EXHIBIT 10.1

AGREEMENT DATED JULY 31, 2008 BETWEEN UNUM GROUP AND DEUTSCHE BANK AG,

LONDON BRANCH FOR AN ACCELERATED SHARE REPURCHASE TRANSACTION

 

         

LOGO [g593400001050.jpg]

 

     

Deutsche Bank AG, London Branch

Winchester house

1 Great Winchester St, London EC2N

2DB

Telephone: 44 20 7545 8000

           

c/o Deutsche Bank Securities Inc.

60 Wall Street

New York, NY 10005

Telephone: 212-250-5977

Facsimile: 212-797-8826

            Internal Reference: [         ]

July 31, 2008

Unum Group (the “Issuer”)

1 Fountain Square

Chattanooga, TN 37402

Fixed Dollar Accelerated Share Repurchase Transaction –DBSI Reference No.
[            ]

Dear Sir/Madam:

The purpose of this letter agreement (this “Confirmation”) is to confirm the
terms and conditions of the Transaction entered into between Deutsche Bank AG,
London Branch, (“Deutsche”) and Issuer on the Trade Date specified below (the
“Transaction”). This Confirmation constitutes a “Confirmation” as referred to in
the ISDA Master Agreement specified below. This Confirmation constitutes the
entire agreement and understanding of the parties with respect to the subject
matter and terms of the Transaction and supersedes all prior or contemporaneous
written and oral communications with respect thereto.

DEUTSCHE BANK AG IS NOT REGISTERED AS A BROKER DEALER UNDER THE U.S. SECURITIES
EXCHANGE ACT OF 1934. DEUTSCHE BANK SECURITIES INC. (“DBSI”) HAS ACTED SOLELY AS
AGENT IN CONNECTION WITH THIS TRANSACTION AND HAS NO OBLIGATION, BY WAY OF
ISSUANCE, ENDORSEMENT, GUARANTEE OR OTHERWISE WITH RESPECT TO THE PERFORMANCE OF
EITHER PARTY UNDER THE TRANSACTION. AS SUCH, ALL DELIVERY OF FUNDS, ASSETS,
NOTICES, DEMANDS AND COMMUNICATIONS OF ANY KIND RELATING TO THIS TRANSACTION
BETWEEN DEUTSCHE AND ISSUER SHALL BE TRANSMITTED EXCLUSIVELY THROUGH DBSI.
DEUTSCHE BANK AG ACTING THROUGH ITS LONDON BRANCH IS NOT A MEMBER OF THE
SECURITIES INVESTOR PROTECTION CORPORATION (SIPC).

The definitions and provisions contained in the 2002 ISDA Equity Derivatives
Definitions (the “Equity Definitions”), as published by the International Swaps
and Derivatives Association, Inc., are incorporated into this Confirmation. In
the event of any inconsistency between the Equity Definitions and this
Confirmation, the terms of this Confirmation will govern. For purposes of the
Equity Definitions, the Transaction shall be considered a Share Forward
Transaction. Any reference to a currency shall have the meaning contained in
Annex A to the 1998 ISDA FX and Currency Option Definitions, as published by
ISDA.

1. This Confirmation evidences a complete and binding agreement between Deutsche
and Issuer as to the terms of the Transaction to which this Confirmation
relates. This Confirmation shall be subject to an agreement (the

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“Agreement”) in the form of the 2002 ISDA Master Agreement (the “ISDA Form”) as
if Deutsche and Issuer had executed an agreement in such form without any
Schedule. For the avoidance of doubt, the Transaction shall be the only
transaction under the Agreement.

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

GENERAL TERMS:

 

Trade Date:

As specified in Schedule I

 

Buyer:

Issuer

 

Seller:

Deutsche

 

Shares:

Common Stock of Issuer (Ticker: UNM)

 

Number of Shares:

The number of Shares delivered in accordance with Physical Settlement below.

 

Forward Price:

A price per Share (as determined by the Calculation Agent) equal to (i) the sum
of the 10b-18 VWAP for each Trading Day during the Calculation Period divided by
(ii) the number of Trading Days in the Calculation Period minus (iii) the
Discount (as specified in Schedule I).

 

10b-18 VWAP:

For each Trading Day during the Calculation Period, a price per share (as
determined by the Calculation Agent) equal to the volume-weighted average price
of the Rule 10b-18 eligible trades in the Shares for the entirety of such
Trading Day as determined by reference to the screen entitled “UNM.N <Equity>
AQR SEC” or any successor page as reported by Bloomberg L.P. (without regard to
pre-open or after hours trading outside of any regular trading session for such
Trading Day or block trades (as defined in Rule 10b-18(b)(5) of the Securities
Exchange Act of 1934 as amended (the “Exchange Act”)) on such Trading Day).

 

Calculation Period:

The period from and including the Prepayment Date to but excluding the relevant
Valuation Date.

 

Trading Day:

Any Exchange Business Day that is not a Disrupted Day.

 

Initial Shares:

As specified in Schedule I

 

Initial Share Delivery Date:

The Prepayment Date. On the Initial Share Delivery Date, Seller shall deliver a
number of Shares equal to the Initial Shares to Buyer in accordance with
Section 9.4 of the Equity Definitions, with the Initial Share Delivery Date
deemed to be a “Settlement Date” for purposes of such Section 9.4.

 

Prepayment:

Applicable

 

Prepayment Amount:

As specified in Schedule I

 

Adjustment Amount:

As specified in Schedule I

 

Prepayment Date:

August 4, 2008. On the Prepayment Date, Buyer shall pay to Seller the Prepayment
Amount and the Adjustment Amount, if any.

 

Exchange:

New York Stock Exchange

 

Related Exchange:

The primary exchange on which options or futures on the relevant Shares are
traded.

 

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Market Disruption Event:

The definition of “Market Disruption Event” in Section 6.3(a) of the Equity
Definitions is hereby amended by inserting the words “at any time on any
Scheduled Trading Day during the Calculation Period or” after the word
“material,” in the third line thereof.

Notwithstanding anything to the contrary in the Equity Definitions, if any
Scheduled Trading Day in the Calculation Period is a Disrupted Day, the
Calculation Agent shall have the option in its sole discretion either (i) to
determine the weighting of each Rule 10b-18 eligible transaction in the Shares
on the relevant Disrupted Day using its commercially reasonable judgment for
purposes of calculating the Forward Price, as applicable, (ii) to elect to
extend the Calculation Period by a number of Scheduled Trading Days equal to the
number of Disrupted Days during the Calculation Period or (iii) to suspend the
Calculation Period, as appropriate, until the circumstances giving rise to such
suspension have ceased. For the avoidance of doubt, if Calculation Agent elects
the option described in clause (i) above, then such Disrupted Day shall be
deemed to be a Trading Day for purposes of calculating the Forward Price.

VALUATION:

 

Valuation Time:

The Scheduled Closing Time on the relevant Exchange

 

Valuation Date:

The earlier of (i) The Scheduled Valuation Date (as specified in Schedule I) and
(ii) any date after the Lock-Out Date (as specified in Schedule I) specified by
Deutsche to Issuer by 9:00pm EST on such date as a Valuation Date, in each case,
subject to extension in accordance with “Market Disruption Event” above or
Section 9 or Section 10 below; provided, however, that if a Valuation Date
occurs pursuant to clause (ii) above, then (A) the Calculation Period for this
Transaction (or portion thereof) shall be deemed to end as of the Trading Day
immediately preceding the relevant Valuation Date and (B) Deutsche shall have
the right to specify a Valuation Date with respect to any portion of this
Transaction as it selects (any such Valuation Date on a portion of this
Transaction for less than the full Prepayment Amount, a “Partial Acceleration
Date”); provided, however, that Deutsche can elect no more than three Partial
Acceleration Dates during the term of this Transaction.

In the case of a Partial Acceleration Date, Deutsche shall specify in its notice
to Issuer designating a Valuation Date in connection with a Partial Acceleration
Date the percentage of the Prepayment Amount that is subject to such Valuation
Date and Calculation Agent shall adjust all terms of this Transaction as it
deems reasonable in order to take into account the occurrence of any Partial
Acceleration Date (including cumulative adjustments to take into account all
Partial Acceleration Dates that occur during the term of this Transaction).

On each Valuation Date, Calculation Agent shall calculate the Settlement Amount.

SETTLEMENT TERMS:

 

Physical Settlement:

Applicable.

On the Settlement Date, Seller shall deliver to Buyer a number of Shares equal
to (a) (i) the Prepayment Amount divided by (ii) the Forward Price as determined
on each Valuation Date, minus (b) the Initial Shares (such number of Shares, the
“Settlement Amount”), rounded to the nearest whole number of Shares; provided,
however, that if the Settlement Amount is less than zero, then Buyer shall
deliver to Seller a number of Shares equal to 100.25% of the absolute value of
the Settlement Amount (such number of Shares, the “Payment Shares”); provided

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further, however if the Buyer chooses to deliver Payment Shares to the Seller,
then the conditions set forth in Annex A attached hereto must be satisfied,
delivery must be made pursuant to the provisions therein and the Buyer shall be
deemed to have made the covenants and representations therein.

Notwithstanding the first proviso above, if the Settlement Amount is less than
zero, Buyer may cash settle its obligation to deliver the Payment Shares by
delivering to Seller a notice by no later than each Valuation Date electing to
cash settle its obligation to deliver the Payment Shares. Any such cash
settlement shall be effected in accordance with “Cash Settlement of Payment
Shares” below.

For the avoidance of doubt, upon the date that (i) Buyer satisfies its
obligation to deliver the Payment Shares to Seller in accordance with the terms
of this provision or (ii) the Settlement Balance (as defined below) is reduced
to zero in connection with cash settlement of Buyer’s obligation to deliver
Payment Shares (as described under “Cash Settlement of Payment Shares” below),
then Buyer shall have no further delivery or payment obligations under the terms
of this Transaction and this Transaction shall be deemed to have been settled as
of such date.

Any such payment and/or delivery shall be made through the relevant Clearance
System(s) to the account(s) specified herein.

 

Settlement Currency:

USD

 

Settlement Date:

Three Exchange Business Days after each Valuation Date, or if such date is not a
Clearance System Business Day or if there is a Settlement Disruption Event on
such day, the immediately succeeding Clearance System Business Day on which
there is no Settlement Disruption Event.

 

Cash Settlement of Payment
Shares:

If Buyer elects to cash settle its obligation to deliver Payment Shares, then on
each Valuation Date a balance (the “Settlement Balance”) shall be created with
an initial balance equal to the absolute value of the Settlement Amount. On the
Settlement Date, Buyer shall deliver to Seller a U.S. dollar amount equal to the
Payment Shares multiplied by a price per Share as determined by the Calculation
Agent in a commercially reasonable manner (such cash amount, the “Initial Cash
Settlement Amount”). On the Exchange Business Day immediately following the
delivery of the Initial Cash Settlement Amount, Seller shall begin purchasing
Shares in a commercially reasonable manner (all such Shares purchased, “Cash
Settlement Shares”). At the end of each Exchange Business Day on which Seller
purchases Cash Settlement Shares, Seller shall reduce (i) the Settlement Balance
by the number of Cash Settlement Shares purchased on such Exchange Business Day
and (ii) the Initial Cash Settlement Amount by the aggregate purchase price
(including commissions) of the Cash Settlement Shares on such Exchange Business
Day. If, on any Exchange Business Day, the Initial Cash Settlement Amount is
reduced to or below zero but the Settlement Balance is above zero, the Buyer
shall (i) deliver to Seller or as directed by Seller on the next Exchange
Business Day after such Exchange Business Day an additional U.S. dollar amount
(an “Additional Cash Settlement Amount”) equal to the Settlement Balance as of
such Exchange Business Day multiplied by a price per Share as determined by the
Calculation Agent in a commercially reasonable manner. This provision shall be
applied successively until the Settlement Balance is reduced to zero. On the
Exchange Business Day that the Settlement Balance is reduced to zero, Seller
shall return to Buyer any unused portion of the Initial Cash Settlement Amount
or the Additional Cash Settlement Amount, as the case may be. For the avoidance
of doubt, any purchases of Cash Settlement Shares contemplated by this paragraph
shall be subject to Seller’s covenants in Section 11(b).

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SHARE ADJUSTMENTS:

 

Potential Adjustment Event:

Notwithstanding anything to the contrary in Section 11.2(e) of the Equity
Definitions, an Extraordinary Dividend shall not constitute a Potential
Adjustment Event

 

Extraordinary Dividend:

For any fiscal quarter occurring (in whole or in part) during the period from
and including the first day of the Calculation Period to and including the final
Valuation Date, any dividend or distribution on the Shares with an ex-dividend
date occurring during such fiscal quarter (other than any dividend or
distribution of the type described in Section 11.2(e)(i) or
Section 11.2(e)(ii)(A) or (B) of the Equity Definitions) (a “Dividend”) that is
either (i) a non-regularly scheduled Dividend or (ii) the amount or value of
which (as determined by the Calculation Agent) exceeds the Ordinary Dividend
Amount.

 

Ordinary Dividend Amount:

For any calendar quarter, USD 0.075

 

Method of Adjustment:

Calculation Agent Adjustment; provided that if Seller suspends trading in the
Shares for all or any portion of a Trading Day within the Calculation Period,
the suspension shall be treated as a Potential Adjustment Event subject to
Calculation Agent Adjustment. In the case of a suspension pursuant to
Section 10, the Calculation Agent shall make such adjustments prior to the
period of suspension, if it is practical to do so. Otherwise, and in all cases
of a suspension as contemplated under “Market Disruption Event” above, the
Calculation Agent shall make such adjustments promptly following the period of
suspension.

EXTRAORDINARY EVENTS:

Consequences of Merger Events:

 

Share-for-Share:

Modified Calculation Agent Adjustment

 

Share-for-Other:

Cancellation and Payment on that portion of the Other Consideration that
consists of cash; Modified Calculation Agent Adjustment on the remainder of the
Other Consideration

 

Share-for-Combined:

Modified Calculation Agent Adjustment

 

Tender Offer:

Applicable

Consequences of Tender Offers:

 

Share-for-Share:

Modified Calculation Agent Adjustment

 

Share-for-Other:

Modified Calculation Agent Adjustment

 

Share-for-Combined:

Modified Calculation Agent Adjustment

 

Composition of
Combined Consideration:

Applicable

 

 

Consequences of Announcement
Events:

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

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Announcement Event:

The occurrence of an Announcement Date in respect of a potential Merger Event or
potential Tender Offer.

 

Announcement Date:

The date of the first public announcement in relation to a potential Merger
Event or potential Tender Offer.

 

Provisions applicable to Merger
Events and Tender Offers:

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

 

Nationalization,
Insolvency or Delisting:

Cancellation and Payment 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 or re-traded 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
or re-traded on any such exchange, such exchange shall thereafter be deemed to
be the Exchange.

Additional Disruption Events:

 

Change in Law:

Applicable provided that Section 12.9(a)(ii) of the Equity Definitions is hereby
amended by (i) replacing the phrase “the interpretation” in the third line
thereof with the phrase “or announcement or statement of the formal or informal
interpretation” and (ii) immediately following the word “Transaction” in clause
(X) thereof, adding the phrase “in the manner contemplated by the Hedging Party
on the Trade Date”.

 

Failure to Deliver:

Applicable

 

Insolvency Filing:

Applicable

 

Hedging Disruption:

Applicable

 

Increased Cost of Hedging:

Applicable

 

Loss of Stock Borrow:

Applicable

 

Maximum Stock Loan Rate:

100bps

 

Increased Cost of Stock Borrow:

Applicable

 

Initial Stock Loan Rate:

25bps

 

Determining Party:

For all Extraordinary Events, Deutsche

 

Hedging Party:

For all Additional Disruption Events, Deutsche

 

Non-Reliance:

Applicable

AGREEMENTS AND ACKNOWLEDGMENTS:

 

Regarding Hedging Activities:

Applicable

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Additional Acknowledgments:                          Applicable

3. Calculation Agent:                                Deutsche

4. Account Details:

Account for Payments to Deutsche:                                       To be
provided separately

Account for Payments to Issuer:                                             To
be provided by Issuer

5. Certain Amendments

(a) Nationalization or Insolvency. The words “the Transaction will be
cancelled,” in the first line of Section 12.6(c)(ii) are replaced with the words
“Deutsche will have the right to cancel this Transaction,”.

(b) Additional Termination Event. The declaration of any Extraordinary Dividend
by Issuer during the period from and including the Trade Date to but excluding
the final Valuation Date shall constitute an Additional Termination Event with
this Transaction as the only “Affected Transaction” and Issuer as the sole
“Affected Party”. For the avoidance of doubt, the Early Settlement Payment or
Deutsche Payment Amount (each as defined below) pursuant to an Early Termination
of this Transaction occurring as a result of an Extraordinary Dividend shall not
include the effect of such Extraordinary Dividend.

(c) For the avoidance of doubt, this Transaction shall be deemed to be a
“Forward Transaction” for purposes of the Equity Definitions; provided, however,
that Section 9.2 of the Equity Definitions shall be replaced in its entirety by
the provisions under “Physical Settlement” above.

6. Certain Payments and Deliveries by Deutsche. Notwithstanding anything to the
contrary herein, or in the Equity Definitions, if at any time (i) an Early
Termination Date occurs and Deutsche would be required to make a payment
pursuant to Sections 6(d) and 6(e) of the Agreement, (ii) a Tender Offer occurs
and Deutsche would be required to make a payment pursuant to Sections 12.3 and
12.7 of the Equity Definitions, (iii) a Merger Event occurs and Deutsche would
be required to make a payment pursuant to Sections 12.2 and 12.7 of the Equity
Definitions, (iv) an Announcement Event occurs and Deutsche would be required to
make a payment pursuant to Sections 12.3 of the Equity Definitions, (v) a
Delisting or Insolvency occurs (except an Insolvency in which the proceeds to be
paid to holders of Shares consist solely of cash) and Deutsche would be required
to make a payment pursuant to Sections 12.6 and 12.7 of the Equity Definitions,
or (vi) an Additional Disruption Event occurs and Deutsche would be required to
make a payment pursuant to Sections 12.8 and 12.9 of the Equity Definitions,
then Issuer shall have the option to require Deutsche to make such payment in
cash or to settle such payment amount in Shares (any such payment described in
Sections 6(i), (ii), (iii), (iv), (v) or (vi) above, an “Deutsche Payment
Amount”). If Issuer elects for Deutsche to settle a Deutsche Payment Amount in
Shares, then on the date such Deutsche Payment Amount is due, a Settlement
Balance shall be established with an initial balance equal to the Deutsche
Payment Amount. On such date, Deutsche shall in its discretion commence
purchasing Shares for delivery to Issuer. At the end of each Trading Day on
which Deutsche purchases Shares pursuant to this Section 6, Deutsche shall
reduce the Settlement Balance by the amount paid by Deutsche to purchase the
Shares purchased on such Trading Day. Deutsche shall deliver any Shares
purchased on a Trading Day to Issuer on the third Exchange Business Day
following the relevant Trading Day. Deutsche shall continue purchasing Shares
until the Settlement Balance has been reduced to zero.

7. Certain Payments and Deliveries by Issuer. Notwithstanding anything to the
contrary herein, or in the Equity Definitions, if at any time (i) an Early
Termination Date occurs and Issuer would be required to make a payment pursuant
to Sections 6(d) and 6(e) of the Agreement, (ii) a Tender Offer occurs and
Issuer would be required to make a payment pursuant to Sections 12.3 and 12.7 of
the Equity Definitions, (iii) a Merger Event occurs and Issuer would be required
to make a payment pursuant to Sections 12.2 and 12.7 of the Equity Definitions,
(iv) an Announcement Event occurs and Issuer would be required to make a payment
pursuant to Sections 12.3 of the Equity Definitions, (v) a Delisting or
Insolvency occurs (except an Insolvency in which the proceeds to be paid to
holders of Shares consist solely of cash) and Issuer would be required to make a
payment pursuant to Sections 12.6 and 12.7 of the Equity Definitions, or (vi) an
Additional Disruption Event occurs and Issuer would be required to make a
payment pursuant to Sections 12.8 and 12.9 of the Equity Definitions (any such
payment described in Sections 7(i), (ii), (iii), (iv), (v) or (vi) above, an
“Early Settlement Payment”), then Issuer shall have the option, in

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lieu of making such cash payment, to settle its payment obligations under
Sections 7(i), (ii), (iii), (iv), (v) or (vi) above in Shares (such Shares, the
“Early Settlement Shares”). In order to elect to deliver Early Settlement
Shares, (i) Issuer must notify Deutsche of its election by no later than 4 p.m.
EST on the date that is three Exchange Business Days before the date that the
Early Settlement Payment is due, (ii) must specify whether such Early Settlement
Shares are to be sold by means of a registered offering or by means of a private
placement and (iii) the conditions described in Section 8 below must be
satisfied on each day Early Settlement Shares are to be sold by Seller in
connection with Buyer’s election to deliver Early Settlement Shares in
connection with the settlement of an Early Settlement Payment.

8. Conditions to Delivery of Early Settlement Shares.

Issuer may only deliver Early Settlement Shares and Make-Whole Shares (as
defined below) subject to satisfaction of the following conditions:

(a) If Issuer timely elects to deliver Early Settlement Shares and Make-Whole
Shares by means of a registered offering, the following provisions shall apply:

(i) On the later of (A) the Trading Day following the Issuer’s election to
deliver Early Settlement Shares and any Make-Whole Shares by means of a
registered offering (the “Registration Notice Date”), and (B) the date on which
the Registration Statement is declared effective by the SEC or becomes effective
(the “Registered Share Delivery Date”), the Issuer shall deliver to Deutsche a
number of Early Settlement Shares equal to the quotient of (I) the relevant
Early Settlement Payment divided by (II) a price per Share as reasonably
determined by the Calculation Agent.

(ii) Promptly following the Registration Notice Date, the Issuer shall file with
the SEC a registration statement (“Registration Statement”) covering the public
resale by Deutsche of the Early Settlement Shares and any Make-Whole Shares
(collectively, the “Registered Securities”) on a continuous or delayed basis
pursuant to Rule 415 (or any similar or successor rule), if available, under the
Securities Act; provided that no such filing shall be required pursuant to this
paragraph (ii) if the Issuer shall have filed a similar registration statement
with unused capacity at least equal to the relevant Early Settlement Payment and
such registration statement has become effective or been declared effective by
the SEC on or prior to the Registration Notice Date and no stop order is in
effect with respect to such registration statement as of the Registration Notice
Date. The Issuer shall use its best efforts to file an automatic shelf
registration statement or have the Registration Statement declared effective by
the SEC as promptly as possible. The Issuer will use its best efforts to cover
the resale of the Payment Shares in accordance with customary resale
registration procedures, including covenants, conditions, representations,
underwriting discounts (if applicable), commissions (if applicable),
indemnities, due diligence rights, opinions and certificates and such other
documentation as is customary for equity resale underwriting agreements, all
reasonably acceptable to Deutsche.

(iii) Promptly following the Registration Notice Date, the Issuer shall afford
Deutsche a reasonable opportunity to conduct a due diligence investigation with
respect to the Issuer customary in scope for underwritten offerings of equity
securities (including, without limitation, the availability of senior management
to respond to questions regarding the business and financial condition of the
Issuer and the right to have made available to Deutsche for inspection all
financial and other records, pertinent corporate documents and other information
reasonably requested by Deutsche), and Deutsche shall be satisfied in all
material respects with the results of such due diligence investigation of the
Issuer. For the avoidance of doubt, the Issuer shall not have the right to
deliver Shares pursuant to this Section 8(a) (and the conditions to delivery of
Early Settlement Shares specified in this Section 8(a) shall not be satisfied)
until Deutsche is satisfied in all material respects with the results of such
due diligence investigation of the Issuer.

(iv) From the effectiveness of the Registration Statement until all Registered
Securities have been sold by Deutsche, the Issuer shall, at the request of
Deutsche, make available to Deutsche a printed prospectus relating to the
Registered Securities in form and substance (including, without limitation, any
sections describing the plan of distribution) satisfactory to Deutsche (a
“Prospectus”, which term shall include any prospectus supplement thereto), in
such quantities as Morgan shall reasonably request.

(v) The Issuer shall use its best efforts to prevent the issuance of any stop
order suspending the effectiveness of the Registration Statement or of any order
preventing or suspending the use of any Prospectus and, if any such order is
issued, to obtain the lifting thereof as soon thereafter as is possible. If the
Registration Statement, the Prospectus or any document incorporated therein by
reference contains a

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misstatement of a material fact or omits to state a material fact required to be
stated therein or necessary to make any statement therein not misleading, the
Issuer shall as promptly as practicable file any required document and prepare
and furnish to Deutsche a reasonable number of copies of such supplement or
amendment thereto as may be necessary so that the Prospectus, as thereafter
delivered to the purchasers of the Registered Securities will not contain a
misstatement of a material fact or omit to state a material fact required to be
stated therein or necessary to make any statement therein not misleading.

(vi) On or prior to the Registered Share Delivery Date, the Issuer shall enter
into an agreement (a “Transfer Agreement”) with Deutsche (or any affiliate of
Deutsche designated by Deutsche) in connection with the public resale of the
Registered Securities, substantially similar to underwriting agreements
customary for underwritten offerings of equity securities, in form and substance
satisfactory to Deutsche (or such affiliate), which Transfer Agreement shall
(without limitation of the foregoing):

(A) contain provisions substantially similar to those contained in such
underwriting agreements relating to the indemnification of, and contribution in
connection with the liability of, Deutsche and its affiliates,

(B) provide for delivery to Deutsche (or such affiliate) of customary opinions
(including, without limitation, accounting comfort letters, opinions relating to
the due authorization, valid issuance and fully paid and non-assessable nature
of the Registered Securities and the lack of material misstatements and
omissions in the Registration Statement, the Prospectus and the Issuer’s filings
under the Exchange Act of 1934, as amended and modified (the “Exchange Act”));
and

(C) provide for the payment by the Issuer of all fees and expenses in connection
with such resale, including all registration costs and all fees and expenses of
counsel for Deutsche (or such affiliate).

(vii) On the Registered Share Delivery Date, a balance (the “Settlement
Balance”) shall be established with an initial balance equal to the applicable
amount of the relevant Early Settlement Payment. Following the delivery of Early
Settlement Shares or any Make-Whole Shares, Seller shall sell all such Early
Settlement Shares or Make-Whole Shares in a commercially reasonable manner.

(viii) At the end of each day upon which sales have been made, the Settlement
Balance shall be (A) reduced by an amount equal to the aggregate proceeds
received by Deutsche upon settlement of the sale of such Share, and
(B) increased by an amount (as determined by the Calculation Agent in a
commercially reasonable manner) equal to Deutsche’s funding cost with respect to
the then-current Settlement Balance as of the close of business on such day.

(ix) If, on any date, the Settlement Balance has been reduced to zero but not
all of the Early Settlement Shares have been sold, no additional Early
Settlement Shares shall be sold and Deutsche shall promptly deliver to the
Issuer (A) any remaining Early Settlement Shares and (B) if the Settlement
Balance has been reduced to an amount less than zero, an amount in cash equal to
the absolute value of the then-current Settlement Balance.

(x) If, on any date, all of the Early Settlement Shares have been sold and the
Settlement Balance has not been reduced to zero, the Issuer shall promptly
deliver to Deutsche an additional number of Shares (“Make-Whole Shares”) equal
to (A) the Settlement Balance as of such date divided by (B) the price per Share
as determined by the Calculation Agent in a commercially reasonable manner. This
clause (x) shall be applied successively until the Settlement Balance is reduced
to zero.

(xi) If at any time the number of Shares covered by the Registration Statement
is less than the number of Registered Securities required to be delivered
pursuant to this Section 8(a), the Issuer shall, at the request of Deutsche,
file additional registration statement(s) to register the sale of all Registered
Securities required to be delivered to Deutsche.

(xii) The Issuer shall cooperate with Deutsche and use its reasonable best
efforts to take any other action necessary to effect the intent of the
provisions set forth in this Section 8(a).

(b) If Issuer timely elects to deliver Early Settlement Shares and Make-Whole
Shares by means of a private placement, the following provisions shall apply:

(i) all Early Settlement Shares and Make-Whole Shares shall be delivered to the
Seller (or any affiliate of the Seller designated by the Seller) pursuant to the
exemption from the registration requirements of the Securities Act provided by
Section 4(2) thereof;

(ii) Seller and any potential purchaser of any such Shares from the Seller (or
any affiliate of the Seller designated by the Seller) identified by Seller shall
have been afforded a commercially reasonable

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opportunity to conduct a due diligence investigation 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) and Buyer shall not disclose material non-public
information in connection with such due diligence investigation; and

(iii) an agreement (a “Private Placement Agreement”) shall have been entered
into between Issuer and the Seller (or any affiliate of the Seller designated by
the Seller) in connection with the private placement of such Shares by Issuer to
the Seller (or any such affiliate) and the private resale of such Shares by the
Seller (or any such affiliate), substantially similar to private placement
purchase agreements customary for private placements of equity securities, in
form and substance commercially reasonably satisfactory to the Seller and the
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, the Seller and its affiliates, and shall
provide for the payment by Issuer of all fees and expenses in connection with
such resale, including all reasonable fees and expenses of one counsel for the
Seller but not including any underwriter or broker discounts and commissions,
and shall contain representations, warranties and agreements of Issuer and
Seller reasonably necessary or advisable to establish and maintain the
availability of an exemption from the registration requirements of the
Securities Act for such resales.

(iv) If Issuer elects to deliver Early Settlement Shares to satisfy its payment
obligation of an Early Settlement Payment, neither Issuer nor Seller shall take
or cause to be taken any action that would make unavailable either (i) the
exemption set forth in Section 4(2) of the Securities Act for the sale of any
Early Settlement Shares or Make-Whole Shares by Issuer to the Seller or (ii) an
exemption from the registration requirements of the Securities Act reasonably
acceptable to the Seller for resales of Early Settlement Shares and Make-Whole
Shares by the Seller.

(v) On the date requested by Deutsche, (A) Issuer shall deliver a number of
Early Settlement Shares equal to the quotient of (I) the relevant Early
Settlement Payment divided by (II) a per share value, determined by Deutsche in
a commercially reasonable manner and which may be based on indicative bids from
institutional “accredited investors” (as defined in Rule 501 under the
Securities Act of 1933, as amended (the “Securities Act”)) and (B) the
provisions of Sections 8(a)(vii) –(x) shall apply to the Early Settlement Shares
delivered pursuant to this Section 8(b)(v). For purposes of applying the
foregoing, the Registered Share Delivery Date referred to in 8(a)(vii) shall be
the date on which Issuer delivers the Early Settlement Shares.

(c) The provisions of Section 8(b) shall apply to any then-current Settlement
Balance if (i) on any given day, Issuer cannot satisfy any of the conditions of
Section 8(a) or (ii) for a period of at least ten (10) consecutive Exchange
Business Days, Deutsche has determined that it is inadvisable to effect sales of
Registered Securities.

(d) If Issuer elects to deliver Early Settlement Shares to satisfy its payment
obligation of an Early Settlement Payment, then, if necessary, Issuer shall use
its best efforts to cause the number of authorized but unissued Shares of Common
Stock to be increased to an amount sufficient to permit Issuer to fulfill its
obligations to satisfy its payment obligation of an Early Settlement Payment by
delivering Early Settlement Shares.

9. Special Provisions for Merger Events.

Notwithstanding anything to the contrary herein or in the Equity Definitions, to
the extent that an Announcement Date for a potential Merger Transaction occurs
during the term of this Transaction and such Announcement Date does not cause
this Transaction to terminate in whole under the provisions of “Extraordinary
Event” in paragraph 2 above:

(a) As soon as practicable following the public announcement of such potential
Merger Transaction, Issuer shall provide Deutsche with written notice of such
announcement;

(b) Promptly after request from Deutsche, Issuer shall provide Deutsche with
written notice specifying (i) Issuer’s average daily Rule 10b-18 Purchases (as
defined in Rule 10b-18) during the three full calendar months immediately
preceding the Announcement Date that were not effected through Deutsche or its
affiliates and (ii) the number of Shares purchased pursuant to the block
purchase proviso in Rule 10b-18(b)(4) under the Exchange Act for the three full
calendar months preceding the Announcement Date. Such written notice shall be
deemed to be a certification by Issuer to Deutsche that such information is true
and correct. Issuer understands that Deutsche will

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use this information in calculating the trading volume for purposes of Rule
10b-18. In addition, to the extent any of the following activities occur, Issuer
shall promptly notify Deutsche of the earlier to occur of the completion such
potential Merger Transaction and the completion of the vote by target
shareholders; and

(c) Deutsche in its sole commercially reasonable discretion may extend the
Calculation Period to account for any reduction in the number of Shares that
could be purchased on each day during the Calculation Period in compliance with
Rule 10b-18 following the Announcement Date.

“Merger Transaction” means any merger, acquisition or similar transaction
involving a recapitalization of Issuer as contemplated by Rule 10b-18(a)(13)(iv)
under the Exchange Act.

10. Seller Adjustments.

In the event that Seller reasonably determines that it is appropriate with
regard to any legal, regulatory or self-regulatory requirements or related
policies and procedures (whether or not such requirements, policies or
procedures are imposed by law or have been voluntarily adopted by Seller, and
including, without limitation, Rule 10b-18, Rule 10b-5, Regulation 13D-G and
Regulation 14E, “Requirements”), for Seller to refrain from purchasing Shares or
to purchase fewer than the number of Shares Seller would otherwise purchase on
any Trading Day during the duration of this Transaction (it being acknowledged
by Buyer that Seller may effect hedging transactions as a result of which the
counterparty of such hedging transaction may purchase Shares in lieu of Seller,
and that such counterparty may reduce or refrain from purchases under like
circumstances), then Seller may, in its discretion, elect that Calculation
Period be suspended and, if appropriate, extended with regard to any
Requirements. Seller shall notify the Issuer upon the exercise of Seller’s
rights pursuant to this Section 10 and shall subsequently notify the Issuer on
the day Seller believes that the circumstances giving rise to such exercise have
changed. If the Calculation Period is suspended pursuant to this Section 10, at
the end of such suspension Seller shall determine the number of Trading Days
remaining in the Calculation Period, as appropriate, and the terms of this
Transaction shall be adjusted as set forth above under “Physical Settlement.”

11. Covenants. The Buyer covenants and agrees:

(i)(A) that it will not treat this Transaction, any portion hereof, or any
obligation hereunder as giving rise to any interest income or other inclusions
of ordinary income; (B) it will not treat the delivery of any portion of the
Shares or cash to be delivered pursuant to this Transaction as the payment of
interest or ordinary income; (C) it will treat this Transaction in its entirety
as a forward contract for the delivery of such Shares or cash; and (D) it will
not take any action (including filing any tax return or form or taking any
position in any tax proceeding) that is inconsistent with the obligations
contained in (A) through (C). Notwithstanding the preceding sentence, Buyer may
take any action or position required by law, provided that Buyer delivers to
Seller an unqualified opinion of counsel, nationally recognized as expert in
Federal tax matters and acceptable to Buyer, to the effect that such action or
position is required by a statutory change or a Treasury regulation or
applicable court decision published after the Trade Date;

(ii) that during the term of this Agreement, neither it nor any of its
affiliates or affiliated purchasers (each as defined in Rule 10b-18 under the
Exchange Act) shall directly or indirectly take any action that would cause the
purchase by Seller (or by any counterparty of Deutsche engaging in purchases of
Shares under a hedging transaction in connection with the Transaction) of any
Shares in connection with this Agreement not to comply with Rule 10b-18 under
the Exchange Act (assuming for the purposes of this paragraph that such Rule
were otherwise applicable to such purchases);

(iii) to comply with all laws, rules and regulations applicable to it
(including, without limitation, the Securities Act of 1933, as amended (the
“Securities Act”) and the Exchange Act) in connection with the transactions
contemplated by this Confirmation;

(iv) that it is not relying, and has not relied, upon Seller or any of its
representatives or advisors with respect to the legal, accounting, tax or other
implications of this Agreement and that it has conducted its own analyses of the
legal, accounting, tax and other implications of this Agreement, and that Seller
and its affiliates may from time to time effect transactions for their own
account or the account of customers and hold positions in securities or options
on securities of the Buyer and that Seller and its affiliates may continue to
conduct such transactions during the term of this Agreement;

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(v) that neither it nor any affiliates shall take any action that would cause
Regulation M under the Exchange Act (“Regulation M”), to be applicable to any
purchases of Shares, or any security for which Shares is a reference security
(as defined in Regulation M), by Buyer or any affiliated purchasers (as defined
in Regulation M) (or by any counterparty of Deutsche engaging in purchases of
Shares under a hedging transaction in connection with the Transaction, or its
affiliated purchasers) during the Calculation Period; and

(vi) that it shall announce any Extraordinary Dividend at least 30 calendar days
prior to the record date for such Extraordinary Dividend.

12. Representations, Warranties and Acknowledgments.

(a) Each of Deutsche and Issuer represents and warrants to the other party that:

(i) Commodity Exchange Act. It is an “eligible contract participant” within the
meaning of Section 1a(12) of the U.S. Commodity Exchange Act, as amended (the
“CEA”), this Transaction has been subject to individual negotiation by the
parties, and this Transaction has been executed or traded on a “trading
facility” as defined in Section 1a(33) of the CEA;

(ii) Securities Act. It is a “qualified institutional buyer” as defined in Rule
144A under the U.S. Securities Act of 1933, as amended (the “Securities Act”);
and

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

(b) The parties intend that this Transaction constitute a binding contract for
the purchase of Shares by Buyer within the meaning of Rule 10b5-1(c)(1)(i)(A)(1)
under the Exchange Act. This Confirmation shall be interpreted to comply with
the requirements of Rule 10b5-1(c)(1)(i)(B) and Buyer shall take no action that
results in this Transaction not so complying with such requirements.
Accordingly:

(i) Buyer acknowledges and agrees that (x) any purchases or sales made by
Deutsche in respect of this Transaction shall be made at Deutsche’s sole
discretion and for Deutsche’s own account and (y) Buyer does not have, and shall
not attempt to exercise, any influence over how, when or whether to make such
purchases or sales, including, without limitation, the price paid or received
per Share pursuant to such purchases or sales or whether such purchases or sales
are made on any securities exchange or privately.

(ii) Buyer acknowledges and agrees that it is entering into the Agreement and
this Confirmation in good faith and not as part of a plan or scheme to evade
compliance with federal securities laws including, without limitation, Rule
10b-5 promulgated under the Exchange Act. Buyer also acknowledges and agrees
that any amendment, modification, waiver or termination of this Confirmation
must be effected in accordance with the requirements for the amendment or
termination of a “plan” as defined in Rule 10b5-1(c) under the Exchange Act.
Without limiting the generality of the foregoing, any such amendment,
modification, waiver or termination shall be made in good faith and not as part
of a plan or scheme to evade the prohibitions of Rule 10b-5 under the Exchange
Act, and no amendment, modification or waiver shall be made at any time at which
Buyer or any officer or director of Buyer is aware of any material nonpublic
information regarding Buyer or the Shares.

(iii) Buyer agrees not to alter or deviate from the terms of this Agreement or
enter into or alter a corresponding or hedging transaction or position with
respect to the Shares (including, without limitation, with respect to any
securities convertible or exchangeable into the Shares) during the term of this
Agreement

(c) The Buyer hereby represents and warrants to Seller that:

(i) as of the date hereof, the Buyer is not in possession of any material,
non-public information with respect to the Buyer or any of its securities, and
is entering into this Agreement in good faith and not as part of a plan or
scheme to evade the prohibitions of Rule 10b5-1 of the Exchange Act;

(ii) the Transaction is consistent with, and has been entered into by it
pursuant to, appropriate board resolutions (or its equivalent), which authorize
it to engage in a stock repurchase program (which

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encompasses engaging in accelerated share repurchase transactions) in respect of
the Shares, which stock repurchase program has been publicly announced prior to
the Trade Date. Prior to the date hereof, Issuer has delivered to Deutsche a
resolution of Issuer’s board of directors authorizing the Transaction and such
other certificate or certificates as Deutsche has reasonably requested.

(iii) the Buyer is not entering into this Agreement to facilitate a distribution
of the Shares (or any security convertible into or exchangeable for Shares) or
in connection with a future issuance of securities except pursuant to the
Buyer’s employee benefit plans and dividend reinvestment plan or other publicly
disclosed transaction;

(iv) the Buyer is not entering into this Agreement to create actual or apparent
trading activity in the Shares (or any security convertible into or exchangeable
for Shares) or to raise or depress the price of the Shares (or any security
convertible into or exchangeable for Shares); and

(v) the Buyer is as of the date hereof, and after giving effect to the
transactions contemplated hereby will be, Solvent. As used in this paragraph,
the term “Solvent” means, with respect to a particular date, that on such date
(A) the present fair market value (or present fair saleable value) of the assets
of the Buyer is not less than the total amount required to pay the liabilities
of the Buyer on its total existing debts and liabilities (including contingent
liabilities) as they become absolute and matured, (B) the Buyer is able to
realize upon its assets and pay its debts and other liabilities, contingent
obligations and commitments as they mature and become due in the normal course
of business, (C) assuming consummation of the transactions as contemplated by
this Agreement, the Buyer is not incurring debts or liabilities beyond its
ability to pay as such debts and liabilities mature, (D) the Buyer is not
engaged in any business or transaction, and does not propose to engage in any
business or transaction, for which its property would constitute unreasonably
small capital after giving due consideration to the prevailing practice in the
industry in which the Buyer is engaged and (E) the Buyer is not a defendant in
any civil action that could reasonably be expected to result in a judgment that
Buyer is or would become unable to satisfy.

(vi) the Buyer is not and, after giving effect to this Transaction, will not be
an “investment company” as such term is defined in the Investment Company Act of
1940, as amended.

(vii) the Buyer’s filings with the Securities and Exchange Commission pursuant
to the 1934 Act, as such filings are amended and supplemented to the Trade Date,
do not, as of the Trade Date, contain any untrue statement of a material fact
required to be stated therein or omit to state any material fact necessary to
make the statements therein not misleading, and the Buyer acknowledges and
agrees that it has not provided Deutsche with any material nonpublic information
in connection with this Transaction.

(d) Seller and the Buyer each hereby acknowledges that any transactions by
Seller in the Shares will be undertaken by Seller, as the case may be, as
principal for its own account. All of the actions to be taken by Seller in
connection with this Agreement, shall be taken by Seller independently and
without any advance or subsequent consultation with the Buyer.

13. Acknowledgements of Buyer Regarding Hedging and Market Activity. Buyer
agrees, understands and acknowledges that:

(a) during the period from (and including) the Trade Date to (and including) the
Settlement Date, Seller and its affiliates may buy or sell Shares or other
securities or buy or sell options or futures contracts or enter into swaps or
other derivative securities in order to adjust its hedge position with respect
to the transactions contemplated by this Transaction;

(b) Seller and its affiliates also may be active in the market for the Shares
other than in connection with hedging activities in relation to the transactions
contemplated by this Transaction;

(c) Seller shall make its own determination as to whether, when and in what
manner any hedging or market activities in the Issuer’s securities shall be
conducted and shall do so in a manner that it deems appropriate to hedge its
price and market risk with respect to 10b-18 VWAP; and

(d) any market activities of Seller and its affiliates with respect to the
Shares may affect the market price and volatility of the Shares, as well as the
10b-18 VWAP, each in a manner that may be adverse to Buyer.

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14. Indemnification.

(a) In the event that Seller becomes involved in any capacity in any action,
proceeding or investigation brought by or against any person in connection with
any matter referred to in this Agreement, the Buyer will reimburse Seller for
its reasonable legal and other expenses (including the cost of any investigation
and preparation) incurred in connection therewith. The Buyer also will indemnify
and hold Seller harmless against any losses, claims, damages or liabilities to
which it may become subject in connection with any matter referred to in this
Agreement, except to the extent that any such loss, claim, damage or liability
results from the gross negligence or bad faith of Seller in effecting the
transactions which are the subject of this Agreement; provided, however, that if
it is determined by a court of competent jurisdiction in a final judgment that
Seller is not entitled to be indemnified hereunder in connection with such
matter, then Seller shall reimburse the Buyer for any expenses paid pursuant to
the first sentence of this Section 14. If for any reason the foregoing
indemnification is unavailable to Seller or insufficient to hold it harmless,
then the Buyer shall contribute to the amount paid or payable by Seller as a
result of such loss, claim, damage or liability in such proportion as is
appropriate to reflect the relative fault of the Buyer on one hand and Seller on
the other hand with respect to such loss, claim, damage, or liability and any
other relevant equitable considerations. The reimbursement, indemnity and
contribution obligations of the Buyer under this Section 14 shall be in addition
to any liability which the Buyer may otherwise have, shall extend upon the same
terms and conditions to any affiliate of Seller and the partners, directors,
officers, agents, employees and controlling persons (if any), as the case may
be, of Seller and any such affiliate and shall be binding upon and inure to the
benefit of any successors, assigns, heirs and personal representatives of the
Buyer, Seller, any such affiliate and any such person. The Buyer also agrees
that neither Seller nor any of such affiliates, partners, directors, officers,
agents, employees or controlling persons shall have any liability to the Buyer
for or in connection with any matter referred to in this Agreement except to the
extent that any losses, claims, damages, liabilities or expenses incurred by the
Buyer result from the gross negligence or bad faith of Seller in effecting the
transactions that are the subject of this Agreement. The foregoing provisions
shall survive any termination or completion of this Agreement. For the purposes
of this Section 14, the term “Seller” shall include Deutsche and its affiliates.

(b) Subject to Section 14(c), the reimbursement, indemnity and contribution
obligations of the Buyer under Section 14(a) (each, an “Obligation”) shall be
paid promptly in cash.

(c) In connection with any Obligation under Section 14(b) above, the Buyer, in
lieu of making any cash payment as contemplated by that section, may elect to
satisfy such Obligation by delivering Shares to Seller (such Shares, the
“Indemnity Shares”) by notifying Seller of such election within one Trading Day
of being informed by Seller that such Obligation is due and payable. The
provisions of “Certain Payments and Deliveries by Issuer” in Section 7 above
shall apply to such a share settlement of an Obligation as if the relevant
Obligation was the “Early Settlement Payment” and the Indemnity Shares were
“Early Settlement Shares”. In order to elect to deliver Indemnity Shares, Issuer
must (i) specify whether such Indemnity Shares are to be sold by means of a
registered offering or by means of a private placement and (ii) the conditions
described in Section 8 above must be satisfied as if the Indemnity Shares were
“Early Settlement Shares” and any additional Shares Issuer delivers to reduce
the settlement balance to zero in connection with this Section 14 were
“Make-Whole Shares”.

15. The parties hereto intend as follows: (A) Deutsche is a “financial
institution,” a “swap participant” and a “financial participant” within the
meaning of Sections 101(22), 101(53C) and 101(22A) of the United States
Bankruptcy Code (the “Bankruptcy Code”) and (B) this Confirmation is (i) a
“securities contract” as such term is defined in Section 741(7) of the
Bankruptcy Code, with respect to which each payment and delivery hereunder or in
connection herewith is a “settlement payment” within the meaning of Sections 362
and 546 of the Bankruptcy Code and any cash, securities or other property
provided as performance assurance, credit support or collateral with respect to
the Transaction is a “margin payment” within the meaning of Sections 362 and 546
of the Bankruptcy Code, and (ii) a “swap agreement,” as such term is defined in
Section 101(53B) of the Bankruptcy Code, with respect to which each payment and
delivery hereunder or in connection herewith is a “transfer” and a “payment or
other transfer of property” within the meaning of Sections 362 and 546 of the
Bankruptcy Code. Deutsche is entitled to the protections afforded by, among
other sections, Sections 362(b)(6), 362(b)(17), 362(o), 546(e), 546(g), 555, 560
and 561 of the Bankruptcy Code.

16. Seller and Issuer hereby agree and acknowledge that Seller has authorized
the Issuer to disclose this Transaction to any and all persons, and there are no
express or implied agreements, arrangements or understandings to the contrary,
and authorizes the Issuer to use any information that the Issuer receives or has
received with respect to this Transaction in any manner.

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17. Treatment in Bankruptcy; No Setoff; No Collateral.

(a) In the event the Buyer becomes the subject of proceedings (“Bankruptcy
Proceedings”) under the U.S. Bankruptcy Code or any other applicable bankruptcy
or insolvency statute from time to time in effect, any rights or claims of
Seller hereunder in respect of this transaction shall rank for all purposes no
higher than, but on a parity with, the rights or claims of holders of Shares,
and Seller hereby agrees that its rights and claims hereunder shall be
subordinated to those of all parties with claims or rights against the Buyer
(other than common stockholders) to the extent necessary to assure such ranking.
Without limiting the generality of the foregoing, after the commencement of
Bankruptcy Proceedings, the claims of Seller hereunder shall for all purposes
have rights equivalent to the rights of a holder of a percentage of the Shares
equal to the aggregate amount of such claims (the “Claim Amount”) taken as a
percentage of the sum of (i) the Claim Amount and (ii) the aggregate fair market
value of all outstanding Shares on the record date for distributions made to the
holders of such Shares in the related Bankruptcy Proceedings. Notwithstanding
any right it might otherwise have to assert a higher priority claim in any such
Bankruptcy Proceedings, Seller shall be entitled to receive a distribution
solely to the extent and only in the form that a holder of such percentage of
the Shares would be entitled to receive in such Bankruptcy Proceedings, and,
from and after the commencement of such Bankruptcy Proceedings, Seller expressly
waives (i) any other rights or distributions to which it might otherwise be
entitled in such Bankruptcy Proceedings in respect of its rights and claims
hereunder and (ii) any rights of setoff it might otherwise be entitled to assert
in respect of such rights and claims.

(b) Notwithstanding any provision of this Agreement or any other agreement
between the parties to the contrary, neither the obligations of the Buyer nor
the obligations of Seller hereunder are secured by any collateral, security
interest, pledge or lien.

(c) Notwithstanding any provision of this Agreement or any other agreement
between the parties to the contrary, the contract shall not be netted with or
against any other contract between Buyer and Seller unless such contract is
classified in shareholder’s equity under U.S. GAAP.

18. Share Cap. Notwithstanding any other provision of this Agreement to the
contrary, in no event shall the Buyer be required to deliver to Seller a number
of Shares that exceeds the Share Cap (as specified in Schedule I), subject to
reduction by the number of Shares delivered hereunder by the Buyer on any prior
date.

19. If Issuer would be obligated to pay cash (other than in respect of the
Prepayment Amount to be paid on the Prepayment Date) to Deutsche (a “General
Obligation”) or receive cash from Deutsche pursuant to the terms of this
Confirmation or the Agreement for any reason (including any Extraordinary Event
or any condition giving rise to an Early Termination Date under the Agreement)
(unless the consideration or proceeds received by holders of Shares in such
event or condition consists solely of cash) without having had the right (other
than pursuant to this paragraph) to elect to deliver Shares or receive Shares,
as the case may be, in satisfaction of such payment obligation or right, then
Issuer may elect that Issuer deliver to Deutsche or receive from Deutsche, as
the case may be, a number of Shares (such Shares “General Obligation Shares”)
having an equivalent value (such number of Shares to be delivered to be
determined by the Calculation Agent acting in a commercially reasonably manner
and taking into account relevant factors, including whether or not the Shares
are subject to legal or other restrictions on transfer or acquisition and the
costs and expenses associated with disposing of or acquiring such Shares).
Settlement relating to any delivery of Shares pursuant to this paragraph shall
occur within a reasonable period of time. To the extent the Issuer elects to
deliver Shares to Deutsche pursuant to this provision, the provisions of
“Certain Payments and Deliveries by Issuer” in Section 7 above shall apply to
such a share settlement of a General Obligation as if the relevant General
Obligation was the “Early Settlement Payment” and the General Obligation Shares
were “Early Settlement Shares”. In order to elect to deliver Shares pursuant to
this provision, Issuer must (i) specify whether such Shares are to be sold by
means of a registered offering or by means of a private placement and (ii) the
conditions described in Section 8 above must be satisfied as if the Shares were
“Early Settlement Shares” and any additional Shares Issuer delivers to reduce
the settlement balance to zero in connection with this Section 14 were
“Make-Whole Shares”.

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

21. Recording. Each party (x) consents to the recording of the telephone
conversations of trading and

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marketing and/or other personnel of the parties and their Affiliates in
connection with this Confirmation, the Agreement or any potential Transaction;
(y) agrees to obtain any necessary consent of and give notice of such recording
to such personnel of such party and such party’s Affiliates; and (z) agrees that
recordings may be submitted in evidence in any proceedings relating to this
Confirmation or the Agreement.

22. Waiver of Trial by Jury. EACH OF THE PARTIES HEREBY IRREVOCABLY WAIVES ANY
AND ALL RIGHT TO A TRIAL BY JURY WITH RESPECT TO ANY LEGAL PROCEEDING ARISING
OUT OF OR RELATING TO THIS CONFIRMATION, THE SUPPLEMENTAL CONFIRMATION, THE
AGREEMENT OR ANY TRANSACTION.

23. Governing Law. THE AGREEMENT, THIS CONFIRMATION AND THE SUPPLEMENTAL
CONFIRMATION SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. THE PARTIES
HERETO IRREVOCABLY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE
STATE OF NEW YORK AND THE UNITED STATES COURT FOR THE SOUTHERN DISTRICT OF NEW
YORK IN CONNECTION WITH ALL MATTERS RELATING HERETO AND WAIVE ANY OBJECTION TO
THE LAYING OF VENUE IN, AND ANY CLAIM OF INCONVENIENT FORUM WITH RESPECT TO,
THESE COURTS.

THIS MESSAGE WILL BE THE ONLY FORM OF CONFIRMATION DISPATCHED BY US. PLEASE
EXECUTE AND RETURN IT BY FACSIMILE IMMEDIATELY TO FAX NUMBER +44 207 541 4913.
IF YOU WISH TO EXCHANGE HARD COPY FORMS OF THIS CONFIRMATION PLEASE CONTACT US.

[SIGNATURES ON NEXT PAGE]

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Please confirm that the foregoing correctly sets forth the terms of our
agreement by sending to us a letter or telex substantially similar to this
facsimile, which letter or telex sets forth the material terms of the
Transaction to which this Confirmation relates and indicates your agreement to
those terms. Deutsche will make the time of execution of the Transaction
available upon request.

Deutsche is regulated by the Financial Services Authority.

 

DEUTSCHE BANK AG, LONDON BRANCH By:   /s/ Lars Kestner

Name:

Title:

 

Lars Kestner

Attorney-in-Fact

 

By:   /s/ Ignacio Arnaubru

Name:

Title:

 

Ignacio Arnaubru

Attorney-in-Fact

 

DEUTSCHE BANK SECURITIES INC.,

acting solely as Agent in connection with the Transaction

By:   /s/ Paul Maley

Name:

Title:

 

Paul Maley

Director

 

By:   /s/ John Ripley

Name:

Title:

 

John Ripley

Managing Director

Confirmed and Acknowledged as of the date first above written:

UNUM GROUP By:   /s/ Kevin A. McMahon

Name:

Title:

 

Kevin A. McMahon

Treasurer

--------------------------------------------------------------------------------

Schedule I

This Schedule I, dated July 31, 2008 may be amended and/or superseded from time
to time by mutual agreement of both parties. For the purposes of this
Transaction, the following terms shall have the following values/meanings:

1. The Trade Date shall be July 31, 2008

2. The Discount equals ***.

3. The Initial Shares equal 12,500,000.

4. The Prepayment Amount equals USD 350,000,000.

5. The Adjustment Amount equals ***.

6. The Scheduled Valuation Date shall mean December 12, 2008.

7. The Lock-Out Date shall mean September 30, 2008.

8. The Share Cap shall equal the lesser of (i) 34,000,000 million Shares and
(ii) 20% of the total number of Shares that Issuer has outstanding as of any
day.

AGREED AND ACKNOWLEDGED (as of the date listed above)

 

UNUM GROUP By:   /s/ Kevin A. McMahon

Name:

Title:

 

Kevin A. McMahon

Treasurer

 

DEUTSCHE BANK AG, LONDON BRANCH By:   /s/ Lars Kestner

Name:

Title:

 

Lars Kestner

Attorney-in-Fact

 

By:   /s/ Ignacio Arnaubru

Name:

Title:

 

Ignacio Arnaubru

Attorney-in-Fact

 

DEUTSCHE BANK SECURITIES INC.,

acting solely as Agent in connection with the Transaction

By:   /s/ Paul Maley

Name:

Title:

 

Paul Maley

Director

 

By:   /s/ John Ripley

Name:

Title:

 

John Ripley

Managing Director

--------------------------------------------------------------------------------

Annex A

If the Issuer chooses to deliver Payment Shares pursuant to the terms of
Physical Settlement in the Confirmation (i) Issuer must notify Deutsche of its
election by no later than 4 p.m. EST on the date that is two Exchange Business
Days before the Settlement Date, and (ii) the conditions described below must be
satisfied on each day Payment Shares are to be sold by Seller in connection with
Buyer’s election to deliver Payment Shares in connection with the terms of
Physical Settlement. The parties agree that the Settlement Date may be postponed
as necessary to accommodate the conditions below.

Issuer may only deliver Payment Shares and Settlement Make-Whole Shares (as
defined below) subject to satisfaction of the following conditions:

Issuer shall use its best efforts to cause the number of authorized but unissued
Shares of Common Stock to be increased to an amount sufficient to permit Issuer
to fulfill its obligations to deliver Payment Shares or satisfy its payment
obligation of a Private Settlement Balance, as applicable.

Registered Settlement

If Issuer timely elects to deliver Payment Shares by means of a registered
offering, the following provisions shall apply:

(i) On the later of (A) the Trading Day following the Issuer’s election to
deliver Payment Shares by means of a registered offering (the “Registration
Settlement Notice Date”), and (B) the date on which the Settlement Registration
Statement is declared effective by the SEC or becomes effective (the “Registered
Settlement Share Delivery Date”), the Issuer shall deliver to Deutsche a number
of Payment Shares determined pursuant to the Physical Settlement provision in
the Confirmation, subject to the other requirements of this Registration
Settlement provision.

(ii) Promptly following the Registration Settlement Notice Date, the Issuer
shall file with the SEC a registration statement (“Settlement Registration
Statement”) covering the public resale by Deutsche of the Payment Shares on a
continuous or delayed basis pursuant to Rule 415 (or any similar or successor
rule), if available, under the Securities Act of 1933, as amended (the
“Securities Act”); provided that no such filing shall be required pursuant to
this paragraph (ii) if the Issuer shall have filed a similar registration
statement with unused capacity at least equal to the number of Payment Shares
and such registration statement has become effective or been declared effective
by the SEC on or prior to the Registration Settlement Notice Date and no stop
order is in effect with respect to such registration statement as of the
Registration Settlement Notice Date. The Issuer shall use its best efforts to
file an automatic shelf registration statement or have the Settlement
Registration Statement declared effective by the SEC as promptly as possible.
The Issuer will use its best efforts to cover the resale of the Payment Shares
in accordance with customary resale registration procedures, including
covenants, conditions, representations, underwriting discounts (if applicable),
commissions (if applicable), indemnities, due diligence rights, opinions and
certificates and such other documentation as is customary for equity resale
underwriting agreements, all reasonably acceptable to Deutsche.

(iii) Promptly following the Registration Settlement Notice Date, the Issuer
shall afford Deutsche a reasonable opportunity to conduct a due diligence
investigation with respect to the Issuer customary in scope for underwritten
offerings of equity securities (including, without limitation, the availability
of senior management to respond to questions regarding the business and
financial condition of the Issuer and the right to have made available to
Deutsche for inspection all financial and other records, pertinent corporate
documents and other information reasonably requested by Deutsche), and Deutsche
shall be satisfied in all material respects with the results of such due
diligence investigation of the Issuer. For the avoidance of doubt, the Issuer
shall not have the right to deliver Shares pursuant to this Annex A (and the
conditions to delivery of Payment Shares specified in this Registration
Settlement section shall not be satisfied) until Deutsche is satisfied in all
material respects with the results of such due diligence investigation of the
Issuer.

(iv) From the effectiveness of the Settlement Registration Statement until all
Payment Shares have been sold by Deutsche, the Issuer shall, at the request of
Deutsche, make available to Deutsche a printed prospectus relating to the
Payment Shares in form and substance (including, without limitation, any
sections describing the plan of distribution) satisfactory to Deutsche (a
“Settlement Prospectus”, which

--------------------------------------------------------------------------------

term shall include any prospectus supplement thereto), in such quantities as
Deutsche shall reasonably request.

(v) The Issuer shall use its best efforts to prevent the issuance of any stop
order suspending the effectiveness of the Settlement Registration Statement or
of any order preventing or suspending the use of any Settlement Prospectus and,
if any such order is issued, to obtain the lifting thereof as soon thereafter as
is possible. If the Settlement Registration Statement, the Settlement Prospectus
or any document incorporated therein by reference contains a misstatement of a
material fact or omits to state a material fact required to be stated therein or
necessary to make any statement therein not misleading, the Issuer shall as
promptly as practicable file any required document and prepare and furnish to
Deutsche a reasonable number of copies of such supplement or amendment thereto
as may be necessary so that the Settlement Prospectus, as thereafter delivered
to the purchasers of the Payment Shares will not contain a misstatement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make any statement therein not misleading.

(vi) On or prior to the Registered Settlement Share Delivery Date, the Issuer
shall enter into an agreement (a “Settlement Transfer Agreement”) with Deutsche
(or any affiliate of Deutsche designated by Deutsche) in connection with the
public resale of the Payment Shares, substantially similar to underwriting
agreements customary for underwritten offerings of equity securities, in form
and substance satisfactory to Deutsche (or such affiliate), which Settlement
Transfer Agreement shall (without limitation of the foregoing):

(A) contain provisions substantially similar to those contained in such
underwriting agreements relating to the indemnification of, and contribution in
connection with the liability of, Deutsche and its affiliates,

(B) provide for delivery to Deutsche (or such affiliate) of customary opinions
(including, without limitation, accounting comfort letters, opinions relating to
the due authorization, valid issuance and fully paid and non-assessable nature
of the Payment Shares and the lack of material misstatements and omissions in
the Settlement Registration Statement, the Prospectus and the Issuer’s filings
under the Exchange Act of 1934, as amended and modified (the “Exchange Act”));
and

(C) provide for the payment by the Issuer of all fees and expenses in connection
with such resale, including all registration costs and all fees and expenses of
counsel for Deutsche (or such affiliate).

(vii) On the Registered Settlement Share Delivery Date and following the
delivery of Payment Shares, Seller shall sell all such Payment Shares in a
commercially reasonable manner.

(xi) If at any time the number of Shares covered by the Registration Statement
is less than the number of Registered Securities required to be delivered
pursuant to the terms of Physical Settlement, the Issuer shall, at the request
of Deutsche, file additional registration statement(s) to register the sale of
all Payment Shares required to be delivered to Deutsche.

(xii) The Issuer shall cooperate with Deutsche and use its reasonable best
efforts to take any other action necessary to effect the intent of the
provisions set forth in the Physical Settlement provision and this Annex A.

(iv) (a) If Deutsche is not satisfied in all material respects with the results
of any due diligence investigation of the Issuer, (b) on any given day, Issuer
cannot satisfy any of the conditions of this Registered Settlement section or
(c) for a period of at least ten (10) consecutive Exchange Business Days,
Deutsche has determined that it is inadvisable to effect sales of Registered
Securities, upon Deutsche’s request the terms of Private Placement Settlement
below shall apply.

Private Placement Settlement

If the Issuer elects to deliver Payment Shares and Private Make-Whole Shares (as
defined below) by means of a private placement, the following provisions shall
apply:

(i) all Payment Shares and Private Make-Whole Shares shall be delivered to the
Seller (or any affiliate of the Seller designated by the Seller) pursuant to the
exemption from the registration requirements of the Securities Act provided by
Section
 4(2) thereof;

(ii) Seller and any potential purchaser of any such Shares from the Seller (or
any affiliate of the Seller designated by the Seller) identified by Seller shall
have been afforded a commercially reasonable opportunity to conduct a due
diligence investigation 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) and Buyer shall not disclose material non-public information in connection
with such due diligence investigation; and

(iii) an agreement (a “Private Placement Agreement”) shall have been entered
into between Issuer and the Seller (or any affiliate of the Seller designated by
the Seller) in connection with the private placement of such Shares by Issuer to
the Seller (or any such affiliate) and the private resale of such Shares by the
Seller (or any such affiliate), substantially similar to private placement
purchase agreements customary for private placements of equity securities, in
form and substance commercially reasonably satisfactory to the Seller and the
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, the Seller and its affiliates, and shall
provide for the payment by Issuer of all fees and expenses in connection with
such resale, including all reasonable fees and expenses of one counsel for the
Seller but not including any underwriter or broker discounts and commissions,
and shall contain representations, warranties and agreements of Issuer and
Seller reasonably necessary or advisable to establish and maintain the
availability of an exemption from the registration requirements of the
Securities Act for such resales.

(iv) If Issuer elects to deliver Payment Shares, neither Issuer nor Seller shall
take or cause to be taken any action that would make unavailable either (i) the
exemption set forth in Section 4(2) of the Securities Act for the sale of any
Payment Shares or Private Make-Whole Shares by Issuer to the Seller or (ii) an
exemption from the registration requirements of the Securities Act reasonably
acceptable to the Seller for resales of Payment Shares and Private Make-Whole
Shares by the Seller.

(v) If Issuer elects that the Private Placement Settlement provisions apply, the
Calculation Agent shall calculate an amount (the “Private Settlement Balance”)
equal to (i) the number of Payment Shares multiplied by (ii) (A) the sum of the
10b-18 VWAP (as defined in the Confirmation) for each Trading Day for the period
from and including the Trading Day after Deutsche requests that Private
Placement Settlement apply to and including the fifth (5th) Trading Day after
such initial day (the “Settlement Calculation Period”), divided by (B) the
number of Trading Days in such Settlement Calculation Period; provided however,
the Calculation Agent may extend such Settlement Calculation Period in its
commercially reasonable discretion by up fifteen (15) additional Trading Days
after the initial day of such Settlement Calculation Period.

(vi) On the date requested by Deutsche the Issuer shall deliver the Payment
Shares. Following the delivery of Payment Shares or any Private Make-Whole
Shares once clauses (i) through (v) have been satisfied, Seller shall sell all
such Payment Shares or Private Make-Whole Shares in a commercially reasonable
manner.

(vii) At the end of each day upon which sales have been made, the Private
Settlement Balance shall be (A) reduced by an amount equal to the aggregate
proceeds received by Deutsche upon settlement of the sale of such Share, and
(B) increased by an amount (as reasonably determined by the Calculation Agent in
a commercially reasonable manner) equal to the Federal Funds Rate with respect
to the then-current Private Settlement Balance as of the close of business on
such day. “Federal Funds Rate” means, for any day, the rate on such day for
Federal Funds, as published by Bloomberg and found by pressing the following
letters “FEDSOPEN” followed by pressing the <Index> key and pressing the
following letters “HP” followed by pressing the <Go> key; provided that if any
such day is not a New York Banking Day, the Federal Funds Rate for such day
shall be the Federal Funds Rate for the immediately preceding New York Banking
Day.

(viii) If, on any date, the Private Settlement Balance has been reduced to zero
but not all of the Payment Shares have been sold, no additional Payment Shares
shall be sold and Deutsche shall promptly deliver to the Issuer (A) any
remaining Payment Shares and (B) if the Private Settlement Balance has been
reduced to an amount less than zero, an amount in cash equal to the absolute
value of the then-current Private Settlement Balance.

(ix) If, on any date, all of the Payment Shares have been sold and the Private
Settlement Balance has not been reduced to zero, the Issuer shall promptly
deliver to Deutsche an additional number of Shares (“Private Make-Whole Shares”)
equal to (A) the Private Settlement Balance as of such date divided by (B) the
price per Share as reasonably determined by the Calculation Agent. This clause
(ix) shall be applied successively until the Private Settlement Balance is
reduced to zero.