UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

______________

 

SCHEDULE 13D

(Rule 13d-101)

 

INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO

SECTION 240.13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO

SECTION 240.13d-2(a)

(Amendment No. 6)*

 

Vail Resorts, Inc.

(Name of Issuer)

 

Common Stock, par value $.01

(Title of Class of Securities)

 

91879Q109

(CUSIP Number)

 

Charles G. Huber, Jr.

Corporate Vice President, General Counsel and Secretary

Ralcorp Holdings, Inc.

800 Market Street, Suite 2900

St. Louis, Missouri 63101

(Name, Address and Telephone Number of Person

Authorized to Receive Notices and Communications)

 

August 6, 2008

(Date of Event Which Requires Filing of this Statement)

 

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Sections 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box.

 

______________

*The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

 

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (the “Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

 

(Continued on following pages)

 

 

 

 

 

 

 

 

 

 

NUMBER OF

SHARES

OWNED BY

EACH

PERSON

WITH

 

 

 

19.4%, based on 38,402,203 shares outstanding as of June 2, 2008 as reported in the Issuer’s Form 10-Q for the quarterly period ended April 30, 2008

 

 

 

 

 

 

 

 

 

 

 

 

NUMBER OF

SHARES

OWNED BY

EACH

PERSON

WITH

 

 

 

19.4%, based on 38,402,203 shares outstanding as of June 2, 2008 as reported in the Issuer’s Form 10-Q for the quarterly period ended April 30, 2008

 

 

 

 

 

This Amendment No. 6 to Schedule 13D (“Amendment No. 6”) amends and restates, where indicated, the statement on Schedule 13D relating to the common stock, par value $.01 per share (the “Common Stock”) of Vail Resorts, Inc., a Delaware corporation (the “Issuer”), filed by Ralcorp Holdings, Inc., a Missouri corporation, formerly known as New Ralcorp Holdings, Inc., (“Ralcorp”), with the Securities and Exchange Commission on February 13, 1997, as amended by Amendment No. 1 to Schedule 13D filed by Ralcorp with the Securities and Exchange Commission on October 18, 2005, Amendment No. 2 to Schedule 13D filed by Ralcorp and RH Financial Corporation (“RH Financial”) with the Securities and Exchange Commission on November 2, 2005, Amendment No. 3 to Schedule 13D filed by Ralcorp and RH Financial with the Securities and Exchange Commission on November 30, 2005, Amendment No. 4 to the Schedule 13D filed by Ralcorp and RH Financial with the Securities and Exchange Commission on March 31, 2006 and Amendment No. 5 to the Schedule 13D filed by Ralcorp and RH Financial with the Securities and Exchange Commission on November 1, 2006 (as amended, the “Schedule 13D”). Capitalized terms used in this Amendment No. 6 but not otherwise defined herein have the meanings given to them in the Schedule 13D.

This Amendment No. 6 is being made to reflect the entry into certain agreements regarding the Common Stock of the Issuer as more fully described in Item 6 below. Except as otherwise set forth herein, this Amendment No. 6 does not modify any of the information previously reported by Ralcorp in the Schedule 13D.

Item 5. Interest in Securities of the Issuer.

 

Item 5 of the Schedule 13D is hereby amended and restated in its entirety as follows:

According to the Issuer’s most recent publicly filed documents, as of June 2, 2008, the Issuer has issued and outstanding the following capital stock: no shares of Class A Common Stock and 38,402,203 shares of Common Stock. Based on this information, the Reporting Persons own 7,450,906 shares of Common Stock, or approximately 19.4% of the outstanding Common Stock, subject to the forward sale agreements, pledge agreements and stock loan agreement described in Item 6 below. Messrs. Granneman, Micheletto and Stiritz each beneficially own less than 1% of the outstanding Common Stock. Included in the shares beneficially owned by Messrs. Micheletto and Stiritz, are 25,000 and 22,500 shares of Common Stock, respectively, that may be acquired on or within 60 days of August 6, 2008 through the exercise of stock options. Each of the Reporting Persons, Messrs. Granneman, Micheletto and Stiritz has the sole power to vote or to direct the vote and the sole power to dispose or direct the disposition of the shares beneficially owned by such person, subject to the forward sale agreements, pledge agreements and stock loan agreement described in Item 6 below. Except as set forth in Appendix 1, neither the Reporting Persons nor, to the Reporting Persons’ knowledge, any director or executive officer of the Reporting Persons beneficially owns or has a right to acquire, directly or indirectly, any other shares of Common Stock of the Issuer. During the past sixty days there have not been any transactions in the Common Stock of the Issuer by the Reporting Persons or, to the Reporting Persons’ knowledge, any director or executive officer of the Reporting Persons, other than the sale in the open market by RH Financial of 3,500 shares of the Issuer's Common Stock on August 12, 2008 at an average price of $45.03 per share pursuant to a Rule 10b5-1 plan, and the stock loan agreement transaction described in Item 6 below.

Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer.

 

Item 6 of the Schedule 13D is hereby amended and restated in its entirety as follows:

 

 

 

Shareholder Agreement and Termination Agreement

 

On January 3, 1997, the Issuer, Apollo Ski Partners, L.P. (“Apollo”) and Ralcorp entered into a shareholder agreement (the “Shareholder Agreement”) pursuant to which Apollo and Ralcorp were subject to voting agreements and had certain registration rights. The Shareholder Agreement was amended as of November 1, 1999. The Issuer, Apollo and Ralcorp entered into a Termination Agreement (the “Termination Agreement”) on October 5, 2004 terminating the Shareholder Agreement, except for certain demand and piggyback registration rights with respect to the Common Stock owned by Ralcorp and the indemnification provisions contained in the Shareholder Agreement, all of which survived until March 5, 2006, the 18-month anniversary of the Termination Agreement. As such, both the Shareholder Agreement and the Termination Agreement have terminated and neither agreement has any surviving provisions.

 

The foregoing description of the Shareholder Agreement and Termination Agreement is qualified in its entirety by the full text of such agreements, which are incorporated herein by reference and are filed as exhibits hereto.

 

Forward Sale Agreements and Pledge Agreements

 

October 2005

 

RH Financial entered into a forward sale agreement (the “October 2005 Forward Sale Agreement”) dated October 31, 2005 with Bank of America, N.A. (“Bank of America”) relating to two transactions of up to 890,000 shares each, or an aggregate of up to 1,780,000 shares (the “October 2005 Hedged Shares”) of the Issuer’s Common Stock, subject to adjustment. On November 22, 2005, following the establishment of an initial hedge by the Bank of America in which it sold a number of shares equal to the October 2005 Hedged Shares at a weighted average per share price of $34.5878 which established the floor price (the “October 2005 Floor Price”) under the October 2005 Forward Sale Agreement in transactions conforming to the manner-of-sale conditions described in Rule 144(f) and (g) under the Securities Act of 1933, as amended, using principles of best execution. In consideration of the October 2005 Forward Sale Agreement, Bank of America paid RH Financial $50,518,214.34.

 

With respect to one transaction (the “October 2005 Tranche A”), RH Financial has agreed to deliver a number of shares of Common Stock on the third business day after November 22, 2010, subject to early termination of the contract under certain circumstances, determined in accordance with the following formula: (i) if the price of the Issuer’s Common Stock is less than the October 2005 Floor Price on November 22, 2010 – 890,000 shares; (ii) if the price of the Issuer’s Common Stock is equal to or greater than the October 2005 Floor Price but less than or equal to $48.6650 (the “October 2005 Tranche A Cap Price”) – a number of shares of Common Stock equal to the product of 890,000 shares multiplied by the quotient of the October 2005 Floor Price divided by the stock price on November 22, 2010; or (iii) if the price of the Issuer’s Common Stock is greater than the October 2005 Tranche A Cap Price – a number of shares equal to 890,000 shares multiplied by 1 minus the quotient of the excess of the October 2005 Tranche A Cap Price over the Floor Price divided by the stock price on November 22, 2010.

 

With respect to the other transaction (the “October 2005 Tranche B”), RH Financial has agreed to deliver a number of shares of Common Stock on the third business day after November 21, 2008, subject to early termination of the contract under certain circumstances, determined in accordance with the following formula: (i) if the price of the Issuer’s Common Stock is less than the October 2005 Floor Price on November 21, 2008 – 890,000 shares; (ii) if the price of the Issuer’s Common Stock is equal to or greater than the October 2005 Floor Price but less than or equal to $42.3335 (the “October 2005 Tranche B Cap Price” and together with the October 2005 Tranche A Cap Price, the “October 2005 Cap Prices”) – a number of shares of Common Stock equal to the product of 890,000 shares multiplied by the quotient of the October 2005 Floor Price divided by the stock price on November 21, 2008; or (iii) if the price of

 

 

 

Issuer’s Common Stock is greater than the October 2005 Tranche B Cap Price – a number of shares equal to 890,000 shares multiplied by 1 minus the quotient of the excess of the October 2005 Tranche B Cap Price over the October 2005 Floor Price divided by the stock price on November 21, 2008.

 

The October 2005 Floor Price and the October 2005 Cap Prices are subject to adjustment for stock splits, reverse stock splits, spinoffs, mergers and similar events affecting the Issuer’s Common Stock, depending on the nature of the transaction. RH Financial may elect to retain ownership of the October 2005 Hedged Shares and settle amounts owing under each transaction in cash. Each of the transactions is subject to early settlement and termination under certain circumstances.

 

Pursuant to a related Pledge Agreement dated October 31, 2005 between RH Financial and Bank of America (the “October 2005 Pledge Agreement”), RH Financial has delivered and pledged the October 2005 Hedged Shares to Bank of America as security for its obligations under the Forward Sale Agreement. Under the October 2005 Pledge Agreement, unless an event of default or termination event has occurred and is continuing, RH Financial will continue to have the right to vote the October 2005 Hedged Shares, except as described below with respect to the Loan Agreement. Additionally, so long as no event of default has occurred and is continuing, RH Financial has the right to substitute cash or government securities for the October 2005 Hedged Shares, subject to certain terms and conditions.

 

March 2006

 

RH Financial entered into a forward sale agreement (the “March 2006 Forward Sale Agreement”) dated March 22, 2006 with Bank of America relating to two transactions of up to 985,050 shares each, or an aggregate of up to 1,970,100 shares (the “March 2006 Hedged Shares”) of the Issuer’s Common Stock, subject to adjustment. On April 19, 2006, following the establishment of an initial hedge by the Bank of America in which it sold a number of shares equal to the March 2006 Hedged Shares at a weighted average per share price of $38.3400 which established the floor price (the “March 2006 Floor Price”) under the March 2006 Forward Sale Agreement in transactions conforming to the manner-of-sale conditions described in Rule 144(f) and (g) under the Securities Act of 1933, as amended, using principles of best execution. In consideration of the March 2006 Forward Sale Agreement, Bank of America paid RH Financial $60,011,472.22.

 

With respect to one transaction (the “March 2006 Tranche A”), RH Financial has agreed to deliver a number of shares of Common Stock on the third business day after November 16, 2011, subject to early termination of the contract under certain circumstances, determined in accordance with the following formula: (i) if the price of the Issuer’s Common Stock is less than the March 2006 Floor Price on November 16, 2011 – 985,050 shares; (ii) if the price of the Issuer’s Common Stock is equal to or greater than the March 2006 Floor Price but less than or equal to $55.4013 (the “March 2006 Tranche A Cap Price”) – a number of shares of Common Stock equal to the product of 985,050 shares multiplied by the quotient of the March 2006 Floor Price divided by the stock price on November 16, 2011; or (iii) if the price of the Issuer’s Common Stock is greater than the March 2006 Tranche A Cap Price – a number of shares equal to 985,050 shares multiplied by 1 minus the quotient of the excess of the March 2006 Tranche A Cap Price over the March 2006 Floor Price divided by the stock price on November 16, 2011.

 

With respect to the other transaction (the “March 2006 Tranche B”), RH Financial has agreed to deliver a number of shares of Common Stock on the third business day after November 18, 2009, subject to early termination of the contract under certain circumstances, determined in accordance with the following formula: (i) if the price of the Issuer’s Common Stock is less than the March 2006 Floor Price on November 18, 2009 – 985,050 shares; (ii) if the price of the Issuer’s Common Stock is equal to or greater than the March 2006 Floor Price but less than or equal to $48.2317 (the “March 2006 Tranche B Cap Price” and together with the March 2006 Tranche A Cap Price, the “March 2006 Cap Prices”) – a number

 

 

 

of shares of Common Stock equal to the product of 985,050 shares multiplied by the quotient of the March 2006 Floor Price divided by the stock price on November 18, 2009; or (iii) if the price of the Issuer’s Common Stock is greater than the March 2006 Tranche B Cap Price – a number of shares equal to 985,050 shares multiplied by 1 minus the quotient of the excess of the March 2006 Tranche B Cap Price over the March 2006 Floor Price divided by the stock price on November 18, 2009.

 

The March 2006 Floor Price and the March 2006 Cap Prices are subject to adjustment for stock splits, reverse stock splits, spinoffs, mergers and similar events affecting the Issuer’s Common Stock, depending on the nature of the transaction. RH Financial may elect to retain ownership of the March 2006 Hedged Shares and settle amounts owing under each transaction in cash. Each of the transactions is subject to early settlement and termination under certain circumstances.

 

Pursuant to a related Pledge Agreement dated March 22, 2006 between RH Financial and Bank of America (the “March 2006 Pledge Agreement”), RH Financial has delivered and pledged the March 2006 Hedged Shares to Bank of America as security for its obligations under the March 2006 Forward Sale Agreement. Under the March 2006 Pledge Agreement, unless an event of default or termination event has occurred and is continuing, RH Financial will continue to have the right to vote the March 2006 Hedged Shares. Additionally, so long as no event of default has occurred and is continuing, RH Financial has the right to substitute cash or government securities for the March 2006 Hedged Shares, subject to certain terms and conditions.

 

October 2006

 

RH Financial entered into a forward sale agreement (the “October 2006 Forward Sale Agreement” and together with the October 2005 Forward Sale Agreement and the March 2006 Forward Sale Agreement, the “Forward Sale Agreements”) dated October 20, 2006 with Bank of America relating to a transaction of up to an aggregate of 1,200,000 shares (the “October 2006 Hedged Shares”) of the Issuer’s Common Stock, subject to adjustment. On November 6, 2006, Bank of America established an initial hedge in which it sold a number of shares equal to the October 2006 Hedged Shares at a weighted average share price of $39.2099 in transactions conforming to the manner-of-sale conditions described in Rule 144(f) and (g) under the Securities Act of 1933, as amended, using principles of best execution. In consideration of the October 2006 Forward Sale Agreement, Bank of America paid RH Financial $29,468,592.44.

 

With respect to the transaction, RH Financial has agreed to deliver a number of shares of Common Stock on the third business day after November 15, 2003 (the “October 2006 Maturity Date”), subject to early termination of the contract under certain circumstances, determined in accordance with the following formula: (i) if the price of the Issuer’s Common Stock is less than $35.2889 (the “October 2006 Floor Price”) on the October 2006 Maturity Date – 1,200,000 shares; (ii) if the price of the Issuer’s Common Stock is equal to or greater than the October 2006 Floor Price but less than or equal to $74.1851 (the “October 2006 Cap Price”) – a number of shares of Common Stock equal to the product of 1,200,000 shares multiplied by the quotient of the October 2006 Floor Price divided by the stock price on the October 2006 Maturity Date; or (iii) if the price of the Issuer’s Common Stock is greater than the October 2006 Cap Price – a number of shares equal to 1,200,000 shares multiplied by 1 minus the quotient of the excess of the October 2006 Cap Price over the October 2006 Floor Price divided by the stock price on the October 2006 Maturity Date.

 

The October 2006 Floor Price and the October 2006 Cap Price are subject to adjustment for stock splits, reverse stock splits, spinoffs, mergers and similar events affecting the Issuer’s Common Stock, depending on the nature of the transaction. RH Financial may elect to retain ownership of the October 2006 Hedged Shares and settle amounts owing under the transaction in cash. The transaction is subject to early settlement and termination under certain circumstances.

 

 

 

Pursuant to a related Pledge Agreement dated October 20, 2006 between RH Financial and Bank of America (the “October 2006 Pledge Agreement,” and together with the October 2005 Pledge Agreement and the March 2006 Pledge Agreement, the “Pledge Agreements”), RH Financial has delivered and pledged the October 2006 Hedged Shares to Bank of America as security for its obligations under the October 2006 Forward Sale Agreement. Under the October 2006 Pledge Agreement, unless an event of default or termination event has occurred and is continuing, RH Financial will continue to have the right to vote the October 2006 Hedged Shares. Additionally, so long as no event of default has occurred and is continuing, RH Financial has the right to substitute cash or government securities for the October 2006 Hedged Shares, subject to certain terms and conditions.

 

Loan Agreement

On August 6, 2008, pursuant to a master securities loan agreement (the “Loan Agreement”), RH Financial agreed to loan Bank of America 890,000 shares of the Issuer’s Common Stock, consisting of a portion of the October 2005 Hedged Shares. During the term of the loan, RH Financial will not have the right to vote any of the loaned shares. Either party may terminate the loan at any time upon notice to the other party, provided that the termination date may not be earlier than the third business day following such notice.

The foregoing description of the material provisions of the Forward Sale Agreements, Pledge Agreements and Loan Agreement is qualified in its entirety by the full text of such agreements, which are incorporated herein by reference and are filed as exhibits hereto.

 

Other than the foregoing agreements and others described in filings made with the SEC by Ralcorp, there are no contracts, arrangements, understandings or relationships among the Reporting Persons or, to the Reporting Persons’ knowledge, any of their directors or executive officers, or between such persons and any other person, with respect to any securities of the Issuer.

 

Item 7. Materials to be Filed as Exhibits.

 

Item 7 of the Schedule 13D is hereby amended and restated in its entirety as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SIGNATURE

 

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

 

 

 

 

 

 

Appendix 1

 

Directors and Executive Officers of Ralcorp Holdings, Inc.

 

Set forth below with respect to each director and executive officer of Ralcorp are (a) his name and business address (unless another address is set forth, the business address of each person is 800 Market Street, St. Louis, Missouri 63101); (b) present principal employment or occupation and the name and (if not Ralcorp) principal business of any corporation or other organization in which such employment or occupation is carried on and the address of such corporation or other organization (which, unless another address is set forth, it is the same as the business address set forth for such person); and (c) the number of shares of the Issuer’s Common Stock beneficially owned. Ralcorp believes the stock ownership information below is correct as of August 6, 2008. The information will be updated when amendments to this Schedule 13D are filed.

 

_________________________

¹ 25,000 shares of Common Stock that may be acquired upon the exercise of stock options granted to Mr. Micheletto.

 

 

 

 

 

_________________________

   

 

 

Directors and Executive Officers of RH Financial Corporation

 

Set forth below with respect to each director and executive officer of RH Financial Corporation are (a) his name and business address (unless another address is set forth, the business address of each person is 800 Market Street, St. Louis, Missouri 63101); (b) present principal employment or occupation and the name and (if not RH Financial Corporation) principal business of any corporation or other organization in which such employment or occupation is carried on and the address of such corporation or other organization (which, unless another address is set forth, it is the same as the business address set forth for such person); and (c) the number of shares of the Issuer’s Common Stock beneficially owned. RH Financial Corporation believes the stock ownership information below is correct as of August 6, 2008. The information will be updated when amendments to this Schedule 13D are filed.

 

 

 

 

 

Exhibit Index

 

 

 

 

 

 

 

 

 

 

Exhibit 99.10

 

 

 

 

March 22, 2006

 

From:

Bank of America, N.A.

c/o Banc of America Securities LLC

9 West 57^th Street, 40^th Floor

New York, NY 10019

Attention: Legal Department

Telephone: 212-583-8373

Facsimile: 212-230-8610

 

To:

RH Financial Corporation

800 Market Street, Suite 2900

St. Louis, MO 63101

Attention: Charles G. Huber, Jr.

Telephone: 314-877-7099

 

Dear Sir or Madam:

 

The purpose of this letter agreement (this “Confirmation”) is to set forth the terms and conditions for STARS transactions (the “Transactions” and each a “Transaction”) entered into between Bank of America, N.A. (“Party A”) and RH Financial Corporation (“Party B”) on the Trade Date (as defined below) for each Transaction. Additional terms of each Transaction subject to this Confirmation shall be set forth in a supplemental written confirmation substantially in the form of Annex A hereto (for any Transaction, a “Supplemental Confirmation”). This Confirmation and each Supplemental Confirmation together constitute a “Confirmation” as referred to in the Agreement specified below.

The definitions and provisions contained in the 1996 ISDA Equity Derivatives Definitions (the “Equity Definitions”) as published by the International Swaps and Derivatives Association, Inc. (“ISDA”) are incorporated into this Confirmation. In the event of any inconsistency between the Equity Definitions and the Agreement, on the one hand, and this Confirmation, on the other hand, this Confirmation shall govern. In the event of any inconsistency between the Equity Definitions, this Confirmation and the Agreement, on the one hand, and a Supplemental Confirmation, on the other hand, the Supplemental Confirmation will govern. This Confirmation and a Supplemental Confirmation evidences a complete binding agreement between Party A and Party B as to the terms of the Transactions to which this Confirmation and such Supplemental Confirmation relates. For purposes of the Equity Definitions, each Transaction will be deemed to be a Share Option Transaction. With respect to a Transaction, capitalized terms used herein that are not otherwise defined shall have the meaning assigned to them in the Supplemental Confirmation relating to such Transaction.

 

 

 

Each party is hereby advised, and each such party acknowledges, that the other party has engaged in, or refrained from engaging in, substantial financial transactions and has taken other material actions in reliance upon the parties’ entry into the Transactions to which this Confirmation and each Supplemental Confirmation relates on the terms and conditions set forth below.

In lieu of negotiating an ISDA Master Agreement and Schedule, Party A and Party B hereby agree that an agreement in the form of the ISDA Master Agreement (Multicurrency–Cross Border) (the “ISDA Form”) as published by ISDA in 1992, without any Schedule attached thereto, but containing all elections, modifications and amendments to the ISDA Form contained herein (as so supplemented, the “Agreement”), shall be deemed to have been executed by both of us on the Trade Date of the first Transaction between us. This Confirmation, each Supplemental Confirmation and the Transaction to which each Supplemental Confirmation relates, as well as any other Transaction between us (unless otherwise specified in the Confirmation with respect to such other Transaction) shall supplement, form a part of, and be subject to, such Agreement. All provisions contained in, or incorporated by reference to, the Agreement shall govern the Transactions referenced in this Confirmation, as well as all other Transactions between the parties hereafter entered into, except as expressly modified herein or therein. In case of any inconsistency between the provisions of the Agreement and this Confirmation, this Confirmation (including any amendments hereto) shall prevail for the purpose of the Transactions to which it relates. This Confirmation, if it relates to the first Transaction between us, constitutes both an Agreement and a Confirmation thereunder.

If Party A and Party B subsequently negotiate an ISDA Master Agreement and Schedule, the Transactions shall be governed thereby only to the extent expressly so agreed by the parties at such time, and in such case, such agreement shall become the “Agreement.” In such event, in case of any inconsistency between the provisions of such Agreement and this Confirmation, this Confirmation (including any amendments hereto) shall prevail for the purpose of the Transactions.

1.         At any time and from time to time during the period beginning on the date hereof (the “Commencement Date”) and ending on 2 months from the date hereof (the “Plan Effectiveness Period”), Party A (or an affiliate of Party A) shall establish Party A’s initial hedge (“Party A’s Initial Hedge”) of the price and market risk under one or more Transactions hereunder, referred to herein as Transaction A and Transaction B in accordance with the plan or instruction set forth in Annex B hereto (the “Hedge Execution Plan”). The sum of the Base Amounts for the Transactions hereunder shall not exceed 1,970,100 Shares (the “Maximum Base Amount”). For each Transaction, Party A shall determine the Base Amount, the Initial Price, the Floor Price, the Cap Price, the Maturity Date, the Payment Date and the Purchase Price for such Transaction in the manner set forth below based on Party A’s Initial Hedge of such Transaction, and shall deliver the Supplemental Confirmation for such Transaction to Party B. Party A’s Initial Hedge for the Transactions shall be established by selling Shares in transactions conforming to the manner-of-sale conditions described in Rule 144 (f) and (g) under the Securities Act of 1933, as amended, using principles of best execution. For the avoidance of doubt, in the event that the Aggregate Base Amount (as defined below) is equal to or less than 985,050 Shares during the Plan Effectiveness Period, there shall only be one Transaction hereunder referred to herein as Transaction A.

Party B acknowledges that, upon effectiveness of this Confirmation, Party A is and will be authorized to execute hedging transactions on Party B’s behalf in accordance with the Hedge Execution Plan, and that such hedging transactions shall be executed in reliance on this Confirmation.

For each Transaction to which a Supplemental Confirmation relates, the following terms shall be applicable:

 

 

 

General Terms:

With respect to Transaction B, as specified in the Supplemental Confirmation for such Transaction, November 18, 2009 for such Transaction.

With respect to Transaction B, 100.0%.

 

 

 

With respect to Transaction B, 125.8%.

Payment of Purchase Price:

 

 

 

 

and (ii) the date all of the conditions specified in Section 2 below are satisfied.

With respect to Transaction B, 75.40%, subject to adjustment as reasonably determined in good faith by the Calculation Agent to reflect changes in, dividends and interest rates during the Plan Effectiveness Period with a goal of preserving for Party A the economic equivalent of the Transaction in light of such changes.

Settlement Terms:

 

 

 

Confirmation as if the date was the Trade Date; (ii) the Early Settlement Date shall be a day on which Party A is reasonably satisfied that Party B would be permitted to purchase or sell Shares pursuant to any policy of the Issuer or any agreement with any person that may be applicable to Party B or Party B’s Shares; (iii) settlement following an Early Settlement Date shall be by physical settlement only; and (iv) the Calculation Agent shall make such reasonable adjustments to the valuation, exercise, settlement, payment or any other term of any Transaction, including (but not limited to) the amount deliverable by Party B in settlement after any Early Settlement, as the Calculation Agent determines in good faith appropriate in its reasonable judgment to account for the change in value of any Transaction to Party A as a result of any Early Settlement.

 

(i) if the Settlement Price for such Settlement Date is less than or equal to the Cap Price for such Transaction but greater than or equal to the Floor Price for such Transaction, the Floor Price for such Transaction divided by such Settlement Price;

(ii) if the Settlement Price for such Settlement Date is greater than the Cap Price for such Transaction, one (1) minus a fraction the numerator of which is the excess of the Cap Price for such Transaction over the Floor Price for such Transaction and the denominator of which is such Settlement Price; or

(iii) if the Settlement Price for such Settlement Date is less than the Floor Price for such Transaction, one (1).

The ratio expressed in clauses (i) and (ii) above shall be rounded upward or downward to the nearest 1/10,000^th or, if there is not a nearest 1/10,000^th, to the next lower 10,000^th.

 

 

 

 

 

 

order from Party B, pledgor, assignor or transferor of such property or item of collateral, together with any evidence of the corporate or other authority of such Person, shall not constitute such a condition or restriction.

 

 

 

immediately available funds, if paid by Party A, to an account designated by Party B, or, if paid by Party B, to an account designated by Party A.

 

 

 

Transaction or is deemed to have elected Cash Settlement for any Transaction and does not deliver the Cash Settlement Amount for such Transaction on the Settlement Date for such Transaction, Party B shall be in breach of the Agreement and this Confirmation and shall be liable to Party A for any losses incurred by Party A or any affiliate of Party A as a result of such breach, including without limitation market losses incurred in connection with any decline in the value of the Shares subsequent to the Maturity Date for such Transaction with respect to such Settlement Date.

Adjustments:

 

Dividends:

 

Obligations with Respect

 

 

Extraordinary Events:

 

 

 

 

(a)        Conditions to Effectiveness. This Confirmation shall become effective upon the satisfaction or waiver of the following condition (the date such condition is satisfied or waived, the “Effective Date”):

The parties hereto shall have executed a Pledge Agreement (the “Pledge Agreement”), and Party B shall have pledged and delivered to Party A or its collateral agent on or prior to the date hereof in the manner specified in the Pledge Agreement a number of Shares at least equal to the Maximum Base Amount as security for Party B’s obligations hereunder, under each Supplemental Confirmation, under the Agreement and under the Pledge Agreement, all as provided in the Pledge Agreement. The Pledge Agreement is a Credit Support Document hereunder and under the Agreement.

(b)        Conditions to Party A’s Payment Obligation. The obligation of Party A to pay the Purchase Price for any Transaction on the Payment Date for such Transaction is subject to the satisfaction of the following conditions:

(i)        The representations and warranties of Party B contained in Section 3 below, in the Agreement and in the Pledge Agreement shall be true and correct as of such Payment Date for such Transaction (it being understood that the representation and warranties contained in the first sentence of Section 3(a)(I)(iv) which by their terms are made as of specific dates need only be true and correct as of such dates).

(ii)        Party B shall have performed all of the covenants and obligations to be performed by it hereunder, under the Agreement and under the Pledge Agreement on or prior to such Payment Date for such Transaction.

(I)        Party B represents and warrants to and for the benefit of, and agrees with, Party A as follows:

 

 

 

(i)        From the date three months prior to the date hereof until the Trade Date for the Transactions hereunder, neither Party B nor any person who would be considered to be the same “person” (as such term is used in Rule 144(a)(2) under the Securities Act) as Party B has, without the consent of Party A, sold any Shares or hedged (through swaps, options, short sales or otherwise) any long position in the Shares, other than any Transaction under this Agreement. For the purposes of this paragraph, Shares shall be deemed to include securities convertible into or exchangeable or exercisable for Shares.

(ii)        Party B does not know or have any reason to believe that the Issuer has not complied with the reporting requirements contained in Rule 144(c)(1) under the Securities Act.

(iii)       Party B’s holding period (calculated in accordance with Rule 144(d) under the Securities Act) with respect to the Shares pledged to Party A pursuant to the Pledge Agreement commenced on May 14, 1999.

(iv)       Party B is not on the date hereof or on the Effective Date in possession of material, non-public information concerning the business, operations or prospects of the Issuer. “Material” information for these purposes is any information to which an investor would reasonably attach importance in reaching a decision to buy, sell or hold securities of the Issuer. Party B is entering into this Confirmation and each Transaction hereunder in good faith and not as a part of a plan or scheme to evade the prohibitions of Rule 10b5-1 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or other applicable securities laws. Party B has not entered into or altered any hedging transaction(s) or position relating to the Shares corresponding to or offsetting any Transaction hereunder.

(v)        Party B is acting for its own account, and it has made its own independent decision to enter into the Transactions and as to whether the Transactions are appropriate or proper for it based upon its own judgment and upon advice from such advisors as it has deemed necessary. Party B is not relying on any communication (written or oral) of Party A or any of its affiliates with respect to the legal, accounting, tax or other implications of this Confirmation or any Supplemental Confirmation and that it has conducted its own analyses of the legal, accounting, tax and other implications hereof and thereof; it being understood that information and explanations related to the terms and conditions of this Confirmation or any Supplemental Confirmation shall not be considered investment advice or a recommendation to enter into this Confirmation or any Supplemental Confirmation. Party B further acknowledges and confirms that it has taken independent tax advice with respect to the Transactions.

(vi)       Party B is entering into this Confirmation with a full understanding of all of the terms and risks hereof (economic and otherwise) and is capable of evaluating and understanding (on its own behalf or through independent professional advice), and understands and accepts, the terms, conditions and risks of the Transactions. Party B is also capable of assuming (financially and otherwise), and assumes, those risks of the Transactions.

(vii)      Neither Party A nor any of its affiliates is acting as a fiduciary or an advisor for Party B in respect of the Transactions.

(viii)     Party B is an “eligible contract participant”(as such term is defined in Section 1(a)(12) of the Commodity Exchange Act, as amended).

 

 

 

(ix)       Party B is (A) an “accredited investor” within the meaning of Rule 501(a)(1), (2), (3), (7) or (8) under the Securities Act, (B) is entering into the Transactions for its own account and not with a view to distribution and (C) understands and acknowledges that the Transactions have not and will not be registered under the Securities Act. Party B is a “qualified investor” within the meaning of Section 3(a)(54) of the Exchange Act.

(x)        Delivery of Shares by Party B pursuant to this Confirmation and each Supplemental Confirmation will pass to Party A title to such Shares (or security entitlements) free and clear of any liens, except for those created pursuant to the Pledge Agreement.

(xi)      Party B owns (as such term is used in Rule 16c-4 under the Exchange Act) a number of Shares (including the Shares pledged to Party A pursuant to the Pledge Agreement), after subtracting the number of Shares to which any put equivalent positions (as defined in Rule 16a-1(h) under the Exchange Act) have been established or are maintained by Party B (other than any put equivalent position established as a result of this transaction), at least equal to the Maximum Base Amount.

(xii)      To Party B’s knowledge, none of the transactions contemplated herein will violate any corporate policy of the Issuer or other rules or regulations of the Issuer known and applicable to Party B or its affiliates, including, but not limited to, the Issuer’s window period policy.

(xiii)     Party B has, on or prior to the date hereof, transmitted for filing with the Securities and Exchange Commission (the “SEC”) a Form 144 with respect to the Transactions, and has filed any amendments thereto necessary pursuant to Rule 144 or any related interpretations of the SEC. Party B promptly will provide Party A with a copy of all such filings.

(xiv)     Party B has not solicited or arranged for the solicitation of, and will not solicit or arrange for the solicitation of, orders to buy Shares in anticipation of or in connection with any sales of Shares that Party A or an affiliate of Party A effects in establishing Party A’s Initial Hedge with respect to any Transaction.

(xv)      Except as provided herein, Party B has not made, will not make, and has not arranged for, any payment to any person in connection with any sales of Shares that Party A or an affiliate of Party A effects in establishing Party A’s Initial Hedge with respect to any Transaction.

(xvi)     Party B agrees that Party B shall not enter into or alter any hedging transaction or position relating to the Shares corresponding to or offsetting any Transaction.

(xvii)         Party B agrees to notify Party A as soon as practicable if at any time during the Plan Effectiveness Period Party B becomes aware of any legal, contractual or regulatory restrictions that is applicable to Party B or Party B’s affiliates that would prohibit sales, pledges or transfers of Shares by Party B (other than any such restriction relating to Party B’s possession or alleged possession of material nonpublic information relating to the Issuer or its securities). Such notice shall be directed to Richard Konefal at (212) 583-8065 and shall indicate the anticipated duration of the restriction, but shall not include any other information about the nature of the restrictions or its applicability to Party B. In any event, Party B shall not communicate any material nonpublic information relating to the Issuer or its securities to Party A or any of Party A’s affiliates.

 

 

 

(xviii)   With respect to each Transaction, Party B (A) has not sold any Shares pursuant to an effective registration statement under which Party B is listed as a selling securityholder at any time during the fifteen (15) Exchange Business Days prior to or following the Effective Date, and shall not make any such sales of Shares at any time during the fifteen (15) Exchange Business Days prior to or following the Maturity Date and (B) has not exercised any rights under any registration rights agreement to cause a registration statement under which Party B is (or will be) listed as a selling securityholder to be filed with respect to any Shares at any time during the fifteen (15) Exchange Business Days prior to or following Trade Date and shall not exercise any such rights, or cause any such registration statement to be filed, at any time during the fifteen (15) Exchange Business Days prior to or following the Maturity Date. For purposes of this paragraph only, “Maturity Date” shall include any other date of early termination or unwind of the Transaction in whole or in part.

 

(II)       The parties intend that, for each Transaction, this Confirmation constitutes a “Preliminary Agreement” and, upon execution of the Supplemental Confirmation for such Transaction, a “Final Agreement,” both as described in the letter dated December 14, 1999 submitted by Robert W. Reeder and Alan L. Beller to Michael Hyatte of the Securities and Exchange Commission staff (the “Staff”) to which the Staff responded in an interpretive letter dated December 20, 1999.

(b)        Additional Termination Events: The following shall be an Additional Termination Event with respect to which Party B is the sole Affected Party and the Transactions hereunder shall be the sole Affected Transactions, provided however, notwithstanding anything to the contrary in Section 6(b)(i) of the Agreement, Party A shall, promptly upon becoming aware of the Additional Termination Event, notify Party B of such Additional Termination Event and shall give such information to Party B regarding such Additional Termination Event as Party B may reasonably require:         

 

A Hedging Disruption Event shall have occurred. “Hedging Disruption Event” means, with respect to Party A as determined in its reasonable good faith judgement, the inability, due to market illiquidity, Illegality (as defined in the Agreement, but with respect to Party A’s hedging activities relating to any Transaction), lack of hedging transactions, credit worthy market participants or otherwise, of establishing, re-establishing or maintaining any transactions necessary in the ordinary course of Party A’s business to hedge, directly or indirectly, the equity price risk of entering into and performing under any Transaction, including the event that at any time Party A concludes that it or any of its affiliates are unable to establish, re-establish or maintain a full hedge of its position in respect of any Transaction through share borrowing arrangements at a rate equal to or less than 400 basis points per annum (the “Maximum Stock Loan Rate”), provided that, in the event that Party A’s hedging costs exceed 37.5 basis points per annum (the “Initial Stock Loan Rate”) but do not exceed 400 basis points per annum, Party A may require that Party B pay Party A an amount corresponding to the increase to Party A’s hedging costs, as reasonably determined in good faith by Party A. In the event that Party A’s stock loan rate exceeds the Maximum Stock Loan Rate, Party A may give notice to Party B that it elects to terminate such Transaction, specifying the date of such termination, which may be the same day that the notice of termination is effective, provided, however, that if Party B can arrange a source of stock borrow acceptable to Party A at a rate less than or equal to the Initial Stock Loan Rate, then no Hedging Disruption Event shall have occurred.

 

 

 

(c)        Additional Events of Default. It shall be an Event of Default under the Agreement with respect to Party B if a Collateral Event of Default, as defined in the Pledge Agreement, shall have occurred.

 

(i)        The first paragraph of Section 9.1(c) of the Equity Definitions is hereby amended to read as follows: ‘(c) If “Calculation Agent Adjustment” is specified as the method of adjustment in the Confirmation of a Share Option Transaction, then following any Potential Adjustment Event, the Calculation Agent will determine reasonably in good faith whether such Potential Adjustment Event has a material effect on the theoretical value of the relevant Shares or Options and, if so, may in its reasonable good faith judgment make appropriate adjustments to any one or more of any Base Amount, any Settlement Ratio, the Cap Price, the Floor Price, the Cash Settlement Amount, any Settlement Price and any other variable relevant to the exercise, settlement or payment terms of such Transaction”, and the sentence immediately preceding Section 9.1(c)(ii) is hereby amended by deleting the words “diluting or concentrative”.

(ii)        Section 9.1(e) of the Equity Definitions shall be amended to add the new following subsection (vii): “(vii) any tender offer with respect to the Shares and is not a Merger Event as defined in Section 9.2 of the Equity Definitions and is deemed to be material in the reasonable good faith determination of the Calculation Agent”.

(iii) Section 9.1(e)(v) of the Equity Definitions is hereby deleted in its entirety and replaced with the following: “(v) a repurchase by the Issuer in one transaction of more than 10% of the Shares outstanding whether out of profits or capital and whether the consideration for such repurchase is cash, securities, or otherwise; or”

(iv)       Section 9.1(e)(vi) of the Equity Definitions is hereby amended by deleting the words “other similar” between “any” and “event” and replacing it with the word “corporate”; deleting the words “diluting or concentrative” and replacing them with “material”; and adding the following words at the end of the sentence “or options on the Shares”.

(v)        Section 9.6 (a)(ii) of the Equity Definitions is hereby amended by (A) inserting into the first line thereof the reference “(1)” after the word “means”, (B) deleting the period at the end of subsection (ii) thereof and inserting the following words in its place: “or (2) at Party A’s option, the occurrence of any of the events specified in Section 5(a)(vii)(1) through (9) of the ISDA Master Agreement with respect to that Issuer.”

(vi)       The first paragraph of Section 9.7(b) of the Equity Definitions is hereby amended by (A) deleting from the second sentence thereof the words “after that date” between the words “that would have been required” and “but for the occurrence of the Option Value Event” and by (B) deleting the period at the end of subsection (iii) thereof and inserting the following words therefor “; and (iv) a term equal to the number of days from the Announcement Date through and including the Maturity Date”.

(vii)      The definition of “Option Value Event” set forth in Section 9.7(c)(i) of the Equity Definitions is hereby amended by (A) deleting from the first line thereof the word “or” after the word “Nationalization” and inserting a comma in place of such word “or”, and (B) inserting into the second line thereof the words “or the De-Listing” after the word “Insolvency”.

 

 

 

(viii) Section 9.1 (e)(iii) of the Equity Definitions is hereby deleted and replaced with the following “an extraordinary dividend, other than an Extraordinary Cash Dividend;”

(e)        Indemnity. In the event that Party A or any of its affiliates becomes involved in any capacity in any action, proceeding or investigation brought by any person in connection with any tax, regulatory or accounting position taken by Party B in connection with the Agreement, this Confirmation, any Supplemental Confirmation or the Pledge Agreement, Party B shall reimburse Party A or such affiliate for its reasonable legal and other out-of-pocket expenses (including the cost of any investigation and preparation) incurred in connection therewith within 30 days of receipt of notice of such expenses and reasonably supporting documentation, and shall indemnify and hold Party A or such affiliate harmless on an after-tax basis against any losses, claims, damages or liabilities to which Party A or such affiliate may become subject in connection with any such action, proceeding or investigation. Notwithstanding the foregoing, such obligation to hold harmless shall not apply to any action, proceeding, or investigation which is finally determined as having resulted from Party A’s negligence, willful misconduct, or breach of the Agreement, this Confirmation, any Supplemental Confirmation or the Pledge Agreement. The reimbursement and indemnity obligations of Party B under this Section shall be in addition to any liability that Party B may otherwise have, shall extend upon the same terms and conditions to the partners, directors, officers, agents, employees and controlling persons (if any), as the case may be, of Party A and its affiliates and shall be binding upon and inure to the benefit of any successors, assigns, heirs and personal representatives of Party B, Party A, any such affiliate and any such person. Party B also agrees that neither Party A nor any of such affiliates, partners, directors, officers, agents, employees or controlling persons shall have any liability to Party B for or in connection with any matter referred to in the Agreement, this Confirmation, any Supplemental Confirmation or the Pledge Agreement except to the extent that any losses, claims, damages, liabilities or expenses incurred by Party B result from the negligence or bad faith of Party A or a breach by Party A of any of its covenants or obligations hereunder. The foregoing provisions shall survive any termination or completion of the Transactions.

(f)        Confidentiality. Except as required by law or judicial or administrative process, or as requested by a regulatory authority or self-regulatory organization, each party hereto agrees to keep this Agreement, each Supplemental Confirmation and the Pledge Agreement and the transactions contemplated hereby and thereby confidential. In the event disclosure is permitted pursuant to the preceding sentence, the disclosing party shall (i) provide prior notice of such disclosure to the other party, (ii) use reasonable efforts to minimize the extent of such disclosure and (iii) comply with all reasonable requests of the other party to minimize the extent of such disclosure. Notwithstanding the foregoing, effective from the date of commencement of discussions concerning the Transactions, Party B and each of its employees, representatives, or other agents may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of the Transactions and all materials of any kind (including opinions or other tax analyses) that are provided to Party B relating to such tax treatment and tax structure.

 

(g)        Termination and Liquidation. The parties hereto agree and acknowledge that Party A is a “financial institution” within the meaning of Section 101(22) of Title 11 of the United States Code (the “Bankruptcy Code”). The parties hereto further agree and acknowledge that this Agreement is a “securities contract,” as such term is defined in Section 741(7) of the Bankruptcy Code, and Party A is entitled to the protections afforded by, among other Sections, Sections 362(b)(6), 546(e) and 555 of the Bankruptcy Code.

(h)        Certain Authorized Transfers. Upon consent of Party B, which consent shall not be unreasonably withheld (provided that the creditworthiness of the assignee is equal to or greater than that of Party A), Party A may transfer or assign its rights and obligations hereunder, under the Agreement, under any Supplemental Confirmation and under the Pledge Agreement, in whole or

 

 

 

in part, to (A) any of its affiliates or (B) any entities sponsored or organized by, or on behalf of or for the benefit of, Party A.

 

(i)        Designation by Party A. Party A (the “Designator”) may designate any of its affiliates (the “Designee”) to deliver or take delivery, as the case may be, and otherwise perform its obligations to deliver or take delivery of, as the case may be, any Shares in respect of any Transaction, and the Designee may assume such obligations. Such designation shall not relieve the Designator of any of its obligations hereunder. Notwithstanding the previous sentence, if the Designee shall have performed the obligations of the Designator hereunder, then the Designator shall be discharged of its obligations to Party B to the extent of such performance.

(j)        Payments on Early Termination. For the purposes of the Transactions, Second Method and Loss shall apply. Upon the occurrence or effective designation of an Early Termination Date occurring as a result of an Event of Default or a Termination Event with respect to which any Transaction hereunder is an Affected Transaction, if Party B would owe any amounts to Party A pursuant to Section 6(e) of the Agreement (determined as if such Transaction were the only Transaction under the Agreement), then, except to the extent that Party A proceeds to realize pursuant to clause (ii) of paragraph 7(a) of the Pledge Agreement upon collateral pledged under the Pledge Agreement and to apply the proceeds of such realization as provided in the second clause of paragraph 7(d) thereof:

(i)        on such Early Termination Date, in lieu of any payment or delivery required by Section 6(e) of the Agreement (as so determined), Party B shall deliver to Party A a number of Free Shares equal to the quotient obtained by dividing (A) the amount that would be payable pursuant to Section 6(e) of the Agreement (as so determined) were it not for this sentence, by (B) the market value of the Shares at the time of such delivery (which for the avoidance of doubt shall mean the quoted price on the Exchange at the time of delivery, or if such Shares are not quoted on an Exchange, the price as reasonably determined in good faith by the Calculation Agent), as reasonably determined by the Calculation Agent; and

(ii)        for purposes of determining any Loss under Section 6(e) of the Agreement in respect of any other Transactions under the Agreement, the Transactions hereunder shall be deemed not to be a Transaction under the Agreement; provided that, for the avoidance of doubt, if Party B fails to deliver Free Shares pursuant to clause (i) above at the time required, then the Transactions hereunder (including such delivery obligation) shall be included for the purpose of determining Party A’s Loss for all Transactions (including the Transactions hereunder) under the Agreement.

(k)        Specified Transaction. For purposes of the Agreement, “Specified Transaction” shall also include any transaction with respect to the forward sale or delivery of any security.

(l)        Cross Default. The “Cross Default” provisions of Section 5(a)(vi) of the Agreement will not apply to Party A and will apply to Party B, and for such purpose “Specified Indebtedness” will not have the meaning specified in Section 14 thereof, and such definition shall be replaced by the following: “any obligation in respect of the payment of moneys (whether present or future, contingent or otherwise, as principal or surety or otherwise), except that such term shall not include obligations in respect of deposits received in the ordinary course of a party’s banking business”, and the “Threshold Amount” in relation to Party B shall be U.S. $25 million.

 

 

 

(m)       Netting and Set-off. (A) If on any date cash would otherwise be payable or Shares or other property would otherwise be deliverable hereunder or pursuant to the Agreement, any Supplemental Confirmation or the Pledge Agreement by Party A to Party B and by Party B to Party A and the type of property required to be paid or delivered by each such party on such date is the same, then, on such date, each such party’s obligation to make such payment or delivery will be automatically satisfied and discharged and, if the aggregate amount that would otherwise have been payable or deliverable by one such party exceeds the aggregate amount that would otherwise have been payable or deliverable by the other such party, replaced by an obligation of the party by whom the larger aggregate amount would have been payable or deliverable to pay or deliver to the other party the excess of the larger aggregate amount over the smaller aggregate amount.

(B)       In addition to and without limiting any rights of set-off that a party hereto may have as a matter of law, pursuant to contract or otherwise, upon the occurrence of an Early Termination Date, Party A shall have the right to terminate, liquidate and otherwise close out any Transaction hereunder, all other Transactions contemplated by the Agreement, each Supplemental Confirmation and the Pledge Agreement pursuant to the terms hereof and thereof, and to set off any obligation that Party A or any affiliate of Party A may have to Party B, including without limitation any obligation to make any release, delivery or payment to Party B pursuant to the Pledge Agreement, against any right Party A or any of its affiliates may have against Party B, including without limitation any right to receive a payment or delivery pursuant to any provision of the Agreement or hereunder. In the case of a set-off of any obligation to release, deliver or pay assets against any right to receive assets of the same type, such obligation and right shall be set off in kind. In the case of a set-off of any obligation to release, deliver or pay assets against any right to receive assets of any other type, the value of each of such obligation and such right shall be reasonably determined in good faith by the Calculation Agent and the result of such set-off shall be that the net obligor shall pay or deliver to the other party an amount of cash or assets, at the net obligor’s option, with a value (reasonably determined in good faith, in the case of a delivery of assets, by the Calculation Agent) equal to that of the net obligation. In determining the value of any obligation to release or deliver Shares or any right to receive Shares, the value at any time of such obligation or right shall be reasonably determined in good faith by reference to the market value of the Shares at such time (which for the avoidance of doubt shall mean the quoted price on the Exchange at the time of delivery, or if such Shares are not quoted on an Exchange, the price as determined by the Calculation Agent), as reasonably determined in good faith by the Calculation Agent. If an obligation or right is unascertained at the time of any such set-off, the Calculation Agent may in good faith reasonably estimate the amount or value of such obligation or right, in which case set-off will be effected in respect of that estimate, and the relevant party shall account to the other party at the time such obligation or right is ascertained.

(n)        Governing Law. This Confirmation shall be governed by the laws of The State of New York without reference to the choice of law rules thereof. The parties hereto irrevocably submit to the non-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 this Confirmation or the transactions contemplated hereby.

(o)        WAIVER OF RIGHT TO TRIAL BY JURY. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHTS TO TRIAL BY JURY WITH RESPECT TO ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS CONFIRMATION OR ANY TRANSACTION CONTEMPLATED HEREBY.

(p)        Amendment or Waiver. Notwithstanding anything to the contrary in the Agreement, any amendment or waiver of any provision of this Confirmation or any Supplemental Confirmation must be effected in accordance with the requirements for the

 

 

 

amendment of a “plan” as defined in Rule 10b5-1(c) under the Exchange Act. Any such amendment or waiver shall be made in good faith and not as part of a plan or scheme to evade the prohibitions of Rule 10b5-1 under the Exchange Act or other applicable securities laws. Party B agrees that he/she/it will not modify this Confirmation or any Supplemental Confirmation at any time that he/she/it is aware of any material non-public information about the Issuer and/or the Shares.

(q)        Binding Contract. (i) As a condition to the execution of Party A’s Initial Hedge, Party B accepts and agrees to be bound by the contractual terms and conditions as set forth in any Supplemental Confirmation. Upon receipt of any Supplemental Confirmation, Party B shall promptly execute and return such Supplemental Confirmation to Party A; provided that Party B’s failure to so execute and return any Supplemental Confirmation shall not affect the binding nature of such Supplemental Confirmation, and the terms set forth therein shall be binding on Party B to the same extent, and with the same force and effect, as if Party B had executed a written version of such Supplemental Confirmation, provided the terms are consistent with the Hedge Execution Plan.

(ii)        Each of Party B and Party A agrees and acknowledges that (i) any Transaction to be entered into pursuant to this Confirmation and the Supplemental Confirmation relating to such Transaction will be entered into in reliance on the fact that this Confirmation and such Supplemental Confirmation form a single agreement between Party B and Party A, and Party A would not otherwise enter into such Transaction, (ii) this Confirmation, as supplemented by any Supplemental Confirmation, is a “qualified financial contract”, as such term is defined in Section 5-701(b)(2) of the General Obligations Law of New York (the “General Obligations Law”); (iii) any Supplemental Confirmation, regardless of whether such Supplemental Confirmation is transmitted electronically or otherwise, constitutes a “confirmation in writing sufficient to indicate that a contract has been made between the parties” hereto, as set forth in Section 5-701(b)(3)(b) of the General Obligations Law; and (iv) this Confirmation constitutes a prior “written contract”, as set forth in Section 5-701(b)(1)(b) of the General Obligations Law, and each party hereto intends and agrees to be bound by this Confirmation, as supplemented by any Supplemental Confirmation.

(iii)       Party B and Party A further agree and acknowledge that this Confirmation, as supplemented by any Supplemental Confirmation, constitutes a contract “for the sale or purchase of a security”, as set forth in Section 8-113 of the Uniform Commercial Code of New York.

(r)         Party A is associated with a NYSE specialist firm which may make a market in the Shares that are the subject of this Confirmation. The specialist firm may at any time have a “long” or “short” inventory position in such Shares and, as a result of its function as a market maker, the specialist firm may be on the opposite side of transactions in the Shares executed on the Floor of the NYSE.

 

 

 

 

Address for notices or communications to Party A:

Bank of America, N.A.

c/o Banc of America Securities LLC

Equity Financial Products

9 West 57^th Street, 40^th Floor

New York, NY 10019

 

Address for notices or communications to Party B:

 

RH Financial Corporation

800 Market Street, Suite 2900

St. Louis, MO 63101

Attention: Charles G. Huber, Jr.

Telephone: 314-877-7099

 

 

Account Details of Party A:

San Francisco, CA

SWIFT: BOFAUS65

Bank Routing: 121-000-358

Account Name: Bank of America

Account No. : 12333-34172

 

Account Details of Party B:

To be advised

Party A: Charlotte

Party B: Inapplicable

 

 

 

Please confirm that the foregoing correctly sets forth the terms of our agreement by executing the copy of this Confirmation enclosed for that purpose and returning it to us.

 

 

 

 

 

 

 

Annex A

 

[Form of Supplemental Confirmation]

SUPPLEMENTAL CONFIRMATION

Date: __________________

To: RH Financial Corporation

Facsimile Number: __________________

Attention: __________________

From: Bank of America, N.A. (“Party A”)

Facsimile Number: __________________

The purpose of this communication (this “Supplemental Confirmation”) is to set forth the terms and conditions of the Transaction entered into on the Trade Date specified below between you and us. This Supplemental Confirmation supplements, forms a part of, and is subject to the letter agreement dated as of March 22, 2006 (the “Confirmation”) between you and us.

1.         The definitions and provisions contained in the Equity Definitions and in the Confirmation are incorporated into this Supplemental Confirmation. In the event of any inconsistency between the Equity Definitions and provisions and this Supplemental Confirmation, this Supplemental Confirmation will govern.

2.         All provisions contained in the Agreement (as modified and as defined in the Confirmation) shall govern this Supplemental Confirmation except as expressly modified below.

3.         The parties intend that the Confirmation, as supplemented by this Supplemental Confirmation, constitutes a “Final Agreement” as described in the letter dated December 14, 1999 submitted by Robert W. Reeder and Alan. L. Beller to Michael Hyatte of the staff of the Securities and Exchange Commission (the “Staff”) to which the Staff responded in an interpretive letter dated December 20, 1999.

4.         The terms of the particular Transaction to which this Supplemental Confirmation relates are as follows:

Reference Number: NY - ______________________

Trade Date: __________________

Initial Price: __________________

Floor Price: __________________

Cap Price: __________________

 

 

 

 

Payment Date: __________________

 

 

 

 

 

 

 

 

Annex B

 

HEDGE EXECUTION PLAN

 

This Hedge Execution Plan (this “Plan”) supplements, forms part of and is subject to the letter agreement dated as of March 22, 2006 (the “Confirmation”) between Bank of America, N.A. (“Party A”) and RH Financial Corporation (“Party B”). Capitalized terms used and not otherwise defined herein shall have the meanings ascribed to them in the Confirmation.

At any time and from time to time during the Plan Effectiveness Period, Party A (or an affiliate of Party A) shall establish Party A’s Initial Hedge for the Transactions, with respect to up to a number of Shares equal to the Maximum Base Amount, in accordance with the following conditions:

 

(a)          Party A shall not sell any Shares in respect of any Transaction at a price below $30.00 per Share, as adjusted by the Calculation Agent in a manner consistent with Calculation Agent Adjustment (the “Minimum Sale Price”). Notwithstanding the Minimum Sale Price, Shares repurchased by Party A in establishing Party A’s Initial Hedge may be repurchased by Party A at any price, in its sole discretion.

 

(b)          If the price per Share on the Exchange is less than the Minimum Sale Price, Party A shall suspend sales in connection with establishing Party A’s Initial Hedge for any Transaction until such price is equal to or greater than the Minimum Sale Price.

 

Except as provided in this Plan, how, when or whether Party A or any of its affiliates effects any sale of Shares, and the price at which Party A or such affiliate effects any such sale, shall be in Party A’s reasonable good faith judgment, provided that Party A shall use principles of best execution. Party B agrees that Party A shall have no responsibility to Party B of any kind with respect to the price at which Party A effects any sale in compliance with this Plan.

 

Party A’s Initial Hedge shall be established without any consultation with Party B. Without limiting the generality of the foregoing, from the date of the Confirmation to the Trade Date for the final Transaction thereunder, Party B agrees that Party B and its affiliates, employees, agents and representatives shall not communicate with Party A or any of Party A’s affiliates, employees, agents or representatives in any way regarding the Issuer, the Shares, the Transaction or Party A’s hedging activities relating thereto. The parties further agree that subsequent to the date of the Confirmation, Party B may not exercise any influence over how, when or whether Party A effects sales or purchases in connection with Party A’s hedging activities.

 

The parties intend that the Confirmation, as supplemented by this Plan, shall constitute a binding contract or instruction satisfying the requirements of Rule 10b5-1(c) under the Exchange Act.

 

 

 

 

Exhibit 99.14

 

 

 

 

October 20, 2006

 

From: Bank of America, N.A.

c/o Banc of America Securities LLC

9 West 57^th Street, 40^th Floor

New York, NY 10019

Attention: Legal Department

Telephone: 212-583-8373

Facsimile: 212-230-8610

 

To: RH Financial Corporation

800 Market Street, Suite 2900

St. Louis, MO 63101

Attention: Charles G. Huber, Jr.

Telephone: 314-877-7099

 

Dear Sir or Madam:

 

The purpose of this letter agreement (this “Confirmation”) is to set forth the terms and conditions for a STARS transaction (the “Transaction”) entered into between Bank of America, N.A. (“Party A”) and RH Financial Corporation (“Party B”) on the Trade Date (as defined below) for the Transaction. Additional terms of the Transaction subject to this Confirmation shall be set forth in a supplemental written confirmation substantially in the form of Annex A hereto (the “Supplemental Confirmation”). This Confirmation and the Supplemental Confirmation together constitute a “Confirmation” as referred to in the Agreement specified below.

The definitions and provisions contained in the 1996 ISDA Equity Derivatives Definitions (the “Equity Definitions”) as published by the International Swaps and Derivatives Association, Inc. (“ISDA”) are incorporated into this Confirmation. In the event of any inconsistency between the Equity Definitions and the Agreement, on the one hand, and this Confirmation, on the other hand, this Confirmation shall govern. In the event of any inconsistency between the Equity Definitions, this Confirmation and the Agreement, on the one hand, and the Supplemental Confirmation, on the other hand, the Supplemental Confirmation will govern. This Confirmation and the Supplemental Confirmation evidences a complete binding agreement between Party A and Party B as to the terms of the Transaction to which this Confirmation and the Supplemental Confirmation relates. For purposes of the Equity Definitions, the Transaction will be deemed to be a Share Option Transaction. With respect to the Transaction, capitalized terms used herein that are not otherwise defined shall have the meaning assigned to them in the Supplemental Confirmation.

Each party is hereby advised, and each such party acknowledges, that the other party has engaged in, or refrained from engaging in, substantial financial transactions and has taken other material actions in reliance upon the parties’ entry into the Transaction to which this Confirmation and the Supplemental Confirmation relates on the terms and conditions set forth below.

In lieu of negotiating an ISDA Master Agreement and Schedule, Party A and Party B hereby agree that an agreement in the form of the ISDA Master Agreement (Multicurrency–Cross Border) (the “ISDA Form”) as published by ISDA in 1992, without any Schedule attached

 

 

thereto, but containing all elections, modifications and amendments to the ISDA Form contained herein (as so supplemented, the “Agreement”), shall be deemed to have been executed by both of us on the Trade Date of the first Transaction between us. This Confirmation, the Supplemental Confirmation and the Transaction to which the Supplemental Confirmation relates, as well as any other Transaction between us (unless otherwise specified in the Confirmation with respect to such other Transaction) shall supplement, form a part of, and be subject to, such Agreement. All provisions contained in, or incorporated by reference to, the Agreement shall govern the Transaction referenced in this Confirmation, as well as all other Transactions between the parties hereafter entered into, except as expressly modified herein or therein. In case of any inconsistency between the provisions of the Agreement and this Confirmation, this Confirmation (including any amendments hereto) shall prevail for the purpose of the Transaction to which it relates. This Confirmation, if it relates to the first Transaction between us, constitutes both an Agreement and a Confirmation thereunder.

If Party A and Party B subsequently negotiate an ISDA Master Agreement and Schedule, the Transaction shall be governed thereby only to the extent expressly so agreed by the parties at such time, and in such case, such agreement shall become the “Agreement.” In such event, in case of any inconsistency between the provisions of such Agreement and this Confirmation, this Confirmation (including any amendments hereto) shall prevail for the purpose of the Transaction.

1.        At any time and from time to time during the period beginning on the date hereof (the “Commencement Date”) and ending on 2 months from the date hereof (the “Plan Effectiveness Period”), Party A (or an affiliate of Party A) shall establish Party A’s initial hedge (“Party A’s Initial Hedge”) of the price and market risk under the Transaction hereunder, in accordance with the plan or instruction set forth in Annex B hereto (the “Hedge Execution Plan”). For the Transaction, Party A shall determine the Base Amount, the Initial Price, the Floor Price, the Cap Price, the Maturity Date, the Payment Date and the Purchase Price for the Transaction in the manner set forth below based on Party A’s Initial Hedge of the Transaction, and shall deliver the Supplemental Confirmation for the Transaction to Party B. Party A’s Initial Hedge for the Transaction shall be established by selling Shares in transactions conforming to the manner-of-sale conditions described in Rule 144 (f) and (g) under the Securities Act of 1933, as amended, using principles of best execution.

Party B acknowledges that, upon effectiveness of this Confirmation, Party A is and will be authorized to execute hedging transactions on Party B’s behalf in accordance with the Hedge Execution Plan, and that such hedging transactions shall be executed in reliance on this Confirmation.

For the Transaction to which a Supplemental Confirmation relates, the following terms shall be applicable:

General Terms:

 

 

Payment of Purchase Price:

 

 

Settlement Terms:

 

 

 

 

(i) if the Settlement Price for such Settlement Date is less than or equal to the Cap Price for the Transaction but greater than or equal to the Floor Price for the Transaction, the Floor Price for the Transaction divided by such Settlement Price;

(ii) if the Settlement Price for such Settlement Date is greater than the Cap Price for the Transaction, one (1) minus a fraction the numerator of which is the excess of the Cap Price for the Transaction over the Floor Price for the Transaction and the denominator of which is such Settlement Price; or

(iii) if the Settlement Price for such Settlement Date is less than the Floor Price for the Transaction, one (1).

The ratio expressed in clauses (i) and (ii) above shall be rounded upward or downward to the

 

 

nearest 1/10,000^th or, if there is not a nearest 1/10,000^th, to the next lower 10,000^th.

 

 

authority of such Person, shall not constitute such a condition or restriction.

 

 

Preliminary Cash Settlement

Preliminary Cash Settlement

 

 

limitation market losses incurred in connection with any decline in the value of the Shares subsequent to the Maturity Date for the Transaction with respect to such Settlement Date.

Adjustments:

 

Dividends:

 

 

Extraordinary Events:

Consequences of Merger Events:

 

 

(a)        Conditions to Effectiveness. This Confirmation shall become effective upon the satisfaction or waiver of the following condition (the date such condition is satisfied or waived, the “Effective Date”):

The parties hereto shall have executed a Pledge Agreement (the “Pledge Agreement”), and Party B shall have pledged and delivered to Party A or its collateral agent on or prior to the date hereof in the manner specified in the Pledge Agreement a number of Shares at least equal to the Base Amount as security for Party B’s obligations hereunder, under the Supplemental Confirmation, under the Agreement and under the Pledge Agreement, all as provided in the Pledge Agreement. The Pledge Agreement is a Credit Support Document hereunder and under the Agreement.

(b)       Conditions to Party A’s Payment Obligation. The obligation of Party A to pay the Purchase Price for the Transaction on the Payment Date for the Transaction is subject to the satisfaction of the following conditions:

(i)        The representations and warranties of Party B contained in Section 3 below, in the Agreement and in the Pledge Agreement shall be true and correct as of the Payment Date (it being understood that the representation and warranties contained in the first sentence of Section 3(a)(I)(iv) which by their terms are made as of specific dates need only be true and correct as of such dates).

(ii)       Party B shall have performed all of the covenants and obligations to be performed by it hereunder, under the Agreement and under the Pledge Agreement on or prior to such Payment Date.

(I)        Party B represents and warrants to and for the benefit of, and agrees with, Party A as follows:

(i)        From the date three months prior to the date hereof until the Trade Date for the Transaction hereunder, neither Party B nor any person who would be considered to be the same “person” (as such term is used in Rule 144(a)(2) under the Securities Act) as Party B has, without the consent of Party A, sold any Shares or hedged (through swaps, options, short sales or otherwise) any long position in the Shares, other than the Transaction under this Agreement. For the purposes of this paragraph, Shares shall be deemed to include securities convertible into or exchangeable or exercisable for Shares.

(ii)       Party B does not know or have any reason to believe that the Issuer has not complied with the reporting requirements contained in Rule 144(c)(1) under the Securities Act.

 

 

(iii)      Party B’s holding period (calculated in accordance with Rule 144(d) under the Securities Act) with respect to the Shares pledged to Party A pursuant to the Pledge Agreement commenced on May 14, 1999.

(iv)      Party B is not on the date hereof or on the Effective Date in possession of material, non-public information concerning the business, operations or prospects of the Issuer. “Material” information for these purposes is any information to which an investor would reasonably attach importance in reaching a decision to buy, sell or hold securities of the Issuer. Party B is entering into this Confirmation and the Transaction hereunder in good faith and not as a part of a plan or scheme to evade the prohibitions of Rule 10b5-1 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or other applicable securities laws. Party B has not entered into or altered any hedging transaction(s) or position relating to the Shares corresponding to or offsetting the Transaction hereunder.

(v)       Party B is acting for its own account, and it has made its own independent decision to enter into the Transaction and as to whether the Transaction is appropriate or proper for it based upon its own judgment and upon advice from such advisors as it has deemed necessary. Party B is not relying on any communication (written or oral) of Party A or any of its affiliates with respect to the legal, accounting, tax or other implications of this Confirmation or the Supplemental Confirmation and that it has conducted its own analyses of the legal, accounting, tax and other implications hereof and thereof; it being understood that information and explanations related to the terms and conditions of this Confirmation or the Supplemental Confirmation shall not be considered investment advice or a recommendation to enter into this Confirmation or the Supplemental Confirmation. Party B further acknowledges and confirms that it has taken independent tax advice with respect to the Transaction.

(vi)      Party B is entering into this Confirmation with a full understanding of all of the terms and risks hereof (economic and otherwise) and is capable of evaluating and understanding (on its own behalf or through independent professional advice), and understands and accepts, the terms, conditions and risks of the Transaction. Party B is also capable of assuming (financially and otherwise), and assumes, those risks of the Transaction.

(vii)     Neither Party A nor any of its affiliates is acting as a fiduciary or an advisor for Party B in respect of the Transaction.

(viii)    Party B is an “eligible contract participant”(as such term is defined in Section 1(a)(12) of the Commodity Exchange Act, as amended).

(ix)      Party B is (A) an “accredited investor” within the meaning of Rule 501(a)(1),(2),(3),(7) or (8) under the Securities Act, (B) is entering into the Transaction for its own account and not with a view to distribution and (C) understands and acknowledges that the Transaction has not and will not be registered under the Securities Act. Party B is a “qualified investor” within the meaning of Section 3(a)(54) of the Exchange Act.

(x)       Delivery of Shares by Party B pursuant to this Confirmation and the Supplemental Confirmation will pass to Party A title to such Shares (or security entitlements) free and clear of any liens, except for those created pursuant to the Pledge Agreement.

 

 

(xi)      Party B owns (as such term is used in Rule 16c-4 under the Exchange Act) a number of Shares (including the Shares pledged to Party A pursuant to the Pledge Agreement), after subtracting the number of Shares to which any put equivalent positions (as defined in Rule 16a-1(h) under the Exchange Act) have been established or are maintained by Party B (other than any put equivalent position established as a result of this transaction), at least equal to the Base Amount.

(xii)     To Party B’s knowledge, none of the transactions contemplated herein will violate any corporate policy of the Issuer or other rules or regulations of the Issuer known and applicable to Party B or its affiliates, including, but not limited to, the Issuer’s window period policy.

(xiii)    Party B has, on or prior to the date hereof, transmitted for filing with the Securities and Exchange Commission (the “SEC”) a Form 144 with respect to the Transaction, and has filed any amendments thereto necessary pursuant to Rule 144 or any related interpretations of the SEC. Party B promptly will provide Party A with a copy of all such filings.

(xiv)     Party B has not solicited or arranged for the solicitation of, and will not solicit or arrange for the solicitation of, orders to buy Shares in anticipation of or in connection with any sales of Shares that Party A or an affiliate of Party A effects in establishing Party A’s Initial Hedge.

(xv)      Except as provided herein, Party B has not made, will not make, and has not arranged for, any payment to any person in connection with any sales of Shares that Party A or an affiliate of Party A effects in establishing Party A’s Initial Hedge.

(xvi)     Party B agrees that Party B shall not enter into or alter any hedging transaction or position relating to the Shares corresponding to or offsetting the Transaction.

(xvii)        Party B agrees to notify Party A as soon as practicable if at any time during the Plan Effectiveness Period Party B becomes aware of any legal, contractual or regulatory restrictions that is applicable to Party B or Party B’s affiliates that would prohibit sales, pledges or transfers of Shares by Party B (other than any such restriction relating to Party B’s possession or alleged possession of material nonpublic information relating to the Issuer or its securities). Such notice shall be directed to Richard Konefal at (212) 583-8065 and shall indicate the anticipated duration of the restriction, but shall not include any other information about the nature of the restrictions or its applicability to Party B. In any event, Party B shall not communicate any material nonpublic information relating to the Issuer or its securities to Party A or any of Party A’s affiliates.

(xviii)   With respect to the Transaction, Party B (A) has not sold any Shares pursuant to an effective registration statement under which Party B is listed as a selling securityholder at any time during the fifteen (15) Exchange Business Days prior to or following the Effective Date, and shall not make any such sales of Shares at any time during the fifteen (15) Exchange Business Days prior to or following the Maturity Date and (B) has not exercised any rights under any registration rights agreement to cause a registration statement under which Party B is (or will be) listed as a selling securityholder to be filed with respect to any Shares at any time during the fifteen (15) Exchange Business Days prior to or following Trade Date and shall not exercise any such rights, or cause any such registration statement to be filed, at any time during the fifteen (15) Exchange Business Days prior to or following the Maturity Date. For purposes of this

 

 

paragraph only, "Maturity Date" shall include any other date of early termination or unwind of the Transaction in whole or in part.

 

(xix)     The parties intend that, for the Transaction, this Confirmation constitutes a “Preliminary Agreement” and, upon execution of the Supplemental Confirmation for the Transaction, a “Final Agreement,” both as described in the letter dated December 14, 1999 submitted by Robert W. Reeder and Alan L. Beller to Michael Hyatte of the Securities and Exchange Commission staff (the “Staff”) to which the Staff responded in an interpretive letter dated December 20, 1999.

 

(b)       Additional Termination Events: The following shall be an Additional Termination Event with respect to which Party B is the sole Affected Party and the Transaction hereunder shall be the sole Affected Transaction, provided however, notwithstanding anything to the contrary in Section 6(b)(i) of the Agreement, Party A shall, promptly upon becoming aware of the Additional Termination Event, notify Party B of such Additional Termination Event and shall give such information to Party B regarding such Additional Termination Event as Party B may reasonably require:

 

A Hedging Disruption Event shall have occurred. “Hedging Disruption Event” means, with respect to Party A as determined in its reasonable good faith judgement, the inability, due to market illiquidity, Illegality (as defined in the Agreement, but with respect to Party A’s hedging activities relating to the Transaction), lack of hedging transactions, credit worthy market participants or otherwise, of establishing, re-establishing or maintaining any transactions necessary in the ordinary course of Party A’s business to hedge, directly or indirectly, the equity price risk of entering into and performing under the Transaction, including the event that at any time Party A concludes that it or any of its affiliates are unable to establish, re-establish or maintain a full hedge of its position in respect of the Transaction through share borrowing arrangements at a rate equal to or less than 400 basis points per annum (the “Maximum Stock Loan Rate”), provided that, in the event that Party A’s hedging costs exceed 37.5 basis points per annum (the “Initial Stock Loan Rate”) but do not exceed 400 basis points per annum, Party A may require that Party B pay Party A an amount corresponding to the increase to Party A’s hedging costs, as reasonably determined in good faith by Party A. In the event that Party A’s stock loan rate exceeds the Maximum Stock Loan Rate, Party A may give notice to Party B that it elects to terminate the Transaction, specifying the date of such termination, which may be the same day that the notice of termination is effective, provided, however, that if Party B can arrange a source of stock borrow acceptable to Party A at a rate less than or equal to the Initial Stock Loan Rate, then no Hedging Disruption Event shall have occurred.

(c)        Additional Events of Default. It shall be an Event of Default under the Agreement with respect to Party B if a Collateral Event of Default, as defined in the Pledge Agreement, shall have occurred.

(i)        The first paragraph of Section 9.1(c) of the Equity Definitions is hereby amended to read as follows: ‘(c) If “Calculation Agent Adjustment” is specified as the method of adjustment in the Confirmation of a Share Option Transaction, then following any Potential Adjustment Event, the Calculation Agent will determine reasonably in good faith whether such Potential Adjustment Event has a material effect on the theoretical value of the relevant Shares or Options and, if so, may in its reasonable good faith judgment make appropriate adjustments to any one or more of any Base Amount, any

 

 

Settlement Ratio, the Cap Price, the Floor Price, the Cash Settlement Amount, any Settlement Price and any other variable relevant to the exercise, settlement or payment terms of the Transaction”, and the sentence immediately preceding Section 9.1(c)(ii) is hereby amended by deleting the words “diluting or concentrative”.

(ii)       Section 9.1(e) of the Equity Definitions shall be amended to add the new following subsection (vii): “(vii) any tender offer with respect to the Shares and is not a Merger Event as defined in Section 9.2 of the Equity Definitions and is deemed to be material in the reasonable good faith determination of the Calculation Agent”.

(iii) Section 9.1(e)(v) of the Equity Definitions is hereby deleted in its entirety and replaced with the following: “(v) a repurchase by the Issuer in one transaction of more than 10% of the Shares outstanding whether out of profits or capital and whether the consideration for such repurchase is cash, securities, or otherwise; or”

(iv)      Section 9.1(e)(vi) of the Equity Definitions is hereby amended by deleting the words “other similar” between “any” and “event” and replacing it with the word “corporate”; deleting the words “diluting or concentrative” and replacing them with “material”; and adding the following words at the end of the sentence “or options on the Shares”.

(v)       Section 9.6 (a)(ii) of the Equity Definitions is hereby amended by (A) inserting into the first line thereof the reference “(1)” after the word “means”, (B) deleting the period at the end of subsection (ii) thereof and inserting the following words in its place: “or (2) at Party A’s option, the occurrence of any of the events specified in Section 5(a)(vii)(1) through (9) of the ISDA Master Agreement with respect to that Issuer.”

(vi)      The first paragraph of Section 9.7(b) of the Equity Definitions is hereby amended by (A) deleting from the second sentence thereof the words “after that date” between the words “that would have been required” and “but for the occurrence of the Option Value Event” and by (B) deleting the period at the end of subsection (iii) thereof and inserting the following words therefor “; and (iv) a term equal to the number of days from the Announcement Date through and including the Maturity Date”.

(vii)     The definition of “Option Value Event” set forth in Section 9.7(c)(i) of the Equity Definitions is hereby amended by (A) deleting from the first line thereof the word “or” after the word “Nationalization” and inserting a comma in place of such word “or”, and (B) inserting into the second line thereof the words “or the De-Listing” after the word “Insolvency”.

(viii) Section 9.1 (e)(iii) of the Equity Definitions is hereby deleted and replaced with the following “an extraordinary dividend, other than an Extraordinary Cash Dividend;”

(e)        Indemnity. In the event that Party A or any of its affiliates becomes involved in any capacity in any action, proceeding or investigation brought by any person in connection with any tax, regulatory or accounting position taken by Party B in connection with the Agreement, this Confirmation, the Supplemental Confirmation or the Pledge Agreement, Party B shall reimburse Party A or such affiliate for its reasonable legal and other out-of-pocket expenses (including the cost of any investigation and preparation) incurred in connection therewith within 30 days of receipt of notice of such expenses and reasonably supporting documentation, and shall indemnify and hold Party A or such affiliate harmless on an after-tax basis against any losses, claims, damages or liabilities to which Party A or such affiliate may become subject in connection with any such action, proceeding or investigation. Notwithstanding the foregoing, such obligation to

 

 

hold harmless shall not apply to any action, proceeding, or investigation which is finally determined as having resulted from Party A’s negligence, willful misconduct, or breach of the Agreement, this Confirmation, the Supplemental Confirmation or the Pledge Agreement. The reimbursement and indemnity obligations of Party B under this Section shall be in addition to any liability that Party B may otherwise have, shall extend upon the same terms and conditions to the partners, directors, officers, agents, employees and controlling persons (if any), as the case may be, of Party A and its affiliates and shall be binding upon and inure to the benefit of any successors, assigns, heirs and personal representatives of Party B, Party A, any such affiliate and any such person. Party B also agrees that neither Party A nor any of such affiliates, partners, directors, officers, agents, employees or controlling persons shall have any liability to Party B for or in connection with any matter referred to in the Agreement, this Confirmation, the Supplemental Confirmation or the Pledge Agreement except to the extent that any losses, claims, damages, liabilities or expenses incurred by Party B result from the negligence or bad faith of Party A or a breach by Party A of any of its covenants or obligations hereunder. The foregoing provisions shall survive any termination or completion of the Transaction.

(f)        Confidentiality. Except as required by law or judicial or administrative process, or as requested by a regulatory authority or self-regulatory organization, each party hereto agrees to keep this Agreement, the Supplemental Confirmation and the Pledge Agreement and the transactions contemplated hereby and thereby confidential. In the event disclosure is permitted pursuant to the preceding sentence, the disclosing party shall (i) provide prior notice of such disclosure to the other party, (ii) use reasonable efforts to minimize the extent of such disclosure and (iii) comply with all reasonable requests of the other party to minimize the extent of such disclosure. Notwithstanding the foregoing, effective from the date of commencement of discussions concerning the Transaction, Party B and each of its employees, representatives, or other agents may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of the Transaction and all materials of any kind (including opinions or other tax analyses) that are provided to Party B relating to such tax treatment and tax structure.

 

(g)       Termination and Liquidation. The parties hereto agree and acknowledge that Party A is a “financial institution” within the meaning of Section 101(22) of Title 11 of the United States Code (the “Bankruptcy Code”). The parties hereto further agree and acknowledge that this Agreement is a “securities contract,” as such term is defined in Section 741(7) of the Bankruptcy Code, and Party A is entitled to the protections afforded by, among other Sections, Sections 362(b)(6), 546(e) and 555 of the Bankruptcy Code.

 

(h)       Certain Authorized Transfers. Upon consent of Party B, which consent shall not be unreasonably withheld (provided that the creditworthiness of the assignee is equal to or greater than that of Party A), Party A may transfer or assign its rights and obligations hereunder, under the Agreement, under the Supplemental Confirmation and under the Pledge Agreement, in whole or in part, to (A) any of its affiliates or (B) any entities sponsored or organized by, or on behalf of or for the benefit of, Party A.

(i)        Designation by Party A. Party A (the “Designator”) may designate any of its affiliates (the “Designee”) to deliver or take delivery, as the case may be, and otherwise perform its obligations to deliver or take delivery of, as the case may be, any Shares in respect of the Transaction, and the Designee may assume such obligations. Such designation shall not relieve the Designator of any of its obligations hereunder. Notwithstanding the previous sentence, if the Designee shall have performed the obligations of the Designator hereunder, then the Designator shall be discharged of its obligations to Party B to the extent of such performance.

(j)        Payments on Early Termination. For the purposes of the Transaction, Second Method and Loss shall apply. Upon the occurrence or effective designation of an Early Termination Date occurring as a result of an Event of Default or a Termination Event with respect

 

 

to which the Transaction hereunder is an Affected Transaction, if Party B would owe any amounts to Party A pursuant to Section 6(e) of the Agreement (determined as if the Transaction were the only Transaction under the Agreement), then, except to the extent that Party A proceeds to realize pursuant to clause (ii) of paragraph 7(a) of the Pledge Agreement upon collateral pledged under the Pledge Agreement and to apply the proceeds of such realization as provided in the second clause of paragraph 7(d) thereof:

(i)        on such Early Termination Date, in lieu of any payment or delivery required by Section 6(e) of the Agreement (as so determined), Party B shall deliver to Party A a number of Free Shares equal to the quotient obtained by dividing (A) the amount that would be payable pursuant to Section 6(e) of the Agreement (as so determined) were it not for this sentence, by (B) the market value of the Shares at the time of such delivery (which for the avoidance of doubt shall mean the quoted price on the Exchange at the time of delivery, or if such Shares are not quoted on an Exchange, the price as reasonably determined in good faith by the Calculation Agent), as reasonably determined by the Calculation Agent; and

(ii)       for purposes of determining any Loss under Section 6(e) of the Agreement in respect of any other Transaction under the Agreement, the Transaction hereunder shall be deemed not to be a Transaction under the Agreement; provided that, for the avoidance of doubt, if Party B fails to deliver Free Shares pursuant to clause (i) above at the time required, then the Transaction hereunder (including such delivery obligation) shall be included for the purpose of determining Party A’s Loss for all Transaction (including the Transaction hereunder) under the Agreement.

(k)       Specified Transaction. For purposes of the Agreement, “Specified Transaction” shall also include any transaction with respect to the forward sale or delivery of any security.

(l)        Cross Default. The “Cross Default” provisions of Section 5(a)(vi) of the Agreement will not apply to Party A and will apply to Party B, and for such purpose “Specified Indebtedness” will not have the meaning specified in Section 14 thereof, and such definition shall be replaced by the following: “any obligation in respect of the payment of moneys (whether present or future, contingent or otherwise, as principal or surety or otherwise), except that such term shall not include obligations in respect of deposits received in the ordinary course of a party’s banking business”, and the “Threshold Amount” in relation to Party B shall be U.S. $25 million.

(m)      Netting and Set-off. (A) If on any date cash would otherwise be payable or Shares or other property would otherwise be deliverable hereunder or pursuant to the Agreement, the Supplemental Confirmation or the Pledge Agreement by Party A to Party B and by Party B to Party A and the type of property required to be paid or delivered by each such party on such date is the same, then, on such date, each such party’s obligation to make such payment or delivery will be automatically satisfied and discharged and, if the aggregate amount that would otherwise have been payable or deliverable by one such party exceeds the aggregate amount that would otherwise have been payable or deliverable by the other such party, replaced by an obligation of the party by whom the larger aggregate amount would have been payable or deliverable to pay or deliver to the other party the excess of the larger aggregate amount over the smaller aggregate amount.

(B)       In addition to and without limiting any rights of set-off that a party hereto may have as a matter of law, pursuant to contract or otherwise, upon the occurrence of an Early Termination Date, Party A shall have the right to terminate, liquidate and otherwise close out the Transaction hereunder, all other Transaction contemplated by the Agreement, the Supplemental Confirmation and the Pledge Agreement pursuant to the terms hereof and thereof, and to set off any obligation that Party A or any affiliate of Party A may have to Party B, including without limitation any

 

 

obligation to make any release, delivery or payment to Party B pursuant to the Pledge Agreement, against any right Party A or any of its affiliates may have against Party B, including without limitation any right to receive a payment or delivery pursuant to any provision of the Agreement or hereunder. In the case of a set-off of any obligation to release, deliver or pay assets against any right to receive assets of the same type, such obligation and right shall be set off in kind. In the case of a set-off of any obligation to release, deliver or pay assets against any right to receive assets of any other type, the value of each of such obligation and such right shall be reasonably determined in good faith by the Calculation Agent and the result of such set-off shall be that the net obligor shall pay or deliver to the other party an amount of cash or assets, at the net obligor’s option, with a value (reasonably determined in good faith, in the case of a delivery of assets, by the Calculation Agent) equal to that of the net obligation. In determining the value of any obligation to release or deliver Shares or any right to receive Shares, the value at any time of such obligation or right shall be reasonably determined in good faith by reference to the market value of the Shares at such time (which for the avoidance of doubt shall mean the quoted price on the Exchange at the time of delivery, or if such Shares are not quoted on an Exchange, the price as determined by the Calculation Agent), as reasonably determined in good faith by the Calculation Agent. If an obligation or right is unascertained at the time of any such set-off, the Calculation Agent may in good faith reasonably estimate the amount or value of such obligation or right, in which case set-off will be effected in respect of that estimate, and the relevant party shall account to the other party at the time such obligation or right is ascertained.

(n)       Governing Law. This Confirmation shall be governed by the laws of The State of New York without reference to the choice of law rules thereof. The parties hereto irrevocably submit to the non-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 this Confirmation or the transactions contemplated hereby.

(o)       WAIVER OF RIGHT TO TRIAL BY JURY. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHTS TO TRIAL BY JURY WITH RESPECT TO ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS CONFIRMATION OR ANY TRANSACTION CONTEMPLATED HEREBY.

(p)       Amendment or Waiver. Notwithstanding anything to the contrary in the Agreement, any amendment or waiver of any provision of this Confirmation or the Supplemental Confirmation must be effected in accordance with the requirements for the amendment of a “plan” as defined in Rule 10b5-1(c) under the Exchange Act. Any such amendment or waiver shall be made in good faith and not as part of a plan or scheme to evade the prohibitions of Rule 10b5-1 under the Exchange Act or other applicable securities laws. Party B agrees that he/she/it will not modify this Confirmation or the Supplemental Confirmation at any time that he/she/it is aware of any material non-public information about the Issuer and/or the Shares.

(q)       Binding Contract. (i) As a condition to the execution of Party A’s Initial Hedge, Party B accepts and agrees to be bound by the contractual terms and conditions as set forth in the Supplemental Confirmation. Upon receipt of the Supplemental Confirmation, Party B shall promptly execute and return the Supplemental Confirmation to Party A; provided that Party B’s failure to so execute and return the Supplemental Confirmation shall not affect the binding nature of the Supplemental Confirmation, and the terms set forth therein shall be binding on Party B to the same extent, and with the same force and effect, as if Party B had executed a written version of the Supplemental Confirmation, provided the terms are consistent with the Hedge Execution Plan.

(ii)       Each of Party B and Party A agrees and acknowledges that (i) the Transaction to be entered into pursuant to this Confirmation and the Supplemental Confirmation

 

 

relating to the Transaction will be entered into in reliance on the fact that this Confirmation and such Supplemental Confirmation form a single agreement between Party B and Party A, and Party A would not otherwise enter into the Transaction, (ii) this Confirmation, as supplemented by the Supplemental Confirmation, is a “qualified financial contract”, as such term is defined in Section 5-701(b)(2) of the General Obligations Law of New York (the “General Obligations Law”); (iii) the Supplemental Confirmation, regardless of whether such Supplemental Confirmation is transmitted electronically or otherwise, constitutes a “confirmation in writing sufficient to indicate that a contract has been made between the parties” hereto, as set forth in Section 5-701(b)(3)(b) of the General Obligations Law; and (iv) this Confirmation constitutes a prior “written contract”, as set forth in Section 5-701(b)(1)(b) of the General Obligations Law, and each party hereto intends and agrees to be bound by this Confirmation, as supplemented by the Supplemental Confirmation.

(iii)      Party B and Party A further agree and acknowledge that this Confirmation, as supplemented by the Supplemental Confirmation, constitutes a contract “for the sale or purchase of a security”, as set forth in Section 8-113 of the Uniform Commercial Code of New York.

(r)         Party A is associated with a NYSE specialist firm which may make a market in the Shares that are the subject of this Confirmation. The specialist firm may at any time have a “long” or “short” inventory position in such Shares and, as a result of its function as a market maker, the specialist firm may be on the opposite side of transactions in the Shares executed on the Floor of the NYSE.

 

Address for notices or communications to Party A:

Bank of America, N.A.

c/o Banc of America Securities LLC

Equity Financial Products

9 West 57^th Street, 40^th Floor

New York, NY 10019

 

 

Address for notices or communications to Party B:

 

RH Financial Corporation

800 Market Street, Suite 2900

St. Louis, MO 63101

Attention: Charles G. Huber, Jr.

Telephone: 314-877-7099

 

 

Account Details of Party A:

New York, NY

SWIFT: BOFAUS3N

 

 

Bank Routing: 026-009-593

Account Name: Bank of America

Account No. : 0012333-34172

 

Account Details of Party B:

To be advised

Party A: Charlotte

Party B: Inapplicable

 

 

Please confirm that the foregoing correctly sets forth the terms of our agreement by executing the copy of this Confirmation enclosed for that purpose and returning it to us.

 

 

 

 

 

 

Annex A

 

[Form of Supplemental Confirmation]

SUPPLEMENTAL CONFIRMATION

[Date]

 

From: Bank of America, N.A.

c/o Banc of America Securities LLC

9 West 57^th Street, 40^th Floor

New York, NY 10019

Attention: Legal Department

Telephone: 212-583-8373

Facsimile: 212-230-8610

 

To: RH Financial Corporation

800 Market Street, Suite 2900

St. Louis, MO 63101

Attention: Charles G. Huber, Jr.

Telephone: 314-877-7099

 

Dear Sir or Madam

The purpose of this communication (this “Supplemental Confirmation”) is to set forth the terms and conditions of the Transaction entered into on the Trade Date specified below between you and us. This Supplemental Confirmation supplements, forms a part of, and is subject to the letter agreement dated as of October 20, 2006 (the “Confirmation”) between you and us.

1.         The definitions and provisions contained in the Equity Definitions and in the Confirmation are incorporated into this Supplemental Confirmation. In the event of any inconsistency between the Equity Definitions and provisions and this Supplemental Confirmation, this Supplemental Confirmation will govern.

2.         All provisions contained in the Agreement (as modified and as defined in the Confirmation) shall govern this Supplemental Confirmation except as expressly modified below.

3.         The parties intend that the Confirmation, as supplemented by this Supplemental Confirmation, constitutes a “Final Agreement” as described in the letter dated December 14, 1999 submitted by Robert W. Reeder and Alan. L. Beller to Michael Hyatte of the staff of the Securities and Exchange Commission (the “Staff”) to which the Staff responded in an interpretive letter dated December 20, 1999.

4.         The terms of the particular Transaction to which this Supplemental Confirmation relates are as follows:

Reference Number: NY - ____________________

Trade Date: __________________

Initial Price: __________________

 

 

Floor Price: ____________________

Cap Price: _____________________

Maturity Date: __________________

Base Amount: __________________

Shares: The common stock, par value $0.01 per share, of Vail Resorts, Inc. (the “Issuer”) (Exchange symbol “MTN”), or security entitlements in respect thereof.

Purchase Price: U.S. $__________________

Payment Date: __________________

 

Please confirm that the foregoing correctly sets forth the terms of our agreement by executing the copy of this Supplemental Confirmation enclosed for that purpose and returning it to us.

 

 

 

 

 

 

 

Annex B

 

HEDGE EXECUTION PLAN

 

This Hedge Execution Plan (this “Plan”) supplements, forms part of and is subject to the letter agreement dated as of October 20, 2006 (the “Confirmation”) between Bank of America, N.A. (“Party A”) and RH Financial Corporation (“Party B”). Capitalized terms used and not otherwise defined herein shall have the meanings ascribed to them in the Confirmation.

At any time and from time to time during the Plan Effectiveness Period, Party A (or an affiliate of Party A) shall establish Party A’s Initial Hedge for the Transaction, with respect to up to a number of Shares equal to the Base Amount, in accordance with the following conditions:

 

(a)         Party A shall not sell any Shares in respect of the Transaction at a price below $35.00 per Share, as adjusted by the Calculation Agent in a manner consistent with Calculation Agent Adjustment (the “Minimum Sale Price”). Notwithstanding the Minimum Sale Price, Shares repurchased by Party A in establishing Party A’s Initial Hedge may be repurchased by Party A at any price, in its sole discretion.

 

(b)        If the price per Share on the Exchange is less than the Minimum Sale Price, Party A shall suspend sales in connection with establishing Party A’s Initial Hedge for the Transaction until such price is equal to or greater than the Minimum Sale Price.

 

Except as provided in this Plan, how, when or whether Party A or any of its affiliates effects any sale of Shares, and the price at which Party A or such affiliate effects any such sale, shall be in Party A’s reasonable good faith judgment, provided that Party A shall use principles of best execution. Party B agrees that Party A shall have no responsibility to Party B of any kind with respect to the price at which Party A effects any sale in compliance with this Plan.

 

Party A’s Initial Hedge shall be established without any consultation with Party B. Without limiting the generality of the foregoing, from the date of the Confirmation to the Trade Date for the final Transaction thereunder, Party B agrees that Party B and its affiliates, employees, agents and representatives shall not communicate with Party A or any of Party A’s affiliates, employees, agents or representatives in any way regarding the Issuer, the Shares, the Transaction or Party A’s hedging activities relating thereto. The parties further agree that subsequent to the date of the Confirmation, Party B may not exercise any influence over how, when or whether Party A effects sales or purchases in connection with Party A’s hedging activities.

 

The parties intend that the Confirmation, as supplemented by this Plan, shall constitute a binding contract or instruction satisfying the requirements of Rule 10b5-1(c) under the Exchange Act.

 

 

 

 

Exhibit 99.16

 

Annex A

 

SUPPLEMENTAL CONFIRMATION

 

November 6, 2006

 

From: Bank of America, N.A.

c/o Banc of America Securities LLC

9 West 57^th Street, 40^th Floor

New York, NY 10019

Attention: Legal Department

Telephone: 212-583-8373

Facsimile: 212-230-8610

 

To: RH Financial Corporation

800 Market Street, Suite 2900

St. Louis, MO 63101

Attention: Charles G. Huber, Jr.

Telephone: 314-877-7099

 

Dear Sir or Madam:

 

The purpose of this communication (this “Supplemental Confirmation”) is to set forth the terms and conditions of the Transaction entered into on the Trade Date specified below between you and us. This Supplemental Confirmation supplements, forms a part of, and is subject to the letter agreement dated as of October 20, 2006 (the “Confirmation”) between you and us.

1.        The definitions and provisions contained in the Equity Definitions and in the Confirmation are incorporated into this Supplemental Confirmation. In the event of any inconsistency between the Equity Definitions and provisions and this Supplemental Confirmation, this Supplemental Confirmation will govern.

2.         All provisions contained in this Agreement (as modified and as defined in the Confirmation) shall govern this Supplemental Confirmation except as expressly modified below.

3.         The parties intend that the Confirmation, as supplemented by this Supplemental Confirmation, constitutes a “Final Agreement” as described in the letter dated December 14, 1999 submitted by Robert W. Reeder and Alan L. Beller to Michael Hyatte of the staff of the Securities and Exchange Commission (the “Staff”) to which the Staff responded in an interpretive letter dated December 20, 1999.

4.         The terms of the particular Transaction to which this Supplemental Confirmation relates are as follows:

 

 

 

Please confirm that the foregoing correctly sets forth the terms of our agreement by executing the copy of this Supplemental Confirmation enclosed for that purpose and returning it to us.

 

 

Receipt confirmed:

 

 

 

 

Exhibit 99.17

 

 

 

2000 Version

 

From time to time the parties hereto may enter into transactions in which one party (“Lender”) will lend to the other party (“Borrower”) certain Securities (as defined herein) against a transfer of Collateral (as defined herein). Each such transaction shall be referred to herein as a “Loan” and, unless otherwise agreed in writing, shall be governed by this Agreement, including any supplemental terms or conditions contained in an Annex or Schedule hereto and in any other annexes identified herein or therein as applicable hereunder. Capitalized terms not otherwise defined herein shall have the meanings provided in Section 25.

 

 

 

 

Borrower does not transfer Collateral to Lender as provided in Section 4.1, Lender shall have the absolute right to the return of the Loaned Securities.

 

 

Notwithstanding the foregoing, all Loan Fees shall be payable by Borrower immediately in the event of a Default hereunder by Borrower and all Cash Collateral Fees shall be payable immediately by Lender in the event of a Default by Lender.

 

 

 

 

Lender or (ii) Collateral for any Loan in which it is acting as Borrower, unless such party has given notice to the contrary to the other party hereto (which notice shall specify the rate at which such Tax would be imposed). Each party agrees to notify the other of any change that occurs during the term of a Loan in the rate of any Tax that would be imposed on any such cash Distributions payable to it.

 

 

The parties to this Agreement hereby make the following representations and warranties, which shall continue during the term of any Loan hereunder:

 

All Loans hereunder may, at the option of the non-defaulting party (which option shall be deemed to have been exercised immediately upon the occurrence of an Act of Insolvency), be terminated immediately upon the occurrence of anyone or more of the following events (individually, a “ Default”):

 

 

The non-defaulting party shall (except upon the occurrence of an Act of Insolvency) give notice as promptly as practicable to the defaulting party of the exercise of its option to terminate all Loans hereunder pursuant to this Section 12.

 

 

like amount of the Collateral shall terminate; provided, however, that Lender shall immediately return any letters of credit supporting any Loan upon the exercise or deemed exercise by Borrower of its termination rights under Section 12. Borrower may similarly apply the Loaned Securities and any proceeds thereof to any other obligation of Lender under this Agreement, including Lender’s obligations with respect to Distributions paid to Lender (and not forwarded to Borrower) in respect of Collateral. In the event that (i) the sales price received from such Loaned Securities is less than (ii) the purchase price of Replacement Collateral (plus the amount of any cash or other Collateral not replaced by Borrower and all other amounts, if any, due to Borrower hereunder), Lender shall be liable to Borrower for the amount of any such deficiency, together with interest on such amounts at a rate equal to (A) in the case of Collateral consisting of Foreign Securities, LIBOR, (B) in the case of Collateral consisting of any other Securities (or other amounts due, if any, to Borrower hereunder), the Federal Funds Rate or (C) such other rate as may be specified in Schedule B, in each case as such rate fluctuates from day to day, from the date of such sale until the date of payment of such deficiency. As security for Lender’s obligation to pay such deficiency, Borrower shall have, and Lender hereby grants, a security interest in any property of Lender then held by or for Borrower and a right of setoff with respect to such property and any other amount payable by Borrower to Lender. The purchase price of any Replacement Collateral purchased under this Section 13.2 shall include, and the proceeds of any sale of Loaned Securities shall be determined after deduction of, broker’s fees and commissions and all other reasonable costs, fees and expenses related to such purchase or sale (as the case may be). In the event Borrower exercises its rights under this Section 13.2, Borrower may elect in its sole discretion, in lieu of purchasing all or a portion of the Replacement Collateral or selling all or a portion of the Loaned Securities, to be deemed to have made, respectively, such purchase of Replacement Collateral or sale of Loaned Securities for an amount equal to the price therefor on the date of such exercise obtained from a generally recognized source or the last bid quotation from such a source at the most recent Close of Trading. Subject to Section 18, upon the satisfaction of all Lender’s obligations hereunder, any remaining Loaned Securities (or remaining cash proceeds thereof) shall be returned to Lender.

All transfer taxes with respect to the transfer of the Loaned Securities by Lender to Borrower and by Borrower to Lender upon termination of the Loan and with respect to the transfer of Collateral by Borrower to Lender and by Lender to Borrower upon termination of the Loan or pursuant to Section 4.5 or Section 9 shall be paid by Borrower.

 

 

 

procedures, purchase with such other currency (after deduction of any premium and costs of exchange) on the banking day next succeeding its receipt of such currency.

Lender shall, if any of the Securities transferred to the Borrower hereunder for any Loan have been or shall be obtained, directly or indirectly, from or using the assets of any Plan, so notify Borrower in writing upon the execution of this Agreement or upon initiation of such Loan under Section 2.1. If Lender so notifies Borrower, then Borrower and Lender shall conduct the Loan in accordance with the terms and conditions of Department of Labor Prohibited Transaction Exemption 81-6 (46 Fed. Reg. 7527, Jan. 23, 1981; as amended, 52 Fed. Reg. 18754, May 19, 1987), or any successor thereto (unless Borrower and Lender have agreed prior to entering into a Loan that such Loan will be conducted in reliance on another exemption, or without relying on any exemption, from the prohibited transaction provisions of Section 406 of the Employee Retirement Income Security Act of 1974, as amended, and Section 4975 of the Internal Revenue Code of 1986, as amended). Without limiting the foregoing and notwithstanding any other provision of this Agreement, if the Loan will be conducted in accordance with Prohibited Transaction Exemption 81-6, then:

 

 

Borrower and Lender acknowledge that, and have entered into this Agreement in reliance on the fact that, all Loans hereunder constitute a single business and contractual relationship and have been entered into in consideration of each other. Accordingly, Borrower and Lender hereby agree that payments, deliveries and other transfers made by either of them in respect of any Loan shall be deemed to have been made in consideration of payments, deliveries and other transfers in respect of any other Loan hereunder, and the obligations to make any such payments, deliveries and other transfers may be applied against each other and netted. In addition, Borrower and Lender acknowledge that, and have entered into this Agreement in reliance on the fact that, all Loans hereunder have been entered into in consideration of each other. Accordingly, Borrower and Lender hereby agree that (a) each shall perform all of its obligations in respect of each Loan hereunder, and that a default in the performance of any such obligation by Borrower or by Lender (the “Defaulting Party”) in any Loan hereunder shall constitute a default by the Defaulting Party under all such Loans hereunder, and (b) the non-defaulting party shall be entitled to set off claims and apply property held by it in respect of any Loan hereunder against obligations owing to it in respect of any other Loan with the Defaulting Party.

THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF.

 

The failure of a party to this Agreement to insist upon strict adherence to any term of this Agreement on any occasion shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement. All waivers in respect of a Default must be in writing.

All remedies hereunder and all obligations with respect to any Loan shall survive the termination of the relevant Loan, return of Loaned Securities or Collateral and termination of this Agreement.

Any and all notices, statements, demands or other communications hereunder may be given by a party to the other by telephone, mail, facsimile, e-mail, electronic message, telegraph, messenger or otherwise to the individuals and at the facsimile numbers and addresses specified with respect to it in Schedule A hereto, or sent to such party at any other place specified in a notice of change of number or address hereafter received by the other party. Any notice, statement, demand or other communication hereunder will be deemed effective on the day and at the time on which it is received or, if not received, on the day and at the time on which its delivery was in good faith attempted; provided, however, that any notice by a party to the other party by telephone shall be deemed effective only if (a) such notice is followed by written confirmation thereof and (b) at least one of the other means of providing notice that are specifically listed above has previously been attempted in good faith by the notifying party.

 

 

shall inure to the benefit of Borrower and Lender and their respective heirs, representatives, successors and assigns. This Agreement may be terminated by either party upon notice to the other, subject only to fulfillment of any obligations then outstanding. This Agreement shall not be modified, except by an instrument in writing signed by the party against whom enforcement is sought. The parties hereto acknowledge and agree that, in connection with this Agreement and each Loan hereunder, time is of the essence. Each provision and agreement herein shall be treated as separate and independent from any other provision herein and shall be enforceable notwithstanding the unenforceability of any such other provision or agreement.

For the purposes hereof:

 

 

foregoing, (a) for purposes of Section 9, “Business Day” shall mean any day on which regular trading occurs in the principal market for any Loaned Securities or for any Collateral consisting of Securities under any outstanding Loan hereunder and “next Business Day” shall mean the next day on which a transfer of Collateral may be effected in accordance with Section 15, and (b) in no event shall a Saturday or Sunday be considered a Business Day.

 

 

 

 

 

 

connection with securities loans is to the contrary). If the relevant quotation did not exist at such Close of Trading, then the Market Value shall be the relevant quotation on the next preceding Close of Trading at which there was such a quotation. The determinations of Market Value provided for in Annex II or in any other writing described in the first sentences of this Section 25.38 or, if applicable, in the preceding sentence shall apply for all purposes under this Agreement, except for purposes of Section 13.

 

 

contract,” as such terms are defined in the FDIA and any rules, orders or policy statements thereunder (except insofar as the type of assets subject to the Loan would render such definitions inapplicable).

 

 

 

 

Annex I

Party Acting as Agent

This Annex sets forth the terms and conditions governing all transactions in which a party lending or borrowing Securities, as the case may be (“ Agent”), in a Loan is acting as agent for one or more third parties (each, a “Principal”). Unless otherwise defined, capitalized terms used but not defined in this Annex shall have the meanings assigned in the Securities Loan Agreement of which it forms a part (such agreement, together with this Annex and any other annexes, schedules or exhibits, referred to as the” Agreement”) and, unless otherwise specified, all section references herein are intended to refer to sections of such Securities Loan Agreement.

 

 

 

Default by Agent under the Agreement shall be deemed a Default by Lender or Borrower, as the case may be).

 

 

 

 

Annex II

Market Value

Unless otherwise agreed by Borrower and Lender:

 

 

 

 

 

Annex III

Term Loans

This Annex sets forth additional terms and conditions governing Loans designated as “Term Loans” in which Lender lends to Borrower a specific amount of Loaned Securities (“Term Loan Amount”) against a pledge of cash Collateral by Borrower for an agreed upon Cash Collateral Fee until a scheduled termination date (“Termination Date”). Unless otherwise defined, capitalized terms used but not defined in this Annex shall have the meanings assigned in the Securities Loan Agreement of which it forms a part (such agreement, together with this Annex and any other annexes, schedules or exhibits, referred to as the “Agreement”).

 

 

 

 

 

 

Schedule A

Names and Addresses for Communications

 

 

Schedule B

Defined Terms and Supplemental Provisions

 

 

Schedule B

AMENDMENT TO

MASTER SECURITIES LOAN AGREEMENT

This Amendment to the Master Securities Loan Agreement (2000 Version) dated as of August 6, 2008 (the “Agreement”) by and between Bank of America, N.A. (the “Borrower”) and RH Financial Corporation (the “Lender”) is entered into as of August 6, 2008 by and between the Borrower and the Lender, who hereby agree to amend the Agreement as follows:

1.        Section 1 of the Agreement is hereby amended by deleting the following language appearing at the end of the first sentence thereof: “against a transfer of Collateral (as defined herein)”.

2.        Section 2.1 of the Agreement is hereby amended by deleting it in its entirety and replacing it with the following:

2.1       Subject to the terms and conditions of this Agreement, Borrower or Lender may, from time to time, orally seek to initiate a transaction in which Lender will lend Securities to Borrower. Borrower and Lender shall agree orally on the terms of each Loan (which terms may be amended during the Loan), including the issuer of the Securities, the amount of Securities to be lent and any additional terms.

All references in the Agreement to the term “Confirmation” shall be disregarded.

3.        A new Section 10A is added to the Agreement as follows:

10A. Representations of Lender

Lender represents and warrants to the Borrower that:

(a) Lender is acting for its own account, and has made its own independent decision to enter into the Agreement and as to whether the Agreement is appropriate or proper for it based upon its own judgment and upon advice of such advisors as it deems necessary. Lender acknowledges and agrees that it is not relying, and has not relied, upon any communication (written or oral) of Borrower or any affiliate of Borrower with respect to the legal, accounting, tax or other implications of the Agreement and that it has conducted its own analyses of the legal, accounting, tax and other implications of the Agreement; it being understood that information and explanations related to the terms and conditions of the Agreement shall not be considered investment advice or

 

 

a recommendation to enter into the Agreement. The foregoing representations and warranties are in addition to Lender’s representations contained in Section 10.2 and 10.3 of the Agreement.

(b) Lender is entering into the Agreement with a full understanding of all of the terms and risks of the Agreement (economic and otherwise) and is capable of evaluating and understanding (on its own behalf or through independent professional advice), and understands and accepts, the terms, conditions and risks. Lender is also capable of assuming (financially and otherwise), and assumes, those risks.

(c) Lender acknowledges that neither Borrower nor any affiliate of Borrower is acting as a fiduciary for or an advisor to Lender in respect of the Agreement.

4.        Section 10.6 of the Agreement is hereby amended by adding the following at the end of the sentence: “For the avoidance of doubt, the Securities borrowed by Borrower from Lender that are held by Borrower pursuant the Pledge Agreement shall continue to be “Eligible Collateral” as defined in the Pledge Agreement.

5.        Section 11.1(b) of the Agreement shall be deleted in its entirety.

6.        A new Section 28 is added to the Agreement as follows:

28.     Netting and Set-off

(a) If on any date cash would otherwise be payable or Shares (as defined in the Confirmation between Lender and Borrower dated as of October 31, 2005 and the Supplemental Confirmation dated November 22, 2005 (Reference: NY-20378) setting forth the terms and conditions of a forward transaction between the parties, as amended from time to time (together with the Agreement, as defined therein, the “Transaction Agreement”)), or other property would otherwise be deliverable, pursuant to the Agreement, the Transaction Agreement or the Pledge Agreement by and between Lender and Borrower dated as of October 31, 2005, as amended from time to time (the “Pledge Agreement”), by Borrower to Lender and by Lender to Borrower and the type of property required to be paid or delivered by each such party on such date is the same, then, on such date, each such party’s obligation to make such payment or delivery will be automatically satisfied and discharged and, if the aggregate amount that would otherwise have been payable or deliverable by one such party exceeds the aggregate amount that would otherwise have been payable or deliverable by the other such party, replaced by an obligation upon the party by whom the larger aggregate amount would have been payable or

 

 

deliverable to pay or deliver to the other party the excess of the larger aggregate amount over the smaller aggregate amount.

(b) In addition to and without limiting any termination rights and rights of set-off that a party to the Agreement may have as a matter of law, pursuant to contract or otherwise, upon the occurrence of an Event of Default, Additional Event of Default, Termination Event or Additional Termination Event (each as defined in the Transaction Agreement) or an event giving rise to a payment obligation under the Transaction Agreement pursuant to Section 9.7 of the Equity Definitions (as defined in the Transaction Agreement), Borrower shall have the right to terminate, liquidate and otherwise close out the transactions contemplated by the Agreement, the Transaction Agreement, each outstanding Confirmation (as defined in the Transaction Agreement) and the Pledge Agreement pursuant to the terms hereof and thereof, and to set off any obligation that Borrower or any affiliate of Borrower may have to Lender, including without limitation any obligation to make any release, delivery or payment to Lender pursuant to the Pledge Agreement or the Agreement, against any right Borrower or any of its affiliates may have against Lender, including without limitation any right to receive a payment or delivery pursuant to any provision of the Agreement or the Transaction Agreement. In the case of a set-off of any obligation to release, deliver or pay assets against any right to receive assets of the same type, such obligation and right shall be set off in kind. In the case of a set-off of any obligation to release, deliver or pay assets against any right to receive assets of any other type, the value of each of such obligation and such right shall be determined by Borrower and the result of such set-off shall be that the net obligor shall pay or deliver to the other party an amount of cash or assets, at the net obligor’s option, with a value (determined, in the case of a delivery of assets, by Borrower) equal to that of the net obligation. In determining the value of any obligation to release or deliver Shares (as defined in the Transaction Agreement) or right to receive Shares, the value at any time of such obligation or right shall be determined by reference to the market value of the Shares at such time. If an obligation or right is unascertained at the time of any such set-off, Borrower may in good faith estimate the amount or value of such obligation or right, in which case set-off will be effected in respect of that estimate, and the relevant party shall account to the other party at the time such obligation or right is ascertained.

7.        A new Section 29 is added to the Agreement as follows:

29.     Status of Lender’s Rights in Respect of the Loaned Securities.

 

 

The parties acknowledge and agree that all of Lender’s right, title and interest in and to (i) any obligation of Borrower to Lender hereunder, including without limitation any obligation to transfer Loaned Securities to Lender upon termination of a Loan or to pay or deliver any amounts or assets to Lender in respect of distributions made on or with respect to the Loaned Security, (ii) any amounts paid or assets delivered by Borrower to Lender in respect of distributions made on or with respect to the Loaned Securities and (iii) any Loaned Securities transferred by Borrower to Lender upon termination of a Loan under the Agreement, in each case, are proceeds of the collateral pledged pursuant to the Pledge Agreement on the date hereof, constitute Collateral (as defined in the Pledge Agreement) and are subject to the security interests granted in and to the Collateral pursuant to the Pledge Agreement.

8.        No Collateral will secure any Loan. Without limiting the generality of the foregoing, no provision of the Agreement relating to Collateral shall be given effect.

9.        The words “to the extent such Loan is secured by Collateral other than cash” are hereby deleted from Section 5.1 (a) of the Agreement and replaced with “by the Borrower.” Borrower hereby agrees to pay a Loan Fee of 37.5 basis points per annum (using the Actual/360 day count convention) in respect of any Loan made under the Agreement. The parties acknowledge and agree that the Loan Fee and the benefits derived by Lender under the Transaction Agreement from this amendment to the Agreement and from any Loans made thereunder constitute adequate consideration for any Loans made thereunder.

10.       Conditions Precedent. As conditions to the effectiveness of this Amendment, (i) Lender shall have delivered to Borrower a completed perfection certificate in the form attached as Exhibit A hereto and (ii) Borrower shall have filed a UCC-l financing statement containing a collateral description in the form of Exhibit B hereto in the appropriate filing office in the Location of Lender specified in Section 3(g) of the Pledge Agreement.

11.       Annex I and Annex III of the Agreement shall be deleted in their entirety.

 

 

IN WITNESS WHEREOF, this Amendment to the Agreement is executed . by Bank of America, N.A. and RH Financial Corporation.

 

 

 

 

 

EXHIBIT A

Perfection Certificate

The undersigned, RH Financial Corporation. (“Lender”), hereby certifies

that:

None

 

 

800 Market Street, 29R, Saint Louis, Missouri 63101

 

 

None

 

 

 

IN WITNESS WHEREOF, the undersigned has executed this Certificate this 6th day of August, 2008.

 

 

 

 

EXHIBIT B

Form of UCC-1 Financing Statement

SCHEDULE A TO FINANCING STATEMENT NAMING RH FINANCIAL CORPORATION. AS DEBTOR, AND BANK OF AMERICA, N.A., AS SECURED PARTY

This financing statement covers the right, title and interest of RH Financial Corporation (“Debtor”) in and to the following, whether owned at the time that the Initial Pledged Items were delivered to Secured Party or thereafter acquired (all of which is hereinafter collectively referred to as the “Collateral”):

(i)       the Initial Pledged Items;

(ii)       all additions to and substitutions for the Initial Pledged Items (the “Additions and Substitutions”);

(iii)       all income, proceeds and collections received or to be received, or derived or to be derived, at the time that the Initial Pledged Items were delivered to Secured Party or at any time thereafter (whether before or after the commencement of any proceeding under applicable bankruptcy, insolvency or similar law, by or against Debtor, with respect to Debtor) from or in connection with the Initial Pledged Items or the Additions and Substitutions (including, without limitation, (A) any shares of capital stock issued by the Issuer in respect of any Common Stock (or security entitlements in respect thereof) constituting Collateral or any cash, securities or other property distributed in respect of or exchanged for any Common Stock (or security entitlements in respect thereof) constituting Collateral, or into which any such Common Stock (or security entitlements in respect thereof) is converted in connection with any Merger Event or otherwise, and any security entitlements in respect of any of the foregoing, (B) any obligation of Secured Party to Debtor under the Master Securities Loan Agreement, including without limitation any obligation to transfer Loaned Securities (as defined in the Master Securities Loan Agreement) to Debtor upon termination of a Loan thereunder or to pay or deliver any amounts or assets to Debtor in respect of distributions made on or with respect to the Loaned Securities thereunder, (C) any amounts paid or assets delivered by Secured Party to Debtor under the Master Securities Loan Agreement in respect of distributions made on or with respect to the Loaned Securities thereunder and (D) any Loaned Securities transferred by Secured Party to Debtor upon termination of a Loan under the Master Securities Loan Agreement);

 

(iv)      the Collateral Account and all securities and other financial assets (each as defined in Section 8-102 of the UCC), including the Initial Pledged Items and the Additions and Substitutions, and other funds, property or other assets from time to time held therein or credited thereto; and

(v)       all powers and rights owned at the time that the Initial Pledged Items were delivered to Secured Party or thereafter acquired under or with respect to the Initial Pledged Items or the Additions and Substitutions.

As used in this Schedule A, the following capitalized terms have the meanings specified below (such meanings being equally applicable to both the singular and plural forms of the terms defined):

“Collateral Account” means a securities account (as defined in Section 8-501(a) of the UCC) of Secured Party maintained at Banc of America Securities LLC in which or to which certain of the Collateral is to be deposited or credited.

“Common Stock” means shares of the Issuer, or security entitlements in respect thereof.

“Initial Pledged Items” means 890,000 shares of Common Stock.

“Issuer” means Vail Resorts, Inc.

“Master Securities Loan Agreement” means the Master Securities Loan Agreement dated as of August 6, 2008 between Debtor and Secured Party, as amended from time to time.

“Merger Event” means any (A) reclassification or change of the Common Stock that results in a transfer of or an irrevocable commitment to transfer all of the outstanding shares of the Common Stock, (B) consolidation, amalgamation or merger of the Issuer with or into another entity (other than a consolidation, amalgamation or merger in which the Issuer is the continuing entity and which does not result in reclassification or change of all of the outstanding shares of the Common Stock), or (C) other takeover offer for shares of the Common Stock that results in a transfer of or an irrevocable commitment to transfer all of the shares of the Common Stock (other than such shares of the Common Stock owned or controlled by the offeror).

“Secured Party” means Bank of America, N.A.

“UCC” means the Uniform Commercial Code as in effect in the State of New York.