Document:

Exhibit
10.8

Citibank, N.A. | 390 Greenwich Street | New York,
NY 10013 | Equity Derivatives | Telephone: (212) 723-7357 | Facsimile: (212)
723-8328

EXECUTION COPY

Opening Transaction

	
  

  	
   

  	
  EMC Corporation

  
	
  To:

  	
   

  	
  176 South Street

  
	
   

  	
   

  	
  Hopkinton, MA 01748

  
	
   

  	
   

  	
   

  
	
  From:

  	
   

  	
  Citibank, N.A.

  
	
   

  	
   

  	
   

  
	
  Re:

  	
   

  	
  Issuer Warrant Transaction

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
  November 13, 2006

  

 

Dear Sir(s):

The purpose of this communication (this “Confirmation”)
is to set forth the terms and conditions of the above-referenced transaction
entered into on the Trade Date specified below (the “Transaction”)
between Citibank, N.A. (“Dealer”) and EMC Corporation (“Issuer”).  This communication constitutes 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.  For purposes of the Equity Definitions, each
reference herein to a Warrant shall be deemed to be a reference to a Call
Option or an Option, as context requires.

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

This Confirmation evidences a complete and binding
agreement between Dealer and Issuer 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 1992 ISDA Master Agreement as if Dealer and Issuer had
executed an agreement in such form on the date hereof (but without any Schedule
except for (i) the election of Loss and Second Method and US Dollars (“USD”) as the Termination Currency and (ii) the replacement
of the word “third” in the last line of Section 5(a)(i) with the word “first”).

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.

2.     The Transaction is a Warrant Transaction,
which shall be considered a Share Option Transaction for purposes of the Equity
Definitions.  The terms of the particular
Transaction to which this Confirmation relates are as follows:

	
  General Terms:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Trade Date:

  	
   

  	
  November 13, 2006

  
	
   

  	
   

  	
   

  
	
  Effective Date:

  	
   

  	
  November 17, 2006, or such other date as agreed
  between the parties, subject to Section 8(k) below

  
	
   

  	
   

  	
   

  
	
  Components:

  	
   

  	
  The Transaction will be divided into individual
  Components, each with the terms set forth in this Confirmation, and, in
  particular, with the Number of Warrants and Expiration Date set forth in this
  Confirmation. The payments and deliveries to be made upon settlement of the
  Transaction will be determined separately for each Component as if each
  Component were a separate Transaction under the Agreement.

  
	
   

  	
   

  	
   

  
	
  Warrant Style:

  	
   

  	
  European

  
	
   

  	
   

  	
   

  
	
  Warrant Type:

  	
   

  	
  Call

  
	
   

  	
   

  	
   

  
	
  Seller:

  	
   

  	
  Issuer

  
	
   

  	
   

  	
   

  
	
  Buyer:

  	
   

  	
  Dealer

  
	
   

  	
   

  	
   

  
	
  Shares:

  	
   

  	
  The Common Stock of Issuer, par value USD 0.01
  per share (Ticker Symbol: “EMC”).

  
	
   

  	
   

  	
   

  
	
  Number of
  Warrants:

  	
   

  	
  For each Component, as provided in Annex A to this
  Confirmation.

  
	
   

  	
   

  	
   

  
	
  Warrant
  Entitlement:

  	
   

  	
  One Share per Warrant

  
	
   

  	
   

  	
   

  
	
  Strike Price:

  	
   

  	
  USD19.5455

  
	
   

  	
   

  	
   

  
	
  Premium:

  	
   

  	
  USD29,601,000 (Premium per Warrant USD1.3795).

  
	
   

  	
   

  	
   

  
	
  Premium Payment
  Date:

  	
   

  	
  The Effective Date

  
	
   

  	
   

  	
   

  
	
  Exchange:

  	
   

  	
  New York Stock Exchange

  
	
   

  	
   

  	
   

  
	
  Related
  Exchange:

  	
   

  	
  All Exchanges

  
	
   

  	
   

  	
   

  
	
  Procedures for Exercise:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  In
  respect of any Component:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Expiration Time:

  	
   

  	
  Valuation Time

  
	
   

  	
   

  	
   

  
	
  Expiration Date:

  	
   

  	
  As provided in Annex A to this Confirmation
  (or, if such date is not a Scheduled Trading Day, the next following
  Scheduled Trading Day that is not already an Expiration Date for another
  Component); provided that if
  that date is a Disrupted Day, the Expiration Date for such Component shall be
  the first succeeding Scheduled Trading Day that is not a Disrupted Day and is
  not or is not deemed to be an Expiration Date in respect of any other
  Component of the Transaction hereunder; and provided
  further that if the Expiration Date has not occurred pursuant to

  

 

 A-2
 

 

	
  

  	
   

  	
  the preceding proviso as of the Final Disruption
  Date, the Final Disruption Date shall be the Expiration Date (irrespective of
  whether such date is an Expiration Date in respect of any other Component for
  the Transaction). “Final Disruption Date” means March
  27, 2012. Notwithstanding the
  foregoing and anything to the contrary in the Equity Definitions, if a Market
  Disruption Event occurs on any Expiration Date, the Calculation Agent may
  determine that such Expiration Date is a Disrupted Day only in part, in which
  case the Calculation Agent shall make adjustments to the number of Warrants
  for the relevant Component for which such day shall be the Expiration Date
  and shall designate the Scheduled Trading Day determined in the manner
  described in the immediately preceding sentence as the Expiration Date for
  the remaining Warrants for such Component. Section 6.6 of the Equity
  Definitions shall not apply to any Valuation Date occurring on an Expiration
  Date.

  
	
   

  	
   

  	
   

  
	
  Market
  Disruption Event:

  	
   

  	
  Section 6.3(a) of the Equity Definitions is hereby
  amended 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.

  
	
   

  	
   

  	
   

  
	
  Automatic
  Exercise:

  	
   

  	
  Applicable; and means that the Number of Warrants
  for the corresponding Expiration Date will be deemed to be automatically
  exercised at the Expiration Time on
  such Expiration Date unless Buyer notifies Seller (by telephone or in
  writing) prior to the Expiration Time on such Expiration Date that it does
  not wish Automatic Exercise to occur, in which case Automatic Exercise will
  not apply to such Expiration Date.

  

 

	
  Issuer’s Telephone Number and
  Telex 

  	
   

  	
  To:

  	
   

  	
  EMC Corporation

  
	
  and/or Facsimile Number
  and Contact 

  	
   

  	
  Attn:

  	
   

  	
  Office of General Counsel

  
	
  Details for purpose of Giving
  Notice:

  	
   

  	
  Telephone:

  	
   

  	
  (508) 435-1000

  
	
   

  	
   

  	
  Facsimile:

  	
   

  	
  (508) 497-6915

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Settlement Terms:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  In
  respect of any Component:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Settlement
  Currency:

  	
   

  	
  USD

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Net Share Settlement:

  	
   

  	
  On each Settlement Date, Issuer shall deliver to
  Dealer a number of Shares equal to the Number of Shares to be Delivered for
  such Settlement Date to the account specified by Dealer and cash in lieu of
  any fractional shares valued at the Relevant Price on the Valuation Date
  corresponding to such Settlement

  

 

 A-3
 

 

	
  

  	
   

  	
  Date. If, in the reasonable opinion of Issuer or
  Dealer based on advice of counsel, for any reason, the Shares deliverable
  upon Net Share Settlement would not be immediately freely transferable by
  Dealer under Rule 144(k) under the Securities Act of 1933, as amended (the “Securities Act”), then Dealer may elect to either (x)
  accept delivery of such Shares notwithstanding any restriction on transfer or
  (y) have the provisions set forth in Section 8(b) below apply.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The Number of Shares to be Delivered shall be
  delivered by Issuer to Dealer no later than 12:00 noon (local time in New
  York City) on the relevant Settlement Date.

  
	
   

  	
   

  	
   

  
	
  Number of Shares to be
  Delivered:

  	
   

  	
  In respect of any Exercise Date, subject to the last
  sentence of Section 9.5 of the Equity Definitions, the product of (i) the
  number of Warrants exercised or deemed exercised on such Exercise Date, (ii)
  the Warrant Entitlement and (iii) (A) the excess of the VWAP Price on the
  Valuation Date occurring on such Exercise Date over the Strike Price (or, if
  no such excess, zero) divided by
  (B) such VWAP Price.

  
	
   

  	
   

  	
   

  
	
  VWAP Price:

  	
   

  	
  For any Valuation Date, the New York 10b-18 Volume
  Weighted Average Price per share of the Shares for the regular trading
  session (including any extensions thereof) of the Exchange on such Valuation
  Date (without regard to pre-open or after hours trading outside of such
  regular trading session) as published by Bloomberg at 4:15 p.m. New York
  time on such date, on Bloomberg page “EMC.N <Equity> AQR_SEC” (or any
  successor thereto).

  
	
   

  	
   

  	
   

  
	
  Other Applicable
  Provisions:

  	
   

  	
  The provisions of Sections 9.1(c), 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 as a result of the fact that Seller is the
  Issuer of the Shares) and 9.12 of the Equity Definitions will be applicable
  as if “Physical Settlement” applied to the Transaction.

  
	
   

  	
   

  	
   

  
	
  Adjustments:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  In
  respect of any Component:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Method of Adjustment:

  	
   

  	
  Calculation Agent Adjustment; provided
  that in respect of an Extraordinary Dividend, “Calculation Agent Adjustment”
  shall be as described in the provision below.

  
	
   

  	
   

  	
   

  
	
  Extraordinary Dividend:

  	
   

  	
  If at any time during the period from and including
  the Trade Date, to but excluding the last Expiration Date, an ex-dividend date
  for a cash dividend occurs

  

 

 A-4
 

 

	
  

  	
   

  	
  with respect to the Shares (an “Ex-Dividend Date”
  and such dividend, an “Extraordinary Dividend”), then the Calculation Agent
  will make adjustments to the Strike Price, the Number of Warrants, the Daily
  Number of Warrants, the Warrant Entitlement and any other variable relevant
  to the exercise, settlement, payment or other terms of the Transaction to
  preserve the fair value of the Transaction to Buyer after taking into account
  such dividend.

  
	
   

  	
   

  	
   

  
	
  Extraordinary Events:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Consequences of
  Merger Events:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (a)  Share-for-Share:

  	
   

  	
  Modified Calculation Agent Adjustment

  
	
   

  	
   

  	
   

  
	
  (b)  Share-for-Other:

  	
   

  	
  Modified Calculation Agent Adjustment

  
	
   

  	
   

  	
   

  
	
  (c)  Share-for-Combined:

  	
   

  	
  Modified Calculation Agent Adjustment; provided that if Cancellation and Payment would otherwise
  be deemed to be applicable to the Transaction pursuant to Section 12.2(e)(ii)
  of the Equity Definitions, the Calculation Agent may elect to have
  Cancellation and Payment apply to the Transaction in whole or in part.

  
	
   

  	
   

  	
   

  
	
  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

  
	
   

  	
   

  	
   

  
	
  Modified
  Calculation Agent Adjustment:

  	
   

  	
  If, in respect of any Merger Event or Tender Offer
  to which Modified Calculation Agent Adjustment applies, the adjustments to be
  made in accordance with Section 12.2(e)(i) or Section 12.3(d)(i), as the case
  may be, of the Equity Definitions would result in Issuer being different from
  the issuer of the Shares, then with respect to such Merger Event or Tender
  Offer, as a condition precedent to the adjustments contemplated in Section
  12.2(e)(i) or Section 12.3(d)(i), as the case may be, of the Equity
  Definitions, Issuer and the issuer of the Shares shall, prior to the Merger
  Date or Tender Offer, as the case may be, have entered into such
  documentation containing representations, warranties and agreements relating
  to securities law and other issues as requested by Buyer that Buyer has
  determined, in its reasonable discretion, to be reasonably necessary or
  appropriate to allow Buyer to continue as a party to the Transaction, as
  adjusted under Section 12.2(e)(i) or Section 12.3(d)(i), as the case may be,
  of the Equity Definitions, and to preserve its hedging or hedge unwind
  activities in connection with the Transaction in a manner compliant with
  applicable legal, regulatory or self-regulatory requirements, or with related
  policies and procedures applicable to

  

 

 A-5
 

 

	
  

  	
   

  	
  Buyer, and if such conditions are not met or if the
  Calculation Agent determines that no adjustment that it could make under
  Section 12.2(e)(i) or Section 12.3(d)(i), as the case may be, of the Equity
  Definitions will produce a commercially reasonable result, then the
  consequences set forth in Section 12.2(e)(ii) or Section 12.3(d)(ii), as the
  case may be, of the Equity Definitions shall apply.

  
	
   

  	
   

  	
   

  
	
  Reference
  Markets:

  	
   

  	
  For the avoidance of doubt, and without limiting the
  generality of the foregoing provisions, any adjustment effected by the
  Calculation Agent pursuant to Section 12.2(e) and/or Section 12.3(d) of the
  Equity Definitions may be determined by reference to the adjustment(s) made
  in respect of Merger Events or Tender Offers, as the case may be, in the
  convertible bond market.

  
	
   

  	
   

  	
   

  
	
  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 American Stock
  Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or
  their respective successors); if the Shares are immediately re-listed,
  re-traded or re-quoted on any such exchange or quotation system, such
  exchange or quotation system shall thereafter be deemed to be the Exchange.

  
	
  Additional
  Disruption Events:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (a)  Change in Law:

  	
   

  	
  Applicable

  
	
   

  	
   

  	
   

  
	
  (b)  Failure to Deliver:

  	
   

  	
  Applicable

  
	
   

  	
   

  	
   

  
	
  (c)  Insolvency Filing:

  	
   

  	
  Applicable

  
	
   

  	
   

  	
   

  
	
  (d)  Hedging Disruption:

  	
   

  	
  Applicable

  
	
   

  	
   

  	
   

  
	
  (e)  Increased Cost of Hedging:

  	
   

  	
  Applicable

  
	
   

  	
   

  	
   

  
	
  (f)  Loss of Stock Borrow:

  	
   

  	
  Applicable

  
	
   

  	
   

  	
   

  
	
  Maximum Stock
  Loan Rate:

  	
   

  	
  1.00% per annum

  
	
   

  	
   

  	
   

  
	
  (g)  Increased Cost of Stock Borrow:

  	
   

  	
  Applicable

  
	
   

  	
   

  	
   

  
	
  Initial Stock
  Loan Rate:

  	
   

  	
  0.25% per annum

  
	
   

  	
   

  	
   

  
	
  Hedging Party:

  	
   

  	
  Buyer for all applicable Additional Disruption
  Events

  
	
   

  	
   

  	
   

  
	
  Determining
  Party:

  	
   

  	
  Buyer for all applicable Additional Disruption
  Events

  
	
   

  	
   

  	
   

  
	
  Non-Reliance:

  	
   

  	
  Applicable

  
	
   

  	
   

  	
   

  
	
  Agreements and
  Acknowledgments

  	
   

  	
   

  
	
  Regarding
  Hedging Activities:

  	
   

  	
  Applicable

  
	
   

  	
   

  	
   

  
	
  Additional
  Acknowledgments:

  	
   

  	
  Applicable

  

 

 A-6
 

 

	
  3.     Calculation Agent:

  	
   

  	
  Dealer.

  
	
   

  	
   

  	
   

  
	
  4.     Account
  Details:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dealer Payment
  Instructions:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Citibank, N.A.

  	
   

  	
   

  
	
  Ref: 

  	
   

  	
   

  
	
  A/C# 

  	
   

  	
   

  
	
  ABA: 

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Issuer Payment
  Instructions:

  	
   

  	
  To be provided by Issuer.

  
	
   

  	
   

  	
   

  
	
  5.     Offices:

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	 

	
  The Office of
  Dealer for the Transaction is:

  	 

	
  390 Greenwich
  Street, New York, NY 10013

  	 

	
   

  	 

	
  The Office of
  Issuer for the Transaction is:

  	 

	
  176 South
  Street, Hopkinton, MA 01748

  	 

	
   

  	 

	
  6.     Notices:
  For purposes of this Confirmation:

  	 

	
   

  	 

	
   

  	
  (a)

  	
  Address for notices or communications to Issuer:

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
  To:

  	
   

  	
  EMC Corporation

  	 

	
   

  	
   

  	
  Attn:

  	
   

  	
  Office of General Counsel

  	 

	
   

  	
   

  	
  Telephone:

  	
   

  	
  (508) 435-1000

  	 

	
   

  	
   

  	
  Facsimile:

  	
   

  	
  (508) 497-6915

  	 

	
   

  	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
  (b)

  	
  Address for notices or communications to Dealer:

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
  To:

  	
   

  	
  Citibank, N.A.

  	 

	
   

  	
   

  	
   

  	
   

  	
  390 Greenwich Street

  	 

	
   

  	
   

  	
   

  	
   

  	
  New York, NY 10013

  	 

	
   

  	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
  Attention:

  	
   

  	
  Equity Derivatives

  	 

	
   

  	
   

  	
  Telephone:

  	
   

  	
  (212) 723-7357

  	 

	
   

  	
   

  	
  Facsimile:

  	
   

  	
  (212) 723-8328

  	 

	
   

  	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
  To:

  	
   

  	
  Citibank, N.A.

  	 

	
   

  	
   

  	
   

  	
   

  	
  250 West Street, 10th Floor

  	 

	
   

  	
   

  	
   

  	
   

  	
  New York, NY 10013

  	 

	
   

  	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
  Attention:

  	
   

  	
  GCIB Legal Group—Derivatives

  	 

	
   

  	
   

  	
  Telephone:

  	
   

  	
  (212) 723-2944

  	 

	
   

  	
   

  	
  Facsimile:

  	
   

  	
  (212) 801-4109

  	 

									

 

7.     Representations,
Warranties and Agreements:

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

 A-7
 

(i)            On
the Trade Date, (A) none of Issuer and its officers and directors is aware of
any material nonpublic information regarding Issuer or the Shares and (B) all
reports and other documents filed by Issuer 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, Issuer acknowledges
that Dealer is not making any representations or warranties with respect to the
treatment of the Transaction under FASB Statements 128, 133, 149 or 150, EITF
Issue No. 00-19 (or any successor issue statements) or under FASB’s Liabilities
& Equity Project.

(iii)          Prior
to the Trade Date, Issuer shall deliver to Dealer a resolution of Issuer’s
board of directors authorizing the Transaction and such other certificate or
certificates as Dealer shall reasonably request.

(iv)          Issuer
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 or otherwise manipulate the price of the Shares
(or any security convertible into or exchangeable for Shares) or otherwise in
violation of the Exchange Act.

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

(vi)          On
the Trade Date (A) the assets of Issuer at their fair valuation exceed the
liabilities of Issuer, including contingent liabilities, (B) the capital of
Issuer is adequate to conduct the business of Issuer and (C) Issuer has the
ability to pay its debts and obligations as such debts mature and does not
intend to, or does not believe that it will, incur debt beyond its ability to
pay as such debts mature.

(vii)         Issuer shall not
take any action to decrease the number of Available Shares below the Capped
Number  (each as defined below).

(viii)        The representations
and warranties of Issuer set forth in Section 3 of the Agreement and Section 1
of the Purchase Agreement dated as of the Trade Date between Issuer and Goldman,
Sachs & Co., Lehman Brothers Inc. and Citigroup Global Markets Inc. as
representatives of the Initial Purchasers party thereto are true and correct as
of the Trade Date and the Effective Date and are hereby deemed to be repeated
to Dealer as if set forth herein.

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

(x)            (A) During the
period starting on the first Expiration Date and ending on the last Expiration Date
(the “Settlement Period”), the Shares or
securities that are convertible into, or exchangeable or exercisable for
Shares, are not, and shall not be, subject to a “restricted period,” as such
term is defined in Regulation M under the Exchange Act (“Regulation M”)
and (B) Issuer shall not engage in any “distribution,” as such term is defined
in Regulation M, other than a distribution meeting the requirements of the
exceptions set forth in sections 101(b)(10) and 102(b)(7) of Regulation M,
until the second Exchange Business Day immediately following the Settlement
Period.

(xi)           During the
Settlement Period, neither Issuer nor any “affiliate” or “affiliated purchaser”
(each as defined in Rule 10b-18 of the Exchange Act (“Rule 10b-18”))
shall directly or indirectly (including, without limitation, by means of any
cash-settled or other derivative instrument) purchase, offer to purchase, place
any bid or limit order that would effect a purchase of, or commence any tender
offer relating to, any Shares (or an equivalent interest, including a unit

 A-8
 

of beneficial interest in a trust or limited
partnership or a depository share) or any security convertible into or
exchangeable or exercisable for Shares.

(b)           Each of Dealer and
Issuer 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)           Each of Dealer and
Issuer acknowledges that the offer and sale of the Transaction to it is
intended to be exempt from registration under the Securities Act of 1933, as
amended (the “Securities Act”), by virtue of
Section 4(2) thereof.  Accordingly,
Dealer represents and warrants to Issuer 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 and its investments in and liabilities in
respect of the Transaction, which it understands are not readily marketable,
are not disproportionate to its net worth, and it is able to bear any loss in
connection with the Transaction, including the loss of its entire investment in
the Transaction, (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 without a view to the distribution or
resale thereof, (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, (v) its financial condition is such that it has no need for
liquidity with respect to its investment in the Transaction and no need to
dispose of any portion thereof to satisfy any existing or contemplated
undertaking or indebtedness and is capable of assessing the merits of and
understanding (on its own behalf or through independent professional advice),
and understands and accepts, the terms, conditions and risks of the
Transaction.

(d)           Each of Dealer and
Issuer agrees and acknowledges (A) that this Confirmation is (i) a “securities
contract,” as such term is defined in Section 741(7) of Title 11 of the United
States Code (the “Bankruptcy Code”),
with respect to which each payment and delivery hereunder is a “settlement
payment,” as such term is defined in Section 741(8) 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 is a
“transfer,” as such term is defined in Section 101(54) of the Bankruptcy Code,
and (B) that Dealer is entitled to the protections afforded by, among other
sections, Section 362(b)(6), 362(b)(17), 546(e), 546(g), 555 and 560 of the
Bankruptcy Code.

(e)           Issuer shall deliver
to Dealer an opinion of counsel, dated as of the Trade Date and reasonably
acceptable to Dealer in form and substance, with respect to the matters set
forth in Section 3(a) of the Agreement.

8.  Other Provisions:

(a)           Alternative Calculations and Payment on Early Termination and on
Certain Extraordinary Events. 
If Issuer shall owe Buyer any amount pursuant to Sections 12.2, 12.3,
12.6, 12.7 or 12.9 of the Equity Definitions (except in the event of a Tender
Offer or a Merger Event, in each case, in which the consideration or proceeds
to be paid to holders of Shares consists solely of cash) or pursuant to Section
6(d)(ii) of the Agreement (except in the event of an Event of Default in which
Issuer is the Defaulting Party or a Termination Event in which Issuer is the
Affected Party, that resulted from an event or events within Issuer’s control)
(a “Payment Obligation”), Issuer shall have
the right, in its sole discretion, to satisfy any such Payment Obligation by
the Share Termination Alternative (as defined below) by giving irrevocable
telephonic notice to Buyer, confirmed in writing within one Scheduled Trading
Day, by 4:00 P.M. New York City time on the Merger Date, Tender Offer Date,
Announcement Date or Early Termination Date, as applicable (“Notice of Share Termination”).  Upon such Notice of Share Termination, the
following provisions shall apply on the Scheduled Trading Day immediately
following the Merger Date, the Tender Offer Date, Announcement Date or Early
Termination Date, as applicable:

	
  Share Termination Alternative:

  	
   

  	
  Applicable and means that Issuer shall deliver to
  Dealer 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
  (the “Share Termination Payment Date”), in
  satisfaction of the Payment Obligation.

  

 

 A-9
 

 

	
  Share Termination Delivery

  	
   

  	
   

  
	
  Property:

  	
   

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

  
	
   

  	
   

  	
   

  
	
  Share Termination Unit Price:

  	
   

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

  
	
   

  	
   

  	
   

  
	
  Share Termination Delivery Unit:

  	
   

  	
  In the case of a Termination Event, Event of Default
  or Delisting, one Share or, in the case of an Insolvency, Nationalization,
  Merger Event or Tender Offer, a 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 as
  a result of the fact that Seller is the Issuer of the Shares) 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”. If, in the reasonable
  opinion of counsel to Issuer or Dealer, for any reason, any securities
  comprising the Share Termination Delivery Units deliverable pursuant to this
  Section 8(a) would not be immediately freely transferable by Dealer under
  Rule 144(k) under the Securities Act, then Dealer may elect to either (x)
  accept delivery of such securities notwithstanding any restriction on
  transfer or (y) have the provisions set forth in Section 8(b) below apply.

  

 

(b)           Registration/Private
Placement Procedures.  (i)  With respect to the Transaction, the
following provisions shall apply to the extent provided for above opposite the
caption “Net Share Settlement” in Section 2 or in paragraph (a) of this Section
8.  If so applicable, then, at the
election of Issuer by notice to Buyer within one Exchange Business Day after
the relevant delivery obligation arises, 
but in any event at least one Exchange Business Day prior to the date on
which such delivery obligation is due, either (A) all Shares or Share
Termination Delivery Units, as the case may be, delivered by Issuer to Buyer
shall be, at the time of such delivery, covered by an effective registration
statement of Issuer for immediate resale by Buyer (such registration statement
and the corresponding prospectus (the “Prospectus”)
(including, without limitation, any sections describing the plan of
distribution) in form and content commercially reasonably satisfactory to
Buyer) or (B) Issuer shall deliver additional Shares or Share Termination
Delivery Units, as the case may be, so that the value of such Shares or Share
Termination Delivery Units, as determined by the Calculation Agent to reflect
an appropriate liquidity

 A-10
 

discount, equals the value of the number of Shares or
Share Termination Delivery Units that would otherwise be deliverable if such
Shares or Share Termination Delivery Units were freely tradeable (without
prospectus delivery) upon receipt by Buyer (such value, the “Freely Tradeable Value”); provided that Issuer may not make the
election described in this clause (B) if, on the date of its election, it has
taken, or caused to be taken, any action that would make unavailable either the
exemption pursuant to Section 4(2) of the Securities Act for the sale by Issuer
to Dealer (or any affiliate designated by Dealer) of the Shares or the
exemption pursuant to Section 4(1) or Section 4(3) of the Securities Act for
resales of the Shares by Dealer (or any such affiliate of Dealer); provided further that,
if requested by Dealer, Issuer shall make the election described in this clause
(B) with respect to Shares delivered on all Settlement Dates no later than one
Exchange Business Day prior to the first Expiration Date, and the applicable
procedures described below shall apply to all Shares delivered on the
Settlement Dates on an aggregate basis.  (For
the avoidance of doubt, as used in this paragraph (b) only, the term “Issuer”
shall mean the issuer of the relevant securities, as the context shall
require.)

(ii)           If Issuer makes the
election described in clause (b)(i)(A) above:

(A)          Buyer (or an affiliate
of Buyer designated by Buyer) shall be afforded a reasonable opportunity to
conduct a due diligence investigation with respect to Issuer that is customary
in scope for underwritten offerings of equity securities and that yields results
that are commercially reasonably satisfactory to Buyer or such affiliate, as
the case may be, in its discretion; and

(B)           Buyer (or an affiliate
of Buyer designated by Buyer) and Issuer shall enter into an agreement (a “Registration Agreement”) on commercially reasonable terms in
connection with the public resale of such Shares or Share Termination Delivery
Units, as the case may be, by Buyer or such affiliate substantially similar to
underwriting agreements customary for underwritten offerings of equity securities,
in form and substance commercially reasonably satisfactory to Buyer or such affiliate
and Issuer, which Registration Agreement shall include, without limitation,
provisions substantially similar to those contained in such underwriting
agreements relating to the indemnification of, and contribution in connection
with the liability of, Buyer and its affiliates and Issuer, shall provide for
the payment by Issuer of all expenses in connection with such resale, including
all registration costs and all fees and expenses of counsel for Buyer, and
shall provide for the delivery of accountants’ “comfort letters” to Buyer or
such affiliate with respect to the financial statements and certain financial
information contained in or incorporated by reference into the Prospectus.

(iii)          If Issuer makes the
election described in clause (b)(i)(B) above:

(A)          Buyer (or an affiliate
of Buyer designated by Buyer) and any potential institutional purchaser of any
such Shares or Share Termination Delivery Units, as the case may be, from Buyer
or such affiliate identified by Buyer shall be afforded a commercially
reasonable opportunity to conduct a due diligence investigation in compliance
with applicable law with respect to Issuer customary in scope for private
placements of equity securities (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), subject to execution by such recipients of customary confidentiality
agreements reasonably acceptable to Issuer;

(B)           Buyer (or an affiliate
of Buyer designated by Buyer) and Issuer shall enter into an agreement (a “Private Placement Agreement”) on commercially reasonable
terms in connection with the private placement of such Shares or Share
Termination Delivery Units, as the case may be, by Issuer to Buyer or such affiliate
and the private resale of such shares by Buyer or such affiliate, substantially
similar to private placement purchase agreements customary for private
placements of equity securities, in form and substance commercially reasonably
satisfactory to Buyer and Issuer, 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, Buyer
and its affiliates and Issuer, shall provide for the payment by Issuer of all
expenses in

 A-11
 

connection with such resale, including all fees and
expenses of counsel for Buyer, shall contain representations, warranties and
agreements of Issuer reasonably necessary or advisable to establish and
maintain the availability of an exemption from the registration requirements of
the Securities Act for such resales, and shall use best efforts to provide for
the delivery of accountants’ “comfort letters” to Buyer or such affiliate with
respect to the financial statements and certain financial information contained
in or incorporated by reference into the offering memorandum prepared for the
resale of such Shares; and

(C)           Issuer agrees that
any Shares or Share Termination Delivery Units so delivered to Dealer, (i) may
be transferred by and among Dealer and its affiliates, and Issuer shall effect
such transfer without any further action by Dealer and (ii) after the minimum “holding
period” within the meaning of Rule 144(d) under the Securities Act has elapsed
with respect to such Shares or any securities issued by Issuer comprising such
Share Termination Delivery Units, Issuer shall promptly remove, or cause the
transfer agent for such Shares or securities to remove, any legends referring
to any such restrictions or requirements from such Shares or securities upon
delivery by Dealer (or such affiliate of Dealer) to Issuer or such transfer
agent of seller’s and broker’s representation letters customarily delivered by
Dealer in connection with resales of restricted securities pursuant to Rule 144
under the Securities Act, without any further requirement for the delivery of
any certificate, consent, agreement, opinion of counsel, notice or any other
document, any transfer tax stamps or payment of any other amount or any other
action by Dealer (or such affiliate of Dealer).

(c)           Make-whole Shares.  If (x) Issuer elects to deliver Share
Termination Delivery Units pursuant to paragraph (a) of this Section 8 or (y)
Issuer makes the election described in clause (b)(i)(B) of paragraph (b) of
this Section 8, then in either case Dealer or its affiliate may sell (which
sale shall be made in a commercially reasonable manner) such Shares or Share
Termination Delivery Units, as the case may be, during a period (the “Resale Period”) commencing on the Exchange Business Day
following delivery of such Shares or Share Termination Delivery Units, as the
case may be, and ending on the Exchange Business Day on which Dealer completes
the sale of all such Shares or Share Termination Delivery Units, as the case
may be, or a sufficient number of Shares or Share Termination Delivery Units,
as the case may be, so that the realized net proceeds of such sales exceed the
amount of the Payment Obligation (in the case of clause (x), or in the case
that both clause (x) and clause (y) apply) or the Freely Tradeable Value (in
the case that only clause (y) applies)(such amount of the Payment Obligation or
Freely Tradeable Value, as the case may be, the “Required Proceeds”).  If
any of such delivered Shares or Share Termination Delivery Units remain after
such realized net proceeds exceed the Required Proceeds, Dealer shall return
such remaining Shares or Share Termination Delivery Units to Issuer.  If the Required Proceeds exceed the realized
net proceeds from such resale, Issuer shall transfer to Dealer by the open of
the regular trading session on the Exchange on the Exchange Trading Day
immediately following the last day of the Resale Period the amount of such
excess (the “Additional Amount”) in cash or in
a number of additional Shares (“Make-whole Shares”)
in an amount that, based on the Relevant Price on the last day of the Resale
Period (as if such day was the “Valuation Date” for purposes of computing such
Relevant Price), has a dollar value equal to the Additional Amount.  The Resale Period shall continue to enable
the sale of the Make-whole Shares in the manner contemplated by this Section
8(c).  This provision shall be applied
successively until the Additional Amount is equal to zero, subject to Section
8(e).

(d)           Beneficial Ownership. 
Notwithstanding anything to the contrary in the Agreement or this
Confirmation, in no event shall Buyer be entitled to receive, or shall be
deemed to receive, any Shares if, upon such receipt of such Shares, the “beneficial
ownership” (within the meaning of Section 13 of the Exchange Act and the rules
promulgated thereunder) of Shares by Buyer or any entity that directly or
indirectly controls Buyer (collectively, “Buyer Group”)
would be equal to or greater than 9.5% or more of the outstanding Shares.  If any delivery owed to Buyer hereunder is
not made, in whole or in part, as a result of this provision, Issuer’s
obligation to make such delivery shall not be extinguished and Issuer shall
make such delivery as promptly as practicable after, but in no event later than
one Exchange Business Day after, Buyer gives notice to Issuer that such
delivery would not result in Buyer Group directly or indirectly so beneficially
owning in excess of 9.5% of the outstanding Shares.  For the avoidance of doubt, nothing in this
subsection (d) obligates Issuer to pay cash to Buyer in lieu of any Share
delivery obligation owed by Issuer to Buyer under this Confirmation.

 A-12
 

(e)           Limitations
on Settlement by Issuer.  Notwithstanding
anything herein or in the Agreement to the contrary, in no event shall Issuer
be required to deliver Shares in connection with the Transaction in excess of a
number of Shares equal to two times the Number of Shares for all Components (as
such number may be adjusted from time to time in accordance with the provisions
hereof) (the “Capped Number”).  Issuer represents and warrants (which representation
and warranty shall be deemed to be repeated on each day that the Transaction is
outstanding) that the Capped Number is equal to or less than the number of
authorized but unissued Shares of the Issuer that are not reserved for future
issuance in connection with transactions in the Shares (other than the
Transaction) on the date of the determination of the Capped Number (such
Shares, the “Available Shares”).  In the event Issuer shall not have delivered
the full number of Shares otherwise deliverable as a result of this Section
8(e) (the resulting deficit, the “Deficit Shares”),
Issuer 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 Issuer or any of its subsidiaries after the Trade Date
(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 and (iii) Issuer additionally authorizes any unissued Shares
that are not reserved for other transactions. 
Issuer 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.

(f)            Equity Rights.  Buyer
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 Issuer’s bankruptcy.  For the avoidance of doubt, the parties agree
that the preceding sentence shall not apply at any time other than during
Issuer’s bankruptcy to any claim arising as a result of a breach by Issuer of
any of its obligations under this Confirmation or the Agreement.  For the avoidance of doubt, the parties
acknowledge that this Confirmation is not secured by any collateral that would
otherwise secure the obligations of Issuer herein under or pursuant to any
other agreement.

(g)           Amendments
to Equity Definitions and the Agreement.  The following amendments shall be made to the
Equity Definitions and to the Agreement:

(i)            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,
then following the announcement or occurrence of any Potential Adjustment
Event, the Calculation Agent will determine whether such Potential Adjustment
Event has a material effect on the theoretical value of the relevant Shares or
options on the Shares and, if so, will (i) make appropriate adjustment(s), if
any, to any one or more of:’ and, the portion of such sentence immediately
preceding clause (ii) thereof is hereby amended by deleting the words “diluting
or concentrative” and the words “(provided that no adjustments will be made to
account solely for changes in volatility, expected dividends, stock loan rate
or liquidity relative to the relevant Shares)” and replacing such latter phrase
with the words “(and, for the avoidance of doubt, adjustments may be made to
account solely for changes in volatility, expected dividends, stock loan rate
or liquidity relative to the relevant Shares)”; and

(ii)           Section 11.2(e)(vii) of the Equity
Definitions is hereby amended by deleting the words “diluting or concentrative”
and replacing them with “material”.

(h)           Transfer and
Assignment.  Buyer may
transfer or assign its rights and obligations hereunder and under the
Agreement, in whole or in part, at any time to any bank or broker-dealer or any
affiliate thereof that in either case regularly enters into over-the-counter equity
derivative transactions without the consent of Issuer.

(i)            Disclosure.  Effective
from the date of commencement of discussions concerning the Transaction, Issuer
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 Issuer relating to such tax
treatment and tax structure.

 A-13
 

(j)            Additional Termination Event.  If within the period commencing on the Trade
Date and ending on the second anniversary of the Premium Payment Date, Buyer
reasonably determines that it is advisable to terminate a portion of the
Transaction so that Buyer’s related hedging activities will comply with
applicable securities laws, rules or regulations, an Additional Termination
Event shall occur in respect of which (1) Issuer shall be the sole Affected
Party and (2) the Transaction shall be the sole Affected Transaction.

(k)           Effectiveness.  If, prior to the Effective Date, Buyer
reasonably determines that it is advisable to cancel the Transaction because of
concerns that Buyer’s related hedging activities could be viewed as not
complying with applicable securities laws, rules or regulations, the
Transaction shall be cancelled and shall not become effective, and neither
party shall have any obligation to the other party in respect of the
Transaction.

(l)            Extension of Settlement. 
Dealer may divide any Component into additional Components and designate
the Expiration Date and the Number of Warrants for each such Component if Dealer
determines, in its reasonable discretion, that such further division is
necessary or advisable to preserve Dealer’s hedging activity hereunder in light
of existing liquidity conditions or to enable Dealer to effect purchases of
Shares in connection with its hedging activity hereunder in a manner that
would, if Dealer were the Issuer or an affiliated purchaser of the Issuer, be in
compliance with applicable legal and regulatory requirements.

(m)          Governing
Law.  THIS
CONFIRMATION SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK (WITHOUT
REFERENCE TO ITS CHOICE OF LAW DOCTRINE).

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

(o)           No Set-off.  The provisions of Section 2(c) of
the Agreement shall not apply to the Transaction.  Each party waives any and all rights it may
have to set-off delivery or payment obligations it owes to the other party
under the Transaction against any delivery or payment obligations owed to it by
the other party, whether arising under the Agreement, under any other agreement
between parties hereto, by operation of law or otherwise.

 A-14

Issuer hereby agrees
(a) to check this Confirmation carefully and immediately upon receipt so
that errors or discrepancies can be promptly identified and rectified and
(b) to confirm that the foregoing (in the exact form provided by Dealer)
correctly sets forth the terms of the agreement between Dealer and Issuer with
respect to the Transaction, by manually signing this Confirmation or this page
hereof as evidence of agreement to such terms and providing the other
information requested herein and immediately returning an executed copy to Equity
Derivatives, Citibank, N.A., 390 Greenwich Street, New York, New York 10013,
Facsimile No. (212) 723-8328.

	
  

  	
   

  	
  Yours faithfully,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CITIBANK, N.A.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized Signatory

  	
  /s/ Herman
  Hirsch

  	
   

  
	
   

  	
   

  	
   

  	
  Name: Herman Hirsch

  
	
   

  	
   

  	
   

  	
  Title: Managing Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Agreed and accepted by:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  EMC CORPORATION

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Irina Simmons

  	
   

  	
   

  
	
   

  	
  Name: Irina Simmons

  	
   

  	
   

  
	
   

  	
  Title: Senior Vice President and Treasurer

  	
   

  	
   

  

 

Annex A

For each Component of the
Transaction, the Number of Warrants and Expiration Date is set forth below.

	
  Component Number

  	
   

  	
  Number of Warrants

  	
   

  	
  Expiration Date

  	
   

  
	
  1

  	
   

  	
  1,072,912

  	
   

  	
  February
  15, 2012

  	
   

  
	
  2

  	
   

  	
  1,072,912

  	
   

  	
  February
  16, 2012

  	
   

  
	
  3

  	
   

  	
  1,072,912

  	
   

  	
  February
  17, 2012

  	
   

  
	
  4

  	
   

  	
  1,072,912

  	
   

  	
  February
  21, 2012

  	
   

  
	
  5

  	
   

  	
  1,072,912

  	
   

  	
  February
  22, 2012

  	
   

  
	
  6

  	
   

  	
  1,072,912

  	
   

  	
  February
  23, 2012

  	
   

  
	
  7

  	
   

  	
  1,072,912

  	
   

  	
  February
  24, 2012

  	
   

  
	
  8

  	
   

  	
  1,072,912

  	
   

  	
  February
  27, 2012

  	
   

  
	
  9

  	
   

  	
  1,072,912

  	
   

  	
  February
  28, 2012

  	
   

  
	
  10

  	
   

  	
  1,072,912

  	
   

  	
  February
  29, 2012

  	
   

  
	
  11

  	
   

  	
  1,072,912

  	
   

  	
  March
  1, 2012

  	
   

  
	
  12

  	
   

  	
  1,072,912

  	
   

  	
  March
  2, 2012

  	
   

  
	
  13

  	
   

  	
  1,072,912

  	
   

  	
  March
  5, 2012

  	
   

  
	
  14

  	
   

  	
  1,072,912

  	
   

  	
  March
  6, 2012

  	
   

  
	
  15

  	
   

  	
  1,072,912

  	
   

  	
  March
  7, 2012

  	
   

  
	
  16

  	
   

  	
  1,072,912

  	
   

  	
  March
  8, 2012

  	
   

  
	
  17

  	
   

  	
  1,072,912

  	
   

  	
  March
  9, 2012

  	
   

  
	
  18

  	
   

  	
  1,072,912

  	
   

  	
  March
  12, 2012

  	
   

  
	
  19

  	
   

  	
  1,072,912

  	
   

  	
  March
  13, 2012

  	
   

  
	
  20

  	
   

  	
  1,072,913

  	
   

  	
  March 14, 2012Exhibit
4.3

IMPERIAL TOBACCO GROUP PLC

RULES OF THE IMPERIAL TOBACCO
GROUP

SHARE MATCHING SCHEME

Approved by the Company
on 14 August 1996

Amended by the
Remuneration Committee on 2 December 1996, 31 January 2000,

24 November 2000, 23 November 2001 and 22 November 2002.

Amended by an ordinary
resolution of the Company passed on 4 February 2003.

Amended by the
Remuneration Committee on 14 November 2003.

Amended by an ordinary
resolution of the Company passed on 1 February 2005.

Amended by the Board on
30 January 2007.

  CONTENTS
  	  Clause
  	   
  	  Page
  
	   
  	   
  	   
  	   
  	   
  
	  1.
  	   
  	  Definitions
  	   
  	  1
  
	  2.
  	   
  	  Invitations
  	   
  	  2
  
	  3.
  	   
  	  Lodged Shares
  	   
  	  3
  
	  4.
  	   
  	  Effect of Allocation
  	   
  	  4
  
	  5.
  	   
  	  Vesting of Additional
  Shares
  	   
  	  4
  
	  6.
  	   
  	  Capitalisation
  	   
  	  6
  
	  7.
  	   
  	  Transfer of legal
  title
  	   
  	  7
  
	  8.
  	   
  	  Stamp duty and other
  expenses
  	   
  	  7
  
	  9.
  	   
  	  Taxation
  	   
  	  8
  
	  10.
  	   
  	  General
  	   
  	  8
  
	  11.
  	   
  	  Amendment
  	   
  	  9
  
	  12.
  	   
  	  Termination
  	   
  	  9
  
	  13.
  	   
  	  Governing law
  	   
  	  10
  
	  SCHEDULE 1
  International rules
  	   
  	  11
  
	  APPENDIX 1
  (Australia)
  	   
  	  12
  
	  APPENDIX 2 (Canada)
  	   
  	  14
  
	  APPENDIX 3 (United
  States of America)
  	   
  	  16
  
	  SCHEDULE 2 Additional
  Share Award Certificate
  	   
  	  17
  
	  SCHEDULE 3
  Performance Conditions for allocations of Additional Shares
  	   
  	  18
  

   

 1

RULES OF
THE IMPERIAL TOBACCO GROUP

SHARE MATCHING SCHEME

1.                                      Definitions

Except where inconsistent with the subject or context,
words defined in the Trust Deed made between Imperial Tobacco Group PLC (1) and
Abacus (C.I.) Limited (the “Trustees”) (2) dated 1 October 1996 establishing
the Imperial Tobacco Employee and Executive Benefit Trust (formerly known as
the Imperial Tobacco Group PLC Employee Benefit Trust (the “Executive Trust”)
or the Trust Deed made between Imperial Tobacco Group PLC (1) and the Trustees
(2) dated 17 October 2001 establishing the Imperial Tobacco Group PLC 2001
Employee Benefit Trust (the “2001 Trust”), as applicable, shall have the same
meanings when used in these Rules and references in the Rules to “the Trust”
shall constitute references either to the Executive Trust or the 2001 Trust, as
applicable.  In addition the following
words and expressions shall have the following meanings:-

	
  “Additional Share”

  	
  a Share allocated pursuant to Rule 4;

  
	
   

  	
   

  
	
  “Board”

  	
  the duly constituted Remuneration Committee of the
  Board of Directors of the Company;

  
	
   

  	
   

  
	
  “Company”

  	
  Imperial Tobacco Group PLC;

  
	
   

  	
   

  
	
  “Control”

  	
  as defined in section 840 of the Income and
  Corporation Taxes Act 1988;

  
	
   

  	
   

  
	
  “CREST”

  	
  means the relevant system (as defined in the
  Uncertificated Securities Regulations 1995 (SI 1995/3272)) in respect of
  which CRESTCo Limited is the operator;

  
	
   

  	
   

  
	
  “CREST
  Account”

  	
  means a designated CREST account held by a
  Participant with any sponsor agreed by the Trustees;

  
	
   

  	
   

  
	
  “Early
  Vesting Date”

  	
  as defined at Rule 5.3;

  
	
   

  	
   

  
	
  “Earnings”

  	
  in respect of any Employee, the basic annual salary
  of that Employee;

  
	
   

  	
   

  
	
  “Employee”

  	
  any person for the time being in full, part-time or
  temporary employment of any Member of the Group;

  
	
   

  	
   

  
	
  “Expected
  Vesting Date”

  	
  as defined at Rule 5.1 and Rule 5.2;

  
	
   

  	
   

  
	
  “Group”

  	
  the Company and its Subsidiaries;

  
	
   

  	
   

  
	
  “Lodged
  Share”

  	
  a Share:

  
	
   

  	
   

  
	
   

  	
  (i)            acquired by the
  Trustees with monies provided by an Employee or transferred to the Trustees
  and in each case held by the Trustees as bare nominee for that Employee; or

  

 

 1
 

 

	
  

  	
  (ii)           in respect of which a
  share certificate(s) covering such Share has been deposited with the Trustees
  by an Employee which shall be held by the Trustees (or such person or persons
  as may from time to time be nominated by the Trustees) on behalf of the
  Employee; or

  
	
   

  	
   

  
	
   

  	
  (iii)          held by the
  Participant in a CREST Account;

  
	
   

  	
   

  
	
  “Member
  of the Group”

  	
  the Company or any of its Subsidiaries;

  
	
   

  	
   

  
	
  “Model
  Code”

  	
  the Model Code on directors’ and relevant employees’
  dealings in securities, as set out in the listing rules published by the UK
  Listing Authority;

  
	
   

  	
   

  
	
  “Participant”

  	
  an Employee on whose behalf Lodged Shares are held
  by the Trustees or by the Employee in a CREST Account, or an Employee who has
  deposited a share certificate(s) with the Trustees and in any case has not
  withdrawn those Lodged Shares under rule 7;

  
	
   

  	
   

  
	
  “Rules”

  	
  these Rules as from time to time amended in
  accordance with their provisions;

  
	
   

  	
   

  
	
  “Scheme”

  	
  the Imperial Tobacco Group Share Matching Scheme
  constituted by these Rules;

  
	
   

  	
   

  
	
  “Share”

  	
  an ordinary share in the capital of the Company;

  
	
   

  	
   

  
	
  “Subsidiary”

  	
  a subsidiary or subsidiary undertaking of the
  Company within the meaning of the Companies Act 1985;

  
	
   

  	
   

  
	
  “Vesting
  Date”

  	
  the earlier of the Expected Vesting Date and Early
  Vesting Date;

  
	
   

  	
   

  
	
  “Vesting
  Period”

  	
  with respect to an Additional Share the period
  between its allocation under Rule 2.4 and its Vesting Date; and

  
	
   

  	
   

  
	
  “Vested
  Share”

  	
  an Additional Share which has been allocated to a
  Participant and which becomes vested in the Participant (or the Participant’s
  personal representatives) in accordance with the Rules.

  

 

2.                                      Invitations

2.1                                Any
Member of the Group may with the consent of the Board, from time to time,
invite any Employee to participate in the Scheme.

2.2                                Any
such invitation shall invite such Employees as the Board may in its discretion
determine:-

 2
 

(a)                                  to
pay monies to the Trustees and to authorise and require the Trustees to apply
such monies in the acquisition of Lodged Shares; and/or

(b)                                 to
transfer Shares to the Trustees as Lodged Shares; and/or

(c)                                  to
deliver a share certificate(s) in respect of the Lodged Shares to the Trustees
(or such other person or persons as may be nominated by the Trustees provided
the share certificate(s) are held to the Trustees’ order);

(d)                                   to open a CREST
Account and either (i) apply monies towards the purchase of Shares; or (ii)
transfer Shares by way of a completed CREST dematerialisation form to the CREST
Account such shares being Lodged Shares;

(e)                                    to leave any
existing Lodged Shares for which the Vesting Date of the related Additional
Shares has occurred (or will occur by or within a short time after (as
determined by the Board) the allocation of Additional Shares pursuant to the
invitation) as Lodged Shares for the purposes of the invitation; and/or

(f)                                      to leave any
Additional Shares which have become Vested Shares as Lodged Shares for the
purpose of the invitation.

and shall advise such Employees of the proposed basis of allocation of
Additional Shares if they accept the invitation.

2.3                                An
Employee invited to participate in the Scheme may accept the invitation by
submitting a duly completed application form and acquiring Lodged Shares in one
of the permitted manners within the time prescribed by the invitation.

2.4                                As
soon as practicable following confirmation of the number of Lodged Shares
acquired by or on behalf of a Participant following an invitation under Rule
2.1, the Trustees shall allocate Additional Shares to Participants in respect
of their Lodged Shares on such basis (including as to vesting) as the Board may
in its discretion determine based on length of service with the Group, the
Earnings of a Participant, the financial performance of the Group or otherwise
howsoever PROVIDED THAT the maximum aggregate number of Additional Shares which
may be allocated to a Participant in respect of that invitation shall not
exceed the total number of Lodged Shares held for or by the Participant under
the Scheme in respect of that invitation.

2.5                                No
invitation will be made to an Employee at a time when that Employee is
prohibited from dealing (as defined in paragraph 1 of the Model Code) in Shares
by the Model Code.

3.                                      Lodged Shares

3.1                                Lodged
Shares shall be registered either:

(a)                                    in the name of the
Trustees (or such other person or persons as may be nominated by the Board for
the purpose) who shall hold such Shares as bare nominee for the relevant
Participant; and/or

 3
 

(b)                                   in the Participant’s
name and the share certificate(s) covering such Shares shall be held by the
Trustees (or such other person or persons as may be nominated by the Trustees
provided the share certificate(s) is held to the Trustees’ order); or

(c)                                    in the Participant’s
name and held in a designated CREST Account.

3.2                                The
Trustees shall not exercise any rights attaching to Lodged Shares otherwise
than in accordance with any written wishes received from the relevant
Participant.  It shall be the
responsibility of each Participant to ensure that any voting wishes are
conveyed to the Trustees in sufficient time and with sufficient clarity to
allow the Trustees to carry out the same. 
The Trustees shall not be liable to any person for the consequences of
any failure to exercise voting rights.

3.3                                A
Participant will be entitled to the amount of any dividends paid by the Company
on the Participant’s Lodged Shares.

4.                                      Effect of Allocation

4.1                                Any
Additional Shares allocated to a Participant will cease to be capable of
vesting if, before their Vesting Date, the Participant causes any of the Lodged
Shares in respect of which the Additional Shares were allocated to be
transferred or delivered in accordance with Rule 7.

4.2                                During
their Vesting Period a Participant will have no right or interest, whether
legal or equitable, in any Additional Shares allocated to that Participant (and
for the avoidance of doubt will have no entitlement to any dividends paid by
the Company on the Additional Shares).

4.3                                Subject
to Rule 7, no Lodged Share may be assigned, charged or otherwise disposed of by
a Participant during the Vesting Period of the related Additional Shares.

5.                                      Vesting of Additional Shares

5.1                                Save
as otherwise provided, and provided that any performance condition(s) imposed
by the Board pursuant to Rule 2.4 has or have been satisfied or waived in
accordance with its terms, “Expected Vesting Date” in relation to any
Additional Shares means the date after the allocation of the Additional Shares
determined by the Board before the allocation. 
If an event occurs as a result of which the Board determines that in
relation to all or any Additional Shares previously allocated the Expected
Vesting Date is no longer appropriate, the Board may in its discretion
substitute such other date as it may determine as the Expected Vesting Date.

5.2                                “Expected
Vesting Date” in relation to any Additional Shares allocated pursuant to an
invitation made by the Board in December 2001 shall be 29 January 2005.

5.3                                Provided
that any performance condition(s) imposed by the Board pursuant to Rule 2.4 has
or have been satisfied or waived in accordance with its terms, “Early Vesting
Date” in relation to any Additional Share means the date on which any of the
following events shall first occur prior to the Expected Vesting Date of such
Additional Share:-

 4
 

(a)                                    any person
acquiring Control of the Company (including for the avoidance of doubt pursuant
to an amalgamation or reconstruction, however effected, or a compromise or a
scheme of arrangement sanctioned by the Court under Section 425 of the
Companies Act 1985);

(b)                                   notice being duly
given of a resolution for the voluntary winding-up of the Company;

(c)                                    death during
service of the Participant;

(d)                                   cessation of the
Participant’s employment by reason of:-

(i)                                 ill health, injury,
disability or redundancy;

(ii)                              the company employing the
Participant ceasing to be a Member of the Group;

(iii)                           the business or part of the
business to which the Participant’s office or employment relates being
transferred to a person who is not a Member of the Group;

(iv)                          any other circumstances; or

(e)                                    notice being given
that the Shares will cease to be listed on the London Stock Exchange.

5.4                                Subject
to the Participant electing to leave any of the Lodged Shares as Lodged Shares
for the purpose of an invitation under Rule 2.1:

(a)                                    any Lodged Shares
held upon bare trust for a Participant shall be transferred (in such manner
(whether in uncertificated form or otherwise) as the Trustees may determine) to
the relevant Participant on the Vesting Date of the related Additional Shares;

(b)                                   the Trustees shall
return or procure the return of all share certificates in respect of Lodged
Shares deposited with the Trustees as soon as practicable following the Vesting
Date of the related Additional Shares.

5.5                                If
the Vesting Date of any Additional Shares has arisen:

(a)                               otherwise than under
Rule 5.3 (a), (b), (c) or (d), the Trustees will transfer to the relevant
Participant on or as soon as permissible after the Vesting Date that number of
Additional Shares determined by the Trustees in accordance with the basis of
allocation determined under Rule 2; or

(b)                              under Rule 5.3 (a) or
(b), the Trustees will transfer to the relevant Participant on or as soon as
permissible after the Vesting Date that proportion of the Additional Shares as
is equal to the proportion of the Vesting Period of those Additional Shares
that had expired before the occurrence of the event that gave rise to the
Vesting Date of the Additional Shares; or

(c)                               under Rule 5.3(c) or
(d)(i), (ii) or (iii), the Trustees will transfer to the relevant Participant
(or to the Participant’s estate) on or as soon as permissible after the

 5
 

Vesting Date that proportion of the Additional Shares as is equal to
the proportion of the Vesting Period of those Additional Shares for which the
Participant remained an Employee; or

(d)                                   under Rule
5.3(d)(iv), any award of Additional Shares to that Participant shall lapse
unless, within six months of that date, the Trustee shall determine otherwise,
in which case there shall be transferred to the relevant Participant such
number of Additional Shares as may be determined by the Trustees in their
discretion, but not exceeding the number of Additional Shares which would have
been transferred to the Participant had the Vesting Date arisen otherwise than
under Rule 5.3(d)(iv).

5.6                                The
Additional Shares transferred to a Participant pursuant to Rule 5.5 above shall
rank pari passu with all Shares then in issue except that they will not rank
for any dividend or other distribution paid or made by reference to a record
date falling prior to the date that they are transferred.

5.7                                For
the purposes of this Rule 5, where a Participant’s employment with any Member
of the Group is terminated (a) without notice, the Participant’s employment
shall be deemed to cease on the date on which the termination takes effect; or
(b) with notice, the Participant’s employment shall be deemed to cease on the
date on which that notice is given, unless the Board in its sole discretion
extends the date on which the employment is deemed to cease to the date when
the notice expires.

5.8                                Notwithstanding
the provisions of this Rule 5, the number of Shares available for the Scheme
will be limited so that on any date:

(a)                                    the total number of
Shares acquired or that may be acquiring during the period of ten years ending
on that date under the Scheme and all other employees’ share schemes
established by the Company cannot exceed 10% of the issued ordinary share
capital of the Company on that date;

(b)                                   the total number of
Shares acquired or that may be acquired during the period of five years ending
on that date under the Scheme and all other employees’ share schemes
established by the Company cannot exceed 5% of the issued ordinary share
capital of the Company on that date;

(c)                                    the total number of
Shares acquired or that may be acquired during the period of ten years ending
on that date under the Scheme and all other employees’ share schemes
established by the Company cannot exceed 5% of the issued ordinary share
capital of the Company on that date, PROVIDED THAT there shall be excluded for
the purposes of this limit Shares acquired or that may be acquired under any
employees’ share scheme in circumstances where participation is offered or
extended to all or most employees of the participating companies under that
scheme.

5.9                                Benefits
received by a Participant under the Scheme are not pensionable.

6.                                      Capitalisation

6.1                                If
and whenever new Shares are allotted to the Trustees by way of capitalisation
or other distribution of a capital nature, such new Shares shall accrue and be
added to and be held on the same terms as the Shares in respect of which such
new Shares shall have been allotted.

 6
 

The number and
nominal value of Additional Shares and the basis of further allocations of
Additional Shares, may be adjusted in such a manner as the Company’s Auditors,
acting as experts and not as arbitrators, may confirm in writing to be fair and
reasonable.  Participants shall be
notified of any such adjustment.

6.2                                If
and whenever the Company shall issue by way of rights or otherwise make any
offer or invitation to shareholders generally and shall issue to its members
nil paid letters of allotment or other documents (“Nil Paid Rights”)
representing negotiable Nil Paid Rights or entitlements relating to any ordinary
shares or other security or securities (or any mixture of the two) in or of the
Company, the Trustees shall be entitled to receive but shall be obliged to sell
such proportion of such Nil Paid Rights as are attributable to Additional
Shares as shall enable the Trustees to subscribe for the new shares or
securities which are the subject of the balance of the Nil Paid Rights and the
Trustees shall so apply the proceeds of disposal in that way.  The shares or securities so purchased shall
be added pro rata and be held on the same terms as the Additional Shares held
by the Trustees in respect of which such Nil Paid Rights shall have been
received by the Trustees.  Any cash
balance shall be held likewise.  If any
such Nil Paid Rights shall be issued by reference to a record date which falls
after the time at which the relevant Shares in respect of which such Nil Paid
Rights shall have been issued shall have become held absolutely for a
Participant, such Nil Paid Rights shall be held by the Trustees upon trust for
such Participant absolutely.

6.3                                If
under Rule 6.1 or 6.2 above any fraction of a Share arises the allocation
therein provided for shall be rounded up or down as the Trustees may in their
sole discretion think fit.

6.4                                In
relation to any Lodged Share registered in the name of the Trustees (or another
person) pursuant to Rule 2.2 the Participant may instruct the Trustees to take
such action as the Participant may inform the Trustees in writing.  The Trustees shall be under no obligation to
take any action unless the Participant shall provide any necessary funds and
shall not be responsible for any failure to act in time or at all, irrespective
of the circumstances.

7.                                      Transfer of legal title

The Trustees shall in respect of all (but not some
only) of the Lodged Shares:

(a)                                    transfer the legal
title into the name of the relevant Participant or at the direction of the
Participant, in such manner (whether in uncertificated form or otherwise) as
the Trustees may determine; and/or

(b)                                   deliver or procure
the delivery of all the share certificate(s) to the relevant Participant,

as soon as
reasonably practicable following the receipt of any written instruction to this
effect from such Participant.

8.                                      Stamp duty and other expenses

Any stamp duty or other expenses incurred in any
transfer of Additional Shares and/or Lodged Shares by the Trustees shall be
payable:-

(a)                                    in the case of
either a transfer into the name or at the direction of the Participant
concerned or the acquisition by the Trust of Additional Shares, by the
Trustees; and

 7
 

(b)                                   in any other case,
by the Participant concerned (unless the Board shall determine otherwise).

9.                                      Taxation

9.1                                The
Company or the Trustees may make such provision for and take such action as may
be considered by either of them to be necessary or expedient for the
withholding or payment of any taxes or any other statutory deductions for which
either of them is properly accountable and wherever those taxes are imposed,
provided those taxes arise in respect of any transfer of funds or assets or any
payment pursuant to the Trust and/or these Rules including (but not limited to)
the withholding of funds or property (or any portion thereof) from any payment
under the Trust and/or under these Rules until a Participant reimburses the Company
or the Trustees for the amounts of any such taxes for which either of them is
respectively and properly accountable.

9.2                                For
the purposes of this Rule 9 the Trustees may rely on any information supplied
to them by the Company or by any tax adviser selected by the Company as to the
amount of any such tax liability.

10.                                General

10.1                          Any
notice or other document given to any Employee pursuant to the Scheme shall be
delivered to him, sent by post to him at his home address according to the
records of his employing company or such other address as may appear to the
Board to be appropriate or sent to him by e-mail to his usual e-mail address
according to the records of his employing company or to such other e-mail
address that the Employee may have advised may be used.  Notices or other documents sent by post shall
be deemed to have been received 2 days following the date of posting for
documents posted to addresses in the United Kingdom and 7 days for documents
posted to an overseas address.  All
documents sent to or by an Employee will be sent entirely at the Employee’s
risk.

10.2                          The
decision of the Board on any question of interpretation of the Rules or any
dispute relating to or connected with the Scheme shall be final and conclusive.

10.3                          The
costs of introducing, operating and administering the Scheme shall be borne by
a Group Company.

10.4                          The
Board shall have power from time to time to make regulations for the
administration and operation of the Scheme provided that they are not
inconsistent with these Rules.

10.5                          Nothing
in the Scheme shall form part of any Participant’s contract of employment. The
rights and obligations of a Participant under the terms and conditions of his
employment by any Member of the Group shall not be affected by his
participation in the Scheme.  The
Participant shall have no right to compensation or damages or any other sum or
benefit in respect of his ceasing to participate in the Scheme or in respect of
any loss or reduction of any rights or expectations under the Scheme in any circumstances.
An Employee who is not invited to participate in the Scheme shall have no right
to compensation or damages or any other sum or benefit in respect of his
non-participation.

 8
 

10.6                          An
Employee agrees as a condition of participation in the Scheme to the
collection, processing, transfer (including to countries outside the European
Economic Area) and retention of the Employee’s personal data for use in
connection with the operation of the Scheme by any Member of the Group, the
Trustees and/or any third party retained by the Board to administer the Scheme.

11.                                Amendment

11.1                          The
Scheme shall be administered under the direction of the Board which may at any
time and from time to time by resolution and without other formality amend or
augment the Rules or the Scheme in any respect provided that:-

(a)                                    no amendment shall
operate to affect adversely in any way any rights already acquired by a
Participant;

(b)                                   no amendment may be
made which would, if carried out, involve the Trustee in a new or additional obligation
or liability without the prior agreement of the Trustee; and

(c)                                    no amendment may be
made to the Rules to the advantage of Participants except with the prior
approval of the shareholders of the Company in General Meeting except for minor
amendments to benefit the administration of the Scheme, to take account of a
change in legislation or to obtain or maintain favourable tax, exchange control
or regulatory treatment for Participants in the Scheme or for any Member of the
Group.

11.2                          Notwithstanding
anything to the contrary contained herein, the Board may at any time and from
time to time by resolution and without further formality amend the Scheme in
such manner as the Board may consider necessary or desirable:

(a)                                    in any way to the
extent necessary to render the Scheme capable of approval by the Inland Revenue
or any other governmental or other regulatory body pursuant to any present or
future United Kingdom legislation;  or

(b)                                   in order to comply
with, take advantage of, or otherwise in connection with any taxation, legal,
regulatory or other rule, law, guideline, regulation or other provision of or
prevailing in any jurisdiction in which this Scheme is or is intended to be
operated.

11.3                          The
limits in Rule 5 may not be increased without the approval of the shareholders
of the Company in General Meeting.

11.4                          No
amendment shall take effect that would cause the Scheme to cease to be an “employees’
share scheme” as defined in section 743 of the Companies Act 1985.

12.                                Termination

The Scheme may be terminated
at any time by a resolution of the Board, and shall in any event terminate on 1
February 2015.  Any termination shall not
affect the outstanding rights of Participants.

 9
 

13.                                Governing law

This Scheme shall be
governed by the laws of England.

 10

SCHEDULE 1

INTERNATIONAL
RULES

The Rules of the Scheme
apply in the jurisdictions specified below:

Belgium

Bosnia

Czech Republic

France

Germany

Greece

Hong Kong

Hungary

Ireland

Kyrgyzstan

The Netherlands

New Zealand

Poland

Russia

Singapore

Slovakia

Slovenia

Spain

Taiwan

Turkey

United Arab
Emirates

The Rules of the Scheme
apply with and subject to the following amendments and provisions which have
been adopted by the Board pursuant to rule 11.2 for the purposes of the
operation of the Scheme in the jurisdictions specified below:

Australia (Appendix 1)

Canada (Appendix 2)

United States of
America (Appendix 3)

 11
 

APPENDIX 1

IMPERIAL
TOBACCO INTERNATIONAL

SHARE MATCHING SCHEME

The purpose of this
Appendix is to specify terms and conditions under which the Scheme is to be
modified in its application to any Lodged Shares or allocation of Additional
Shares made or to be made to a person resident in Australia.

Words and phrases defined
in the Scheme shall bear the same meaning in this Appendix 1 except as
otherwise provided:

1.                                           An
Employee must, in order to participate in the Scheme, either

(a)                               deliver
share certificates in respect of the Lodged Shares owned by the Employee to the
Trustees or,

(b)                              open
a CREST Account and either,

(i)                               apply monies towards the
purchase of Shares; or

(ii)                            transfer
Shares by way of a CREST dematerialisation to the CREST Account

and the definition of “Lodged Shares” and Rule 2.2 of
the Scheme shall be read and construed accordingly.

2.                                           The
following new Rules 2.5 and 2.6 shall be inserted after Rule 2.4:

‘2.5                             The
allocation of Additional Shares to any Participant shall be deemed to be, and
shall have effect as, the grant of an option by the Company in favour of the
Participant to require the Company to procure the transfer to the Participant of
the Additional Shares to which the Participant is entitled under these Rules on
the Vesting Date and:

(a)                               any
reference in these Rules to the loss, termination or lapsing of any award of
Additional Shares shall be deemed to be a reference to such option lapsing; and

(b)                              any
reference to Additional Shares shall be deemed to be a reference to such option
to call for a transfer of the relevant number of Additional Shares.

2.6                                  The
option referred to in Rule 2.5 shall lapse and be of no further effect unless the
Participant shall, throughout the period commencing on the date of the grant of
that option and ending on the Vesting Date:

(c)                               be
and have been employed continuously under a contract of employment with any
Member of the Group and is not then under notice of termination of such
contract given or received; and

(d)                              not
have caused the certificate in respect of any of the Lodged Shares in respect
of which the option was granted to have been delivered in the same manner as if
Rule 7 applied to such transfer.’

 12
 

3.                                           Rule
4.1 shall be deleted, and the following Rule 4.1 inserted in its place:

‘4.1                             Notwithstanding
any provision of these Rules or of the Trust, no Participant shall have any
right or interest, whether legal or equitable, in:

(a)                               any
Additional Shares allocated to that Participant until the Vesting Date;

(b)                              any
Nil Paid Rights issued by the Company under Rule 6.2 or, until the Vesting
Date, in any shares or securities acquired from exercising those Nil Paid
Rights; or

(c)                               any
option to acquire any right or interest in any such Share.’

4.                                           Rule
6.2 shall be deleted and the following Rule 6.2 inserted in its place:

‘If and whenever the Company shall issue by
way of rights or otherwise make any offer or invitation to shareholders
generally and shall issue to its members nil paid letters of allotment or other
documents (“Nil Paid Rights”) representing negotiable Nil Paid Rights or
entitlements relating to any ordinary shares or other security or securities
(or any mixture of the two) in or of the Company, the Trustees shall be
entitled to receive but shall be obliged to sell such proportion of such Nil
Paid Rights as are attributable to Additional Shares as shall enable the
Trustees to subscribe for the new shares or securities which are the subject of
the balance of the Nil Paid Rights and the Trustees shall so apply the proceeds
of disposal in that way.  The shares or
securities so purchased shall be added pro rata and be held upon the same terms as the Additional Shares
held by the Trustees in respect of which such Nil Paid Rights shall have been
received by the Trustees.  Any cash
balance shall be held likewise.  If any
such Nil Paid Rights shall be issued by reference to a record date which falls
after the time at which the relevant Shares in respect of which such Nil Paid
Rights shall have been issued shall have become held absolutely for a
Participant, such Nil Paid Rights shall be held by the Trustees upon trust for
such Participant absolutely. No Participant
shall have any right or interest, whether legal or equitable in any Nil Paid
Rights or, until the Vesting Date, in any shares or securities acquired from
exercising those Nil Paid Rights. ‘

 13
 

APPENDIX
2

IMPERIAL
TOBACCO GROUP INTERNATIONAL

SHARE MATCHING SCHEME

The purpose of this
Appendix is to specify terms and conditions under which the Scheme is to be
modified in its application to any Lodged Shares or allocation of Additional
Shares made or to be made to a person resident for tax purposes in Canada.

Words and phrases defined
in the Scheme shall bear the same meaning in this Appendix 2 except as
otherwise provided.

	
  Rule 1

  	
   

  
	
   

  	
   

  
	
  “Additional
  Shares”

  	
  notional additional shares allocated pursuant to
  Rule 4.

  
	
   

  	
   

  
	
  “Exit Price”

  	
  the middle market price of a Share as derived from
  the London Stock Exchange Daily Official List on the Vesting Date.

  
	
   

  	
   

  
	
  “Notional
  Additional Gain”

  	
  the Exit Price multiplied by the number of
  Additional Shares allocated to a Participant in accordance with the basis of
  allocation determined under Rule 2.

  
	
   

  	
   

  
	
  “Vesting Date”

  	
  the earlier of the Expected Vesting Date and Early
  Vesting Date provided that this date shall not be a date falling more than
  three years after the date of the allocation of the Additional Shares.

  
	
   

  	
   

  
	
  Rule 4 shall be
  replaced with the

  following:

  	
  “Any Additional Shares allocated to a Participant
  will be held for that Participant provided that the Participant, throughout
  the period commencing on the date of allocation of such Additional Shares and
  ending on their Vesting Date does not cause any of the Lodged Shares in
  respect of which the Additional Shares were allocated to be transferred or
  delivered in accordance with Rule 7”.

  
	
   

  	
   

  
	
  Rule 5.5 shall
  be replaced with the

  following:

  	
  If the Vesting Date of any Additional Shares has
  arisen:

   

  (a)           otherwise than under
  Rule 5.3 (a), (b), (c) or (d) a payment shall be made to the Participant on
  or as soon as permissible after the Vesting Date, but in no event later than
  December, 31 of the calendar year in which the vesting date falls, of an
  amount equal to the Notional Additional Gain; or

   

  (b)           under Rule 5.3(a) or
  (b) a payment shall be made to the Participant on or as soon as permissible
  after the Vesting Date, but in no event later than December, 31 of the
  calendar year in which the vesting date falls,

  

 

 14
 

 

	
  

  	
  of an amount equal to
  that proportion of the Notional Additional Gain as is equal to the proportion
  of the Vesting Period of the Additional Shares that had expired on the
  occurrence of the event that gave rise to the Vesting Date of the Additional
  Shares; or 

   

  (c)           under Rule 5.3(c) or
  d(i), (ii) or (iii), a payment shall be made to the Participant (or to the
  Participant’s estate) on or as soon as permissible after the Vesting Date,
  but in no event later than December, 31 of the calendar year in which the
  vesting date falls, of an amount equal to that proportion of the Notional
  Additional Gain as is equal to the proportion of the Vesting Period of the
  Additional Shares for which the Participant remained an Employee; or

   

  (d)           under Rule
  5.3(d)(iv), any allocation of Additional Shares to that Participant shall
  lapse, unless within six months of that date, the Board shall determine
  otherwise, in which case a payment shall be made to the Participant of an
  amount determined by the Board in its discretion but not exceeding the
  Notional Additional Gain which the Participant would have entitled to had the
  Vesting Date arisen otherwise than under Rule 5.3(d)(iv).

  
	
  Rule 5.6 shall
  be deleted.

  	
   

  
	
   

  	
   

  
	
  Rule 5.7 shall
  be

  replaced with the

  following:

  	
  “For the purposes of the Scheme, a Participant’s
  employment with any Member of the Group shall be considered to have
  terminated effective on the last day of the Participant’s actual and active
  employment with a Member of the Group whether such day is selected by
  agreement with the individual, unilaterally by such a Member of the Group and
  whether with or without advance notice to the Participant unless the Board in
  its sole discretion shall agree to extend the date on which the employment is
  deemed to cease to the date when the notice expires. Except as may be
  authorised by the Board, for the avoidance of doubt, no period of notice that
  is given or that ought to have been given under applicable law in respect of
  such termination of employment will be utilised in determining entitlement
  under the Rules of the Scheme.”

  
	
  Rule 6.2 shall
  be deleted.

  	
   

  
	
   

  	
   

  
	
  Rule 6.3

  	
  delete the words “or 6.2” where it occurs on the
  first line of that provision;

  
	
   

  	
   

  
	
  Rule 8 shall be
  replaced with the

  following:

  	
  Any stamp duty or other expenses incurred in the
  transfer of Lodged Shares by the Trustees shall be payable:

   

  (a)           in the case of either
  a transfer into the name or at the discretion of the Participant concerned,
  by the Trustees; and

   

  (b)           in any other case, by
  the Participant concerned (unless the Board shall determine otherwise).

  

 

 15
 

APPENDIX 3

IMPERIAL TOBACCO GROUP
INTERNATIONAL

SHARE
MATCHING SCHEME

The purpose of this
Appendix is to specify terms and conditions under which the Scheme is to be
modified in its application to any Lodged Shares or allocation of Additional
Shares made or to be made to a person resident for tax purposes in the United
States of America.

Words and phrases defined
in the Scheme shall bear the same meaning in this Appendix 3 except as
otherwise provided.

	
  Rule 1

  	
   

  
	
   

  	
   

  
	
  “ADS”

  	
  American Depositary Shares, evidenced by American
  Depositary Receipts, which may be issued by Citibank, N.A., as depositary
  (“the Depositary”) pursuant to the Amended and Restated Deposit Agreement,
  dated as of November 2, 1998, among the Company, the Depositary and all
  holders and beneficial owners of American Depositary Shares thereunder;

  
	
   

  	
   

  
	
  “Additional Share”

  	
  a Share allocated pursuant to Rule 4;

  
	
   

  	
   

  
	
  “Lodged Share”

  	
  a Share:

   

  (i),           or ADS, if
  applicable, acquired by the Trustees with monies provided by an Employee or
  transferred to the Trustees by an Employee and in each case held by the
  Trustees as bare nominees for such Employee; or

   

  (ii)           held by an Employee
  in a CREST Account;

  
	
   

  	
   

  
	
  “Share”

  	
  an ordinary share in the capital of the Company or
  ADS, if applicable;

  
	
   

  	
   

  
	
  Rule 2.2(d)

  	
  insert the words “,to be approved by the Trustee,”
  after the words “CREST Account” on the first line of that provision;

  
	
   

  	
   

  
	
  Rule 5.3 (e)

  	
  at the end of the sentence add the words “or, that
  the ADSs cease to be listed on the New York Stock Exchange, Inc.”

  
	
   

  	
   

  
	
  Rule 5.8

  	
  insert the words “(including Shares represented by
  ADSs)” after the word “Share” wherever it occurs.

  

 

 16
 

SCHEDULE 2

[Imperial
Tobacco Group PLC notepaper]

ADDITIONAL SHARE
AWARD CERTIFICATE

IMPERIAL TOBACCO
GROUP SHARE MATCHING SCHEME (the “Scheme”)

This is to certify that
[                         ]
has been granted [                      ]
Additional Shares in accordance with the Scheme.

The Additional Shares are
subject to the rules of the Scheme and shall be held by Abacus (C.I.) Limited
as Trustees of the Scheme and of the Imperial Tobacco Group Employee and
Executive Benefit Trust [and the Imperial Tobacco Group PLC 2001 Employee
Benefit Trust] until the Vesting Date.

The Additional Shares
shall be transferred to you as soon as practicable after the Vesting Date
provided that [insert details of performance condition(s) imposed on the award of Additional Shares
including details of performance condition(s) if early good leaver].

Until the Vesting Date:

·                  You cannot sell, assign, transfer,
pledge, encumber or otherwise dispose of your interest in the Additional
Shares;

·                  You will not receive any dividends in
respect of the Additional Shares; and

·                  You
cannot exercise voting rights attached to the Additional Shares.

For and on behalf of IMPERIAL TOBACCO GROUP PLC

	
  Authorised signatory

  	
   

  

 

 17
 

SCHEDULE 3

PERFORMANCE CONDITION

For Additional
Shares allocated to executive directors of the Company

This Schedule 3 contains the
performance condition to which Additional Shares allocated to executive
directors of the Company after 1 February 2005 will be subject, unless and
until the Board decides otherwise.

The Additional Shares
will only vest if the average annual growth in the Company’s basic Earnings per
Share over their Vesting Period, as adjusted over that period on a basis
confirmed as appropriate by the auditors of the Company, for amortisation,
exceptional and extraordinary items and inflation, exceeds three (3) per cent.

Following testing of the
performance conditions the Board may vary, but not increase, the extent to
which the Additional Shares have vested to ensure that vesting will only occur,
and at an appropriate level, if there has been an improvement in the underlying
financial performance of the Company, including the maintenance of long-term
return on capital employed.

There will be no
re-testing of the performance condition if it is not achieved at the end of the
Vesting Period.

 18

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