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2008 MASTER DESIGNATEDEXCHANGE-TRADED CONTRACT OPTION

By Kimberly Howard,2014-11-26 16:34
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2008 MASTER DESIGNATEDEXCHANGE-TRADED CONTRACT OPTION

    2008 AMERICAS MASTER DESIGNATED/EXCHANGE-TRADED CONTRACT OPTION

    CONFIRMATION AGREEMENT

    This 2008 Americas Master Designated/Exchange-traded Contract Option Confirmation Agreement (this “Master Confirmation Agreement”) is dated as of [____] between [_______] (“Party

    A”) and [_______] (“Party B”).

     The parties wish to facilitate the process of entering into and confirming certain types of options transactions and accordingly agree as follows:

    1. Equity Derivatives Definitions. This Master Confirmation Agreement hereby incorporates by

    reference the 2002 ISDA Equity Derivatives Definitions as published by the International Swaps and

    Derivatives Association, Inc. (the “Equity Definitions”). Any capitalized term not otherwise defined

    herein shall have the meaning assigned to such term in the Equity Definitions. 2. Confirmation Process. The parties intend to enter into separate options transactions (each a

    Transaction”) set out in a Transaction Supplement substantially in the form attached to an Annex

    specified in Exhibit I hereto (each, a “Transaction Supplement”). The confirmation applicable to

    each Transaction, which shall constitute a “Confirmation” for the purposes of, and will supplement,

    form a part of, and be subject to, the ISDA Master Agreement between Party A and Party B dated as

    of [ ], as amended and supplemented from time to time (the “Master Agreement”), shall consist

    of this Master Confirmation Agreement including the relevant form of General Terms Confirmation

    contained in an Annex specified in Exhibit I hereto (each, a “General Terms Confirmation”), as

    supplemented by the trade details applicable to such Transaction as set forth in the Transaction

    Supplement for that Transaction. In the event of any inconsistency between this Master Confirmation

    Agreement and a General Terms Confirmation, the General Terms Confirmation shall govern for the

    purpose of the Transactions related to such General Terms Confirmation. In the event of any

    inconsistency between (i) this Master Confirmation Agreement (including the relevant form of

    General Terms Confirmation) and a Transaction Supplement and/or (ii) the Equity Definitions and a

    Transaction Supplement, the Transaction Supplement shall govern for the purpose of the relevant

    Transaction. The Transaction Supplement shall set forth, at a minimum, all of the relevant

    information set out in the form of Transaction Supplement attached to the relevant General Terms

    Confirmation.

    Exhibit I hereto may be amended in writing by the parties from time to time.

    3. Non-Exclusive. The parties acknowledge and agree that the execution of this Master Confirmation

    Agreement does not require them to document Transactions in accordance with this Master

    Confirmation Agreement.

    4. Preparation of Transaction Supplements. Unless otherwise agreed by the parties, the preparation of a 1Transaction Supplement shall be the responsibility of [ ].

    5. Miscellaneous.

    Copyright ? 2008 by International Swaps and Derivatives Association, Inc.

     1 Fill in as applicable.

    1

    (a) Entire Agreement. This Master Confirmation Agreement constitutes the entire agreement and

    understanding of the parties with respect to its subject matter and supersedes all oral

    communication and prior writings with respect specifically thereto.

    (b) Amendments. An amendment, modification or waiver in respect of this Master Confirmation

    Agreement will be effective only if in writing (including a writing evidenced by a facsimile

    transmission) and executed by each of the parties or confirmed by an exchange of telexes or by an

    exchange of electronic messages on an electronic messaging system.

    (c) Counterparts. This Master Confirmation Agreement and each Transaction Supplement

    documented hereunder may be executed in counterparts, each of which will be deemed an

    original.

    (d) Headings. The headings used in this Master Confirmation Agreement are for convenience of

    reference only and shall not affect the construction of or be taken into consideration in

    interpreting this Master Confirmation Agreement.

    (e) Governing Law; Jurisdiction. This Master Confirmation Agreement and each Transaction

    confirmed by a Confirmation documented hereunder will be governed by and construed in

    accordance with the law specified in the Master Agreement and will be subject to the jurisdiction,

    service of process and waiver of immunities provisions of Section 13 of the Master Agreement.

    IN WITNESS WHEREOF the parties have executed this document with effect from the date specified on the first page of this document.

[__________] [__________]

By:___________________________ By:___________________________

    Name: Name:

    Title: Title:

    2

    EXHIBIT I

    APPLICABLE ANNEXES

    Pursuant to the terms of the 2008 Americas Master Designated/Exchange-traded Contract Option Confirmation Agreement dated as of [________] between [_______] (“Party A”) and [_______] (“Party

    B”) (the “Master Confirmation Agreement”), the following Annexes (including the related Transaction Supplements) attached hereto, will be subject to the Master Confirmation Agreement, effective as of the

    date set forth below:

    Annex Date

    Annex A (Physically-settled Share Option) [ ]

    Annex B (Cash-settled Index Option) [ ]

    3

    ANNEX A

    (Physically-settled Designated Contract Share Option Transactions)

     [Date]

Re: Designated Contract Share Option General Terms Confirmation

Dear Sir or Madam,

The purpose of this Designated Contract Share Option General Terms Confirmation (this “General

    Terms Confirmation”) is to confirm certain general terms and conditions of Physically-Settled Share

    Option Transactions entered into between us under the 2008 Americas Master Designated/Exchange-traded Contract Option Confirmation Agreement between us dated as of [ ] (the “Master

    Confirmation Agreement”).

    This General Terms Confirmation hereby incorporates by reference the 2002 ISDA Equity Derivatives

     ISDA Definitions (the “Swap Definitions”), each as Definitions (the “Equity Definitions”) and the 2006

    published by the International Swaps and Derivatives Association, Inc. In the event of any inconsistency between the Equity Definitions and the Swap Definitions, the Equity Definitions will govern. In the event of any inconsistency between the Equity Definitions or the Swap Definitions and this General Terms Confirmation, this General Terms Confirmation will govern.

    All provisions contained in the Master Agreement govern each Confirmation (each as defined in the Master Confirmation Agreement) except as expressly modified below.

    1. The general terms of each Option Transaction to which this General Terms Confirmation relates are

    as follows (unless otherwise specified in the relevant Transaction Supplement), as supplemented by

    the Transaction Supplement related to such Transaction:

    General Terms:

    Trade Date: As specified in the Transaction Supplement.

    Option Style: As specified in the Transaction Supplement.

    Option Type: As specified in the Transaction Supplement.

    Seller: As specified in the Transaction Supplement.

    Buyer: As specified in the Transaction Supplement.

    Shares: As specified in the Transaction Supplement.

    Number of Options: As specified in the Transaction Supplement.

    Option Entitlement: [ ][ Share(s) per Option], unless otherwise

    specified in the Transaction Supplement.

    Strike Price: As specified in the Transaction Supplement.

    Premium: As specified in the Transaction Supplement.

    Premium Payment Date: As specified in the Transaction Supplement.

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Exchange: As specified in the Transaction Supplement.

    Related Exchange: As specified in the Transaction Supplement.

    Settlement Terms:

    Settlement Method: Physical Settlement.

    Settlement Method Election: Not Applicable

    Settlement Currency: US Dollars.

    Designated Contracts

    (for Share Option Transactions):

    Designated Contract: Unless otherwise specified in the Transaction

    Supplement, an option contract on a relevant Share

    traded on the Related Exchange with an expiry date (or

    the date which would have been the expiry date but for

    that day being a Disrupted Day or not being a Scheduled

    Trading Day) scheduled to occur on the Transaction‟s

    Expiration Date; provided, however, that, in the event

    that the Expiration Date of a Transaction were to occur

    on the third Friday of a calendar month and no option

    contract on the relevant Share traded on the Related

    Exchange exists with an expiry date scheduled to occur

    on the Expiration Date, but an option contract on the

    relevant Share traded on the Related Exchange exists

    with an expiry date scheduled to occur on the Saturday

    immediately following such Expiration Date, then such

    option contract shall be the Designated Contract.

    Procedures for Exercise:

    Commencement Date: The Trade Date, unless otherwise specified in the

    Transaction Supplement.

    Exercise Period: As specified in Section 3.1(a) of the Equity Definitions,

    excluding any day (other than the Expiration Date) on

    which american-style option contracts that trade on the

    relevant Share on the Related Exchange cannot be

    exercised under the rules of the Related Exchange. To

    the extent a Designated Contract trades on the Related

    Exchange, the text “9:00 a.m.” referred to in Sections

    3.1(a)(i) and 3.1(a)(iii) of the Equity Definitions is

    replaced by the words “the first time at which the

    Designated Contract may be exercised”.

    Exercise of European Options: If notice of exercise of a European Option is given prior

    to the Exercise Period commencing, that notice is

    deemed given when the Exercise Period commences.

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    2[Potential Exercise Date(s): As specified in the Transaction Supplement.]

    Expiration Time: To the extent a Designated Contract exists on the

    Related Exchange at the relevant date, thirty minutes

    prior to the latest exercise time provided for on the

    Related Exchange (determined, in any case, as if Cash

    Settlement applied).

    Expiration Date: As specified in the Transaction Supplement; provided,

    however, that to the extent a Designated Contract exists

    on the Related Exchange and its expiry date is postponed,

    the Expiration Date shall be postponed to the same

    Exchange Business Day, unless the expiry date has been

    postponed to a day that is not an Exchange Business Day,

    in which case the Expiration Date shall be postponed to

    the last Exchange Business Day immediately preceding

    the postponed expiry date.

    Multiple Exercise: If the Option is American or Bermuda, Applicable,

    unless otherwise specified in the Transaction

    Supplement.

    [Minimum Number of Options: If the Option is American or Bermuda, one, unless

    otherwise specified in the Transaction Supplement. Maximum Number of Options: If the Option is American or Bermuda, the Number of

    Options remaining, unless otherwise specified in the 3Transaction Supplement.]

    Integral Multiple: One, unless otherwise specified in the Transaction

    Supplement.

    Automatic Exercise: Applicable, unless otherwise specified in the Transaction

    Supplement.

    For purposes of Automatic Exercise, Section 3.4(b) is

    revised by replacing “Expiration Time” with “Valuation

    Time”.

    In-the-Money: As determined in accordance with Section 3.4 of the

    Equity Definitions, provided, however, that for purposes

    of Section 3.4(c)(i)(A) and 3.4(c)(ii)(A) of the Equity

    Definitions, if the Related Exchange uses a different

    automatic exercise threshold for dealers versus parties

    that are not dealers, then whether a Call or Put is In-the-

    Money shall be determined using the price for a Share at

    which the Related Exchange would automatically

    exercise a Physically-settled option for which a dealer

    was the buyer thereof.

     2 Include if a Transaction for a Bermuda Option. 3 Include if a Transaction provides for Multiple Exercise.

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    Reference Price: Means the Relevant Price of the Share as of the

    Valuation Time on the Expiration Date.

    NASDAQ Closing Price: Where NASDAQ is the Exchange, notwithstanding

    Sections 1.23(b) and 7.3(a) of the Equity Definitions, the

    Relevant Price and Settlement Price, as the case may be,

    will be the NASDAQ Official Closing Price (NOCP) as

    of the Valuation Time on the Valuation Date, as reported

    in the official price dissemination mechanism for the

    Exchange. Otherwise, the Relevant Price and Settlement

    Price, as the case may be, shall be determined in

    accordance with Sections 1.23(b) and 7.3(a) of the

    Equity Definitions, as applicable.

    Share Adjustment

    (for Share Option Transactions):

    Method of Adjustment: Options Exchange Adjustment

    Options Exchange: The Related Exchange

    Extraordinary Events:

    Consequences of Merger Events:

    Share-for-Share: Modified Options Exchange Adjustment

    Share-for-Other: Modified Options Exchange Adjustment

    Share-for-Combined: Modified Options Exchange Adjustment Tender Offer: Applicable; provided, however, that so long as there has

    not occurred a Designated Contract Disruption, then

    Section 12.1(d) of the Equity Definitions shall be

    amended to read, in its entirety, as follows:

     “„Tender Offer‟ means any tender offer that, per the

    rules and/or by-laws of the Options Exchange, results in

    an adjustment to option contracts of the Issuer.”

    Consequences of Tender Offers:

    Share-for-Share: Modified Options Exchange Adjustment

    Share-for-Other: Modified Options Exchange Adjustment

    Share-for-Combined: Modified Options Exchange Adjustment

    Modified Options Exchange

    Adjustment (i) Provided there has not occurred and is not continuing

    any Designated Contract Disruption, Options Exchange

    Adjustment shall apply; and (ii) if a Designated Contract

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    Disruption has occurred and Designated Contract

    Disruption is Not Applicable or Designated Contract

    Disruption is Applicable and the Transaction has not

    been terminated (if applicable), Calculation Agent

    Adjustment shall apply.

    Composition of Combined

    Consideration: Section 12.5 of the Equity Definitions shall not apply;

    provided, however, that if a Designated Contract

    Disruption has occurred, then Composition of Combined

    Consideration shall be Not Applicable.

    Nationalization, Insolvency

    or Delisting: Notwithstanding Section 12.6(c) of the Equity

    Definitions, (i) if there has not occurred and is not

    continuing any Designated Contract Disruption, Options

    Exchange Adjustment shall be the consequence of

    Nationalization, Insolvency or Delisting as if

    Nationalization, Insolvency or Delisting were a Merger

    Event for the purpose of this Transaction; and (ii) if a

    Designated Contract Disruption has occurred and

    Designated Contract Disruption is Not Applicable or

    Designated Contract Disruption is Applicable and the

    Transaction has not been terminated (if applicable), then

    the consequences of Nationalization, Insolvency, or

    Delisting shall be Cancellation and Payment

    (Calculation Agent Determination); provided further that

    in addition to the provisions of Section 12.6(a)(iii) of the

    Equity Definition, 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 exchange or

    quotation system, such exchange or quotation system

    shall be deemed to be the Exchange.

    Additional Disruption Events:

    4Designated Contract Disruption: [Applicable] / [Not Applicable]

    Designated Contract Disruption” means at any time

    prior to the Expiration Date, an official announcement

    by the applicable Related Exchange that trading on the

    Designated Contract shall be permanently discontinued.

     4 If (i) Designated Contract Disruption is Applicable, (ii) there occurs a Designated Contract Disruption, and (iii)

    either party elects to terminate, then the Determining Party shall determine the Cancellation Amount as per Section

    12.8 of the Equity Definitions.

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    For the avoidance of doubt, it shall not be a Designated

    Contract Disruption if the Designated Contract is

    permitted to settle on the Related Exchange.

     If Designated Contract Disruption is Applicable, then

    upon or following the occurrence of such an event, either

    party may elect, while the Designated Contract

    Disruption is continuing, to terminate this Transaction

    upon at least one Scheduled Trading Day‟s notice,

    specifying the date of such termination, which may be

    no earlier than the effective date of the Designated

    Contract‟s permanent discontinuance. The Determining

    Party shall determine the Cancellation Amount payable

    by one party to the other, in accordance with Section

    12.8 of the Equity Definitions.

    If Designated Contract Disruption is Not Applicable,

    then upon or following the occurrence of a Designated

    Contract Disruption, [the Transaction shall continue per

    its applicable terms] [Options Exchange Adjustment

    shall apply].

    5[Change in Law: [ ]]

    6[Failure to Deliver: [ ]]

    7[Insolvency Filing: [ ]]

    [Hedging Disruption: [ ]

    8Hedging Party: [ ]]

    Increased Cost of Hedging: [ ]

    9Hedging Party: [ ]]

    [Loss of Stock Borrow: [ ]

    [Maximum Stock Loan Rate: [ ]

    10Hedging Party: [ ]]

    [Increased Cost of Stock Borrow: [ ]

    Maximum Stock Loan Rate: [ ]

    Initial Stock Loan Rate: [ ]

     5 Include if Change in Law is applicable. 6 Include if Failure to Deliver is applicable. 7 Include if Insolvency Filing is applicable. 8 Include if Hedging Disruption is applicable. 9 Include if Increased Cost of Hedging is applicable. 10 Include if Loss of Stock Borrow is applicable.

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    11Hedging Party: [ ]]

    12[Determining Party: [ ]

    Non-Reliance: [Applicable] [Not Applicable]

    Agreements and Acknowledgements

    Regarding Hedging Activities: [Applicable] [Not Applicable]

    Additional Acknowledgements: [Applicable] [Not Applicable]

    Additional Provisions: [Insert any additional provisions required or agreed to

    between the parties, e.g., the role of any agents, etc.]

    [___________________] [_____________________]

    By: ___________________________ By: ______________________________

    Name: Name:

    Title: Title:

     11 Include if Increased Cost of Stock Borrow is applicable. 12 Include if any Additional Disruption Event is applicable.

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