Attached files
Pursuant to 17 §C.F.R.
240.24b-2, confidential information (indicated as [***])
has been omitted and has been filed separately
with the Securities and Exchange Commission pursuant to a Confidential Treatment Application filed
with the Commission.
Exhibit 10.4
EXECUTION VERSION
GOLDMAN,
SACHS & CO. | 200 WEST STREET | NEW YORK, NEW YORK 10282-2198 | TEL: 212-902-1000
Opening Transaction
To: |
Dresser-Rand Group Inc. | |
West8 Tower, Suite 1000 | ||
10205 Westheimer Rd. | ||
Houston, Texas 77042 | ||
A/C: |
042401364 | |
From: |
Goldman, Sachs & Co. | |
Re: |
Accelerated Stock Buyback | |
Ref. No: |
As provided in the Supplemental Confirmation | |
Date: |
March 22, 2011 |
This master confirmation (this Master Confirmation), dated as of March 22, 2011 is intended
to set forth certain terms and provisions of certain Transactions (each, a Transaction) entered
into from time to time between Goldman, Sachs & Co. (GS&Co.) and Dresser-Rand Group Inc.
(Counterparty). This Master Confirmation, taken alone, is neither a commitment by either party
to enter into any Transaction nor evidence of a Transaction. The additional terms of any
particular Transaction shall be set forth in a Supplemental Confirmation in the form of Schedule A
hereto (a Supplemental Confirmation), which shall reference this Master Confirmation and
supplement, form a part of, and be subject to this Master Confirmation. This Master Confirmation
and each Supplemental Confirmation together shall constitute a Confirmation as referred to in the
Agreement specified below.
The definitions and provisions contained in the 2002 ISDA Equity Derivatives Definitions (the
Equity Definitions), as published by the International Swaps and Derivatives Association, Inc.,
are incorporated into this Master Confirmation. This Master Confirmation and each Supplemental
Confirmation evidence a complete binding agreement between Counterparty and GS&Co. as to the
subject matter and terms of each Transaction to which this Master Confirmation and such
Supplemental Confirmation relate and shall supersede all prior or contemporaneous written or oral
communications with respect thereto.
This Master Confirmation and each Supplemental Confirmation supplement, form a part of, and
are subject to an agreement in the form of the 1992 ISDA Master Agreement (Multicurrency-Cross
Border) (the Agreement) as if GS&Co. and Counterparty had executed the Agreement on the date of
this Master Confirmation (but without any Schedule except for (i) the election of Loss and Second
Method, New York law (without reference to its choice of laws doctrine other than Title 14 of
Article 5 of the New York General Obligations Law) as the governing law and US Dollars (USD) as
the Termination Currency, (ii) the election that subparagraph (ii) of Section 2(c) will not apply
to the Transactions, (iii) the replacement of the word third in the last line of Section 5(a)(i)
with the word first and (iv) the election that the Cross Default provisions of Section 5(a)(vi)
shall apply to GS&Co. and to Counterparty, with a Threshold Amount of USD 50 million in each
case; provided that (i) the phrase , or becoming capable at such time of being declared, shall be
deleted from clause (1) of such Section 5(a)(vi); and (ii) the following language shall be added to
the end thereof: Notwithstanding the foregoing, a default under subsection (2) hereof shall not
constitute an Event of Default if (i) the default was caused solely by error or omission of an
administrative or operational nature; (ii) funds were available to enable the party to make the
payment when
due; and (iii) the payment is made within two Local Business Days of such partys receipt of
written notice of its failure to pay.).
The Transactions shall be the sole Transactions under the Agreement. If there exists any ISDA
Master Agreement between GS&Co. and Counterparty or any confirmation or other agreement between
GS&Co. and Counterparty pursuant to which an ISDA Master Agreement is deemed to exist between
GS&Co. and Counterparty, then notwithstanding anything to the contrary in such ISDA Master
Agreement, such confirmation or agreement or any other agreement to which GS&Co. and Counterparty
are parties, the Transactions shall not be considered Transactions under, or otherwise governed by,
such existing or deemed ISDA Master Agreement.
All provisions contained or incorporated by reference in the Agreement shall govern this
Master Confirmation and each Supplemental Confirmation except as expressly modified herein or in
the related Supplemental Confirmation.
If, in relation to any Transaction to which this Master Confirmation and a Supplemental
Confirmation relate, there is any inconsistency between the Agreement, this Master Confirmation,
any Supplemental Confirmation and the Equity Definitions, the following will prevail for purposes
of such Transaction in the order of precedence indicated: (i) such Supplemental Confirmation; (ii)
this Master Confirmation; (iii) the Agreement; and (iv) the Equity Definitions.
1. Each Transaction constitutes a Share Forward Transaction for the purposes of the Equity
Definitions. Set forth below are the terms and conditions that, together with the terms and
conditions set forth in the Supplemental Confirmation relating to any Transaction, shall govern
such Transaction.
General Terms: |
||
Trade Date: |
For each Transaction, as set forth in the related Supplemental Confirmation. | |
Buyer: |
Counterparty | |
Seller: |
GS&Co. | |
Shares: |
Common stock, par value $0.01 per share, of Counterparty (Ticker: DRC) | |
Exchange: |
New York Stock Exchange | |
Related Exchange(s): |
All Exchanges. | |
Prepayment\Variable
Obligation: |
Applicable | |
Prepayment Amount: |
For each Transaction, as set forth in the related Supplemental Confirmation. | |
Prepayment Date: |
For each Transaction, as set forth in the related Supplemental Confirmation. | |
Valuation: |
||
VWAP Price: |
For any Exchange Business Day, the New York 10b-18 Volume Weighted Average Price per Share for the regular trading session (including any extensions thereof) of the Exchange on such Exchange Business Day (without regard to pre-open or after hours trading outside of such regular trading session for such Exchange Business Day), as published by Bloomberg at 4:15 p.m. New York time (or 15 minutes following the end of any extension of the regular trading session) on such Exchange Business Day, on Bloomberg page DRC.N <Equity> AQR_SEC (or any successor thereto), or if such price is not so reported on such Exchange Business Day for any reason or is, in the Calculation Agents reasonable discretion, erroneous, such VWAP Price shall be as reasonably determined by the Calculation Agent. For purposes of calculating the VWAP Price, the Calculation Agent will include only those trades that are reported during the period of time during which Counterparty could purchase its own shares under Rule 10b-18(b)(2) and are effected pursuant to the conditions of Rule 10b-18(b)(3), each under the Securities Exchange Act of 1934, as amended (the Exchange Act) (such trades, Rule 10b-18 eligible transactions). |
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Forward Price: |
The average of the VWAP Prices for the Exchange Business Days in the Calculation Period, subject to Valuation Disruption below. | |
Forward Price
Adjustment Amount: |
For each Transaction, as set forth in the related Supplemental Confirmation. | |
Calculation Period: |
The period from and including the Calculation Period Start Date to and including the Termination Date. | |
Calculation Period Start Date: |
For each Transaction, as set forth in the related Supplemental Confirmation. | |
Termination Date: |
The Scheduled Termination Date; provided that GS&Co. shall have the right to designate any Exchange Business Day on or after the First Acceleration Date to be the Termination Date (the Accelerated Termination Date) by delivering notice to Counterparty of any such designation prior to 5:00 p.m. New York City time on the Exchange Business Day immediately following the designated Accelerated Termination Date. | |
Scheduled Termination Date: |
For each Transaction, as set forth in the related Supplemental Confirmation, subject to postponement as provided in Valuation Disruption below. | |
First Acceleration Date: |
For each Transaction, as set forth in the related Supplemental Confirmation. | |
Valuation Disruption: |
The definition of Market Disruption Event in Section 6.3(a) of the Equity Definitions is hereby amended by deleting the words at any time during the one-hour period that ends at the relevant Valuation Time, Latest Exercise Time, Knock-in Valuation Time or Knock-out Valuation Time, as the case may be and inserting the words at any time on any Scheduled Trading Day during the Calculation Period or Settlement Valuation Period after the word material, in the third line thereof. | |
Section 6.3(d) of the Equity Definitions is hereby amended by deleting the remainder of the provision following the term Scheduled Closing Time in the fourth line thereof. | ||
Notwithstanding anything to the contrary in the Equity Definitions, to the extent that a Disrupted Day occurs (i) in the Calculation Period, the Calculation Agent may, in its good faith and commercially reasonable discretion, postpone the Scheduled Termination Date by no more than such number of Disrupted Days, or (ii) in the Settlement Valuation Period, the Calculation Agent may extend the Settlement Valuation Period by no more than such number of Disrupted Days. If any such Disrupted Day is a Disrupted Day because of a Market Disruption Event (or a deemed Market Disruption Event as provided herein), the Calculation Agent shall determine whether (i) such Disrupted Day is a Disrupted Day in full, in which case the VWAP Price for such Disrupted Day shall not be included for purposes of determining the Forward Price or the Settlement Price, as the case may be, or (ii) such Disrupted Day is a Disrupted Day only in part, in which case the VWAP Price for such Disrupted Day shall be determined by the Calculation Agent based on Rule 10b-18 eligible transactions in the Shares on such Disrupted Day effected before the relevant Market Disruption Event occurred and/or after the relevant Market Disruption Event ended, and the weighting of the VWAP Price for the relevant Exchange Business Days during | ||
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the Calculation Period or the Settlement Valuation Period, as the case may be, shall be adjusted in a commercially reasonable manner by the Calculation Agent for purposes of determining the Forward Price | ||
or the Settlement Price, as the case may be, with such adjustments based on, among other factors, the duration of any Market Disruption Event and the volume, historical trading patterns and price of the Shares. Any Scheduled Trading Day on which the Exchange is scheduled to close prior to its normal close of trading shall be deemed to be a Disrupted Day in full. | ||
If a Disrupted Day occurs during the Calculation Period or the Settlement Valuation Period, as the case may be, and each of the nine immediately following Scheduled Trading Days is a Disrupted Day, then the Calculation Agent, in its good faith and commercially reasonable discretion, may deem such ninth Scheduled Trading Day to be an Exchange Business Day that is not a Disrupted Day and determine the VWAP Price for such ninth Scheduled Trading Day using its good faith and commercially reasonable | ||
estimate of the value of the Shares on such ninth Scheduled Trading Day based on the volume, historical trading patterns and price of the Shares and such other factors as it deems appropriate. | ||
Settlement Terms: |
||
Settlement Procedures: |
If the Number of Shares to be Delivered is positive, Physical Settlement shall be applicable; provided that GS&Co. does not, and shall not, make the agreement or the representations set forth in Section 9.11 of the Equity Definitions related to the restrictions imposed by applicable securities laws with respect to any Shares delivered by GS&Co. to Counterparty under any Transaction. If the Number of Shares to be Delivered is negative, then the Counterparty Settlement Provisions in Annex A shall apply. | |
Number of Shares
to be Delivered: |
A number of Shares equal to (x)(a) the Prepayment Amount divided by (b)(i) the Forward Price minus (ii) the Forward Price Adjustment Amount minus (y) the number of Initial Shares. | |
Excess Dividend Amount: |
For the avoidance of doubt, all references to the Excess Dividend Amount shall be deleted from Section 9.2(a)(iii) of the Equity Definitions. | |
Settlement Date: |
If the Number of Shares to be Delivered is positive, the date that is one Settlement Cycle immediately following the Termination Date. | |
Settlement Currency: |
USD | |
Initial Share Delivery: |
GS&Co. shall deliver a number of Shares equal to the Initial Shares to Counterparty on the Initial Share Delivery Date in accordance with Section 9.4 of the Equity Definitions, with the Initial Share Delivery Date deemed to be a Settlement Date for purposes of such Section 9.4. | |
Initial Share Delivery Date: |
For each Transaction, as set forth in the related Supplemental Confirmation. | |
Initial Shares: |
For each Transaction, as set forth in the related Supplemental Confirmation. | |
Share Adjustments: |
||
Potential Adjustment Event: |
Notwithstanding anything to the contrary in Section 11.2(e) of the Equity Definitions, an Extraordinary Dividend shall not constitute a Potential Adjustment Event. | |
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It shall constitute an additional Potential Adjustment Event if the Scheduled Termination Date for any Transaction is postponed pursuant to Valuation Disruption above, in which case the Calculation Agent may, in its commercially reasonable discretion, adjust any relevant terms of any such Transaction to the extent necessary to preserve as nearly as practicable the fair value of such Transaction to GS&Co. prior to such postponement. | ||
Extraordinary Dividend: |
Any dividend or distribution on the Shares (other than 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). | |
Method of Adjustment: |
Calculation Agent Adjustment | |
Extraordinary Events: |
||
Consequences of
Merger Events: |
||
(a) Share-for-Share: |
Modified Calculation Agent Adjustment | |
(b) Share-for-Other: |
Cancellation and Payment | |
(c) Share-for-Combined: |
Component Adjustment | |
Tender Offer: |
Applicable; provided that (i) Section 12.1(l) of the Equity Definitions shall be amended (x) by deleting the parenthetical in the fifth line thereof, (y) by replacing that in the fifth line thereof with whether or not such announcement and (z) by adding immediately after the words Tender Offer in the fifth line thereof , and any publicly announced change or amendment to such an announcement (including the announcement of an abandonment of such intention) and (ii) Sections 12.3(a) and 12.3(d) of the Equity Definitions shall each be amended by replacing each occurrence of the words Tender Offer Date by Announcement Date. | |
Consequences of
Tender Offers: |
||
(a) Share-for-Share: |
Modified Calculation Agent Adjustment or Cancellation and Payment, at the election of GS&Co. | |
(b) Share-for-Other: |
Modified Calculation Agent Adjustment or Cancellation and Payment, at the election of GS&Co. | |
(c) Share-for-Combined: |
Modified Calculation Agent Adjustment or Cancellation and Payment, at the election of GS&Co. | |
Nationalization,
Insolvency or Delisting: |
Cancellation and Payment; provided that in addition to the provisions of Section 12.6(a)(iii) of the Equity Definitions, it shall also constitute a Delisting if the Exchange is located in the United States and the Shares are not immediately re-listed, re-traded or re-quoted on any of the New York Stock Exchange, the American Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or their respective successors); if the Shares are immediately re-listed, re-traded or re-quoted on any such exchange or quotation system, such exchange or quotation system shall be deemed to be the Exchange. |
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Additional Disruption Events: |
||
(a) Change in Law: |
Applicable; provided that clause (Y) of Section 12.9(a)(ii) of the Equity Definitions shall not be applicable; provided further that the parties agree that, for the avoidance of doubt, for purposes of Section 12.9(a)(ii) of the Equity Definitions, any applicable law or regulation shall include the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, any rules and regulations promulgated thereunder and any similar law or regulation, 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 and the consequences specified in Section 12.9(b)(i) of the Equity Definitions shall apply to any Change in Law arising from any such act, rule or regulation. | |
(b) Failure to Deliver: |
Applicable | |
(c) Insolvency Filing: |
Applicable | |
(d) Loss of Stock Borrow: |
Applicable | |
Maximum Stock Loan Rate: |
200 basis points per annum | |
(e) Increased Cost of Stock Borrow: |
Applicable | |
Initial Stock Loan Rate: |
37.5 basis points per annum | |
Hedging Party: |
GS&Co. | |
Determining Party: |
GS&Co. | |
Additional Termination Event(s): |
The declaration by the Issuer of any Extraordinary Dividend, the ex-dividend date for which occurs or is scheduled to occur during the Relevant Dividend Period, will constitute an Additional Termination Event, with Counterparty as the sole Affected Party and all Transactions hereunder as the Affected Transactions. | |
Relevant Dividend Period: |
The period from and including the Calculation Period Start Date to and including the Relevant Dividend Period End Date. | |
Relevant Dividend Period End Date: |
If the Number of Shares to be Delivered is negative, the last day of the Settlement Valuation Period; otherwise, the Termination Date. | |
Non-Reliance/Agreements and
Acknowledgements Regarding
Hedging Activities/Additional
Acknowledgements: |
Applicable | |
Transfer: |
Notwithstanding anything to the contrary in the Agreement, GS&Co. may assign, transfer and set over all rights, title and interest, powers, privileges and remedies of GS&Co. under any Transaction, in whole or in part, to an affiliate of GS&Co. whose obligations are guaranteed by The Goldman Sachs Group, Inc. without the consent of Counterparty; provided that Counterparty will not, as a result of such transfer, be required under the Agreement or this Confirmation to (i) pay to the transferee or assignee an amount greater than the amount that it would have been required to pay to GS&Co. in the absence of such transfer or assignment or (ii) receive from the transferee or assignee an amount less than the amount that Counterparty would have received from GS&Co. in the absence of such transfer or assignment, in each case based on the circumstances in effect on the date of such transfer. |
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GS&Co. Payment Instructions: |
Chase Manhattan Bank New York For A/C Goldman, Sachs & Co. |
|
A/C #930-1-011483 | ||
ABA: 021-000021 | ||
Counterpartys Contact Details
for Purpose of Giving Notice: |
To be provided by Counterparty | |
GS&Co.s Contact Details for Purpose of Giving Notice: |
Goldman, Sachs & Co. 200 West Street |
|
New York, NY 10282-2198 | ||
Attention: Serge Marquie, Equity Capital Markets | ||
Telephone: 212-902-9779 | ||
Facsimile: 917-977-4253 | ||
Email: serge.marquie@gs.com | ||
With a copy to: | ||
Attention: Vijay Culas, Equity Capital Markets | ||
Equity Capital Markets | ||
Telephone: +1-212-902-6247 | ||
Facsimile: +1-212- 428-1898 | ||
Email: vijay.culas@gs.com | ||
And email notification to the following address: | ||
Eq-derivs-notifications@am.ibd.gs.com |
2. Calculation Agent. GS&Co. Following any determination or calculation by the
Calculation Agent hereunder, the Calculation Agent will, upon request, provide to Counterparty
promptly following such request a report (in a commonly used file format for the storage and
manipulation of financial data without disclosing GS&Co.s proprietary models or other information
that is proprietary or confidential) displaying in reasonable detail the basis for such
determination or calculation, as the case may be.
3. Additional Mutual Representations, Warranties and Covenants of Each Party. In addition
to the representations, warranties and covenants in the Agreement, each party represents, warrants
and covenants to the other party that:
(a) Eligible Contract Participant. It is an eligible contract participant, as
defined in the U.S. Commodity Exchange Act (as amended), and is entering into each Transaction
hereunder as principal (and not as agent or in any other capacity, fiduciary or otherwise) and not
for the benefit of any third party.
(b) Accredited Investor. Each party acknowledges that the offer and sale of each
Transaction to it is intended to be exempt from registration under the Securities Act of 1933, as
amended (the Securities Act), by virtue of Section 4(2) thereof. Accordingly, each party
represents and warrants to the other that (i) it has the financial ability to bear the economic
risk of its investment in each Transaction and is able to bear a total loss of its investment, (ii)
it is an accredited investor as that term is defined under Regulation D under the Securities Act
and (iii) the disposition of each Transaction is restricted under this Master Confirmation, the
Securities Act and state securities laws.
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4. Additional Representations, Warranties and Covenants of Counterparty. In addition to
the representations, warranties and covenants in the Agreement, Counterparty represents, warrants
and covenants to GS&Co. that:
(a) As of the Trade Date for each Transaction hereunder, it will not be engaged in an issuer
tender offer as such term is defined in Rule 13e-4 under the Exchange Act nor is it aware of any
third party tender offer with respect to the Shares within the meaning of Rule 13e-1 under the
Exchange Act.
(b) It is not entering into nor making any election with respect to any Transaction (i) on the
basis of, and is not aware of, any material non-public information with respect to the Shares, (ii)
in anticipation of, in connection with, or to facilitate, a distribution of its securities, a self
tender offer or a third-party tender offer in violation of the Exchange Act or (iii) to create
actual or apparent trading activity in the Shares (or any security convertible into or exchangeable
for the Shares) or to raise or depress or otherwise manipulate the price of the Shares (or any
security convertible into or exchangeable for the Shares) in violation of the Exchange Act.
(c) Each Transaction is being entered into pursuant to a publicly disclosed Share buy-back
program and its Board of Directors has approved the use of derivatives to effect the Share buy-back
program.
(d) Without limiting the generality of Section 13.1 of the Equity Definitions, Counterparty
acknowledges that neither GS&Co. nor any of its affiliates is making any representations or
warranties or taking any position or expressing any view with respect to the treatment of any
Transaction under any accounting standards including ASC Topic 260, Earnings Per Share, ASC Topic
815, Derivatives and Hedging, or ASC Topic 480, Distinguishing Liabilities from Equity and ASC
815-40, Derivatives and Hedging Contracts in Entitys Own Equity.
(e) As of the Trade Date for each Transaction hereunder, Counterparty is in compliance with
its reporting obligations under the Exchange Act and its most recent Annual Report on Form 10-K,
together with all reports subsequently filed by it pursuant to the Exchange Act, taken together and
as amended and supplemented to the date of this representation, do not, as of their respective
filing dates, contain any untrue statement of a material fact or omit 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;
(f) Counterparty shall report each Transaction to the extent required under the Exchange Act
and the rules and regulations thereunder.
(g) The Shares are not, and Counterparty will not cause the Shares to be, subject to a
restricted period (as defined in Regulation M promulgated under the Exchange Act) at any time
during any Regulation M Period (as defined below) for any Transaction unless Counterparty has
provided written notice to GS&Co. of such restricted period not later than the Scheduled Trading
Day immediately preceding the first day of such restricted period; Counterparty acknowledges that
any such notice may cause a Disrupted Day to occur pursuant to Section 5 below; accordingly,
Counterparty acknowledges that its delivery of such notice must comply with the standards set forth
in Section 6 below; Regulation M Period means, for any Transaction, (i) the Relevant Period (as
defined below) and (ii) the Settlement Valuation Period, if any, for such Transaction. Relevant
Period means, for any Transaction, the period commencing on the Calculation Period Start Date for
such Transaction and ending on the earlier of (i) the Scheduled Termination Date and (ii) the last
Additional Relevant Day (as specified in the related Supplemental Confirmation) for such
Transaction, or such earlier day as elected by GS&Co. and communicated to Counterparty on such day
(or, if later, the First Acceleration Date without regard to any acceleration thereof pursuant to
Special Provisions for Friendly Transaction Announcements below).
(h) As of the Trade Date, the Prepayment Date, the Initial Share Delivery Date, the Settlement
Date and the date of any Second Settlement, if any, for each Transaction, 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)) and Counterparty would be able to purchase a
number of Shares with a value equal to the Prepayment Amount in compliance with the laws of the
jurisdiction of Counterpartys incorporation.
(i) Counterparty is not and, after giving effect to any Transaction, will not be, required to
register as an investment company as such term is defined in the Investment Company Act of 1940,
as amended.
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(j) Counterparty has not and will not enter into agreements with respect to the Shares (or any
security convertible into or exchangeable for the Shares) similar to the Transactions described
herein where any initial hedge period, calculation period, relevant period or settlement valuation
period (each however defined) in such other transaction will overlap at any time (including as a
result of extensions in such initial hedge period, calculation period, relevant period or
settlement valuation period as provided in the relevant agreements) with any Relevant Period or, if
applicable, any Settlement Valuation Period under this Master Confirmation, except for any such
other agreements entered into with GS&Co. In the event that the initial hedge period, relevant
period, calculation period or settlement valuation period in any other similar transaction overlaps
with any Relevant Period or, if applicable, Settlement Valuation Period under this Master
Confirmation as a result of any postponement of the Scheduled Termination Date or extension of the
Settlement Valuation Period pursuant to Valuation Disruption above, Counterparty shall promptly
amend such transaction to avoid any such overlap.
5. Regulatory Disruption. In the event that GS&Co. concludes, in its good faith discretion
based on 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 GS&Co., but provided
that such policies or procedures are related to legal, regulatory or self-regulatory issues and are
generally applicable in similar situations and applied to any Transaction hereunder in a
non-discriminatory manner), for it to refrain from or decrease any market activity on any Scheduled
Trading Day or Days during the Calculation Period or, if applicable, the Settlement Valuation
Period, GS&Co. may by written notice to Counterparty elect to deem that a Market Disruption Event
has occurred and will be continuing on such Scheduled Trading Day or Days, subject to the other
provisions under Valuation Disruption in Section 1 above.
6. 10b5-1 Plan. Counterparty represents, warrants and covenants to GS&Co. that:
(a) Counterparty is entering into this Master Confirmation and each Transaction hereunder in
good faith and not as part of a plan or scheme to evade the prohibitions of Rule 10b5-1 under the
Exchange Act (Rule 10b5-1) or any other antifraud or anti-manipulation provisions of the federal
or applicable state securities laws and that it has not entered into or altered and will not enter
into or alter any corresponding or hedging transaction or position with respect to the Shares.
Counterparty acknowledges that it is the intent of the parties that each Transaction entered into
under this Master Confirmation comply with the requirements of paragraphs (c)(1)(i)(A) and (B) of
Rule 10b5-1 and each Transaction entered into under this Master Confirmation shall be interpreted
to comply with the requirements of Rule 10b5-1(c).
(b) Counterparty will not seek to control or influence GS&Co.s decision to make any
purchases or sales (within the meaning of Rule 10b5-1(c)(1)(i)(B)(3)) under any Transaction
entered into under this Master Confirmation, including, without limitation, GS&Co.s decision to
enter into any hedging transactions. Counterparty represents and warrants that it has consulted
with its own advisors as to the legal aspects of its adoption and implementation of this Master
Confirmation and each Supplemental Confirmation under Rule 10b5-1.
(c) Counterparty acknowledges and agrees that any amendment, modification, waiver or
termination of this Master Confirmation or the relevant Supplemental 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.
7. Counterparty Purchases. Counterparty (or any affiliated purchaser as defined in Rule
10b-18 under the Exchange Act (Rule 10b-18)) shall not, without the prior written consent of
GS&Co., directly or indirectly purchase any Shares (including by means of a derivative instrument),
listed contracts on the Shares or securities that are convertible into, or exchangeable or
exercisable for Shares (including, without limitation, any Rule 10b-18 purchases of blocks (as
defined in Rule 10b-18)) during any Relevant Period or, if applicable, Settlement Valuation Period,
except through GS&Co.; provided that the foregoing shall not (i) limit Counterpartys ability to
withhold Shares or to have Shares delivered by Counterpartys employees or directors to
Counterparty in privately negotiated transactions to cover tax liabilities associated with equity
transactions relating to a plan (as defined in Rule 10b-18) or (ii) otherwise restrict
Counterpartys ability to repurchase Shares under privately negotiated transactions with any of its
employees, officers, directors or affiliates, so long as any repurchase described in this clause
(ii) does not constitute a Rule 10b-18 purchase (as defined in Rule 10b-18).
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8. Special Provisions for Merger Transactions. Notwithstanding anything to the contrary
herein or in the Equity Definitions:
(a) Counterparty agrees that it:
(i) will not during the period commencing on the Trade Date through the end of the
Relevant Period or, if applicable, the Settlement Valuation Period for any Transaction make,
or, to the extent it is within its reasonable control, permit to be made, any public
announcement (as defined in Rule 165(f) under the Securities Act) of any Merger Transaction
or potential Merger Transaction (a Merger Announcement) unless such public announcement is
made prior to the opening or after the close of the regular trading session on the Exchange
for the Shares;
(ii) shall promptly (but in any event prior to the next opening of the regular trading
session on the Exchange) notify GS&Co. following any such announcement that such
announcement has been made; and
(iii) shall promptly (but in any event prior to the next opening of the regular trading
session on the Exchange) provide GS&Co. with written notice specifying (i) Counterpartys
average daily Rule 10b-18 Purchases (as defined in Rule 10b-18) during the three full
calendar months immediately preceding the announcement date of any Merger Transaction or
potential Merger Transaction that were not effected through GS&Co. or its affiliates and
(ii) the number of Shares purchased pursuant to the proviso in Rule 10b-18(b)(4) under the
Exchange Act for the three full calendar months preceding the announcement date of any
Merger Transaction or potential Merger Transaction. Such written notice shall be deemed to
be a certification by Counterparty to GS&Co. that such information is true and correct. In
addition, Counterparty shall promptly notify GS&Co. 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 cause the terms of any Transaction to be
adjusted or such Transaction to be terminated; accordingly, Counterparty acknowledges that
its delivery of such notice must comply with the standards set forth in Section 6 above.
(b) If a Merger Announcement has been made, GS&Co. in its sole discretion may (i) make, in a
good faith and commercially reasonable manner, adjustments to the terms of any Transaction,
including, without limitation, the Scheduled Termination Date or the Forward Price Adjustment
Amount, and/or suspend the Calculation Period and/or any Settlement Valuation Period or (ii)
terminate any Transaction by prior written notice to Counterparty, in which case such Transaction
will be cancelled as of the date designated by GS&Co. in such notice and a Cancellation Amount (as
determined by GS&Co. as the Determining Party) shall be paid by one party to the other.
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.
9. Special Provisions for Friendly Transaction Announcements. (a) If a Friendly
Transaction Announcement occurs after the Trade Date and on or prior to the date that is one
Settlement Cycle immediately following the Termination Date for any Transaction (such date, the
First Settlement Date), then the Number of Shares to be Delivered for such Transaction shall be
determined as if clause (x)(b)(ii) of the definition thereof were replaced with (b)(ii) the
Prorated Forward Price Adjustment Amount. If a Friendly Transaction Announcement occurs after the
Trade Date, but prior to the First Acceleration Date of any Transaction, the First Acceleration
Date shall be the date of such Friendly Transaction Announcement. If a Friendly Transaction
Announcement occurs after the First Settlement Date for any Transaction or any earlier date of
termination or cancellation of such Transaction pursuant to Section 6 of the Agreement or Article
12 of the Equity Definitions, then a second settlement of such Transaction (a Second Settlement)
shall occur (notwithstanding such earlier termination or cancellation) with a Number of Shares to
be Delivered equal to the lesser of (i) zero and (ii) (x) the Number of Shares to be Delivered
determined pursuant to the first sentence of this paragraph as if such Friendly Transaction
Announcement occurred prior to such First Settlement Date minus (y) the Number of Shares to be
Delivered determined pursuant to Section 1 of this Master Confirmation (provided that in the case
of a Second Settlement occurring after such an early termination or cancellation, a Number of
Shares to be Delivered shall not be determined and instead a Forward Cash Settlement Amount will be
determined as provided in Annex A). If the Number of Shares to be Delivered for any settlement of
any Transaction is a negative number, or if a Second Settlement is to occur pursuant to the
immediately preceding sentence, then the terms of the Counterparty Settlement Provisions in Annex A
shall apply.
10
(b) Friendly Transaction Announcement means (i) an Acquisition Transaction Announcement by
Counterparty or its board of directors prior to the First Settlement Date or any earlier date of
termination or cancellation of the relevant Transaction pursuant to Section 6 of the Agreement or
Article 12 of the Equity Definitions (such date, the Actual Termination Date), (ii)(A) an
announcement by Counterparty or its board of directors prior to the date three months following the
Scheduled Termination Date that an Acquisition Transaction that is the subject of an Acquisition
Transaction Announcement occurring prior to the Actual Termination Date has been approved, agreed
to, recommended by or otherwise consented to by Counterparty or its board of directors or (B)
consummation prior to the date three months following the Scheduled Termination Date of an
Acquisition Transaction that is the subject of an Acquisition Transaction Announcement occurring
prior to the Actual Termination Date, or (iii) where Counterparty or its board of directors has a
legal obligation to make a recommendation to its shareholders in respect of any such Acquisition
Transaction prior to the date three months following the Scheduled Termination Date, the absence of
a recommendation that its shareholders reject such transaction.
(c) Acquisition Transaction Announcement means (i) the announcement of an Acquisition
Transaction, (ii) an announcement that Counterparty or any of its subsidiaries has entered into an
agreement, a letter of intent or an understanding designed to result in an Acquisition Transaction,
(iii) the announcement of the intention to solicit or enter into, or to explore strategic
alternatives or other similar undertaking that may include (as stated in such announcement), an
Acquisition Transaction, or (iv) any other announcement that in the reasonable judgment of the
Calculation Agent is reasonably likely to result in an Acquisition Transaction. For the avoidance
of doubt, announcements as used in the definition of Acquisition Transaction Announcement refer to
any public announcement whether made by the Issuer or a third party.
(d) Acquisition Transaction means (i) any Merger Event (for purposes of this definition the
definition of Merger Event shall be read with the references therein to 100% being replaced by
25% and to 50% by 75% and without reference to the clause beginning immediately following the
definition of Reverse
Merger therein to the end of such definition), Tender Offer or Merger Transaction, (ii) the sale or
transfer of all or substantially all of the assets of Counterparty, (iii) a recapitalization,
reclassification, binding share exchange or other similar transaction with respect to Counterparty,
(iv) any acquisition by Counterparty or any of its subsidiaries where the aggregate consideration
transferable by Counterparty or its subsidiaries exceeds [***]% of the market
capitalization of Counterparty, (v) any lease, exchange, transfer, disposition (including by way of
spin-off or distribution) of assets (including any capital stock or other ownership interests in
subsidiaries) or other similar event by Counterparty or any of its subsidiaries where the aggregate
consideration transferable or receivable by or to Counterparty or its subsidiaries exceeds 25% of
the market capitalization of Counterparty and (vi) any transaction in which Counterparty or its
board of directors has a legal obligation to make a recommendation to its shareholders in respect
of such transaction (whether pursuant to Rule 14e-2 under the Exchange Act or otherwise).
(e) Prorated Forward Price Adjustment Amount means the Forward Price Adjustment Amount
multiplied by the Proration Fraction.
(f) Proration Fraction means the fraction (i) the numerator of which is the number of
Scheduled Trading Days during the period commencing on the Calculation Period Start Date and ending
on the date of any Friendly Transaction Announcement (or, in the case of a Friendly Transaction
Announcement of the type described in clause (ii) or clause (iii) of the definition thereof, the
date of the related Acquisition Transaction Announcement) (inclusive), and (ii) the denominator of
which is the number of Scheduled Trading Days during the period commencing on the Calculation
Period Start Date and ending on the Scheduled Termination Date (inclusive).
11
10. Acknowledgments. (a) The parties hereto intend for:
(i) each Transaction to be a securities contract as defined in Section 741(7) of the
Bankruptcy Code, a swap agreement as defined in Section 101(53B) of the Bankruptcy Code
and a forward contract as defined in Section 101(25) of the Bankruptcy Code, and the
parties hereto to be entitled to the protections afforded by, among other Sections, Sections
362(b)(6), 362(b)(17), 362(b)(27), 362(o), 546(e), 546(g), 546(j), 555, 556, 560 and 561 of
the Bankruptcy Code;
(ii) the Agreement to be a master netting agreement as defined in Section 101(38A) of
the Bankruptcy Code;
(iii) a partys right to liquidate, terminate or accelerate any Transaction, net out or
offset termination values or payment amounts, and to exercise any other remedies upon the
occurrence of any Event of Default or Termination Event under the Agreement with respect to
the other party or any Extraordinary Event that results in the termination or cancellation
of any Transaction to constitute a contractual right (as defined in the Bankruptcy Code);
and
(iv) all payments for, under or in connection with each Transaction, all payments for
the Shares (including, for the avoidance of doubt, payment of the Prepayment Amount) and the
transfer of such Shares to constitute settlement payments and transfers (as defined in
the Bankruptcy Code).
(b) Counterparty acknowledges that:
(i) during the term of any Transaction, GS&Co. 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 hedge position with respect to
such Transaction;
(ii) GS&Co. and its affiliates may also be active in the market for the Shares other than in
connection with hedging activities in relation to any Transaction;
(iii) GS&Co. shall make its own determination as to whether, when or in what manner any
hedging or market activities in Counterpartys securities shall be conducted and shall do so in a
manner that it deems appropriate to hedge its price and market risk with respect to the Forward
Price and the VWAP Price;
(iv) any market activities of GS&Co. 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 VWAP Price, each in
a manner that may be adverse to Counterparty; and
(v) each Transaction is a derivatives transaction in which it has granted GS&Co. an option;
GS&Co. may purchase shares for its own account at an average price that may be greater than, or
less than, the price paid by Counterparty under the terms of the related Transaction.
11. Credit Support Documents. The parties hereto acknowledge that no Transaction hereunder
is secured by any collateral that would otherwise secure the obligations of Counterparty herein or
pursuant to the Agreement.
12. Set-off. (a) The parties agree to amend Section 6 of the Agreement by adding a new
Section 6(f) thereto as follows:
(f) Upon the occurrence of an Event of Default or Termination
Event with respect to a party who is the Defaulting Party or the
Affected Party (X), the other party (Y) will have the right
(but not be obliged) without prior notice to X or any other person
to set-off or apply any obligation of X owed to Y (or any Affiliate
of Y) (whether or not matured or contingent and whether or not
arising under the Agreement, and regardless of the currency, place
of payment or booking office of the obligation) against any
obligation of Y (or any Affiliate of Y) owed to X (whether or not
matured or contingent and whether or not arising under the
Agreement, and regardless of the currency, place of payment or
booking office of the obligation). Y will give notice to the other
party of any set-off effected under this Section 6(f).
12
Amounts (or the relevant portion of such amounts) subject to
set-off may be converted by Y into the Termination Currency at the
rate of exchange at which such party would be able, acting in a
reasonable manner and in good faith, to purchase the relevant
amount of such currency. If any obligation is unascertained, Y may
in good faith estimate that obligation and set-off in respect of
the estimate, subject to the relevant party accounting to the other
when the obligation is ascertained. Nothing in this Section 6(f)
shall be effective to create a charge or other security interest.
This Section 6(f) shall be without prejudice and in addition to any
right of set-off, combination of accounts, lien or other right to
which any party is at any time otherwise entitled (whether by
operation of law, contract or otherwise).
(b) Notwithstanding anything to the contrary in the foregoing, GS&Co. agrees not to set off or
net amounts due from Counterparty with respect to any Transaction against amounts due from GS&Co.
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 GS&Co. rights, or the ability
to assert claims, that are senior to the rights and claims of common stockholders in the event of
Counterpartys bankruptcy.
13. Delivery of Shares. Notwithstanding anything to the contrary herein, GS&Co. 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.
14. Early Termination. In the event that (i) an Early Termination Date (whether as a
result of an Event of Default or a Termination Event) occurs or is designated with respect to any
Transaction (except as a result of a Merger Event in which the consideration or proceeds to be paid
to holders of Shares consists solely of cash) or (ii) the Transaction is cancelled or terminated
upon the occurrence of an Extraordinary Event or pursuant to Section 8(b) hereof, if either party
would owe any amount to the other party pursuant to Section 6(d)(ii) of the Agreement or any
Cancellation Amount pursuant to Article 12 of the Equity Definitions (any such amount, a Payment
Amount), then, in lieu of any payment of such Payment Amount, Counterparty may, no later than the
Early Termination Date or the date on which such Transaction is terminated or cancelled, elect to
deliver or for GS&Co. to deliver, as the case may be, to the other party a number of Shares (or, in
the case of a Merger Event, a number of units, each comprising the number or amount of the
securities or property that a hypothetical holder of one Share would receive in such Merger Event
(each such unit, an Alternative Delivery Unit and, the securities or property comprising such
unit, Alternative Delivery Property)) with a value equal to the Payment Amount, as determined by
the Calculation Agent (and the parties agree that, in making such determination of value, the
Calculation Agent may take into account a number of factors, including the market price of the
Shares or Alternative Delivery Property on the date of early termination and, if such delivery is
made by GS&Co., the prices at which GS&Co. purchases Shares or Alternative Delivery Property to
fulfill its delivery obligations under this Section 14); provided that in determining the
composition of any Alternative Delivery Unit, if the relevant Merger Event involves a choice of
consideration to be received by holders, such holder shall be deemed to have elected to receive the
maximum possible amount of cash. If such delivery is made by Counterparty, paragraphs 2 through 7
of Annex A shall apply as if such delivery were a settlement of the Transaction to which Net Share
Settlement applied, the Cash Settlement Payment Date were the Early Termination Date and the
Forward Cash Settlement Amount were zero (0) minus the Payment Amount owed by Counterparty.
13
15. Calculations and Payment Date upon Early Termination. The parties acknowledge and
agree that in calculating Loss pursuant to Section 6 of the Agreement GS&Co. may (but need not)
determine losses without reference to actual losses incurred but based on expected losses assuming
a commercially reasonable (including without limitation with regard to reasonable legal and
regulatory guidelines) risk bid were used to determine loss to avoid awaiting the delay associated
with closing out any hedge or related trading position in a commercially reasonable manner prior to
or sooner following the designation of an Early Termination Date. Notwithstanding anything to the
contrary herein or in the Equity Definitions, if Counterparty elects to receive Shares or
Alternative Delivery Property in accordance with Section 14, such Shares or Alternative Delivery
Property shall be delivered on a date selected by GS&Co as promptly as practicable.
16. Automatic Termination Provisions. Notwithstanding anything to the contrary in Section
6 of the Agreement, if a Termination Price is specified in any Supplemental Confirmation, then an
Additional Termination Event with Counterparty as the sole Affected Party and the Transaction to
which such Supplemental Confirmation relates as the Affected Transaction will automatically occur
without any notice or action by GS&Co. or Counterparty if the price of the Shares on the Exchange
at any time falls below such Termination Price, and the Exchange Business Day that the price of the
Shares on the Exchange at any time falls below the Termination Price will be the Early Termination
Date for purposes of the Agreement.
17. Delivery of Cash. For the avoidance of doubt, nothing in this Master Confirmation
shall be interpreted as requiring Counterparty to deliver cash in respect of the settlement of the
Transactions contemplated by this Master Confirmation following payment by Counterparty of the
relevant Prepayment Amount, except in circumstances where the required cash settlement thereof is
permitted for classification of the contract as equity by ASC 815-40-15 (EITF Issue 00-19) as in
effect on the relevant Trade Date (including, without limitation, where Counterparty so elects to
deliver cash or fails timely to elect to deliver Shares or Alternative Delivery Property in respect
of the settlement of such Transactions).
18. Claim in Bankruptcy. GS&Co. acknowledges and agrees that this Confirmation is not
intended to convey to it rights with respect to the Transaction that are senior to the claims of
common stockholders in the event of Counterpartys bankruptcy.
19. Illegality. The parties agree that, for the avoidance of doubt, for purposes of
Section 5(b)(i) of the Agreement, any applicable law shall include the Dodd-Frank Wall Street
Reform and Consumer Protection Act of 2010, any rules and regulations promulgated thereunder and
any similar law or regulation, 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, and the consequences specified in the Agreement, including without limitation, the
consequences specified in Section 6 of the Agreement, shall apply to any Illegality arising from
any such act, rule or regulation.
20. Governing Law. The Agreement, this Master Confirmation, each Supplemental Confirmation
and all matters arising in connection with the Agreement, this Master Confirmation and each
Supplemental Confirmation shall be governed by, and construed and enforced in accordance with, the
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).
21. Offices.
(a) The Office of GS&Co. for each Transaction is: 200 West Street, New York, NY 10282-2198.
(b) The Office of Counterparty for each Transaction is: West8 Tower, Suite 1000, 10205
Westheimer Rd., Houston, TX 77042.
22. Waiver of Jury Trial. EACH PARTY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING RELATING
TO THE AGREEMENT, THIS MASTER CONFIRMATION, EACH SUPPLEMENTAL CONFIRMATION AND ALL MATTERS ARISING
IN CONNECTION WITH THE AGREEMENT, THIS MASTER CONFIRMATION AND EACH SUPPLEMENTAL CONFIRMATION.
14
23. Submission to Jurisdiction. THE PARTIES HERETO IRREVOCABLY SUBMIT TO THE EXCLUSIVE
JURISDICTION OF THE FEDERAL AND STATE COURTS LOCATED IN THE BOROUGH OF MANHATTAN, IN THE CITY OF
NEW YORK IN ANY SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO THE AGREEMENT, THIS MASTER
CONFIRMATION AND ANY SUPPLEMENTAL CONFIRMATION OR THE TRANSACTIONS HEREUNDER.
24. Counterparts. This Master 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
Master Confirmation by signing and delivering one or more counterparts.
15
Counterparty hereby agrees (a) to check this Master Confirmation carefully and immediately
upon receipt so that errors or discrepancies can be promptly identified and rectified and (b) to
confirm that the foregoing (in the exact form provided by GS&Co.) correctly sets forth the terms of
the agreement between GS&Co. and Counterparty with respect to any particular Transaction to which
this Master Confirmation relates, by manually signing this Master Confirmation or this page hereof
as evidence of agreement to such terms and providing the other information requested herein and
immediately returning an executed copy to Equity Derivatives Documentation Department, Facsimile
No. 212-428-1980/83.
Yours faithfully, GOLDMAN, SACHS & CO. |
||||
By: | /s/ Jonathan Lipnick | |||
Authorized Signatory | ||||
Agreed and Accepted By:
DRESSER-RAND GROUP INC.
By:
|
/s/ Mark E. Baldwin
Title: Executive Vice President and Chief Financial Officer |
SCHEDULE A
SUPPLEMENTAL CONFIRMATION
To:
|
Dresser-Rand Group Inc. | |
West8 Tower, Suite 1000 | ||
10205 Westheimer Rd. | ||
Houston, Texas 77042 | ||
From:
|
Goldman, Sachs & Co. | |
Subject:
|
Accelerated Stock Buyback | |
Ref. No:
|
[Insert Reference No.] | |
Date:
|
[Insert Date] |
The purpose of this Supplemental Confirmation is to confirm the terms and conditions of the
Transaction entered into between Goldman, Sachs & Co. (GS&Co.) and Dresser-Rand Group Inc.
(Counterparty) (together, the Contracting Parties) on the Trade Date specified below. This
Supplemental Confirmation is a binding contract between GS&Co. and Counterparty as of the relevant
Trade Date for the Transaction referenced below.
1. This Supplemental Confirmation supplements, forms part of, and is subject to the Master
Confirmation dated as of March 22, 2011 (the Master Confirmation) between the Contracting
Parties, as amended and supplemented from time to time. All provisions contained in the Master
Confirmation govern this Supplemental Confirmation except as expressly modified below.
2. The terms of the Transaction to which this Supplemental Confirmation relates are as follows:
Trade Date:
|
[___] | |
Forward Price Adjustment Amount:
|
USD [___] | |
Calculation Period Start Date:
|
[___] | |
Scheduled Termination Date:
|
[___] | |
First Acceleration Date:
|
[___] | |
Prepayment Amount:
|
USD [___] | |
Prepayment Date:
|
[___] |
A-1
Initial Shares:
|
[___] Shares; provided that if, in connection with the Transaction, GS&Co. is unable, after using its good faith commercially reasonable efforts, to borrow or otherwise acquire a number of Shares equal to the Initial Shares for delivery to Counterparty on the Initial Share Delivery Date, the Initial Shares delivered on the Initial Share Delivery Date shall be reduced to such number of Shares that GS&Co. is able to so borrow or otherwise acquire, and GS&Co. shall use reasonable good faith efforts to borrow or otherwise acquire a number of Shares equal to the shortfall in the Initial Share Delivery and to deliver such additional Shares as soon as reasonably practicable. The aggregate of all Shares delivered to Counterparty in respect of the Transaction pursuant to this paragraph shall be the Initial Shares for purposes of Number of Shares to be Delivered in the Master Confirmation. | |
Initial Share Delivery Date:
|
[___] | |
Termination Price:
|
USD [___] per Share | |
Additional Relevant Days:
|
The [___] Exchange Business Days immediately following the Calculation Period. |
3. Counterparty represents and warrants to GS&Co. that neither it nor any affiliated purchaser
(as defined in Rule 10b-18 under the Exchange Act) has made any purchases of blocks pursuant to the
proviso in Rule 10b-18(b)(4) under the Exchange Act during either (i) the four full calendar weeks
immediately preceding the Trade Date or (ii) during the calendar week in which the Trade Date
occurs.
4. This Supplemental 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 Supplemental
Confirmation by signing and delivering one or more counterparts.
A-2
Counterparty hereby agrees (a) to check this Supplemental Confirmation carefully and
immediately upon receipt so that errors or discrepancies can be promptly identified and rectified
and (b) to confirm that the foregoing (in the exact form provided by GS&Co.) correctly sets forth
the terms of the agreement between GS&Co. and Counterparty with respect to the Transaction to which
this Supplemental Confirmation relates, by manually signing this Supplemental Confirmation or this
page hereof as evidence of agreement to such terms and providing the other information requested
herein and immediately returning an executed copy to Equity Derivatives Documentation Department,
facsimile No. 212-428-1980/83.
Yours sincerely,
GOLDMAN, SACHS & CO. |
||||
By: | ||||
Authorized Signatory |
Agreed and Accepted By:
DRESSER-RAND GROUP INC.
By: |
||||
Title: |
A-3
ANNEX A
COUNTERPARTY SETTLEMENT PROVISIONS
1. The following Counterparty Settlement Provisions shall apply to the extent indicated under
the Master Confirmation:
Settlement Currency:
|
USD | ||
Settlement Method Election:
|
Applicable; provided that (i) Section 7.1 of the Equity Definitions is hereby amended by deleting the word Physical in the sixth line thereof and replacing it with the words Net Share and (ii) the Electing Party may make a settlement method election only if the Electing Party represents and warrants to GS&Co. in writing on the date it notifies GS&Co. of its election that, as of such date, the Electing Party is not aware of any material non-public information concerning Counterparty or the Shares and is electing the settlement method in good faith and not as part of a plan or scheme to evade compliance with the federal securities laws. | ||
Electing Party:
|
Counterparty | ||
Settlement Method Election Date: |
The earlier of (i) the Scheduled Termination Date and (ii) the second Exchange Business Day immediately following the Accelerated Termination Date (in which case the election under Section 7.1 of the Equity Definitions shall be made no later than 10 minutes prior to the open of trading on the Exchange on such second Exchange Business Day), as the case may be; provided that if a Friendly Transaction Announcement occurs after the Actual Termination Date, the Settlement Method Election Date for the Second Settlement shall be the date of the Friendly Transaction Announcement. | ||
Default Settlement Method:
|
Cash Settlement | ||
Forward Cash Settlement
Amount:
|
The Number of Shares to be Delivered multiplied by the Settlement Price; provided that in the case of a Second Settlement occurring after an early termination or cancellation of the relevant Transaction pursuant to Section 6 of the Agreement or Article 12 of the Equity Definitions, the Forward Cash Settlement Amount shall equal the lesser of (i) zero and (ii)(x) the Payment Amount that would have been calculated for such early termination or cancellation if clause (x)(b)(ii) in the definition of Number of Shares to be Delivered had been replaced with (b)(ii) the Prorated Forward Price Adjustment Amount, as determined by the Calculation Agent minus (y) the actual Payment Amount calculated for such early termination or cancellation (in each case, with an amount that would have been owed by Counterparty expressed as a negative number for purposes of this calculation). |
1
Settlement Price:
|
The average of the VWAP Prices (or, in the case of a Second Settlement, the Relevant Prices) for the Exchange Business Days in the Settlement Valuation Period, subject to Valuation Disruption as specified in the Master Confirmation or, in the case of a Second Settlement, subject to Section 6.6(a) of the Equity Definitions as if such dates were Valuation Dates. | ||
Settlement Valuation Period:
|
A number of Scheduled Trading Days selected by GS&Co. in its reasonable discretion, beginning on the Scheduled Trading Day immediately following the earlier of (i) the Scheduled Termination Date or (ii) the Exchange Business Day immediately following the Termination Date or, in the case of a Second Settlement, the date of the Friendly Transaction Announcement. | ||
Cash Settlement:
|
If Cash Settlement is applicable, then Buyer shall pay to Seller the absolute value of the Forward Cash Settlement Amount on the Cash Settlement Payment Date. | ||
Cash Settlement
Payment Date:
|
The date one Settlement Cycle following the last day of the Settlement Valuation Period. | ||
Net Share Settlement
Procedures:
|
If Net Share Settlement is applicable, Net Share Settlement shall be made in accordance with paragraphs 2 through 7 below. |
2. Net Share Settlement shall be made by delivery on the Cash Settlement Payment Date of a
number of Shares satisfying the conditions set forth in paragraph 3 below (the Registered
Settlement Shares), or a number of Shares not satisfying such conditions (the Unregistered
Settlement Shares), in either case with a value equal to the absolute value of the Forward Cash
Settlement Amount, with such Shares value based on the value thereof to GS&Co. (which value shall,
in the case of Unregistered Settlement Shares, take into account a commercially reasonable
illiquidity discount), in each case as determined by the Calculation Agent.
3. Counterparty may only deliver Registered Settlement Shares pursuant to paragraph 2 above
if:
(a) a registration statement covering public resale of the Registered Settlement Shares by
GS&Co. (the Registration Statement) shall have been filed with the Securities and Exchange
Commission under the Securities Act and been declared or otherwise become effective on or prior to
the date of delivery, and no stop order shall be in effect with respect to the Registration
Statement; a printed prospectus relating to the Registered Settlement Shares (including any
prospectus supplement thereto, the Prospectus) shall have been delivered to GS&Co., in such
quantities as GS&Co. shall reasonably have requested, on or prior to the date of delivery;
(b) the form and content of the Registration Statement and the Prospectus (including, without
limitation, any sections describing the plan of distribution) shall be reasonably satisfactory to
GS&Co.;
(c) as of or prior to the date of delivery, GS&Co. and its agents shall have been afforded a
reasonable opportunity to conduct a due diligence investigation with respect to Counterparty
customary in scope for underwritten offerings of equity securities and the results of such
investigation are satisfactory to GS&Co., in its discretion; and
2
(d) as of the date of delivery, an agreement (the Underwriting Agreement) shall have been
entered into with GS&Co. in connection with the public resale of the Registered Settlement Shares
by GS&Co. substantially similar to underwriting agreements customary for underwritten offerings of
equity securities of similar size by similar companies, in form and substance reasonably
satisfactory to GS&Co., which Underwriting Agreement shall include, without limitation, provisions
substantially similar to those contained in such underwriting agreements relating, without
limitation, to the indemnification of, and contribution in connection with the liability of, GS&Co.
and its affiliates and the provision of customary opinions, accountants comfort letters and
lawyers negative assurance letters.
4. If Counterparty delivers Unregistered Settlement Shares pursuant to paragraph 2 above:
(a) all Unregistered Settlement Shares shall be delivered to GS&Co. (or any affiliate of
GS&Co. designated by GS&Co.) pursuant to the exemption from the registration requirements of the
Securities Act provided by Section 4(2) thereof;
(b) as of or prior to the date of delivery, GS&Co. and any potential purchaser of any such
shares from GS&Co. (or any affiliate of GS&Co. designated by GS&Co.) identified by GS&Co. 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 similar
size by similar companies (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 any such potential purchaser 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 GS&Co. (or any affiliate of GS&Co. designated by GS&Co.) in connection
with the private placement of such shares by Counterparty to GS&Co. (or any such affiliate) and the
private resale of such shares by GS&Co. (or any such affiliate), substantially similar to private
placement purchase agreements customary for private placements of equity securities of similar size
by similar companies, in form and substance commercially reasonably satisfactory to GS&Co., 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, GS&Co. and its affiliates
and the provision of customary opinions, accountants comfort letters and lawyers negative
assurance letters, and shall provide for the payment by Counterparty of all fees and expenses in
connection with such resale, including the reasonable fees and documented out-of-pocket expenses of
counsel for GS&Co., 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 GS&Co. (or any
such affiliate) and the private resale of such shares by GS&Co. (or any such affiliate),
Counterparty shall, if so requested by GS&Co., prepare, in cooperation with GS&Co., a private
placement memorandum in form and substance reasonably satisfactory to GS&Co. and customary for
private placements of equity securities of similar size by similar companies.
5. GS&Co., itself or through an affiliate (the Selling Agent) or any underwriter(s), will
sell all, or such lesser portion as may be required hereunder, of the Registered Settlement Shares
or Unregistered Settlement Shares and any Makewhole Shares (as defined below) (together, the
Settlement Shares) delivered by Counterparty to GS&Co. pursuant to paragraph 6 below commencing
on the Cash Settlement Payment Date and continuing until the date on which the aggregate Net
Proceeds (as such term is defined below) of such sales, as determined by GS&Co., is equal to the
absolute value of the Forward Cash Settlement Amount (such date, the Final Resale Date). If the
proceeds of any sale(s) made by GS&Co., the Selling Agent or any underwriter(s), net of any fees
and commissions (including, without limitation, underwriting or placement fees) customary for
similar transactions under the circumstances at the time of the offering, together with carrying
charges and expenses incurred in connection with the offer and sale of the Shares (including, but
without limitation to, the covering of any over-allotment or short position (syndicate or
otherwise)) (the Net Proceeds) exceed the absolute value of the
Forward Cash Settlement Amount, GS&Co. will refund, in USD, such excess to Counterparty on the
date that is three (3) Currency Business Days following the Final Resale Date, and, if any portion
of the Settlement Shares remains unsold, GS&Co. shall return to Counterparty on that date such
unsold Shares.
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6. If the Calculation Agent determines that the Net Proceeds received from the sale of the
Registered Settlement Shares or Unregistered Settlement Shares or any Makewhole Shares, if any,
pursuant to this paragraph 6 are less than the absolute value of the Forward Cash Settlement Amount
(the amount in USD by which the Net Proceeds are less than the absolute value of the Forward Cash
Settlement Amount being the Shortfall and the date on which such determination is made, the
Deficiency Determination Date), Counterparty shall on the Exchange Business Day next succeeding
the Deficiency Determination Date (the Makewhole Notice Date) deliver to GS&Co., through the
Selling Agent, a notice of Counterpartys election that Counterparty shall either (i) pay an amount
in cash equal to the Shortfall on the day that is one (1) Currency Business Day after the Makewhole
Notice Date, or (ii) deliver additional Shares. If Counterparty elects to deliver to GS&Co.
additional Shares, then Counterparty shall deliver additional Shares in compliance with the terms
and conditions of paragraph 3 or paragraph 4 above, as the case may be (the Makewhole Shares), on
the first Clearance System Business Day which is also an Exchange Business Day following the
Makewhole Notice Date in such number as the Calculation Agent reasonably believes would have a
market value on that Exchange Business Day equal to the Shortfall. Such Makewhole Shares shall be
sold by GS&Co. in accordance with the provisions above; provided that if the sum of the Net
Proceeds from the sale of the originally delivered Shares and the Net Proceeds from the sale of any
Makewhole Shares is less than the absolute value of the Forward Cash Settlement Amount then
Counterparty shall, at its election, either make such cash payment or deliver to GS&Co. further
Makewhole Shares until such Shortfall has been reduced to zero.
7. Notwithstanding the foregoing, in no event shall the aggregate number of Settlement Shares
and Makewhole Shares be greater than the Reserved Shares minus the amount of any Shares actually
delivered by Counterparty under any other Transaction(s) under this Master Confirmation (the result
of such calculation, the Capped Number). Counterparty represents and warrants (which shall be
deemed to be repeated on each day that a Transaction is outstanding) that the Capped Number is
equal to or less than the number of Shares determined according to the following formula:
A B
Where | A = the number of authorized but unissued shares of the
Counterparty that are not reserved for future issuance on the date of the
determination of the Capped Number; and B = the maximum number of Shares required to be delivered to third parties if Counterparty elected Net Share Settlement of all transactions in the Shares (other than Transactions in the Shares under this Master Confirmation) with all third parties that are then currently outstanding and unexercised. |
Reserved Shares means initially, 3,048,780 Shares. The Reserved Shares may be increased or
decreased in a Supplemental Confirmation.
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