase of Shares at current market value or pursuant to a forward repurchase transaction substantially identical to the Transaction entered into by Counterparty with another dealer on the date hereof (an “Other Transaction”) by Counterparty or any of its subsidiaries shall be a Potential Adjustment Event.

 

	
  

	
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 appropriate to preserve the fair value of the Transaction following such postponement.

 

  

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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:

	
Component Adjustment

 

	
  

	
Tender Offer:

	
Applicable

 

	
  

	
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

 

	
  

	
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 to the extent necessary to preserve the fair value of the Transaction and account for the net economic gain obtained or loss suffered by Dealer (in each case applying consistent methodology) as a result of the occurrence of such Merger Event or Tender Offer.

 

	
  

	
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)”.

 

	
  

	
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 with respect to the Transaction, a Change in Law shall occur only if the Hedging Party (x) was unable, after using commercially reasonable efforts, to replace

 

  

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its existing Hedge Positions with alternative Hedge Positions in respect of the Transaction to avoid the Change in Law that would have otherwise occurred absent such change in the Hedge Positions, and (y) in the event (x) applies, has used commercially reasonable efforts to transfer its rights and obligations under the Transaction to the extent necessary to avoid such Change in Law and failed to so effect such transfer pursuant to Section 10(e) below.

 

	
  

	
Failure to Deliver:

	
Applicable

 

	
  

	
Insolvency Filing:

	
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; provided that, upon receipt of written request from Counterparty, Determining Party shall promptly (but in no event later than within seven Scheduled Trading Days from the receipt of such request) provide Counterparty with a written explanation describing in reasonable detail any determination made by it (including any quotations, market data or information from internal sources used in making such calculations, but without disclosing Dealer’s proprietary models).

 

	
  

	
Non-Reliance:

	
Applicable

 

	
  

	
Agreements and Acknowledgments

	
  

	
Regarding Hedging Activities:

	
Applicable

 

	
  

	
Additional Acknowledgments:

	
Applicable

 

3.            Account Details:

 

	
  

	
(a)  Account for delivery of Shares

	
  

	
to Counterparty:

 

	
  

	
[***

	
]

 

	
  

	
(b)  Account for payments to

	
  

	
Counterparty:

 

	
  

	
[***

	
]

 

	
  

	
(c)  Account for payments to Dealer:

 

	
  

	
Wells Fargo Bank, N.A.

ABA 121-000-248

Internal acct no. 010203000064228

A/C name:  WFB Equity Derivatives

 

DTC Number:  2072

Agent ID: 52196

Institution ID: 52196

	
 

 

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:  Charlotte

 

Wells Fargo Securities, LLC

201 South College Street, 6th Floor

  

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Charlotte, NC  28288-0601

Facsimile No.:  704-383-8425

Telephone No.: 704-715-8086

Attention:  Equity Derivatives

 

5.           Notices:  For purposes of this Confirmation:

 

	
  

	
(a)  Address for notices or communications to Counterparty:

 

RadioShack Corporation

	
  

	
300 Radioshack Circle

	
  

	
Fort Worth, TX 76102

Attn: Mark Barfield

Vice President & Treasurer

MS CF3-255

Telephone: 817-415-3738

Facsimile: 817-415-2638

 

	
  

	
(b)  Address for notices or communications to Dealer:

 

  For the purpose of Section 12(a) of the Agreement:

Wells Fargo Bank, National Association

375 Park Avenue

New York, NY 10152

Attention: Structured Derivatives Support

Telephone No.: 212-214-6101

Facsimile No.: 212-214-5913

Trader’s Contact Information:

Mark Kohn or Head Trader

Telephone: 212-214-6089

Facsimile: 212-214-8914

Except as otherwise provided herein, any and all notices, demands, or communications of any kind transmitted in writing by either Dealer or the Counterparty under or in connection with this Transaction will be transmitted exclusively by such party to the other party through the Agent at the following address:

Wells Fargo Securities, LLC

201 South College Street, 6th Floor

Charlotte, NC  28288-0601

Facsimile No.:  704-383-8425

Telephone No.: 704-715-8086

Attention:  Equity Derivatives

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 earlier of (x) the Scheduled Final Averaging Date and (y) the 24th Exchange Business Day following the Final Averaging Date, 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

 

  

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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, subject to Section 8(b) below.  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, Counterparty shall not, directly or indirectly, communicate any information regarding Counterparty or the Shares to Dealer or its 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.  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 Regulation M to be applicable to any purchases of Shares, or any security for which the Shares are a reference security (as defined in Regulation M), by Counterparty or any of its affiliated purchasers (as defined in Regulation M) during the Relevant Period.

 

(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), which notice shall be substantially in the form set forth as Appendix A hereto. For the avoidance of doubt, this clause 6(c) shall not apply with respect to any repurchases under the Other Transaction.

 

(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 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 each case, excluding any purchase by any dealer under the Other 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).

 

  

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(e)           Without the prior written consent of Dealer, 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 Counterparty may enter into the Other Transaction so long as no “Relevant Day” under such Other Transaction is a Relevant Day hereunder; and provided further, that this Section 6(e) shall not apply to (A) purchases of Shares pursuant to exercises of stock options or vesting of restricted stock grants pursuant to incentive stock plans granted to former or current employees, officers, directors, or other affiliates of Counterparty, including the withholding and/or purchase of Shares from holders of such options or restricted stock to satisfy payment of the option exercise price and/or satisfy tax withholding requirements in connection with the exercise of such options or vesting of such restricted stock; (B) the conversion or exchange by holders of any convertible or exchangeable securities of Counterparty previously issued; (C) purchases of Shares effected by or for a plan by an agent independent of Counterparty that satisfy the requirements of Rule 10b-18(a)(13)(ii); (D) purchases which are not solicited by or on behalf of Counterparty, its “affiliates” or “affiliated purchasers” (each as defined in Rule 10b-18); or (E) purchases effected on a day that is not a Relevant Day.

 

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) Counterparty is not 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)           As of the Trade Date, Counterparty is not the subject of a self-tender offer and has not received notice that it is the subject of a tender offer that has commenced under Rule 14d-2 of the Exchange Act.

 

(iv)           On or 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 on August 18, 2010 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 raise or depress the price of the Shares (or any security convertible into or exchangeable for Shares) for the purpose of inducing the purchase or sale of the Shares by others.

 

  

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(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)           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 an ordinary cash dividend of USD 0.25 or less per Share to holders of record on November 26, 2010 (or any later date within the same quarterly fiscal period of Counterparty).

 

(ix)           Counterparty understands that 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.

 

(b)           Each of Dealer and Counterparty agrees and represents that it is an “eligible contract participant” as defined in Section 1a(12) of the U.S. Commodity Exchange Act, as amended.

 

(c)           Counterparty and Dealer acknowledge that the offer and entry into the Transaction to it is intended to be exempt from registration under the Securities Act, by virtue of Section 4(2) thereof.  Accordingly, each of Counterparty and Dealer represents and warrants to the other party 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)           Dealer represents to Counterparty that Dealer is a “financial institution,”  “swap participant” and “financial participant” and Counterparty represents to Dealer that Counterparty is a “swap participant”, in each case within the meaning of Sections 101(22), 101(53C) and 101(22A) of the Bankruptcy Code, as applicable.  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 be 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 and Hedge Unwind.

 

(a)           Subject to Dealer’s covenants contained in Section 8(b) below, Counterparty acknowledges and agrees that (i) 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; (ii) 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; (iii) Dealer shall make its own

 

  

10

  

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 (iv) 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.

 

(b)           Dealer covenants and agrees that (i) on each Relevant Day during the Relevant Period, it shall effect all purchases of Shares in connection with the Transaction (including without limitation purchases during the Relevant Period and purchases made for the purpose of covering any short position in Shares that was established for the purposes of hedging Dealer’s equity price risk in respect of the Transaction), other than purchases made on such Relevant Day in connection with any dynamic adjustments to Dealer's hedge position in respect of the market risk associated with the equity options embedded in the Transaction, in a manner that Dealer reasonably believes, based on the representations, warranties and agreements of Counterparty set forth herein, 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”), if Dealer were Counterparty or an “affiliated purchaser” (as such term is defined in Rule 10b-18) of Counterparty and such rule were applicable to such purchases and (ii) it will not directly or indirectly purchase any Shares or enter into any derivatives or any other transaction that provides Dealer or an affiliate of Dealer with a long exposure to the Shares for any purpose in connection with the Transaction on any day that is not a Relevant Day.

 

9.           [Reserved.]

 

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 the event of (i) an Insolvency, a Nationalization, a Merger Event or a Tender Offer, 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. 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

 

  

11

  

 

 

	 	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 commercially reasonable discretion and notified by the Calculation Agent to the parties at the time of notification of the Payment Obligation.

 

	
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 solely 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

 

  

12

  

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)           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 that are Relevant Days (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 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.

 

(d)           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 to preserve the fair value of the Transaction, assuming that the Hedging Party maintains a commercially reasonable hedge position.

 

(e)           Transfer and Assignment.  Dealer may transfer or assign its rights and obligations hereunder and under the Agreement, in whole or in part, to (i) any of its Affiliates without the consent of Counterparty or (ii) any third party with the prior written consent of Counterparty.

 

(f)           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 Relevant Price on any Exchange Business Day (determined as if such day were a Valuation Date) is at or below the Threshold Price (as provided in Annex B to this Confirmation).

 

(g)           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 “a material 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 dilutive or concentrative effect on the theoretical value of the Shares or options on the Shares and, if so, will (i) make appropriate adjustment(s), if any, to any one or more of:’ and clause (B) thereof is hereby amended by inserting, after ‘the Forward Price,’ ‘the Initial Shares,’ 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 resulting from such Potential Adjustment Event)”. For the avoidance of doubt, the Calculation Agent shall make adjustments pursuant to Section 11.2(c) of the Definitions (as amended hereby) to preserve the fair value of the relevant Transaction by making adjustments to account for the net economic gain obtained or loss suffered by Dealer (in each case applying consistent methodology) as a result of the occurrence of such Potential Adjustment Event;

 

  

13

  

(iii)           Section 11.2(e)(vii) of the Equity Definitions is hereby replaced in its entirety with “any other corporate action taken by the Issuer with respect to the Shares (other than any event that would otherwise constitute an Extraordinary Event) that has a dilutive or concentrative effect on the theoretical value of the Shares or options on the Shares”; 

 

(iv)           (A) Section 12.1(l) of the Equity Definitions shall be amended (x) by deleting the parenthetical phrase in both the third line thereof and the fifth line thereof and (y) by replacing the word “that” in both the third line thereof and the fifth line thereof with the words “whether or not such announcement”, (B) Sections 12.2(b), 12.2(e), 12.3(a) and 12.3(d) of the Equity Definitions shall each be amended by replacing each occurrence of the words “Merger Date” and “Tender Offer Date”, as the case may be, with the words “Announcement Date”, and (C) (1) Section 12.2(e) shall be amended by inserting, in the first line thereof, after the newly inserted words “Announcement Date”, the words “(or, if the Calculation Agent reasonably determines that such adjustment is appropriate, on the relevant Merger Date or the date on which the Calculation Agent reasonably determines that the Merger Event, with respect to which such Announcement Date has occurred, will not be completed)” and (2) Section 12.3(d) shall be amended by inserting, in the first line thereof, after the newly inserted words “Announcement Date”, the words “(or, if the Calculation Agent reasonably determines that such adjustment is appropriate, on the relevant Tender Offer Date or the date on which the Calculation Agent reasonably determines that an event, with respect to which such Announcement Date has occurred, will not be completed)”.

 

(v)           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”;

 

(vi)           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

 

(vii)           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.

 

(h)           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.

 

(i)           Factors for Adjustments. Dealer acknowledges and agrees that any adjustment by the Calculation Agent to the terms of the Transaction on or after the Trade Date that affects the Number of Shares to be Delivered or the Forward Cash Settlement Amount, as applicable, would be an adjustment that is based on factors that would serve as an input to, or theoretical modeling assumptions for, the fair value of a fixed-for-fixed forward or option on equity shares.  These factors may include Counterparty’s stock price and additional variables, including the strike price of the instrument, term of the instrument, expected dividends or other dilutive activities, stock borrow cost, interest rates, stock price volatility, Counterparty’s credit spread or the ability to maintain a standard hedge position in the Shares.

 

(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.

 

  

14

  

(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.  Such designation shall not relieve the Designator of any of its obligations, if any, 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)           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.

 

(n)           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.

 

(o)           The Agent is registered as a broker-dealer with the SEC and the Financial Industry Regulatory Authority (FINRA), is acting hereunder for and on behalf of Dealer solely in its capacity as agent for Dealer pursuant to instructions from Dealer, and is not and will not be acting as the Counterparty’s agent, broker, advisor or fiduciary in any respect under or in connection with the Transaction.

 

(p)           In addition to acting as Dealer’s agent in executing this Transaction, the Agent is authorized from time to time to give written payment and/or delivery instructions to the Counterparty directing it to make its payments and/or deliveries under this Transaction to an account of the Agent for remittance to Dealer (or its designee), and for that purpose any such payment or delivery by the Counterparty to the Agent shall be treated as a payment or delivery to Dealer.

 

(q)           The Agent shall have no responsibility or liability to Dealer or the Counterparty for or arising from (i) any failure by either Dealer or the Counterparty to perform any of their respective obligations under or in connection with this Transaction, (ii) the collection or enforcement of any such obligations, or (iii) the exercise of any of the rights and remedies of either Dealer or the Counterparty under or in connection with this Transaction.  Each of Dealer and the Counterparty agrees to proceed solely against the other to collect or enforce any such obligations, and the Agent shall have no liability in respect of this Transaction except for its gross negligence or willful misconduct in performing its duties as the agent of Dealer.

 

(r)           Upon written request, the Agent will furnish to Dealer and the Counterparty the date and time of the execution of this Transaction and a statement as to the source and amount of any remuneration received or to be received by the Agent in connection with this Transaction.

 

 

  

15

  

Please confirm that the foregoing correctly sets forth the terms of our agreement by executing a copy of this Confirmation and returning it to us by facsimile at 212-214-5913 (Attention: Structured Derivatives Documentation Unit).

Very truly yours,

                                                                                      

 

	 WELLS FARGO SECURITIES, LLC,	 WELLS FARGO BANK, NATIONAL ASSOCIATION
	 acting solely in its capacity as Agent	 By:  Wells Fargo Securities, LLC,
	 of Wells Fargo Bank, National Association	 acting solely in its capacity as its Agent
	 	 
	 	 
	 By: /s/  Cathleen Burke	 By: /s/  Cathleen Burke                                                              
	 Name:  Cathleen Burke                                                                     	 Name:  Cathleen Burke
	 Title:  Managing Director                                                                           	 Title:  Managing Director
	 	 
	  

 Accepted and confirmed as

 of the date first above written:

	 
	 	 
	  

 RADIOSHACK CORPORATION

	 
	 	 
	 	 
	 By: /s/ James F. Gooch                                                                	 
	 Name:  James F. Gooch	 
	 Title:  Executive Vice President and 

           Chief Financial Officer

	 
	 	 

 

                                                        

  

16

  

APPENDIX A

[Counterparty Letterhead]

 

[Dealer]

 

[Address]

 

Re:           Issuer Forward Repurchase Transaction

 

Ladies and Gentlemen:

 

In connection with our entry into a confirmation between you and us dated as of August 23, 2010 (the “Confirmation”), we hereby represent that set forth below is the total number of shares of our common stock purchased by or for us or any of our affiliated purchasers in Rule 10b-18 purchases of blocks pursuant to the once-a-week block exception contained in Rule 10b-18(b)(4) (all defined in Rule 10b-18 under the Securities Exchange Act of 1934, as amended) during the four full calendar weeks immediately preceding the first day of the Relevant Period (as defined in the Confirmation) and the week during which the first day of the Relevant Period occurs:

 

	  	
Monday’s

Date

	
Friday’s

Date

	
Share

Number

	
Week 4:

	  	  	  
	
Week 3:

	  	  	  
	
Week 2:

	  	  	  
	
Week 1:

	  	  	  
	
Current Week:

	  	  	
 

We understand that you will use this information in calculating trading volume for purposes of Rule 10b-18.

 

 

	 	 Very truly yours,
	 	 
	 	 RADIOSHACK CORPORATION
	 	 
	 	 By:   ____________________________________
	 	 Name:   
	 	 Title:  

 

  

  

  

ANNEX A

 

COUNTERPARTY SETTLEMENT PROVISIONS

 

1.           The following Counterparty Settlement Provisions shall apply to the extent indicated under the Confirmation:

 

	
  

	
Settlement Currency:

	
USD

 

	
     Settlement Method Election:

	
Applicable; provided that (i) Section 7.1 of the Equity Definitions is hereby amended by deleting the word “Physical” in the sixth line thereof and replacing it with the words “Net Share” and (ii) the Electing Party may make a settlement method election only if the Electing Party represents and warrants to Dealer in writing on the date it notifies Dealer of its election that, as of such date, (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.

 

	
  

	
Electing Party:

	
Counterparty

 

	
  

	
Settlement Method

	
  

	
Election Date:

	
The date 10 Exchange Business Days prior to the Valuation Date; provided that if Dealer accelerates the Final Averaging Date pursuant to the proviso to the definition of Final Averaging Date, the Settlement Method Election Date shall be the second Exchange Business Day immediately following the Valuation Date.

 

	
      Default Settlement Method:

	
Cash Settlement

 

	
  

	
Special Settlement:

	
Any settlement to which paragraphs 2 through 5 of this Annex A apply that follows a termination or cancellation of the Transaction pursuant to Section 6 of the Agreement or Article 12 of the Equity Definitions to which Section 10(a) of this Confirmation applies.

 

	
  

	
Forward Cash Settlement

	
  

	
Amount:

	
The Number of Shares to be Delivered multiplied by the Settlement Valuation Price.

 

	
     Settlement Valuation Price:

	
The arithmetic average of the VWAP Prices for all Settlement Valuation Dates, subject to Averaging Date Disruption, determined as if each Settlement Valuation Date were an Averaging Date (with Averaging Date Disruption applying as if the last Settlement Valuation Date were the Final Averaging Date and the Settlement Valuation Price were the Settlement Price).

 

	
     Settlement Valuation Dates:

	
A number of Relevant Days selected by Dealer in its reasonable discretion, beginning on the Relevant Day immediately following the later of the Settlement Method Election Date and the Final Averaging Date.

 

	
  

	
Cash Settlement:

	
If Cash Settlement is applicable, then Counterparty shall pay to Dealer the absolute value of the Forward Cash Settlement Amount on the Cash Settlement Payment Date.

A-1

  

  

  

 

	
  

	
Cash Settlement

	
  

	
Payment Date:

	
The date one Settlement Cycle following the last Settlement Valuation Date.

 

	
  

	
Net Share Settlement

	
  

	
Procedures:

	
If Net Share Settlement is applicable, Net Share Settlement shall be made in accordance with paragraphs 2 through 5 below.

 

2.           Net Share Settlement shall be made by delivery on the Settlement Date of a number of Shares equal to the product of 102 % of the absolute value of the Number of Shares to be Delivered; provided that in the case of a Special Settlement, Net Share Settlement shall be made (i) by delivery on the Cash Settlement Payment Date (such date, the “Net Share Settlement Date”) of a number of Shares (the “Restricted Payment Shares”) with a value equal to the absolute value of the Forward Cash Settlement Amount (as determined pursuant to Section 10(a) of this Confirmation), with such Shares’ value based on the realizable market value thereof to Dealer (which value shall take into account an illiquidity discount resulting from the fact that the Restricted Payment Shares will not be registered for resale), as determined by the Calculation Agent (the “Restricted Share Value”), and paragraph 3 of this Annex A shall apply to such Restricted Payment Shares, and (ii) by delivery of the Make-Whole Payment Shares as described in paragraph 4 below.

 

3.           (a)           All Restricted Payment Shares and Make-Whole Payment Shares shall be delivered to Dealer (or any affiliate of Dealer designated by Dealer) pursuant to the exemption from the registration requirements of the Securities Act provided by Section 4(2) thereof.

 

(b)           As of or prior to the date of delivery, Wells Fargo Securities, LLC, Dealer and any potential purchaser of any such Shares from Dealer (or any affiliate of Dealer designated by Dealer) identified by Dealer shall be afforded a commercially reasonable opportunity to conduct a due diligence investigation with respect to Counterparty customary in scope for private placements of equity securities of similar size (including, without limitation, the right to have made available to them for inspection all financial and other records, pertinent corporate documents and other information reasonably requested by them).

 

(c)           As of the date of delivery, Counterparty shall enter into an agreement (a “Private Placement Agreement”) with Dealer (or any affiliate of Dealer designated by Dealer) in connection with the private placement of such Shares by Counterparty to Dealer (or any such affiliate) and the private resale of such shares by Dealer (or any such affiliate), substantially similar to private placement purchase agreements customary for private placements of equity securities of similar size, in form and substance commercially reasonably satisfactory to Dealer, which Private Placement Agreement shall include, without limitation, provisions substantially similar to those contained in such private placement purchase agreements relating to the indemnification of, and contribution in connection with the liability of, Dealer and its affiliates, and shall provide for the payment by Counterparty of all fees and expenses in connection with such resale, including all fees and expenses of counsel for Dealer, and shall contain representations, warranties and agreements of Counterparty reasonably necessary or advisable to establish and maintain the availability of an exemption from the registration requirements of the Securities Act for such resales.

 

(d)           Counterparty shall not take or cause to be taken any action that would make unavailable either (i) the exemption set forth in Section 4(2) of the Securities Act for the sale of any Restricted Payment Shares or Make-Whole Payment Shares by Counterparty to Dealer or (ii) an exemption from the registration requirements of the Securities Act reasonably acceptable to Dealer for resales of Restricted Payment Shares and Make-Whole Payment Shares by the Dealer (or an affiliate of Dealer).

 

(e)           Counterparty expressly agrees and acknowledges that the public disclosure of all material information relating to Counterparty is within Counterparty’s control.

 

4.           If Restricted Payment Shares are delivered in accordance with paragraph 3 above, on the last Settlement Valuation Date, a balance (the “Settlement Balance”) shall be established with an initial balance equal to the absolute value of the Forward Cash Settlement Amount.  Following the delivery of Restricted Payment Shares or any Make-Whole Payment Shares, Dealer shall sell all such Restricted Payment Shares or Make-Whole Payment Shares on Relevant Days in a commercially reasonable manner.  At the end of each Relevant Day upon which sales have been made, the Settlement Balance shall be reduced by an amount equal to the aggregate proceeds received by Dealer or its affiliate upon the sale of such Restricted Payment Shares or Make-Whole Payment Shares, less a customary and commercially 

 

  A-2

  

  

 

 

reasonable private placement fee for private placements of common stock by similar issuers.  If, on any Exchange Business Day, all Restricted Payment Shares and Make-Whole Payment Shares have been sold and the Settlement Balance has not been reduced to zero, Counterparty shall (i) deliver to Dealer or as directed by Dealer one Settlement Cycle following such Exchange Business Day an additional number of Shares (the “Make-Whole Payment Shares” and, together with the Restricted Payment Shares, the “Payment Shares”) equal to (x) the Settlement Balance as of such Exchange Business Day divided by (y) the Restricted Share Value of the Make-Whole Payment Shares as of such Exchange Business Day or (ii) promptly deliver to Dealer cash in an amount equal to the then remaining Settlement Balance.  This provision shall be applied successively until either the Settlement Balance is reduced to zero or the aggregate number of Restricted Payment Shares and Make-Whole Payment Shares equals the Maximum Deliverable Number. If on any Exchange Business Day, Restricted Payment Shares and Make-Whole Payment Shares remain unsold and the Settlement Balance has been reduced to zero, Dealer shall promptly return such unsold Restricted Payment Shares or Make-Whole Payment Shares.

 

5.           Notwithstanding the foregoing, in no event shall Counterparty be required to deliver more than the Maximum Deliverable Number of Shares as Payment Shares hereunder.  “Maximum Deliverable Number” means the number of Shares set forth as such in Annex B to this Confirmation.  Counterparty agrees that from the date hereof to the Settlement Date or, if Counterparty has elected to deliver any Payment Shares hereunder in connection with a Special Settlement, to the date on which resale of such Payment Shares is completed (the “Final Resale Date”), it will ensure that the Maximum Deliverable Number is equal to or less than the number of authorized but unissued Shares of Counterparty that are not reserved for future issuance in connection with transactions in such Shares (other than the transactions under this Confirmation) on the date of the determination of the Maximum Deliverable Number (such Shares, the “Available Shares”).  In the event Counterparty shall not have delivered the full number of Shares otherwise deliverable as a result of this paragraph 5 (the resulting deficit, the “Deficit Shares”), Counterparty shall be continually obligated to deliver, from time to time until the full number of Deficit Shares have been delivered pursuant to this paragraph, Shares when, and to the extent that, (i) Shares are repurchased, acquired or otherwise received by Counterparty or any of its subsidiaries after the date hereof (whether or not in exchange for cash, fair value or any other consideration), (ii) authorized and unissued Shares reserved for issuance in respect of other transactions prior to such date which prior to the relevant date become no longer so reserved or (iii) Counterparty additionally authorizes any unissued Shares that are not reserved for other transactions.  Counterparty shall immediately notify Dealer of the occurrence of any of the foregoing events (including the number of Shares subject to clause (i), (ii) or (iii) and the corresponding number of Shares to be delivered) and promptly deliver such Shares thereafter.

A-3

  

  

  

ANNEX B

[***]

 

 

 

 

 

 

 

 

B-1Unassociated Document

Exhibit 4.2

2010 ARCELORMITTAL EMPLOYEE SHARE PURCHASE PLAN

 

ARTICLE 1.  Purpose

 

This 2010 ArcelorMittal Employee Share Purchase Plan (the “ESPP 2010”) is intended to enable Employees of the Companies to acquire an equity interest in ArcelorMittal through the acquisition of Shares (in each case, as defined hereinafter) on favourable terms and thereby for ArcelorMittal to align the interest of those employees and of ArcelorMittal’s shareholders.

 

ARTICLE 2.  Definitions

 

For the purposes of the ESPP 2010, the following terms shall have the meaning set forth below:

 

	
“Allocation Date”

	
means 8 December 2010.

	 	 
	
“ArcelorMittal”

	
means ArcelorMittal, a Luxembourg public limited liability company (société anonyme) with its registered office at 19, Avenue de la Liberté, L-2930 Luxembourg, Grand Duchy of Luxembourg.  ArcelorMittal is registered with the Luxembourg Registry of Trade and Companies under number B 82.454.

	 	 
	
“Board”

	
means the Board of Directors of ArcelorMittal.

	 	 
	
“Committee”

	
means the Appointments, Remuneration and Corporate Governance Committee of the Board or such other committee appointed by the Board to administer the ESPP 2010.

	 	 
	
“Company”

	
means any of (i) the entities exclusively controlled, directly or indirectly, by ArcelorMittal (which, for the avoidance of doubt, includes Paul Wurth entities) and having their registered office in the Jurisdictions or (ii) the U.S. joint venture entity I/N Tek or I/N Kote.

	  	
For the purposes hereof, an entity shall be deemed “exclusively controlled” by ArcelorMittal if it is fully consolidated in ArcelorMittal’s financial statements.

	 	 
	
“Custodian”

	
means either the European Custodian or the U.S. Custodian, as applicable.

	 	 

 

  

  

  

	
“Early Exit Event”

	
means, for any Participant, (i) the termination of the Participant’s employment with any Company for any reason, whether voluntarily or involuntarily, including death, unless after such termination, the Participant is an employee of an entity exclusively or jointly controlled, directly or indirectly, by ArcelorMittal, or (ii) the permanent disability of the Participant, as determined in the sole discretion of the human resources department of the relevant Company.

	 	 
	
“Early Exit Notice”

	
has the meaning set forth in Section 8.1.

	 	 
	
“Employee”

	
means a person who is an employee of any Company (for a definite or indefinite period of time) at the end of the Subscription Period, excluding any such employee who has given or received notice of termination of employment or who will have been employed for less than three months as of the end of the Subscription Period.

	 	 
	
“ESPP 2010”

	
has the meaning set forth in Article 1.

	 	 
	
“European Custodian”

	
means, with respect to Shares purchased by Employees of Companies having their registered office in Jurisdictions other than the United States of America or Canada, BNP Paribas Securities Services, a French public limited liability company (société anonyme) with its registered office at 3, rue d’Antin, 75002 Paris, France, registered with the Paris Registry of Trade and Companies under number 552 108 011 RCS.

	 	 
	
“European Securities Account”

	
has the meaning set forth in Section 4.4.

	 	 
	
“European Stock Exchange”

	
means any European regulated market on which ArcelorMittal shares are officially admitted to trading.

	 	 
	
“Expiration Date”

	
means 10 January 2014; provided, that if such day is not a Stock Exchange Day, then the Expiration Date will be the following Stock Exchange Day.

	 	 
	
“First Cap”

	
has the meaning set forth in Section 3.2.

	 	 
	
“Initial FX Rate”

	
means, with respect to any Local Currency other than the U.S. dollar, the foreign exchange rate of the U.S. dollar into the Local Currency (or, depending on the context, of the Local Currency into the U.S. dollar) fixed by ArcelorMittal:

	 	 	 
	  	●	
for Local Currencies for which there is a U.S. Federal Reserve official exchange rate of the US. dollar into the Local Currency, based on the foreign exchange rate of the U.S. dollar into the Local Currency for the Stock Exchange Day immediately preceding the date of the determination of the Reference Price, as published by the U.S. Federal Reserve at http://www.federalreserve.gov/Releases/H10/;

	 	 	 

 

  

2

  

	 	●	for Local Currencies for which there is no U.S. Federal Reserve official exchange rate of the U.S. dollar into the Local Currency but for which there is a European Central Bank official exchange rate of the euro into the Local Currency, based on the foreign exchange rate of the euro into the Local Currency published by the European Central Bank at 14:15 Central European time (on Reuters, page ECB 371) on the Stock Exchange Day immediately preceding the date of the determination of the Reference Price, as converted from the euro to the U.S. dollar based on the foreign exchange rate of the euro into the U.S. dollar published by the European Central Bank at the same time and on the same page; and
	 	 	 
	 	●	for other Local Currencies, based on the foreign exchange rate of the U.S. dollar into the Local Currency published by the central bank of the relevant jurisdiction on the Stock Exchange Day immediately preceding the date of the determination of the Reference Price.
	  	 
	
“Insider Dealing Regulations”

	
means the insider dealing regulations adopted by the Board (as amended from time to time), in order to ensure appropriate treatment of inside information and thus avoid insider dealing and market manipulation.  Such regulations, which are available on the ArcelorMittal website (www.arcelormittal.com), form an integral part of the ESPP 2010.

	 	 
	
“Interest Period”

	
for any dividend payment on the Shares, the duration of the first Interest Period shall be from and including the date on which the Custodian receives the dividend on the Shares held in the relevant Securities Account to and including the last day of the same month, and the duration of each subsequent Interest Period shall be from but excluding the last day of the previous Interest Period to and including the last day of the subsequent month.

	 	 
	
“Interest Rate”

	
means, for each Interest Period, (i) with respect to dividends paid on the Shares held in the U.S. Securities Account, the percentage rate per annum equal to the U.S. Federal Funds rate relevant for that Interest Period (as determined by the U.S. Custodian) less ten basis points, and (ii) with respect to dividends paid on the Shares held in the European Securities Account, the percentage rate per annum equal to the Euribor one-month rate relevant for that Interest Period (as determined by the European Custodian) less ten basis points.

	 	 

 

________________________________________

1           Also available at http://www.ecb.int/stats/exchange/eurofxref/html/index.en.html.

 

  

3

  

	  	
Any interest accruing under the ESPP 2010 shall accrue from day to day and shall be calculated on the basis of the actual number of days elapsed and a year of 360 days or, in any case where the practice in the relevant interbank market differs, in accordance with that market practice.

	 	 
	
“Jurisdictions”

	
means Argentina, Austria, Belgium, Bosnia & Herzegovina, Brazil, Canada, Costa Rica, the Czech Republic, Germany, India, Italy, Kazakhstan, Liberia, Luxembourg, Mexico, the Netherlands, Poland, Romania, Spain, Trinidad & Tobago, the United Kingdom and the United States of America.2

	 	 
	
“Local Currency”

	
means, with respect to any Jurisdiction, the official currency of that Jurisdiction.

	 	 
	
“Local Supplement”

	
means, with respect to any Jurisdiction, the supplement to the ESPP 2010 providing a summary of certain specific terms and conditions of the ESPP 2010 applicable in that Jurisdiction. The provisions of the Local Supplement (other than the tax and social charges withholding summary included therein) constitute an integral and essential part of the ESPP 2010 applicable in the relevant Jurisdiction.  In case of inconsistencies between the ESPP 2010 and the Local Supplement, the provisions of the Local Supplement shall prevail.

	 	 
	
“Maximum Number of Shares”

	
means 2.5 million Shares.

	 	 
	
“NYSE”

	
means the New York Stock Exchange.

	 	 
	
“Open Market”

	
means, (i) if the Custodian is the U.S. Custodian, the NYSE, and (ii) if the Custodian is the European Custodian, any European Stock Exchange, at the European Custodian’s discretion.

	 	 
	
“Participant”

	
means an Employee (i) who was validly enrolled in the ESPP 2010 in accordance with Article 3 and (ii) whose participation in the ESPP 2010 has not terminated.

	 	 
	
“Purchase Price”

	
means the purchase price per Share as determined in accordance with Section 3.2.

	 	 

 

________________________________________

2           Subject to feasibility.

  

4

  

	
“Purchased Shares”

	
has the meaning set forth in Section 4.2.

	 	 
	
“Reference Price”

	
means the average of the opening and closing market prices of the Share on the NYSE on the Stock Exchange Day before the first day of the Subscription Period.

	 	 
	
“Second Cap”

	
has the meaning set forth in Section 3.2.

	 	 
	
“Securities Account”

	
means the U.S. Securities Account or the European Securities Account.

	 	 
	
“Settlement Date”

	
means 10 January 2011.

	 	 
	
“Share”

	
means an ordinary, whole, existing share of ArcelorMittal and/or, if ArcelorMittal decides to deliver in whole or in part newly issued shares carrying the same rights as existing shares, a newly issued share of ArcelorMittal carrying upon issuance the same rights as existing shares.

	 	 
	
“Stock Exchange Day”

	
means a day on which the NYSE and all of the European Stock Exchanges are open.

	 	 
	
“Subscription Amount”

	
means the aggregate amount to be paid by an Employee to purchase Shares under the ESPP 2010, based on the Purchase Price.

	 	 
	
“Subscription Form”

	
means the Subscription Form provided by ArcelorMittal and, in Italy, by the financial intermediary appointed by ArcelorMittal, to be executed by an Employee pursuant to Section 3.1 in connection with participation in the ESPP 2010.

	 	 
	
“Subscription Period”

	
means the period beginning on 16 November 2010 at 00:01 New York time and ending on 25 November 2010 at 23:59 New York time.

	 	 
	
“Termination Notice”

	
has the meaning set forth in Section 7.1.

	 	 
	
“U.S. Custodian”

	
means, with respect to Shares purchased by Employees of Companies having their registered office in the United States of America or Canada, The Bank of New York Mellon, a corporation incorporated under the laws of the State of New York, with its registered office at One Wall Street, New York, NY 10286.

	 	 
	
“U.S. Securities Account”

	
has the meaning set forth in Section 4.4.

	  	  

 

 

  

5

  

ARTICLE 3.  Subscription

 

	
3.1

	
Pursuant to the ESPP 2010, an Employee may apply to purchase a number of whole Shares not exceeding that number of whole Shares equal to the lower of (i) 200 Shares and (ii) the whole number of Shares that may be purchased for US$ 15,000 pursuant to Section 3.2 (rounded down to the nearest whole number of Shares), by submitting a duly completed and signed Subscription Form during the Subscription Period or, where applicable, by subscribing online during the Subscription Period, in each case as set out in the applicable Local Supplement and, as the case may be, accompanied by any means of payment or document permitted and required to be delivered in accordance with the terms and conditions of the Subscription Form and the Local Supplement.  Unless the Local Supplement provides for a cancellation right, the submission of the Subscription Form or the subscription online, as the case may be, will be an irrevocable and definitive subscription order and cannot be cancelled or rescinded by the Employee once such order has been submitted.

 

	
3.2

	
The Purchase Price will be equal to the Reference Price, less a discount equal to:

 

	
  

	
(a)

	
15% of the Reference Price for a purchase order not exceeding the lower of (x) 100 Shares and (y) the number of Shares (rounded down to the nearest whole number) corresponding to an investment of US$ 7,500 (the “First Cap”); and thereafter;

 

	
  

	
(b)

	
10% of the Reference Price for any additional acquisition of Shares up to a number of Shares (including those in the First Cap) not exceeding the lower of (x) 200 Shares and (y) the number of Shares (rounded down to the nearest whole number) corresponding to an investment of US$ 15,000 (the “Second Cap”).

 

	
3.3

	
The Subscription Amount (converted into the Employee’s Local Currency at the Initial FX Rate, if applicable) shall be payable in Local Currency in accordance with the terms and conditions set out in the relevant Local Supplement.  In the event that an Employee fails in whole or in part to make such payment in accordance with the terms and conditions set out in the Local Supplement, his/her subscription shall be null, void and without effect.  If the payment default is identified after the Settlement Date, then the Custodian will deliver the corresponding Shares to ArcelorMittal as soon as practicable.  In case of a partial payment by an Employee, any such payment shall be refunded to the Employee without any accrual or payment of interest as soon as practicable through means such as payroll, wire transfer or check, at ArcelorMittal’s option.

 

ARTICLE 4.  Reduction, Allocation and Settlement

 

	
4.1

	
If the total amount of the Subscription Amounts, as converted into U.S. dollars at the Initial FX Rate if applicable, of all Participants for whom no partial or total payment default has been identified as of 17:00 Central European time on the Stock Exchange Day immediately preceding the Allocation Date, corresponds to a number of Shares exceeding the Maximum Number of Shares, each Participant’s subscription order shall be reduced such that the number of Shares effectively purchased by him/her shall be equal to the sum of (i) one Share and (ii) the number of Shares (rounded down to the nearest whole number of Shares) corresponding to the product of (x) the ratio of (1) the excess of such Participant’s demand over one Share over (2) the aggregate demand of all the Participants in excess of one Share per Participant and (y) the difference between the Maximum Number of Shares and the number of Participants (for the avoidance of doubt, excluding any Participants for whom a partial or total payment default has been identified).  The Subscription Amount of each Participant shall be reduced accordingly, based on the reduced number of Shares allocated to him or her, the Purchase Price and, if applicable, the Initial FX Rate.

 

  

6

  

	
4.2

	
As soon as practicable after the Settlement Date, each Participant will receive an individual allocation statement setting forth the final number of Shares allocated to such Employee under the ESPP 2010, as reduced in accordance with the provisions of Section 4.1 (the “Purchased Shares”).

 

	
4.3

	
Any excess payment made by a Participant resulting from the reduction contemplated by Section 4.1 shall be refunded to such Participant, without any accrual or payment of interest, as soon as practicable through means such as payroll, wire transfer or check, at ArcelorMittal’s option.

 

	
4.4

	
On the Settlement Date, in consideration of the Participants’ payment of the Subscription Amount, as reduced in accordance with Section 4.1, ArcelorMittal shall cause (i) a number of Shares equal to the aggregate number of Purchased Shares of the Employees of the Companies having their registered office in the United States of America or in Canada to be delivered to and deposited in a securities account maintained by the U.S. Custodian for the ESPP 2010 (the “U.S. Securities Account”) and (ii) a number of Shares equal to the aggregate number of Purchased Shares of the Employees of the Companies having their registered office in Jurisdictions other than the United States of America or Canada to be delivered to and deposited in a securities account maintained by the European Custodian for the ESPP 2010 (the “European Securities Account”).

 

ARTICLE 5.  Custody – Dividends

 

	
5.1

	
ArcelorMittal shall cause the relevant Custodian to credit in its records in the name of each Participant the number of Purchased Shares purchased by such Participant.

 

	
5.2

	
From the Settlement Date, subject to the transfer restrictions set out in Article 6 and the specific terms relating to the payment of dividends set out in Section 5.3 and seq., any Participant shall have, with respect to his/her Purchased Shares, all of the rights of a holder of such Shares, including the right to vote the Shares.  In order to attend a general meeting of shareholders in person or by proxy, Participants must contact the Custodian or use the documents enabling them to vote posted on the ArcelorMittal website (www.arcelormittal.com), which will be available as from the date of publication of the convening notice, which is announced by press release.

 

	
5.3

	
Any cash dividend paid by ArcelorMittal on the Shares held in the U.S. Securities Account shall be paid to and deposited with the U.S. Custodian, net of applicable withholding tax, in a separate global U.S. dollar cash account opened and maintained for such purposes.

 

	
5.4

	
Any cash dividend paid by ArcelorMittal on the Shares held in the European Securities Account shall be paid to and deposited with the European Custodian, net of applicable withholding tax, in a separate global euro cash account opened and maintained for such purposes.

 

	
5.5

	
Any cash dividend paid by ArcelorMittal on the Shares will not be paid to the Participant until the delivery of the Shares to such Participant’s securities account or the sale of his/her Shares on the Open Market, in each case, as set out in Articles 7 and 8.  The net amount of such dividends will accrue interest at the Interest Rate between the date of their receipt by the Custodian and the last day of the month preceding the month during which dividends are effectively paid to the Participant.  The Custodian will provide the Participant with annual statements indicating the amount of the dividend earned by the Participant on his/her Shares, net of any applicable withholding tax levied at the time of the payment of the dividends to the Custodian, together with the Interest Rate applied for the relevant period.  Payment of the dividends (and interest accrued thereon) to the Participants will be made net of any applicable withholding tax and in Local Currency, based on the applicable foreign exchange rate when the Local Currency differs from the functional currency of the cash account to which the dividends were credited.

 

  

7

  

	
5.6

	
ArcelorMittal will bear any bookkeeping costs incurred in connection with the custody of the Purchased Shares until the earlier of the Expiration Date and the early sale or delivery of the Purchased Shares in accordance with Article 8, as the case may be.  ArcelorMittal will bear any brokerage and related fees and stock exchange duties incurred in connection with the sale of the Purchased Shares in accordance with Article 7.  Any other costs (including any brokerage and related fees and stock exchange duties) incurred in connection with the sale of the Purchased Shares in accordance with Article 8, other than upon the death of the Participant, shall be borne by the Participants.

 

ARTICLE 6.  Transfer Restrictions

 

Subject to the provisions of Article 8, no Purchased Shares and no interest therein may be assigned, transferred, sold, exchanged, pledged or otherwise encumbered or disposed of by a Participant or any beneficiary of any Participant until the Expiration Date.  Any attempted assignment, transfer, sale, exchange, pledge or other encumbrance or disposition shall be null and void.

 

ARTICLE 7.  Termination

 

	
7.1

	
Approximately 90 days prior to the Expiration Date, the Custodian shall distribute to the Participants a notice (the “Termination Notice”) pursuant to which the Participant may request, subject to compliance with the Insider Dealing Regulations, either the delivery to such Participant of all of his/her Purchased Shares or the sale of all of his/her Purchased Shares by the relevant Custodian on the Open Market on his/her behalf.  The Termination Notice shall set forth a deadline for Participants to return a duly completed Termination Notice to the Custodian.

 

	
7.2

	
As soon as possible after the Expiration Date and in accordance with the Termination Notice, the Custodian shall, in accordance with the Participant’s choice, cause all of his/her Purchased Shares to be delivered to him/her or cause such Shares to be sold on the Open Market on his/her behalf in accordance with Section 7.4.  A combination of these alternatives will not be permitted.

 

	
7.3

	
Any Participant’s Purchased Shares for which the Custodian has not received a duly completed Termination Notice in due time will be sold on the Open Market as soon as possible after the Expiration Date on behalf of such Participant together with the Shares for which the Custodian has received or is deemed to have received a selling instruction.  The provisions of Section 7.4 shall apply to such sale.

 

	
7.4

	
The relevant Custodian will cause the Purchased Shares as to which it has received a selling instruction or no instruction to be sold in accordance with the provisions of this Article 7 on the Open Market for the accounts of the relevant Participants at dates it shall determine in its sole discretion but not later than 15 Stock Exchange Days following the Expiration Date; provided, however, that this period may be extended by the Custodian in case of market disruption or in order to comply with the Insider Dealing Regulations or any other regulations that would restrict the ability of the Custodian to sell the Shares on the Open Market; provided further, that the Custodian shall take all reasonable steps to obtain, when executing or transmitting sales instructions for execution pursuant to this Section 7, the best possible result for the Participating Employees, taking into account the price, costs, speed, likelihood of execution and settlement, size, nature, or any other consideration relevant to the execution of these instructions, including  the aggregation of the sales instructions in accordance with Section 7.3 (which may potentially result in a less favourable execution than in the absence of any such aggregation).  The proceeds realised from such sale will be paid to each Participant entitled thereto in proportion to each Participant’s interest in the aggregate number of Shares sold.  No interest will accrue or be paid in respect of the cash proceeds resulting from the sale.  Payment to the Participants will be made net of any applicable withholding tax and in Local Currency, based on the applicable foreign exchange rate when the Local Currency differs from the currency of the Open Market.  If a Participant cannot be reached at the address provided by him or her, such funds will continue to be held on his/her behalf until the expiration of the applicable statute of limitations.  When this period has elapsed, the Custodian shall dispose of the corresponding sums in accordance with applicable laws.  No interest will accrue or be paid in respect of such sums.

 

  

8

  

ARTICLE 8.  Early Exit

 

	
8.1

	
Subject to compliance with the Insider Dealing Regulations, upon the occurrence of an Early Exit Event, a Participant (or, in case of the Participant’s death, his/her beneficiaries) shall be permitted but not required to deliver to the human resources department of his Company (or former Company) a notice (an “Early Exit Notice”) within three months following the occurrence of an Early Exit Event, which notice requests either the delivery to such Participant of all of his/her Purchased Shares or the sale of all of his/her Purchased Shares by the Custodian on the Open Market on his/her behalf; provided, however, that the Companies will not accept any Early Exit Notice received on or after the fifteenth day before the Expiration Date.  A combination of these alternatives will not be permitted.  The Company will be responsible for confirming the occurrence of an Early Exit Event and for transmitting the Early Exit Notice to the relevant Custodian.  In the event that for a given Participant the Custodian receives an Early Exit Notice after having received a Termination Notice, the Early Exit Notice shall prevail.

 

	
8.2

	
As soon as practicable following the receipt of a properly completed Early Exit Notice, the Custodian shall, in accordance with the Participant’s choice, cause all of his/her Purchased Shares to be delivered to him/her, or cause such Shares to be sold on the Open Market on his/her behalf.  In the latter case, the cash proceeds of the sale (net of applicable fees) shall be paid to the relevant Participant(s), as soon as practicable thereafter in Local Currency, based on the applicable foreign exchange rate when the Local Currency differs from the currency of the Open Market.

 

	
8.3

	
Upon the occurrence of an Early Exit Event, in the event that a Participant does not submit a properly completed Early Exit Notice on a timely basis, then his/her Shares shall be maintained in the relevant Securities Account and remain subject to the terms and conditions of the ESPP 2010, including the transfer restrictions, until the earlier of the Expiration Date or the occurrence of a subsequent Early Exit Event for which the Participant submits a properly completed Early Exit Notice.

 

ARTICLE 9.  Administration

 

The ESPP 2010 shall be administered by the Committee.  The Committee may, from time to time, adopt rules and regulations for carrying out the provisions and purposes of the ESPP 2010.  The Committee, in its absolute discretion, shall have the power to interpret and construe the ESPP 2010; provided, however, that the Committee or the Board may designate persons other than members of the Committee to carry out such responsibilities of the Committee under the ESPP 2010 as it may deem appropriate.  Any interpretation or construction of any provision of this ESPP 2010 by the Committee shall be final and conclusive upon all parties.  No member of the Committee or the Board shall be liable for any action or determination made hereunder in good faith.

 

  

9

  

ARTICLE 10.  Miscellaneous

 

	
10.1

	
No Additional Rights.  Nothing in the ESPP 2010 shall interfere with or limit in any way the right of any Company to terminate any Participant’s employment at any time, or confer upon any Participant any right to continue employment with any Company.  The benefits arising under the ESPP 2010 shall neither constitute part of a Participant’s employment contract with any Company or other affiliates of ArcelorMittal nor be taken into account for the computation of any labour-related benefits, including any severance payments.

 

	
10.2

	
Binding Effect.  Any decision made or action taken by ArcelorMittal, the Board or the Committee arising out of or in connection with the construction, administration, interpretation, and effect of the ESPP 2010 shall be conclusive and binding upon all persons having any interest in the ESPP 2010, including ArcelorMittal, its employees, Participants and their beneficiaries.

 

	
10.3

	
Withholding.  The Companies and the Custodian shall, to the fullest extent permitted by applicable laws and regulations, have the power and the right to deduct or withhold from any payment due to a Participant, or require a Participant to remit to the Companies or the Custodian, an amount sufficient to satisfy all taxes and social security contributions or similar social charges required by law or regulation to be withheld or accounted for in connection with this ESPP 2010.

 

	
10.4

	
Changes in Capital Structure.  In the event of any changes in the common stock or the capital structure of ArcelorMittal through a corporate transaction, including, without limitation, pursuant to a merger, demerger (including a spin-off), reorganization, partial or complete liquidation, recapitalization, stock dividend, stock split or reverse stock split, any such transaction shall be binding on the Participant as on any other ArcelorMittal shareholder and the Committee shall make any appropriate adjustments and changes, to the extent necessary, to reflect such changes in the ESPP 2010.

 

	
10.5

	
Amendments.  The Board may at any time alter, amend, suspend, or terminate the ESPP 2010 in whole or in part; provided, however, that no amendment, suspension or termination of the ESPP 2010 shall be permitted that would impair or diminish, in any material respect, any outstanding right of a Participant without such Participant’s written consent.

 

	
10.6

	
Delivery of Title.  ArcelorMittal shall have no obligation to deliver Shares under the ESPP 2010 prior to (i) obtaining any approvals from governmental agencies that ArcelorMittal determines are necessary or advisable, and (ii) completing any registration or other qualification of the Shares under any applicable national or foreign law or regulation that ArcelorMittal determines to be necessary or advisable.

 

	
10.7

	
Registration - Listing.  ArcelorMittal may use reasonable endeavours to register all or part of the Shares offered pursuant to the ESPP 2010 with the United States Securities and Exchange Commission or to effect compliance with the registration, qualification and listing requirements of any national or foreign securities laws, stock exchange or automated quotation system.

 

  

10

  

	
10.8

	
Governing Law - Jurisdiction.  The ESPP 2010 and all actions taken hereunder shall be governed by and construed in accordance with the laws of the Grand Duchy of Luxembourg.  The courts of the judicial district of Luxembourg shall have exclusive jurisdiction to resolve any disputes arising in relation to the ESPP 2010 (including in connection with its interpretation or its performance).

 

	
10.9

	
Effective Date.  The ESPP 2010 shall be effective on the opening date of the Subscription Period.

 

 

  

 

 11

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