Exhibit 10.1

 

EXECUTION VERSION

 

BASE CAPPED CALL OPTION
 TRANSACTION CONFIRMATION

 

	
Date:
    	
September   23, 2014
    
	
 
    	
 
    
	
To:
    	
TESARO,   Inc. (“Counterparty”)
    
	
 
    	
 
    
	
Telefax   No.:
    	
xxx.xxx.xxxx
    
	
 
    	
 
    
	
Attention:
    	
Tim   Pearson, Executive Vice President and Chief Financial Officer
    
	
 
    	
 
    
	
From:
    	
Citibank,   N.A. (“Dealer”)
    
	
 
    	
 
    
	
Telefax   No.:
    	
(212)   723-8328
    


 

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 between you and us.  This Confirmation supplements, forms a part of, and is subject to the Master Terms and Conditions for Capped Call Option Transactions dated as of September 23, 2014 (as amended from time to time, the “Master Confirmation”) between you and us.

 

1.                                      The definitions and provisions contained in the Definitions (as such term is defined in the Master Confirmation) and in the Master Confirmation are incorporated into this Confirmation.  In the event of any inconsistency between those definitions and provisions and this Confirmation, this Confirmation will govern.

 

2.                                      The particular Transaction to which this Confirmation relates is entered into as part of an integrated hedging transaction of the Convertible Notes pursuant to the provisions of Treasury Regulation Section 1.1275-6.

 

3.                                      The particular Transaction to which this Confirmation relates shall have the following terms:

 

	
Trade   Date:
    	
 
    	
September   23, 2014
    
	
 
    	
 
    	
 
    
	
Effective   Date:
    	
 
    	
The   closing date of the initial issuance of the Convertible Notes.
    
	
 
    	
 
    	
 
    
	
Premium:
    	
 
    	
As   set forth in Schedule 1 hereto.
    
	
 
    	
 
    	
 
    
	
Premium   Payment Date:
    	
 
    	
The   Effective Date
    
	
 
    	
 
    	
 
    
	
Convertible   Notes:
    	
 
    	
3.0%   Senior Convertible Notes due 2021, offered pursuant to a Prospectus   Supplement dated as of September 23, 2014 and issued by Counterparty pursuant   to the Indenture.
    
	
 
    	
 
    	
 
    
	
Number   of Units:
    	
 
    	
The   number of Convertible Notes in denominations of USD 1,000 principal amount to   be issued by Counterparty on the closing date for the initial issuance of the   Convertible Notes,
    


 

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excluding   any Convertible Notes that may be purchased by the Underwriters upon exercise   of their option pursuant to Section 2(b) of the Underwriting Agreement that   are issued on such date (the “Relevant Convertible Notes”).  For the avoidance of doubt, the Number of   Units shall be reduced by any Units that are exercised.
    
	
 
    	
 
    	
 
    
	
Number   of Exercised Units:
    	
 
    	
For   any Conversion Date, a number of Units equal to the lesser of (i)  the   number of Convertible Notes in denominations of USD1,000 principal amount   satisfying all of the requirements for conversion on such Conversion Date in   accordance with the terms of the Indenture and (ii) the Number of Units   on such Conversion Date.
    
	
 
    	
 
    	
 
    
	
Strike   Price:
    	
 
    	
As   of any date, an amount in USD equal to USD 1,000 divided by the Unit   Entitlement.
    
	
 
    	
 
    	
 
    
	
Cap   Price:
    	
 
    	
As   set forth in Schedule 1 hereto.
    
	
 
    	
 
    	
 
    
	
Applicable   Percentage:
    	
 
    	
60.0%
    
	
 
    	
 
    	
 
    
	
Number   of Shares:
    	
 
    	
The   product of the Applicable Percentage, the Number of Units and the Unit   Entitlement.
    
	
 
    	
 
    	
 
    
	
Expiration   Date:
    	
 
    	
The   earlier of (i) the last day on which any Convertible Notes remain outstanding   and (ii) the second “Scheduled Trading Day” (as defined in the Indenture)   immediately preceding the “Maturity Date” (as defined in the Indenture).
    
	
 
    	
 
    	
 
    
	
Unit   Entitlement:
    	
 
    	
As   of any date, a number of Shares per Unit equal to the Conversion Rate   (determined by the Calculation Agent in accordance with the Indenture, except   without regard to any adjustments to the Conversion Rate pursuant to the   Excluded Provisions of the Indenture).
    
	
 
    	
 
    	
 
    
	
Conversion   Rate:
    	
 
    	
As   defined in the Indenture.
    
	
 
    	
 
    	
 
    
	
Indenture:
    	
 
    	
That   certain Base Indenture to be dated as of September 29, 2014 by and between   Counterparty and U.S. Bank National Association, as trustee (the “Trustee”),   pursuant to which the Convertible Notes are to be issued, as   supplemented by a Supplemental Indenture thereto to be dated as of September   29, 2014 (the “Supplemental Indenture”).
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
The   parties acknowledge that references to the Indenture or sections of the Supplemental   Indenture herein are based on the Base Indenture in effect on the date of   this Confirmation and the draft of the Supplemental Indenture last reviewed   by the Dealer as of the date of this Confirmation. If the Supplemental   Indenture as executed differs from such draft of the
    


 

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Supplemental   Indenture, the parties shall amend this Confirmation and the Master   Confirmation in good faith to preserve the intent of the parties. References   to the Indenture or sections of the Supplemental Indenture herein or in the   Master Confirmation, subject to the foregoing, are references to the   Indenture or sections of the Supplemental Indenture as in effect on the date   of the execution of the Supplemental Indenture (the “Original Indenture”);   provided that if the Original Indenture is amended following such date   pursuant to the Merger Provision of the Indenture (any such amendment, a “Merger   Amendment”), (A) as long as the Calculation Agent determines that   such Merger Amendment appropriately adjusts the terms of the Convertible   Notes in a commercially reasonable manner to account for the relevant Merger   Event in compliance with the Merger Provision, such references shall be   deemed to refer to the Original Indenture as so amended, and   (B) otherwise, (1) such references shall be deemed to refer to the   Original Indenture as if it had been amended to appropriately adjust the   terms of the Convertible Notes to account for the relevant Merger Event in   compliance with the Merger Provision, as determined by the Calculation Agent   in a commercially reasonable manner and (2) with respect to any exercise   of Units thereafter, the Calculation Agent shall determine the applicable   Settlement Date and Delivery Obligation pursuant to the Master Confirmation   and this Confirmation, except that in making such determinations the   Calculation Agent shall refer to the relevant provisions of the Indenture as   deemed amended pursuant to sub-clause (1) above.  If the Indenture is amended following such   date other than pursuant to the Merger Provision of the Indenture and other   than any amendment pursuant to Section 8.01(i) of the Indenture that, as   determined by the Calculation Agent, conforms the Indenture to the   description of the Convertible Notes in the preliminary prospectus supplement   related to the Convertible Notes, as supplemented by the pricing term sheet   related to the Convertible Notes, without prejudice to the provisions set   forth in Section 11(e) of the Master Confirmation, (x) such amendment   shall be disregarded for purposes of the Transaction unless the parties   otherwise agree in writing and (y) with respect to any exercise of Units   thereafter, the Calculation Agent shall determine the Settlement Date and   Delivery Obligation pursuant to the Master Confirmation and this   Confirmation, except that in making such determinations, the Calculation   Agent shall refer to the relevant provisions of the Indenture without giving   effect to such amendment.
    
	
 
    	
 
    	
 
    
	
Settlement   Provision:
    	
 
    	
Section   4.03 of the Supplemental Indenture
    
	
 
    	
 
    	
 
    
	
Excluded   Provisions:
    	
 
    	
The   Make-whole Provision and Section 4.05(b) of the Supplemental Indenture
    


 

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Make-whole   Provision:
    	
 
    	
Section   4.06 of the Supplemental Indenture
    
	
 
    	
 
    	
 
    
	
Conversion   Rate Adjustment Fallback Provisions:
    	
 
    	
The   second sentence of Section 4.04(c) and the second sentence of Section 4.04(d)   of the Supplemental Indenture
    
	
 
    	
 
    	
 
    
	
Adjustment   of Prices Provision:
    	
 
    	
Section   4.05(a) of the Supplemental Indenture
    
	
 
    	
 
    	
 
    
	
Adjustment   of Shares Provision:
    	
 
    	
Section   4.04(f) of the Supplemental Indenture
    
	
 
    	
 
    	
 
    
	
Dilution   Provision:
    	
 
    	
The   Adjustment of Shares Provision, the Adjustment of Prices Provision and   Sections 4.04(a) through 4.04(e) of the Supplemental Indenture
    
	
 
    	
 
    	
 
    
	
Merger   Provision:
    	
 
    	
Section   4.07(a) of the Supplemental Indenture
    
	
 
    	
 
    	
 
    
	
Tender   Offer Provision:
    	
 
    	
Section   4.04(e) of the Supplemental Indenture
    
	
 
    	
 
    	
 
    
	
Cut-Off   Date:
    	
 
    	
The   45th “Scheduled Trading Day” (as defined in the Indenture) immediately   preceding the “Maturity Date” (as defined in the Indenture).
    
	
 
    	
 
    	
 
    
	
Affected   Portion:
    	
 
    	
With   respect to any Early Conversion Event, a number of Units equal to the lesser   of (i) the number of Convertible Notes in denominations of USD 1,000   principal amount converted on the relevant Conversion Date and (ii) the   Number of Units as of the relevant Early Termination Date.
    
	
 
    	
 
    	
 
    
	
Early   Unwind Date:
    	
 
    	
September   29, 2014, or such later date as agreed by the parties hereto.
    


 

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4.                                      Counterparty hereby agrees (a) to check this Confirmation promptly upon receipt so that errors or discrepancies can be promptly identified and rectified and (b) to confirm that the foregoing correctly sets forth the terms of the agreement between us with respect to the particular Transaction to which this Confirmation relates, by manually signing this Confirmation and providing any other information requested herein or in the Master Confirmation and immediately returning an executed copy to Confirmation Unit via 212-615-8985.  Hard copies should be returned to Citibank, N.A., 333 West 34th Street, 2nd Floor, New York, New York 10001, Attention:  Confirmation Unit.

 

	
 
    	
 
    	
Yours   sincerely,
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
CITIBANK,   N.A.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   Herman Hirsch
    
	
 
    	
 
    	
 
    	
Name:
    	
Herman   Hirsch
    
	
 
    	
 
    	
 
    	
Title:
    	
Authorized   Representative
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Confirmed   as of the
    	
 
    	
 
    
	
date   first above written:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
TESARO,   INC.
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/   Timothy R. Pearson
    	
 
    	
 
    
	
 
    	
Name:
    	
Timothy   R. Pearson
    	
 
    	
 
    
	
 
    	
Title:
    	
EVP   and Chief Financial Officer
    	
 
    	
 
    


 

[TSRO – Base Capped Call Confirmation]

 











 

SCHEDULE 1

 

	
Premium:
    	
USD10,867,500.00
    
	
 
    	
 
    
	
Cap   Price:
    	
USD45.5438