GOLDMAN
SACHS & CO. | 85 BROAD STREET | NEW YORK, NEW YORK 10004 | TEL:
212-902-1000
Opening
Transaction
|
To:
|
Dollar
Tree Stores, Inc.
500
Volvo Parkway
Chesapeake,
VA 23320
|
|
From:
|
Goldman,
Sachs & Co.
|
|
Subject:
|
Accelerated
Stock Buyback
|
|
Ref.
No:
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As
provided in the Supplemental Confirmation
|
|
Date:
|
December
8, 2006
|
This
master confirmation (“Master
Confirmation”)
dated
as of December 8, 2006 is intended to supplement the terms and provisions of
certain Transactions (each, a “Transaction”)
entered into from time to time between Goldman, Sachs & Co. (“GS&Co.”)
and
Dollar Tree Stores, 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 terms of any
particular Transaction shall be set forth in a Supplemental Confirmation in
the
form of Annex A hereto (a “Supplemental
Confirmation”),
which
shall reference this Master Confirmation and supplement, form a part, 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 the related 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 regard to the conflicts of
law
principles) 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”,
(iv) the election that the “Cross Default” provisions of Section 5(a)(vi) shall
apply to Counterparty and GS&Co., with a “Threshold Amount” of USD50 million
and (v) the amendment of Section 5(a)(vi) to delete the phrase “or becoming
capable at such time of being declared” in the seventh line thereof).
For
each
Transaction, all provisions contained or incorporated by reference in the
Agreement shall govern this Master Confirmation and the Supplemental
Confirmation relating to such Transaction except as expressly modified herein
or
in such Supplemental Confirmation.
If,
in
relation to any Transaction to which this Master Confirmation and 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. On
the
third Clearance System Business Day following the Trade Date for each
Transaction (the “Initial
Settlement Date”),
GS&Co. will deliver to Counterparty a number of Shares equal to the Number
of Shares for the relevant Transaction, and Counterparty will pay to GS&Co.
cash in immediately available funds in an amount to be specified in the
Supplemental Confirmation (the “Initial
Purchase Price”)
equal
to the product of the Initial Share Price (as set forth below) and the Number
of
Shares. The additional terms of each Transaction set forth below are intended
to
be in substance and effect an adjustment to the Initial Purchase Price. Solely
for the purposes of the Equity Definitions, each Transaction shall be treated
as
if it were a Share Forward Transaction. However, the parties acknowledge that
the Transaction is a Share buyback transaction and is not intended to effect
a
net issuance of shares or raise equity capital for Counterparty. Set forth
below
are the terms and conditions which, together with the terms and conditions
set
forth in each Supplemental Confirmation (in respect of each relevant
Transaction), shall govern each such Transaction.
General
Terms:
|
Trade
Date:
|
For
each Transaction, as set forth in the Supplemental
Confirmation.
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Seller:
|
Counterparty
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Buyer:
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GS&Co.
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|
Shares:
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Shares
of common stock, $1.00 par value, of Counterparty (Ticker:
DLTR)
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Initial
Share
Price:
|
For
each Transaction, as set forth in the Supplemental
Confirmation.
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|
Forward
Price:
|
For
each Transaction, the Initial Share Price for such
Transaction.
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|
Prepayment:
|
Not
Applicable
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Variable
Obligation:
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Not
Applicable
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Exchange:
|
NASDAQ
Global Select Market
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Related
Exchange(s):
|
All
Exchanges
|
|
Market
Disruption
Event:
|
The
definition of “Market Disruption Event” in Section 6.3(a) of the Equity
Definitions is hereby amended by replacing the words “at any time during
the one-hour period that ends at the relevant Valuation Time” in the third
line thereof with the words “at any time on any Scheduled Trading Day
during the Valuation Period or” after the word
“material”.
|
Valuation:
|
Valuation
Period:
|
Each
Scheduled Trading Day during the period commencing on and including
the
First Valuation Date, to and including the Valuation Date (but
excluding
any day(s) on which the Valuation Period is suspended in accordance
with
Section 5 herein).
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| |
Notwithstanding
anything to the contrary in the Equity Definitions, to the extent
that a
Disrupted Day occurs in the Valuation Period, the Calculation Agent
may
postpone the Valuation Date. In such event, the Calculation Agent
must
determine whether (i) such Disrupted Day is a Disrupted Day in
full, in
which case such Disrupted Day shall not be included for purposes
of
determining the Settlement Price, 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
Prices for the relevant Scheduled Trading Days during the Valuation
Period
shall be adjusted by the Calculation Agent for purposes of determining
the
Settlement Price, 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.
|
| |
If
a Disrupted Day occurs during the Valuation Period, and each of
the nine
immediately following Scheduled Trading Days is a Disrupted Day,
then the
Calculation Agent, in its discretion, may either (i) deem such
ninth
Scheduled Trading Day to be an Exchange Business Day and determine
the
VWAP Price for such ninth Scheduled Trading Day and adjust the
weighting
of the VWAP Prices for the relevant Scheduled Trading Days during
the
Valuation Period as it deems appropriate for purposes of determining
the
Settlement Price based on, among other factors, the duration of
any Market
Disruption Event and the volume, historical trading patterns and
price of
the Shares or (ii) disregard such day for purposes of determining
the
Settlement Price and further postpone the Valuation Date as it
deems
appropriate to determine the VWAP Price.
|
|
First
Valuation
Date:
|
For
each Transaction, as set forth in the Supplemental
Confirmation.
|
|
Valuation
Date:
|
For
each Transaction, the Scheduled Valuation Date set forth in the
Supplemental Confirmation (as the same may be postponed in accordance
with
the provisions hereof); provided
that GS&Co. shall have the right to designate any date (the
“Accelerated
Valuation Date”) on or after the First Acceleration Date
to be the Valuation Date by providing notice to Counterparty of
any such
designation on such date.
|
|
First
Acceleration
Date:
|
For
each Transaction, as set forth in the Supplemental
Confirmation.
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Settlement
Terms:
|
Settlement
Currency:
|
USD
|
|
Settlement
Method Election:
|
Applicable;
provided
that (a) 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 (b) in the event that GS&Co. would be obligated to deliver to
Counterparty any Shares under Net Share Settlement, Cash Settlement
shall
be applicable in lieu of Net Share Settlement.
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|
Electing
Party:
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Counterparty
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|
Settlement
Method Election Date:
|
The
earlier of (i) the fifth Scheduled Trading Day immediately prior
to the
originally scheduled Valuation Date and (ii) the Accelerated Valuation
Date, as the case may be.
|
|
Default
Settlement Method:
|
Cash
Settlement
|
|
Forward
Cash Settlement Amount:
|
An
amount in the Settlement Currency equal to the Number of Shares
multiplied
by an
amount equal to (i) the Settlement Price minus
(ii) the Forward Price.
|
|
Settlement
Price:
|
The
arithmetic mean of the VWAP Prices of the Shares for each Scheduled
Trading Day in the Valuation Period minus
the Settlement Price Adjustment Amount.
|
|
Settlement
Price Adjustment Amount:
|
For
each Transaction, as set forth in the Supplemental
Confirmation.
|
|
VWAP
Price:
|
For
any Exchange Business Day, as determined by the Calculation Agent
based on
the NASDAQ 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 “DLTR.Q <Equity> AQR_SEC” (or any successor
thereto).
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 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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|
Counterparty’s
Contact Details
|
|
|
for
Purpose of Giving Notice:
|
Kent
Kleeberger
|
| |
500
Volvo Parkway
|
| |
Chesapeake,
VA 23320
|
|
GS&Co.’s
Contact Details for
|
|
|
Purpose
of Giving Notice:
|
Telephone
No.: (212)
902-8996
|
| |
Facsimile
No.: (212)
902-0112
|
| |
Attention:
Equity Operations: Options and Derivatives
|
| |
|
| |
With
a copy to:
|
| |
Tracey
McCabe
|
| |
Equity
Capital Markets
|
| |
One
New York Plaza
|
| |
New
York, NY 10004
|
| |
Telephone
No.: (212)
357-0428
|
| |
Facsimile
No.: (212)
902-3000
|
Net
Share
Settlement:
|
Net
Share Settlement Procedures:
|
Net
Share Settlement shall be made in accordance with the procedures
attached
hereto as Annex B.
|
|
Net
Share Settlement Price:
|
The
Relevant Price on the Net Share Valuation Date, as reduced by the
per
Share amount of the underwriting discount and/or commissions agreed
to
pursuant to the equity underwriting agreement contemplated by the
Net
Share Settlement Procedures.
|
|
Valuation
Time:
|
As
provided in Section 6.1 of the Equity Definitions; provided
that Section 6.1 of the Equity Definitions is hereby amended by inserting
the words “Net Share Valuation Date,” before the words “Valuation Date” in
the first and third lines thereof.
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Net
Share Valuation Date:
|
The
Exchange Business Day immediately following the Valuation
Date.
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|
Net
Share Settlement Date:
|
The
third Exchange Business Day immediately following the Valuation
Date.
|
|
Reserved
Shares:
|
Initially,
700,000 Shares. The Reserved Shares may be increased or decreased
in a
Supplemental Confirmation.
|
|
Relevant
Price:
|
As
provided in Section 1.23(b) of the Equity Definitions; provided
that Section 1.23(b) of the Equity Definitions is hereby amended
by
replacing each occurrence therein of “the Valuation Date or Averaging
Date, as the case may be,” with the term “such
day.”
|
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.
|
|
Extraordinary
Dividend:
|
For
any calendar quarter, any dividend or distribution on the Shares
with an
ex-dividend date occurring during such calendar quarter (other than
any
dividend or distribution of the type described in Section 11.2(e)(i)
or
Section 11.2(e)(ii)(A) or (B) of the Equity
Definitions).
|
|
Method
of Adjustment:
|
Calculation
Agent Adjustment
|
Extraordinary
Events:
Consequences
of Merger Events and Tender Offers:
|
(a) Share-for-Share:
|
Modified
Calculation Agent Adjustment
|
|
(b) Share-for-Other:
|
Cancellation
and Payment
|
|
(c) Share-for-Combined:
|
Component
Adjustment
|
|
Determining
Party:
|
GS&Co.
|
|
Tender
Offer:
|
Applicable
|
|
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); and 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.
|
Notwithstanding
anything to the contrary in the Equity Definitions, if, as a result of a Merger
Event, a Tender Offer, a Nationalization, an Insolvency or a Delisting,
Cancellation and Payment applies to one or more Transactions hereunder (whether
in whole or in part), an Additional Termination Event (with the Transactions
(or
portions thereof) to which Cancellation and Payment applies being the Affected
Transactions, Counterparty being the sole Affected Party and the Early
Termination Date being the date on which such Transactions would be cancelled
pursuant to Article 12 of the Equity Definitions) shall be deemed to occur,
and,
in lieu of Sections 12.7 and 12.8 of the Equity Definitions, Section 6 of the
Agreement shall apply to such Affected Transactions.
Additional
Disruption Events:
|
(a) Change
in Law:
|
Applicable
|
|
(b) Insolvency
Filing:
|
Applicable
|
|
(c) Loss
of Stock Borrow:
|
Applicable;
provided
that Sections 12.9(a)(vii) and 12.9(b)(iv) of the Equity Definitions
shall
be amended by deleting the words “at a rate equal to or less than the
Maximum Stock Loan Rate” and replacing them with “at a rate of return
equal to or greater than zero”.
|
|
Hedging
Party:
|
GS&Co.
|
|
Determining
Party:
|
GS&Co.
|
Notwithstanding
anything to the contrary in the Equity Definitions, if, as a result of an
Additional Disruption Event, any Transaction is cancelled or terminated, an
Additional Termination Event (with such terminated Transaction(s) being the
Affected Transaction(s), Counterparty being the sole Affected Party and the
Early Termination Date being the date on which such Transaction(s) would be
cancelled or terminated pursuant to Article 12 of the Equity Definitions) shall
be deemed to occur, and, in lieu of Sections 12.7 and 12.8 of the Equity
Definitions, Section 6 of the Agreement shall apply to such Affected
Transaction(s).
Non-Reliance/Agreements
and
Acknowledgments
Regarding
Hedging
Activities/Additional
Acknowledgements: Applicable
|
Net
Share Settlement Upon
|
|
|
Early
Termination:
|
Counterparty
shall have the right, in its sole discretion, in lieu of making any
payment required to be made by it (the “Early
Termination Amount”)
pursuant to Sections 6(d) and 6(e) of the Agreement following the
occurrence of an Early Termination Date in respect of the Transaction
(other than any Early Termination Date occurring as a result of a
Share-for-Other or Share-for-Combined Merger Event or Tender Offer
in
respect of the portion of the consideration for the Shares consisting
of
cash), elect to settle its obligation to pay the Early Termination
Amount
in Shares in accordance with the terms, and subject to the conditions,
for
Net Share Settlement herein by giving written notice to GS&Co. of such
election on the day that the notice fixing an Early Termination Date
is
effective. If Counterparty elects Net Share Settlement under such
circumstances: (a) the Net Share Valuation Date shall be the Early
Termination Date, which shall be either the Exchange Business Day
that
such notice is effective or the first Exchange Business Day immediately
following the Exchange Business Day that such notice is effective,
(b) the
Net Share Settlement Date shall be deemed to be the Exchange Business
Day
immediately following the Early Termination Date and (c) all references
to
Forward Cash Settlement Amount in Annex B hereto shall be deemed
references to the Early Termination Amount.
|
|
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.
|
|
Counterparty
Payment Instructions:
|
To
be provided by Counterparty
|
2. Calculation
Agent:
GS&Co.; provided
that
any
disagreement regarding any determination made by the Calculation Agent shall
be
resolved in accordance with Section 20 of this Master Confirmation.
3. Representations,
Warranties and Covenants of GS&Co. and Counterparty.
In
addition to the representations and warranties in the Agreement, each party
represents, warrants and covenants to the other party that:
(a) Eligible
Contract Participant.
(i) It
is an “eligible contract participant”, as defined in the U.S. Commodity Exchange
Act, as amended and (ii) 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 and the provisions of Regulation D promulgated
thereunder (“Regulation
D”).
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, (iii) it
will purchase each Transaction not with a view to the distribution or resale
thereof in a manner that would violate the Securities Act and (iv) the
disposition of each Transaction is restricted under this Master Confirmation,
the Securities Act and state securities laws.
4. Additional
Representations, Warranties and Covenants of GS&Co.
In
addition to the representations, warranties and covenants in the Agreement
and
those contained herein, GS&Co. hereby represents, warrants and covenants to
Counterparty that:
(a) with
respect to purchases of Shares by GS&Co. in connection with any Transaction
during the Valuation Period for such Transaction (other than any purchases
made
by GS&Co. in connection with dynamic hedge adjustments of GS&Co.’s
exposure to any Transaction as a result of any equity optionality contained
in
such Transaction), GS&Co. will use good faith efforts to effect such
purchases in a manner so that, if such purchases were made by Counterparty,
they
would meet the requirements of Rule 10b-18(b)(2), (3) and (4), and effect
calculations in respect thereof, taking into account any applicable Securities
and Exchange Commission no-action letters as appropriate and subject to any
delays between the execution and reporting of a trade of the Shares on the
Exchange and other circumstances beyond GS&Co.’s control;
(b) it
will
conduct its purchases in connection herewith in a manner that would not be
deemed to constitute a tender offer within the meaning of Section 14(d)(1)
of
the Exchange Act; and
(c) for
the
avoidance of doubt, GS&Co. has implemented reasonable policies and
procedures, taking into consideration the nature of its business, to ensure
that
individuals making investment decisions would not violate laws prohibiting
trading on the basis of material nonpublic information. Such individuals shall
not be in possession of material nonpublic information during all relevant
times
beginning on the date hereof and continuing through the Valuation Period for
any
Transaction.
5. Additional
Representations, Warranties and Covenants of Counterparty.
In
addition to the representations, warranties and covenants in the Agreement
and
those contained herein, as of (i) the date hereof and (ii) the period of time
from the Trade Date for each Transaction hereunder until the time that each
party has fully performed all of its obligations under such Transaction,
Counterparty represents, warrants and covenants to GS&Co. that:
(a) assuming
the accuracy of the representations by GS&Co. in Section 4(b)
hereof,
the purchase or writing of each Transaction and the transactions contemplated
hereby do not and will not violate Rule 13e-1 or Rule 13e-4 under the
Exchange Act;
(b) it
is not
entering into 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 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);
(c) (i)
each
Transaction is being entered into pursuant to a publicly disclosed Share
buy-back program; (ii) its Board of Directors has approved the use of
derivatives to effect the Share buy-back program; and (iii) Counterparty shall
immediately retire the Shares purchased in any Transaction;
(d) without
limiting the generality of Section 13.1 of the Equity Definitions, Counterparty
acknowledges that GS&Co. is not making any representations or warranties
with respect to the treatment of any Transaction under FASB Statements 128,
133
(as amended), 149 or 150, EITF 00-19, 01-6 or 03-6 (or any successor issue
statements) or under the Financial Accounting Standards Board’s Liabilities
& Equity Project;
(e) Counterparty
is in compliance with its reporting obligations under the Exchange Act in all
material respects 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 as required under Regulation S-K and/or Regulation
S-B under the Exchange Act, as applicable;
(g) Counterparty
is not, and will not be, engaged in a “distribution” of Shares or securities
that are convertible into, or exchangeable or exercisable for Shares for
purposes of Regulation M promulgated under the Exchange Act (“Regulation
M”)
at any
time during the period commencing on the first day of the Valuation Period
and
ending on the last day of the Valuation Period or, in the event GS&Co.
designates an Accelerated Termination Date or either party designates an Early
Termination Date or an Early Termination Date is deemed to occur, the
15th
Exchange
Business Day immediately following such Accelerated Termination Date or Early
Termination Date, as the case may be, or such earlier day as elected by
GS&Co. and communicated to Counterparty on such day (the “Relevant
Period”)
unless
Counterparty has provided written notice to GS&Co. of such distribution (a
“Regulation
M Distribution Notice”)
not
later than the Scheduled Trading Day immediately preceding the first day of
the
relevant “restricted period” (as defined in Regulation M); Counterparty
acknowledges that any such notice may cause the Valuation Period to be extended
or suspended pursuant to Section 6
below;
accordingly, Counterparty acknowledges that its delivery of such notice must
comply with the standards set forth in Section 7
below;
(h) Counterparty
acknowledges that 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;
(i) on
the
Trade Date for each Transaction and on each day of the Valuation Period for
such
Transaction, Counterparty is not and will not be “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 equal to the Number
of
Shares in compliance with the laws of the jurisdiction of Counterparty’s
incorporation;
(j) 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;
(k) with
the
exception of the Collared Accelerated Stock Buyback transaction (the
“Collared
ASB Transaction”)
evidenced by the confirmation dated December 8, 2006 between Counterparty and
GS&Co. and the Supplemental Confirmation thereto dated December 8, 2006, it
has not and, during the Relevant Period for any Transaction, will not enter
into
agreements similar to the Transactions described herein where any initial hedge
period (however defined), the valuation period (however defined) or the relevant
period (however defined) in such other transaction will overlap at any time
(including as a result of extensions in such initial hedge period, valuation
period or relevant period as provided in the relevant agreements) with any
Relevant Period under this Master Confirmation. In the event that the initial
hedge period, valuation period or relevant period in any other similar
transaction overlaps with any Relevant Period under this Master Confirmation
as
a result of an extension of the Valuation Date pursuant to Section 5 herein,
Counterparty shall promptly amend such transaction to avoid any such
overlap.
6. Suspension
of Valuation Period.
(a) If
Counterparty concludes that it will be engaged in a distribution of the Shares
for purposes of Regulation M, Counterparty agrees that it will, on a day no
later than the Scheduled Trading Day immediately preceding the start of the
relevant restricted period, provide GS&Co. with a Regulation M Distribution
Notice. Upon the effectiveness of such Regulation M Distribution Notice,
GS&Co. shall halt any purchase of Shares in connection with hedging any
Transaction during the relevant restricted period (other than any purchases
made
by GS&Co. in connection with dynamic hedge adjustments of GS&Co.’s
exposure to any Transaction as a result of any equity optionality contained
in
such Transaction). If on any Scheduled Trading Day Counterparty delivers the
Regulation M Distribution Notice in writing (and confirms by telephone) by
8:30
a.m. New York City time (the “Notification
Time”)
then
such notice shall be effective as of such Notification Time. In the event that
Counterparty delivers such Regulation M Distribution Notice in writing and/or
confirms by telephone after the Notification Time, then such notice shall be
effective as of 8:30 a.m. New York City time on the following Scheduled Trading
Day or as otherwise required by law or agreed between Counterparty and
GS&Co. Upon the effectiveness of such Regulation M Distribution Notice, the
Valuation Period shall be suspended and the Valuation Date shall be postponed
for each Scheduled Trading Day in such restricted period; accordingly,
Counterparty acknowledges that its delivery of such notice must comply with
the
standards set forth in Section 7
below,
including, without limitation, the requirement that such notice be made at
a
time at which none of Counterparty or any officer, director, manager or similar
person of Counterparty is aware of any material non-public information regarding
Counterparty or the Shares.
(b) In
the
event that GS&Co. reasonably concludes, in its good faith discretion, based
on advice of outside legal 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.), for it to refrain from
purchasing Shares on any Scheduled Trading Day during the Valuation Period,
GS&Co. may by written notice to Counterparty (confirmed by telephone) elect
to suspend the Valuation Period for such number of Scheduled Trading Days as
is
specified in the notice; provided
that
GS&Co. may exercise this right to suspend only in relation to events or
circumstances that are unknown to it or any of its affiliates at the Trade
Date
of any Transaction, occur within the normal course of its or any of its
affiliates’ businesses, and are not the result of deliberate actions of it or
any of its affiliates with the intent to avoid its obligations under the terms
of any Transaction. The notice shall not specify, and GS&Co. shall not
otherwise communicate to Counterparty, the reason for GS&Co.’s election to
suspend the Valuation Period. The Valuation Period shall be suspended and the
Valuation Date shall be postponed for each Scheduled Trading Day occurring
during any such suspension.
(c) In
the
event that the Valuation Period is suspended pursuant to Section 6(a)
or
(b)
above
during the regular trading session on the Exchange, such suspension shall be
deemed to be an additional Market Disruption Event, and the second and third
paragraphs under “Valuation Period” shall apply.
7. 10b5-1
Plan.
Counterparty represents, warrants and covenants to GS&Co. that for each
Transaction:
(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
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 Rule 10b5-1(c)(1)(i)(A)
and (B) 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. to make “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, waiver or termination 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.
8. 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
(as
extended pursuant to the provisions hereof). During this time, any such
purchases by Counterparty shall be made through GS&Co., or if not through
GS&Co., with the prior written consent of GS&Co. (which shall not be
unreasonably withheld), and in compliance with Rule 10b-18 or otherwise in
a manner that Counterparty and GS&Co. reasonably believe is in compliance
with applicable requirements.
However,
the foregoing shall not limit Counterparty’s ability, pursuant to its employee
incentive plan, to re-acquire Shares in connection with the related equity
transactions or to limit Counterparty’s ability to withhold shares to cover tax
liabilities associated with such equity transaction or otherwise restrict
Counterparty’s ability to repurchase Shares under privately negotiated
transactions with any of its employees, officers, directors or affiliates,
so
long as any re-acquisition, withholding or repurchase does not constitute a
“Rule 10b-18 purchase” (as defined in Rule 10b-18). Furthermore, this Section
shall not restrict any purchase by Counterparty of Shares effected during any
suspension of any Valuation Period in accordance with Section 6(b).
9. Additional
Termination Event.
The
declaration of any Extraordinary Dividend by the Issuer during the Valuation
Period for any Transaction will constitute an Additional Termination Event,
with
Counterparty as the sole Affected Party and all Transactions hereunder as the
Affected Transactions.
10. Additional
Event of Default.
The
following occurrence will constitute an Event of Default for purposes of Section
5(a) of the Agreement (with Counterparty considered to be the Defaulting Party):
Counterparty
fails
to
perform any obligation required to be performed under any other agreement
between Counterparty and GS&Co. or its affiliated entities.
11. Automatic
Termination Provisions.
Notwithstanding anything to the contrary in Section 6 of the
Agreement:
(a) If
a
Termination Price is specified in one or more Supplemental Confirmations, then
an Additional Termination Event with Counterparty as the sole Affected Party
and
all Transactions to which such Supplemental Confirmations relate as Affected
Transactions 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. 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.
(b) Notwithstanding
anything to the contrary in Section 6(d) of the Agreement, following the
occurrence of such an Additional Termination Event, GS&Co. will notify
Counterparty of the amount owing under Section 6(e) of the Agreement within
a
commercially reasonable time period (with such period based upon the amount
of
time, determined by GS&Co. (or any of its Affiliates) in its sole
discretion, that it would take to unwind any of its Hedge Position(s) related
to
the Transaction in a commercially reasonable manner based on relevant market
indicia). For purposes of the “Net Share Settlement Upon Early Termination”
provisions herein, the date that such notice is effective shall constitute
the
Net Share Valuation Date and the Early Termination Date.
12. Special
Provisions for Merger Transactions.
Notwithstanding anything to the contrary herein or in the Equity Definitions,
Counterparty shall,
(a) prior
to
the opening of trading in the Shares on any day during any Valuation Period
on
which Counterparty makes, or expects to be made, any public announcement (as
defined in Rule 165(f) under the Securities Act of 1933, as amended) of any
Merger Transaction, notify GS&Co. of such public announcement;
(b) promptly
notify GS&Co. following any such announcement that such announcement has
been made;
(c) promptly
provide GS&Co. with written notice specifying (i) Counterparty’s average
daily Rule 10b-18 Purchases (as defined in Rule 10b-18) during the three full
calendar months immediately preceding the Announcement Date 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. 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; and
(d) GS&Co.
in good faith and commercially reasonable discretion may (i) suspend the
Valuation Period and postpone the Valuation Date or (ii) treat the occurrence
of
such public announcement as an Additional Termination Event with Counterparty
as
the sole Affected Party and the Transactions hereunder as the Affected
Transactions.
“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.
13. Special
Calculation and Settlement Following Early Termination.
Notwithstanding anything to the contrary in this Master Confirmation or any
Supplemental Confirmation hereunder, in the event that an Early Termination
Date
occurs or is designated with respect to one or more Transactions (each an
“Elected
Transaction”
and
collectively, the “Elected
Transactions”),
then
GS&Co. may elect, in its sole discretion, by notice to Counterparty, to have
Counterparty deliver the Number of Early Settlement Shares to GS&Co. on the
date that such notice is effective and either (x) GS&Co. shall pay to
Counterparty the Special Termination Amount, if such amount is positive, or
(y)
Counterparty shall either (1) pay to GS&Co. the absolute value of the
Special Termination Amount, if such amount is negative, or (2) elect for the
provisions set forth opposite “Net Share Settlement Upon Early Termination” to
apply except that all references in such provision to “the Early Termination
Amount” shall be replaced with references to “the Special Termination Amount”.
To
the
extent that Counterparty elects to deliver Early Settlement Shares to GS&Co.
accompanied by an effective Registration Statement (as defined in Annex B and
satisfactory to GS&Co. in its reasonable discretion) covering such Shares,
Counterparty must be in compliance with the conditions specified in paragraph
3
in Annex B hereto at the time of such delivery. If Counterparty elects to
deliver Unregistered Settlement Shares (as defined in Annex B) to GS&Co.,
Counterparty and GS&Co. will negotiate in good faith on acceptable
procedures and documentation relating to the sale of such Unregistered
Settlement Shares. Counterparty and GS&Co. agree that the payment of the
Special Termination Amount and the delivery of the Early Settlement Shares
satisfy in full any obligation of a party to make any payments pursuant to
Section 6(e) of the Agreement or Article 12 of the Equity Definitions, as the
case may be, in respect of the Elected Transactions.
“Number
of Early Settlement Shares”
means
a
number of Shares (“Early
Settlement Shares”)
as
determined by GS&Co. in a good faith and commercially reasonable manner
based on its or any of its Affiliates’ Hedge Positions with respect to the
Elected Transactions under this Master Confirmation.
“Special
Termination Amount”
means
the sum of (a) the product of (i) the Number of Early Settlement Shares
multiplied
by
(ii) a
per Share price (the “Early
Termination Price”)
determined by GS&Co. in a good faith and commercially reasonable manner
based on relevant market indicia, including GS&Co.’s funding costs
associated with Early Settlement Shares and costs incurred or estimated to
be
incurred by GS&Co. in connection with the purchase and sale of Shares in
order to close out GS&Co.’s or any of its Affiliates’ Hedge Positions with
respect to each Affected Transaction and, in the event that Counterparty
delivers Unregistered Shares to GS&Co., whether GS&Co. and Counterparty
have agreed on acceptable procedures and documentation relating to such
Unregistered Shares as described above and (b) any amount owing under Section
6(e) of the Agreement, in respect of the Elected Transactions by GS&Co. to
Counterparty (expressed as a positive number) or by Counterparty to GS&Co.
(expressed as a negative number).
14. Acknowledgments.
The
parties hereto intend for:
(a) 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), 555, 556, 560 and 561 of the Bankruptcy
Code;
(b) the
Agreement to be a “master netting agreement” as defined in Section 101 (38A) of
the Bankruptcy Code;
(c) a
party’s
right to liquidate or terminate 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);
(d) any
cash,
securities or other property transferred as performance assurance, credit
support or collateral with respect to each Transaction to constitute “margin
payments” (as defined in the Bankruptcy Code); and
(e) all
payments for, under or in connection with each Transaction, all payments for
the
Shares and the transfer of such Shares to constitute “settlement payments” and
“transfers” (as defined in the Bankruptcy Code).
15. Credit
Support Documents.
The
parties hereto acknowledge that no Transaction hereunder is secured by any
collateral.
16. Calculations
on Early Termination and Set-Off.
(a) Notwithstanding
anything to the contrary in the Agreement or the Equity Definitions, the
calculation of any Settlement Amounts or Unpaid Amounts shall be calculated
separately for (A) all Terminated Transactions in the Shares of the Issuer
that qualify as equity under applicable accounting rules (collectively, the
“Equity
Shares”)
as
determined by the Calculation Agent and (B) all other Terminated
Transactions under the Agreement including, without limitation, Transactions
in
Shares other than those of the Issuer (collectively, the “Other
Shares”)
and the
netting and set-off provisions of the Agreement shall only operate to provide
netting and set-off (i) among Terminated Transactions in the Equity Shares
and
(ii) among Terminated Transactions in the Other Shares. In no event shall the
netting and set-off provisions of the Agreement operate to permit netting and
set-off between Terminated Transactions in the Equity Shares and Terminated
Transactions in the Other Shares.
(b) The
parties agree that upon the occurrence of an Event of Default or Termination
Event with respect to a party who is the Defaulting Party or an 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 16.
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 16
shall be
effective to create a charge or other security interest. This Section
16
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).”
(c) 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 rights to GS&Co. senior
to claims of common stockholders in the event of Counterparty’s bankruptcy.
17. Payment
Date upon Early Termination.
Notwithstanding anything to the contrary in Section 6(d)(ii) of the Agreement,
all amounts calculated as being due in respect of an Early Termination Date
under Section 6(e) of the Agreement will be payable on the day that notice
of
the amount payable is effective.
18. Delivery
on Initial Settlement Date.
For the
avoidance of doubt, GS&Co. may satisfy its obligation to deliver Shares on
the Initial Settlement Date by making separate deliveries of Shares at more
than
one time on the Initial Settlement Date, so long as the aggregate number of
Shares so delivered is equal to the Number of Shares.
19. Claim
in Bankruptcy.
GS&Co. agrees that in the event of the bankruptcy of Counterparty,
GS&Co. shall not have rights or assert a claim that is senior in priority to
the rights and claims available to the shareholders of the common stock of
Counterparty.
20. Governing
Law.
The
Agreement, this Master Confirmation and 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).
21. Offices.
(a) The
Office of GS&Co. for each Transaction is: One New York Plaza, New York, New
York 10004.
(b) The
Office of Counterparty for each Transaction is: 500 Volvo Parkway, Chesapeake,
Virginia 23320.
22. Arbitration.
(a) All
parties to this Confirmation are giving up the right to sue each other in court,
including the right to a trial by jury, except as provided by the rules of
the
arbitration forum in which a claim is filed.
(b) Arbitration
awards are generally final and binding; a party’s ability to have a court
reverse or modify an arbitration award is very limited.
(c) The
ability of the parties to obtain documents, witness statements and other
discovery is generally more limited in arbitration than in court
proceedings.
(d) The
arbitrators do not have to explain the reason(s) for their
award.
(e) The
panel of arbitrators will typically include a minority of arbitrators who were
or are affiliated with the securities industry, unless Counterparty is a member
of the organization sponsoring the arbitration facility, in which case all
arbitrators may be affiliated with the securities
industry.
(f) The
rules of some arbitration forums may impose time limits for bringing a claim
in
arbitration. In some cases, a claim that is ineligible for arbitration may
be
brought in court.
(g) The
rules of the arbitration forum in which the claim is filed, and any amendments
thereto, shall be incorporated into this Confirmation.
(h) Counterparty
agrees that any and all controversies that may arise between Counterparty and
GS
& Co., including, but not limited to, those arising out of or relating to
the Agreement or any Transaction hereunder, shall be determined by arbitration
conducted before The New York Stock Exchange, Inc. (“NYSE”) or NASD Dispute
Resolution (“NASD-DR”), or, if the NYSE and NASD-DR decline to hear the matter,
before the American Arbitration Association, in accordance with their
arbitration rules then in force. The award of the arbitrator shall be final,
and
judgment upon the award rendered may be entered in any court, state or federal,
having jurisdiction.
(i) No
person shall bring a putative or certified class action to arbitration, nor
seek
to enforce any pre-dispute arbitration agreement against any person who has
initiated in court a putative class action or who is a member of a putative
class who has not opted out of the class with respect to any claims encompassed
by the putative class action until: (i) the class certification is denied;
(ii)
the class is decertified; or (iii) Counterparty is excluded from the class
by
the court.
(j) Such
forbearance to enforce an agreement to arbitrate shall not constitute a waiver
of any rights under this Confirmation except to the extent stated
herein.
23. 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.
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/
Conrad
Langenegger
Authorized
Signatory
Agreed
and accepted by:
DOLLAR
TREE STORES, INC.
By: /s/
Kent
A. Kleeberger
Name:
Kent A. Kleeberger
Title:
Senior Vice-President and CFO
ANNEX
A
SUPPLEMENTAL
CONFIRMATION
|
To:
|
Dollar
Tree Stores, Inc.
500
Volvo Parkway
Chesapeake,
VA 23320
|
|
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
Dollar Tree Stores, Inc. (“Counterparty”
and
together with GS&Co., 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 December
8, 2006 (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:
|
[
], 2006
|
|
First
Valuation Date:
|
[The
first day of the Calculation Period with respect to the Collared
ASB
Transaction.]
|
|
Initial
Share Price:
|
USD[
] per Share.
|
|
Scheduled
Valuation Date:
|
[
]
|
|
First
Acceleration Date:
|
[The
First Acceleration Date for the Collared ASB
Transaction.]
|
|
Number
of Shares:
|
[
]
|
|
Settlement
Price Adjustment Amount:
|
USD[
] per Share
|
|
Initial
Purchase Price:
|
USD[50,000,000]
|
|
[Termination
Price:
|
USD[
] per Share]
|
|
[Increase/Decrease
in Reserved Shares]:
|
[
]
Shares
|
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) have made any
purchases of blocks pursuant to the proviso in Rule 10b-18(b)(4) under the
Exchange Act during the four full calendar weeks immediately preceding the
Trade
Date other than through GS&Co.
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.
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 this Transaction,
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:
DOLLAR
TREE STORES, INC.
By: __________________________________________
Name:
Title:
ANNEX
B
NET
SHARE
SETTLEMENT PROCEDURES
1. The
following Net Share Settlement Procedures shall apply to the extent that Net
Share Settlement applies under the Master Confirmation:
2. Net
Share
Settlement shall be made by delivery on the Net Share Settlement Date of a
number of Shares satisfying the conditions set forth in paragraph 3 below with
a
value equal to the Forward Cash Settlement Amount (the “Registered
Settlement Shares”),
with
such Shares’ value based on the Net Share Settlement Price, or a number of
Shares not satisfying such conditions with a value equal to the Forward Cash
Settlement Amount (the “Unregistered
Settlement Shares”),
with
such Shares’ value based on the value thereof to GS&Co. (which value shall
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 the GS&Co. (the “Registration
Statement”)
shall
have been filed with, and declared effective by, the Securities and Exchange
Commission under the Securities Act 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
satisfactory to GS&Co.;
(c) as
of or
prior 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
(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, in form and substance satisfactory to GS&Co., which Underwriting
Agreement shall include, without limitation, provisions substantially similar
to
those contained in such underwriting agreements relating to the indemnification
of, and contribution in connection with the liability of, GS&Co. and its
affiliates.
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
(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); and
(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,
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 to the indemnification of, and contribution in connection
with the liability of, GS&Co. and its affiliates, and shall provide for the
payment by Counterparty of all fees and expenses in connection with such resale,
including all fees and expenses of counsel for GS&Co., and shall contain
representations, warranties 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.
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 Net Share Settlement 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 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 Forward Cash Settlement Amount, GS&Co. will refund, in U.S. Dollars,
such excess to Counterparty on the date that is three (3) 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.
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 Forward Cash
Settlement Amount (the amount in U.S. Dollars by which the Net Proceeds are
less
than 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 Agent, a notice of Counterparty’s election
that Counterparty shall either (i) pay an amount in cash equal to the Shortfall
on the day that is one (1) 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 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 number of Settlement Shares, be greater
than the Reserved Shares minus
the
amount of any Shares actually delivered 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 Issuer 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.
|