EXHIBIT 10.16

FORM OF MASTER CONFIRMATION

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GOLDMAN SACHS & CO. | 85 BROAD STREET | NEW YORK, NEW YORK 10004 | TEL:
212-902-1000

Opening Transaction

 

 

To:

First Horizon National Corporation
165 Madison Avenue
Memphis, Tennessee 38103

 

 

From:

Goldman, Sachs & Co.

 

 

Subject:

Accelerated Share Repurchase Transaction - VWAP Pricing

 

 

Ref. No:

[Insert Reference Number]

 

 

Date:

March 1, 2006

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                    This master confirmation (“Master Confirmation”) dated as of
March 1, 2006, is intended to supplement the terms and provisions of certain
Transactions (each, a “Transaction”) entered into from time to time between
Goldman, Sachs & Co. (“GS&Co.”) and First Horizon National Corporation
(“Counterparty”). This Master Confirmation, taken alone, is neither a commitment
by either party to enter into any Transaction nor evidence of a Transaction. The
terms of any particular Transaction shall be set forth in a Supplemental
Confirmation in the form of Annex A hereto which references this Master
Confirmation, in which event the terms and provisions of this Master
Confirmation shall be deemed to be incorporated into and made a part of each
such Supplemental Confirmation. This Master Confirmation and each Supplemental
Confirmation together shall constitute a “Confirmation” as referred to in the
Agreement specified below.

                    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 Master Confirmation. This Master Confirmation and each Supplemental
Confirmation evidences a complete binding agreement between the Counterparty and
GS&Co. as to the terms of each Transaction to which this Master Confirmation and
the related Supplemental Confirmation relates.

                    All provisions contained in or incorporated by reference in
the form of the 1992 ISDA Master Agreement (Multi-Currency Cross Border) (the
“ISDA Form” or the “Agreement”) will govern this Master Confirmation and each
Supplemental Confirmation except as expressly modified below. This Master
Confirmation and each Supplemental Confirmation, together with all other
documents referring to the Agreement confirming Transactions entered into
between GS&Co. and Counterparty (notwithstanding anything to the contrary in a
Confirmation), shall supplement, form a part of, and be subject to the ISDA Form
as if GS&Co. and Counterparty had executed the Agreement (but without any
Schedule except for (i) the election of Loss and Second Method, New York law
(without regard to the conflicts of law principles) as the governing law and US
Dollars (“USD”) as the Termination Currency, (ii) the election that subparagraph
(ii) of Section 2(c) will not apply to Transactions, (iii) the replacement of
the word “third” in the last line of Section 5(a)(i) with the word “first” and
(iv) the election that the “Cross Default” provisions of Section 5(a)(vi) shall
apply to Counterparty, with a “Threshold Amount” of USD 50 million).

               All provisions contained in the Agreement shall govern this
Master Confirmation and the related Supplemental Confirmation relating to a
Transaction except as expressly modified below or in the related Supplemental
Confirmation. With respect to any relevant Transaction, the Agreement, this
Master Confirmation and the related Supplemental Confirmation shall represent
the entire agreement and understanding of the parties with respect to the
subject matter and terms of such Transaction and shall supersede all prior or
contemporaneous written or oral communications with respect thereto.

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                    If, in relation to any Transaction to which this Master
Confirmation and related Supplemental Confirmation relate, there is any
inconsistency between the Agreement, this Master Confirmation, any Supplemental
Confirmation and the Equity Definitions that are incorporated into any
Supplemental Confirmation, the following will prevail for purposes of such
Transaction in the order of precedence indicated: (i) such Supplemental
Confirmation; (ii) this Master Confirmation; (iii) the Agreement; and (iv) the
Equity Definitions.

                    1. Each Transaction constitutes a Share Forward Transaction
for the purposes of the Equity Definitions. Set forth below are the terms and
conditions which, together with the terms and conditions set forth in each
Supplemental Confirmation (in respect of each relevant Transaction), shall
govern each such Transaction.

General Terms:

 

 

 

 

Trade Date:

For each Transaction, as set forth in the Supplemental Confirmation.

 

 

 

 

Seller:

Counterparty

 

 

 

 

Buyer:

GS&Co.

 

 

 

 

Shares:

Common Capital Stock, $0.625 par value per share of Counterparty (Ticker: FHN)

 

 

 

 

Number of Shares:

For each Transaction, as set forth in the Supplemental Confirmation.

 

 

 

 

Forward Price:

For each Transaction, as set forth in the Supplemental Confirmation.

 

 

 

 

Prepayment:

Not Applicable

 

 

 

 

Variable Obligation:

Not Applicable

 

 

 

 

Exchange:

New York Stock Exchange

 

 

 

 

Related Exchange(s):

All Exchanges

 

 

 

 

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 Valuation Period or” after the word “material,”
in the third line thereof.

 

 

 

 

Counterparty Additional

 

 

Payment Amount:

For each Transaction, as set forth in the Supplemental Confirmation.
Counterparty shall pay the Counterparty Additional Payment Amount to GS&Co. on
the Cash Settlement Payment Date.

 

 

 

Valuation:

 

 

 

 

 

Valuation Period:

Each Scheduled Trading Day during the period commencing on and including the
first succeeding Scheduled Trading Day following the Trade Date, to and
including the Valuation Date (but excluding any day(s) on which the Valuation
Period is suspended in accordance with Section 5 herein and including any day(s)
by which the Valuation Period is extended pursuant to the provision below).

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Notwithstanding anything to the contrary in the Equity Definitions, to the
extent that any Scheduled Trading Day in the Valuation Period is a Disrupted
Day, the Valuation Date shall be postponed and the Calculation Agent in its sole
discretion shall extend the Valuation Period and make adjustments to the
weighting of each Relevant Price for purposes of determining the Settlement
Price, with such adjustments based on, among other factors, the duration of any
Market Disruption Event and the volume, historical trading patterns and price of
the Shares. To the extent that there are 9 consecutive Disrupted Days during the
Valuation Period, then notwithstanding the occurrence of a Disrupted Day, the
Calculation Agent shall have the option in its sole discretion to either (i)
terminate the Valuation Period and determine the Relevant Price for such 9th
consecutive day using its good faith and commercially reasonable estimate after
consultation with Counterparty or (ii) elect to further extend the Valuation
Period as it deems necessary.

 

 

 

 

Valuation Date:

For each Transaction, as set forth in the Supplemental Confirmation (as the same
may be postponed in accordance with the provisions of “Valuation Period” and
Section 5 herein).

 

 

 

Settlement Terms:

 

 

 

 

 

Settlement Currency:

USD (all amounts shall be converted to the Settlement Currency in good faith and
in a commercially reasonable manner by the Calculation Agent).

 

 

 

 

Settlement Method Election:

Applicable; provided that Section 7.1 of the Equity Definitions is hereby
amended by deleting the word “Physical” in the sixth line thereof and replacing
it with the words “Net Share” and deleting the word “Physical” in the last line
thereof and replacing it with word “Cash”.

 

 

 

 

Electing Party:

Counterparty

 

 

 

 

Settlement Method Election Date:

Subject to “Net Share Settlement following Extraordinary Event” and “Net Share
Settlement Upon Early Termination” herein, 5 Scheduled Trading Days prior to the
originally scheduled Valuation Date.

 

 

 

 

Default Settlement Method:

Cash Settlement

 

 

 

 

Forward Cash Settlement Amount:

An amount in the Settlement Currency equal to the product of (a) the Number of
Shares multiplied by (b) an amount equal to (i) the Settlement Price minus (ii)
the Forward Price.

 

 

 

 

Settlement Price:

The arithmetic mean of the Relevant Prices of the Shares for each Exchange
Business Day in the Valuation Period minus the Settlement Price Adjustment
Amount.

 

 

 

 

Settlement Price Adjustment Amount:

For each Transaction, as set forth in the Supplemental Confirmation.

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Relevant Price:

The New York Stock Exchange 10b-18 Volume Weighted Average Price per share of
the Shares for the regular trading session (including any extensions thereof) of
the Exchange on the related Exchange Business Day (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.

 

 

 

 

Cash Settlement Payment Date:

3 Currency Business Days after the Valuation Date.

 

 

 

 

Counterparty’s Contact Details

 

 

for Purpose of Giving Notice:

[Redacted]
165 Madison Ave
3rd Floor
Memphis, TN 38103
[email redacted]
(901) [Redacted]

 

 

 

 

GS&Co.’s Contact Details for

 

 

Purpose of Giving Notice:

Telephone No.: (212) [Redacted]
Facsimile No.: (212) [Redacted]
Attention: [Redacted]

 

 

 

 

 

With a copy to:

 

 

[Redacted]

 

 

Equity Capital Markets

 

 

One New York Plaza

 

 

New York, NY 10004

 

 

Telephone No.: (212) [Redacted]

 

 

Facsimile No.: (212) [Redacted]

 

 

 

Counterparty Net Share Settlement:

 

 

 

 

 

Counterparty Net Share

 

 

Settlement Procedures:

Counterparty Net Share Settlement shall be made in accordance with the
procedures attached hereto as Annex B.

 

 

 

 

Net Share Settlement Price:

(a) in respect of any Share for which the Exchange is an auction or “open
outcry” exchange that has a price as of the Valuation Time at which any trade
can be submitted for execution, the Net Share Settlement Price shall be the
price per Share as of the Valuation Time on the Net Share Valuation Date as
reported in the official real-time price dissemination mechanism for such
Exchange, (b) in respect of any Share for which the Exchange is a dealer
exchange or dealer quotation system, the Net Share Settlement Price shall be the
mid-point of the highest bid and lowest ask prices quoted as of the Valuation
Time on the Net Share Valuation Date (or the last such prices quoted immediately
before the Valuation Time) without regard to quotations that “lock” or “cross”
the dealer exchange or dealer quotation system. In all cases the Net Share
Settlement Price shall be reduced by the per Share amount of the underwriting
discount and/or commissions agreed to pursuant to the equity underwriting
agreement contemplated by the Net Share Settlement Procedures and (c)
notwithstanding anything to the contrary in (b) above, where

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NASDAQ is the Exchange, the Net Share Settlement Price will be the NASDAQ
Official Closing Price (NOCP) as of the Valuation Time on the Net Share
Valuation Date as reported in the official price determination mechanism for the
Exchange.

 

 

 

 

Valuation Time:

As provided in Section 6.1 of the Equity Definitions; provided that Section 6.1
of the Equity Definitions is hereby amended by inserting the words “Net Share
Valuation Date,” before the words “Valuation Date” in the first and third lines
thereof.

 

 

 

 

Net Share Valuation Date:

The Exchange Business Day immediately following the Valuation Date.

 

 

 

 

Net Share Settlement Date:

The third Exchange Business Day immediately following the Valuation Date.

 

 

 

 

Reserved Shares:

For each Transaction, as set forth in the Supplemental Confirmation.

 

 

 

GS&Co. Net Share Settlement:

 

 

 

 

 

GS&Co. Net Share

 

 

Settlement Procedures:

In the event that GS&Co. owes the Forward Cash Settlement Amount, settlement
shall be made by delivery of the number of Shares equal in value to the Forward
Cash Settlement Amount, with such value based on the Relevant Price per share
further described below. In such event, on each succeeding Exchange Business Day
after the Net Share Valuation Date, GS&Co. shall use good faith, commercially
reasonable efforts to purchase up to the maximum amount of Shares each day in
accordance with the provisions of Rule 10b-18 (2), (3) and (4), subject to any
delays between the execution and reporting of a trade of the Shares on the
Exchange and other circumstances beyond its reasonable control, until the sum of
the products of the number of Shares purchased by GS&Co. multiplied by the price
at which GS&Co. executes such purchases on the respective date of purchase
equals the Forward Cash Settlement Amount. GS&Co. shall deliver all Shares
purchased pursuant to this paragraph free of any contractual or other
restriction in good transferable form on the third Exchange Business Day
following the day on which GS&Co. completes all such purchases; or, if
Counterparty so elects prior to the Net Share Valuation Date, GS&Co. will
deliver all shares that are purchased on each succeeding Exchange Business Day
after the Net Share Valuation Date on the third Exchange Business Day following
the day of such purchase.

 

 

 

 

 

In the event that Counterparty elects Net Share Settlement in respect of the
Forward Cash Settlement owed to such Counterparty by GS&Co., the terms of
Sections 5 and 6 hereof shall apply during the period in which GS&Co. makes
purchases under the “GS&Co. Net Share Settlement Procedures” described in the
previous paragraph.

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Share Adjustments:

 

 

 

 

 

Method of Adjustment:

Calculation Agent Adjustment

 

 

 

Extraordinary Events:

 

 

 

 

Consequences of Merger Events:

 

 

 

 

 

(a) Share-for-Share:

Modified Calculation Agent Adjustment

 

 

 

 

(b) 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.

 

 

 

 

(c) Share-for-Combined:

Component Adjustment

 

 

 

 

Determining Party:

GS&Co.

 

 

 

Tender Offer:

Applicable

 

 

 

Consequences of Tender Offers:

 

 

 

 

 

(a) Share-for-Share:

Modified Calculation Agent Adjustment

 

 

 

 

(b) 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.

 

 

 

 

(c) Share-for-Combined:

Component Adjustment

 

 

 

 

Determining Party:

GS&Co.

 

 

 

Nationalization, Insolvency or Delisting:

Negotiated Close-out; 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 or The NASDAQ National 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
be deemed to be the Exchange.

 

 

 

Additional Disruption Events:

 

 

 

 

 

(a) Change in Law:

Applicable

 

 

 

 

(b) Failure to Deliver:

Not Applicable

 

 

 

 

(c) Insolvency Filing:

Applicable

 

 

 

 

(d) Loss of Stock Borrow:

Applicable; furthermore Sections 12.9(a)(vii) and 12.9(b)(iv) of the Equity
Definitions are amended by deleting the words “at a rate equal to or less than
the Maximum Stock Loan Rate”

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and replacing them with “at a rate of return equal to or greater than zero”.

 

 

 

 

Hedging Party:

GS&Co.

 

 

 

 

Determining Party:

GS&Co.

 

 

 

Non-Reliance:

Applicable

 

 

 

Agreements and Acknowledgements

 

Regarding Hedging Activities:

Applicable

 

 

 

Additional Acknowledgements:

Applicable

 

 

 

Net Share Settlement following Extraordinary Event:

Counterparty shall have the right, in its sole discretion, to make any payment
required to be made by it pursuant to Sections 12.7 or 12.9 of the Equity
Definitions (except with respect to any portion of the consideration for the
Shares consisting of cash in the event of a Merger Event or Tender Offer), or to
cause GS&Co. to make any payment required by such sections, following the
occurrence of an Extraordinary Event by electing to Net Share Settle the
Transactions under this Master Confirmation in accordance with the terms, and
subject to the conditions, for Counterparty Net Share Settlement or GS&Co. Net
Share Settlement, as applicable, herein by giving written notice to GS&Co. of
such election on the day that the notice fixing the date that the Transactions
are terminated or cancelled, as the case may be, (the “Cancellation Date”)
pursuant to the applicable provisions of Section 12 of the Equity Definitions is
effective. If Counterparty elects net share settlement: (a) the Net Share
Valuation Date shall be the date specified in the notice fixing the date that
the Transactions are terminated or cancelled, as the case may be; provided that
the Net Share Valuation Date shall be either the Exchange Business Day that such
notice is effective or the first Exchange Business Day immediately following the
Exchange Business Day that such notice is effective, (b) the Net Share
Settlement Date shall be deemed to be the Exchange Business Day immediately
following the Cancellation Date and (c) all references to the Forward Cash
Settlement Amount in Annex B hereto shall be deemed to be references to the
Cancellation Amount.

 

 

 

Net Share Settlement Upon

 

Early Termination:

Counterparty shall have the right, in its sole discretion, to make any payment
required to be made by it (the “Early Termination Amount”) pursuant to
Sections 6(d) and 6(e) of the Agreement or to cause GS&Co. to make any payment
required by such sections, following the occurrence of an Early Termination Date
in respect of the Agreement by electing to Net Share Settle all the Transactions
under this Master Confirmation in accordance with the terms, and subject to the
conditions, for Counterparty Net Share Settlement or GS&Co. Net Share
Settlement, as applicable, herein by giving written notice to GS&Co. of such
election on the day that the

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notice fixing an Early Termination Date is effective. If Counterparty elects Net
Share Settlement: (a) the Net Share Valuation Date shall be the date specified
in the notice fixing an Early Termination Date; provided that the Net Share
Valuation Date shall be either the Exchange Business Day that such notice is
effective or the first Exchange Business Day immediately following the Exchange
Business Day that such notice is effective, (b) the Net Share Settlement Date
shall be deemed to be the Exchange Business Day immediately following the Early
Termination Date and (c) all references to Forward Cash Settlement Amount in
Annex B hereto shall be deemed references to the Early Termination Amount.

 

 

 

Transfer:

Notwithstanding anything to the contrary in the Agreement, GS&Co. may assign,
transfer and set over all rights, title and interest, powers, privileges and
remedies of GS&Co. under any Transaction, in whole or in part, to an affiliate
of GS&Co. that is guaranteed by The Goldman Sachs Group, Inc. without the
consent of Counterparty.

 

 

 

GS&Co. Payment Instructions:

[bank redacted]

 

 

For A/C Goldman, Sachs & Co.

 

 

A/C # [redacted]

 

 

ABA: [redacted]

 

 

 

Counterparty Payment Instructions:

To be provided by Counterparty

                    2. Calculation Agent: GS&Co.

                    3. Representations, Warranties and Covenants of GS&Co. and
Counterparty.

                    (a) Each party represents and warrants that it (i) is an
“eligible contract participant”, as defined in the U.S. Commodity Exchange Act,
as amended and (ii) is entering into each Transaction hereunder as principal
(and not as agent or in any other capacity, fiduciary or otherwise) and not for
the benefit of any third party.

                    (b) Each party acknowledges that the offer and sale of each
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 and the provisions of Regulation D promulgated thereunder
(“Regulation D”). Accordingly, each party represents and warrants to the other
that (i) it has the financial ability to bear the economic risk of its
investment in each Transaction and is able to bear a total loss of its
investment, (ii) it is an “accredited investor” as that term is defined under
Regulation D, (iii) it will purchase each Transaction for investment and not
with a view to the distribution or resale thereof, and (iv) the disposition of
each Transaction is restricted under this Master Confirmation and each
Supplemental Confirmation, the Securities Act and state securities laws.

                    4. Additional Representations, Warranties and Covenants of
Counterparty.

                    As of (i) the date hereof and (ii) the Trade Date,
Counterparty represents, warrants and covenants to GS&Co. that:

                    (a) the purchase or writing of each Transaction will not
violate Rule 13e-1 or Rule 13e-4 under the Securities Exchange Act of 1934, as
amended (the “Exchange Act”);

                    (b) is not entering into any Transaction on the basis of,
and is not aware of, any material non-public information with respect to the
Shares or in anticipation of, in connection with, or to facilitate, a
distribution of its securities, a self tender offer or a third-party tender
offer;

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                    (c) Counterparty is in compliance with its reporting
obligations under the Exchange Act and its most recent Annual Report on Form
10-K, together with all reports subsequently filed by it pursuant to the
Exchange Act, taken together and as amended and supplemented to the date of this
representation, do not, as of their respective filing dates, contain any untrue
statement of a material fact or omit any 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;

                    (d) each Transaction is being entered into pursuant to a
publicly disclosed Share buy-back program and its Board of Directors has
approved the use of derivatives to effect the Share buy-back program;

                    (e) notwithstanding the generality of Section 13.1 of the
Equity Definitions, GS&Co. is not making any representations or warranties with
respect to the treatment of any Transaction under FASB Statements 149 or 150,
EITF 00-19 (or any successor issue statements) or under FASB’s Liabilities &
Equity Project;

                    (f) it will not take any action or refrain from taking any
action that would limit or in any way adversely affect GS&Co.’s rights under the
Agreement;

                    (g) it has not, and during any Valuation Period (as extended
pursuant to the provisions of Section 5 and “Valuation Period” herein) will not,
enter into agreements similar to the Transactions described herein where the
valuation period in such other transaction will overlap at any time (including
as a result of extensions in such valuation period as provided in the relevant
agreements) with any Valuation Period (as extended pursuant to the provisions of
Section 5 and “Valuation Period” herein) under this Master Confirmation. In the
event that the valuation period in any other similar transaction overlaps with
any Valuation Period under this Master Confirmation as a result of any extension
made pursuant to the provisions of Section 5 and “Valuation Period” herein,
Counterparty shall promptly amend such transaction to avoid any such overlap;

                    (h) during the Valuation Period (as extended or suspended
pursuant to the provisions of Section 5 and “Valuation Period” herein) the
Shares or securities that are convertible into, or exchangeable or exercisable
for Shares are not subject to a “restricted period” as such term is defined in
Regulation M promulgated under the Exchange Act (“Regulation M”); and

                    (i) it shall report each Transaction as required under
Regulation S-K and/or Regulation S-B under the Exchange Act, as applicable.

                    5. Suspension of Valuation Period.

                    (a) If Counterparty concludes that it will be engaged in a
distribution of the Shares for purposes of Regulation M, Counterparty agrees
that it will, on one Scheduled Trading Day’s written notice, direct GS&Co. not
to purchase Shares in connection with hedging any Transaction during the
“restricted period” (as defined in Regulation M). If on any Scheduled Trading
Day Counterparty delivers written notice (and confirms by telephone) by 8:30
a.m. New York Time (the “Notification Time”) then such notice shall be effective
to suspend the Valuation Period as of such Notification Time. In the event that
Counterparty delivers notice and/or confirms by telephone after the Notification
Time, then the Valuation Period shall be suspended effective as of 8:30 a.m. New
York Time on the following Scheduled Trading Day or as otherwise required by law
or agreed between Counterparty and GS&Co. The Valuation Period shall be
suspended and the Valuation Date extended for each Scheduled Trading Day in such
restricted period.

                    (b) In the event that GS&Co. concludes, in its sole
discretion, that it is appropriate with respect 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 GS&Co.), for it to refrain from purchasing Shares on any
Scheduled Trading Day during the Valuation Period, GS&Co. may by written notice
to Counterparty elect to suspend the Valuation Period for such number of
Scheduled Trading Days as is specified in the notice. The notice shall not
specify, and GS&Co. shall not otherwise communicate to Counterparty, the reason
for GS&Co.’s election to suspend the Valuation Period. The Valuation Period
shall be suspended and the Valuation Date extended for each Scheduled Trading
Day occurring during any such suspension.

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                    (c) On one occasion and upon written notice to GS&Co. prior
to 8:30 a.m. New York time on any Scheduled Trading Day during the Valuation
Period, Counterparty may elect to suspend the Valuation Period for such number
of Scheduled Trading Days as is specified in the notice up to a maximum of 30
calendar days. The notice shall not specify, and Counterparty shall not
otherwise communicate to GS&Co., the reason for Counterparty’s election to
suspend the Valuation Period. The Valuation Period shall be suspended and the
Valuation Date extended for each Scheduled Trading Day occurring during any such
suspension.

                    (d) In the event that the Valuation Period is suspended
pursuant to Sections 5(a),(b) or (c) above during the regular trading session on
the Exchange then the Calculation Agent in its sole discretion shall, in
calculating the Forward Cash Settlement Amount, extend the Valuation Period and
make adjustments to the weighting of each Relevant Price for purposes of
determining the Settlement Price, with such adjustments based on, among other
factors, the duration of any such suspension and the volume, historical trading
patterns and price of the Shares.

                    6. Counterparty Purchases. Counterparty represents, warrants
and covenants to GS&Co. that for each Transaction:

                    (a) Counterparty (or any “affiliated purchaser” as defined
in Rule 10b-18 under the Exchange Act (“Rule 10b-18”)) shall not, without the
prior written consent of GS&Co., purchase any Shares, listed contracts on the
Shares or securities that are convertible into, or exchangeable or exercisable
for Shares (including, without limitation, any Rule 10b-18 purchases of blocks
(as defined in Rule 10b-18)) during any Valuation Period (as extended pursuant
to the provisions of Section 5 and “Valuation Period” herein); provided that
Counterparty may purchase Shares in connection with its employee stock options
plan or under any privately negotiated repurchases. During this time, any such
purchases by Counterparty shall be made through GS&Co., or if not through
GS&Co., with the prior written consent of GS&Co., and in compliance with
Rule 10b-18 or otherwise in a manner that Counterparty and GS&Co. believe is in
compliance with applicable requirements. Any such purchase by Counterparty shall
be disregarded for purposes of determining the Forward Cash Settlement Amount.
To the extent that Counterparty makes any such purchase other than through
GS&Co., or other than in connection with any Transaction, Counterparty hereby
represents and warrants to GS&Co. that (a) it will not take other action that
would or could cause GS&Co.’s purchases of the Shares during the Valuation
Period not to comply with Rule 10b-18 and (b) any such purchases will not
otherwise constitute a violation of Section 9(a) or Rule 10(b) of the Exchange
Act. This subparagraph (a) shall not restrict any purchases by Counterparty of
Shares effected during any suspension of any Valuation Period in accordance with
Section 5 herein and any purchases during such suspension shall be disregarded
in calculating the Forward Cash Settlement Amount; and

                    (b) Counterparty is entering into this Master Confirmation
and each Transaction hereunder in good faith and not as part of a plan or scheme
to evade the prohibitions of Rule 10b5-1 under the Exchange Act (“Rule 10b5-1”).
It is the intent of the parties that each Transaction entered into under this
Master Confirmation comply with the requirements of Rule 10b5-1(c)(1)(i)(A) and
(B) and each Transaction entered into under this Master Confirmation shall be
interpreted to comply with the requirements of Rule 10b5-1(c). Counterparty will
not seek to control or influence GS&Co. to make “purchases or sales” (within the
meaning of Rule 10b5-1(c)(1)(i)(B)(3)) under any Transaction entered into under
this Master Confirmation, including, without limitation, GS&Co.’s decision to
enter into any hedging transactions. Counterparty represents and warrants that
it has consulted with its own advisors as to the legal aspects of its adoption
and implementation of this Master Confirmation and each Supplemental
Confirmation under Rule 10b5-1.

                    7. Additional Termination Events. Additional Termination
Event will apply. The following will constitute Additional Termination Events,
in each case with Counterparty as the sole Affected Party:

                    (a) Notwithstanding anything to the contrary in the Equity
Definitions, the occurrence of a Nationalization, Insolvency or a Delisting (in
each case effective on the Announcement Date as determined by the Calculation
Agent);

                    (b) Notwithstanding anything to the contrary in the Equity
Definitions, the occurrence of a Merger Event (effective on the Merger Date) or
a Tender Offer (effective on the Tender Offer Date) in respect of which any
Other Consideration received for the Shares does not consist of cash. For the
avoidance of doubt, in the

10

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event that any portion of the consideration received for the Shares consists of
cash or New Shares, this Additional Termination Event shall only apply with
respect to all or any Transaction(s) (or portions thereof) remaining after
giving effect to the provisions in “Consequences of Merger Events” or
“Consequences of Tender Offers”, as the case may be, above;

                    (c) GS&Co. shall reasonably believe in good faith that
Counterparty will be unable to meet its obligations when due for any reason and
Counterparty fails, after 10 Business Days prior written notice from GS&Co. to
provide GS&Co. with adequate assurance of its ability to perform; or

                    (d) Notwithstanding anything to the contrary in the Equity
Definitions, an Extraordinary Dividend is declared by the Issuer.

                    8. Additional Event of Default. The following occurrence
will constitute an Event of Default for purposes of Section 5(a) of the
Agreement (with Counterparty considered to be the Defaulting Party):

                    Counterparty fails to perform any obligation required to be
performed under any other agreement between Counterparty and GS&Co. or its
affiliated entities.

                    9. Automatic Termination Provisions. Notwithstanding
anything to the contrary in Section 6 of the Agreement:

                    (a) An Additional Termination Event with Counterparty as the
sole Affected Party will automatically occur without any notice or action by
GS&Co. or Counterparty if the price of the Shares on the Exchange at any time
falls below the Termination Price (as specified in the related Supplemental
Confirmation) provided that (for the avoidance of doubt only) such Additional
Termination Event shall be an Additional Termination Event only with respect to
the Transaction documented in such related Supplemental Confirmation. The
Exchange Business Day that the price of the Shares on the Exchange at any time
falls below the Termination Price will be the “Early Termination Date” for
purposes of the Agreement.

                    (b) Notwithstanding anything to the contrary in Section 6(d)
of the Agreement, following the occurrence of such an Additional Termination
Event, GS&Co. will notify Counterparty of the amount owing under Section 6(e) of
the Agreement within a commercially reasonable time period (with such period
based upon the amount of time, determined by GS&Co. (or any of its Affiliates)
in its sole discretion, that it would take to unwind any of its Hedge
Position(s) related to the Transaction in a commercially reasonable manner based
on relevant market indicia). For purposes of the “Net Share Settlement Upon
Early Termination” provisions herein, (i) the date that such notice is effective
(the “Notice Date”) shall constitute the “Net Share Valuation Date”, (ii) the
Exchange Business Day immediately following the Notice Date shall be the Net
Share Settlement Date and (iii) all references to the Forward Cash Settlement
Amount in Annex B hereto shall be deemed to be the Early Termination Amount.

                    10. 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 any
Valuation Period:

                    (a) Promptly after request from GS&Co., Counterparty shall
provide GS&Co. with written notice specifying (i) Counterparty’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 GS&Co. or its affiliates and (ii) the number of Shares purchased
pursuant to the 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 Counterparty to GS&Co. that such
information is true and correct. Counterparty understands that GS&Co. will use
this information in calculating the trading volume for purposes of Rule 10b-18;
and

                    (b) GS&Co. in its sole discretion may (i) make adjustments
to the terms of any Transaction, including, without limitation, the Valuation
Date, the Counterparty Additional Payment Amount and the Number of Shares to
account for the number of Shares that could be purchased on each day during the
Valuation Period in

11

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compliance with Rule 10b-18 following the Announcement Date or (ii) treat the
occurrence of the Announcement Date as an Additional Termination Event with
Counterparty as the sole Affected Party.

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

                    11. Special Calculation and Settlement Following Early
Termination and Extraordinary Events. Notwithstanding anything to the contrary
in this Master Confirmation or any Supplemental Confirmation hereunder, in the
event that an Extraordinary Event under Article 12 of the Equity Definitions
occurs or an Early Termination Date occurs or is designated with respect to any
Transaction (each an “Affected Transaction”), then GS&Co. may elect, in its sole
discretion, by notice to Counterparty, to have Counterparty deliver the Number
of Early Settlement Shares to GS&Co. on the date that such notice is effective
and either GS&Co. shall pay to Counterparty the Special Termination Amount, if
positive, or Counterparty shall pay to GS&Co. the absolute value of the Special
Termination Amount, if negative. To the extent that Counterparty elects to
deliver Shares to GS&Co. accompanied by an effective Registration Statement
(satisfactory to GS&Co. in its sole discretion) covering such Shares,
Counterparty must be in compliance with the conditions specified in (iii) though
(ix) in Annex B hereto at the time of such delivery. If Counterparty elects to
deliver Unregistered Shares (as defined in Annex B) to GS&Co., Counterparty and
GS&Co. will negotiate in good faith on acceptable procedures and documentation
relating to the sale of such Unregistered Shares. Counterparty and GS&Co. agree
that the payment of the Special Termination Amount and the delivery of the
Number of Early Settlement Shares satisfies in full any obligation of a party to
make any payments pursuant to Section 6(e) of the Agreement or Article 12 of the
Equity Definitions, as the case may be.

                    “Number of Early Settlement Shares” means a number of Shares
as determined by GS&Co. in a good faith and commercially reasonable manner based
on its or any of its Affiliates’ Hedge Positions with respect to each Affected
Transaction under this Master Confirmation.

                    “Special Termination Amount” means the sum of (a) the
product of (i) the Number of Early Settlement Shares multiplied by (ii) a per
Share price (the “Early Termination Price”) determined by GS&Co. in a good faith
and commercially reasonable manner based on relevant market indicia, including
GS&Co.’s funding costs associated with Early Settlement Shares and costs
incurred or estimated to be incurred by GS&Co. in connection with the purchase
and sale of Shares in order to close out GS&Co.’s or any of its Affiliates’
Hedge Positions with respect to each Affected Transaction and, in the event that
Counterparty delivers Unregistered Shares to GS&Co., whether GS&Co. and
Counterparty have agreed on acceptable procedures and documentation relating to
such Unregistered Shares as described above and (b) any amount owing under
Section 6(e) of the Agreement or pursuant to Article 12 of the Equity
Definitions, as the case may be, by GS&Co. to Counterparty (expressed as a
positive number) or by Counterparty to GS&Co. (expressed as a negative number).

                    12. Acknowledgments. The parties hereto intend for:

                    (a) Each Transaction to be a “securities contract” as
defined in Section 741(7) of the U.S. Bankruptcy Code (Title 11 of the United
States Code) (the “Bankruptcy Code”), a “swap agreement” as defined in Section
101(53B) of the Bankruptcy Code, or a “forward contract” as defined in Section
101(25) of the Bankruptcy Code, and the parties hereto to be entitled to the
protections afforded by, among other Sections, Sections 362(b)(6), 362(b)(17),
555, 556, and 560 of the Bankruptcy Code;

                    (b) A party’s right to liquidate or terminate any
Transaction, net out or offset termination values of payment amounts, and to
exercise any other remedies upon the occurrence of any Event of Default under
the Agreement with respect to the other party to constitute a “contractual
right” (as defined in the Bankruptcy Code);

                    (c) Any cash, securities or other property transferred as
performance assurance, credit support or collateral with respect to each
Transaction to constitute “margin payments” (as defined in the Bankruptcy Code);
and

12

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                    (d) All payments for, under or in connection with each
Transaction, all payments for the Shares and the transfer of such Shares to
constitute “settlement payments” and “transfers” (as defined in the Bankruptcy
Code).

                    13. Calculations on Early Termination and Set-Off.

                    (a) Notwithstanding anything to the contrary in the
Agreement or the Equity Definitions, the calculation of any Settlement Amounts,
Unpaid Amounts and amounts owed in respect of cancelled Transactions under
Article 12 of the Equity Definitions shall be calculated separately for (A) all
Terminated Transactions (it being understood that such term for the purposes of
this paragraph includes cancelled Transactions under Article 12 of the Equity
Definitions) in the Shares of the Issuer that qualify as equity under applicable
accounting rules (collectively, the “Equity Shares”) as determined by the
Calculation Agent and (B) all other Terminated Transactions under the Agreement
including, without limitation, Transactions in Shares other than those of the
Issuer (collectively, the “Other Shares”) and the netting and set-off provisions
of the Agreement shall only operate to provide netting and set-off (i) among
Terminated Transactions in the Equity Shares and (ii) among Terminated
Transactions in the Other Shares. In no event shall the netting and set-off
provisions of the Agreement operate to permit netting and set-off between
Terminated Transactions in the Equity Shares and Terminated Transactions in the
Other Shares.

                    (b) The parties agree to amend Section 6 of the Agreement by
adding a new Section 6(f) thereto as follows:

 

 

 

 

“(f) Upon the occurrence of an Event of Default or Termination Event with
respect to a party who is the Defaulting Party or the Affected Party (“X”), the
other party (“Y”) will have the right (but not be obliged) without prior notice
to X or any other person to set-off or apply any obligation of X owed to Y (or
any Affiliate of Y) (whether or not matured or contingent and whether or not
arising under the Agreement, and regardless of the currency, place of payment or
booking office of the obligation) against any obligation of Y (or any Affiliate
of Y) owed to X (whether or not matured or contingent and whether or not arising
under the Agreement, and regardless of the currency, place of payment or booking
office of the obligation). Y will give notice to the other party of any set-off
effected under this Section 6(f).

 

 

 

 

 

Amounts (or the relevant portion of such amounts) subject to set-off may be
converted by Y into the Termination Currency at the rate of exchange at which
such party would be able, acting in a reasonable manner and in good faith, to
purchase the relevant amount of such currency. If any obligation is
unascertained, Y may in good faith estimate that obligation and set-off in
respect of the estimate, subject to the relevant party accounting to the other
when the obligation is ascertained. Nothing in this Section 6(f) shall be
effective to create a charge or other security interest. This Section 6(f) shall
be without prejudice and in addition to any right of set-off, combination of
accounts, lien or other right to which any party is at any time otherwise
entitled (whether by operation of law, contract or otherwise).”

 

                    14. Payment Date Upon Early Termination. Notwithstanding
anything to the contrary in Section 6(d)(ii) of the Agreement, all amounts
calculated as being due in respect of an Early Termination Date under Section
6(e) of the Agreement will be payable on the day that notice of the amount
payable is effective.

                    15. Governing Law. The Agreement, this Master Confirmation
and each Supplemental Confirmation and all matters arising in connection with
the Agreement, this Master Confirmation and each Supplemental Confirmation shall
be governed by, and construed and enforced in accordance with, the law of the
State of New York without reference to its choice of law doctrine.

                    16. Offices.

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                    (a) The Office of GS&Co. for each Transaction is: One New
York Plaza, New York, New York 10004.

                    (b) The Office of Counterparty for each Transaction is: 165
Madison Avenue, Memphis, Tennessee 38103.

                    17. Arbitration.

                    (a) All parties to this Confirmation are giving up the right
to sue each other in court, including the right to a trial by jury, except as
provided by the rules of the arbitration forum in which a claim is filed.

                    (b) Arbitration awards are generally final and binding; a
party’s ability to have a court reverse or modify an arbitration award is very
limited.

                    (c) The ability of the parties to obtain documents, witness
statements and other discovery is generally more limited in arbitration than in
court proceedings.

                    (d) The arbitrators do not have to explain the reason(s) for
their award.

                    (e) The panel of arbitrators will typically include a
minority of arbitrators who were or are affiliated with the securities industry,
unless Counterparty is a member of the organization sponsoring the arbitration
facility, in which case all arbitrators may be affiliated with the securities
industry.

                    (f) The rules of some arbitration forums may impose time
limits for bringing a claim in arbitration. In some cases, a claim that is
ineligible for arbitration may be brought in court.

                    (g) The rules of the arbitration forum in which the claim is
filed, and any amendments thereto, shall be incorporated into this Confirmation.

                    (h) Counterparty agrees that any and all controversies that
may arise between Counterparty and GS & Co., including, but not limited to,
those arising out of or relating to the Agreement or any Transaction hereunder,
shall be determined by arbitration conducted before The New York Stock Exchange,
Inc. (“NYSE”) or NASD Dispute Resolution (“NASD-DR”), or, if the NYSE and
NASD-DR decline to hear the matter, before the American Arbitration Association,
in accordance with their arbitration rules then in force. The award of the
arbitrator shall be final, and judgment upon the award rendered may be entered
in any court, state or federal, having jurisdiction.

                    (i) No person shall bring a putative or certified class
action to arbitration, nor seek to enforce any pre-dispute arbitration agreement
against any person who has initiated in court a putative class action or who is
a member of a putative class who has not opted out of the class with respect to
any claims encompassed by the putative class action until: (i) the class
certification is denied; (ii) the class is decertified; or (iii) Counterparty is
excluded from the class by the court.

                    (j) Such forbearance to enforce an agreement to arbitrate
shall not constitute a waiver of any rights under this Confirmation except to
the extent stated herein.

                    18. Counterparty hereby agrees (a) to check this Master
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 GS&Co.) correctly sets forth the
terms of the agreement between GS&Co. and Counterparty with respect to any
Transaction, by manually signing this Master 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 Documentation Department, facsimile No. [redacted].

14

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Yours sincerely,

 

 

 

 

GOLDMAN, SACHS & CO.

 

 

 

 

By: 

 

 

 

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

 

 

Authorized Signatory

 

 

 

Agreed and Accepted By:

 

 

 

FIRST HORIZON NATIONAL CORPORATION

 

 

 

By: 

 

 

 

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

 

 

Name:

 

 

Title:

 

15

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ANNEX A

SUPPLEMENTAL CONFIRMATION

 

 

To:

First Horizon National Corporation
165 Madison Avenue
Memphis, Tennessee 38103

 

 

From:

Goldman, Sachs & Co.

 

 

Subject:

Accelerated Share Repurchase Transaction – VWAP Pricing

 

 

Ref. No:

[Insert Reference No.]

 

 

Date:

March 1, 2006

 

 

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

          The purpose of this Supplemental Confirmation is to confirm the terms
and conditions of the Transaction entered into between Goldman, Sachs & Co.
(“GS&Co.”) and First Horizon National Corporation (“Counterparty”) (together,
the “Contracting Parties”) on the Trade Date specified below. This Supplemental
Confirmation is a binding contract between GS&Co. and Counterparty as of the
relevant Trade Date for the Transaction referenced below.

          The definitions and provisions contained in the Master Confirmation
specified below are incorporated into this Supplemental Confirmation. In the
event of any inconsistency between those definitions and provisions and this
Supplemental Confirmation, this Supplemental Confirmation will govern.

1.       This Supplemental Confirmation supplements, forms part of, and is
subject to the Master Confirmation dated as of March 1, 2006 (the “Master
Confirmation”) between the Contracting Parties, as amended and supplemented from
time to time. All provisions contained in the Master Confirmation govern this
Supplemental Confirmation except as expressly modified below.

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

 

 

Trade Date:

March 1, 2006. In a related transaction Counterparty agreed to purchase a number
of Shares equal to the Number of Shares from GS&Co. on the Trade Date at the
Forward Price per Share.

 

 

Forward Price:

$39.43 per Share

 

 

Valuation Date:

Any date between [date in second quarter], 2006 and [date in third quarter],
2006 as determined by GS&Co. in its sole discretion.

 

 

Number of Shares:

4,000,000 Shares

 

 

Settlement Price Adjustment Amount:

$[redacted] per Share

 

 

Termination Price:

$[redacted] per Share

 

 

Reserved Shares:

1,000,000 Shares

 

 

Counterparty Additional Payment Amount:

$[redacted]

3.       Counterparty represents and warrants to GS&Co. that neither it (nor any
“affiliated purchaser” as defined in Rule 10b-18 under the Exchange Act) have
made any purchases of blocks pursuant to the proviso in Rule 10b-18(b)(4) under
the Exchange Act during the four full calendar weeks immediately preceding the
Trade Date, except as otherwise disclosed to GS&Co.

A-1

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          Counterparty hereby agrees (a) to check this Supplemental 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 GS&Co.) correctly sets forth the terms of the agreement
between GS&Co. and Counterparty with respect to this Transaction, by manually
signing this Supplemental 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 Documentation
Department, facsimile No. [redacted].

 

 

 

 

Yours sincerely,

 

GOLDMAN, SACHS & CO.

 

 

 

By: 

 

 

 

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

 

 

Authorized Signatory

 

 

 

Agreed and Accepted

 

By: 

FIRST HORIZON NATIONAL CORPORATION

 

 

 

By:

 

 

 

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

 

 

Name:

 

 

Title:

 

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

ANNEX B

COUNTERPARTY NET SHARE SETTLEMENT PROCEDURES

                    The following Counterparty Net Share Settlement Procedures
shall apply to the extent that Counterparty elects Counterparty Net Share
Settlement in accordance with the Master Confirmation:

                    Counterparty Net Share Settlement shall be made by delivery
of the number of Shares equal in value to the Forward Cash Settlement Amount
(the “Settlement Shares”), with such Shares’ value based on the Net Share
Settlement Price. Delivery of such Settlement Shares shall be made free of any
contractual or other restrictions in good transferable form on the Net Share
Settlement Date with Counterparty (i) representing and warranting to GS&Co. at
the time of such delivery that it has good, valid and marketable title or right
to sell and transfer all such Shares to GS&Co. under the terms of the related
Transaction free of any lien charge, claim or other encumbrance and (ii) making
the representations and agreements contained in Section 9.11(ii) through (iv) of
the Equity Definitions to GS&Co. with respect to the Settlement Shares. GS&Co.
or any affiliate of GS&Co. designated by GS&Co. (GS&Co. or such affiliate, “GS”)
shall resell the Settlement Shares during a period (the “Resale Period”)
commencing no earlier than the Net Share Valuation Date. The Resale Period shall
end on the Exchange Business Day on which GS completes the sale of all
Settlement Shares or a sufficient number of Settlement Shares so that the
realized net proceeds of such sales exceed the Forward Cash Settlement Amount.
Notwithstanding the foregoing, if resale by GS of the Settlement Shares, as
determined by GS in its sole discretion conflicts with any legal, regulatory or
self-regulatory requirements or related policies and procedures applicable to GS
(whether or not such requirements, policies or procedures are imposed by law or
have been voluntarily adopted by GS), the Resale Period will be postponed or
tolled, as the case may be, until such conflict is no longer applicable. During
the Resale Period, if the realized net proceeds from the resale of the
Settlement Shares exceed the Forward Cash Settlement Amount, GS shall refund
such excess in cash to Counterparty by the close of business on the third
Exchange Business Day immediately following the last day of the Resale Period.
If the Forward Cash Settlement Amount exceeds the realized net proceeds from
such resale, Counterparty shall transfer to GS by the open of the regular
trading session on the Exchange on the third Scheduled Trading Day immediately
following the last day of the Resale Period the amount of such excess (the
“Additional Amount”) in cash or in the number of Shares (“Make-whole Shares”) in
an amount that, based on the Net Share Settlement Price on the last day of the
Resale Period (as if such day was the “Net Share Valuation Date” for purposes of
computing such Net Share Settlement Price), has a dollar value equal to the
Additional Amount. The Resale Period shall continue to enable the sale of the
Make-whole Shares. If Counterparty elects to pay the Additional Amount in
Shares, the requirements and provisions set forth below shall apply. This
provision shall be applied successively until the Additional Amount is equal to
zero.

Counterparty Net Share Settlement of a Transaction is subject to the following
conditions:

Counterparty at its sole expense shall:

 

 

 

          (i) as promptly as practicable (but in no event more than five (5)
Exchange Business Days immediately following the Settlement Method Election Date
or, in the case of an election of Net Share Settlement upon the occurrence of an
Extraordinary Event or an Early Termination Date, no more than one Exchange
Business Day immediately following either the Cancellation Date or the Early
Termination Date, as the case may be) file under the Securities Act and use its
best efforts to make effective, as promptly as practicable, a registration
statement or supplement or amend an outstanding registration statement, in any
such case, in form and substance reasonably satisfactory to GS (the
“Registration Statement”) covering the offering and sale by GS of not less than
150% of the Shares necessary to fulfill the Net Share Settlement delivery
obligation by Counterparty (determining the number of such Shares to be
registered on the basis of the average of the Settlement Prices on the five
(5) Exchange Business Days prior to the date of such filing, amendment or
supplement, as the case may be);

 

 

 

          (ii) maintain the effectiveness of the Registration Statement until GS
has sold all shares to be delivered by Counterparty in satisfaction of its Net
Share Settlement obligations;

B-1

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

 

 

 

          (iii) have afforded GS and its counsel and other advisers a reasonable
opportunity to conduct a due diligence investigation of Counterparty customary
in scope for transactions in which GS acts as underwriter of equity securities,
and GS shall have been satisfied (with the approval of its Commitments Committee
in accordance with its customary review process) with the results of such
investigation;

 

 

 

          (iv) have negotiated and entered into an agreement with GS providing
for such covenants, conditions, representations and warranties, underwriting
discounts, commissions, indemnities and contribution rights as are customary for
GS equity underwriting agreements, together with customary certificates and
opinions of counsel and letters of independent auditors of Counterparty to be
delivered to GS covering the shares to be delivered by Counterparty in
satisfaction of its Net Share Settlement obligations;

 

 

 

          (v) have delivered to GS such number of prospectuses relating thereto
as GS shall have reasonably requested and shall promptly update and provide GS
with replacement prospectuses as necessary to ensure the prospectus does 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;

 

 

 

          (vi) reimburse GS for an underwriting counsel selected by GS (in its
sole discretion);

 

 

 

          (vii) have taken all steps necessary for the shares sold by GS to be
listed or quoted on the primary exchange or quotation system that the Shares are
listed or quoted on;

 

 

 

          (viii) have paid all reasonable and actual out-of-pocket costs and
expenses of GS and all reasonable and actual fees and expenses of GS’s outside
counsel and other independent experts in connection with the foregoing; and

 

 

 

          (ix) take such action as is required to ensure that GS’s sale of the
Shares does not violate, or result in a violation of, the federal or state
securities laws.

                    In the event that the Registration Statement is not declared
effective by the Securities Exchange Commission (the “SEC”) or any of the
conditions specified in (ii) through (ix) above are not satisfied on or prior to
the Valuation Date (or, in the case of an election of Counterparty Net Share
Settlement upon the occurrence of an Extraordinary Event or an Early Termination
Date, on or prior to the fifth Exchange Business Day or the first Exchange
Business Day following either the Cancellation Date or the Early Termination
Date, as the case may be), then Counterparty may deliver Unregistered Shares (as
defined below) to GS in accordance with the following conditions. If GS and
Counterparty can agree on acceptable pricing, procedures and documentation
relating to the sale of such Unregistered Shares (including, without limitation,
applicable requirements in (iii) through (ix) above and insofar as pertaining to
private offerings), then such Unregistered Shares shall be deemed to be the
“Settlement Shares” for the purposes of the related Transaction and the
settlement procedure specified in this Annex B shall be followed except that in
the event that the Forward Cash Settlement Amount exceeds the proceeds from the
sale of such Unregistered Shares then for the purpose of calculating the number
of “Make-whole Shares” to be delivered by Counterparty, GS shall determine the
discount to the Net Share Settlement Price at which it can sell the Unregistered
Shares. Notwithstanding the delivery of the Unregistered Shares, Counterparty
shall endeavor in good faith to have a registration statement declared effective
by the SEC as soon as practical. In the event that GS has not sold sufficient
Unregistered Shares to satisfy Counterparty’s obligations to GS contained herein
at the time that a Registration Statement covering the offering and sale by GS
of a number of Shares equal in value to not less than 150% of the amount then
owed to GS is declared effective (based on the Net Share Settlement Price on the
Exchange Business Day (as if such Exchange Business Day were the “Net Share
Valuation Date” for purposes of computing such Net Share Settlement Price) that
the Registration Statement was declared effective), GS shall return all unsold
Unregistered Shares to Counterparty and Counterparty shall deliver such number
of Shares covered by the effective Registration Statement equal to 100% of the
amount then owed to GS based on such Net Share Settlement Price. Such delivered
shares shall be deemed to be the “Settlement Shares” for the purposes of the
related Transaction and the settlement procedure specified in this Master
Confirmation (including the obligation to deliver any Make-whole Shares, if
applicable) shall be followed. In all cases GS shall be entitled to take any and
all required actions in the course of its sales of the Settlement Shares,
including without limitation making sales of the

B-2

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Unregistered Shares only to “Qualified Institutional Buyers” (as such term is
defined under the Securities Act), to ensure that the sales of the Unregistered
Shares and the Settlement Shares covered by the Registration Statement are not
integrated resulting in a violation of the securities laws and Counterparty
agrees to take all actions requested by GS in furtherance thereof.

                    If GS and Counterparty cannot agree on acceptable pricing,
procedures and documentation relating to the sales of such Unregistered Shares
then the number of Unregistered Shares to be delivered to GS pursuant to the
provisions above shall not be based on the Net Share Settlement Price but rather
GS shall determine the value attributed to each Unregistered Share in a
commercially reasonable manner and based on such value Counterparty shall
deliver a number of Shares equal in value to the Forward Cash Settlement Amount.
For the purposes hereof “Unregistered Shares” means Shares that have not been
registered pursuant to an effective registration statement under the Securities
Act or any state securities laws (“Blue Sky Laws”) and that cannot be sold,
transferred, pledged or otherwise disposed of without registration under the
Securities Act or under applicable Blue Sky Laws unless such sale, transfer,
pledge or other disposition is made in a transaction exempt from registration
thereunder.

                    In the event that Counterparty delivers Shares pursuant to
an election of Counterparty Net Share Settlement then Counterparty agrees to
indemnify and hold harmless GS, its affiliates and its assignees and their
respective directors, officers, employees, agents and controlling persons (GS
and each such person being an “Indemnified Party”) from and against any and all
losses, claims, damages and liabilities (or actions in respect thereof), joint
or several, to which such Indemnified Party may become subject, under the
Securities Act or otherwise, (i) relating to or arising out of any of the
Transactions contemplated by this Master Confirmation concerning the Shares or
(ii) arising out of or based upon any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus,
prospectus, Registration Statement or other written material relating to the
Shares delivered to prospective purchasers, including in each case any
amendments or supplements thereto and including but not limited to any documents
deemed to be incorporated in any such document by reference (the “Offering
Materials”), or arising out of or based upon any omission or alleged omission to
state in the Offering Materials a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that, in the case of this clause (ii),
Counterparty will not be liable to the extent that any loss, claim, damage or
liability arises out of or is based upon any untrue statement or omission or
alleged untrue statement or omission in the Offering Materials made in reliance
upon and in conformity with written information furnished to Counterparty by GS
expressly for use in the Offering Materials, as expressly identified in a letter
to be delivered at the closing of the delivery of Shares by Counterparty to GS.
The foregoing indemnity shall exclude losses that GS incurs solely by reason of
the proceeds from the sale of the Capped Number of Shares being less than the
Forward Cash Settlement Amount. Counterparty will not be liable under the
foregoing indemnification provision to the extent that any loss, claim, damage,
liability or expense is found in a nonappealable judgment by a court of
competent jurisdiction to have resulted from GS’s willful misconduct, gross
negligence or bad faith in performing the services that are subject of this
Master Confirmation. If for any reason the foregoing indemnification is
unavailable to any Indemnified Party or insufficient to hold harmless any
Indemnified Party, then Counterparty shall contribute, to the maximum extent
permitted by law, to the amount paid or payable by the Indemnified Party as a
result of such loss, claim, damage or liability. In addition, Counterparty will
reimburse any Indemnified Party for all expenses (including reasonable counsel
fees and expenses) as they are incurred (after notice to Counterparty) in
connection with the investigation of, preparation for or defense or settlement
of any pending or threatened claim or any action, suit or proceeding arising
therefrom, whether or not such Indemnified Party is a party thereto and whether
or not such claim, action, suit or proceeding is initiated or brought by or on
behalf of Counterparty. Counterparty also agrees that no Indemnified Party shall
have any liability to Counterparty or any person asserting claims on behalf of
or in right of Counterparty in connection with or as a result of any matter
referred to in the Agreement or this Master Confirmation except to the extent
that any losses, claims, damages, liabilities or expenses incurred by
Counterparty result from the gross negligence, willful misconduct or bad faith
of the Indemnified Party. This indemnity shall survive the completion of any
Transaction contemplated by this Master Confirmation and any assignment and
delegation of a Transaction made pursuant to this Master Confirmation or the
Agreement shall inure to the benefit of any permitted assignee of GS&Co.

                    In no event shall the number of Settlement Shares
(including, without duplication, any Unregistered Shares) and any Make-whole
Shares, be greater than the Reserved Shares minus the amount of any Shares
actually delivered under any other Transaction(s) under this Master Confirmation
(the result of such

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calculation, the “Capped Number”). Counterparty represents and warrants (which
shall be deemed to be repeated on each day that a Transaction is outstanding)
that the Capped Number is equal to or less than the number of Shares determined
according to the following formula:

A – B

 

 

 

 

Where

A = the number of authorized but unissued shares of the Issuer that are not
reserved for future issuance on the date of the determination of the Capped
Number; and

 

 

 

 

 

B = the maximum number of Shares required to be delivered to third parties if
Counterparty elected net share settlement of all transactions in the Shares
(other than Transactions in the Shares under this Master Confirmation) with all
third parties that are then currently outstanding and unexercised.

 

 

 

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