Document:

Exhibit 10.2

 

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:
    	
Deutsche   Bank AG, London Branch (“Dealer”)
    

 

Transaction Reference Number:  600545

 

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:
    	
 
    	
3.00%   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
    

 

A-1

 

	
 
    	
 
    	
closing   date for the initial issuance of the Convertible Notes, 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:
    	
 
    	
40.0%
    
	
 
    	
 
    	
 
    
	
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
    

 

A-2

 

	
 
    	
 
    	
Indenture   as executed differs from such draft of the 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
    

 

A-3

 

	
Excluded   Provisions:
    	
 
    	
The   Make-whole Provision and Section 4.05(b) of the Supplemental   Indenture
    
	
 
    	
 
    	
 
    
	
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.
    

 

A-4

 

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 Dealer.

 

	
 
    	
Yours   sincerely,
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
DEUTSCHE BANK AG, LONDON BRANCH
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Michael Sanderson
    
	
 
    	
 
    	
Name:
    	
Michael   Sanderson
    
	
 
    	
 
    	
Title:
    	
Attorney   in Fact
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Lars Kestner
    
	
 
    	
 
    	
Name:
    	
Lars   Kestner
    
	
 
    	
 
    	
Title:
    	
Attorney   in Fact
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
DEUTSCHE   BANK SECURITIES INC.,
    
	
 
    	
acting   solely as Agent in connection with the Transaction
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Michael Sanderson
    
	
 
    	
 
    	
Name:
    	
Michael   Sanderson
    
	
 
    	
 
    	
Title:
    	
Managing   Director
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Lars Kestner
    
	
 
    	
 
    	
Name:
    	
Lars   Kestner
    
	
 
    	
 
    	
Title:
    	
Managing   Director
    
					

 

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:                                           USD7,245,000

 

Cap Price:                                        USD45.5438Exhibit 10.3

 

EXECUTION VERSION

 

ADDITIONAL CAPPED CALL OPTION
 TRANSACTION CONFIRMATION

 

	
Date:
    	
September 25,   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 25,   2014
    
	
 
    	
 
    	
 
    
	
Effective   Date:
    	
 
    	
The   closing date of the Convertible Notes purchased by the Underwriters upon   exercise, on the date hereof, of their option pursuant to   Section 2(b) of the Underwriting Agreement.
    
	
 
    	
 
    	
 
    
	
Premium:
    	
 
    	
As   set forth in Schedule 1 hereto.
    
	
 
    	
 
    	
 
    
	
Premium   Payment Date:
    	
 
    	
The   Effective Date
    
	
 
    	
 
    	
 
    
	
Convertible   Notes:
    	
 
    	
3.00%   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   purchased by the Underwriters upon exercise, on the date hereof, of their   option pursuant to Section
    

 

A-1

 

	
 
    	
 
    	
2(b) of   the Underwriting Agreement (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) (a) 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 minus (b) the “Number of Exercised Units” for such   Conversion Date under the Transaction evidenced by the Master Confirmation as   supplemented by the Base Capped Call Option Transaction Confirmation between   Dealer and Counterparty, dated as of the date of the Master Confirmation (the   “Base Call Option Confirmation”) 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
    

 

A-2

 

	
 
    	
 
    	
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 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
    

 

A-3

 

	
Excluded   Provisions:
    	
 
    	
The   Make-whole Provision and Section 4.05(b) of the Supplemental   Indenture
    
	
 
    	
 
    	
 
    
	
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) (a) the number of Convertible Notes in denominations of USD   1,000 principal amount converted on the relevant Conversion Date minus (b) the “Affected Portion” (as defined in the   Base Call Option Confirmation) 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.
    

 

A-4

 

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 – Additional Capped Call Confirmation]

 

 

SCHEDULE 1

 

Premium:                                           USD1,630,125.00

 

Cap Price:                                        USD45.5438

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