Exhibit 10.3

Execution Version

GOLDMAN SACHS & CO. LLC | 200 WEST STREET | NEW YORK, NEW YORK 10282-2198 | TEL:
(212) 902-1000

Opening Transaction

 

To:    Atmos Energy Corporation
1800 Three Lincoln Centre
5430 LBJ Freeway
Dallas, Texas 75240 From:    Goldman Sachs & Co. LLC Re:    Issuer Share Forward
Sale Transaction Date:    November 29, 2018

Dear Sir(s):

The purpose of this communication (this “Confirmation”) is to set forth the
terms and conditions of the above-referenced transaction entered into on the
Trade Date specified below (the “Transaction”) between Goldman Sachs & Co. LLC
(“Dealer”) and Atmos Energy Corporation (“Counterparty”). This communication
constitutes a “Confirmation” as referred to in the Agreement specified below.
This Confirmation is a confirmation for purposes of Rule 10b-10 promulgated
under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

 

1.

This Confirmation is subject to, and incorporates, the 2002 ISDA Equity
Derivatives Definitions (the “Equity Definitions”), as published by the
International Swaps and Derivatives Association, Inc. (“ISDA”). For purposes of
the Equity Definitions, the Transaction will be deemed to be a Share Forward
Transaction.

This Confirmation shall supplement, form a part of and be subject to an
agreement (the “Agreement”) in the form of the ISDA 2002 Master Agreement (the
“ISDA Form”), as published by ISDA, as if Dealer and Counterparty had executed
the ISDA Form on the date hereof (but without any Schedule except for the
election of New York law (without regard to New York’s choice of laws doctrine
other than Title 14 of Article 5 of the New York General Obligations Law (the
“General Obligations Law”)) as the governing law and US Dollars (“USD”) as the
Termination Currency. All provisions contained in the Agreement are incorporated
into and shall govern this Confirmation except as expressly modified below. This
Confirmation evidences a complete and binding agreement between Dealer and
Counterparty as to the terms of the Transaction and replaces any previous
agreement between the parties with respect to the subject matter hereof.

The Transaction hereunder shall be the sole Transaction under the Agreement. If
there exists any ISDA Master Agreement between Dealer or any of its Affiliates
and Counterparty or any confirmation or other agreement between Dealer or any of
its Affiliates and Counterparty pursuant to which an ISDA Master Agreement is
deemed to exist between Dealer or any of its Affiliates and Counterparty, then
notwithstanding anything to the contrary in such ISDA Master Agreement, such
confirmation or agreement or any other agreement to which Dealer or any of its
Affiliates and Counterparty are parties, the Transaction shall not be considered
a Transaction under, or otherwise governed by, such existing or deemed ISDA
Master Agreement, and the occurrence of any Event of Default or Termination
Event under the Agreement with respect to either party or the Transaction shall
not, by itself, give rise to any right or obligation under any such other
agreement or deemed agreement. Notwithstanding anything to the contrary in any
other agreement between the parties or their Affiliates, the Transaction shall
not be a “Specified Transaction” (or similarly treated) under any other
agreement between the parties or their Affiliates. In the event of any
inconsistency among the Agreement, this Confirmation and the Equity Definitions,
the following will prevail in the order of precedence indicated: (i) this
Confirmation; (ii) the Equity Definitions; and (iii) the Agreement. For the
purposes of the Equity Definitions, the Transaction is a Share Forward
Transaction.

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2.

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

General Terms:

 

Trade Date:

November 29, 2018.

 

Effective Date:

December 3, 2018 (the “Scheduled Effective Date”), or such later date on which
the conditions set forth in Section 3 of this Confirmation shall have been
satisfied or waived by Dealer.

 

Buyer:

Dealer.

 

Seller:

Counterparty.

 

Maturity Date:

March 31, 2020 (or, if such date is not a Scheduled Trading Day, the next
following Scheduled Trading Day).

 

Shares:

The shares of common stock, no par value per Share, of Counterparty
(Ticker: “ATO”).

 

Number of Shares:

Initially, (x) if no Initial Hedging Disruption (as defined below) occurs,
525,607 Shares (the “Full Number of Shares”) or (y) if an Initial Hedging
Disruption occurs, the Reduced Number of Shares (as defined below), in each
case, as reduced on each Relevant Settlement Date (as defined under “Settlement
Terms” below) by the number of Settlement Shares to which the related Valuation
Date relates.

 

Settlement Currency:

USD.

 

Exchange:

The New York Stock Exchange.

 

Related Exchange:

All Exchanges.

 

Prepayment:

Not Applicable.

 

Variable Obligation:

Not Applicable.

 

Forward Price:

On the Effective Date, USD91.7731, and on any day thereafter, the product of the
Forward Price on the immediately preceding calendar day and

 

  1 + the Daily Rate * (1/365);

 

  provided that the Forward Price on each Forward Price Reduction Date on or
after the Effective Date shall be the Forward Price otherwise in effect on such
date minus the Forward Price Reduction Amount for such Forward Price Reduction
Date.

 

Daily Rate:

For any day, the USD-Federal Funds Rate minus the Spread.

 

Spread:

0.75 %.

 

USD-Federal Funds Rate:

For any day, the rate set forth for the Currency Business Day immediately
preceding such day opposite the caption “Federal funds”, as such rate is
displayed on the page “FEDL01 Index <GO>” on the

 

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BLOOMBERG Professional Service, or any successor page; provided that if no rate
appears for any day on such page, the rate for the immediately preceding day for
which a rate appears shall be used for such day.

 

Forward Price Reduction Dates:

Each as separately agreed in writing between Dealer and Counterparty.

 

Forward Price Reduction Amount:

For each Forward Price Reduction Date, an amount separately agreed in writing
between Dealer and Counterparty.

Valuation:

 

Valuation Date:

For any Settlement (as defined below), if Physical Settlement is applicable, as
designated in the relevant Settlement Notice (as defined below); or if Cash
Settlement or Net Share Settlement is applicable, the last Unwind Date for such
Settlement. Section 6.6 of the Equity Definitions shall not apply to any
Valuation Date.

 

Unwind Dates:

For any Cash Settlement or Net Share Settlement, each day on which Dealer (or
its agent or affiliate) purchases Shares in the market to unwind its
commercially reasonable hedge position in a commercially reasonable manner in
connection with such Settlement, starting on the First Unwind Date for such
Settlement.

 

First Unwind Date:

For any Cash Settlement or Net Share Settlement, as designated in the relevant
Settlement Notice.

 

Unwind Period:

For any Cash Settlement or Net Share Settlement, the period starting on the
First Unwind Date for such Settlement and ending on the Valuation Date for such
Settlement.

Settlement Terms:

 

Settlement:

Any Physical Settlement, Cash Settlement or Net Share Settlement of all or any
portion of the Transaction.

 

Settlement Notice:

Subject to “Early Valuation” below, Counterparty may elect to effect a
Settlement of all or any portion of the Transaction by designating one or more
Scheduled Trading Days following the Effective Date and on or prior to the
Maturity Date to be Valuation Dates (or, with respect to Cash Settlements or Net
Share Settlements, First Unwind Dates, each of which First Unwind Dates shall
occur no later than the 60th Scheduled Trading Day immediately preceding the
Maturity Date) in a written notice to Dealer (a “Settlement Notice”) delivered
no later than the applicable Settlement Method Election Date, which notice shall
also specify (i) the number of Shares (the “Settlement Shares”) for such
Settlement (not to exceed the number of Undesignated Shares as of the date of
such Settlement Notice) and (ii) the Settlement Method applicable to such
Settlement; provided that (A) Counterparty may not designate a First Unwind Date
for a Cash Settlement or a Net Share Settlement if, as of the date of such
Settlement Notice, any Shares have been designated as Settlement Shares for a
Cash Settlement or a Net Share Settlement for which the related Relevant
Settlement Date has not occurred; and (B) if the number of Undesignated Shares
as of the Maturity Date is not zero, then the Maturity Date shall be a Valuation

 

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Date for a Physical Settlement and the number of Settlement Shares for such
Settlement shall be the number of Undesignated Shares as of the Maturity Date
(provided that if the Maturity Date occurs during the period from, and
including, the time any Settlement Notice is given for a Cash Settlement or Net
Share Settlement to, and including, the related Relevant Settlement Date, then
the provisions set forth below opposite “Early Valuation” shall apply as if the
Maturity Date were the Early Valuation Date).

 

Undesignated Shares:

As of any date, the Number of Shares minus the number of Shares designated as
Settlement Shares for Settlements for which the related Relevant Settlement Date
has not occurred.

 

Settlement Method Election:

Applicable; provided that:

 

  (i) Net Share Settlement shall be deemed to be included as an additional
settlement method under Section 7.1 of the Equity Definitions;

 

  (ii) Counterparty may elect Cash Settlement or Net Share Settlement only if
Counterparty represents and warrants to Dealer in the Settlement Notice
containing such election that, as of the date of such Settlement Notice,
(A) Counterparty is not aware of any material nonpublic information concerning
itself or the Shares, (B) Counterparty is electing the settlement method and
designating the First Unwind Date specified in such Settlement Notice in good
faith and not as part of a plan or scheme to evade compliance with Rule 10b-5
under the Exchange Act (“Rule 10b-5”) or any other provision of the federal
securities laws, (C) Counterparty is not “insolvent” (as such term is defined
under Section 101(32) of the U.S. Bankruptcy Code (Title 11 of the United States
Code) (the “Bankruptcy Code”)), (D) Counterparty would be able to purchase a
number of Shares equal to the greater of (x) the number of Settlement Shares
designated in such Settlement Notice and (y) a number of Shares with a value as
of the date of such Settlement Notice equal to the product of (I) such number of
Settlement Shares and (II) the applicable Relevant Forward Price for such Cash
Settlement or Net Share Settlement in compliance with the laws of Counterparty’s
jurisdiction of organization, (E) it is not electing Cash Settlement or Net
Share Settlement to create actual or apparent trading activity in the Shares (or
any security convertible into or exchangeable for Shares) or to raise or depress
or otherwise manipulate the price of the Shares (or any security convertible
into or exchangeable for Shares) and (F) such election, and settlement in
accordance therewith, does not and will not violate or conflict with any law,
regulation or supervisory guidance applicable to Counterparty, or any order or
judgment of any court or other agency of government applicable to it or any of
its assets, and any governmental consents that are required to have been
obtained by Counterparty with respect to such election or settlement have been
obtained and are in full force and effect and all conditions of any such
consents have been complied with; and

 

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  (iii) Notwithstanding any election to the contrary in any Settlement Notice,
Physical Settlement shall be applicable:

 

  (A)

to all of the Settlement Shares designated in such Settlement Notice if, at any
time from, and including, the date such Settlement Notice is received by Dealer
to, and including the related First Unwind Date, (I) the trading price per Share
on the Exchange (as determined by Dealer) is below USD45.89 (the “Threshold
Price”) or (II) Dealer determines, in its good faith and commercially reasonable
judgment, that it would be unable to purchase a number of Shares in the market
sufficient to unwind its commercially reasonable hedge position in respect of
(i) the portion of the Transaction represented by such Settlement Shares and
(ii) the portion of the “Transaction” represented by any “Settlement Shares,”
each as defined under the confirmation dated as of November 28, 2018 between
Dealer and Counterparty relating to a substantially identical forward
transaction with respect to 808,626 Shares (the “Base Confirmation”) and satisfy
its delivery obligation hereunder, if any, by the Maturity Date (x) in a manner
that (A) would, if Dealer were Counterparty or an affiliated purchaser of
Counterparty, be subject to the safe harbor provided by Rule 10b-18(b) under the
Exchange Act and (B) based on the advice of counsel, would not raise material
risks under applicable securities laws, other than as a result of activities by
Dealer unrelated to any Transaction or (y) due to the lack of sufficient
liquidity in the Shares (each, a “Trading Condition”); or

 

  (B)

to all or a portion of the Settlement Shares designated in such Settlement
Notice if, on any day during the relevant Unwind Period, (I) the trading price
per Share on the Exchange (as determined by the Calculation Agent in a good
faith and commercially reasonable manner) is below the Threshold Price or
(II) Dealer determines, in its good faith and commercially reasonable judgment
or based on advice of counsel, as applicable, that a Trading Condition has
occurred, in which case the provisions set forth below in the third paragraph
opposite “Early Valuation Date” shall apply as if such day were the Early
Valuation Date and (x) for purposes of clause (i) of such paragraph, such day
shall be the last Unwind Date of such Unwind Period and the “Unwound Shares”
shall be calculated to, and including, such day and (y) for purposes of clause
(ii) of such paragraph, the “Remaining Shares” shall be equal to the number of
Settlement Shares designated in such Settlement Notice minus the Unwound Shares
determined in accordance with clause (x) of this sentence.

 

Electing Party:

Counterparty.

 

Settlement Method Election Date:

With respect to any Settlement, the 2nd Scheduled Trading Day immediately
preceding (x) the Valuation Date, in the case of Physical Settlement, or (y) the
First Unwind Date, in the case of Cash Settlement or Net Share Settlement.

 

Default Settlement Method:

Physical Settlement.

 

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Physical Settlement:

Notwithstanding Section 9.2(a)(i) of the Equity Definitions, on the Physical
Settlement Date, Dealer shall pay to Counterparty an amount equal to the Forward
Price on the relevant Valuation Date multiplied by the number of Settlement
Shares for such Settlement, and Counterparty shall deliver to Dealer such
Settlement Shares.

 

Physical Settlement Date:

The Valuation Date.

 

Net Share Settlement:

On the Net Share Settlement Date, if the Net Share Settlement Amount is greater
than zero, Counterparty shall deliver a number of Shares equal to the Net Share
Settlement Amount (rounded down to the nearest integer) to Dealer, and if the
Net Share Settlement Amount is less than zero, Dealer shall deliver a number of
Shares equal to the absolute value of the Net Share Settlement Amount (rounded
down to the nearest integer) to Counterparty, in either case, in accordance with
Section 9.4 of the Equity Definitions, with the Net Share Settlement Date deemed
to be a “Settlement Date” for purposes of such Section 9.4, and, in either case,
plus cash in lieu of any fractional Shares included in the Net Share Settlement
Amount but not delivered due to rounding required hereby, valued at the
Settlement Price.

 

Net Share Settlement Date:

The date that follows the Valuation Date by one Settlement Cycle.

 

Net Share Settlement Amount:

For any Net Share Settlement, an amount equal to the Forward Cash Settlement
Amount divided by the Settlement Price.

 

Forward Cash Settlement Amount:

Notwithstanding Section 8.5(c) of the Equity Definitions, the Forward Cash
Settlement Amount for any Cash Settlement or Net Share Settlement shall be equal
to (i) the number of Settlement Shares for such Settlement multiplied by (ii) an
amount equal to (A) the Settlement Price minus (B) the Relevant Forward Price.

 

Relevant Forward Price:

For any Cash Settlement or Net Share Settlement, the weighted average of the
Forward Prices on each Unwind Date relating to such Settlement (weighted based
on the number of Shares purchased by Dealer or its agent or affiliate on each
such Unwind Date in connection with unwinding its commercially reasonable hedge
position in connection with such Settlement, as determined by the Calculation
Agent in a commercially reasonable manner), minus a commercially reasonable
commission related to Dealer’s purchase of shares in connection with the unwind
of its commercially reasonable hedge position.

 

Settlement Price:

For any Cash Settlement or Net Share Settlement, the weighted average price of
the purchases of Shares made by Dealer (or its agent or affiliate) in a
commercially reasonable manner at prevailing market prices during the Unwind
Period relating to such Settlement in connection with unwinding its commercially
reasonable hedge position relating to such Settlement (weighted based on the
number of Shares purchased by Dealer or its agent or affiliate on each Unwind
Date in connection with unwinding its commercially reasonable hedge position in
connection with such Settlement, as determined by the Calculation Agent in a
commercially reasonable manner).

 

Unwind Activities:

The times and prices at which Dealer (or its agent or affiliate) purchases any
Shares during any Unwind Period for purposes of unwinding its commercially
reasonable hedge shall be at Dealer’s sole

 

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discretion, provided that Dealer shall act in a commercially reasonable manner
when determining the times and prices at which to purchase Shares during any
Unwind Period and the prices shall reflect prevailing market prices at the time
of the purchase. Without limiting the generality of the foregoing, in the event
that Dealer concludes, in its good faith and reasonable judgment and based on
the advice of counsel, 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 Dealer) (a “Regulatory Disruption”), for it to
refrain from purchasing Shares on any Scheduled Trading Day that would have been
an Unwind Date but for the occurrence of a Regulatory Disruption, Dealer may
(but shall not be required to) notify Counterparty in writing that a Regulatory
Disruption has occurred on such Scheduled Trading Day without specifying (and
Dealer shall not otherwise communicate to Counterparty) the nature of such
Regulatory Disruption, and, for the avoidance of doubt, such Scheduled Trading
Day shall not be an Unwind Date and such Regulatory Disruption shall be deemed
to be a Market Disruption Event; provided that Dealer may exercise its right to
suspend under this sentence only in good faith in relation to events or
circumstances that are not the result of actions of it or any of its Affiliates
that are taken with the intent to avoid its obligations under the Transactions.

 

Relevant Settlement Date:

For any Settlement, the Physical Settlement Date, Cash Settlement Payment Date
or Net Share Settlement Date, as the case may be.

 

Other Applicable Provisions:

To the extent Dealer is obligated to deliver Shares hereunder, the provisions of
Sections 9.2 (last sentence only), 9.8, 9.9, 9.10, 9.11 and 9.12 of the Equity
Definitions will be applicable as if “Physical Settlement” applied to the
Transaction; provided that the Representation and Agreement contained in
Section 9.11 of the Equity Definitions shall be modified by excluding any
representations therein relating to restrictions, obligations, limitations or
requirements under applicable securities laws that exist as a result of the fact
that Counterparty is the issuer of the Shares.

Share Adjustments:

 

Potential Adjustment Events:

An Extraordinary Dividend shall not constitute a Potential Adjustment Event. For
the avoidance of doubt, a cash dividend on the Shares that differs from expected
dividends as of the Trade Date shall not be a Potential Adjustment Event under
Section 11.2(e)(vii) of the Equity Definitions with respect to the Transaction.

 

Extraordinary Dividend:

Any dividend or distribution on the Shares with an ex-dividend date occurring on
any day following the Trade Date (other than (i) any dividend or distribution of
the type described in Section 11.2(e)(i) or Section 11.2(e)(ii)(A) of the Equity
Definitions or (ii) a regular, quarterly cash dividend in an amount equal to or
less than the Regular Dividend Amount for such calendar quarter that has an
ex-dividend date no earlier than the Forward Price Reduction Date occurring in
the relevant quarter).

 

Regular Dividend Amount:

For each calendar quarter, an amount separately agreed in writing between Dealer
and Counterparty.

 

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Method of Adjustment:

Calculation Agent Adjustment.

Extraordinary Events:

 

Extraordinary Events:

The consequences that would otherwise apply under Article 12 of the Equity
Definitions to any applicable Extraordinary Event (excluding any Failure to
Deliver, Increased Cost of Hedging, Increased Cost of Stock Borrow or any
Extraordinary Event that also constitutes a Bankruptcy Termination Event, but
including, for the avoidance of doubt, any other applicable Additional
Disruption Event) shall not apply.

 

Tender Offer:

Applicable; provided that Section 12.1(d) of the Equity Definitions shall be
amended by replacing “10%” in the third line thereof with “20%”.

 

Delisting:

In addition to the provisions of Section 12.6(a)(iii) of the Equity Definitions,
it shall also constitute a Delisting if the Exchange is located in the United
States and the Shares are not immediately re-listed, re-traded or re-quoted on
any of the New York Stock Exchange, The NASDAQ Global Select Market or The
NASDAQ Global Market (or their respective successors); if the Shares are
immediately re-listed, re-traded or re-quoted on any such exchange or quotation
system, such exchange or quotation system shall be deemed to be the Exchange.

Additional Disruption Events:

 

Change in Law:

Applicable; provided that (A) any determination as to whether (i) the adoption
of or any change in any applicable law or regulation (including, without
limitation, any tax law) or (ii) the promulgation of or any change in or public
announcement of the formal or informal interpretation by any court, tribunal or
regulatory authority with competent jurisdiction of any applicable law or
regulation (including any action taken by a taxing authority), in each case,
constitutes a “Change in Law” shall be made without regard to Section 739 of the
Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 or any similar
legal certainty provision in any legislation enacted, or rule or regulation
promulgated, on or after the Trade Date; (B) Section 12.9(a)(ii) of the Equity
Definitions is hereby amended (i) by adding the words “(including, for the
avoidance of doubt and without limitation, adoption or promulgation of new
regulations authorized or mandated by existing statute)” after the word
“regulation” in the second line thereof and (ii) by replacing the words “the
interpretation” with the words “or public announcement of any formal or informal
interpretation” in the third line thereof; and (C) the words “, unless the
illegality is due to an act or omission of the party seeking to elect
termination of the Transaction with the intent to avoid its obligations under
the terms of the Transaction” are added immediately following the word
“Transaction” in the fifth line thereof; and provided further that
Section 12.9(a)(ii) of the Equity Definitions is hereby amended by adding the
phrase “and/or Hedge Position” after the word “Shares” in clause (X) thereof;
and (iii) by immediately following the word “Transaction” in clause (X) thereof,
adding the phrase “in the manner contemplated by the Hedging Party on the Trade
Date”.

 

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Failure to Deliver:

Applicable if Dealer is required to deliver Shares hereunder; otherwise, Not
Applicable.

 

Hedging Disruption:

Applicable.

 

Increased Cost of Hedging:

Applicable; provided that Section 12.9(b)(vi) of the Equity Definitions shall be
amended by (i) adding the word “or” before clause (B) of the second sentence
thereof, (ii) deleting clause (C) of the second sentence thereof and
(iii) deleting the third and fourth sentences thereof.

 

Increased Cost of Stock Borrow:

Applicable; provided that Section 12.9(b)(v) of the Equity Definitions shall be
amended by (i) adding the word “or” before clause (B) of the second sentence
thereof, (ii) deleting clause (C) of the second sentence thereof and
(iii) deleting the third, fourth and fifth sentences thereof. For the avoidance
of doubt, upon the announcement of any event that, if consummated, would result
in a Merger Event or Tender Offer, the term “rate to borrow Shares” as used in
Section 12.9(a)(viii) of the Equity Definitions shall include any commercially
reasonable cost borne or amount payable by the Hedging Party in respect of
maintaining or reestablishing its commercially reasonable hedge position,
including, but not limited to, any assessment or other amount payable by the
Hedging Party to a lender of Shares in respect of any merger or tender offer
premium, as applicable.

 

Initial Stock Loan Rate:

25 basis points per annum.

 

Loss of Stock Borrow:

Applicable; provided that Section 12.9(b)(iv) of the Equity Definitions shall be
amended by (i) deleting clause (A) of the first sentence thereof in its entirety
and (ii) deleting the words “neither the Non-Hedging Party nor the Lending Party
lends Shares in the amount of the Hedging Shares or” in the second sentence
thereof.

 

Maximum Stock Loan Rate:

200 basis points per annum.

 

Hedging Party:

For all applicable Additional Disruption Events, Dealer.

 

Determining Party:

For all applicable Extraordinary Events, Dealer.

Early Valuation:

 

Early Valuation:

Notwithstanding anything to the contrary herein, in the Agreement or in the
Equity Definitions, at any time (x) following the occurrence of a (1) Hedging
Event, (2) the declaration by Issuer of an Extraordinary Dividend, or (3) an
ISDA Event or (y) if an Excess Section 13 Ownership Position, an NYSE Ownership
Position or an Excess Regulatory Ownership Position exists, Dealer (or, in the
case of an ISDA Event that is an Event of Default or Termination Event, the
party entitled to designate an Early Termination Date in respect of such event
pursuant to Section 6 of the Agreement) shall have the right to designate any
Scheduled Trading Day to be the “Early Valuation Date”, in which case the
provisions set forth in this “Early Valuation” section shall apply, in the case
of an Event of Default or Termination Event, in lieu of Section 6 of the
Agreement. For the avoidance of doubt, other than as set forth in the third
immediately following paragraph, any amount calculated pursuant to this “Early
Valuation” section as a result of an Extraordinary Dividend shall not be
adjusted by the value associated with such Extraordinary Dividend.

 

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  If the Early Valuation Date occurs on a date that is not during an Unwind
Period, then the Early Valuation Date shall be a Valuation Date for a Physical
Settlement, and the number of Settlement Shares for such Settlement shall be the
Number of Shares on the Early Valuation Date; provided that Dealer may in its
sole discretion permit Counterparty to elect Cash Settlement or Net Share
Settlement, or to designate more than one Early Valuation Date, each such Early
Valuation Date relating to a number of Settlement Shares designated by Dealer.

 

  If the Early Valuation Date occurs during an Unwind Period, then (i) (A) the
last Unwind Date of such Unwind Period shall be deemed to be the Early Valuation
Date, (B) a Settlement shall occur in respect of such Unwind Period, and the
Settlement Method elected by Counterparty in respect of such Settlement shall
apply, and (C) the number of Settlement Shares for such Settlement shall be the
number of Unwound Shares for such Unwind Period on the Early Valuation Date, and
(ii) (A) the Early Valuation Date shall be a Valuation Date for an additional
Physical Settlement (provided that Dealer may in its sole discretion elect that
the Settlement Method elected by Counterparty for the Settlement described in
clause (i) of this sentence shall apply) and (B) the number of Settlement Shares
for such additional Settlement shall be the number of Remaining Shares on the
Early Valuation Date; provided that Dealer may designate more than one Early
Valuation Date, each such Early Valuation Date relating to a portion of the
Remaining Shares designated by Dealer.

 

  Notwithstanding the foregoing, in the case of a Nationalization or Merger
Event, if at the time of the related Relevant Settlement Date the Shares have
changed into cash or any other property or the right to receive cash or any
other property, the Calculation Agent shall adjust the nature of the Shares as
it determines appropriate in a commercially reasonable manner to account for
such change such that the nature of the Shares is consistent with what
shareholders receive in such event.

 

ISDA Event:

(i) Any Event of Default or Termination Event, other than an Event of Default or
Termination Event that also constitutes a Bankruptcy Termination Event, that
gives rise to the right of either party to designate an Early Termination Date
pursuant to Section 6 of the Agreement or (ii) the announcement of any event or
transaction that, if consummated, would result in a Merger Event, Tender Offer,
Nationalization, Delisting or Change in Law, in each case, as reasonably
determined by the Calculation Agent.

 

Amendment to Merger Event:

Section 12.1(b) of the Equity Definitions is hereby amended by deleting the
remainder of such Section beginning with the words “in each case if the Merger
Date is on or before” in the fourth to last line thereof.

 

Hedging Event:

(i) A Loss of Stock Borrow or Hedging Disruption, (ii) (A) an Increased Cost of
Stock Borrow or (B) an Increased Cost of Hedging, in the case of sub-clause
(A) or (B), in connection with which Counterparty does not elect, and so notify
the Hedging Party of its

 

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election, in each case, within the required time period to either amend the
Transaction pursuant to Section 12.9(b)(v)(A) or Section 12.9(b)(vi)(A) of the
Equity Definitions, as applicable, or pay an amount determined by the
Calculation Agent that corresponds to the relevant Price Adjustment pursuant to
Section 12.9(b)(v)(B) or Section 12.9(b)(vi)(B) of the Equity Definitions, as
applicable, or (iii) the occurrence of a Market Disruption Event during an
Unwind Period and the continuance of such Market Disruption Event for at least
eight Scheduled Trading Days.

 

Remaining Shares:

On any day, the Number of Shares as of such day (or, if such day occurs during
an Unwind Period, the Number of Shares as of such day minus the Unwound Shares
for such Unwind Period on such day).

 

Unwound Shares:

For any Unwind Period on any day, the aggregate number of Shares with respect to
which Dealer has unwound its commercially reasonable hedge position in respect
of the Transaction in connection with the related Settlement as of such day.

Acknowledgements:

 

Non-Reliance:

Applicable.

Agreements and Acknowledgements

Regarding Hedging Activities:

Applicable.

 

Additional Acknowledgements:

Applicable.

 

Transfer:

Notwithstanding anything to the contrary in the Agreement, Dealer may assign,
transfer and set over all rights, title and interest, powers, privileges and
remedies of Dealer under the Transaction, in whole or in part, to an affiliate
of Dealer whose obligation is guaranteed by The Goldman Sachs Group, Inc.
without the consent of Counterparty; provided that (1)(a) Counterparty will not
be required to pay to such assignee or transferee an amount in respect of an
Indemnifiable Tax under Section 2(d)(i)(4) of the Agreement greater than the
amount in respect of which Counterparty would have been required to pay Dealer
in the absence of such assignment or transfer; (b) Counterparty will not receive
a payment from which an amount has been withheld or deducted on account of a Tax
under Section 2(d)(i) of the Agreement in excess of that which Dealer would have
been required to so withhold or deduct in the absence of such assignment or
transfer; (c) no Event of Default, Potential Event of Default or Termination
Event will occur as a result of such assignment or transfer, and (d) the senior
unsecured debt rating (the “Credit Rating”) of such affiliate (or any guarantor
of its obligations under the Transaction) is equal to or greater than the Credit
Rating of Dealer or its Credit Support Provider as specified by Standard and
Poor’s Rating Services or Moody’s Investor Service, Inc., at the time of such
assignment or transfer. In connection with any assignment or transfer pursuant
to the immediately preceding sentence, the assignee or transferee shall deliver
to Counterparty a properly executed IRS Form W-9 or Form W-8 (together with all
necessary attachments) establishing an exemption from backup withholding under
the Internal Revenue Code of 1986, as amended (the “Code”). For the avoidance of
doubt, any such guarantee shall not be a Credit Support Document hereunder, and
any such guarantor shall not be a Credit Support Provider hereunder.

 

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Calculation Agent:

Dealer. Whenever the Calculation Agent is required to act or to exercise
judgment in any way with respect to any Transaction hereunder, it will do so in
good faith and in a commercially reasonable manner.

 

  Following the occurrence and during the continuation of an Event of Default
pursuant to Section 5(a)(vii) of the Agreement with respect to which Dealer is
the sole Defaulting Party, Counterparty shall have the right to select a leading
dealer in the market for U.S. corporate equity derivatives reasonably acceptable
to Dealer to replace Dealer as Calculation Agent, and the parties shall work in
good faith to execute any appropriate documentation required by such replacement
Calculation Agent.

 

  Following any determination or calculation by the Calculation Agent hereunder,
upon a written request by Counterparty, the Calculation Agent will, within a
commercially reasonable period of time following such request, provide to
Counterparty by e-mail to the e-mail address provided by Counterparty in such
written request a report (in a commonly used file format for the storage and
manipulation of financial data) displaying in reasonable detail the basis for
such determination or calculation, as the case may be; provided that Dealer
shall not be required to disclose any proprietary or confidential models of
Dealer or any information that is proprietary or subject to contractual, legal
or regulatory obligations to not disclose such information.

 

Counterparty Payment Instructions:

To be provided by Counterparty.

 

Dealer Payment Instructions:

JPMorgan Chase Bank, NY

For A/C Goldman Sachs & Co. LLC

A/C #930-1-011483

ABA: 021-000021

Counterparty’s Contact Details

for Purpose of Giving Notice:

To be provided by Counterparty.

Dealer’s Contact Details

for Purpose of Giving Notice:

Goldman Sachs & Co. LLC

200 West Street

New York, NY 10282-2198

Attention: Daniel Josephs

Telephone: 212-902-8193

Facsimile: 917-977-3943

Email: daniel.josephs@gs.com

 

  And email notification to the following address:

Eq-derivs-notifications@am.ibd.gs.com

 

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3.

Effectiveness.

The effectiveness of this Confirmation and the Transaction shall be subject to
satisfaction (or waiver by Dealer) of the following conditions:

(a)    the representations and warranties of Counterparty contained in the
Underwriting Agreement dated November 28, 2018 among Counterparty, Goldman
Sachs & Co. LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Wells
Fargo Securities, LLC (the “Underwriting Agreement”), and any certificate
delivered pursuant thereto by Counterparty shall be true and correct on the
Effective Date as if made as of the Effective Date;

(b)    Counterparty shall have performed all of the obligations required to be
performed by it under the Underwriting Agreement on or prior to the Effective
Date;

(c)    all of the conditions set forth in Section 5 of the Underwriting
Agreement shall have been satisfied;

(d)    the Option Closing Date (as defined in the Underwriting Agreement) shall
have occurred as provided in the Underwriting Agreement;

(e)    all of the representations and warranties of Counterparty hereunder and
under the Agreement shall be true and correct on the Effective Date as if made
as of the Effective Date, except to the extent such representations and
warranties expressly relate to an earlier date, in which case they shall have
been true and correct as of such earlier date in all material respects;

(f)    Counterparty shall have performed all of the obligations required to be
performed by it hereunder and under the Agreement on or prior to the Effective
Date, including without limitation its obligations under Section 6 hereof; and

(g)    Counterparty shall have delivered to Dealer an opinion of counsel in form
and substance reasonably satisfactory to Dealer, with respect to the matters set
forth in Section 3(a) of the Agreement (subject to customary exceptions,
limitations, qualifications and assumptions reasonably acceptable to Dealer) and
that the maximum number of Shares initially issuable hereunder have been duly
authorized and, upon issuance pursuant to the terms of the Transaction, will be
validly issued, fully paid and nonassessable.

Dealer shall use commercially reasonable means to establish its commercially
reasonable hedge position. However, notwithstanding the foregoing or any other
provision of this Confirmation, if (x) on or prior to 9:00 a.m., New York City
time, on the date the Option Closing Date (as defined in the Underwriting
Agreement) is scheduled to occur, Dealer, in its good faith and commercially
reasonable judgment, is unable to borrow and deliver for sale the Full Number of
Shares or (y) in Dealer’s commercially reasonable judgment, it would incur a
stock loan cost of more than the Maximum Stock Loan Rate with respect to all or
any portion of the Full Number of Shares (in each case, an “Initial Hedging
Disruption”), the effectiveness of this Confirmation and the Transaction shall
be limited to the number of Shares Dealer may borrow at a cost of not more than
the Maximum Stock Loan Rate (such number of Shares, the “Reduced Number of
Shares”), which, for the avoidance of doubt, may be zero.

 

4.

Additional Mutual Representations and Warranties. In addition to the
representations and warranties in the Agreement, each party represents and
warrants to the other party that it is an “eligible contract participant”, as
defined in the U.S. Commodity Exchange Act (as amended), and an “accredited
investor” as defined in Section 2(a)(15)(ii) of the Securities Act of 1933 (as
amended) (the “Securities Act”), and is entering into the Transaction hereunder
as principal and not for the benefit of any third party.

 

5.

Additional Representations and Warranties of Counterparty. In addition to the
representations and warranties in the Agreement and those contained elsewhere
herein, Counterparty represents and warrants to Dealer, and agrees with Dealer,
that:

(a)    without limiting the generality of Section 13.1 of the Equity
Definitions, it acknowledges that Dealer is not making any representations or
warranties with respect to the treatment of the Transaction, including without

 

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limitation ASC Topic 260, Earnings Per Share, ASC Topic 815, Derivatives and
Hedging, FASB Statements 128, 133, as amended, 149 or 150, EITF 00-19, 01-6,
03-6 or 07-5, ASC Topic 480, Distinguishing Liabilities from Equity, ASC 815-40,
Derivatives and Hedging – Contracts in Entity’s Own Equity (or any successor
issue statements) or under the Financial Accounting Standards Board’s
Liabilities & Equity Project;

(b)    it will not take any action or refrain from taking any action that would
limit or in any way adversely affect Dealer’s rights under the Agreement or this
Confirmation; provided that the parties acknowledge and agree that in no event
will Counterparty exercising its rights under this Agreement or this
Confirmation be deemed to adversely affect Dealer’s rights under the Agreement
or this Confirmation;

(c)    it shall not take any action to reduce or decrease the number of
authorized and unissued Shares below the sum of (i) the Number of Shares plus
(ii) the total number of Shares issuable upon settlement (whether by net share
settlement or otherwise) of any other transaction or agreement to which it is a
party;

(d)    it will not repurchase any Shares if, immediately following such
repurchase, the sum of (x) the Number of Shares hereunder and (y) the “Number of
Shares” as such term is defined in the Base Confirmation would be equal to or
greater than 4.5% of the number of then-outstanding Shares and it will notify
Dealer immediately upon the announcement or consummation of any repurchase of
Shares in an amount that, taken together with the amount of all repurchases
since the date of the last such notice (or, if no such notice has been given,
since the Trade Date), exceeds 0.5% of the number of then-outstanding Shares;

(e)    it is not entering into this Confirmation to create actual or apparent
trading activity in the Shares (or any security convertible into or exchangeable
for Shares) or to raise or depress or otherwise manipulate the price of the
Shares (or any security convertible into or exchangeable for Shares);

(f)    neither it nor any of its officers, directors, managers or similar
persons is aware of any material non-public information regarding itself or the
Shares; it is entering into this Confirmation and will provide any Settlement
Notice in good faith and not as part of a plan or scheme to evade compliance
with Rule 10b-5 or any other provision of the federal securities laws; it has
not entered into or altered any hedging transaction relating to the Shares
corresponding to or offsetting the Transaction; and it has consulted with its
own advisors as to the legal aspects of its adoption and implementation of this
Confirmation under Rule 10b5-1 under the Exchange Act (“Rule 10b5-1”);

(g)    it 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
to state any material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading;

(h)    no state or local (including non-U.S. jurisdictions) law, rule,
regulation or regulatory order applicable to the Shares would give rise to any
reporting, consent, registration or other requirement (including without
limitation a requirement to obtain prior approval from any person or entity) as
a result of Dealer or its affiliates owning or holding (however defined) Shares;

(i)    as of the Trade Date and as of the date of any payment or delivery by
Counterparty or Dealer hereunder, it is not and will not be “insolvent” (as such
term is defined under Section 101(32) of the Bankruptcy Code);

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

(k)    it: (i) is an “institutional account” as defined in FINRA Rule 4512(c);
and (ii) is capable of evaluating investment risks independently, both in
general and with regard to all transactions and investment strategies involving
a security or securities, and will exercise independent judgment in evaluating
any recommendations of Dealer or its associated persons; and

 

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(l)    IT UNDERSTANDS THAT THE TRANSACTION IS SUBJECT TO COMPLEX RISKS WHICH MAY
ARISE WITHOUT WARNING AND MAY AT TIMES BE VOLATILE AND THAT LOSSES MAY OCCUR
QUICKLY AND IN UNANTICIPATED MAGNITUDE AND IS WILLING TO ACCEPT SUCH TERMS AND
CONDITIONS AND ASSUME (FINANCIALLY AND OTHERWISE) SUCH RISKS.

 

6.

Additional Covenants of Counterparty.

(a)    Counterparty acknowledges and agrees that any Shares delivered by
Counterparty to Dealer on any Settlement Date or Net Share Settlement Date will
be (i) newly issued, (ii) approved for listing or quotation on the Exchange,
subject to official notice of issuance, and (iii) registered under the Exchange
Act, and, when delivered by Dealer (or an affiliate of Dealer) to securities
lenders from whom Dealer (or an affiliate of Dealer) borrowed Shares in
connection with hedging its exposure to the Transaction, will be freely saleable
without further registration or other restrictions under the Securities Act in
the hands of those securities lenders, irrespective of whether any such stock
loan is effected by Dealer or an affiliate of Dealer Accordingly, Counterparty
agrees that any Shares so delivered will not bear a restrictive legend and will
be deposited in, and the delivery thereof shall be effected through the
facilities of, the Clearance System. In addition, Counterparty represents and
agrees that any such Shares shall be, upon such delivery, duly and validly
authorized, issued and outstanding, fully paid and nonassessable, free of any
lien, charge, claim or other encumbrance.

(b)    Counterparty agrees that Counterparty shall not enter into or alter any
hedging transaction relating to the Shares corresponding to or offsetting the
Transaction. Without limiting the generality of the provisions set forth
opposite the caption “Unwind Activities” in Section 2 of this Confirmation,
Counterparty acknowledges that it has no right to, and agrees that it will not
seek to, control or influence Dealer’s decision to make any “purchases or sales”
(within the meaning of Rule 10b5-1(c)(1)(i)(B)(3)) under or in connection with
the Transaction, including, without limitation, Dealer’s decision to enter into
any hedging transactions.

(c)    Counterparty 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). 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, and no such
amendment, modification or waiver shall be made at any time at which
Counterparty or any officer, director, manager or similar person of Counterparty
is aware of any material non-public information regarding Counterparty or the
Shares.

(d)    Counterparty shall promptly provide notice thereof to Dealer (i) upon the
occurrence of any event that would, with the giving of notice, the passage of
time or the satisfaction of any condition, constitute an Event of Default, a
Potential Event of Default or a Termination Event in respect of which
Counterparty is a Defaulting Party or an Affected Party, as the case may be, and
(ii) upon announcement of any event that, if consummated, would constitute an
Extraordinary Event or Potential Adjustment Event.

(e)    Neither Counterparty nor any of its “affiliated purchasers” (as defined
by Rule 10b-18 under the Exchange Act (“Rule 10b-18”)) shall take any action
that would cause any purchases of Shares by Dealer or any of its Affiliates in
connection with any Cash Settlement or Net Share Settlement not to meet the
requirements of the safe harbor provided by Rule 10b-18 if such purchases were
made by Counterparty. Without limiting the generality of the foregoing, during
any Unwind Period, except with the prior written consent of Dealer, Counterparty
will not, and will cause its affiliated purchasers (as defined in Rule 10b-18)
not to, directly or indirectly (including, without limitation, by means of a
derivative instrument) purchase, offer to purchase, place any bid or limit order
that would effect a purchase of, or announce or commence any tender offer
relating to, any Shares (or equivalent interest, including a unit of beneficial
interest in a trust or limited partnership or a depository share) or any
security convertible into or exchangeable for the Shares. However, the foregoing
shall not (a) limit Counterparty’s ability, pursuant to any issuer “plan” (as
defined in Rule 10b-18), to re-acquire Shares from employees in connection with
such plan or program, (b) limit Counterparty’s ability to withhold Shares to
cover tax liabilities associated with such a plan, (c) prohibit any purchases
effected by or for an issuer “plan” by an “agent independent of the issuer”
(each as

 

15

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defined in Rule 10b-18), (d) otherwise restrict Counterparty’s or any of its
affiliates’ ability to repurchase Shares under privately negotiated,
off-exchange transactions with any of its employees, officers, directors,
affiliates or any third party that will not result in market transactions or
(e) limit Counterparty’s ability to grant stock and options to “affiliated
purchasers” (as defined in Rule 10b-18) or the ability of such affiliated
purchasers to acquire such stock or options in connection with any issuer “plan”
(as defined in Rule 10b-18) for directors, officers and employees or any
agreements with respect to any such plan for directors, officers or employees of
any entities that are acquisition targets of Counterparty, and in connection
with any such purchase under (a) through (e) above, Counterparty will be deemed
to represent to Dealer that such purchase does not constitute a “Rule 10b-18
purchase” (as defined in Rule 10b-18).

(f)    Counterparty will not be subject to any “restricted period” (as such term
is defined in Regulation M promulgated under the Exchange Act (“Regulation M”))
in respect of Shares or any security with respect to which the Shares are a
“reference security” (as such term is defined in Regulation M) during any Unwind
Period.

(g)    During any Unwind Period, Counterparty shall: (i) prior to the opening of
trading in the Shares on any day on which Counterparty makes, or expects to be
made, any public announcement (as defined in Rule 165(f) under the Securities
Act) of any Merger Transaction, to the extent permitted by applicable law,
notify Dealer of such public announcement; (ii) promptly notify Dealer following
any such announcement that such announcement has been made; (iii) promptly (but
in any event prior to the next opening of the regular trading session on the
Exchange) provide Dealer with written notice specifying (A) 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 for the Merger
Transaction that were not effected through Dealer or its affiliates and (B) 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 such announcement
date. Such written notice shall be deemed to be a certification by Counterparty
to Dealer that such information is true and correct. In addition, Counterparty
shall promptly notify Dealer of the earlier to occur of the completion of such
transaction and the completion of the vote by target shareholders. Counterparty
acknowledges that any such notice may result in a Regulatory Disruption, a
Trading Condition or an Early Valuation or may affect the length of any ongoing
Unwind Period; accordingly, Counterparty acknowledges that its delivery of such
notice must comply with the standards set forth in Section 6(c) above. “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. For the avoidance of doubt, a Merger Transaction or the announcement
thereof shall not give either party the right to designate an Early Valuation
Date and/or to accelerate or preclude an election by Counterparty of Physical
Settlement for any Settlement, unless such Merger Transaction or the
announcement thereof is also an ISDA Event.

 

7.

Termination on Bankruptcy. The parties hereto agree that, notwithstanding
anything to the contrary in the Agreement or the Equity Definitions, the
Transaction constitutes a contract to issue a security of Counterparty as
contemplated by Section 365(c)(2) of the Bankruptcy Code and that the
Transaction and the obligations and rights of Counterparty and Dealer (except
for any liability as a result of breach of any of the representations or
warranties provided by Counterparty in Section 4 or Section 5 above) shall
immediately terminate, without the necessity of any notice, payment (whether
directly, by netting or otherwise) or other action by Counterparty or Dealer,
if, on or prior to the final Physical Settlement Date, Cash Settlement Payment
Date or Net Share Settlement Date, an Insolvency Filing occurs or any other
proceeding commences with respect to Counterparty under the Bankruptcy Code (a
“Bankruptcy Termination Event”).

 

8.

Additional Provisions.

(a) Dealer acknowledges and agrees that Counterparty’s obligations under the
Transaction are not secured by any collateral and that this Confirmation is not
intended to convey to Dealer rights with respect to the transactions
contemplated hereby that are senior to the claims of common stockholders in any
U.S. bankruptcy proceedings of Counterparty; provided that nothing herein shall
limit or shall be deemed to limit Dealer’s right to pursue remedies in the event
of a breach by Counterparty of its obligations and agreements with respect to
this Confirmation or the Agreement; provided further that nothing herein shall
limit or shall be deemed to limit Dealer’s rights in respect of any transaction
other than the Transaction.

 

16

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(b)    The parties hereto intend for:

(i)    the Transaction to be a “securities contract” as defined in
Section 741(7) 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)(27), 362(o), 546(e), 546(j), 555 and 561 of the Bankruptcy Code;

(ii)    the rights given to Dealer pursuant to “Early Valuation” in Section 2
above to constitute “contractual rights” to cause the liquidation of a
“securities contract” and to set off mutual debts and claims in connection with
a “securities contract”, as such terms are used in Sections 555 and 362(b)(6) of
the Bankruptcy Code;

(iii)    any cash, securities or other property provided as performance
assurance, credit support or collateral with respect to the Transaction to
constitute “margin payments” and “transfers” under a “securities contract” as
defined in the Bankruptcy Code;

(iv)    all payments for, under or in connection with the Transaction, all
payments for Shares and the transfer of Shares to constitute “settlement
payments” and “transfers” under a “securities contract” as defined in the
Bankruptcy Code; and

(v)    any or all obligations that either party has with respect to this
Confirmation or the Agreement to constitute property held by or due from such
party to margin, guaranty or settle obligations of the other party with respect
to the transactions under the Agreement (including the Transaction) or any other
agreement between such parties.

(c)    Notwithstanding any other provision of the Agreement or this
Confirmation, in no event will Counterparty be required to deliver in the
aggregate in respect of all Settlement Dates, Net Share Settlement Dates or
other dates on which Shares are delivered in respect of any amount owed under
this Agreement a number of Shares greater than 1.25 times the Full Number of
Shares (as adjusted for stock splits and similar events that are within the
control of the Counterparty to prevent) (the “Capped Number”). Counterparty
represents and warrants to Dealer (which representation and warranty shall be
deemed to be repeated on each day that the Transaction is outstanding) that the
Capped Number is equal to or less than the number of authorized but unissued
Shares that are not reserved for future issuance in connection with transactions
in the Shares (other than the Transaction) on the date of the determination of
the Capped Number (such Shares, the “Available Shares”). In the event
Counterparty shall not have delivered the full number of Shares otherwise
deliverable as a result of this Section 8(c) (the resulting deficit, the
“Deficit Shares”), Counterparty shall be continually obligated to deliver
Shares, from time to time until the full number of Deficit Shares have been
delivered pursuant to this paragraph, when, and to the extent that, (A) Shares
are repurchased, acquired or otherwise received by Counterparty or any of its
subsidiaries after the Trade Date (whether or not in exchange for cash, fair
value or any other consideration), (B) authorized and unissued Shares reserved
for issuance in respect of other transactions prior to such date which prior to
the relevant date become no longer so reserved and (C) Counterparty additionally
authorizes any unissued Shares that are not reserved for other transactions
(such events as set forth in clauses (A), (B) and (C) above, collectively, the
“Share Issuance Events”). Counterparty shall promptly notify Dealer of the
occurrence of any of the Share Issuance Events (including the number of Shares
subject to clause (A), (B) or (C) and the corresponding number of Shares to be
delivered) and, as promptly as reasonably practicable, deliver such Shares
thereafter. Counterparty shall not, until Counterparty’s obligations under the
Transaction have been satisfied in full, use any Shares that become available
for potential delivery to Dealer as a result of any Share Issuance Event for the
settlement or satisfaction of any transaction or obligation other than the
Transaction or reserve any such Shares for future issuance for any purpose other
than to satisfy Counterparty’s obligations to Dealer under the Transaction.

(d)    The parties intend for this Confirmation to constitute a “Contract” as
described in the letter dated October 6, 2003 submitted on behalf of Dealer to
Paula Dubberly of the staff of the Securities and Exchange Commission (the
“Staff”) to which the Staff responded in an interpretive letter dated October 9,
2003.

(e)    The parties intend for this Transaction (taking into account purchases of
Shares in connection with any Cash Settlement or Net Share Settlement) to comply
with the requirements of Rule 10b5-1(c)(1)(i)(A) under the Exchange Act and for
this Confirmation to constitute a binding contract or instruction satisfying the
requirements of 10b5-1(c) and to be interpreted to comply with the requirements
of Rule 10b5-1(c).

 

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(f)    Notwithstanding any provisions of the Agreement, all communications
relating to the Transaction or the Agreement shall be transmitted exclusively
through Dealer at 200 West Street, New York, New York 10282-2198, Telephone No.
(212) 902-1981, Facsimile No. (212) 428-1980/1983.

(g)    Counterparty acknowledges that:

(i)    during the term of the Transaction, Dealer and its affiliates may buy or
sell Shares or other securities or buy or sell options or futures contracts or
enter into swaps or other derivative securities in order to establish, adjust or
unwind its commercially reasonable hedge position with respect to the
Transaction;

(ii)    Dealer and its affiliates may also be active in the market for the
Shares and derivatives linked to the Shares other than in connection with
commercially reasonable hedging activities in relation to the Transaction,
including acting as agent or as principal and for its own account or on behalf
of customers;

(iii)    Dealer shall make its own determination as to whether, when or in what
manner any hedging or market activities in Counterparty’s securities shall be
conducted and shall do so in a manner that it deems appropriate in its
commercially reasonable discretion to hedge its price and market risk with
respect to the Forward Price and the Settlement Price, provided, that if the
provisions of this Transaction require adjustment to reflect the economic effect
on an adjustment event on Dealer’s hedge, such adjustment shall be made as if
and to the extent Dealer had a commercially reasonable hedge;

(iv)    any market activities of Dealer and its affiliates with respect to the
Shares may affect the market price and volatility of the Shares, as well as the
Forward Price and the Settlement Price, each in a manner that may be adverse to
Counterparty; and

(v)    the Transaction is a derivatives transaction; Dealer may purchase or sell
Shares for its own account at an average price that may be greater than, or less
than, the price received by Counterparty under the terms of the Transaction.

 

9.

Indemnification. Counterparty agrees to indemnify and hold harmless Dealer, its
affiliates and its assignees and their respective directors, officers,
employees, agents and controlling persons (Dealer 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, incurred by or
asserted against such Indemnified Party for the violation of federal or state
securities law and which arise out of, are in connection with, or relate to, the
performance by Counterparty of its obligations under the Transaction or any
breach of any covenant or representation made by Counterparty in this
Confirmation or the Agreement. 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 Dealer’s willful misconduct, gross
negligence or bad faith in performing the services that are subject of the
Transaction. 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 reasonable expenses (including reasonable counsel fees
and expenses) as they are incurred 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 this
Confirmation except to the extent that any losses, claims, damages, liabilities
or expenses incurred by Counterparty result from the material breach of any
covenant or representation made by Dealer in this Confirmation or any willful
misconduct, fraud, gross negligence or bad faith of the Indemnified Party. The
provisions of this Section 9 shall survive the completion of the Transaction
contemplated by this Confirmation and any assignment and/or delegation of the
Transaction made pursuant to the Agreement or this Confirmation shall inure to
the benefit of any permitted assignee of Dealer For the avoidance of doubt, any
payments due as a result of this provision may not be used to set off any
obligation of Dealer upon settlement of the Transactions.

 

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10.

Beneficial Ownership. Notwithstanding anything to the contrary in the Agreement
or this Confirmation, in no event shall Dealer be entitled to receive, or be
deemed to receive, or have the “right to acquire” (within the meaning of NYSE
Rule 312.04(g)), Shares to the extent that, upon such receipt of such Shares,
(i) the “beneficial ownership” (within the meaning of Section 13 of the Exchange
Act and the rules promulgated thereunder) of Shares by Dealer, any of its
affiliates’ business units subject to aggregation with Dealer for purposes of
the “beneficial ownership” test under Section 13 of the Exchange Act and all
persons who may form a “group” (within the meaning of Rule 13d-5(b)(1) under the
Exchange Act) with Dealer with respect to “beneficial ownership” of any Shares
(collectively, “Dealer Group”) would be equal to or greater than the lesser of
(x) 4.9% of the outstanding Shares (such condition, an “Excess Section 13
Ownership Position”) and (y) 5,461,872 Shares (such number of Shares, the
“Threshold Number of Shares” and such condition, an “Excess NYSE Ownership
Position”), or (ii) Dealer, Dealer Group or any person whose ownership position
would be aggregated with that of Dealer or Dealer Group (Dealer, Dealer Group or
any such person, a “Dealer Person”) under Article 14 and Article 14.1 of the
Virginia Stock Corporation Act and the Texas Business Organizations Code or any
state or federal bank holding company or banking laws, or any federal, state or
local laws, regulations or regulatory orders applicable to ownership of Shares
(“Applicable Laws”), would own, beneficially own, constructively own, control,
hold the power to vote or otherwise meet a relevant definition of ownership in
excess of a number of Shares equal to (x) the lesser of (A) the maximum number
of Shares that would be permitted under Applicable Laws and (B) the number of
Shares that would give rise to reporting or registration obligations or other
requirements (including obtaining prior approval by a state or federal
regulator) of a Dealer Person under Applicable Laws and with respect to which
such requirements have not been met or the relevant approval has not been
received or that would give rise to any consequences under the constitutive
documents of Counterparty or any contract or agreement to which Counterparty is
a party, in each case minus (y) 1% of the number of Shares outstanding on the
date of determination (such condition described in clause (iii), an “Excess
Regulatory Ownership Position”). If any delivery owed to Dealer hereunder is not
made, in whole or in part, as a result of this provision, (i) Counterparty’s
obligation to make such delivery shall not be extinguished and Counterparty
shall make such delivery as promptly as practicable after, but in no event later
than one Exchange Business Day after, Dealer gives notice to Counterparty that
such delivery would not result in (x) Dealer Group directly or indirectly so
beneficially owning in excess of the lesser of (A) 4.9% of the outstanding
Shares and (B) the Threshold Number of Shares or (y) the occurrence of an Excess
Regulatory Ownership Position and (ii) if such delivery relates to a Physical
Settlement, notwithstanding anything to the contrary herein, Dealer shall not be
obligated to satisfy the portion of its payment obligation corresponding to any
Shares required to be so delivered until the date Counterparty makes such
delivery.

 

11.

Non-Confidentiality. The parties hereby agree that (i) effective from the date
of commencement of discussions concerning the Transaction, Counterparty and each
of its employees, representatives, or other agents may disclose to any and all
persons, without limitation of any kind, the tax treatment and tax structure of
the Transaction and all materials of any kind, including opinions or other tax
analyses, provided by Dealer and its affiliates to Counterparty relating to such
tax treatment and tax structure; provided that the foregoing does not constitute
an authorization to disclose the identity of Dealer or its affiliates, agents or
advisers, or, except to the extent relating to such tax structure or tax
treatment, any specific pricing terms or commercial or financial information,
and (ii) Dealer does not assert any claim of proprietary ownership in respect of
any description contained herein or therein relating to the use of any entities,
plans or arrangements to give rise to a particular United States federal income
tax treatment for Counterparty; provided, further, that Counterparty may
disclose any such information if required by applicable law, regulatory body, or
court order.

 

12.

Restricted Shares. If Counterparty is unable to comply with the covenant of
Counterparty contained in Section 6(a) above because of a change in law or a
change in the policy of the Securities and Exchange Commission or its staff, or
Dealer otherwise determines in its reasonable opinion based on the advice of
counsel that any Shares to be delivered to Dealer by Counterparty may not be
freely returned by Dealer to securities lenders as described in the covenant of
Counterparty contained in Section 6(a) above, then delivery of any such
Settlement Shares (the “Unregistered Settlement Shares”) shall be effected
pursuant to Annex A hereto, unless waived by Dealer.

 

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13.

Governing Law. Notwithstanding anything to the contrary in the Agreement, the
Agreement, this Confirmation and all matters arising in connection with the
Agreement and this Confirmation shall be governed by, and construed and enforced
in accordance with, the laws of the State of New York (without reference to its
choice of laws doctrine other than Title 14 of Article 5 of the New York General
Obligations Law).

 

14.

Set-Off.

(a)     The parties agree that 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 (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 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 14.

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 14 shall be
effective to create a charge or other security interest. This Section 14 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).

(b)    Notwithstanding anything to the contrary in the foregoing, Dealer agrees
not to set off or net amounts due from Counterparty with respect to any
Transaction against amounts due from Dealer to Counterparty with respect to
contracts or instruments that are not Equity Contracts. “Equity Contract” means
any transaction or instrument that does not convey to Dealer rights, or the
ability to assert claims, that are senior to the rights and claims of common
stockholders in the event of Counterparty’s bankruptcy.

 

15.

Staggered Settlement. Notwithstanding anything to the contrary herein, Dealer
may, by prior notice to Counterparty, satisfy its obligation to deliver any
Shares or other securities on any date due (an “Original Delivery Date”) by
making separate deliveries of Shares or such securities, as the case may be, at
more than one time on or prior to such Original Delivery Date, so long as the
aggregate number of Shares and other securities so delivered on or prior to such
Original Delivery Date is equal to the number required to be delivered on such
Original Delivery Date.

 

16.

Waiver of Trial by Jury. EACH OF COUNTERPARTY AND Dealer HEREBY IRREVOCABLY
WAIVES (ON ITS OWN BEHALF AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ON
BEHALF OF ITS STOCKHOLDERS) ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR
RELATING TO THE TRANSACTION OR THE ACTIONS OF Dealer OR ITS AFFILIATES IN THE
NEGOTIATION, PERFORMANCE OR ENFORCEMENT HEREOF.

 

17.

Jurisdiction. 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. NOTHING IN THIS PROVISION
SHALL PROHIBIT A PARTY FROM BRINGING AN ACTION TO ENFORCE A MONEY JUDGMENT IN
ANY OTHER JURISDICTION.

 

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18.

Counterparts. This Confirmation may be executed in any number of counterparts,
all of which shall constitute one and the same instrument, and any party hereto
may execute this Confirmation by signing and delivering one or more
counterparts.

 

19.

Other Forwards. Dealer acknowledges that Counterparty has entered into a
substantially identical forward transaction for the Shares on the date hereof
(the “Other Additional Forward”) and a substantially identical forward on
November 28, 2018 (the “Other Base Forward” and together with the Other
Additional Forward, the “Other Forwards”) with Bank of America, N.A. Dealer and
Counterparty agree that if Counterparty designates a Relevant Settlement Date
with respect to an Other Forward and for which Cash Settlement or Net Share
Settlement is applicable, and the resulting Unwind Period for an Other Forward
coincides for any period of time with an Unwind Period for the Transaction or
the “Transaction” under the Base Confirmation (the “Overlap Unwind Period”),
Counterparty shall notify Dealer prior to the commencement of such Overlap
Unwind Period of the first Exchange Business Day and length of such Overlap
Unwind Period, and Dealer shall only be permitted to purchase Shares to unwind
its hedge in respect of the Transaction or the “Transaction” under the Base
Confirmation on every other Exchange Business Day during such Overlap Unwind
Period, commencing on the first Exchange Business Day of such Overlap Unwind
Period.

Counterparty hereby agrees (a) to check this Confirmation carefully and
immediately upon receipt so that errors or discrepancies can be promptly
identified and rectified and (b) to confirm that the foregoing (in the exact
form provided by Dealer) correctly sets forth the terms of the agreement between
Dealer and Counterparty with respect to the Transaction, by manually signing
this Confirmation or this page hereof as evidence of agreement to such terms and
providing the other information requested herein and immediately returning an
executed copy to Equity Derivatives Documentation Department, Facsimile
No. 212-428-1980/83.

 

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Yours faithfully, GOLDMAN SACHS & CO. LLC By:   /s/ La Vonda Williams   Name:  
La Vonda Williams   Title:   Vice President

 

Agreed and accepted by: ATMOS ENERGY CORPORATION By:   /s/ Daniel M. Meziere  
Name:   Daniel M. Meziere   Title:   Vice President and Treasurer

[Signature Page to Block Forward Additional Confirmation]

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ANNEX A

PRIVATE PLACEMENT PROCEDURES

If Counterparty delivers Unregistered Settlement Shares pursuant to Section 12
above (a “Private Placement Settlement”), then:

(a)    all Unregistered Settlement Shares shall be delivered to Dealer (or any
affiliate of Dealer designated by Dealer) pursuant to the exemption from the
registration requirements of the Securities Act provided by Section 4(a)(2)
thereof;

(b)    as of or prior to the date of delivery, Dealer and any potential
purchaser of any such shares from Dealer (or any affiliate of Dealer designated
by Dealer) identified by Dealer shall be afforded a commercially reasonable
opportunity to conduct a due diligence investigation with respect to
Counterparty customary in scope for private placements of equity securities of a
similar size (including, without limitation, the right to have made available to
them for inspection all financial and other records, pertinent corporate
documents and other information reasonably requested by them); provided that
prior to receiving or being granted access to any such information, Dealer, such
affiliate of Dealer or such potential purchaser, as the case may be, may be
required by Counterparty to enter into a customary nondisclosure agreement with
Counterparty in respect of any such due diligence investigation;

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

(d)    in connection with the private placement of such shares by Counterparty
to Dealer (or any such affiliate) and the private resale of such shares by
Dealer (or any such affiliate), Counterparty shall, if so requested by Dealer,
prepare, in cooperation with Dealer, a private placement memorandum in form and
substance reasonably satisfactory to Dealer.

In the case of a Private Placement Settlement, Dealer shall, in its good faith
discretion, adjust the amount of Unregistered Settlement Shares to be delivered
to Dealer hereunder in a commercially reasonable manner to reflect the fact that
such Unregistered Settlement Shares may not be freely returned to securities
lenders by Dealer and may only be saleable by Dealer at a discount to reflect
the lack of liquidity in Unregistered Settlement Shares.

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