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UNITED STATESSECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-KCurrent Report
Pursuant to Section 13 or 15(d)of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 7, 2019
BB&T Corporation(Exact name of registrant as specified in its charter)
North Carolina 1-10853 56-0939887
(State or other jurisdiction ofincorporation)
(Commission File Number)
(I.R.S. Employer Identification No.)
200 West Second Street
Winston-Salem, North Carolina 27101(Address of principal executive offices) (Zip Code)
(336) 733-2000(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of theregistrant under any of the following provisions:
☒Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Actof 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transitionperiod for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of theExchange Act. ☐
ITEM 1.01. Entry into a Material Definitive Agreement.
On February 7, 2019, BB&T Corporation, a North Carolina corporation (“BB&T”), entered into an Agreement and Plan ofMerger (the “Merger Agreement”) with SunTrust Banks, Inc., a Georgia corporation (“SunTrust”). The Merger Agreementprovides that, upon the terms and subject to the conditions set forth therein, SunTrust will merge with and into BB&T (the“Merger”), with BB&T as the surviving entity in the Merger. Immediately following the Merger, SunTrust’s wholly ownedsubsidiary, SunTrust Bank, will merge with and into BB&T’s wholly owned subsidiary, Branch Banking and Trust Company(the “Bank Merger”), with Branch Banking and Trust Company as the surviving entity in the Bank Merger. The MergerAgreement was unanimously approved by the Board of Directors of each of BB&T and SunTrust.
Upon the terms and subject to the conditions set forth in the Merger Agreement, at the effective time of the Merger (the“Effective Time”), each share of common stock, par value, $1.00 per share, of SunTrust (“SunTrust Common Stock”)outstanding immediately prior to the Effective Time, other than certain shares held by SunTrust or BB&T, will be convertedinto the right to receive 1.295 shares of common stock (the “Exchange Ratio”), par value $5.00 per share, of BB&T (“BB&TCommon Stock”). Holders of SunTrust Common Stock will receive cash in lieu of fractional shares.
At the Effective Time, (i) each outstanding share of perpetual preferred stock, Series A, Series B, Series F, Series G andSeries H, of SunTrust (collectively, “SunTrust Preferred Stock”) will be converted into the right to receive one share of anapplicable newly issued series of BB&T preferred stock having the same terms as such share of SunTrust Preferred Stock,and (ii) each outstanding SunTrust equity award granted under SunTrust’s equity compensation plans will be convertedinto a corresponding award with respect to BB&T Common Stock, with the number of shares underlying such award (and,in the case of stock options, the applicable exercise price) adjusted based on the Exchange Ratio. Each such convertedBB&T equity award will continue to be subject to the same terms and conditions as applied to the corresponding SunTrustequity award, except that, in the case of SunTrust performance stock unit awards, the number of shares underlying theconverted BB&T equity award will be determined based on actual performance for the portion of the applicableperformance period through the Effective Time and target performance for the balance of the applicable performanceperiod and such award will continue to vest after the Effective Time solely based on continued service.
The Merger Agreement also provides, among other things, that effective as of the Effective Time, Kelly S. King, the currentChairman and Chief Executive Officer of BB&T, will continue to serve as Chairman and Chief Executive Officer of thesurviving entity and of the surviving bank until September 12, 2021, at which time he will serve as Executive Chairman ofthe surviving entity and the surviving bank until March 12, 2022. The Merger Agreement also provides that, effective as ofthe Effective Time, William H. Rogers, Jr., the current Chairman and Chief Executive Officer of SunTrust, will be appointedas a director and as President and Chief Operating Officer of the surviving entity and the surviving bank and will serve insuch role until Mr. King is no longer serving as Chief Executive Officer of the surviving entity or the surviving bank, at whichtime Mr. Rogers will become Chief Executive Officer of the surviving entity and the surviving bank. Mr. Rogers will alsobecome Chairman of the board of directors of the surviving entity and the surviving bank at such time as Mr. King is nolonger serving as Executive Chairman. In addition, the Board of Directors of the surviving entity will be comprised of 22directors, of which 11 will be former members of the board of directors of SunTrust and of which 11 will be former membersof the board of
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directors of BB&T.
The Merger Agreement provides that the headquarters of the surviving entity and the surviving bank will be located inCharlotte, North Carolina. In addition, the Merger Agreement provides that the hub for the surviving entity’s and thesurviving bank’s wholesale business will be located in Atlanta, Georgia; the hub for the surviving entity’s and the survivingbank’s consumer and community banking business will be located in Winston-Salem, North Carolina; and the hub for thesurviving entity’s and the surviving bank’s technology and innovation operations will be located in Charlotte, NorthCarolina.
The Merger Agreement contains customary representations and warranties from both BB&T and SunTrust, and each partyhas agreed to customary covenants, including, among others, covenants relating to (1) the conduct of its business duringthe interim period between the execution of the Merger Agreement and the Effective Time, (2) its obligation to call ameeting of its shareholders to adopt the Merger Agreement, and, subject to certain exceptions, to recommend that itsshareholders adopt the Merger Agreement, and (3) its non-solicitation obligations related to alternative acquisitionproposals.
The completion of the Merger is subject to customary conditions, including (1) adoption of the Merger Agreement bySunTrust’s shareholders and by BB&T’s shareholders, (2) authorization for listing on the New York Stock Exchange of theshares of BB&T Common Stock to be issued in the Merger, subject to official notice of issuance, (3) the receipt of requiredregulatory approvals, including the approval of the Board of Governors of the Federal Reserve System, the FederalDeposit Insurance Corporation, the North Carolina Commissioner of Banks and the Georgia Department of Banking andFinance, (4) effectiveness of the registration statement on Form S-4 for the BB&T Common Stock to be issued in theMerger, and (5) the absence of any order, injunction, decree or other legal restraint preventing the completion of theMerger or making the completion of the Merger illegal. Each party’s obligation to complete the Merger is also subject tocertain additional customary conditions, including (a) subject to certain exceptions, the accuracy of the representations andwarranties of the other party, (b) performance in all material respects by the other party of its obligations under the MergerAgreement and (c) receipt by such party of an opinion from its counsel to the effect that the Merger will qualify as areorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended.
The Merger Agreement provides certain termination rights for both BB&T and SunTrust and further provides that atermination fee of $1.121 billion will be payable by either BB&T or SunTrust, as applicable, upon termination of the MergerAgreement under certain circumstances.
The foregoing description of the Merger Agreement does not purport to be complete and is qualified in its entirety byreference to the full text of the Merger Agreement, which is attached hereto as Exhibit 2.1 and is incorporated herein byreference.
The representations, warranties and covenants of each party set forth in the Merger Agreement have been made only forthe purposes of, and were and are solely for the benefit of the parties to, the Merger Agreement, may be subject tolimitations agreed upon by the contracting parties, including being qualified by confidential disclosures made for thepurposes of allocating contractual risk between the parties to the Merger Agreement instead of establishing these mattersas facts, and may be subject to standards of materiality applicable to the contracting parties that differ from thoseapplicable to investors. Accordingly, the representations and warranties may not describe the actual state of affairs at thedate they were made or at any other time, and investors should not rely on them as statements of fact. In addition, suchrepresentations and warranties (1) will not survive consummation of the Merger, and (2) were made only as of the date ofthe Merger Agreement or such other date as is specified in the Merger Agreement. Moreover, information concerning thesubject matter of the representations and warranties may change
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after the date of the Merger Agreement, which subsequent information may or may not be fully reflected in the parties’public disclosures. Accordingly, the Merger Agreement is included with this filing only to provide investors with informationregarding the terms of the Merger Agreement, and not to provide investors with any factual information regarding BB&T orSunTrust, their respective affiliates or their respective businesses. The Merger Agreement should not be read alone, butshould instead be read in conjunction with the other information regarding BB&T, SunTrust, their respective affiliates ortheir respective businesses, the Merger Agreement and the Merger that will be contained in, or incorporated by referenceinto, the Registration Statement on Form S-4 that will include a Joint Proxy Statement of BB&T and SunTrust and aprospectus of BB&T, as well as in the Forms 10-K, Forms 10-Q and other filings that each of BB&T and SunTrust makewith the Securities and Exchange Commission (“SEC”).
ITEM 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers;Compensatory Arrangements of Certain Officers.
In connection with its execution of the Merger Agreement, BB&T entered into an amended and restated employmentagreement with Mr. King (the “King Employment Agreement”), which will replace Mr. King’s existing employmentagreement with BB&T as of the Effective Time. The King Employment Agreement, which incorporates the terms of thesuccession plan noted in Item 1.01 above, provides for Mr. King’s employment with BB&T through March 12, 2022 onsubstantially similar terms as apply under Mr. King’s current employment agreement and for Mr. King’s service as anon-employee consultant thereafter until September 12, 2022. In exchange for providing consulting services, during hisservice as a non-employee consultant, Mr. King will receive a monthly consulting fee in an amount equal to the quotient ofhis then-current base salary and target annual bonus opportunity divided by 12. If Mr. King’s consulting term is terminatedby BB&T without “just cause” (as defined in the King Employment Agreement), Mr. King will be entitled to receive theconsulting fees for the balance of the consulting period in a lump sum. In addition, if, prior to the commencement ofMr. King’s consulting services, Mr. King’s employment is terminated by BB&T without just cause or Mr. King resigns for“good reason” (as defined in the King Employment Agreement), Mr. King’s severance entitlement under the KingEmployment Agreement will also include the consulting fees he would have received during the consulting period.
The foregoing description of the King Employment Agreement does not purport to be complete and is qualified in itsentirety by reference to the full text of the King Employment Agreement, which is attached hereto as Exhibit 10.1 andincorporated herein by reference.
ITEM 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. Description of Exhibit2.1
Agreement and Plan of Merger, dated as of February 7, 2019, by and between SunTrust Banks, Inc.and BB&T Corporation.*
10.1
Amended and Restated Employment Agreement, dated as of February 7, 2019, by and among BB&TCorporation, Branch Banking and Trust Company, and Kelly S. King.
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*Pursuant to Item 601(b)(2) of Regulation S-K, certain schedules and similar attachments have been omitted. Theregistrant hereby agrees to furnish a copy of any omitted schedule or similar attachment to the SEC upon request.
Forward-Looking Statements
This communication contains “forward-looking statements” within the meaning of the Private Securities Litigation ReformAct of 1995 regarding the financial condition, results of operations, business plans and the future performance of BB&Tand SunTrust. Words such as “anticipates,” “believes,” “estimates,” “expects,” “forecasts,” “intends,” “plans,” “projects,”“could,” “may,” “should,” “will” or other similar words and expressions are intended to identify these forward-lookingstatements. These forward-looking statements are based on BB&T’s and SunTrust’s current expectations and assumptionsregarding BB&T’s and SunTrust’s businesses, the economy, and other future conditions. Because forward-lookingstatements relate to future results and occurrences, they are subject to inherent uncertainties, risks, and changes incircumstances that are difficult to predict. Many possible events or factors could affect BB&T’s or SunTrust’s futurefinancial results and performance and could cause actual results or performance to differ materially from anticipated resultsor performance. Such risks and uncertainties include, among others: the occurrence of any event, change or othercircumstances that could give rise to the right of one or both of the parties to terminate the definitive merger agreementbetween BB&T and SunTrust, the outcome of any legal proceedings that may be instituted against BB&T or SunTrust,delays in completing the transaction, the failure to obtain necessary regulatory approvals (and the risk that such approvalsmay result in the imposition of conditions that could adversely affect the combined company or the expected benefits of thetransaction) and shareholder approvals or to satisfy any of the other conditions to the transaction on a timely basis or at all,the possibility that the anticipated benefits of the transaction are not realized when expected or at all, including as a resultof the impact of, or problems arising from, the integration of the two companies or as a result of the strength of theeconomy and competitive factors in the areas where BB&T and SunTrust do business, the possibility that the transactionmay be more expensive to complete than anticipated, including as a result of unexpected factors or events, diversion ofmanagement’s attention from ongoing business operations and opportunities, potential adverse reactions or changes tobusiness or employee relationships, including those resulting from the announcement or completion of the transaction, theability to complete the transaction and integration of BB&T and SunTrust successfully, and the dilution caused by BB&T’sissuance of additional shares of its capital stock in connection with the transaction. Except to the extent required byapplicable law or regulation, each of BB&T and SunTrust disclaims any obligation to update such factors or to publiclyannounce the results of any revisions to any of the forward-looking statements included herein to reflect future events ordevelopments. Further information regarding BB&T, SunTrust and factors which could affect the forward-lookingstatements contained herein can be found in BB&T’s Annual Report on Form 10-K for the fiscal year ended December 31,2017, its Quarterly Reports on Form 10-Q for the three-month periods ended March 31, 2018, June 30, 2018 andSeptember 30, 2018, and its other filings with the SEC, and in SunTrust’s Annual Report on Form 10-K for the fiscal yearended December 31, 2017, its Quarterly Reports on Form 10-Q for the three-month periods ended March 31, 2018,June 30, 2018 and September 30, 2018, and its other filings with the SEC.
Additional Information about the Merger and Where to Find It
In connection with the proposed merger with SunTrust, BB&T will file with the SEC a registration statement on Form S-4 toregister the shares of BB&T’s capital stock to be issued in connection with the merger. The
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registration statement will include a joint proxy statement/prospectus which will be sent to the shareholders of BB&T andSunTrust seeking their approval of the proposed transaction.
INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT ON FORM S-4,THE JOINT PROXY STATEMENT/PROSPECTUS INCLUDED WITHIN THE REGISTRATION STATEMENT ON FORMS-4 AND ANY OTHER RELEVANT DOCUMENTS FILED OR TO BE FILED WITH THE SEC IN CONNECTION WITHTHE PROPOSED TRANSACTION BECAUSE THESE DOCUMENTS DO AND WILL CONTAIN IMPORTANTINFORMATION ABOUT BB&T, SUNTRUST, AND THE PROPOSED TRANSACTION.
Investors and security holders may obtain copies of these documents free of charge through the website maintained by theSEC at www.sec.gov or from BB&T at its website, www.bbt.com, or from SunTrust at its website,www.suntrust.com. Documents filed with the SEC by BB&T will be available free of charge by accessing BB&T’s website athttp://bbt.com/ under the tab “About BB&T” and then under the heading “Investor Relations” or, alternatively, by directing arequest by telephone or mail to BB&T Corporation, 200 West Second Street, Winston-Salem, North Carolina, (336)733-3065, and documents filed with the SEC by SunTrust will be available free of charge by accessing SunTrust’s websiteat http://suntrust.com/ under the tab “Investor Relations,” and then under the heading “Financial Information” or,alternatively, by directing a request by telephone or mail to SunTrust Banks, Inc., 303 Peachtree Street, N.E., Atlanta,Georgia 30308, (877) 930-8971.
Participants in the Solicitation
BB&T, SunTrust and certain of their respective directors and executive officers may be deemed to be participants in thesolicitation of proxies from the shareholders of BB&T and SunTrust in connection with the proposed transaction under therules of the SEC. Certain information regarding the interests of these participants and a description of their direct andindirect interests, by security holdings or otherwise, will be included in the joint proxy statement/prospectus regarding theproposed transaction when it becomes available. Additional information about BB&T, and its directors and executiveofficers, may be found in the definitive proxy statement of BB&T relating to its 2018 Annual Meeting of Shareholders filedwith the SEC on March 15, 2018, and other documents filed by BB&T with the SEC. Additional information about SunTrust,and its directors and executive officers, may be found in the definitive proxy statement of SunTrust relating to its 2018Annual Meeting of Shareholders filed with the SEC on March 9, 2018, and other documents filed by SunTrust with theSEC. These documents can be obtained free of charge from the sources described above.
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SIGNATUREPursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to besigned on its behalf by the undersigned hereunto duly authorized.
BB&T CORPORATION
(Registrant)
By: /s/DarylN.Bible Name: Daryl N. Bible
Title:
Senior Executive Vice President and Chief Financial Officer
Date: February 13, 2019
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Exhibit2.1
EXECUTIONVERSION
AGREEMENTANDPLANOFMERGER
byandbetween
SUNTRUSTBANKS,INC.
and
BB&TCORPORATION
DatedasofFebruary7,2019
TABLEOFCONTENTS
ARTICLEI
THEMERGER Page
1.1 TheMerger 11.2 Closing 11.3 EffectiveTime 21.4 EffectsoftheMerger 21.5 ConversionofSunTrustCommonStock 21.6 BB&TStock 31.7 SunTrustPreferredStock 31.8 TreatmentofSunTrustEquityAwards 41.9 ArticlesofIncorporationofSurvivingEntity 71.10 BylawsofSurvivingEntity 71.11 TaxConsequences 71.12 BankMerger 7
ARTICLEII
EXCHANGEOFSHARES
2.1 BB&TtoMakeConsiderationAvailable 72.2 ExchangeofShares 8
ARTICLEIII
REPRESENTATIONSANDWARRANTIESOFSUNTRUST
3.1 CorporateOrganization 113.2 Capitalization 123.3 Authority;NoViolation 143.4 ConsentsandApprovals 153.5 Reports 153.6 FinancialStatements 163.7 Broker’sFees 173.8 AbsenceofCertainChangesorEvents 183.9 LegalandRegulatoryProceedings 183.10 TaxesandTaxReturns 183.11 Employees 193.12 SECReports 223.13 CompliancewithApplicableLaw 223.14 CertainContracts 243.15 AgreementswithRegulatoryAgencies 263.16 EnvironmentalMatters 263.17 InvestmentSecuritiesandCommodities 27
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3.18 RealProperty 273.19 IntellectualProperty 273.20 RelatedPartyTransactions 283.21 StateTakeoverLaws 283.22 Reorganization 283.23 Opinion 283.24 SunTrustInformation 293.25 LoanPortfolio 293.26 Insurance 303.27 InvestmentAdvisorSubsidiary 303.28 InsuranceSubsidiary 313.29 Broker-DealerSubsidiary 313.30 NoOtherRepresentationsorWarranties 32
ARTICLEIV
REPRESENTATIONSANDWARRANTIESOFBB&T
4.1 CorporateOrganization 334.2 Capitalization 344.3 Authority;NoViolation 354.4 ConsentsandApprovals 364.5 Reports 374.6 FinancialStatements 374.7 Broker’sFees 394.8 AbsenceofCertainChangesorEvents 394.9 LegalandRegulatoryProceedings 394.10 TaxesandTaxReturns 394.11 Employees 404.12 SECReports 434.13 CompliancewithApplicableLaw 434.14 CertainContracts 454.15 AgreementswithRegulatoryAgencies 464.16 EnvironmentalMatters 474.17 InvestmentSecuritiesandCommodities 474.18 RealProperty 474.19 IntellectualProperty 484.20 RelatedPartyTransactions 484.21 StateTakeoverLaws 484.22 Reorganization 484.23 Opinion 484.24 BB&TInformation 494.25 LoanPortfolio 494.26 Insurance 504.27 InvestmentAdvisorSubsidiary 504.28 InsuranceSubsidiary 514.29 Broker-DealerSubsidiary 51
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4.30 NoOtherRepresentationsorWarranties 52
ARTICLEV
COVENANTSRELATINGTOCONDUCTOFBUSINESS
5.1 ConductofBusinessesPriortotheEffectiveTime 525.2 Forbearances 53
ARTICLEVI
ADDITIONALAGREEMENTS
6.1 RegulatoryMatters 566.2 AccesstoInformation;Confidentiality 586.3 Shareholders’Approvals 586.4 LegalConditionstoMerger 606.5 StockExchangeListing 606.6 EmployeeMatters 606.7 Indemnification;Directors’andOfficers’Insurance 636.8 AdditionalAgreements 646.9 AdviceofChanges 646.10 Dividends 646.11 ShareholderLitigation 656.12 CorporateGovernance;Headquarters 656.13 CommitmentstotheCommunity 666.14 AcquisitionProposals 666.15 PublicAnnouncements 686.16 ChangeofMethod 686.17 RestructuringEfforts 686.18 TakeoverStatutes 686.19 TreatmentofSunTrustIndebtedness 696.20 ExemptionfromLiabilityUnderSection16(b) 69
ARTICLEVII
CONDITIONSPRECEDENT
7.1 ConditionstoEachParty’sObligationtoEffecttheMerger 707.2 ConditionstoObligationsofBB&T 707.3 ConditionstoObligationsofSunTrust 71
ARTICLEVIII
TERMINATIONANDAMENDMENT
8.1 Termination 728.2 EffectofTermination 73
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ARTICLEIX
GENERALPROVISIONS
9.1 Amendment 759.2 Extension;Waiver 759.3 NonsurvivalofRepresentations,WarrantiesandAgreements 759.4 Expenses 769.5 Notices 769.6 Interpretation 779.7 Counterparts 779.8 EntireAgreement 779.9 GoverningLaw;Jurisdiction 789.10 WaiverofJuryTrial 789.11 Assignment;Third-PartyBeneficiaries 789.12 SpecificPerformance 799.13 Severability 799.14 ConfidentialSupervisoryInformation 799.15 DeliverybyFacsimileorElectronicTransmission 79
ExhibitA–FormofBB&TBylawAmendment
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INDEXOFDEFINEDTERMS Page
AcquisitionProposal 67affiliate 77Agreement 1BankMerger 7BankMergerAgreement 7BankMergerCertificates 7BB&T 1BB&T401(k)Plan 62BB&TAdvisoryEntity 50BB&TAgent 51BB&TArticles 33BB&TBenefitPlans 40BB&TBoardRecommendation 59BB&TBroker-DealerSubsidiary 51BB&TBylawAmendment 7BB&TBylaws 33BB&TCommonStock 2BB&TContract 46BB&TDisclosureSchedule 33BB&TEquityAwards 35BB&TERISAAffiliate 40BB&TInsuranceSubsidiary 51BB&TMeeting 58BB&TOwnedProperties 47BB&TPhantomStockAward 5BB&TPreferredStock 34BB&TPSUAwards 34BB&TQualifiedPlans 41BB&TRealProperty 47BB&TRegulatoryAgreement 47BB&TReports 43BB&TRestrictedStockAward 5BB&TRSUAward 6BB&TSecurities 35BB&TSeriesIPreferredStock 3BB&TSeriesJPreferredStock 3BB&TSeriesKPreferredStock 4BB&TSeriesLPreferredStock 4BB&TSeriesMPreferredStock 4BB&TStockOption 4BB&TSubsidiary 33BB&TSubsidiaryBank 7BHCAct 11
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CEOSuccessionDate 65CertificatesofMerger 2ChairmanSuccessionDate 66ChosenCourts 78Closing 1ClosingDate 2Code 1ConfidentialityAgreement 58ContinuingEmployees 60EffectiveTime 2EnforceabilityExceptions 14EnvironmentalLaws 26ERISA 19ExchangeAct 17ExchangeAgent 7ExchangeFund 8ExchangeRatio 2FDIC 12FederalReserveBoard 15FINRA 15GAAP 11GBCC 1GeorgiaSecretary 2GovernmentalEntity 15IntellectualProperty 28InvestmentAdvisersAct 30IRS 20JointProxyStatement 15knowledge 77Liens 14Loans 29madeavailable 77MaterialAdverseEffect 11MateriallyBurdensomeRegulatoryCondition 57Merger 1MergerConsideration 2MultiemployerPlan 20MultipleEmployerPlan 20NCBCA 1NewBB&TPreferredStock 4NewBenefitPlans 61NewCertificates 8NorthCarolinaSecretary 2NYSE 9OldCertificate 2PBGC 20
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PermittedEncumbrances 27person 77PremiumCap 64RecommendationChange 59RegulatoryAgencies 15Representatives 66RequisiteBB&TVote 35RequisiteRegulatoryApprovals 57RequisiteSunTrustVote 14S-4 15Sarbanes-OxleyAct 17SEC 15SecuritiesAct 22SRO 15Subsidiary 12SunTrust 1SunTrust401(k)Plan 62SunTrustAdvisoryEntity 30SunTrustAgent 31SunTrustArticles 12SunTrustBenefitPlans 19SunTrustBoardRecommendation 59SunTrustBroker-DealerSubsidiary 31SunTrustBylaws 12SunTrustCommonStock 2SunTrustCompensationCommittee 6SunTrustContract 25SunTrustDisclosureSchedule 10SunTrustEquityAwards 13SunTrustERISAAffiliate 19SunTrustIndemnifiedParties 63SunTrustInsiders 69SunTrustInsuranceSubsidiary 31SunTrustMeeting 58SunTrustOwnedProperties 27SunTrustPhantomStockAward 5SunTrustPreferredStock 4SunTrustPSUAward 6SunTrustQualifiedPlans 20SunTrustRealProperty 27SunTrustRegulatoryAgreement 26SunTrustReports 22SunTrustRestrictedStockAward 5SunTrustRSUAward 5SunTrustSecurities 13SunTrustSeriesAPreferredStock 3
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SunTrustSeriesBPreferredStock 3SunTrustSeriesFPreferredStock 4SunTrustSeriesGPreferredStock 4SunTrustSeriesHPreferredStock 4SunTrustStockOption 4SunTrustSubsidiary 12SunTrustSubsidiaryBank 7SurvivingEntity 1TakeoverStatutes 28Tax 19TaxReturn 19Taxes 19TerminationDate 73TerminationFee 74
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AGREEMENT AND PLAN OF MERGER
AGREEMENTANDPLANOFMERGER,datedasofFebruary7,2019(this“Agreement”),byandbetweenSunTrustBanks,Inc.,aGeorgiacorporation(“SunTrust”),andBB&TCorporation,aNorthCarolinacorporation(“BB&T”).
W I T N E S S E T H:
WHEREAS,theBoardsofDirectorsofBB&TandSunTrusthavedeterminedthatitisinthebestinterestsoftheirrespectivecompaniesandtheirshareholderstoconsummatethestrategicbusinesscombinationtransactionprovidedforherein,pursuanttowhichSunTrustwill,subjecttothetermsandconditionssetforthherein,mergewithandintoBB&T(the“Merger”),sothatBB&Tisthesurvivingentity(hereinaftersometimesreferredtoinsuchcapacityasthe“SurvivingEntity”)intheMerger;
WHEREAS,infurtherancethereof,therespectiveBoardsofDirectorsofBB&TandSunTrusthaveapprovedtheMergerandthisAgreement;
WHEREAS,forfederalincometaxpurposes,itisintendedthattheMergershallqualifyasa“reorganization”withinthemeaningofSection368(a)oftheInternalRevenueCodeof1986,asamended(the“Code”),andthisAgreementisintendedtobeandisadoptedasaplanofreorganizationforpurposesofSections354and361oftheCode;and
WHEREAS,thepartiesdesiretomakecertainrepresentations,warrantiesandagreementsinconnectionwiththeMergerandalsotoprescribecertainconditionstotheMerger.
NOW,THEREFORE,inconsiderationofthemutualcovenants,representations,warrantiesandagreementscontainedherein,andintendingtobelegallyboundhereby,thepartiesagreeasfollows:
ARTICLEI
THEMERGER
1.1TheMerger.SubjecttothetermsandconditionsofthisAgreement,inaccordancewiththeNorthCarolinaBusinessCorporationAct(the“NCBCA”)andtheGeorgiaBusinessCorporationCode(the“GBCC”),attheEffectiveTime,SunTrustshallmergewithandintoBB&TpursuanttothisAgreement.BB&TshallbetheSurvivingEntityintheMerger,andshallcontinueitscorporateexistenceunderthelawsoftheStateofNorthCarolina.UponconsummationoftheMerger,theseparatecorporateexistenceofSunTrustshallterminate.
1.2Closing.SubjecttothetermsandconditionsofthisAgreement,theclosingoftheMerger(the“Closing”)willtakeplacebyelectronicexchangeofdocumentsat10:00a.m.,NewYorkCitytime,onadatewhichshallbenolaterthanthree(3)businessdaysafterthesatisfactionorwaiver(subjecttoapplicablelaw)ofalloftheconditionssetforthinArticleVIIhereof(otherthanthoseconditionsthatbytheirnaturecanonlybe
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satisfiedattheClosing,butsubjecttothesatisfactionorwaiverthereof),unlessanotherdate,timeorplaceisagreedtoinwritingbySunTrustandBB&T.ThedateonwhichtheClosingoccursisreferredtoasthe“ClosingDate.”
1.3EffectiveTime.Onor(ifagreedbySunTrustandBB&T)priortotheClosingDate,BB&TandSunTrust,respectively,shallcausetobefiledarticlesofmergerwiththeSecretaryofStateoftheStateofNorthCarolina(the“NorthCarolinaSecretary”)andacertificateofmergerwiththeSecretaryofStateoftheStateofGeorgia(the“GeorgiaSecretary”)(collectively,the“CertificatesofMerger”).TheMergershallbecomeeffectiveatsuchtimeasspecifiedintheCertificatesofMergerinaccordancewiththerelevantprovisionsoftheNCBCAandGBCC,oratsuchothertimeasshallbeprovidedbyapplicablelaw(suchtimehereinafterreferredtoasthe“EffectiveTime”).
1.4EffectsoftheMerger.AtandaftertheEffectiveTime,theMergershallhavetheeffectssetforthintheapplicableprovisionsoftheNCBCAandtheGBCC.
1.5ConversionofSunTrustCommonStock.AttheEffectiveTime,byvirtueoftheMergerandwithoutanyactiononthepartofBB&T,SunTrustortheholderofanysecuritiesofBB&TorSunTrust:
(a)SubjecttoSection2.2(e),eachshareofthecommonstock,parvalue$1.00pershare,ofSunTrustissuedandoutstandingimmediatelypriortotheEffectiveTime(the“SunTrustCommonStock”),exceptforsharesofSunTrustCommonStockownedbySunTrustorBB&T(ineachcaseotherthansharesofSunTrustCommonStock(i)heldintrustaccounts,managedaccounts,mutualfundsandthelike,orotherwiseheldinafiduciaryoragencycapacitythatarebeneficiallyownedbythirdpartiesor(ii)held,directlyorindirectly,bySunTrustorBB&Tinrespectofdebtspreviouslycontracted),shallbeconvertedintotherighttoreceive1.295shares(the“ExchangeRatio”andsuchsharesthe“MergerConsideration”)ofthecommonstock,parvalue$5.00,ofBB&T(the“BB&TCommonStock”);itbeingunderstoodthatupontheEffectiveTime,pursuanttoSection1.6,theBB&TCommonStock,includingthesharesissuedtoformerholdersofSunTrustCommonStock,shallbethecommonstockoftheSurvivingEntity.
(b)AllofthesharesofSunTrustCommonStockconvertedintotherighttoreceivetheMergerConsiderationpursuanttothisArticleIshallnolongerbeoutstandingandshallautomaticallybecancelledandshallceasetoexistasoftheEffectiveTime,andeachcertificate(each,an“OldCertificate,”itbeingunderstoodthatanyreferencehereinto“OldCertificate”shallbedeemedtoincludereferencetobook-entryaccountstatementsrelatingtotheownershipofsharesofSunTrustCommonStock)previouslyrepresentinganysuchsharesofSunTrustCommonStockshallthereafterrepresentonlytherighttoreceive(i)aNewCertificaterepresentingthenumberofwholesharesofBB&TCommonStockwhichsuchsharesofSunTrustCommonStockhavebeenconvertedintotherighttoreceive,(ii)cashinlieuoffractionalshareswhichthesharesofSunTrustCommonStockrepresentedbysuchOldCertificatehavebeenconvertedintotherighttoreceivepursuanttothisSection1.5andSection2.2(e),withoutanyinterestthereonand(iii)anydividendsor
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distributionswhichtheholderthereofhastherighttoreceivepursuanttoSection2.2,ineachcase,withoutanyinterestthereon.If,priortotheEffectiveTime,theoutstandingsharesofBB&TCommonStockorSunTrustCommonStockshallhavebeenincreased,decreased,changedintoorexchangedforadifferentnumberorkindofsharesorsecuritiesasaresultofareorganization,recapitalization,reclassification,stockdividend,stocksplitorreversestocksplit,orthereshallbeanyextraordinarydividendordistribution,anappropriateandproportionateadjustmentshallbemadetotheExchangeRatiotogiveBB&TandtheholdersofSunTrustCommonStockthesameeconomiceffectascontemplatedbythisAgreementpriortosuchevent;providedthatnothingcontainedinthissentenceshallbeconstruedtopermitSunTrustorBB&TtotakeanyactionwithrespecttoitssecuritiesorotherwisethatisprohibitedbythetermsofthisAgreement.
(c)NotwithstandinganythinginthisAgreementtothecontrary,attheEffectiveTime,allsharesofSunTrustCommonStockthatareownedbySunTrustorBB&T(ineachcaseotherthansharesofSunTrustCommonStock(i)heldintrustaccounts,managedaccounts,mutualfundsandthelike,orotherwiseheldinafiduciaryoragencycapacitythatarebeneficiallyownedbythirdpartiesor(ii)held,directlyorindirectly,bySunTrustorBB&Tinrespectofdebtspreviouslycontracted)shallbecancelledandshallceasetoexistandnoBB&TCommonStockorotherconsiderationshallbedeliveredinexchangetherefor.
1.6BB&TStock.AtandaftertheEffectiveTime,eachshareofBB&TCommonStockandeachshareofBB&TPreferredStockissuedandoutstandingimmediatelypriortotheEffectiveTimeshallremainanissuedandoutstandingshareofcommonstockorpreferredstock,asapplicable,oftheSurvivingEntityandshallnotbeaffectedbytheMerger.
1.7SunTrustPreferredStock.AttheEffectiveTime,byvirtueoftheMergerandwithoutanyactiononthepartofBB&T,SunTrustortheholderofanysecuritiesofBB&TorSunTrust:
(a)EachshareofPerpetualPreferredStock,SeriesA,noparvalue,ofSunTrust(“SunTrustSeriesAPreferredStock”)issuedandoutstandingimmediatelypriortotheEffectiveTimeshallautomaticallybeconvertedintotherighttoreceiveashareofanewlycreatedseriesofpreferredstockofBB&Thavingthesameterms(takingintoaccountthatSunTrustwillnotbethesurvivingentityintheMerger)astheSunTrustSeriesAPreferredStock(allsharesofsuchnewlycreatedseries,collectively,the“BB&TSeriesIPreferredStock”)and,uponsuchconversion,theSunTrustSeriesAPreferredStockshallnolongerbeoutstandingandshallautomaticallybecancelledandshallceasetoexistasoftheEffectiveTime.
(b)EachshareofPerpetualPreferredStock,SeriesB,noparvalue,ofSunTrust(“SunTrustSeriesBPreferredStock”)issuedandoutstandingimmediatelypriortotheEffectiveTimeshallautomaticallybeconvertedintotherighttoreceiveashareofanewlycreatedseriesofpreferredstockofBB&Thavingthesameterms(takingintoaccountthatSunTrustwillnotbethesurvivingentityintheMerger)astheSunTrustSeriesBPreferredStock(allsharesofsuchnewlycreatedseries,collectively,the“BB&TSeriesJPreferredStock”)and,uponsuchconversion,theSunTrustSeriesBPreferredStockshallnolongerbeoutstandingandshallautomaticallybecancelledandshallceasetoexistasoftheEffectiveTime.
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(c)EachshareofPerpetualPreferredStock,SeriesF,noparvalue,ofSunTrust(“SunTrustSeriesFPreferredStock”)issuedandoutstandingimmediatelypriortotheEffectiveTimeshallautomaticallybeconvertedintotherighttoreceiveashareofanewlycreatedseriesofpreferredstockofBB&Thavingthesameterms(takingintoaccountthatSunTrustwillnotbethesurvivingentityintheMerger)astheSunTrustSeriesFPreferredStock(allsharesofsuchnewlycreatedseries,collectively,the“BB&TSeriesKPreferredStock”)and,uponsuchconversion,theSunTrustSeriesFPreferredStockshallnolongerbeoutstandingandshallautomaticallybecancelledandshallceasetoexistasoftheEffectiveTime.
(d)EachshareofPerpetualPreferredStock,SeriesG,noparvalue,ofSunTrust(“SunTrustSeriesGPreferredStock”)issuedandoutstandingimmediatelypriortotheEffectiveTimeshallautomaticallybeconvertedintotherighttoreceiveashareofanewlycreatedseriesofpreferredstockofBB&Thavingthesameterms(takingintoaccountthatSunTrustwillnotbethesurvivingentityintheMerger)astheSunTrustSeriesGPreferredStock(allsharesofsuchnewlycreatedseries,collectively,the“BB&TSeriesLPreferredStock”)and,uponsuchconversion,theSunTrustSeriesGPreferredStockshallnolongerbeoutstandingandshallautomaticallybecancelledandshallceasetoexistasoftheEffectiveTime.
(e)EachshareofPerpetualPreferredStock,SeriesH,noparvalue,ofSunTrust(“SunTrustSeriesHPreferredStock,”andtogetherwiththeSunTrustSeriesAPreferredStock,SunTrustSeriesBPreferredStock,SunTrustSeriesFPreferredStockandSunTrustSeriesGPreferredStock,the“SunTrustPreferredStock”)issuedandoutstandingimmediatelypriortotheEffectiveTimeshallautomaticallybeconvertedintotherighttoreceiveashareofanewlycreatedseriesofpreferredstockofBB&Thavingthesameterms(takingintoaccountthatSunTrustwillnotbethesurvivingentityintheMerger)astheSunTrustSeriesHPreferredStock(allsharesofsuchnewlycreatedseries,collectively,the“BB&TSeriesMPreferredStock,”andcollectivelywiththeBB&TSeriesIPreferredStock,BB&TSeriesJPreferredStock,BB&TSeriesKPreferredStockandBB&TSeriesLPreferredStock,the“NewBB&TPreferredStock”)and,uponsuchconversion,theSunTrustSeriesHPreferredStockshallnolongerbeoutstandingandshallautomaticallybecancelledandshallceasetoexistasoftheEffectiveTime.
1.8TreatmentofSunTrustEquityAwards.
(a)AttheEffectiveTime,eachoptiontopurchasesharesofSunTrustCommonStock(a“SunTrustStockOption”)thatisoutstandingandunexercisedimmediatelypriortotheEffectiveTimeshall,automaticallyandwithoutanyrequiredactiononpartoftheholderthereof,beconvertedintoanoption(a“BB&TStockOption”)topurchase(i)thatnumberofsharesofBB&TCommonStock(roundeddowntothenearestwholeshare)equaltotheproductof(A)thetotalnumberofsharesofSunTrustCommonStocksubjecttosuchSunTrustStockOptionimmediatelypriortotheEffectiveTimemultipliedby(B)theExchangeRatio(asitmay
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beadjustedifnecessarypursuanttothelastsentenceofSection1.5(b)),(ii)atanexercisepricepershareofBB&TCommonStock(roundeduptothenearestwholecent)equaltothequotientof(A)theexercisepricepershareofSunTrustCommonStockofsuchSunTrustStockOptionimmediatelypriortotheEffectiveTimedividedby(B)theExchangeRatio(asitmaybeadjustedifnecessarypursuanttothelastsectionofSection1.5(b));provided,however,thattheexercisepriceandthenumberofsharesofBB&TCommonStockpurchasablepursuanttotheSunTrustStockOptionsshallbedeterminedinamannerconsistentwiththerequirementsofSection409AoftheInternalRevenueCode;provided,further,thatinthecaseofanySunTrustStockOptiontowhichSection422oftheInternalRevenueCodeapplies,theexercisepriceandthenumberofsharesofBB&TCommonStockpurchasablepursuanttosuchoptionshallbedeterminedinaccordancewiththeforegoing,subjecttosuchadjustmentsasarenecessaryinordertosatisfytherequirementsofSection424(a)oftheInternalRevenueCode.ExceptasexpresslyprovidedinthisSection1.8(a),eachsuchBB&TStockOptionshallbesubjecttothesametermsandconditions(includingvestingandexercisabilityterms)asappliedtothecorrespondingSunTrustStockOptionimmediatelypriortotheEffectiveTime.
(b)AttheEffectiveTime,eachphantomstockunitawardinrespectofsharesofSunTrustCommonStock(a“SunTrustPhantomStockAward”)thatisoutstandingimmediatelypriortotheEffectiveTimeshall,automaticallyandwithoutanyrequiredactiononthepartoftheholderthereof,beconvertedintoanawardofphantomstockunits(a“BB&TPhantomStockAward”)inrespectofthatnumberofsharesofBB&TCommonStock(roundedtothenearestwholeshare)equaltotheproductof(i)thetotalnumberofsharesofSunTrustCommonStocksubjecttosuchSunTrustPhantomStockAwardimmediatelypriortotheEffectiveTimemultipliedby(ii)theExchangeRatio(asitmaybeadjustedifnecessarypursuanttothelastsentenceofSection1.5(b)).ExceptasexpresslyprovidedinthisSection1.8(b),eachsuchBB&TPhantomStockAwardshallbesubjecttothesametermsandconditions(includingvestingterms)asappliedtothecorrespondingSunTrustPhantomStockAwardimmediatelypriortotheEffectiveTime.
(c)AttheEffectiveTime,eachawardinrespectofashareofSunTrustCommonStocksubjecttovesting,repurchaseorotherlapserestriction(a“SunTrustRestrictedStockAward”)thatisoutstandingimmediatelypriortotheEffectiveTimeshall,automaticallyandwithoutanyrequiredactiononthepartoftheholderthereof,beconvertedintoarestrictedstockaward(a“BB&TRestrictedStockAward”)inrespectofthatnumberofsharesofBB&TCommonStock(roundedtothenearestwholeshare)equaltotheproductof(i)thetotalnumberofsharesofSunTrustCommonStocksubjecttotheSunTrustRestrictedStockAwardimmediatelypriortotheEffectiveTimemultipliedby(ii)theExchangeRatio(asitmaybeadjustedifnecessarypursuanttothelastsentenceofSection1.5(b)).ExceptasexpresslyprovidedinthisSection1.8(c),eachsuchBB&TRestrictedStockAwardshallbesubjecttothesametermsandconditions(includingvestingterms)asappliedtothecorrespondingSunTrustRestrictedStockAwardimmediatelypriortotheEffectiveTime.
(d)AttheEffectiveTime,eachrestrictedstockunitawardinrespectofsharesofSunTrustCommonStock(a“SunTrustRSUAward”)thatisoutstandingimmediatelypriortotheEffectiveTimeshall,automatically
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andwithoutanyrequiredactiononthepartoftheholderthereof,beconvertedintoarestrictedstockunitaward(a“BB&TRSUAward”)inrespectofthatnumberofsharesofBB&TCommonStock(roundedtothenearestwholeshare)equaltotheproductof(i)thetotalnumberofsharesofSunTrustCommonStocksubjecttotheSunTrustRSUAwardimmediatelypriortotheEffectiveTimemultipliedby(ii)theExchangeRatio(asitmaybeadjustedifnecessarypursuanttothelastsentenceofSection1.5(b)).EachsuchBB&TRSUAwardshallbesettlableinsharesofBB&TCommonStock.ExceptasexpresslyprovidedinthisSection1.8(c),eachsuchBB&TRSUAwardshallbesubjecttothesametermsandconditions(includingvestingterms)asappliedtothecorrespondingSunTrustRSUAwardimmediatelypriortotheEffectiveTime.
(e)AttheEffectiveTime,eachperformancestockunitawardinrespectofsharesofSunTrustCommonStock(a“SunTrustPSUAward”)thatisoutstandingimmediatelypriortotheEffectiveTimeshall,automaticallyandwithoutanyrequiredactiononthepartoftheholderthereof,beconvertedintoaBB&TRSUAwardinrespectofthatnumberofsharesofBB&TCommonStock(roundedtothenearestwholeshare)equaltotheproductof(i)totalnumberofsharesofSunTrustCommonStocksubjecttotheSunTrustPSUAwardimmediatelypriortotheEffectiveTime,withthenumberofsharesofSunTrustCommonStockdeterminedbasedon(A)actualperformancefortheportionoftheperformanceperiodthroughtheEffectiveTimeasreasonablydeterminedbythecompensationcommitteeoftheSunTrustBoardofDirectors(the“SunTrustCompensationCommittee”)consistentwithpastpractice,and(B)targetperformancefortheportionoftheperformanceperiodfollowingtheEffectiveTimethroughtheremainderoftheapplicableperformanceperiod,multipliedby(ii)theExchangeRatio(asitmaybeadjustedifnecessarypursuanttothelastsentenceofSection1.5(b)).EachsuchBB&TPSUAwardshallbesettlableinsharesofBB&TCommonStock.ExceptasspecificallyprovidedinthisSection1.8(e),eachsuchBB&TRSUAwardshallbesubjecttothesametermsandconditions(includingservice-basedvestingterms)asappliedtothecorrespondingSunTrustPSUAwardimmediatelypriortotheEffectiveTime.
(f)AtorpriortotheEffectiveTime,SunTrust,theBoardofDirectorsofSunTrustandtheSunTrustCompensationCommittee,asapplicable,shalladoptanyresolutionsandtakeanyactionsthatarenecessaryorappropriatetoeffectuatetheprovisionsofthisSection1.8.
(g)AsoftheEffectiveTime,thenumberandkindofsharesavailableforissuanceundereachequityincentiveplanofSunTrustshallbeadjustedtoreflectBB&TCommonStockinaccordancewiththeprovisionsoftheapplicableplan.
(h)BB&TshalltakeallcorporateactionsthatarenecessaryfortheassumptionoftheSunTrustEquityAwardspursuanttoSection1.8(a)through1.8(e),includingthereservation,issuanceandlistingofBB&TCommonStockasnecessarytoeffectthetransactionscontemplatedbythisSection1.8.AssoonaspracticablefollowingtheEffectiveTime,BB&TshallfilewiththeSECapost-effectiveamendmenttotheFormS-4oraregistrationstatementonFormS-8(oranysuccessororotherappropriateform)withrespecttothesharesofBB&TCommonStockunderlyingsuchSunTrustEquityAwards,andshallusereasonablebesteffortsto
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maintaintheeffectivenessofsuchregistrationstatementforsolongassuchassumedSunTrustEquityAwardsremainoutstanding.
1.9ArticlesofIncorporationofSurvivingEntity.AttheEffectiveTime,thearticlesofincorporationofBB&T,asineffectimmediatelypriortotheEffectiveTime,shallbetheArticlesofIncorporationoftheSurvivingEntityuntilthereafteramendedinaccordancewithapplicablelaw.
1.10BylawsofSurvivingEntity.AttheEffectiveTime,thebylawsofBB&T,asamendedassetforthinExhibitA(suchamendment,the“BB&TBylawAmendment”),shallbethebylawsoftheSurvivingEntityuntilthereafteramendedinaccordancewithapplicablelaw.
1.11TaxConsequences.ItisintendedthattheMergershallqualifyasa“reorganization”withinthemeaningofSection368(a)oftheCode,andthatthisAgreementisintendedtobeandisadoptedasaplanofreorganizationforthepurposesofSections354and361oftheCode.
1.12BankMerger.ImmediatelyfollowingtheMerger,SunTrustBank,aGeorgia-charteredbankandwholly-ownedSubsidiaryofSunTrust(“SunTrustSubsidiaryBank”),willmergewithandintoBranchBankingandTrustCompany,aNorthCarolina-charteredcommercialbankandwholly-ownedSubsidiaryofBB&T(“BB&TSubsidiaryBank”)(the“BankMerger”).BB&TSubsidiaryBankshallbethesurvivingentityintheBankMergerand,followingtheBankMerger,theseparatecorporateexistenceofSunTrustSubsidiaryBankshallcease.PromptlyafterthedateofthisAgreement,BB&TSubsidiaryBankandSunTrustSubsidiaryBankwillenterintoanagreementandplanofmergerinformandsubstanceagreedbyBB&TandSunTrust,whichshallbecustomaryformergerssimilartotheBankMerger(the“BankMergerAgreement”).EachofBB&TandawhollyownedsubsidiaryofSunTrustshallapprovetheBankMergerAgreementandtheBankMergerasthesoleshareholderofBB&TSubsidiaryBankandSunTrustSubsidiaryBank,respectively,andBB&TandSunTrustshall,andshallcauseBB&TSubsidiaryBankandSunTrustSubsidiaryBank,respectively,to,executecertificatesorarticlesofmergerandsuchotherdocumentsandcertificatesasarenecessarytomaketheBankMergereffective(“BankMergerCertificates”)immediatelyfollowingtheEffectiveTime.TheBankMergershallbecomeeffectiveatsuchtimeanddateasspecifiedintheBankMergerAgreementinaccordancewithapplicablelaw,oratsuchothertimeasshallbeprovidedbyapplicablelaw.
ARTICLEII
EXCHANGEOFSHARES
2.1BB&TtoMakeConsiderationAvailable.AtorpriortotheEffectiveTime,BB&Tshalldeposit,orshallcausetobedeposited,withabankortrustcompanymutuallyagreeduponbyBB&TandSunTrust(the“ExchangeAgent”),forexchangeinaccordancewiththisArticleIIforthebenefitoftheholdersofOldCertificates(whichforpurposesofthisArticleIIshallbedeemedtoincludecertificatesorbook-entryaccount
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statementsrepresentingsharesofSunTrustPreferredStock),certificatesor,atBB&T’soption,evidenceinbook-entryform,representingsharesofBB&TCommonStockorNewBB&TPreferredStocktobeissuedpursuanttoSection1.5andSection1.7,respectively(collectively,referredtohereinas“NewCertificates”),andcashinlieuofanyfractionalsharestobepaidpursuanttoSection2.2(e)(suchcashandNewCertificates,togetherwithanydividendsordistributionswithrespecttosharesofBB&TCommonStockorNewBB&TPreferredStockpayableinaccordancewithSection2.2(b),beinghereinafterreferredtoasthe“ExchangeFund”).
2.2ExchangeofShares.
(a)AspromptlyaspracticableaftertheEffectiveTime,butinnoeventlaterthanten(10)daysthereafter,BB&TandSunTrustshallcausetheExchangeAgenttomailtoeachholderofrecordofoneormoreOldCertificatesrepresentingsharesofSunTrustCommonStockorSunTrustPreferredStockimmediatelypriortotheEffectiveTimethathavebeenconvertedattheEffectiveTimeintotherighttoreceiveBB&TCommonStockorNewBB&TPreferredStock,asapplicable,pursuanttoArticleI,aletteroftransmittal(whichshallspecifythatdeliveryshallbeeffected,andriskoflossandtitletotheOldCertificatesshallpass,onlyuponproperdeliveryoftheOldCertificatestotheExchangeAgent)andinstructionsforuseineffectingthesurrenderoftheOldCertificatesinexchangeforNewCertificatesrepresentingthenumberofwholesharesofBB&TCommonStockandanycashinlieuoffractionalsharesorsharesofNewBB&TPreferredStock,asapplicable,whichthesharesofSunTrustCommonStockorSunTrustPreferredStockrepresentedbysuchOldCertificateorOldCertificatesshallhavebeenconvertedintotherighttoreceivepursuanttothisAgreementaswellasanydividendsordistributionstobepaidpursuanttoSection2.2(b).UponpropersurrenderofanOldCertificateorOldCertificatesforexchangeandcancellationtotheExchangeAgent,togetherwithsuchproperlycompletedletteroftransmittal,dulyexecuted,theholderofsuchOldCertificateorOldCertificatesshallbeentitledtoreceiveinexchangetherefor,asapplicable,(i)(A)aNewCertificaterepresentingthatnumberofwholesharesofBB&TCommonStocktowhichsuchholderofSunTrustCommonStockshallhavebecomeentitledpursuanttotheprovisionsofArticleIand(B)acheckrepresentingtheamountof(x)anycashinlieuoffractionalshareswhichsuchholderhastherighttoreceiveinrespectoftheOldCertificateorOldCertificatessurrenderedpursuanttotheprovisionsofthisArticleIIand(y)anydividendsordistributionswhichtheholderthereofhastherighttoreceivepursuanttoSection2.2(b)or(ii)(A)aNewCertificaterepresentingthatnumberofsharesofNewBB&TPreferredStocktowhichsuchholderofSunTrustPreferredStockshallhavebecomeentitledpursuanttotheprovisionsofArticleI,and(B)acheckrepresentingtheamountofanydividendsordistributionswhichtheholderthereofhastherighttoreceivepursuanttoSection2.2(b),andtheOldCertificateorOldCertificatessosurrenderedshallforthwithbecancelled.NointerestwillbepaidoraccruedonanycashinlieuoffractionalsharesordividendsordistributionspayabletoholdersofOldCertificates.UntilsurrenderedascontemplatedbythisSection2.2,eachOldCertificateshallbedeemedatanytimeaftertheEffectiveTimetorepresentonlytherighttoreceive,uponsurrender,thenumberofwholesharesofBB&TCommonStockorsharesofNewBB&TPreferredStockwhichthesharesofSunTrustCommonStockorSunTrustPreferredStock,asapplicable,representedbysuchOldCertificatehavebeenconvertedintotherighttoreceiveandanycashinlieuoffractionalsharesorinrespectofdividendsordistributionsascontemplatedbythisSection2.2.
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(b)NodividendsorotherdistributionsdeclaredwithrespecttoBB&TCommonStockorNewBB&TPreferredStockshallbepaidtotheholderofanyunsurrenderedOldCertificateuntiltheholderthereofshallsurrendersuchOldCertificateinaccordancewiththisArticleII.AfterthesurrenderofanOldCertificateinaccordancewiththisArticleII,therecordholderthereofshallbeentitledtoreceiveanysuchdividendsorotherdistributions,withoutanyinterestthereon,whichtheretoforehadbecomepayablewithrespecttothewholesharesofBB&TCommonStockorsharesofNewBB&TPreferredStockthatthesharesofSunTrustCommonStockorSunTrustPreferredStock,asapplicable,representedbysuchOldCertificatehavebeenconvertedintotherighttoreceive.
(c)IfanyNewCertificaterepresentingsharesofBB&TCommonStockorNewBB&TPreferredStockistobeissuedinanameotherthanthatinwhichtheOldCertificateorOldCertificatessurrenderedinexchangethereforisorareregistered,itshallbeaconditionoftheissuancethereofthattheOldCertificateorOldCertificatessosurrenderedshallbeproperlyendorsed(oraccompaniedbyanappropriateinstrumentoftransfer)andotherwiseinproperformfortransfer,andthatthepersonrequestingsuchexchangeshallpaytotheExchangeAgentinadvanceanytransferorothersimilarTaxesrequiredbyreasonoftheissuanceofaNewCertificaterepresentingsharesofBB&TCommonStockorNewBB&TPreferredStockinanynameotherthanthatoftheregisteredholderoftheOldCertificateorOldCertificatessurrendered,orrequiredforanyotherreason,orshallestablishtothesatisfactionoftheExchangeAgentthatsuchTaxhasbeenpaidorisnotpayable.
(d)AftertheEffectiveTime,thereshallbenotransfersonthestocktransferbooksofSunTrustofthesharesofSunTrustCommonStockorSunTrustPreferredStockthatwereissuedandoutstandingimmediatelypriortotheEffectiveTime.If,aftertheEffectiveTime,OldCertificatesrepresentingsuchsharesarepresentedfortransfertotheExchangeAgent,theyshallbecancelledandexchangedforNewCertificatesrepresentingsharesofBB&TCommonStockorNewBB&TCommonStock,asapplicable,asprovidedinthisArticleII.
(e)Notwithstandinganythingtothecontrarycontainedherein,noNewCertificatesorscriprepresentingfractionalsharesofBB&TCommonStockshallbeissueduponthesurrenderforexchangeofOldCertificates,nodividendordistributionwithrespecttoBB&TCommonStockshallbepayableonorwithrespecttoanyfractionalshare,andsuchfractionalshareinterestsshallnotentitletheownerthereoftovoteortoanyotherrightsofashareholderofBB&T.Inlieuoftheissuanceofanysuchfractionalshare,BB&TshallpaytoeachformerholderofSunTrustCommonStockwhootherwisewouldbeentitledtoreceivesuchfractionalshareanamountincash(roundedtothenearestcent)determinedbymultiplying(i)theaverageoftheclosing-salepricesofBB&TCommonStockontheNewYorkStockExchange(the“NYSE”)asreportedbyTheWallStreetJournalfortheconsecutiveperiodoffive(5)fulltradingdaysendingonthedayprecedingtheClosingDateby(ii)thefractionofashare(aftertakingintoaccountallsharesofSunTrustCommonStockheldbysuchholderimmediatelypriortotheEffectiveTimeandroundedtothenearestone-thousandthwhenexpressedindecimalform)ofBB&TCommonStockwhichsuchholderwouldotherwisebeentitledtoreceivepursuanttoSection1.5.Thepartiesacknowledgethatpaymentofsuchcashconsiderationinlieuofissuingfractionalsharesisnotseparatelybargained-forconsideration,butmerelyrepresentsamechanicalroundingoffforpurposesofavoidingtheexpenseandinconveniencethatwouldotherwisebecausedbytheissuanceoffractionalshares.
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(f)AnyportionoftheExchangeFundthatremainsunclaimedbytheshareholdersofSunTrustfortwelve(12)monthsaftertheEffectiveTimeshallbepaidtotheSurvivingEntity.AnyformerholdersofSunTrustCommonStockorSunTrustPreferredStockwhohavenottheretoforecompliedwiththisArticleIIshallthereafterlookonlytotheSurvivingEntityforpaymentofthesharesofBB&TCommonStock,cashinlieuofanyfractionalsharesandanyunpaiddividendsanddistributionsontheBB&TCommonStockdeliverableinrespectofeachformershareofSunTrustCommonStocksuchholderholdsasdeterminedpursuanttothisAgreement,orthesharesofNewBB&TPreferredStockandanyunpaiddividendsanddistributionsontheNewBB&TPreferredStockdeliverableinrespectofeachformershareofSunTrustPreferredStocksuchholderholdsasdeterminedpursuanttothisAgreement,ineachcase,withoutanyinterestthereon.Notwithstandingtheforegoing,noneofBB&T,SunTrust,theSurvivingEntity,theExchangeAgentoranyotherpersonshallbeliabletoanyformerholderofsharesofSunTrustCommonStockorSunTrustPreferredStockforanyamountdeliveredingoodfaithtoapublicofficialpursuanttoapplicableabandonedproperty,escheatorsimilarlaws.
(g)BB&Tshallbeentitledtodeductandwithhold,orcausetheExchangeAgenttodeductandwithhold,fromanycashinlieuoffractionalsharesofBB&TCommonStock,cashdividendsordistributionspayablepursuanttothisSection2.2oranyotheramountsotherwisepayablepursuanttothisAgreementtoanyholderofSunTrustCommonStock,SunTrustPreferredStockorSunTrustEquityAwards,suchamountsasitisrequiredtodeductandwithholdwithrespecttothemakingofsuchpaymentundertheCodeoranyprovisionofstate,localorforeignTaxlaw.TotheextentthatamountsaresowithheldbyBB&TortheExchangeAgent,asthecasemaybe,andpaidovertotheappropriategovernmentalauthority,thewithheldamountsshallbetreatedforallpurposesofthisAgreementashavingbeenpaidtotheholderofSunTrustCommonStock,SunTrustPreferredStockorSunTrustEquityAwardsinrespectofwhichthedeductionandwithholdingwasmadebyBB&TortheExchangeAgent,asthecasemaybe.
(h)IntheeventanyOldCertificateshallhavebeenlost,stolenordestroyed,uponthemakingofanaffidavitofthatfactbythepersonclaimingsuchOldCertificatetobelost,stolenordestroyedand,ifrequiredbyBB&TortheExchangeAgent,thepostingbysuchpersonofabondinsuchamountasBB&TortheExchangeAgentmaydetermineisreasonablynecessaryasindemnityagainstanyclaimthatmaybemadeagainstitwithrespecttosuchOldCertificate,theExchangeAgentwillissueinexchangeforsuchlost,stolenordestroyedOldCertificatethesharesofBB&TCommonStockandanycashinlieuoffractionalshares,orthesharesofNewBB&TPreferredStock,asapplicable,deliverableinrespectthereofpursuanttothisAgreement.
ARTICLEIII
REPRESENTATIONSANDWARRANTIESOFSUNTRUST
Except(a)asdisclosedinthedisclosurescheduledeliveredbySunTrusttoBB&Tconcurrentlyherewith(the“SunTrustDisclosureSchedule”);provided,that(i)nosuchitemisrequiredtobesetforthasanexceptiontoarepresentationorwarrantyifitsabsencewouldnotresultintherelatedrepresentationorwarrantybeingdeemeduntrueorincorrect,(ii)themereinclusionofanitemintheSunTrustDisclosureScheduleasan
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exceptiontoarepresentationorwarrantyshallnotbedeemedanadmissionbySunTrustthatsuchitemrepresentsamaterialexceptionorfact,eventorcircumstanceorthatsuchitemwouldreasonablybeexpectedtohaveaMaterialAdverseEffectand(iii)anydisclosuresmadewithrespecttoasectionofArticleIIIshallbedeemedtoqualify(1)anyothersectionofArticleIIIspecificallyreferencedorcross-referencedand(2)othersectionsofArticleIIItotheextentitisreasonablyapparentonitsface(notwithstandingtheabsenceofaspecificcrossreference)fromareadingofthedisclosurethatsuchdisclosureappliestosuchothersectionsor(b)asdisclosedinanySunTrustReportsfiledbySunTrustsinceDecember31,2013andpriortothedatehereof(butdisregardingriskfactordisclosurescontainedundertheheading“RiskFactors,”ordisclosuresofriskssetforthinany“forward-lookingstatements”disclaimeroranyotherstatementsthataresimilarlynon-specificorcautionary,predictiveorforward-lookinginnature),SunTrustherebyrepresentsandwarrantstoBB&Tasfollows:
3.1CorporateOrganization.
(a)SunTrustisacorporationdulyorganized,validlyexistingandingoodstandingunderthelawsoftheStateofGeorgia,isabankholdingcompanydulyregisteredundertheBankHoldingCompanyActof1956,asamended(the“BHCAct”)andhaselectedtobetreatedasafinancialholdingcompanyundertheBHCAct.SunTrusthasthecorporatepowerandauthoritytoown,leaseoroperateallofitspropertiesandassetsandtocarryonitsbusinessasitisnowbeingconducted.SunTrustisdulylicensedorqualifiedtodobusinessandingoodstandingineachjurisdictioninwhichthenatureofthebusinessconductedbyitorthecharacterorlocationofthepropertiesandassetsowned,leasedoroperatedbyitmakessuchlicensing,qualificationorstandingnecessary,exceptwherethefailuretobesolicensedorqualifiedortobeingoodstandingwouldnot,eitherindividuallyorintheaggregate,reasonablybeexpectedtohaveaMaterialAdverseEffectonSunTrust.AsusedinthisAgreement,theterm“MaterialAdverseEffect”means,withrespecttoBB&T,SunTrustortheSurvivingEntity,asthecasemaybe,anyeffect,change,event,circumstance,condition,occurrenceordevelopmentthat,eitherindividuallyorintheaggregate,hashadorwouldreasonablybeexpectedtohaveamaterialadverseeffecton(i)thebusiness,properties,assets,resultsofoperationsorfinancialconditionofsuchpartyanditsSubsidiariestakenasawhole(provided,however,that,withrespecttothisclause(i),MaterialAdverseEffectshallnotbedeemedtoincludetheimpactof(A)changes,afterthedatehereof,inU.S.generallyacceptedaccountingprinciples(“GAAP”)orapplicableregulatoryaccountingrequirements,(B)changes,afterthedatehereof,inlaws,rulesorregulationsofgeneralapplicabilitytocompaniesintheindustriesinwhichsuchpartyanditsSubsidiariesoperate,orinterpretationsthereofbycourtsorGovernmentalEntities,(C)changes,afterthedatehereof,inglobal,nationalorregionalpoliticalconditions(includingtheoutbreakofwaroractsofterrorism)orineconomicormarket(includingequity,creditanddebtmarkets,aswellaschangesininterestrates)conditionsaffectingthefinancialservicesindustrygenerallyandnotspecificallyrelatingtosuchpartyoritsSubsidiaries,(D)publicdisclosureofthetransactionscontemplatedherebyoractionsexpresslyrequiredbythisAgreementorthataretakenwiththepriorwrittenconsentoftheotherpartyincontemplationofthetransactionscontemplatedhereby,or(E)adeclineinthetradingpriceofaparty’scommonstockorthefailure,inandofitself,tomeetearningsprojectionsorinternalfinancialforecasts,butnot,ineithercase,includinganyunderlyingcausesthereof;except,withrespecttosubclause(A),(B),or(C),totheextentthattheeffectsofsuchchangearemateriallydisproportionatelyadversetothebusiness,properties,resultsofoperationsorfinancialconditionof
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suchpartyanditsSubsidiaries,takenasawhole,ascomparedtoothercompaniesintheindustryinwhichsuchpartyanditsSubsidiariesoperate)or(ii)theabilityofsuchpartytotimelyconsummatethetransactionscontemplatedhereby.AsusedinthisAgreement,theword“Subsidiary”whenusedwithrespecttoanyperson,meansanycorporation,partnership,limitedliabilitycompany,bankorotherorganization,whetherincorporatedorunincorporated,orpersonofwhich(x)suchfirstpersondirectlyorindirectlyownsorcontrolsatleastamajorityofthesecuritiesorotherinterestshavingbytheirtermsordinaryvotingpowertoelectamajorityoftheboardofdirectorsorothersperformingsimilarfunctionsor(y)suchfirstpersonisordirectlyorindirectlyhasthepowertoappointageneralpartner,managerormanagingmemberorothersperformingsimilarfunctions.TrueandcompletecopiesoftheamendedandrestatedarticlesofincorporationofSunTrust(the“SunTrustArticles”)andtheamendedandrestatedbylawsofSunTrust(the“SunTrustBylaws”),ineachcaseasineffectasofthedateofthisAgreement,havepreviouslybeenmadeavailablebySunTrusttoBB&T.
(b)Exceptaswouldnot,eitherindividuallyorintheaggregate,reasonablybeexpectedtohaveaMaterialAdverseEffectonSunTrust,eachSubsidiaryofSunTrust(a“SunTrustSubsidiary”)(i)isdulyorganizedandvalidlyexistingunderthelawsofitsjurisdictionoforganization,(ii)isdulylicensedorqualifiedtodobusinessand,wheresuchconceptisrecognizedunderapplicablelaw,ingoodstandinginalljurisdictions(whetherfederal,state,localorforeign)whereitsownership,leasingoroperationofpropertyortheconductofitsbusinessrequiresittobesolicensedorqualifiedoringoodstandingand(iii)hasallrequisitecorporatepowerandauthoritytoown,leaseoroperateitspropertiesandassetsandtocarryonitsbusinessasnowconducted.TherearenorestrictionsontheabilityofSunTrustoranySubsidiaryofSunTrusttopaydividendsordistributionsexcept,inthecaseofSunTrustoraSubsidiarythatisaregulatedentity,forrestrictionsondividendsordistributionsgenerallyapplicabletoallsimilarlyregulatedentities.ThedepositaccountsofeachSubsidiaryofSunTrustthatisaninsureddepositoryinstitutionareinsuredbytheFederalDepositInsuranceCorporation(the“FDIC”)throughtheDepositInsuranceFund(asdefinedinSection3(y)oftheFederalDepositInsuranceActof1950)tothefullestextentpermittedbylaw,allpremiumsandassessmentsrequiredtobepaidinconnectiontherewithhavebeenpaidwhendue,andnoproceedingsfortheterminationofsuchinsurancearependingorthreatened.Section3.1(b)oftheSunTrustDisclosureSchedulesetsforthatrueandcompletelistofallSubsidiariesofSunTrustthatwouldconstitute“significantsubsidiaries”withinthemeaningofRule1-02ofRegulationS-XoftheSECasofthedatehereof.Thereisnopersonwhoseresultsofoperations,cashflows,changesinshareholders’equityorfinancialpositionareconsolidatedinthefinancialstatementsofSunTrustotherthantheSunTrustSubsidiaries.
3.2Capitalization.
(a)TheauthorizedcapitalstockofSunTrustconsistsof750,000,000sharesofSunTrustCommonStockand50,000,000sharesofpreferredstock,noparvalue.AsofFebruary5,2019,therewere(i)442,341,518sharesofSunTrustCommonStockissuedandoutstanding,including7,404sharesofSunTrustCommonStockgrantedinrespectofoutstandingSunTrustRestrictedStockAwards;(ii)110,442,218sharesofSunTrustCommonStockheldintreasury;(iii)855,001sharesofSunTrustCommonStockreservedforissuance
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upontheexerciseofoutstandingSunTrustStockOptions;(iv)844,433sharesofSunTrustCommonStocksubjecttooutstandingSunTrustPhantomStockAwards;(v)4,749,661sharesofSunTrustCommonStockreservedforissuanceuponthesettlementofoutstandingSunTrustRSUAwards;(vi)1,221,976sharesofSunTrustCommonStockreservedforissuanceuponthesettlementofoutstandingSunTrustPSUAwards(assumingperformancegoalsaresatisfiedatthetargetlevel)or1,710,766sharesofSunTrustCommonStockreservedforissuanceuponthesettlementofoutstandingSunTrustPSUAwards(assumingperformancegoalsaresatisfiedatthemaximumlevel);and(vii)(A)1,725sharesofSunTrustSeriesAPreferredStockissuedandoutstanding,(B)1,025sharesofSunTrustSeriesBPreferredStockissuedandoutstanding,(C)5,000sharesofSunTrustSeriesFPreferredStockissuedandoutstanding,(D)7,500sharesofSunTrustSeriesGPreferredStockissuedandoutstandingand(E)5,000sharesofSunTrustSeriesHpreferredstockissuedandoutstanding.AsofthedateofthisAgreement,exceptassetforthintheimmediatelyprecedingsentenceandforchangessinceFebruary5,2019resultingfromtheexercise,vestingorsettlementofanySunTrustEquityAwardsdescribedintheimmediatelyprecedingsentence,therearenosharesofcapitalstockorothervotingsecuritiesorequityinterestsofSunTrustissued,reservedforissuanceoroutstanding.AlloftheissuedandoutstandingsharesofSunTrustCommonStockandSunTrustPreferredStockhavebeendulyauthorizedandvalidlyissuedandarefullypaid,nonassessableandfreeofpreemptiverights,withnopersonalliabilityattachingtotheownershipthereof.SunTrustiscurrentonalldividendspayableontheoutstandingsharesofSunTrustPreferredStock,andhascompliedinallmaterialrespectswithtermsandconditionsthereof.Therearenobonds,debentures,notesorotherindebtednessthathavetherighttovoteonanymattersonwhichshareholdersofSunTrustmayvote.OtherthanSunTrustStockOptions,SunTrustPhantomStockAwards,SunTrustRestrictedStockAwards,SunTrustRSUAwardsandSunTrustPSUAwards(collectively,“SunTrustEquityAwards”)issuedpriortothedateofthisAgreementasdescribedinthisSection3.2(a),asofthedateofthisAgreementtherearenooutstandingsubscriptions,options,warrants,stockappreciationrights,phantomunits,scrip,rightstosubscribeto,preemptiverights,anti-dilutiverights,rightsoffirstrefusalorsimilarrights,puts,calls,commitmentsoragreementsofanycharacterrelatingto,orsecuritiesorrightsconvertibleorexchangeableintoorexercisablefor,sharesofcapitalstockorothervotingorequitysecuritiesoforownershipinterestinSunTrust,orcontracts,commitments,understandingsorarrangementsbywhichSunTrustmaybecomeboundtoissueadditionalsharesofitscapitalstockorotherequityorvotingsecuritiesoforownershipinterestsinSunTrust,orthatotherwiseobligateSunTrusttoissue,transfer,sell,purchase,redeemorotherwiseacquire,anyoftheforegoing(collectively,“SunTrustSecurities”).OtherthanSunTrustEquityAwards,noequity-basedawards(includinganycashawardswheretheamountofpaymentisdetermined,inwholeorinpart,basedonthepriceofanycapitalstockofSunTrustoranyofitsSubsidiaries)areoutstanding.Therearenovotingtrusts,shareholderagreements,proxiesorotheragreementsineffecttowhichSunTrustoranyofitsSubsidiariesisapartywithrespecttothevotingortransferofSunTrustCommonStock,capitalstockorothervotingorequitysecuritiesorownershipinterestsofSunTrustorgrantinganyshareholderorotherpersonanyregistrationrights.
(b)Exceptaswouldnot,eitherindividuallyorintheaggregate,reasonablybeexpectedtohaveaMaterialAdverseEffectonSunTrust,SunTrustowns,directlyorindirectly,alloftheissuedandoutstandingsharesofcapitalstockorotherequityownershipinterestsofeachoftheSunTrustSubsidiaries,freeandclearofanyliens,claims,titledefects,mortgages,pledges,charges,encumbrancesandsecurityinterestswhatsoever
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(“Liens”),andallofsuchsharesorequityownershipinterestsaredulyauthorizedandvalidlyissuedandarefullypaid,nonassessable(except,withrespecttoSubsidiariesthataredepositoryinstitutions,asprovidedunder12U.S.C.§55oranycomparableprovisionofapplicablestatelaw)andfreeofpreemptiverights,withnopersonalliabilityattachingtotheownershipthereof.
3.3Authority;NoViolation.
(a)SunTrusthasfullcorporatepowerandauthoritytoexecuteanddeliverthisAgreementandtoconsummatethetransactionscontemplatedhereby.TheexecutionanddeliveryofthisAgreementandtheconsummationoftheMergerhavebeendulyandvalidlyapprovedbytheBoardofDirectorsofSunTrust.TheBoardofDirectorsofSunTrusthasdeterminedthattheMerger,onthetermsandconditionssetforthinthisAgreement,isadvisableandinthebestinterestsofSunTrustanditsshareholders,hasadoptedandapprovedthisAgreementandthetransactionscontemplatedhereby(includingtheMerger),andhasdirectedthatthisAgreementbesubmittedtoSunTrust’sshareholdersforapprovalatameetingofsuchshareholdersandhasadoptedaresolutiontotheforegoingeffect.ExceptfortheapprovalofthisAgreementbytheaffirmativevoteofamajorityofallthevotesentitledtobecastonthisAgreementbyallsharesofSunTrustCommonStockentitledtovoteonthisAgreement(the“RequisiteSunTrustVote”),andtheapprovaloftheBankMergerAgreementbySunTrustasSunTrustSubsidiaryBank’ssoleshareholder,noothercorporateproceedingsonthepartofSunTrustarenecessarytoapprovethisAgreementortoconsummatethetransactionscontemplatedhereby.ThisAgreementhasbeendulyandvalidlyexecutedanddeliveredbySunTrustand(assumingdueauthorization,executionanddeliverybyBB&T)constitutesavalidandbindingobligationofSunTrust,enforceableagainstSunTrustinaccordancewithitsterms(exceptinallcasesassuchenforceabilitymaybelimitedbybankruptcy,insolvency,moratorium,reorganizationorsimilarlawsofgeneralapplicabilityaffectingtherightsofcreditorsgenerallyandtheavailabilityofequitableremedies(the“EnforceabilityExceptions”)).
(b)NeithertheexecutionanddeliveryofthisAgreementbySunTrustnortheconsummationbySunTrustofthetransactionscontemplatedhereby(includingtheMergerandtheBankMerger),norcompliancebySunTrustwithanyofthetermsorprovisionshereof,will(i)violateanyprovisionoftheSunTrustArticlesortheSunTrustBylawsor(ii)assumingthattheconsentsandapprovalsreferredtoinSection3.4aredulyobtained,(x)violateanylaw,statute,code,ordinance,rule,regulation,judgment,order,writ,decreeorinjunctionapplicabletoSunTrustoranyofitsSubsidiariesoranyoftheirrespectivepropertiesorassetsor(y)violate,conflictwith,resultinabreachofanyprovisionoforthelossofanybenefitunder,constituteadefault(oraneventwhich,withnoticeorlapseoftime,orboth,wouldconstituteadefault)under,resultintheterminationoforarightofterminationorcancellationunder,acceleratetheperformancerequiredby,orresultinthecreationofanyLienuponanyoftherespectivepropertiesorassetsofSunTrustoranyofitsSubsidiariesunder,anyoftheterms,conditionsorprovisionsofanynote,bond,mortgage,indenture,deedoftrust,license,lease,agreementorotherinstrumentorobligationtowhichSunTrustoranyofitsSubsidiariesisaparty,orbywhichtheyoranyoftheirrespectivepropertiesorassetsmaybebound,except(inthecaseofclauses(x)and(y)above)forsuchviolations,conflicts,breachesordefaultsthat,eitherindividuallyorintheaggregate,wouldnotreasonablybeexpectedtohaveaMaterialAdverseEffectonSunTrust.
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3.4ConsentsandApprovals.Exceptfor(a)thefilingofanyrequiredapplications,filingsandnotices,asapplicable,withtheNewYorkStockExchange,(b)thefilingofanyrequiredapplications,filingsandnotices,asapplicable,withtheBoardofGovernorsoftheFederalReserveSystem(the“FederalReserveBoard”)undertheBHCActandapprovalofsuchapplications,filingsandnotices,(c)thefilingofanyrequiredapplications,filingsandnotices,asapplicable,withtheFDIC,andapprovalofsuchapplications,filingsandnotices,(d)thefilingofanyrequiredapplications,filingsandnotices,asapplicable,withtheNorthCarolinaCommissionerofBanksandtheGeorgiaDepartmentofBankingandFinanceinconnectionwiththeBankMergerandapprovalofsuchapplications,filingsandnotices,(e)thefilingofanyrequiredapplications,filingsornoticeswiththeFinancialIndustryRegulatoryAuthority(“FINRA”)andapprovalofsuchapplications,filingsandnotices,(f)thefilingofanyrequiredapplications,filingsornoticeswithanystatebankingauthoritieslistedonSection3.4oftheSunTrustDisclosureScheduleorSection4.4oftheBB&TDisclosureScheduleandapprovalofsuchapplications,filingsandnotices,(g)thefilingbySunTrustwiththeSecuritiesandExchangeCommission(the“SEC”)ofajointproxystatementindefinitiveform(includinganyamendmentsorsupplementsthereto,the“JointProxyStatement”),andtheregistrationstatementonFormS-4inwhichtheJointProxyStatementwillbeincludedasaprospectus,tobefiledwiththeSECbyBB&TinconnectionwiththetransactionscontemplatedbythisAgreement(the“S-4”)andthedeclarationofeffectivenessoftheS-4,(h)thefilingoftheCertificatesofMergerwiththeNorthCarolinaSecretarypursuanttotheNCBCAandtheGeorgiaSecretarypursuanttotheGBCC,asapplicable,thefilingoftheBankMergerCertificateswiththeapplicableGovernmentalEntitiesasrequiredbyapplicablelaw,andthefilingofArticlesofAmendmentfortheNewBB&TPreferredStockwiththeNorthCarolinaSecretaryand(i)suchfilingsandapprovalsasarerequiredtobemadeorobtainedunderthesecuritiesor“BlueSky”lawsofvariousstatesinconnectionwiththeissuanceofthesharesofBB&TCommonStockandNewBB&TPreferredStockpursuanttothisAgreementandtheapprovalofthelistingofsuchBB&TCommonStockontheNYSE,noconsentsorapprovalsoforfilingsorregistrationswithanycourt,administrativeagencyorcommissionorothergovernmentalorregulatoryauthorityorinstrumentalityorSRO(eacha“GovernmentalEntity”)arenecessaryinconnectionwith(i)theexecutionanddeliverybySunTrustofthisAgreementor(ii)theconsummationbySunTrustoftheMergerandtheothertransactionscontemplatedhereby(includingtheBankMerger).Asofthedatehereof,SunTrustisnotawareofanyreasonwhythenecessaryregulatoryapprovalsandconsentswillnotbereceivedbySunTrusttopermitconsummationoftheMergerandBankMergeronatimelybasis.
3.5Reports.SunTrustandeachofitsSubsidiarieshavetimelyfiled(orfurnished)allreports,forms,correspondence,registrationsandstatements,togetherwithanyamendmentsrequiredtobemadewithrespectthereto,thattheywererequiredtofile(orfurnish,asapplicable)sinceJanuary1,2016with(i)anystateregulatoryauthority,(ii)theSEC,(iii)theFederalReserveBoard,(iv)theFDIC,(v)anyforeignregulatoryauthorityand(vi)anyself-regulatoryorganization(an“SRO”)(clauses(i)–(vi),collectively“RegulatoryAgencies”),includinganyreport,form,correspondence,registrationorstatementrequiredtobefiled(orfurnished,asapplicable)pursuanttothelaws,rulesorregulationsoftheUnitedStates,anystate,anyforeign
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entity,oranyRegulatoryAgency,andhavepaidallfeesandassessmentsdueandpayableinconnectiontherewith,exceptwherethefailuretofile(orfurnish,asapplicable)suchreport,form,correspondence,registrationorstatementortopaysuchfeesandassessments,eitherindividuallyorintheaggregate,wouldnotreasonablybeexpectedtohaveaMaterialAdverseEffectonSunTrust.SubjecttoSection9.14,exceptfornormalexaminationsconductedbyaRegulatoryAgencyintheordinarycourseofbusinessofSunTrustanditsSubsidiaries,noRegulatoryAgencyhasinitiatedorhaspendinganyproceedingor,totheknowledgeofSunTrust,investigationintothebusinessoroperationsofSunTrustoranyofitsSubsidiariessinceJanuary1,2016,exceptwheresuchproceedingsorinvestigationswouldnotreasonablybeexpectedtohave,eitherindividuallyorintheaggregate,aMaterialAdverseEffectonSunTrust.SubjecttoSection9.14,there(i)isnounresolvedviolation,criticism,orexceptionbyanyRegulatoryAgencywithrespecttoanyreportorstatementrelatingtoanyexaminationsorinspectionsofSunTrustoranyofitsSubsidiariesand(ii)hasbeennoformalorinformalinquiriesby,ordisagreementsordisputeswith,anyRegulatoryAgencywithrespecttothebusiness,operations,policiesorproceduresofSunTrustoranyofitsSubsidiariessinceJanuary1,2016,ineachcase,whichwouldreasonablybeexpectedtohave,eitherindividuallyorintheaggregate,aMaterialAdverseEffectonSunTrust.
3.6FinancialStatements.
(a)ThefinancialstatementsofSunTrustanditsSubsidiariesincluded(orincorporatedbyreference)intheSunTrustReports(includingtherelatednotes,whereapplicable)(i)havebeenpreparedfrom,andareinaccordancewith,thebooksandrecordsofSunTrustanditsSubsidiaries,(ii)fairlypresentinallmaterialrespectstheconsolidatedresultsofoperations,cashflows,changesinshareholders’equityandconsolidatedfinancialpositionofSunTrustanditsSubsidiariesfortherespectivefiscalperiodsorasoftherespectivedatesthereinsetforth(subjectinthecaseofunauditedstatementstoyear-endauditadjustmentsnormalinnatureandamount),(iii)complied,asoftheirrespectivedatesoffilingwiththeSEC,inallmaterialrespectswithapplicableaccountingrequirementsandwiththepublishedrulesandregulationsoftheSECwithrespectthereto,and(iv)havebeenpreparedinaccordancewithGAAPconsistentlyappliedduringtheperiodsinvolved,except,ineachcase,asindicatedinsuchstatementsorinthenotesthereto.SinceDecember31,2015,noindependentpublicaccountingfirmofSunTrusthasresigned(orinformedSunTrustthatitintendstoresign)orbeendismissedasindependentpublicaccountantsofSunTrustasaresultoforinconnectionwithanydisagreementswithSunTrustonamatterofaccountingprinciplesorpractices,financialstatementdisclosureorauditingscopeorprocedure.
(b)Exceptaswouldnotreasonablybeexpectedtohave,eitherindividuallyorintheaggregate,aMaterialAdverseEffectonSunTrust,neitherSunTrustnoranyofitsSubsidiarieshasanyliabilityofanynaturewhatsoever(whetherabsolute,accrued,contingentorotherwiseandwhetherdueortobecomedue),exceptforthoseliabilitiesthatarereflectedorreservedagainstontheconsolidatedbalancesheetofSunTrustincludedinitsQuarterlyReportonForm10-QforthefiscalquarterendedSeptember30,2018(includinganynotesthereto)andforliabilitiesincurredintheordinarycourseofbusinessconsistentwithpastpracticesinceSeptember30,2018,orinconnectionwiththisAgreementandthetransactionscontemplatedhereby.
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(c)Therecords,systems,controls,dataandinformationofSunTrustanditsSubsidiariesarerecorded,stored,maintainedandoperatedundermeans(includinganyelectronic,mechanicalorphotographicprocess,whethercomputerizedornot)thatareundertheexclusiveownershipofSunTrustoritsSubsidiariesoraccountants(includingallmeansofaccesstheretoandtherefrom),exceptforanynon-exclusiveownershipthatwouldnotreasonablybeexpectedtohaveaMaterialAdverseEffectonSunTrust.SunTrust(x)hasimplementedandmaintainsdisclosurecontrolsandprocedures(asdefinedinRule13a-15(e)oftheSecuritiesExchangeActof1934,asamended(the“ExchangeAct”))toensurethatmaterialinformationrelatingtoSunTrust,includingitsSubsidiaries,ismadeknowntothechiefexecutiveofficerandthechieffinancialofficerofSunTrustbyotherswithinthoseentitiesasappropriatetoallowtimelydecisionsregardingrequireddisclosuresandtomakethecertificationsrequiredbytheExchangeActandSections302and906oftheSarbanes-OxleyActof2002(the“Sarbanes-OxleyAct”),and(y)hasdisclosed,basedonitsmostrecentevaluationpriortothedatehereof,toSunTrust’soutsideauditorsandtheauditcommitteeofSunTrust’sBoardofDirectors(i)anysignificantdeficienciesandmaterialweaknessesinthedesignoroperationofinternalcontroloverfinancialreporting(asdefinedinRule13a-15(f)oftheExchangeAct)whicharereasonablylikelytoadverselyaffectSunTrust’sabilitytorecord,process,summarizeandreportfinancialinformation,and(ii)anyfraud,whetherornotmaterial,thatinvolvesmanagementorotheremployeeswhohaveasignificantroleinSunTrust’sinternalcontrolsoverfinancialreporting.ThesedisclosuresweremadeinwritingbymanagementtoSunTrust’sauditorsandauditcommittee.ThereisnoreasontobelievethatSunTrust’soutsideauditorsanditschiefexecutiveofficerandchieffinancialofficerwillnotbeabletogivethecertificationsandattestationsrequiredpursuanttotherulesandregulationsadoptedpursuanttoSection404oftheSarbanes-OxleyAct,withoutqualification,whennextdue.
(d)SinceJanuary1,2016,(i)neitherSunTrustnoranyofitsSubsidiaries,nor,totheknowledgeofSunTrust,anydirector,officer,auditor,accountantorrepresentativeofSunTrustoranyofitsSubsidiaries,hasreceivedorotherwisehadorobtainedknowledgeofanymaterialcomplaint,allegation,assertionorclaim,whetherwrittenororal,regardingtheaccountingorauditingpractices,procedures,methodologiesormethods(includingwithrespecttoloanlossreserves,write-downs,charge-offsandaccruals)ofSunTrustoranyofitsSubsidiariesortheirrespectiveinternalaccountingcontrols,includinganymaterialcomplaint,allegation,assertionorclaimthatSunTrustoranyofitsSubsidiarieshasengagedinquestionableaccountingorauditingpractices,and(ii)noemployeeoforattorneyrepresentingSunTrustoranyofitsSubsidiaries,whetherornotemployedbySunTrustoranyofitsSubsidiaries,hasreportedevidenceofamaterialviolationofsecuritieslawsorbankinglaws,breachoffiduciarydutyorsimilarviolationbySunTrustoranyofitsSubsidiariesoranyoftheirrespectiveofficers,directors,employeesoragentstotheBoardofDirectorsofSunTrustoranycommitteethereofortheBoardofDirectorsorsimilargoverningbodyofanySunTrustSubsidiaryoranycommitteethereof,ortotheknowledgeofSunTrust,toanydirectororofficerofSunTrustoranySunTrustSubsidiary.
3.7Broker’sFees.WiththeexceptionoftheengagementofGoldmanSachs&Co.LLC,neitherSunTrustnoranySunTrustSubsidiarynoranyoftheirrespectiveofficersordirectorshasemployedanybroker,finderorfinancialadvisororincurredanyliabilityforanybroker’sfees,commissionsorfinder’sfeesinconnectionwiththeMergerorrelatedtransactionscontemplatedbythisAgreement.SunTrusthasdisclosedto
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BB&TasofthedatehereoftheaggregatefeesprovidedforinconnectionwiththeengagementbySunTrustofGoldmanSachs&Co.LLCrelatedtotheMergerandtheothertransactionscontemplatedhereunder.
3.8AbsenceofCertainChangesorEvents.
(a)SinceDecember31,2017,therehasnotbeenanyeffect,change,event,circumstance,condition,occurrenceordevelopmentthathashadorwouldreasonablybeexpectedtohave,eitherindividuallyorintheaggregate,aMaterialAdverseEffectonSunTrust.
(b)SinceDecember31,2017,SunTrustanditsSubsidiarieshavecarriedontheirrespectivebusinessesinallmaterialrespectsintheordinarycourse.
3.9LegalandRegulatoryProceedings.
(a)Exceptaswouldnotreasonablybeexpectedto,eitherindividuallyorintheaggregate,haveaMaterialAdverseEffectonSunTrust,neitherSunTrustnoranyofitsSubsidiariesisapartytoany,andtherearenooutstandingorpendingor,totheknowledgeofSunTrust,threatened,legal,administrative,arbitralorotherproceedings,claims,actionsorgovernmentalorregulatoryinvestigationsofanynatureagainstSunTrustoranyofitsSubsidiariesoranyoftheircurrentorformerdirectorsorexecutiveofficersorchallengingthevalidityorproprietyofthetransactionscontemplatedbythisAgreement.
(b)Thereisnomaterialinjunction,order,judgment,decree,orregulatoryrestrictionimposeduponSunTrust,anyofitsSubsidiariesortheassetsofSunTrustoranyofitsSubsidiaries(orthat,uponconsummationoftheMerger,wouldapplytotheSurvivingEntityoranyofitsaffiliates).
3.10TaxesandTaxReturns.
(a)EachofSunTrustanditsSubsidiarieshasdulyandtimelyfiled(includingallapplicableextensions)allmaterialTaxReturnsinalljurisdictionsinwhichTaxReturnsarerequiredtobefiledbyit,andallsuchTaxReturnsaretrue,correct,andcompleteinallmaterialrespects.NeitherSunTrustnoranyofitsSubsidiariesisthebeneficiaryofanyextensionoftimewithinwhichtofileanymaterialTaxReturn(otherthanextensionstofileTaxReturnsobtainedintheordinarycourse).AllmaterialTaxesofSunTrustanditsSubsidiaries(whetherornotshownonanyTaxReturns)thatareduehavebeenfullyandtimelypaid.EachofSunTrustanditsSubsidiarieshaswithheldandpaidallmaterialTaxesrequiredtohavebeenwithheldandpaidinconnectionwithamountspaidorowingtoanyemployee,creditor,shareholder,independentcontractororotherthirdparty.NeitherSunTrustnoranyofitsSubsidiarieshasgrantedanyextensionorwaiverofthelimitationperiodapplicabletoanymaterialTaxthatremainsineffect.NeitherSunTrustnoranyofitsSubsidiarieshasreceivedwrittennoticeofassessmentorproposedassessmentinconnectionwithanymaterialamountofTaxes,andtherearenothreatenedinwritingorpendingdisputes,claims,audits,examinationsorotherproceedingsregardinganymaterialTaxofSunTrustanditsSubsidiariesortheassetsofSunTrustanditsSubsidiaries.NeitherSunTrustnoranyofitsSubsidiariesisapartytoorisboundbyanyTaxsharing,allocationorindemnificationagreementorarrangement(otherthansuchanagreementorarrangementexclusivelybetweenoramongSunTrustanditsSubsidiaries).NeitherSunTrustnoranyofitsSubsidiaries(A)hasbeenamemberofanaffiliatedgroupfilinga
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consolidatedfederalincomeTaxReturnforwhichthestatuteoflimitationsisopen(otherthanagroupthecommonparentofwhichwasSunTrust)or(B)hasanyliabilityfortheTaxesofanyperson(otherthanSunTrustoranyofitsSubsidiaries)underTreasuryRegulationSection1.1502-6(oranysimilarprovisionofstate,localorforeignlaw),asatransfereeorsuccessor,bycontractorotherwise.NeitherSunTrustnoranyofitsSubsidiarieshasbeen,withinthepasttwo(2)yearsorotherwiseaspartofa“plan(orseriesofrelatedtransactions)”withinthemeaningofSection355(e)oftheCodeofwhichtheMergerisalsoapart,a“distributingcorporation”ora“controlledcorporation”(withinthemeaningofSection355(a)(1)(A)oftheCode)inadistributionofstockintendingtoqualifyfortax-freetreatmentunderSection355oftheCode.NeitherSunTrustnoranyofitsSubsidiarieshasparticipatedina“reportabletransaction”withinthemeaningofTreasuryRegulationSection1.6011-4(b)(1).Atnotimeduringthepastfive(5)yearshasSunTrustbeenaUnitedStatesrealpropertyholdingcorporationwithinthemeaningofSection897(c)(2)oftheCode.
(b)AsusedinthisAgreement,theterm“Tax”or“Taxes”meansallfederal,state,local,andforeignincome,excise,grossreceipts,advalorem,profits,gains,property,capital,sales,transfer,use,license,payroll,employment,socialsecurity,severance,unemployment,withholding,duties,excise,windfallprofits,intangibles,franchise,backupwithholding,valueadded,alternativeoradd-onminimum,estimatedandothertaxes,charges,leviesorlikeassessmentstogetherwithallpenaltiesandadditionstotaxandinterestthereon.
(c)AsusedinthisAgreement,theterm“TaxReturn”meansanyreturn,declaration,report,claimforrefund,orinformationreturnorstatementrelatingtoTaxes,includinganyscheduleorattachmentthereto,andincludinganyamendmentthereof,suppliedorrequiredtobesuppliedtoaGovernmentalEntity.
3.11Employees.
(a)Exceptaswouldnotreasonablybeexpectedtohave,eitherindividuallyorintheaggregate,aMaterialAdverseEffectonSunTrust,eachSunTrustBenefitPlanhasbeenestablished,operatedandadministeredinaccordancewithitstermsandtherequirementsofallapplicablelaws,includingERISAandtheCode.ForpurposesofthisAgreement,theterm“SunTrustBenefitPlans”meansallemployeebenefitplans(asdefinedinSection3(3)oftheEmployeeRetirementIncomeSecurityActof1974,asamended(“ERISA”)),whetherornotsubjecttoERISA,andallequity,bonusorincentive,deferredcompensation,retireemedicalorlifeinsurance,supplementalretirement,severance,termination,changeincontrol,retention,employment,welfare,insurance,medical,fringeorotherbenefitplans,programs,agreements,contracts,policies,arrangementsorremunerationofanykindwithrespecttowhichSunTrustoranySubsidiaryoranytradeorbusinessofSunTrustoranyofitsSubsidiaries,whetherornotincorporated,allofwhichtogetherwithSunTrustwouldbedeemeda“singleemployer”withinthemeaningofSection4001ofERISA(a“SunTrustERISAAffiliate”),isapartyorhasanycurrentorfutureobligationorthataremaintained,contributedtoorsponsoredbySunTrustoranyofitsSubsidiariesoranySunTrustERISAAffiliateforthebenefitofanycurrentorformeremployee,officer,directororindependentcontractorofSunTrustoranyofitsSubsidiariesoranySunTrust
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ERISAAffiliate,excluding,ineachcase,any“multiemployerplan”withinthemeaningofSection4001(a)(3)ofERISA(a“MultiemployerPlan”).
(b)SunTrusthasmadeavailabletoBB&TtrueandcompletecopiesofeachmaterialSunTrustBenefitPlanandthefollowingrelateddocuments,totheextentapplicable:(i)allsummaryplandescriptions,amendments,modificationsormaterialsupplements,(ii)themostrecentannualreport(Form5500)filedwiththeInternalRevenueService(the“IRS”),(iii)themostrecentlyreceivedIRSdeterminationletter,and(iv)themostrecentlypreparedactuarialreport.
(c)TheIRShasissuedafavorabledeterminationletteroropinionwithrespecttoeachSunTrustBenefitPlanthatisintendedtobequalifiedunderSection401(a)oftheCode(the“SunTrustQualifiedPlans”)andtherelatedtrust,whichletteroropinionhasnotbeenrevoked(norhasrevocationbeenthreatened),and,totheknowledgeofSunTrust,therearenoexistingcircumstancesandnoeventshaveoccurredthatwouldreasonablybeexpectedtoadverselyaffectthequalifiedstatusofanySunTrustQualifiedPlanortherelatedtrust.
(d)ExceptaswouldnotresultinanymaterialliabilitytoSunTrustanditsSubsidiaries,takenasawhole,withrespecttoeachSunTrustBenefitPlanthatissubjecttoSection302orTitleIVofERISAorSection412,430or4971oftheCode:(i)theminimumfundingstandardunderSection302ofERISAandSections412and430oftheCodehasbeensatisfiedandnowaiverofanyminimumfundingstandardoranyextensionofanyamortizationperiodhasbeenrequestedorgranted,(ii)nosuchplanisin“at-risk”statusforpurposesofSection430oftheCode,(iii)thepresentvalueofaccruedbenefitsundersuchSunTrustBenefitPlan,basedupontheactuarialassumptionsusedforfundingpurposesinthemostrecentactuarialreportpreparedbysuchSunTrustBenefitPlan’sactuarywithrespecttosuchSunTrustBenefitPlan,didnot,asofitslatestvaluationdate,exceedthethencurrentfairmarketvalueoftheassetsofsuchSunTrustBenefitPlanallocabletosuchaccruedbenefits,(iv)noreportableeventwithinthemeaningofSection4043(c)ofERISAforwhichthe30-daynoticerequirementhasnotbeenwaivedhasoccurred,(v)allpremiumstothePensionBenefitGuarantyCorporation(the“PBGC”)havebeentimelypaidinfull,(vi)noliability(otherthanforpremiumstothePBGC)underTitleIVofERISAhasbeenorisexpectedtobeincurredbySunTrustoranyofitsSubsidiaries,and(vii)thePBGChasnotinstitutedproceedingstoterminateanysuchSunTrustBenefitPlan.
(e)NoneofSunTrustanditsSubsidiariesnoranySunTrustERISAAffiliatehas,atanytimeduringthelastsix(6)years,contributedtoorbeenobligatedtocontributetoaMultiemployerPlanoraplanthathastwo(2)ormorecontributingsponsorsatleasttwo(2)ofwhomarenotundercommoncontrol,withinthemeaningofSection4063ofERISA(a“MultipleEmployerPlan”),andnoneofSunTrustanditsSubsidiariesnoranySunTrustERISAAffiliatehasincurredanyliabilitythathasnotbeensatisfiedtoaMultiemployerPlanorMultipleEmployerPlanasaresultofacompleteorpartialwithdrawal(asthosetermsaredefinedinPartIofSubtitleEofTitleIVofERISA)fromaMultiemployerPlanorMultipleEmployerPlan.
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(f)ExceptaswouldnotresultinanymaterialliabilitytoSunTrustanditsSubsidiaries,takenasawhole,noSunTrustBenefitPlanprovidesforanypost-employmentorpost-retirementhealthormedicalorlifeinsurancebenefitsforretired,formerorcurrentemployeesorbeneficiariesordependentsthereof,exceptasrequiredbySection4980BoftheCode.
(g)Exceptaswouldnotreasonablybeexpectedtohave,eitherindividuallyorintheaggregate,aMaterialAdverseEffectonSunTrust,allcontributionsrequiredtobemadetoanySunTrustBenefitPlanbyapplicablelaworbyanyplandocumentorothercontractualundertaking,andallpremiumsdueorpayablewithrespecttoinsurancepoliciesfundinganySunTrustBenefitPlan,foranyperiodthroughthedatehereof,havebeentimelymadeorpaidinfullor,totheextentnotrequiredtobemadeorpaidonorbeforethedatehereof,havebeenfullyreflectedonthebooksandrecordsofSunTrust.
(h)Therearenopendingorthreatenedclaims(otherthanclaimsforbenefitsintheordinarycourse),lawsuitsorarbitrationswhichhavebeenassertedorinstituted,and,toSunTrust’sknowledge,nosetofcircumstancesexistswhichmayreasonablygiverisetoaclaimorlawsuit,againsttheSunTrustBenefitPlans,anyfiduciariesthereofwithrespecttotheirdutiestotheSunTrustBenefitPlansortheassetsofanyofthetrustsunderanyoftheSunTrustBenefitPlansthatwouldreasonablybeexpectedtoresultinanyliabilityofSunTrustoranyofitsSubsidiariesinanamountthatwouldbematerialtoSunTrustanditsSubsidiaries,takenasawhole.
(i)Exceptaswouldnotreasonablybeexpectedtohave,eitherindividuallyorintheaggregate,aMaterialAdverseEffectonSunTrust,noneofSunTrustanditsSubsidiariesnoranySunTrustERISAAffiliatehasengagedinany“prohibitedtransaction”(asdefinedinSection4975oftheCodeorSection406ofERISA)whichwouldreasonablybeexpectedtosubjectanyoftheSunTrustBenefitPlansortheirrelatedtrusts,SunTrust,anyofitsSubsidiariesoranySunTrustERISAAffiliatetoanymaterialTaxorpenaltyimposedunderSection4975oftheCodeorSection502ofERISA.
(j)NeithertheexecutionanddeliveryofthisAgreementnortheconsummationofthetransactionscontemplatedherebywill(eitheraloneorinconjunctionwithanyotherevent)resultintheaccelerationofvesting,exercisability,fundingordeliveryof,orincreaseintheamountorvalueof,anypayment,rightorotherbenefittoanyemployee,officer,directororotherserviceproviderofSunTrustoranyofitsSubsidiaries,orresultinanylimitationontherightofSunTrustoranyofitsSubsidiariestoamend,merge,terminateorreceiveareversionofassetsfromanySunTrustBenefitPlanorrelatedtrustonoraftertheEffectiveTime.Withoutlimitingthegeneralityoftheforegoing,noamountpaidorpayable(whetherincash,inproperty,orintheformofbenefits)bySunTrustoranyofitsSubsidiariesinconnectionwiththetransactionscontemplatedhereby(eithersolelyasaresultthereoforasaresultofsuchtransactionsinconjunctionwithanyotherevent)willbean“excessparachutepayment”withinthemeaningofSection280GoftheCode.
(k)NoSunTrustBenefitPlanprovidesforthegross-uporreimbursementofTaxesunderSection409Aor4999oftheCode,orotherwise.
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(l)Exceptaswouldnotreasonablybeexpectedtohave,eitherindividuallyorintheaggregate,aMaterialAdverseEffectonSunTrust,therearenopendingor,toSunTrust’sknowledge,threatenedlaborgrievancesorunfairlaborpracticeclaimsorchargesagainstSunTrustoranyofitsSubsidiaries,oranystrikesorotherlabordisputesagainstSunTrustoranyofitsSubsidiaries.NeitherSunTrustnoranyofitsSubsidiariesispartytoorboundbyanycollectivebargainingorsimilaragreementwithanylabororganization,orworkrulesorpracticesagreedtowithanylabororganizationoremployeeassociationapplicabletoemployeesofSunTrustoranyofitsSubsidiariesand,exceptaswouldnotreasonablybeexpectedtohave,eitherindividuallyorintheaggregate,aMaterialAdverseEffectonSunTrust,therearenopendingor,totheknowledgeofSunTrust,threatenedorganizingeffortsbyanyunionorothergroupseekingtorepresentanyemployeesofSunTrustoranyofitsSubsidiaries.
3.12SECReports.SunTrusthaspreviouslymadeavailabletoBB&Tanaccurateandcompletecopyofeach(a)finalregistrationstatement,prospectus,report,scheduleanddefinitiveproxystatementfiledwithorfurnishedtotheSECsinceDecember31,2015bySunTrustpursuanttotheSecuritiesActof1933,asamended(the“SecuritiesAct”),ortheExchangeAct(the“SunTrustReports”)and(b)communicationmailedbySunTrusttoitsshareholderssinceDecember31,2015andpriortothedatehereof,andnosuchSunTrustReportorcommunication,asofthedatethereof(and,inthecaseofregistrationstatementsandproxystatements,onthedatesofeffectivenessandthedatesoftherelevantmeetings,respectively),containedanyuntruestatementofamaterialfactoromittedtostateanymaterialfactrequiredtobestatedthereinornecessaryinordertomakethestatementstherein,inlightofthecircumstancesinwhichtheyweremade,notmisleading,exceptthatinformationfiledorfurnishedasofalaterdate(butbeforethedateofthisAgreement)shallbedeemedtomodifyinformationasofanearlierdate.SinceDecember31,2015,asoftheirrespectivedates,allSunTrustReportsfiledorfurnishedundertheSecuritiesActandtheExchangeActcompliedinallmaterialrespectswiththepublishedrulesandregulationsoftheSECwithrespectthereto.NoexecutiveofficerofSunTrusthasfailedinanyrespecttomakethecertificationsrequiredofhimorherunderSection302or906oftheSarbanes-OxleyAct.
3.13CompliancewithApplicableLaw.
(a)SunTrustandeachofitsSubsidiarieshold,andhaveatalltimessinceDecember31,2015,held,alllicenses,registrations,franchises,certificates,variances,permits,chartersandauthorizationsnecessaryforthelawfulconductoftheirrespectivebusinessesandownershipoftheirrespectiveproperties,rightsandassetsunderandpursuanttoeach(andhavepaidallfeesandassessmentsdueandpayableinconnectiontherewith),exceptwhereneitherthecostoffailuretoholdnorthecostofobtainingandholdingsuchlicense,registration,franchise,certificate,variance,permit,charterorauthorization(northefailuretopayanyfeesorassessments)would,eitherindividuallyorintheaggregate,reasonablybeexpectedtohaveaMaterialAdverseEffectonSunTrust,andtotheknowledgeofSunTrust,nosuspensionorcancellationofanysuchnecessarylicense,registration,franchise,certificate,variance,permit,charterorauthorizationisthreatened.
(b)Exceptaswouldnot,eitherindividuallyorintheaggregate,reasonablybeexpectedtohaveaMaterialAdverseEffectonSunTrust,SunTrustandeachofitsSubsidiarieshavecompliedwithandarenotindefaultorviolationunderanyapplicablelaw,statute,order,rule,regulation,policyand/orguidelineofany
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GovernmentalEntityrelatingtoSunTrustoranyofitsSubsidiaries,includingalllawsrelatedtodataprotectionorprivacy(includinglawsrelatingtotheprivacyandsecurityofdataorinformationthatconstitutespersonaldataorpersonalinformationunderapplicablelaw(“PersonalData”)),theUSAPATRIOTAct,theBankSecrecyAct,theEqualCreditOpportunityActandRegulationB,theFairHousingAct,theCommunityReinvestmentAct,theFairCreditReportingAct,theTruthinLendingActandRegulationZ,theHomeMortgageDisclosureAct,theFairDebtCollectionPracticesAct,theElectronicFundTransferAct,theDodd-FrankWallStreetReformandConsumerProtectionAct,anyregulationspromulgatedbytheConsumerFinancialProtectionBureau,theInteragencyPolicyStatementonRetailSalesofNondepositInvestmentProducts,theSAFEMortgageLicensingActof2008,theRealEstateSettlementProceduresActandRegulationX,TitleVoftheGramm-Leach-BlileyAct,anyandallsanctionsorregulationsenforcedbytheOfficeofForeignAssetsControloftheUnitedStatesDepartmentofTreasuryandanyotherlaw,policyorguidelinerelatingtobanksecrecy,discriminatorylending,financingorleasingpractices,consumerprotection,moneylaunderingprevention,foreignassetscontrol,U.S.sanctionslawsandregulations,Sections23Aand23BoftheFederalReserveAct,theSarbanes-OxleyAct,andallagencyrequirementsrelatingtotheorigination,saleandservicingofmortgageandconsumerloans.
(c)SunTrustSubsidiaryBankhasaCommunityReinvestmentActratingof“satisfactory”orbetter.
(d)SunTrustmaintainsawritteninformationprivacyandsecurityprogramthatmaintainsreasonablemeasurestoprotecttheprivacy,confidentialityandsecurityofallPersonalDataagainstany(i)lossormisuseofPersonalData,(ii)unauthorizedorunlawfuloperationsperformeduponPersonalData,or(iii)otheractoromissionthatcompromisesthesecurityorconfidentialityofPersonalData(clauses(i)through(iii),a“SecurityBreach”).TotheknowledgeofSunTrust,SunTrusthasnotexperiencedanySecurityBreachthatwould,individuallyorintheaggregate,reasonablybeexpectedtohaveaMaterialAdverseEffectonSunTrust.TotheknowledgeofSunTrust,therearenodatasecurityorothertechnologicalvulnerabilitieswithrespecttoitsinformationtechnologysystemsornetworksthat,individuallyorintheaggregate,wouldreasonablybeexpectedtohaveaMaterialAdverseEffectonSunTrust.
(e)Withoutlimitation,noneofSunTrustoranyofitsSubsidiaries,ortotheknowledgeofSunTrust,anydirector,officer,employee,agentorotherpersonactingonbehalfofSunTrustoranyofitsSubsidiarieshas,directlyorindirectly,(i)usedanyfundsofSunTrustoranyofitsSubsidiariesforunlawfulcontributions,unlawfulgifts,unlawfulentertainmentorotherexpensesrelatingtopoliticalactivity,(ii)madeanyunlawfulpaymenttoforeignordomesticgovernmentalofficialsoremployeesortoforeignordomesticpoliticalpartiesorcampaignsfromfundsofSunTrustoranyofitsSubsidiaries,(iii)violatedanyprovisionthatwouldresultintheviolationoftheForeignCorruptPracticesActof1977,asamended,oranysimilarlaw,(iv)establishedormaintainedanyunlawfulfundofmoniesorotherassetsofSunTrustoranyofitsSubsidiaries,(v)madeanyfraudulententryonthebooksorrecordsofSunTrustoranyofitsSubsidiaries,or(vi)madeanyunlawfulbribe,unlawfulrebate,unlawfulpayoff,unlawfulinfluencepayment,unlawfulkickbackorotherunlawfulpaymenttoanyperson,privateorpublic,regardlessofform,whetherinmoney,propertyorservices,toobtainfavorabletreatmentinsecuringbusiness,toobtainspecialconcessionsforSunTrustoranyofitsSubsidiaries,topayfor
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favorabletreatmentforbusinesssecuredortopayforspecialconcessionsalreadyobtainedforSunTrustoranyofitsSubsidiaries,oriscurrentlysubjecttoanyUnitedStatessanctionsadministeredbytheOfficeofForeignAssetsControloftheUnitedStatesTreasuryDepartment,exceptineachcaseaswouldnot,eitherindividuallyorintheaggregate,reasonablybeexpectedtohaveaMaterialAdverseEffectonSunTrust.
(f)Asofthedatehereof,SunTrust,SunTrustSubsidiaryBankandeachotherinsureddepositoryinstitutionSubsidiaryofSunTrustis“well-capitalized”(assuchtermisdefinedintherelevantregulationoftheinstitution’sprimarybankregulator).
(g)Exceptaswouldnot,eitherindividuallyorintheaggregate,reasonablybeexpectedtohaveaMaterialAdverseEffectonSunTrust,(i)SunTrustandeachofitsSubsidiarieshaveproperlyadministeredallaccountsforwhichitactsasafiduciary,includingaccountsforwhichitservesasatrustee,agent,custodian,personalrepresentative,guardian,conservatororinvestmentadvisor,inaccordancewiththetermsofthegoverningdocumentsandapplicablestate,federalandforeignlaw;and(ii)noneofSunTrust,anyofitsSubsidiaries,oranyofitsoritsSubsidiaries’directors,officersoremployees,hascommittedanybreachoftrustorfiduciarydutywithrespecttoanysuchfiduciaryaccount,andtheaccountingsforeachsuchfiduciaryaccountaretrueandcorrectandaccuratelyreflecttheassetsandresultsofsuchfiduciaryaccount.
3.14CertainContracts.
(a)ExceptassetforthinSection3.14(a)oftheSunTrustDisclosureScheduleorasfiledwithanySunTrustReports,asofthedatehereof,neitherSunTrustnoranyofitsSubsidiariesisapartytoorboundbyanycontract,arrangement,commitmentorunderstanding(whetherwrittenororal),butexcludinganySunTrustBenefitPlan:
(i)whichisa“materialcontract”(assuchtermisdefinedinItem601(b)(10)ofRegulationS-KoftheSEC);
(ii)whichcontainsaprovisionthatmateriallyrestrictstheconductofanylineofbusinessbySunTrustoranyofitsSubsidiariesoruponconsummationoftheMergerwillmateriallyrestricttheabilityoftheSurvivingEntityoranyofitsaffiliatestoengageinanylineofbusinessorinanygeographicregion;
(iii)withortoalaborunionorguild(includinganycollectivebargainingagreement);
(iv)anyofthebenefitsoforobligationsunderwhichwillariseorbeincreasedoracceleratedbytheoccurrenceoftheexecutionanddeliveryofthisAgreement,receiptoftheRequisiteSunTrustVoteortheannouncementorconsummationofanyofthetransactionscontemplatedbythisAgreement,orunderwhicharightofcancellationorterminationwillariseasaresultthereof,orthevalueofanyofthebenefitsofwhichwillbecalculatedonthebasisofanyofthetransactionscontemplatedbythisAgreement,wheresuchincreaseoraccelerationofbenefitsorobligations,rightofcancellationortermination,orchangeincalculationofvalueofbenefitswould,eitherindividuallyorintheaggregate,reasonablybeexpectedtohaveaMaterialAdverseEffectonSunTrust;
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(v)(A)thatrelatestotheincurrenceofindebtednessbySunTrustoranyofitsSubsidiaries,includinganysaleandleasebacktransactions,capitalizedleasesandothersimilarfinancingarrangements(otherthandepositliabilities,tradepayables,federalfundspurchased,advancesandloansfromtheFederalHomeLoanBankandsecuritiessoldunderagreementstorepurchase,ineachcaseincurredintheordinarycourseofbusinessconsistentwithpastpractice),or(B)thatprovidesfortheguarantee,support,indemnification,assumptionorendorsementbySunTrustoranyofitsSubsidiariesof,oranysimilarcommitmentbySunTrustoranyofitsSubsidiarieswithrespectto,theobligations,liabilitiesorindebtednessofanyotherperson,inthecaseofeachofclauses(A)and(B),intheprincipalamountof$25,000,000ormore;
(vi)thatgrantsanyrightoffirstrefusal,rightoffirstofferorsimilarrightwithrespecttoanymaterialassets,rightsorpropertiesofSunTrustoritsSubsidiaries;
(vii)thatisaconsultingagreementordataprocessing,softwareprogrammingorlicensingcontractinvolvingthepaymentofmorethan$10,000,000perannum(otherthananysuchcontractswhichareterminablebySunTrustoranyofitsSubsidiariesonsixty(60)daysorlessnoticewithoutanyrequiredpaymentorotherconditions,otherthantheconditionofnotice);
(viii)thatisasettlement,consentorsimilaragreementandcontainsanymaterialcontinuingobligationsofSunTrustoranyofitsSubsidiaries;or
(ix)thatrelatestotheacquisitionordispositionofanyperson,businessorassetandunderwhichSunTrustoritsSubsidiarieshaveormayhaveamaterialobligationorliability.
Eachcontract,arrangement,commitmentorunderstandingofthetypedescribedinthisSection3.14(a),whetherornotsetforthintheSunTrustDisclosureSchedule,isreferredtohereinasa“SunTrustContract.”SunTrusthasmadeavailabletoBB&Ttrue,correctandcompletecopiesofeachSunTrustContractineffectasofthedatehereof.
(b)(i)EachSunTrustContractisvalidandbindingonSunTrustoroneofitsSubsidiaries,asapplicable,andinfullforceandeffect,exceptas,eitherindividuallyorintheaggregate,wouldnotreasonablybeexpectedtohaveaMaterialAdverseEffectonSunTrust,(ii)SunTrustandeachofitsSubsidiarieshaveinallmaterialrespectscompliedwithandperformedallobligationsrequiredtobecompliedwithorperformedbyanyofthemtodateundereachSunTrustContract,exceptwheresuchnoncomplianceornonperformance,eitherindividuallyorintheaggregate,wouldnotreasonablybeexpectedtohaveaMaterialAdverseEffectonSunTrust,(iii)totheknowledgeofSunTrust,eachthird-partycounterpartytoeachSunTrustContracthasinallmaterialrespectscompliedwithandperformedallobligationsrequiredtobecompliedwithandperformedbyittodateundersuchSunTrustContract,exceptwheresuchnoncomplianceornonperformance,eitherindividuallyorintheaggregate,wouldnotreasonablybeexpectedtohaveaMaterialAdverseEffectonSunTrust,(iv)neither
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SunTrustnoranyofitsSubsidiarieshasknowledgeof,orhasreceivednoticeof,anyviolationofanySunTrustContractbyanyoftheotherpartiestheretowhichwouldreasonablybeexpectedtohave,eitherindividuallyorintheaggregate,aMaterialAdverseEffectonSunTrustand(v)noeventorconditionexistswhichconstitutesor,afternoticeorlapseoftimeorboth,willconstitute,amaterialbreachordefaultonthepartofSunTrustoranyofitsSubsidiaries,ortotheknowledgeofSunTrust,anyotherpartythereto,oforunderanysuchSunTrustContract,exceptwheresuchbreachordefault,eitherindividuallyorintheaggregate,wouldnotreasonablybeexpectedtohaveaMaterialAdverseEffectonSunTrust.
3.15AgreementswithRegulatoryAgencies.SubjecttoSection9.14,neitherSunTrustnoranyofitsSubsidiariesissubjecttoanycease-and-desistorotherorderorenforcementactionissuedby,orisapartytoanywrittenagreement,consentagreementormemorandumofunderstandingwith,orisapartytoanycommitmentletterorsimilarundertakingto,orissubjecttoanyorderordirectiveby,orhasbeenorderedtopayanycivilmoneypenaltyby,orhasbeensinceJanuary1,2016,arecipientofanysupervisoryletterfrom,orsinceJanuary1,2016,hasadoptedanypolicies,proceduresorboardresolutionsattherequestorsuggestionof,anyRegulatoryAgencyorotherGovernmentalEntitythatcurrentlyrestrictsinanymaterialrespectorwouldreasonablybeexpectedtorestrictinanymaterialrespecttheconductofitsbusinessorthatinanymaterialmannerrelatestoitscapitaladequacy,itsabilitytopaydividends,itscreditorriskmanagementpolicies,itsmanagementoritsbusiness(each,whetherornotsetforthintheSunTrustDisclosureSchedule,a“SunTrustRegulatoryAgreement”),norhasSunTrustoranyofitsSubsidiariesbeenadvisedsinceJanuary1,2016,byanyRegulatoryAgencyorotherGovernmentalEntitythatitisconsideringissuing,initiating,ordering,orrequestinganysuchSunTrustRegulatoryAgreement.
3.16EnvironmentalMatters.Exceptaswouldnotreasonablybeexpectedtohave,eitherindividuallyorintheaggregate,aMaterialAdverseEffectonSunTrust,SunTrustanditsSubsidiariesareincompliance,andhavecomplied,withanyfederal,stateorlocallaw,regulation,order,decree,permit,authorization,commonlaworagencyrequirementrelatingto:(a)theprotectionorrestorationoftheenvironment,healthandsafetyasitrelatestohazardoussubstanceexposureornaturalresourcedamages,(b)thehandling,use,presence,disposal,releaseorthreatenedreleaseof,orexposureto,anyhazardoussubstance,or(c)noise,odor,wetlands,indoorair,pollution,contaminationoranyinjurytopersonsorpropertyfromexposuretoanyhazardoussubstance(collectively,“EnvironmentalLaws”).Therearenolegal,administrative,arbitralorotherproceedings,claimsoractions,ortotheknowledgeofSunTrust,anyprivateenvironmentalinvestigationsorremediationactivitiesorgovernmentalinvestigationsofanynatureseekingtoimpose,orthatcouldreasonablybeexpectedtoresultintheimposition,onSunTrustoranyofitsSubsidiariesofanyliabilityorobligationarisingunderanyEnvironmentalLawpendingorthreatenedagainstSunTrust,whichliabilityorobligationwouldreasonablybeexpectedtohave,eitherindividuallyorintheaggregate,aMaterialAdverseEffectonSunTrust.TotheknowledgeofSunTrust,thereisnoreasonablebasisforanysuchproceeding,claim,actionorgovernmentalinvestigationthatwouldimposeanyliabilityorobligationthatwouldreasonablybeexpectedtohave,eitherindividuallyorintheaggregate,aMaterialAdverseEffectonSunTrust.SunTrustisnotsubjecttoanyagreement,order,judgment,decree,letteragreementormemorandumofagreementbyorwithanycourt,GovernmentalEntity,Regulatory
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Agencyorotherthirdpartyimposinganyliabilityorobligationwithrespecttotheforegoingthatwouldreasonablybeexpectedtohave,eitherindividuallyorintheaggregate,aMaterialAdverseEffectonSunTrust.
3.17InvestmentSecuritiesandCommodities.EachofSunTrustanditsSubsidiarieshasgoodtitletoallsecuritiesandcommoditiesownedbyit(exceptthosesoldunderrepurchaseagreements)whicharematerialtoSunTrust’sbusinessonaconsolidatedbasis,freeandclearofanyLien,excepttotheextentsuchsecuritiesorcommoditiesarepledgedintheordinarycourseofbusinesstosecureobligationsofSunTrustoritsSubsidiaries.SuchsecuritiesandcommoditiesarevaluedonthebooksofSunTrustinaccordancewithGAAPinallmaterialrespects.
3.18RealProperty.SunTrustoraSunTrustSubsidiary(a)hasgoodandmarketabletitletoalltherealpropertyreflectedinthelatestauditedbalancesheetincludedintheSunTrustReportsasbeingownedbySunTrustoraSunTrustSubsidiaryoracquiredafterthedatethereofwhicharematerialtoSunTrust’sbusinessonaconsolidatedbasis(exceptpropertiessoldorotherwisedisposedofsincethedatethereofintheordinarycourseofbusiness)(the“SunTrustOwnedProperties”),freeandclearofallmaterialLiens,except(i)statutoryLienssecuringpaymentsnotyetdue,(ii)LiensforrealpropertyTaxesnotyetdueandpayable,(iii)easements,rightsofway,andothersimilarencumbrancesthatdonotmateriallyaffectthevalueoruseofthepropertiesorassetssubjecttheretooraffectedtherebyorotherwisemateriallyimpairbusinessoperationsatsuchpropertiesand(iv)suchimperfectionsorirregularitiesoftitleorLiensasdonotmateriallyaffectthevalueoruseofthepropertiesorassetssubjecttheretooraffectedtherebyorotherwisemateriallyimpairbusinessoperationsatsuchproperties(collectively,“PermittedEncumbrances”),and(b)isthelesseeofallleaseholdestatesreflectedinthelatestauditedfinancialstatementsincludedinsuchSunTrustReportsoracquiredafterthedatethereofwhicharematerialtoSunTrust’sbusinessonaconsolidatedbasis(exceptforleasesthathaveexpiredbytheirtermssincethedatethereof)(suchleaseholdestates,collectivelywiththeSunTrustOwnedProperties,the“SunTrustRealProperty”),freeandclearofallmaterialLiens,exceptforPermittedEncumbrances,andisinpossessionofthepropertiespurportedtobeleasedthereunder,andeachsuchleaseisvalidwithoutdefaultthereunderbythelesseeor,totheknowledgeofSunTrust,thelessor.Therearenopendingor,totheknowledgeofSunTrust,threatenedcondemnationproceedingsagainsttheSunTrustRealProperty.
3.19IntellectualProperty.SunTrustandeachofitsSubsidiariesowns,orislicensedtouse(ineachcase,freeandclearofanymaterialLiens),allIntellectualPropertynecessaryfortheconductofitsbusinessascurrentlyconducted.Exceptaswouldnotreasonablybeexpectedtohave,eitherindividuallyorintheaggregate,aMaterialAdverseEffectonSunTrust:(a)(i)totheknowledgeofSunTrust,theuseofanyIntellectualPropertybySunTrustanditsSubsidiariesdoesnotinfringe,misappropriateorotherwiseviolatetherightsofanypersonandisinaccordancewithanyapplicablelicensepursuanttowhichSunTrustoranySunTrustSubsidiaryacquiredtherighttouseanyIntellectualProperty,and(ii)nopersonhasassertedinwritingtoSunTrustthatSunTrustoranyofitsSubsidiarieshasinfringed,misappropriatedorotherwiseviolatedtheIntellectualPropertyrightsofsuchperson,(b)totheknowledgeofSunTrust,nopersonischallenging,infringingonorotherwiseviolatinganyrightofSunTrustoranyofitsSubsidiarieswithrespecttoanyIntellectualPropertyownedbyand/orlicensedto
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SunTrustoritsSubsidiaries,and(c)neitherSunTrustnoranySunTrustSubsidiaryhasreceivedanywrittennoticeofanypendingclaimwithrespecttoanyIntellectualPropertyownedbySunTrustoranySunTrustSubsidiary,andSunTrustanditsSubsidiarieshavetakencommerciallyreasonableactionstoavoidtheabandonment,cancellationorunenforceabilityofallIntellectualPropertyownedorlicensed,respectively,bySunTrustanditsSubsidiaries.ForpurposesofthisAgreement,“IntellectualProperty”meanstrademarks,servicemarks,brandnames,internetdomainnames,logos,symbols,certificationmarks,tradedressandotherindicationsoforigin,thegoodwillassociatedwiththeforegoingandregistrationsinanyjurisdictionof,andapplicationsinanyjurisdictiontoregister,theforegoing,includinganyextension,modificationorrenewalofanysuchregistrationorapplication;inventions,discoveriesandideas,whetherpatentableornot,inanyjurisdiction;patents,applicationsforpatents(includingdivisions,continuations,continuationsinpartandrenewalapplications),allimprovementsthereto,andanyrenewals,extensionsorreissuesthereof,inanyjurisdiction;nonpublicinformation,tradesecretsandknow-how,includingprocesses,technologies,protocols,formulae,prototypesandconfidentialinformationandrightsinanyjurisdictiontolimittheuseordisclosurethereofbyanyperson;writingsandotherworks,whethercopyrightableornotandwhetherinpublishedorunpublishedworks,inanyjurisdiction;andregistrationsorapplicationsforregistrationofcopyrightsinanyjurisdiction,andanyrenewalsorextensionsthereof;andanysimilarintellectualpropertyorproprietaryrights.
3.20RelatedPartyTransactions.Asofthedatehereof,exceptassetforthinanySunTrustReports,therearenotransactionsorseriesofrelatedtransactions,agreements,arrangementsorunderstandings,norarethereanycurrentlyproposedtransactionsorseriesofrelatedtransactions,betweenSunTrustoranyofitsSubsidiaries,ontheonehand,andanycurrentorformerdirectoror“executiveofficer”(asdefinedinRule3b-7undertheExchangeAct)ofSunTrustoranyofitsSubsidiariesoranypersonwhobeneficiallyowns(asdefinedinRules13d-3and13d-5oftheExchangeAct)fivepercent(5%)ormoreoftheoutstandingSunTrustCommonStock(oranyofsuchperson’simmediatefamilymembersoraffiliates)(otherthanSubsidiariesofSunTrust)ontheotherhand,ofthetyperequiredtobereportedinanySunTrustReportpursuanttoItem404ofRegulationS-KpromulgatedundertheExchangeAct.
3.21StateTakeoverLaws.TheBoardofDirectorsofSunTrusthasapprovedthisAgreementandthetransactionscontemplatedherebyandhastakenallsuchothernecessaryactionsasrequiredtorenderinapplicabletosuchagreementsandtransactionstheprovisionsofanypotentiallyapplicabletakeoverlawsofanystate,includingany“moratorium,”“controlshare,”“fairprice,”“takeover”or“interestedshareholder”laworanysimilarprovisionsoftheSunTrustArticlesorSunTrustBylaws(collectively,withanysimilarprovisionsoftheBB&TArticlesorBB&TBylaws“TakeoverStatutes”).InaccordancewithSection14-2-1302oftheGBCC,noappraisalordissenters’rightswillbeavailabletotheholdersofSunTrustCommonStockorSunTrustPreferredStockinconnectionwiththeMerger.
3.22Reorganization.SunTrusthasnottakenanyactionandisnotawareofanyfactorcircumstancethatcouldreasonablybeexpectedtopreventtheMergerfromqualifyingasa“reorganization”withinthemeaningofSection368(a)oftheCode.
3.23Opinion.PriortotheexecutionofthisAgreement,theBoardofDirectorsofSunTrusthasreceivedanopinion(whichifinitiallyrenderedorally,hasbeenorwillbeconfirmedbywrittenopinionofthe
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samedate)fromGoldmanSachs&Co.LLCtotheeffectthatasofthedatehereofandbaseduponandsubjecttothematterssetforthinthewrittenopinion,theExchangeRatiopursuanttothisAgreementisfairfromafinancialpointofviewtotheholders(otherthanBB&Tanditsaffiliates)ofSunTrustCommonStock.SuchopinionhasnotbeenamendedorrescindedasofthedateofthisAgreement.
3.24SunTrustInformation.TheinformationrelatingtoSunTrustanditsSubsidiariesorthatisprovidedbySunTrustoritsSubsidiariesortheirrespectiverepresentativesforinclusionintheJointProxyStatementandtheS-4,orinanyotherdocumentfiledwithanyRegulatoryAgencyorGovernmentalEntityinconnectionherewith,willnotcontainanyuntruestatementofamaterialfactoromittostateamaterialfactnecessarytomakethestatementstherein,inlightofthecircumstancesinwhichtheyaremade,notmisleading.TheJointProxyStatement(exceptforsuchportionsthereofthatrelateonlytoBB&ToranyofitsSubsidiaries)willcomplyinallmaterialrespectswiththeprovisionsoftheExchangeActandtherulesandregulationsthereunder.
3.25LoanPortfolio.
(a)Asofthedatehereof,exceptassetforthinSection3.25(a)oftheSunTrustDisclosureSchedule,neitherSunTrustnoranyofitsSubsidiariesisapartytoanywrittenororalloan,loanagreement,noteorborrowingarrangement(includingleases,creditenhancements,commitments,guaranteesandinterest-bearingassets)(collectively,“Loans”)inwhichSunTrustoranySubsidiaryofSunTrustisacreditorthat,asofSeptember30,2018,hadanoutstandingbalanceof$10,000,000ormoreandunderthetermsofwhichtheobligorwas,asofSeptember30,2018,overninety(90)daysormoredelinquentinpaymentofprincipalorinterest.SetforthinSection3.25(a)oftheSunTrustDisclosureScheduleisatrue,correctandcompletelistof(A)alloftheLoansofSunTrustanditsSubsidiariesthat,asofSeptember30,2018,hadanoutstandingbalanceof$10,000,000andwereclassifiedbySunTrustas“OtherLoansSpeciallyMentioned,”“SpecialMention,”“Substandard,”“Doubtful,”“Loss,”“Classified,”“Criticized,”“CreditRiskAssets,”“ConcernedLoans,”“WatchList”orwordsofsimilarimport,togetherwiththeprincipalamountofandaccruedandunpaidinterestoneachsuchLoanandtheidentityoftheborrowerthereunder,togetherwiththeaggregateprincipalamountofandaccruedandunpaidinterestonsuchLoans,bycategoryofLoan(e.g.,commercial,consumer,etc.),togetherwiththeaggregateprincipalamountofsuchLoansbycategoryand(B)eachassetofSunTrustoranyofitsSubsidiariesthat,asofSeptember30,2018,isclassifiedas“OtherRealEstateOwned”andthebookvaluethereof.
(b)Exceptaswouldnotreasonablybeexpectedtohave,eitherindividuallyorintheaggregate,aMaterialAdverseEffectonSunTrust,eachLoanofSunTrustoranyofitsSubsidiaries(i)isevidencedbynotes,agreementsorotherevidencesofindebtednessthataretrue,genuineandwhattheypurporttobe,(ii)totheextentcarriedonthebooksandrecordsofSunTrustanditsSubsidiariesassecuredLoans,hasbeensecuredbyvalidcharges,mortgages,pledges,securityinterests,restrictions,claims,liensorencumbrances,asapplicable,whichhavebeenperfectedand(iii)isthelegal,validandbindingobligationoftheobligornamedtherein,enforceableinaccordancewithitsterms,subjecttotheEnforceabilityExceptions.
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(c)Exceptaswouldnotreasonablybeexpectedtohave,eitherindividuallyorintheaggregate,aMaterialAdverseEffectonSunTrust,eachoutstandingLoanofSunTrustoranyofitsSubsidiaries(includingLoansheldforresaletoinvestors)wassolicitedandoriginated,andisandhasbeenadministeredand,whereapplicable,serviced,andtherelevantLoanfilesarebeingmaintained,inallmaterialrespectsinaccordancewiththerelevantnotesorothercreditorsecuritydocuments,thewrittenunderwritingstandardsofSunTrustanditsSubsidiaries(and,inthecaseofLoansheldforresaletoinvestors,theunderwritingstandards,ifany,oftheapplicableinvestors)andwithallapplicablefederal,stateandlocallaws,regulationsandrules.
3.26Insurance.Exceptaswouldnotreasonablybeexpected,eitherindividuallyorintheaggregate,tohaveaMaterialAdverseEffectonSunTrust,(a)SunTrustanditsSubsidiariesareinsuredwithreputableinsurersagainstsuchrisksandinsuchamountsasthemanagementofSunTrustreasonablyhasdeterminedtobeprudentandconsistentwithindustrypractice,andSunTrustanditsSubsidiariesareincomplianceinallmaterialrespectswiththeirinsurancepoliciesandarenotindefaultunderanyofthetermsthereof,(b)eachsuchpolicyisoutstandingandinfullforceandeffectand,exceptforpoliciesinsuringagainstpotentialliabilitiesofofficers,directorsandemployeesofSunTrustanditsSubsidiaries,SunTrustortherelevantSubsidiarythereofisthesolebeneficiaryofsuchpolicies,(c)allpremiumsandotherpaymentsdueunderanysuchpolicyhavebeenpaid,andallclaimsthereunderhavebeenfiledindueandtimelyfashion,(d)thereisnoclaimforcoveragebySunTrustoranyofitsSubsidiariespendingunderanyinsurancepolicyastowhichcoveragehasbeenquestioned,deniedordisputedbytheunderwritersofsuchinsurancepolicyand(e)neitherSunTrustnoranyofitsSubsidiarieshasreceivednoticeofanythreatenedterminationof,materialpremiumincreasewithrespectto,ormaterialalterationofcoverageunder,anyinsurancepolicies.
3.27InvestmentAdvisorSubsidiary.
(a)SunTrusthascertainSubsidiariesthatprovideinvestmentmanagement,investmentadvisoryorsub-advisoryservices(includingmanagementandadviceprovidedtoseparateaccountsandparticipationinwrapfeeprogramsandarerequiredtoregisterwiththeSECasaninvestmentadviserundertheInvestmentAdvisersActof1940,asamended(the“InvestmentAdvisersAct”))(eachsuchSubsidiary,a“SunTrustAdvisoryEntity”).EachSunTrustAdvisoryEntityisregisteredasaninvestmentadviserundertheInvestmentAdvisersActandhasoperatedsinceJanuary1,2016andiscurrentlyoperatingincompliancewithalllawsapplicabletoitoritsbusinessandhasallregistrations,permits,licenses,exemptions,ordersandapprovalsrequiredfortheoperationofitsbusinessorownershipofitspropertiesandassetssubstantiallyaspresentlyconducted,exceptineachcaseaswouldnotreasonablybeexpected,eitherindividuallyorintheaggregate,tohaveaMaterialAdverseEffectonSunTrust.
(b)TheaccountsofeachadvisoryclientofSunTrustoritsSubsidiaries,forpurposesoftheInvestmentAdvisersAct,thataresubjecttoERISAhavebeenmanagedbytheapplicableSunTrustAdvisoryEntityincompliancewiththeapplicablerequirementsofERISA,exceptaswouldnotreasonablybeexpected,eitherindividuallyorintheaggregate,tohaveaMaterialAdverseEffectonSunTrust.
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(c)NoneoftheSunTrustAdvisoryEntitiesnorany“personassociatedwithaninvestmentadviser”(asdefinedintheInvestmentAdvisersAct)ofanyofthemisineligiblepursuanttoSection203oftheInvestmentAdvisersActtoserveasaninvestmentadvisororasapersonassociatedwitharegisteredinvestmentadvisor,exceptaswouldnotreasonablybeexpected,eitherindividuallyorintheaggregate,tohaveaMaterialAdverseEffectonSunTrust.
3.28InsuranceSubsidiary.
(a)Exceptaswouldnotreasonablybeexpected,individuallyorintheaggregate,tohaveaMaterialAdverseEffectonSunTrust,(i)sinceJanuary1,2016,atthetimeeachagent,representative,producer,reinsuranceintermediary,wholesaler,third-partyadministrator,distributor,broker,employeeorotherpersonauthorizedtosell,produce,manageoradministerproductsonbehalfofanySunTrustSubsidiary(“SunTrustAgent”)wrote,sold,produced,managed,administeredorprocuredbusinessforaSunTrustSubsidiary,suchSunTrustAgentwas,atthetimetheSunTrustAgentwroteorsoldbusiness,dulylicensedforthetypeofactivityandbusinesswritten,sold,produced,managed,administeredorproducedtotheextentrequiredbyapplicablelaw,(ii)noSunTrustAgenthasbeensinceJanuary1,2016,oriscurrently,inviolation(orwithorwithoutnoticeorlapseoftimeorboth,wouldbeinviolation)ofanylaw,ruleorregulationapplicabletosuchSunTrustAgent’swriting,sale,management,administrationorproductionofinsurancebusinessforanySunTrustInsuranceSubsidiaryand(iii)eachSunTrustAgentwasappointedbySunTrustoraSunTrustInsuranceSubsidiaryincompliancewithapplicableinsurancelaws,rulesandregulationsandallprocessesandproceduresundertakenwithrespecttosuchSunTrustAgentwereundertakenincompliancewithapplicableinsurancelaws,rulesandregulations.“SunTrustInsuranceSubsidiary”meanseachSubsidiaryofSunTrustthroughwhichinsuranceoperationsisconducted.
(b)Exceptaswouldnotreasonablybeexpected,individuallyorintheaggregate,tohaveaMaterialAdverseEffectonSunTrust,(i)sinceJanuary1,2016,SunTrustandtheSunTrustInsuranceSubsidiarieshavemadeallrequirednotices,submissions,reportsorotherfilingsunderapplicableinsuranceholdingcompanystatutes,(ii)allcontracts,agreements,arrangementsandtransactionsineffectbetweenanySunTrustInsuranceSubsidiaryandanyaffiliateareincomplianceinallmaterialrespectswiththerequirementsofallapplicableinsuranceholdingcompanystatutes,and(iii)eachSunTrustInsuranceSubsidiaryhasoperatedandotherwisebeenincompliancewithallapplicableinsurancelaws,rulesandregulations.
3.29Broker-DealerSubsidiary.
(a)SunTrusthascertainSubsidiariesthatarebroker-dealers(each,a“SunTrustBroker-DealerSubsidiary”).Exceptaswouldnotreasonablybeexpectedto,eitherindividuallyorintheaggregate,haveaMaterialAdverseEffectonSunTrust:(i)eachSunTrustBroker-DealerSubsidiaryisdulyregisteredundertheExchangeActasabroker-dealerwiththeSECandisincompliancewiththeapplicableprovisionsoftheExchangeAct,includingthenetcapitalrequirementsandcustomerprotectionrequirementsthereof;(ii)eachSunTrustBroker-DealerSubsidiaryisamemberingoodstandingwithFINRAandallotherrequiredSROsandincompliancewithallapplicablerulesandregulationsofFINRAandanysuchSROofwhichitisamemberorwhichotherwisehasauthorityoverit;(iii)eachSunTrustBroker-DealerSubsidiary(andeachregistered
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representativethereof)isdulyregistered,licensedorqualifiedasabroker-dealerorregisteredrepresentative,asapplicable,under,andincompliancewith,theapplicablelawsofalljurisdictionsinwhichitisrequiredtobesoregisteredandeachsuchregistration,licenseorqualificationisinfullforceandeffectandingoodstanding;and(iv)thereisnoaction,suit,proceedingorinvestigationpendingor,totheknowledgeofSunTrust,threatenedthatwouldreasonablybelikelytoleadtotherevocation,amendment,failuretorenew,limitation,suspensionorrestrictionofanysuchregistrations,licensesandqualifications.
(b)Exceptaswouldnotreasonablybeexpectedto,eitherindividuallyorintheaggregate,haveaMaterialAdverseEffectonSunTrust,(i)noneoftheSunTrustBroker-DealerSubsidiariesnorany“associatedperson”thereof(A)isorhasbeenineligibletoserveasabroker-dealeroranassociatedpersonofabroker-dealerunderSection15(b)oftheExchangeAct,(B)issubjecttoa“statutorydisqualification”asdefinedinSection3(a)(39)oftheExchangeActor(C)issubjecttoadisqualificationthatwouldbeabasisforcensure,limitationsontheactivities,functionsoroperationsof,orsuspensionorrevocationoftheregistrationofanySunTrustBroker-DealerSubsidiaryasbroker-dealer,municipalsecuritiesdealer,governmentsecuritiesbrokerorgovernmentsecuritiesdealerunderSection15,Section15BorSection15CoftheExchangeAct,and(ii)thereisnoaction,suit,proceedingorinvestigationpendingor,totheknowledgeofSunTrust,threatened,thatisreasonablylikelytoresultinanysuchpersonbeingdeemedineligibleasdescribedinclause(A),subjecttoa“statutorydisqualification”asdescribedinclause(B)orsubjecttoadisqualificationasdescribedinclause(C).
3.30NoOtherRepresentationsorWarranties.
(a)ExceptfortherepresentationsandwarrantiesmadebySunTrustinthisArticleIII,neitherSunTrustnoranyotherpersonmakesanyexpressorimpliedrepresentationorwarrantywithrespecttoSunTrust,itsSubsidiaries,ortheirrespectivebusinesses,operations,assets,liabilities,conditions(financialorotherwise)orprospects,andSunTrustherebydisclaimsanysuchotherrepresentationsorwarranties.Inparticular,withoutlimitingtheforegoingdisclaimer,neitherSunTrustnoranyotherpersonmakesorhasmadeanyrepresentationorwarrantytoBB&Toranyofitsaffiliatesorrepresentativeswithrespectto(i)anyfinancialprojection,forecast,estimate,budgetorprospectiveinformationrelatingtoSunTrust,anyofitsSubsidiariesortheirrespectivebusinessesor(ii)exceptfortherepresentationsandwarrantiesmadebySunTrustinthisArticleIII,anyoralorwritteninformationpresentedtoBB&ToranyofitsaffiliatesorrepresentativesinthecourseoftheirduediligenceinvestigationofSunTrust,thenegotiationofthisAgreementorinthecourseofthetransactionscontemplatedhereby.
(b)SunTrustacknowledgesandagreesthatneitherBB&TnoranyotherpersonhasmadeorismakinganyexpressorimpliedrepresentationorwarrantyotherthanthosecontainedinArticleIV.
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ARTICLEIV
REPRESENTATIONSANDWARRANTIESOFBB&T
Except(a)asdisclosedinthedisclosurescheduledeliveredbyBB&TtoSunTrustconcurrentlyherewith(the“BB&TDisclosureSchedule”);provided,that(i)nosuchitemisrequiredtobesetforthasanexceptiontoarepresentationorwarrantyifitsabsencewouldnotresultintherelatedrepresentationorwarrantybeingdeemeduntrueorincorrect,(ii)themereinclusionofanitemintheBB&TDisclosureScheduleasanexceptiontoarepresentationorwarrantyshallnotbedeemedanadmissionbyBB&Tthatsuchitemrepresentsamaterialexceptionorfact,eventorcircumstanceorthatsuchitemwouldreasonablybeexpectedtohaveaMaterialAdverseEffectand(iii)anydisclosuresmadewithrespecttoasectionofArticleIVshallbedeemedtoqualify(1)anyothersectionofArticleIVspecificallyreferencedorcross-referencedand(2)othersectionsofArticleIVtotheextentitisreasonablyapparentonitsface(notwithstandingtheabsenceofaspecificcrossreference)fromareadingofthedisclosurethatsuchdisclosureappliestosuchothersectionsor(b)asdisclosedinanyBB&TReportsfiledbyBB&TsinceDecember31,2013,andpriortothedatehereof(butdisregardingriskfactordisclosurescontainedundertheheading“RiskFactors,”ordisclosuresofriskssetforthinany“forward-lookingstatements”disclaimeroranyotherstatementsthataresimilarlynon-specificorcautionary,predictiveorforward-lookinginnature),BB&TherebyrepresentsandwarrantstoSunTrustasfollows:
4.1CorporateOrganization.
(a)BB&Tisacorporationdulyorganized,validlyexistingandingoodstandingunderthelawsoftheStateofNorthCarolina,isabankholdingcompanydulyregisteredundertheBHCActandhaselectedtobetreatedasafinancialholdingcompanyundertheBHCAct.BB&Thasthecorporatepowerandauthoritytoown,leaseoroperateallofitspropertiesandassetsandtocarryonitsbusinessasitisnowbeingconducted.BB&Tisdulylicensedorqualifiedtodobusinessandingoodstandingineachjurisdictioninwhichthenatureofthebusinessconductedbyitorthecharacterorlocationofthepropertiesandassetsowned,leasedoroperatedbyitmakessuchlicensing,qualificationorstandingnecessary,exceptwherethefailuretobesolicensedorqualifiedortobeingoodstandingwouldnot,eitherindividuallyorintheaggregate,reasonablybeexpectedtohaveaMaterialAdverseEffectonBB&T.TrueandcompletecopiesofthearticlesofincorporationofBB&T(the“BB&TArticles”)andthebylawsofBB&T(the“BB&TBylaws”),ineachcaseasineffectasofthedateofthisAgreement,havepreviouslybeenmadeavailablebyBB&TtoSunTrust.
(b)Exceptaswouldnot,eitherindividuallyorintheaggregate,reasonablybeexpectedtohaveaMaterialAdverseEffectonBB&T,eachSubsidiaryofBB&T(a“BB&TSubsidiary”)(i)isdulyorganizedandvalidlyexistingunderthelawsofitsjurisdictionoforganization,(ii)isdulylicensedorqualifiedtodobusinessand,wheresuchconceptisrecognizedunderapplicablelaw,ingoodstandinginalljurisdictions(whetherfederal,state,localorforeign)whereitsownership,leasingoroperationofpropertyortheconductofitsbusinessrequiresittobesolicensedorqualifiedoringoodstandingand(iii)hasallrequisitecorporatepowerandauthoritytoown,leaseoroperateitspropertiesandassetsandtocarryonitsbusinessasnowconducted.There
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arenorestrictionsontheabilityofBB&ToranySubsidiaryofBB&Ttopaydividendsordistributionsexcept,inthecaseofBB&ToraSubsidiarythatisaregulatedentity,forrestrictionsondividendsordistributionsgenerallyapplicabletoallsimilarlyregulatedentities.ThedepositaccountsofeachSubsidiaryofBB&TthatisaninsureddepositoryinstitutionareinsuredbytheFDICthroughtheDepositInsuranceFund(asdefinedinSection3(y)oftheFederalDepositInsuranceActof1950)tothefullestextentpermittedbylaw,allpremiumsandassessmentsrequiredtobepaidinconnectiontherewithhavebeenpaidwhendue,andnoproceedingsfortheterminationofsuchinsurancearependingorthreatened.Section4.1(b)oftheBB&TDisclosureSchedulesetsforthatrueandcompletelistofallSubsidiariesofBB&Tthatwouldconstitute“significantsubsidiaries”withinthemeaningofRule1-02ofRegulationS-XoftheSECasofthedatehereof.Thereisnopersonwhoseresultsofoperations,cashflows,changesinshareholders’equityorfinancialpositionareconsolidatedinthefinancialstatementsofBB&TotherthantheBB&TSubsidiaries.
4.2Capitalization.
(a)TheauthorizedcapitalstockofBB&Tconsistsof2,000,000,000sharesofBB&TCommonStock,and5,000,000sharesofpreferredstock,parvalue$5.00pershare.AsofFebruary5,2019,therewere(i)763,655,494sharesofBB&TCommonStockissuedandoutstanding,including436,449sharesofBB&TCommonStockgrantedinrespectofoutstandingBB&TRestrictedStockAwards;(ii)zerosharesofBB&TCommonStockheldintreasury;(iii)3,978,535sharesofBB&TCommonStockreservedforissuanceupontheexerciseofoutstandingBB&TStockOptions;(iv)11,161,064sharesofBB&TCommonStockreservedforissuanceuponthesettlementofoutstandingBB&TRSUAwards;(v)236,951sharesofBB&TCommonStock(assumingperformancegoalsaresatisfiedatthetargetlevel)or296,186sharesofBB&TCommonStock(assumingperformancegoalsaresatisfiedatthemaximumlevel)reservedforissuanceuponthesettlementofoutstandingperformanceunitawardsinrespectofsharesofBB&TCommonStock(“BB&TPSUAwards”);and(vi)(A)23,000sharesofpreferredstock,whichhavebeendesignatedasSeriesDNon-CumulativePerpetualPreferredStock,issuedandoutstanding,(B)46,000sharesofpreferredstock,whichhavebeendesignatedasSeriesENon-CumulativePerpetualPreferredStock,issuedandoutstanding,(C)18,000sharesofpreferredstock,whichhavebeendesignatedasSeriesFNon-CumulativePerpetualPreferredStock,issuedandoutstanding,(D)20,000sharesofpreferredstock,whichhavebeendesignatedasSeriesGNon-CumulativePerpetualPreferredStock,issuedandoutstandingand(E)18,600sharesofpreferredstock,whichhavebeendesignatedasSeriesHNon-CumulativePerpetualPreferredStock,issuedandoutstanding(thepreferredstockdescribedinsubclauses(A)through(E),the“BB&TPreferredStock”).AsofthedateofthisAgreement,exceptassetforthintheimmediatelyprecedingsentenceandforchangessinceFebrurary5,2019resultingfromtheexercise,vestingorsettlementofanyBB&TEquityAwardsdescribedintheimmediatelyprecedingsentence,therearenosharesofcapitalstockorothervotingsecuritiesorequityinterestsofBB&Tissued,reservedforissuanceoroutstanding.AlloftheissuedandoutstandingsharesofBB&TCommonStockandBB&TPreferredStockhavebeendulyauthorizedandvalidlyissuedandarefullypaid,nonassessableandfreeofpreemptiverights,withnopersonalliabilityattachingtotheownershipthereof.BB&TiscurrentonalldividendspayableontheoutstandingsharesofBB&TPreferredStock,andhascompliedinallmaterialrespectswithtermsandconditionsthereof.Therearenobonds,debentures,notesorotherindebtednessthathavetherighttovoteonany
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mattersonwhichshareholdersofBB&Tmayvote.OtherthanBB&TStockOptions,BB&TRestrictedStockAwards,BB&TRSUAwards,BB&TPSUAwardsandBB&TPreferredStock,issuedpriortothedateofthisAgreementasdescribedinthisSection4.2(a),asofthedateofthisAgreementtherearenooutstandingsubscriptions,options,warrants,stockappreciationrights,phantomunits,scrip,rightstosubscribeto,preemptiverights,anti-dilutiverights,rightsoffirstrefusalorsimilarrights,puts,calls,commitmentsoragreementsofanycharacterrelatingto,orsecuritiesorrightsconvertibleorexchangeableintoorexercisablefor,sharesofcapitalstockorothervotingorequitysecuritiesoforownershipinterestinBB&T,orcontracts,commitments,understandingsorarrangementsbywhichBB&TmaybecomeboundtoissueadditionalsharesofitscapitalstockorotherequityorvotingsecuritiesoforownershipinterestsinBB&TorthatotherwiseobligateBB&Ttoissue,transfer,sell,purchase,redeemorotherwiseacquire,anyoftheforegoing(collectively,“BB&TSecurities”).OtherthantheBB&TStockOptions,theBB&TRestrictedStockAwards,theBB&TRSUAwardsandtheBB&TPSUAwards(collectively,the“BB&TEquityAwards”),noequity-basedawards(includinganycashawardswheretheamountofpaymentisdeterminedinwholeorinpartbasedonthepriceofanycapitalstockofBB&ToranyofitsSubsidiaries)areoutstanding.Therearenovotingtrusts,shareholderagreements,proxiesorotheragreementsineffecttowhichBB&ToranyofitsSubsidiariesisapartywithrespecttothevotingortransferofBB&TCommonStock,capitalstockorothervotingorequitysecuritiesorownershipinterestsofBB&Torgrantinganyshareholderorotherpersonanyregistrationrights.
(b)Exceptaswouldnot,eitherindividuallyorintheaggregate,reasonablybeexpectedtohaveaMaterialAdverseEffectonBB&T,BB&Towns,directlyorindirectly,alloftheissuedandoutstandingsharesofcapitalstockorotherequityownershipinterestsofeachoftheBB&TSubsidiaries,freeandclearofanyLiens,andallofsuchsharesorequityownershipinterestsaredulyauthorizedandvalidlyissuedandarefullypaid,nonassessable(except,withrespecttoSubsidiariesthataredepositoryinstitutions,asprovidedunder12U.S.C.§55oranycomparableprovisionofapplicablestatelaw)andfreeofpreemptiverights,withnopersonalliabilityattachingtotheownershipthereof.
4.3Authority;NoViolation.
(a)BB&ThasfullcorporatepowerandauthoritytoexecuteanddeliverthisAgreementandtoconsummatethetransactionscontemplatedhereby.TheexecutionanddeliveryofthisAgreementandtheconsummationoftheMergerhavebeendulyandvalidlyapprovedbytheBoardofDirectorsofBB&T.TheBoardofDirectorsofBB&ThasdeterminedthattheMerger,onthetermsandconditionssetforthinthisAgreement,isadvisableandinthebestinterestsofBB&Tanditsshareholders,hasadoptedandapprovedthisAgreementandthetransactionscontemplatedhereby(includingtheMerger),andhasdirectedthatthisAgreementbesubmittedtoBB&T’sshareholdersforapprovalatameetingofsuchshareholdersandhasadoptedaresolutiontotheforegoingeffect.ExceptfortheapprovalofthisAgreementbytheaffirmativevoteofamajorityofallthevotesentitledtobecastonthisAgreementbytheholdersofBB&TCommonStock(the“RequisiteBB&TVote”),andsubjecttotheadoptionandapprovaloftheBankMergerAgreementbyBB&TasBB&TSubsidiaryBank’ssoleshareholder,noothercorporateproceedingsonthepartofBB&TarenecessarytoapprovethisAgreementortoconsummatethetransactionscontemplatedhereby.ThisAgreementhasbeenduly
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andvalidlyexecutedanddeliveredbyBB&Tand(assumingdueauthorization,executionanddeliverybySunTrust)constitutesavalidandbindingobligationofBB&T,enforceableagainstBB&Tinaccordancewithitsterms(exceptinallcasesassuchenforceabilitymaybelimitedbytheEnforceabilityExceptions).ThesharesofBB&TCommonStockandNewBB&TPreferredStocktobeissuedintheMergerhavebeenvalidlyauthorized(subjecttothereceiptoftheRequisiteBB&TVote),andwhenissued,willbevalidlyissued,fullypaidandnonassessable,andnocurrentorpastshareholderofBB&Twillhaveanypreemptiverightorsimilarrightsinrespectthereof.
(b)NeithertheexecutionanddeliveryofthisAgreementbyBB&T,northeconsummationbyBB&Tofthetransactionscontemplatedhereby(includingtheMergerandtheBankMerger),norcompliancebyBB&Twithanyofthetermsorprovisionshereof,will(i)violateanyprovisionoftheBB&TArticlesortheBB&TBylawsor(ii)assumingthattheconsentsandapprovalsreferredtoinSection4.4aredulyobtained,(x)violateanylaw,statute,code,ordinance,rule,regulation,judgment,order,writ,decreeorinjunctionapplicabletoBB&ToranyofitsSubsidiariesoranyoftheirrespectivepropertiesorassetsor(y)violate,conflictwith,resultinabreachofanyprovisionoforthelossofanybenefitunder,constituteadefault(oraneventwhich,withnoticeorlapseoftime,orboth,wouldconstituteadefault)under,resultintheterminationoforarightofterminationorcancellationunder,acceleratetheperformancerequiredby,orresultinthecreationofanyLienuponanyoftherespectivepropertiesorassetsofBB&ToranyofitsSubsidiariesunder,anyoftheterms,conditionsorprovisionsofanynote,bond,mortgage,indenture,deedoftrust,license,lease,agreementorotherinstrumentorobligationtowhichBB&ToranyofitsSubsidiariesisaparty,orbywhichtheyoranyoftheirrespectivepropertiesorassetsmaybebound,except(inthecaseofclauses(x)and(y)above)forsuchviolations,conflicts,breachesordefaultsthateitherindividuallyorintheaggregatewouldnotreasonablybeexpectedtohaveaMaterialAdverseEffectonBB&T.
4.4ConsentsandApprovals.Exceptfor(a)thefilingofanyrequiredapplications,filingsandnotices,asapplicable,withtheNewYorkStockExchange,(b)thefilingofanyrequiredapplications,filingsandnotices,asapplicable,withtheFederalReserveBoardundertheBHCActandapprovalofsuchapplications,filingsandnotices,(c)thefilingofanyrequiredapplications,filingsandnotices,asapplicable,withtheFDIC,andapprovalofsuchapplications,filingsandnotices,(d)thefilingofanyrequiredapplications,filingsandnotices,asapplicable,withtheNorthCarolinaCommissionerofBanksandtheGeorgiaDepartmentofBankingandFinanceinconnectionwiththeBankMerger,andapprovalofsuchapplications,filingsandnotices,(e)thefilingofanyrequiredapplications,filingsornoticeswithFINRAandapprovalofsuchapplications,filingsandnotices,(f)thefilingofanyrequiredapplications,filingsornoticeswithanystatebankingauthoritieslistedonSection3.4oftheSunTrustDisclosureScheduleorSection4.4oftheBB&TDisclosureScheduleandapprovalofsuchapplications,filingsandnotices,(g)thefilingwiththeSECoftheJointProxyStatementandtheS-4inwhichtheJointProxyStatementwillbeincludedasaprospectus,andthedeclarationofeffectivenessoftheS-4,(h)thefilingoftheCertificatesofMergerwiththeNorthCarolinaSecretarypursuanttotheNCBCAandtheGeorgiaSecretarypursuanttotheGBCC,asapplicable,thefilingoftheBankMergerCertificateswiththeapplicableGovernmentalEntitiesasrequiredbyapplicablelaw,andthefilingofArticlesofAmendmentfortheNewBB&TPreferredStockwiththeNorthCarolinaSecretaryand(i)suchfilingsandapprovalsasarerequiredtobemadeorobtainedunderthesecuritiesor“BlueSky”lawsofvariousstatesinconnectionwiththeissuanceofthe
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sharesofBB&TCommonStockandNewBB&TPreferredStockpursuanttothisAgreementandtheapprovalofthelistingofsuchBB&TCommonStockontheNYSE,noconsentsorapprovalsoforfilingsorregistrationswithanyGovernmentalEntityarenecessaryinconnectionwith(i)theexecutionanddeliverybyBB&TofthisAgreementor(ii)theconsummationbyBB&ToftheMergerandtheothertransactionscontemplatedhereby(includingtheBankMerger).Asofthedatehereof,BB&TisnotawareofanyreasonwhythenecessaryregulatoryapprovalsandconsentswillnotbereceivedbyBB&TtopermitconsummationoftheMergerandBankMergeronatimelybasis.
4.5Reports.BB&TandeachofitsSubsidiarieshavetimelyfiled(orfurnished)allreports,forms,correspondence,registrationsandstatements,togetherwithanyamendmentsrequiredtobemadewithrespectthereto,thattheywererequiredtofile(orfurnish,asapplicable)sinceJanuary1,2016withanyRegulatoryAgencies,includinganyreport,form,correspondence,registrationorstatementrequiredtobefiled(orfurnished,asapplicable)pursuanttothelaws,rulesorregulationsoftheUnitedStates,anystate,anyforeignentity,oranyRegulatoryAgency,andhavepaidallfeesandassessmentsdueandpayableinconnectiontherewith,exceptwherethefailuretofile(orfurnish,asapplicable)suchreport,form,correspondence,registrationorstatementortopaysuchfeesandassessments,eitherindividuallyorintheaggregate,wouldnotreasonablybeexpectedtohaveaMaterialAdverseEffectonBB&T.SubjecttoSection9.14,exceptfornormalexaminationsconductedbyaRegulatoryAgencyintheordinarycourseofbusinessofBB&TanditsSubsidiaries,noRegulatoryAgencyhasinitiatedorhaspendinganyproceedingor,totheknowledgeofBB&T,investigationintothebusinessoroperationsofBB&ToranyofitsSubsidiariessinceJanuary1,2016,exceptwheresuchproceedingsorinvestigationswouldnotreasonablybeexpectedtohave,eitherindividuallyorintheaggregate,aMaterialAdverseEffectonBB&T.SubjecttoSection9.14,there(i)isnounresolvedviolation,criticism,orexceptionbyanyRegulatoryAgencywithrespecttoanyreportorstatementrelatingtoanyexaminationsorinspectionsofBB&ToranyofitsSubsidiariesand(ii)hasbeennoformalorinformalinquiriesby,ordisagreementsordisputeswith,anyRegulatoryAgencywithrespecttothebusiness,operations,policiesorproceduresofBB&ToranyofitsSubsidiariessinceJanuary1,2016,ineachcase,whichwouldreasonablybeexpectedtohave,eitherindividuallyorintheaggregate,aMaterialAdverseEffectonBB&T.
4.6FinancialStatements.
(a)ThefinancialstatementsofBB&TanditsSubsidiariesincluded(orincorporatedbyreference)intheBB&TReports(includingtherelatednotes,whereapplicable)(i)havebeenpreparedfrom,andareinaccordancewith,thebooksandrecordsofBB&TanditsSubsidiaries,(ii)fairlypresentinallmaterialrespectstheconsolidatedresultsofoperations,cashflows,changesinshareholders’equityandconsolidatedfinancialpositionofBB&TanditsSubsidiariesfortherespectivefiscalperiodsorasoftherespectivedatesthereinsetforth(subjectinthecaseofunauditedstatementstoyear-endauditadjustmentsnormalinnatureandamount),(iii)complied,asoftheirrespectivedatesoffilingwiththeSEC,inallmaterialrespectswithapplicableaccountingrequirementsandwiththepublishedrulesandregulationsoftheSECwithrespectthereto,and(iv)havebeenpreparedinaccordancewithGAAPconsistentlyappliedduringtheperiodsinvolved,except,ineachcase,asindicatedinsuchstatementsorinthenotesthereto.SinceDecember31,2015,noindependentpublicaccountingfirmofBB&Thasresigned(orinformedBB&Tthatitintendstoresign)orbeendismissedasindependentpublicaccountantsofBB&TasaresultoforinconnectionwithanydisagreementswithBB&Tonamatterofaccountingprinciplesorpractices,financialstatementdisclosureorauditingscopeorprocedure.
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(b)Exceptaswouldnotreasonablybeexpectedtohave,eitherindividuallyorintheaggregate,aMaterialAdverseEffectonBB&T,neitherBB&TnoranyofitsSubsidiarieshasanyliabilityofanynaturewhatsoever(whetherabsolute,accrued,contingentorotherwiseandwhetherdueortobecomedue),exceptforthoseliabilitiesthatarereflectedorreservedagainstontheconsolidatedbalancesheetofBB&TincludedinitsQuarterlyReportonForm10-QforthefiscalquarterendedSeptember30,2018(includinganynotesthereto)andforliabilitiesincurredintheordinarycourseofbusinessconsistentwithpastpracticesinceSeptember30,2018,orinconnectionwiththisAgreementandthetransactionscontemplatedhereby.
(c)Therecords,systems,controls,dataandinformationofBB&TanditsSubsidiariesarerecorded,stored,maintainedandoperatedundermeans(includinganyelectronic,mechanicalorphotographicprocess,whethercomputerizedornot)thatareundertheexclusiveownershipofBB&ToritsSubsidiariesoraccountants(includingallmeansofaccesstheretoandtherefrom),exceptforanynon-exclusiveownershipthatwouldnotreasonablybeexpectedtohaveaMaterialAdverseEffectonBB&T.BB&T(x)hasimplementedandmaintainsdisclosurecontrolsandprocedures(asdefinedinRule13a-15(e)oftheExchangeAct)toensurethatmaterialinformationrelatingtoBB&T,includingitsSubsidiaries,ismadeknowntothechiefexecutiveofficerandthechieffinancialofficerofBB&TbyotherswithinthoseentitiesasappropriatetoallowtimelydecisionsregardingrequireddisclosuresandtomakethecertificationsrequiredbytheExchangeActandSections302and906oftheSarbanes-OxleyAct,and(y)hasdisclosed,basedonitsmostrecentevaluationpriortothedatehereof,toBB&T’soutsideauditorsandtheauditcommitteeofBB&T’sBoardofDirectors(i)anysignificantdeficienciesandmaterialweaknessesinthedesignoroperationofinternalcontroloverfinancialreporting(asdefinedinRule13a-15(f)oftheExchangeAct)whicharereasonablylikelytoadverselyaffectBB&T’sabilitytorecord,process,summarizeandreportfinancialinformation,and(ii)anyfraud,whetherornotmaterial,thatinvolvesmanagementorotheremployeeswhohaveasignificantroleinBB&T’sinternalcontrolsoverfinancialreporting.ThesedisclosuresweremadeinwritingbymanagementtoBB&T’sauditorsandauditcommittee.ThereisnoreasontobelievethatBB&T’soutsideauditorsanditschiefexecutiveofficerandchieffinancialofficerwillnotbeabletogivethecertificationsandattestationsrequiredpursuanttotherulesandregulationsadoptedpursuanttoSection404oftheSarbanes-OxleyAct,withoutqualification,whennextdue.
(d)SinceJanuary1,2016,(i)neitherBB&TnoranyofitsSubsidiaries,nor,totheknowledgeofBB&T,anydirector,officer,auditor,accountantorrepresentativeofBB&ToranyofitsSubsidiaries,hasreceivedorotherwisehadorobtainedknowledgeofanymaterialcomplaint,allegation,assertionorclaim,whetherwrittenororal,regardingtheaccountingorauditingpractices,procedures,methodologiesormethods(includingwithrespecttoloanlossreserves,write-downs,charge-offsandaccruals)ofBB&ToranyofitsSubsidiariesortheirrespectiveinternalaccountingcontrols,includinganymaterialcomplaint,allegation,assertionorclaimthatBB&ToranyofitsSubsidiarieshasengagedinquestionableaccountingorauditingpractices,and(ii)noemployeeoforattorneyrepresentingBB&ToranyofitsSubsidiaries,whetherornotemployedbyBB&ToranyofitsSubsidiaries,hasreportedevidenceofamaterialviolationofsecuritieslawsor
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bankinglaws,breachoffiduciarydutyorsimilarviolationbyBB&ToranyofitsSubsidiariesoranyoftheirrespectiveofficers,directors,employeesoragentstotheBoardofDirectorsofBB&ToranycommitteethereofortheBoardofDirectorsorsimilargoverningbodyofanyBB&TSubsidiaryoranycommitteethereof,ortotheknowledgeofBB&T,toanydirectororofficerofBB&ToranyBB&TSubsidiary.
4.7Broker’sFees.WiththeexceptionoftheengagementofRBCCapitalMarkets,LLC,neitherBB&TnoranyBB&TSubsidiarynoranyoftheirrespectiveofficersordirectorshasemployedanybroker,finderorfinancialadvisororincurredanyliabilityforanybroker’sfees,commissionsorfinder’sfeesinconnectionwiththeMergerorrelatedtransactionscontemplatedbythisAgreement.BB&ThasdisclosedtoSunTrustasofthedatehereoftheaggregatefeesprovidedforinconnectionwiththeengagementbyBB&TofRBCCapitalMarkets,LLCrelatedtotheMergerandtheothertransactionscontemplatedhereunder.
4.8AbsenceofCertainChangesorEvents.
(a)SinceDecember31,2017,therehasnotbeenanyeffect,change,event,circumstance,condition,occurrenceordevelopmentthathashadorwouldreasonablybeexpectedtohave,eitherindividuallyorintheaggregate,aMaterialAdverseEffectonBB&T.
(b)SinceDecember31,2017,BB&TanditsSubsidiarieshavecarriedontheirrespectivebusinessesinallmaterialrespectsintheordinarycourse.
4.9LegalandRegulatoryProceedings.
(a)Exceptaswouldnotreasonablybeexpectedto,eitherindividuallyorintheaggregate,haveaMaterialAdverseEffectonBB&T,neitherBB&TnoranyofitsSubsidiariesisapartytoany,andtherearenooutstandingorpendingor,totheknowledgeofBB&T,threatened,legal,administrative,arbitralorotherproceedings,claims,actionsorgovernmentalorregulatoryinvestigationsofanynatureagainstBB&ToranyofitsSubsidiariesoranyoftheircurrentorformerdirectorsorexecutiveofficersorchallengingthevalidityorproprietyofthetransactionscontemplatedbythisAgreement.
(b)Thereisnomaterialinjunction,order,judgment,decree,orregulatoryrestrictionimposeduponBB&T,anyofitsSubsidiariesortheassetsofBB&ToranyofitsSubsidiaries(orthat,uponconsummationoftheMerger,wouldapplytotheSurvivingEntityoranyofitsaffiliates).
4.10TaxesandTaxReturns.EachofBB&TanditsSubsidiarieshasdulyandtimelyfiled(includingallapplicableextensions)allmaterialTaxReturnsinalljurisdictionsinwhichTaxReturnsarerequiredtobefiledbyit,andallsuchTaxReturnsaretrue,correct,andcompleteinallmaterialrespects.NeitherBB&TnoranyofitsSubsidiariesisthebeneficiaryofanyextensionoftimewithinwhichtofileanymaterialTaxReturn(otherthanextensionstofileTaxReturnsobtainedintheordinarycourse).AllmaterialTaxesofBB&TanditsSubsidiaries(whetherornotshownonanyTaxReturns)thatareduehavebeenfullyandtimelypaid.EachofBB&TanditsSubsidiarieshaswithheldandpaidallmaterialtaxesrequiredtohavebeenwithheldandpaidinconnectionwithamountspaidorowingtoanyemployee,creditor,shareholder,independentcontractororotherthirdparty.NeitherBB&TnoranyofitsSubsidiarieshasgrantedanyextensionorwaiverofthelimitation
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periodapplicabletoanymaterialTaxthatremainsineffect.NeitherBB&TnoranyofitsSubsidiarieshasreceivedwrittennoticeofassessmentorproposedassessmentinconnectionwithanymaterialamountofTaxes,andtherearenothreatenedinwritingorpendingdisputes,claims,audits,examinationsorotherproceedingsregardinganymaterialTaxofBB&TanditsSubsidiariesortheassetsofBB&TanditsSubsidiaries.NeitherBB&TnoranyofitsSubsidiariesisapartytoorisboundbyanyTaxsharing,allocationorindemnificationagreementorarrangement(otherthansuchanagreementorarrangementexclusivelybetweenoramongBB&TanditsSubsidiaries).NeitherBB&TnoranyofitsSubsidiaries(A)hasbeenamemberofanaffiliatedgroupfilingaconsolidatedfederalincomeTaxReturnforwhichthestatuteoflimitationsisopen(otherthanagroupthecommonparentofwhichwasBB&T)or(B)hasanyliabilityfortheTaxesofanyperson(otherthanBB&ToranyofitsSubsidiaries)underTreasuryRegulationSection1.1502-6(oranysimilarprovisionofstate,localorforeignlaw),asatransfereeorsuccessor,bycontractorotherwise.NeitherBB&TnoranyofitsSubsidiarieshasbeen,withinthepasttwo(2)yearsorotherwiseaspartofa“plan(orseriesofrelatedtransactions)”withinthemeaningofSection355(e)oftheCodeofwhichtheMergerisalsoapart,a“distributingcorporation”ora“controlledcorporation”(withinthemeaningofSection355(a)(1)(A)oftheCode)inadistributionofstockintendingtoqualifyfortax-freetreatmentunderSection355oftheCode.NeitherBB&TnoranyofitsSubsidiarieshasparticipatedina“reportabletransaction”withinthemeaningofTreasuryRegulationSection1.6011-4(b)(1).Atnotimeduringthepastfive(5)yearshasBB&TbeenaUnitedStatesrealpropertyholdingcorporationwithinthemeaningofSection897(c)(2)oftheCode.
4.11Employees.
(a)Exceptaswouldnotreasonablybeexpectedtohave,eitherindividuallyorintheaggregate,aMaterialAdverseEffectonBB&T,eachBB&TBenefitPlanhasbeenestablished,operatedandadministeredinaccordancewithitstermsandtherequirementsofallapplicablelaws,includingERISAandtheCode.ForpurposesofthisAgreement,theterm“BB&TBenefitPlans”meansallemployeebenefitplans(asdefinedinSection3(3)ofERISA),whetherornotsubjecttoERISA,andallequity,bonusorincentive,deferredcompensation,retireemedicalorlifeinsurance,supplementalretirement,severance,terminationchangeincontrol,retention,employment,welfare,insurance,medical,fringeorotherbenefitplans,programs,agreements,contracts,policies,arrangementsorremunerationofanykindwithrespecttowhichBB&ToranySubsidiaryoranytradeorbusinessofBB&ToranyofitsSubsidiaries,whetherornotincorporated,allofwhichtogetherwithBB&Twouldbedeemeda“singleemployer”withinthemeaningofSection4001ofERISA(a“BB&TERISAAffiliate”),isapartyorhasanycurrentorfutureobligationorthataremaintained,contributedtoorsponsoredbyBB&ToranyofitsSubsidiariesoranyBB&TERISAAffiliateforthebenefitofanycurrentorformeremployee,officer,directororindependentcontractorofBB&ToranyofitsSubsidiariesoranyBB&TERISAAffiliate,excluding,ineachcase,anyMultiemployerPlan.
(b)BB&ThasmadeavailabletoSunTrusttrueandcompletecopiesofeachmaterialBB&TBenefitPlanandthefollowingrelateddocuments,totheextentapplicable:(i)allsummaryplandescriptions,amendments,modificationsormaterialsupplements,(ii)themostrecentannualreport(Form5500)filedwiththeIRS,(iii)themostrecentlyreceivedIRSdeterminationletter,and(iv)themostrecentlypreparedactuarialreport.
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(c)TheIRShasissuedafavorabledeterminationletteroropinionwithrespecttoeachBB&TBenefitPlanthatisintendedtobequalifiedunderSection401(a)oftheCode(the“BB&TQualifiedPlans”)andtherelatedtrust,whichletteroropinionhasnotbeenrevoked(norhasrevocationbeenthreatened),and,totheknowledgeofBB&T,therearenoexistingcircumstancesandnoeventshaveoccurredthatwouldreasonablybeexpectedtoadverselyaffectthequalifiedstatusofanyBB&TQualifiedPlanortherelatedtrust.
(d)ExceptaswouldnotresultinanymaterialliabilitytoBB&TanditsSubsidiaries,takenasawhole,withrespecttoeachBB&TBenefitPlanthatissubjecttoSection302orTitleIVofERISAorSection412,430or4971oftheCode:(i)theminimumfundingstandardunderSection302ofERISAandSections412and430oftheCodehasbeensatisfiedandnowaiverofanyminimumfundingstandardoranyextensionofanyamortizationperiodhasbeenrequestedorgranted,(ii)nosuchplanisin“at-risk”statusforpurposesofSection430oftheCode,(iii)thepresentvalueofaccruedbenefitsundersuchBB&TBenefitPlan,basedupontheactuarialassumptionsusedforfundingpurposesinthemostrecentactuarialreportpreparedbysuchBB&TBenefitPlan’sactuarywithrespecttosuchBB&TBenefitPlan,didnot,asofitslatestvaluationdate,exceedthethencurrentfairmarketvalueoftheassetsofsuchBB&TBenefitPlanallocabletosuchaccruedbenefits,(iv)noreportableeventwithinthemeaningofSection4043(c)ofERISAforwhichthe30-daynoticerequirementhasnotbeenwaivedhasoccurred,(v)allpremiumstothePBGChavebeentimelypaidinfull,(vi)noliability(otherthanforpremiumstothePBGC)underTitleIVofERISAhasbeenorisexpectedtobeincurredbyBB&ToranyofitsSubsidiaries,and(vii)thePBGChasnotinstitutedproceedingstoterminateanysuchBB&TBenefitPlan.
(e)NoneofBB&TanditsSubsidiariesnoranyBB&TERISAAffiliatehas,atanytimeduringthelastsix(6)years,contributedtoorbeenobligatedtocontributetoaMultiemployerPlanoraMultipleEmployerPlan,andnoneofBB&TanditsSubsidiariesnoranyBB&TERISAAffiliatehasincurredanyliabilitythathasnotbeensatisfiedtoaMultiemployerPlanorMultipleEmployerPlanasaresultofacompleteorpartialwithdrawal(asthosetermsaredefinedinPartIofSubtitleEofTitleIVofERISA)fromaMultiemployerPlanorMultipleEmployerPlan.
(f)ExceptaswouldnotresultinanymaterialliabilitytoBB&TanditsSubsidiaries,takenasawhole,noBB&TBenefitPlanprovidesforanypost-employmentorpost-retirementhealthormedicalorlifeinsurancebenefitsforretired,formerorcurrentemployeesorbeneficiariesordependentsthereof,exceptasrequiredbySection4980BoftheCode.
(g)Exceptaswouldnotreasonablybeexpectedtohave,eitherindividuallyorintheaggregate,aMaterialAdverseEffectonBB&T,allcontributionsrequiredtobemadetoanyBB&TBenefitPlanbyapplicablelaworbyanyplandocumentorothercontractualundertaking,andallpremiumsdueorpayablewithrespecttoinsurancepoliciesfundinganyBB&TBenefitPlan,foranyperiodthroughthedatehereof,havebeentimelymadeorpaidinfullor,totheextentnotrequiredtobemadeorpaidonorbeforethedatehereof,havebeenfullyreflectedonthebooksandrecordsofBB&T.
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(h)Therearenopendingorthreatenedclaims(otherthanclaimsforbenefitsintheordinarycourse),lawsuitsorarbitrationswhichhavebeenassertedorinstituted,and,toBB&T’sknowledge,nosetofcircumstancesexistswhichmayreasonablygiverisetoaclaimorlawsuit,againsttheBB&TBenefitPlans,anyfiduciariesthereofwithrespecttotheirdutiestotheBB&TBenefitPlansortheassetsofanyofthetrustsunderanyoftheBB&TBenefitPlansthatwouldreasonablybeexpectedtoresultinanyliabilityofBB&ToranyofitsSubsidiariesinanamountthatwouldbematerialtoBB&TanditsSubsidiaries,takenasawhole.
(i)Exceptaswouldnotreasonablybeexpectedtohave,eitherindividuallyorintheaggregate,aMaterialAdverseEffectonBB&T,noneofBB&TanditsSubsidiariesnoranyBB&TERISAAffiliatehasengagedinany“prohibitedtransaction”(asdefinedinSection4975oftheCodeorSection406ofERISA)whichwouldreasonablybeexpectedtosubjectanyoftheBB&TBenefitPlansortheirrelatedtrusts,BB&T,anyofitsSubsidiariesoranyBB&TERISAAffiliatetoanymaterialTaxorpenaltyimposedunderSection4975oftheCodeorSection502ofERISA.
(j)NeithertheexecutionanddeliveryofthisAgreementnortheconsummationofthetransactionscontemplatedherebywill(eitheraloneorinconjunctionwithanyotherevent)resultin,theaccelerationofvesting,exercisability,fundingordeliveryof,orincreaseintheamountorvalueof,anypayment,rightorotherbenefittoanyemployee,officer,directororotherserviceproviderofBB&ToranyofitsSubsidiaries,orresultinanylimitationontherightofBB&ToranyofitsSubsidiariestoamend,merge,terminateorreceiveareversionofassetsfromanyBB&TBenefitPlanorrelatedtrustonoraftertheEffectiveTime.Withoutlimitingthegeneralityoftheforegoing,noamountpaidorpayable(whetherincash,inproperty,orintheformofbenefits)byBB&ToranyofitsSubsidiariesinconnectionwiththetransactionscontemplatedhereby(eithersolelyasaresultthereoforasaresultofsuchtransactionsinconjunctionwithanyotherevent)willbean“excessparachutepayment”withinthemeaningofSection280GoftheCode.
(k)NoBB&TBenefitPlanprovidesforthegross-uporreimbursementofTaxesunderSection409Aor4999oftheCode,orotherwise.
(l)Exceptaswouldnotreasonablybeexpectedtohave,eitherindividuallyorintheaggregate,aMaterialAdverseEffectonBB&T,therearenopendingor,toBB&T’sknowledge,threatenedlaborgrievancesorunfairlaborpracticeclaimsorchargesagainstBB&ToranyofitsSubsidiaries,oranystrikesorotherlabordisputesagainstBB&ToranyofitsSubsidiaries.NeitherBB&TnoranyofitsSubsidiariesispartytoorboundbyanycollectivebargainingorsimilaragreementwithanylabororganization,orworkrulesorpracticesagreedtowithanylabororganizationoremployeeassociationapplicabletoemployeesofBB&ToranyofitsSubsidiariesand,exceptaswouldnotreasonablybelikelytohave,eitherindividuallyorintheaggregate,aMaterialAdverseEffectonBB&T,therearenopendingor,totheknowledgeofBB&T,threatenedorganizingeffortsbyanyunionorothergroupseekingtorepresentanyemployeesofBB&ToranyofitsSubsidiaries.
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4.12SECReports.BB&ThaspreviouslymadeavailabletoSunTrustanaccurateandcompletecopyofeach(a)finalregistrationstatement,prospectus,report,scheduleanddefinitiveproxystatementfiledwithorfurnishedtotheSECsinceDecember31,2015byBB&TpursuanttotheSecuritiesActortheExchangeAct(the“BB&TReports”)and(b)communicationmailedbyBB&TtoitsshareholderssinceDecember31,2015andpriortothedatehereof,andnosuchBB&TReportorcommunication,asofthedatethereof(and,inthecaseofregistrationstatementsandproxystatements,onthedatesofeffectivenessandthedatesoftherelevantmeetings,respectively),containedanyuntruestatementofamaterialfactoromittedtostateanymaterialfactrequiredtobestatedthereinornecessaryinordertomakethestatementstherein,inlightofthecircumstancesinwhichtheyweremade,notmisleading,exceptthatinformationfiledorfurnishedasofalaterdate(butbeforethedateofthisAgreement)shallbedeemedtomodifyinformationasofanearlierdate.SinceDecember31,2015,asoftheirrespectivedates,allBB&TReportsfiledorfurnishedundertheSecuritiesActandtheExchangeActcompliedinallmaterialrespectswiththepublishedrulesandregulationsoftheSECwithrespectthereto.NoexecutiveofficerofBB&ThasfailedinanyrespecttomakethecertificationsrequiredofhimorherunderSection302or906oftheSarbanes-OxleyAct.
4.13CompliancewithApplicableLaw.
(a)BB&TandeachofitsSubsidiarieshold,andhaveatalltimessinceDecember31,2015,held,alllicenses,registrations,franchises,certificates,variances,permitschartersandauthorizationsnecessaryforthelawfulconductoftheirrespectivebusinessesandownershipoftheirrespectiveproperties,rightsandassetsunderandpursuanttoeach(andhavepaidallfeesandassessmentsdueandpayableinconnectiontherewith),exceptwhereneitherthecostoffailuretoholdnorthecostofobtainingandholdingsuchlicense,registration,franchise,certificate,variance,permit,charterorauthorization(northefailuretopayanyfeesorassessments)would,eitherindividuallyorintheaggregate,reasonablybeexpectedtohaveaMaterialAdverseEffectonBB&T,andtotheknowledgeofBB&T,nosuspensionorcancellationofanysuchnecessarylicense,registration,franchise,certificate,variance,permit,charterorauthorizationisthreatened.
(b)Exceptaswouldnot,eitherindividuallyorintheaggregate,reasonablybeexpectedtohaveaMaterialAdverseEffectonBB&T,BB&TandeachofitsSubsidiarieshavecompliedwithandarenotindefaultorviolationunderanyapplicablelaw,statute,order,rule,regulation,policyand/orguidelineofanyGovernmentalEntityrelatingtoBB&ToranyofitsSubsidiaries,includingalllawsrelatedtodataprotectionorprivacy(includinglawsrelatingtotheprivacyandsecurityofPersonalData),theUSAPATRIOTAct,theBankSecrecyAct,theEqualCreditOpportunityActandRegulationB,theFairHousingAct,theCommunityReinvestmentAct,theFairCreditReportingAct,theTruthinLendingActandRegulationZ,theHomeMortgageDisclosureAct,theFairDebtCollectionPracticesAct,theElectronicFundTransferAct,theDodd-FrankWallStreetReformandConsumerProtectionAct,anyregulationspromulgatedbytheConsumerFinancialProtectionBureau,theInteragencyPolicyStatementonRetailSalesofNondepositInvestmentProducts,theSAFEMortgageLicensingActof2008,theRealEstateSettlementProceduresActandRegulationX,TitleVoftheGramm-Leach-BlileyAct,anyandallsanctionsorregulationsenforcedbytheOfficeofForeignAssetsControloftheUnitedStatesDepartmentofTreasuryandanyotherlaw,policyorguidelinerelatingtobank
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secrecy,discriminatorylending,financingorleasingpractices,consumerprotection,moneylaunderingprevention,foreignassetscontrol,U.S.sanctionslawsandregulations,Sections23Aand23BoftheFederalReserveAct,theSarbanes-OxleyAct,andallagencyrequirementsrelatingtotheorigination,saleandservicingofmortgageandconsumerloans.
(c)BB&TSubsidiaryBankhasaCommunityReinvestmentActratingof“satisfactory”orbetter.
(d)BB&Tmaintainsawritteninformationprivacyandsecurityprogramthatmaintainsreasonablemeasurestoprotecttheprivacy,confidentialityandsecurityofallPersonalDataagainstanySecurityBreach.TotheknowledgeofBB&T,BB&ThasnotexperiencedanySecurityBreachthatwould,individuallyorintheaggregate,reasonablybeexpectedtohaveaMaterialAdverseEffectonBB&T.TotheknowledgeofBB&T,therearenodatasecurityorothertechnologicalvulnerabilitieswithrespecttoitsinformationtechnologysystemsornetworksthat,individuallyorintheaggregate,wouldreasonablybeexpectedtohaveaMaterialAdverseEffectonBB&T.
(e)Withoutlimitation,noneofBB&T,oranyofitsSubsidiaries,ortotheknowledgeofBB&T,anydirector,officer,employee,agentorotherpersonactingonbehalfofBB&ToranyofitsSubsidiarieshas,directlyorindirectly,(i)usedanyfundsofBB&ToranyofitsSubsidiariesforunlawfulcontributions,unlawfulgifts,unlawfulentertainmentorotherexpensesrelatingtopoliticalactivity,(ii)madeanyunlawfulpaymenttoforeignordomesticgovernmentalofficialsoremployeesortoforeignordomesticpoliticalpartiesorcampaignsfromfundsofBB&ToranyofitsSubsidiaries,(iii)violatedanyprovisionthatwouldresultintheviolationoftheForeignCorruptPracticesActof1977,asamended,oranysimilarlaw,(iv)establishedormaintainedanyunlawfulfundofmoniesorotherassetsofBB&ToranyofitsSubsidiaries,(v)madeanyfraudulententryonthebooksorrecordsofBB&ToranyofitsSubsidiaries,or(vi)madeanyunlawfulbribe,unlawfulrebate,unlawfulpayoff,unlawfulinfluencepayment,unlawfulkickbackorotherunlawfulpaymenttoanyperson,privateorpublic,regardlessofform,whetherinmoney,propertyorservices,toobtainfavorabletreatmentinsecuringbusiness,toobtainspecialconcessionsforBB&ToranyofitsSubsidiaries,topayforfavorabletreatmentforbusinesssecuredortopayforspecialconcessionsalreadyobtainedforBB&ToranyofitsSubsidiaries,oriscurrentlysubjecttoanyUnitedStatessanctionsadministeredbytheOfficeofForeignAssetsControloftheUnitedStatesTreasuryDepartment,exceptineachcaseaswouldnot,eitherindividuallyorintheaggregate,reasonablybeexpectedtohaveaMaterialAdverseEffect.
(f)Asofthedatehereof,BB&T,BB&TSubsidiaryBankandeachotherinsureddepositoryinstitutionSubsidiaryofBB&Tis“well-capitalized”(assuchtermisdefinedintherelevantregulationoftheinstitution’sprimarybankregulator).
(g)Exceptaswouldnot,eitherindividuallyorintheaggregate,reasonablybeexpectedtohaveaMaterialAdverseEffectonBB&T,(i)BB&TandeachofitsSubsidiarieshaveproperlyadministeredallaccountsforwhichitactsasafiduciary,includingaccountsforwhichitservesasatrustee,agent,custodian,personalrepresentative,guardian,conservatororinvestmentadvisor,inaccordancewiththetermsofthegoverningdocumentsandapplicablestate,federalandforeignlaw;and(ii)noneofBB&T,anyofitsSubsidiaries,oranyofitsoritsSubsidiaries’directors,officersoremployees,hascommittedanybreachoftrust
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orfiduciarydutywithrespecttoanysuchfiduciaryaccount,andtheaccountingsforeachsuchfiduciaryaccountaretrueandcorrectandaccuratelyreflecttheassetsandresultsofsuchfiduciaryaccount.
4.14CertainContracts.
(a)ExceptassetforthinSection4.14(a)oftheBB&TDisclosureScheduleorasfiledwithanyBB&TReports,asofthedatehereof,neitherBB&TnoranyofitsSubsidiariesisapartytoorboundbyanycontract,arrangement,commitmentorunderstanding(whetherwrittenororal),butexcludinganyBB&TBenefitPlan:
(i)whichisa“materialcontract”(assuchtermisdefinedinItem601(b)(10)ofRegulationS-KoftheSEC);
(ii)whichcontainsaprovisionthatmateriallyrestrictstheconductofanylineofbusinessbyBB&ToranyofitsSubsidiariesoruponconsummationoftheMergerwillmateriallyrestricttheabilityoftheSurvivingEntityoranyofitsaffiliatestoengageinanylineofbusinessorinanygeographicregion;
(iii)withortoalaborunionorguild(includinganycollectivebargainingagreement);
(iv)anyofthebenefitsoforobligationsunderwhichwillariseorbeincreasedoracceleratedbytheoccurrenceoftheexecutionanddeliveryofthisAgreement,receiptoftheRequisiteBB&TVoteortheannouncementorconsummationofanyofthetransactionscontemplatedbythisAgreement,orunderwhicharightofcancellationorterminationwillariseasaresultthereof,orthevalueofanyofthebenefitsofwhichwillbecalculatedonthebasisofanyofthetransactionscontemplatedbythisAgreement,wheresuchincreaseoraccelerationofbenefitsorobligations,rightofcancellationortermination,orchangeincalculationofvalueofbenefitswould,eitherindividuallyorintheaggregate,reasonablybeexpectedtohaveaMaterialAdverseEffectonBB&T;
(v)(A)thatrelatestotheincurrenceofindebtednessbyBB&ToranyofitsSubsidiaries,includinganysaleandleasebacktransactions,capitalizedleasesandothersimilarfinancingarrangements(otherthandepositliabilities,tradepayables,federalfundspurchased,advancesandloansfromtheFederalHomeLoanBankandsecuritiessoldunderagreementstorepurchase,ineachcaseincurredintheordinarycourseofbusinessconsistentwithpastpractice),or(B)thatprovidesfortheguarantee,support,indemnification,assumptionorendorsementbyBB&ToranyofitsSubsidiariesof,oranysimilarcommitmentbyBB&ToranyofitsSubsidiarieswithrespectto,theobligations,liabilitiesorindebtednessofanyotherperson,inthecaseofeachofclauses(A)and(B),intheprincipalamountof$25,000,000ormore;
(vi)thatgrantsanyrightoffirstrefusal,rightoffirstofferorsimilarrightwithrespecttoanymaterialassets,rightsorpropertiesofBB&ToritsSubsidiaries;
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(vii)thatisaconsultingagreementordataprocessing,softwareprogrammingorlicensingcontractinvolvingthepaymentofmorethan$10,000,000perannum(otherthananysuchcontractswhichareterminablebyBB&ToranyofitsSubsidiariesonsixty(60)daysorlessnoticewithoutanyrequiredpaymentorotherconditions,otherthantheconditionofnotice);
(viii)thatisasettlement,consentorsimilaragreementandcontainsanymaterialcontinuingobligationsofBB&ToranyofitsSubsidiaries;or
(ix)thatrelatestotheacquisitionordispositionofanyperson,businessorassetandunderwhichBB&ToritsSubsidiarieshaveormayhaveamaterialobligationorliability.
Eachcontract,arrangement,commitmentorunderstandingofthetypedescribedinthisSection4.14(a),whetherornotsetforthintheBB&TDisclosureSchedule,isreferredtohereinasa“BB&TContract.”BB&ThasmadeavailabletoSunTrusttrue,correctandcompletecopiesofeachBB&TContractineffectasofthedatehereof.
(b)(i)EachBB&TContractisvalidandbindingonBB&ToroneofitsSubsidiaries,asapplicable,andinfullforceandeffect,exceptas,eitherindividuallyorintheaggregate,wouldnotreasonablybeexpectedtohaveaMaterialAdverseEffectonBB&T,(ii)BB&TandeachofitsSubsidiarieshaveinallmaterialrespectscompliedwithandperformedallobligationsrequiredtobecompliedwithorperformedbyanyofthemtodateundereachBB&TContract,exceptwheresuchnoncomplianceornonperformance,eitherindividuallyorintheaggregate,wouldnotreasonablybeexpectedtohaveaMaterialAdverseEffectonBB&T,(iii)totheknowledgeofBB&T,eachthird-partycounterpartytoeachBB&TContracthasinallmaterialrespectscompliedwithandperformedallobligationsrequiredtobecompliedwithandperformedbyittodateundersuchBB&TContract,exceptwheresuchnoncomplianceornonperformance,eitherindividuallyorintheaggregate,wouldnotreasonablybeexpectedtohaveaMaterialAdverseEffectonBB&T,(iv)neitherBB&TnoranyofitsSubsidiarieshasknowledgeof,orhasreceivednoticeof,anyviolationofanyBB&TContractbyanyoftheotherpartiestheretowhichwouldreasonablybeexpectedtohave,eitherindividuallyorintheaggregate,aMaterialAdverseEffectonBB&Tand(v)noeventorconditionexistswhichconstitutesor,afternoticeorlapseoftimeorboth,willconstitute,amaterialbreachordefaultonthepartofBB&ToranyofitsSubsidiariesor,totheknowledgeofBB&T,anyotherpartythereto,oforunderanysuchBB&TContract,exceptwheresuchbreachordefault,eitherindividuallyorintheaggregate,wouldnotreasonablybeexpectedtohaveaMaterialAdverseEffectonBB&T.
4.15AgreementswithRegulatoryAgencies.SubjecttoSection9.14,neitherBB&TnoranyofitsSubsidiariesissubjecttoanycease-and-desistorotherorderorenforcementactionissuedby,orisapartytoanywrittenagreement,consentagreementormemorandumofunderstandingwith,orisapartytoanycommitmentletterorsimilarundertakingto,orissubjecttoanyorderordirectiveby,orhasbeenorderedtopayanycivilmoneypenaltyby,orhasbeensinceJanuary1,2016,arecipientofanysupervisoryletterfrom,orsinceJanuary1,2016,hasadoptedanypolicies,proceduresorboardresolutionsattherequestorsuggestionof,anyRegulatoryAgencyorotherGovernmentalEntitythatcurrentlyrestrictsinanymaterialrespectorwould
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reasonablybeexpectedtorestrictinanymaterialrespecttheconductofitsbusinessorthatinanymaterialmannerrelatestoitscapitaladequacy,itsabilitytopaydividends,itscreditorriskmanagementpolicies,itsmanagementoritsbusiness(each,whetherornotsetforthintheBB&TDisclosureSchedule,a“BB&TRegulatoryAgreement”),norhasBB&ToranyofitsSubsidiariesbeenadvisedsinceJanuary1,2016,byanyRegulatoryAgencyorotherGovernmentalEntitythatitisconsideringissuing,initiating,orderingorrequestinganysuchBB&TRegulatoryAgreement.
4.16EnvironmentalMatters.Exceptaswouldnotreasonablybeexpectedtohave,eitherindividuallyorintheaggregate,aMaterialAdverseEffectonBB&T,BB&TanditsSubsidiariesareincompliance,andhavecomplied,withallEnvironmentalLaws.Therearenolegal,administrative,arbitralorotherproceedings,claimsoractionsor,totheknowledgeofBB&T,anyprivateenvironmentalinvestigationsorremediationactivitiesorgovernmentalinvestigationsofanynatureseekingtoimpose,orthatcouldreasonablybeexpectedtoresultintheimposition,onBB&ToranyofitsSubsidiariesofanyliabilityorobligationarisingunderanyEnvironmentalLawpendingorthreatenedagainstBB&T,whichliabilityorobligationwouldreasonablybeexpectedtohave,eitherindividuallyorintheaggregate,aMaterialAdverseEffectonBB&T.TotheknowledgeofBB&T,thereisnoreasonablebasisforanysuchproceeding,claim,actionorgovernmentalinvestigationthatwouldimposeanyliabilityorobligationthatwouldreasonablybeexpectedtohave,eitherindividuallyorintheaggregate,aMaterialAdverseEffectonBB&T.BB&Tisnotsubjecttoanyagreement,order,judgment,decree,letteragreementormemorandumofagreementbyorwithanycourt,GovernmentalEntity,RegulatoryAgencyorotherthirdpartyimposinganyliabilityorobligationwithrespecttotheforegoingthatwouldreasonablybeexpectedtohave,eitherindividuallyorintheaggregate,aMaterialAdverseEffectonBB&T.
4.17InvestmentSecuritiesandCommodities.EachofBB&TanditsSubsidiarieshasgoodtitletoallsecuritiesandcommoditiesownedbyit(exceptthosesoldunderrepurchaseagreements)whicharematerialtoBB&T’sbusinessonaconsolidatedbasis,freeandclearofanyLien,excepttotheextentsuchsecuritiesorcommoditiesarepledgedintheordinarycourseofbusinesstosecureobligationsofBB&ToritsSubsidiaries.SuchsecuritiesandcommoditiesarevaluedonthebooksofBB&TinaccordancewithGAAPinallmaterialrespects.
4.18RealProperty.BB&ToraBB&TSubsidiary(a)hasgoodandmarketabletitletoalltherealpropertyreflectedinthelatestauditedbalancesheetincludedintheBB&TReportsasbeingownedbyBB&ToraBB&TSubsidiaryoracquiredafterthedatethereofwhicharematerialtoBB&T’sbusinessonaconsolidatedbasis(exceptpropertiessoldorotherwisedisposedofsincethedatethereofintheordinarycourseofbusiness)(the“BB&TOwnedProperties”),freeandclearofallmaterialLiens,exceptforPermittedEncumbrances,and(b)isthelesseeofallleaseholdestatesreflectedinthelatestauditedfinancialstatementsincludedinsuchBB&TReportsoracquiredafterthedatethereofwhicharematerialtoBB&T’sbusinessonaconsolidatedbasis(exceptforleasesthathaveexpiredbytheirtermssincethedatethereof)(suchleaseholdestates,collectivelywiththeBB&TOwnedProperties,the“BB&TRealProperty”),freeandclearofallmaterialLiens,exceptforPermittedEncumbrances,andisinpossessionofthepropertiespurportedtobeleasedthereunder,andeachsuchleaseisvalidwithoutdefaultthereunderbythelesseeor,totheknowledgeofBB&T,thelessor.Therearenopendingor,totheknowledgeofBB&T,threatenedcondemnationproceedingsagainsttheBB&TRealProperty.
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4.19IntellectualProperty.BB&TandeachofitsSubsidiariesowns,orislicensedtouse(ineachcase,freeandclearofanymaterialLiens),allIntellectualPropertynecessaryfortheconductofitsbusinessascurrentlyconducted.Exceptaswouldnotreasonablybeexpectedtohave,eitherindividuallyorintheaggregate,aMaterialAdverseEffectonBB&T:(a)(i)totheknowledgeofBB&T,theuseofanyIntellectualPropertybyBB&TanditsSubsidiariesdoesnotinfringe,misappropriateorotherwiseviolatetherightsofanypersonandisinaccordancewithanyapplicablelicensepursuanttowhichBB&ToranyBB&TSubsidiaryacquiredtherighttouseanyIntellectualProperty,and(ii)nopersonhasassertedinwritingtoBB&TthatBB&ToranyofitsSubsidiarieshasinfringed,misappropriatedorotherwiseviolatedtheIntellectualPropertyrightsofsuchperson,(b)totheknowledgeofBB&T,nopersonischallenging,infringingonorotherwiseviolatinganyrightofBB&ToranyofitsSubsidiarieswithrespecttoanyIntellectualPropertyownedbyand/orlicensedtoBB&ToritsSubsidiaries,and(c)neitherBB&TnoranyBB&TSubsidiaryhasreceivedanywrittennoticeofanypendingclaimwithrespecttoanyIntellectualPropertyownedbyBB&ToranyBB&TSubsidiary,andBB&TanditsSubsidiarieshavetakencommerciallyreasonableactionstoavoidtheabandonment,cancellationorunenforceabilityofallIntellectualPropertyownedorlicensed,respectively,byBB&TanditsSubsidiaries.
4.20RelatedPartyTransactions.Asofthedatehereof,exceptassetforthinanyBB&TReports,therearenotransactionsorseriesofrelatedtransactions,agreements,arrangementsorunderstandings,norarethereanycurrentlyproposedtransactionsorseriesofrelatedtransactions,betweenBB&ToranyofitsSubsidiaries,ontheonehand,andanycurrentorformerdirectoror“executiveofficer”(asdefinedinRule3b-7undertheExchangeAct)ofBB&ToranyofitsSubsidiariesoranypersonwhobeneficiallyowns(asdefinedinRules13d-3and13d-5oftheExchangeAct)fivepercent(5%)ormoreoftheoutstandingBB&TCommonStock(oranyofsuchperson’simmediatefamilymembersoraffiliates)(otherthanSubsidiariesofBB&T)ontheotherhand,ofthetyperequiredtobereportedinanySunTrustReportpursuanttoItem404ofRegulationS-KpromulgatedundertheExchangeAct.
4.21StateTakeoverLaws.TheBoardofDirectorsofBB&ThasapprovedthisAgreementandthetransactionscontemplatedherebyandhastakenallsuchothernecessaryactionsasrequiredtorenderinapplicabletosuchagreementsandtransactionstheprovisionsofanypotentiallyapplicableTakeoverStatutes.
4.22Reorganization.BB&ThasnottakenanyactionandisnotawareofanyfactorcircumstancethatcouldreasonablybeexpectedtopreventtheMergerfromqualifyingasa“reorganization”withinthemeaningofSection368(a)oftheCode.
4.23Opinion.PriortotheexecutionofthisAgreement,BB&Thasreceivedanopinion(whichifinitiallyrenderedorally,hasbeenorwillbeconfirmedbywrittenopinionofthesamedate)fromRBCCapitalMarkets,LLC,totheeffectthatasofthedatethereofandbaseduponandsubjecttothematterssetforththerein,theExchangeRatiointheMergerisfairfromafinancialpointofviewtoBB&T.SuchopinionhasnotbeenamendedorrescindedasofthedateofthisAgreement.
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4.24BB&TInformation.TheinformationrelatingtoBB&TanditsSubsidiariesorthatisprovidedbyBB&ToritsSubsidiariesortheirrespectiverepresentativesforinclusionintheJointProxyStatementandtheS-4,orinanyotherdocumentfiledwithanyRegulatoryAgencyorGovernmentalEntityinconnectionherewith,willnotcontainanyuntruestatementofamaterialfactoromittostateamaterialfactnecessarytomakethestatementstherein,inlightofthecircumstancesinwhichtheyaremade,notmisleading.TheJointProxyStatement(exceptforsuchportionsthereofthatrelateonlytoSunTrustoranyofitsSubsidiaries)willcomplyinallmaterialrespectswiththeprovisionsoftheExchangeActandtherulesandregulationsthereunder.TheS-4(exceptforsuchportionsthereofthatrelateonlytoSunTrustoranyofitsSubsidiaries)willcomplyinallmaterialrespectswiththeprovisionsoftheSecuritiesActandtherulesandregulationsthereunder.
4.25LoanPortfolio.
(a)Asofthedatehereof,exceptassetforthinSection4.26(a)oftheBB&TDisclosureSchedule,neitherBB&TnoranyofitsSubsidiariesisapartytoanywrittenororalLoaninwhichBB&ToranySubsidiaryofBB&Tisacreditorthat,asofSeptember30,2018,hadanoutstandingbalanceof$10,000,000ormoreandunderthetermsofwhichtheobligorwas,asofSeptember30,2018,overninety(90)daysormoredelinquentinpaymentofprincipalorinterest.SetforthinSection4.26(a)oftheBB&TDisclosureScheduleisatrue,correctandcompletelistof(A)alloftheLoansofBB&TanditsSubsidiariesthat,asofSeptember30,2018,hadanoutstandingbalanceof$10,000,000andwereclassifiedbyBB&Tas“OtherLoansSpeciallyMentioned,”“SpecialMention,”“Substandard,”“Doubtful,”“Loss,”“Classified,”“Criticized,”“CreditRiskAssets,”“ConcernedLoans,”“WatchList”orwordsofsimilarimport,togetherwiththeprincipalamountofandaccruedandunpaidinterestoneachsuchLoanandtheidentityoftheborrowerthereunder,togetherwiththeaggregateprincipalamountofandaccruedandunpaidinterestonsuchLoans,bycategoryofLoan(e.g.,commercial,consumer,etc.),togetherwiththeaggregateprincipalamountofsuchLoansbycategoryand(B)eachassetofBB&ToranyofitsSubsidiariesthat,asofSeptember30,2018,isclassifiedas“OtherRealEstateOwned”andthebookvaluethereof.
(b)Exceptaswouldnotreasonablybeexpectedtohave,eitherindividuallyorintheaggregate,aMaterialAdverseEffectonBB&T,eachLoanofBB&ToranyofitsSubsidiaries(i)isevidencedbynotes,agreementsorotherevidencesofindebtednessthataretrue,genuineandwhattheypurporttobe,(ii)totheextentcarriedonthebooksandrecordsofBB&TanditsSubsidiariesassecuredLoans,hasbeensecuredbyvalidcharges,mortgages,pledges,securityinterests,restrictions,claims,liensorencumbrances,asapplicable,whichhavebeenperfectedand(iii)isthelegal,validandbindingobligationoftheobligornamedtherein,enforceableinaccordancewithitsterms,subjecttotheEnforceabilityExceptions.
(c)Exceptaswouldnotreasonablybeexpectedtohave,eitherindividuallyorintheaggregate,aMaterialAdverseEffectonBB&T,eachoutstandingLoanofBB&ToranyofitsSubsidiaries(includingLoansheldforresaletoinvestors)wassolicitedandoriginated,andisandhasbeenadministeredand,whereapplicable,serviced,andtherelevantLoanfilesarebeingmaintained,inallmaterialrespectsinaccordancewiththerelevant
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notesorothercreditorsecuritydocuments,thewrittenunderwritingstandardsofBB&TanditsSubsidiaries(and,inthecaseofLoansheldforresaletoinvestors,theunderwritingstandards,ifany,oftheapplicableinvestors)andwithallapplicablefederal,stateandlocallaws,regulationsandrules.
4.26Insurance.Exceptaswouldnotreasonablybeexpected,eitherindividuallyorintheaggregate,tohaveaMaterialAdverseEffectonBB&T,(a)BB&TanditsSubsidiariesareinsuredwithreputableinsurersagainstsuchrisksandinsuchamountsasthemanagementofBB&Treasonablyhasdeterminedtobeprudentandconsistentwithindustrypractice,andBB&TanditsSubsidiariesareincomplianceinallmaterialrespectswiththeirinsurancepoliciesandarenotindefaultunderanyofthetermsthereof,(b)eachsuchpolicyisoutstandingandinfullforceandeffectand,exceptforpoliciesinsuringagainstpotentialliabilitiesofofficers,directorsandemployeesofBB&TanditsSubsidiaries,BB&TortherelevantSubsidiarythereofisthesolebeneficiaryofsuchpolicies,(c)allpremiumsandotherpaymentsdueunderanysuchpolicyhavebeenpaid,andallclaimsthereunderhavebeenfiledindueandtimelyfashion,(d)thereisnoclaimforcoveragebyBB&ToranyofitsSubsidiariespendingunderanyinsurancepolicyastowhichcoveragehasbeenquestioned,deniedordisputedbytheunderwritersofsuchinsurancepolicyand(e)neitherBB&TnoranyofitsSubsidiarieshasreceivednoticeofanythreatenedterminationof,materialpremiumincreasewithrespectto,ormaterialalterationofcoverageunder,anyinsurancepolicies.
4.27InvestmentAdvisorSubsidiary.
(a)BB&TandcertainofitsSubsidiariesprovideinvestmentmanagement,investmentadvisoryorsub-advisoryservices(includingmanagementandadviceprovidedtoseparateaccountsandparticipationinwrapfeeprogramsandarerequiredtoregisterwiththeSECasaninvestmentadviserundertheInvestmentAdvisersAct)(BB&TandeachsuchSubsidiary,a“BB&TAdvisoryEntity”).EachBB&TAdvisoryEntityisregisteredasaninvestmentadviserundertheInvestmentAdvisersActandhasoperatedsinceJanuary1,2016andiscurrentlyoperatingincompliancewithalllawsapplicabletoitoritsbusinessandhasallregistrations,permits,licenses,exemptions,ordersandapprovalsrequiredfortheoperationofitsbusinessorownershipofitspropertiesandassetssubstantiallyaspresentlyconducted,exceptineachcaseaswouldnotreasonablybeexpected,eitherindividuallyorintheaggregate,tohaveaMaterialAdverseEffectonBB&T.
(b)TheaccountsofeachadvisoryclientofBB&ToritsSubsidiaries,forpurposesoftheInvestmentAdvisersAct,thataresubjecttoERISAhavebeenmanagedbytheapplicableBB&TAdvisoryEntityincompliancewiththeapplicablerequirementsofERISA,exceptaswouldnotreasonablybeexpected,eitherindividuallyorintheaggregate,tohaveaMaterialAdverseEffectonBB&T.
(c)NoneoftheBB&TAdvisoryEntitiesnorany“personassociatedwithaninvestmentadviser”(asdefinedintheInvestmentAdvisersAct)ofanyofthemisineligiblepursuanttoSection203oftheInvestmentAdvisersActtoserveasaninvestmentadvisororasapersonassociatedwitharegisteredinvestmentadvisor,exceptaswouldnotreasonablybeexpected,eitherindividuallyorintheaggregate,tohaveaMaterialAdverseEffectonBB&T.
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4.28InsuranceSubsidiary.
(a)Exceptaswouldnotreasonablybeexpected,individuallyorintheaggregate,tohaveaMaterialAdverseEffectonBB&T,(i)sinceJanuary1,2016,atthetimeeachagent,representative,producer,reinsuranceintermediary,wholesaler,third-partyadministrator,distributor,broker,employeeorotherpersonauthorizedtosell,produce,manageoradministerproductsonbehalfofanyBB&TSubsidiary(“BB&TAgent”)wrote,sold,produced,managed,administeredorprocuredbusinessforaBB&TSubsidiary,suchBB&TAgentwas,atthetimetheBB&TAgentwroteorsoldbusiness,dulylicensedforthetypeofactivityandbusinesswritten,sold,produced,managed,administeredorproducedtotheextentrequiredbyapplicablelaw,(ii)noBB&TAgenthasbeensinceJanuary1,2016,oriscurrently,inviolation(orwithorwithoutnoticeorlapseoftimeorboth,wouldbeinviolation)ofanylaw,ruleorregulationapplicabletosuchBB&TAgent’swriting,sale,management,administrationorproductionofinsurancebusinessforanyBB&TInsuranceSubsidiaryand(iii)eachBB&TAgentwasappointedbyBB&ToraBB&TInsuranceSubsidiaryincompliancewithapplicableinsurancelaws,rulesandregulationsandallprocessesandproceduresundertakenwithrespecttosuchBB&TAgentwereundertakenincompliancewithapplicableinsurancelaws,rulesandregulations.“BB&TInsuranceSubsidiary”meanseachSubsidiaryofBB&Tthroughwhichinsuranceoperationsisconducted.
(b)Exceptaswouldnotreasonablybeexpected,individuallyorintheaggregate,tohaveaMaterialAdverseEffectonBB&T,(i)sinceJanuary1,2016,BB&TandtheBB&TInsuranceSubsidiarieshavemadeallrequirednotices,submissions,reportsorotherfilingsunderapplicableinsuranceholdingcompanystatutes,(ii)allcontracts,agreements,arrangementsandtransactionsineffectbetweenanyBB&TInsuranceSubsidiaryandanyaffiliateareincomplianceinallmaterialrespectswiththerequirementsofallapplicableinsuranceholdingcompanystatutes,and(iii)eachBB&TInsuranceSubsidiaryhasoperatedandotherwisebeenincompliancewithallapplicableinsurancelaws,rulesandregulations.
4.29Broker-DealerSubsidiary.
(a)BB&ThascertainSubsidiariesthatarebroker-dealers(each,a“BB&TBroker-DealerSubsidiary”).Exceptaswouldnotreasonablybeexpectedto,eitherindividuallyorintheaggregate,haveaMaterialAdverseEffectonBB&T:(i)eachBB&TBroker-DealerSubsidiaryisdulyregisteredundertheExchangeActasabroker-dealerwiththeSECandisincompliancewiththeapplicableprovisionsoftheExchangeAct,includingthenetcapitalrequirementsandcustomerprotectionrequirementsthereof;(ii)eachBB&TBroker-DealerSubsidiaryisamemberingoodstandingwithFINRAandallotherrequiredSROsandincompliancewithallapplicablerulesandregulationsofFINRAandanysuchSROofwhichitisamemberorwhichotherwisehasauthorityoverit;(iii)eachBB&TBroker-DealerSubsidiary(andeachregisteredrepresentativethereof)isdulyregistered,licensedorqualifiedasabroker-dealerorregisteredrepresentative,asapplicable,under,andincompliancewith,theapplicablelawsofalljurisdictionsinwhichitisrequiredtobesoregisteredandeachsuchregistration,licenseorqualificationisinfullforceandeffectandingoodstanding;and(iv)thereisnoaction,suit,proceedingorinvestigationpendingor,totheknowledgeofBB&T,threatenedthatwouldreasonablybelikelytoleadtotherevocation,amendment,failuretorenew,limitation,suspensionorrestrictionofanysuchregistrations,licensesandqualifications.
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(b)Exceptaswouldnotreasonablybeexpectedto,eitherindividuallyorintheaggregate,haveaMaterialAdverseEffectonBB&T,(i)noneoftheBB&TBroker-DealerSubsidiariesnorany“associatedperson”thereof(A)isorhasbeenineligibletoserveasabroker-dealeroranassociatedpersonofabroker-dealerunderSection15(b)oftheExchangeAct,(B)issubjecttoa“statutorydisqualification”asdefinedinSection3(a)(39)oftheExchangeActor(C)issubjecttoadisqualificationthatwouldbeabasisforcensure,limitationsontheactivities,functionsoroperationsof,orsuspensionorrevocationoftheregistrationofanyBB&TBroker-DealerSubsidiaryasbroker-dealer,municipalsecuritiesdealer,governmentsecuritiesbrokerorgovernmentsecuritiesdealerunderSection15,Section15BorSection15CoftheExchangeAct,and(ii)thereisnoaction,suit,proceedingorinvestigationpendingor,totheknowledgeofBB&T,threatened,thatisreasonablylikelytoresultinanysuchpersonbeingdeemedineligibleasdescribedinclause(A),subjecttoa“statutorydisqualification”asdescribedinclause(B)orsubjecttoadisqualificationasdescribedinclause(C).
4.30NoOtherRepresentationsorWarranties.
(a)ExceptfortherepresentationsandwarrantiesmadebyBB&TinthisArticleIV,neitherBB&TnoranyotherpersonmakesanyexpressorimpliedrepresentationorwarrantywithrespecttoBB&T,itsSubsidiaries,ortheirrespectivebusinesses,operations,assets,liabilities,conditions(financialorotherwise)orprospects,andBB&Therebydisclaimsanysuchotherrepresentationsorwarranties.Inparticular,withoutlimitingtheforegoingdisclaimer,neitherBB&TnoranyotherpersonmakesorhasmadeanyrepresentationorwarrantytoSunTrustoranyofitsaffiliatesorrepresentativeswithrespectto(i)anyfinancialprojection,forecast,estimate,budgetorprospectiveinformationrelatingtoBB&T,anyofitsSubsidiariesortheirrespectivebusinessesor(ii)exceptfortherepresentationsandwarrantiesmadebyBB&TinthisArticleIV,anyoralorwritteninformationpresentedtoSunTrustoranyofitsaffiliatesorrepresentativesinthecourseoftheirduediligenceinvestigationofBB&T,thenegotiationofthisAgreementorinthecourseofthetransactionscontemplatedhereby.
(b)BB&TacknowledgesandagreesthatneitherSunTrustnoranyotherpersonhasmadeorismakinganyexpressorimpliedrepresentationorwarrantyotherthanthosecontainedinArticleIII.
ARTICLEV
COVENANTSRELATINGTOCONDUCTOFBUSINESS
5.1ConductofBusinessesPriortotheEffectiveTime.DuringtheperiodfromthedateofthisAgreementtotheEffectiveTimeorearlierterminationofthisAgreement,exceptasexpresslycontemplatedorpermittedbythisAgreement(includingassetforthintheSunTrustDisclosureScheduleortheBB&TDisclosureSchedule),requiredbylaworasconsentedtoinwritingbytheotherparty(suchconsentnottobeunreasonablywithheld,conditionedordelayed),eachofBB&TandSunTrustshall,andshallcauseeachofitsrespectiveSubsidiariesto,(a)conductitsbusinessintheordinarycourseinallmaterialrespects,(b)usereasonablebest
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effortstomaintainandpreserveintactitsbusinessorganization,employeesandadvantageousbusinessrelationships,and(c)takenoactionthatwouldreasonablybeexpectedtoadverselyaffectordelaytheabilityofeitherBB&TorSunTrusttoobtainanynecessaryapprovalsofanyRegulatoryAgencyorotherGovernmentalEntityrequiredforthetransactionscontemplatedherebyortoperformitscovenantsandagreementsunderthisAgreementortoconsummatethetransactionscontemplatedherebyonatimelybasis.
5.2Forbearances.DuringtheperiodfromthedateofthisAgreementtotheEffectiveTimeorearlierterminationofthisAgreement,exceptassetforthintheBB&TDisclosureScheduleortheSunTrustDisclosureSchedule,asexpresslycontemplatedorpermittedbythisAgreementorasrequiredbylaw,neitherBB&TnorSunTrustshall,andneitherBB&TnorSunTrustshallpermitanyoftheirrespectiveSubsidiariesto,withoutthepriorwrittenconsentoftheotherpartytothisAgreement(suchconsentnottobeunreasonablywithheld,conditionedordelayed):
(a)otherthan(i)federalfundsborrowingsandFederalHomeLoanBankborrowings,ineachcasewithamaturitynotinexcessofsix(6)months,and(ii)deposits,ineachcaseintheordinarycourseofbusiness,incuranyindebtednessforborrowedmoney(otherthanindebtednessofSunTrustoranyofitswholly-ownedSubsidiariestoSunTrustoranyofitswholly-ownedSubsidiaries,ontheonehand,orofBB&Toranyofitswholly-ownedSubsidiariestoBB&Toranyofitswholly-ownedSubsidiaries,ontheotherhand),orassume,guarantee,endorseorotherwiseasanaccommodationbecomeresponsiblefortheobligationsofanyotherindividual,corporationorotherentity;
(b)(i)adjust,split,combineorreclassifyanycapitalstock;
(ii)make,declare,payorsetarecorddateforanydividend,oranyotherdistributionon,ordirectlyorindirectlyredeem,purchaseorotherwiseacquire,anysharesofitscapitalstockorotherequityorvotingsecuritiesoranysecuritiesorobligationsconvertible(whethercurrentlyconvertibleorconvertibleonlyafterthepassageoftimeortheoccurrenceofcertainevents)orexchangeableintoorexercisableforanysharesofitscapitalstockorotherequityorvotingsecurities,includinganySunTrustSecuritiesorSunTrustSubsidiarySecurities,inthecaseofSunTrust,orBB&TSecuritiesorBB&TSubsidiarySecurities,inthecaseofBB&T,except,ineachcase,(A)regularquarterlycashdividendsbySunTrustataratenotinexcessof$0.500pershareofSunTrustCommonStock,(B)regularquarterlycashdividendsbyBB&Tataratenotinexcessof$0.405pershareofBB&TCommonStock,(C)dividendspaidbyanyoftheSubsidiariesofeachofBB&TandSunTrusttoBB&TorSunTrustoranyoftheirwholly-ownedSubsidiaries,respectively,(D)inthecaseofSunTrust,dividendsprovidedforandpaidonSunTrustPreferredStockinaccordancewiththetermsofsuchSunTrustPreferredStock,(E)inthecaseofBB&T,dividendsprovidedforandpaidonsharesofBB&TPreferredStockinaccordancewiththetermsoftheBB&TPreferredStockor(F)theacceptanceofsharesofSunTrustCommonStockorBB&TCommonStock,asthecasemaybe,aspaymentfortheexercisepriceofstockoptionsorforwithholdingTaxesincurredinconnectionwiththeexerciseofstockoptionsorthevestingorsettlementofequitycompensationawards,ineachcase,inaccordancewithpastpracticeandthetermsoftheapplicableawardagreements;
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(iii)grantanystockoptions,restrictedstockunits,performancestockunits,phantomstockunits,restrictedsharesorotherequity-basedawardsorinterests,orgrantanypersonanyrighttoacquireanySunTrustSecuritiesorSunTrustSubsidiarySecurities,inthecaseofSunTrust,orBB&TSecuritiesorBB&TSubsidiarySecurities,inthecaseofBB&T;or
(iv)issue,sell,transfer,encumberorotherwisepermittobecomeoutstandinganysharesofcapitalstockorvotingsecuritiesorequityinterestsorsecuritiesconvertible(whethercurrentlyconvertibleorconvertibleonlyafterthepassageoftimeoftheoccurrenceofcertainevents)orexchangeableinto,orexercisablefor,anysharesofitscapitalstockorotherequityorvotingsecurities,includinganySunTrustSecuritiesorSunTrustSubsidiarySecurities,inthecaseofSunTrust,orBB&TSecuritiesorBB&TSubsidiarySecurities,inthecaseofBB&T,oranyoptions,warrants,orotherrightsofanykindtoacquireanysharesofcapitalstockorotherequityorvotingsecurities,includinganySunTrustSecuritiesorSunTrustSubsidiarySecurities,inthecaseofSunTrust,orBB&TSecuritiesorBB&TSubsidiarySecurities,inthecaseofBB&T,exceptpursuanttotheexerciseofstockoptionsorthesettlementofequitycompensationawardsinaccordancewiththeirterms;
(c)sell,transfer,mortgage,encumberorotherwisedisposeofanyofitsmaterialpropertiesorassetstoanyindividual,corporationorotherentityotherthanawholly-ownedSubsidiary,orcancel,releaseorassignanyindebtednesstoanysuchpersonoranyclaimsheldbyanysuchperson,ineachcaseotherthanintheordinarycourseofbusinessorpursuanttocontractsoragreementsinforceatthedateofthisAgreement;
(d)exceptforforeclosureoracquisitionsofcontrolinafiduciaryorsimilarcapacityorinsatisfactionofdebtspreviouslycontractedingoodfaithintheordinarycourseofbusiness,makeanymaterialinvestmentinoracquisitionof(whetherbypurchaseofstockorsecurities,contributionstocapital,propertytransfers,mergerorconsolidation,orformationofajointventureorotherwise)anyotherpersonorthepropertyorassetsofanyotherperson,ineachcaseotherthanawholly-ownedSubsidiaryofSunTrustorBB&T,asapplicable;
(e)ineachcaseexceptfortransactionsintheordinarycourseofbusiness,terminate,materiallyamend,orwaiveanymaterialprovisionof,anySunTrustContractorBB&TContract,asthecasemaybe,ormakeanychangeinanyinstrumentoragreementgoverningthetermsofanyofitssecurities,otherthannormalrenewalsofcontractswithoutmaterialadversechangesoftermswithrespecttoSunTrustorBB&T,asthecasemaybe,orenterintoanycontractthatwouldconstituteaSunTrustContractorBB&TContract,asthecasemaybe,ifitwereineffectonthedateofthisAgreement;
(f)exceptasrequiredunderapplicablelaworthetermsofanySunTrustBenefitPlanorBB&TBenefitPlanexistingasofthedatehereof,asapplicable,(i)enterinto,establish,adopt,amendorterminateanySunTrustBenefitPlanorBB&TBenefitPlan,oranyarrangementthatwouldbeaSunTrustBenefitPlanoraBB&TBenefitPlanifineffectonthedatehereof,otherthan(x)intheordinarycourseofbusinessconsistentwithpastpracticeand(y)aswouldnotreasonablybeexpectedtomateriallyincreasethecostofbenefitsunderanySunTrustBenefitPlan,BB&TBenefitPlan,SunTrustContractorBB&TContract,asthecasemaybe,
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(ii)increasethecompensationorbenefitspayabletoanycurrentorformeremployee,officer,directororindividualconsultant,otherthanincreasestocurrentemployeesandofficers(x)inconnectionwithapromotionorchangeinresponsibilitiesandtoalevelconsistentwithsimilarlysituatedpeeremployees,(y)intheordinarycourseofbusinessconsistentwithpastpracticeor(z)thepaymentofincentivecompensationforcompletedperformanceperiodsbaseduponcorporateperformance,theperformanceofsuchemployeeand,ifapplicable,suchemployee’sbusiness,(iii)acceleratethevestingofanyequity-basedawardsorothercompensation,(iv)enterintoanynew,oramendanyexisting,employment,severance,changeincontrol,retention,collectivebargainingagreementorsimilaragreementorarrangement,otherthanentryintoretentionagreementsorarrangementsnotrelatedtothetransactionscontemplatedbythisAgreementwithemployeesbelowthelevelofseniorvicepresidentintheordinarycourseofbusinessconsistentwithpastpractice,(v)fundanyrabbitrustorsimilararrangementorinanyotherwaysecurethepaymentofcompensationorbenefitsunderanySunTrustBenefitPlan,BB&TBenefitPlan,SunTrustContractorBB&TContract,asthecasemaybe,(vi)terminatetheemploymentorservicesofany“executiveofficer”(asdefinedinRule3b-7promulgatedundertheExchangeAct),otherthanforcause,or(vii)hireany“executiveofficer”(asdefinedinRule3b-7promulgatedundertheExchangeAct)(otherthanasareplacementhirereceivingsubstantiallysimilartermsofemployment);
(g)settleanymaterialclaim,suit,actionorproceeding,exceptinvolvingsolelymonetaryremediesinanamount,individuallyandintheaggregate,thatisnotmaterialtoSunTrustorBB&T,asapplicable,andthatwouldnotimposeanymaterialrestrictionon,orcreateanyadverseprecedentthatwouldbematerialto,thebusinessofitoritsSubsidiariesortheSurvivingEntity;
(h)takeanyactionorknowinglyfailtotakeanyactionwheresuchactionorfailuretoactcouldreasonablybeexpectedtopreventtheMergerfromqualifyingasa“reorganization”withinthemeaningofSection368(a)oftheCode;
(i)amenditsarticlesofincorporation,itsbylawsorcomparablegoverningdocumentsofitsSubsidiariesthatare“significantsubsidiaries”withinthemeaningofRule1-02ofRegulationS-XoftheSEC;
(j)otherthaninpriorconsultationwiththeotherpartytothisAgreement,materiallyrestructureormateriallychangeitsinvestmentsecuritiesorderivativesportfoliooritsinterestrateexposure,throughpurchases,salesorotherwise,orthemannerinwhichtheportfolioisclassifiedorreported;
(k)implementoradoptanychangeinitsaccountingprinciples,practicesormethods,otherthanasmayberequiredbyGAAP;
(l)enterintoanynewlineofbusinessor,otherthanintheordinarycourseofbusiness(whichmayincludepartneringwiththirdpartiesinorigination,flow,servicingandothercapacities)consistentwithpastpractice,changeinanymaterialrespectitslending,investment,underwriting,riskandassetliabilitymanagementandotherbankingandoperating,securitizationandservicingpolicies(includinganychangeinthemaximumratioorsimilarlimitsasapercentageofitscapitalexposureapplicablewithrespecttoitsloanportfoliooranysegmentthereof),exceptasrequiredbyapplicablelaw,regulationorpoliciesimposedbyanyGovernmentalEntity;
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(m)make,changeorrevokeanymaterialTaxelection,changeanannualTaxaccountingperiod,adoptorchangeanymaterialTaxaccountingmethod,fileanymaterialamendedTaxReturn,enterintoanyclosingagreementwithrespecttoamaterialamountofTaxes,orsettleanymaterialTaxclaim,audit,assessmentordisputeorsurrenderanymaterialrighttoclaimarefundofTaxes;or
(n)agreetotake,makeanycommitmenttotake,oradoptanyresolutionsofitsBoardofDirectorsorsimilargoverningbodyinsupportof,anyoftheactionsprohibitedbythisSection5.2.
ARTICLEVI
ADDITIONALAGREEMENTS
6.1RegulatoryMatters.
(a)PromptlyafterthedateofthisAgreement,BB&TandSunTrustshallprepareandfilewiththeSECtheJointProxyStatement,andBB&TshallprepareandfilewiththeSECtheS-4,inwhichtheJointProxyStatementwillbeincludedisaprospectus.BB&TandSunTrust,asapplicable,shallusereasonablebesteffortstomakesuchfilingswithinthirty(30)daysofthedateofthisAgreement.EachofBB&TandSunTrustshalluseitsreasonablebesteffortstohavetheS-4declaredeffectiveundertheSecuritiesActaspromptlyaspracticableaftersuchfilings,andBB&TandSunTrustshallthereaftermailordelivertheJointProxyStatementtotheirrespectiveshareholders.BB&Tshallalsouseitsreasonablebesteffortstoobtainallnecessarystatesecuritieslawor“BlueSky”permitsandapprovalsrequiredtocarryoutthetransactionscontemplatedbythisAgreement,andSunTrustshallfurnishallinformationconcerningSunTrustandtheholdersofSunTrustCommonStockasmaybereasonablyrequestedinconnectionwithanysuchaction.
(b)Thepartiesheretoshallcooperatewitheachotherandusetheirreasonablebesteffortstopromptlyprepareandfileallnecessarydocumentation,toeffectallapplications,notices,petitionsandfilings(andinthecaseoftheapplications,notices,petitionsandfilingsinrespectoftheRequisiteRegulatoryApprovals,usetheirreasonablebesteffortstomakesuchfilingswithinthirty(30)daysofthedateofthisAgreement),toobtainaspromptlyaspracticableallpermits,consents,approvalsandauthorizationsofallthirdpartiesandGovernmentalEntitieswhicharenecessaryoradvisabletoconsummatethetransactionscontemplatedbythisAgreement(includingtheMergerandtheBankMerger),andtocomplywiththetermsandconditionsofallsuchpermits,consents,approvalsandauthorizationsofallsuchGovernmentalEntities.BB&TandSunTrustshallhavetherighttoreviewinadvance,and,totheextentpracticable,eachwillconsulttheotheron,ineachcasesubjecttoapplicablelawsrelatingtotheexchangeofinformation,alltheinformationrelatingtoSunTrustorBB&T,asthecasemaybe,andanyoftheirrespectiveSubsidiaries,whichappearsinanyfilingmadewith,orwrittenmaterialssubmittedto,anythirdpartyoranyGovernmentalEntityinconnectionwiththetransactionscontemplatedbythisAgreement.Inexercisingtheforegoingright,eachofthepartiesheretoshallactreasonablyandaspromptly
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aspracticable.Thepartiesheretoagreethattheywillconsultwitheachotherwithrespecttotheobtainingofallpermits,consents,approvalsandauthorizationsofallthirdpartiesandGovernmentalEntitiesnecessaryoradvisabletoconsummatethetransactionscontemplatedbythisAgreementandeachpartywillkeeptheotherapprisedofthestatusofmattersrelatingtocompletionofthetransactionscontemplatedherein,andeachpartyshallconsultwiththeotherinadvanceofanymeetingorconferencewithanyGovernmentalEntityinconnectionwiththetransactionscontemplatedbythisAgreementand,totheextentpermittedbysuchGovernmentalEntity,givetheotherpartyand/oritscounseltheopportunitytoattendandparticipateinsuchmeetingsandconferences,ineachcasesubjecttoapplicablelaw.AsusedinthisAgreement,theterm“RequisiteRegulatoryApprovals”shallmeanallregulatoryauthorizations,consents,ordersandapprovals(andtheexpirationorterminationofallstatutorywaitingperiodsinrespectthereof)(i)fromtheFederalReserveBoard,theFDIC,theNorthCarolinaCommissionerofBanksandtheGeorgiaDepartmentofBankingandFinance,or(ii)setforthinSection3.4orSection4.4thatarenecessarytoconsummatethetransactionscontemplatedbythisAgreement(includingtheMergerandtheBankMerger)orthosethefailureofwhichtobeobtainedwouldreasonablybeexpectedtohave,individuallyorintheaggregate,aMaterialAdverseEffectontheSurvivingEntity.
(c)EachpartyshalluseitsreasonablebesteffortstoresolveanyobjectionthatmaybeassertedbyanyGovernmentalEntitywithrespecttothisAgreementorthetransactionscontemplatedhereby.Notwithstandingtheforegoing,nothingcontainedhereinshallbedeemedtorequireBB&TorSunTrustoranyoftheirrespectiveSubsidiaries,andneitherBB&TnorSunTrustnoranyoftheirrespectiveSubsidiariesshallbepermitted(withoutthewrittenconsentoftheotherparty),totakeanyaction,orcommittotakeanyaction,oragreetoanyconditionorrestriction,inconnectionwithobtainingtheforegoingpermits,consents,approvalsandauthorizationsofGovernmentalEntitiesthatwouldreasonablybeexpectedtohaveaMaterialAdverseEffectontheSurvivingEntityanditsSubsidiaries,takenasawhole,aftergivingeffecttotheMerger(a“MateriallyBurdensomeRegulatoryCondition”).
(d)BB&TandSunTrustshall,uponrequest,furnisheachotherwithallinformationconcerningthemselves,theirSubsidiaries,directors,officersandshareholdersandsuchothermattersasmaybereasonablynecessaryoradvisableinconnectionwiththeJointProxyStatement,theS-4oranyotherstatement,filing,noticeorapplicationmadebyoronbehalfofBB&T,SunTrustoranyoftheirrespectiveSubsidiariestoanyGovernmentalEntityinconnectionwiththeMerger,theBankMergerandtheothertransactionscontemplatedbythisAgreement.
(e)BB&TandSunTrustshallpromptlyadviseeachotheruponreceivinganycommunicationfromanyGovernmentalEntitywhoseconsentorapprovalisrequiredforconsummationofthetransactionscontemplatedbythisAgreementthatcausessuchpartytobelievethatthereisareasonablelikelihoodthatanyRequisiteRegulatoryApprovalwillnotbeobtained,orthatthereceiptofanysuchapprovalwillbemateriallydelayed.
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6.2AccesstoInformation;Confidentiality.
(a)Uponreasonablenoticeandsubjecttoapplicablelaws,eachofBB&TandSunTrust,forthepurposesofverifyingtherepresentationsandwarrantiesoftheotherandpreparingfortheMergerandtheothermatterscontemplatedbythisAgreement,shall,andshallcauseeachoftheirrespectiveSubsidiariesto,affordtotheofficers,employees,accountants,counsel,advisorsandotherrepresentativesoftheotherparty,access,duringnormalbusinesshoursduringtheperiodpriortotheEffectiveTime,toallitsproperties,books,contracts,commitments,personnel,informationtechnologysystems,andrecords,andeachshallcooperatewiththeotherpartyinpreparingtoexecuteaftertheEffectiveTimetheconversionorconsolidationofsystemsandbusinessoperationsgenerally,and,duringsuchperiod,eachofBB&TandSunTrustshall,andshallcauseitsrespectiveSubsidiariesto,makeavailabletotheotherparty(i)acopyofeachreport,schedule,registrationstatementandotherdocumentfiledorreceivedbyitduringsuchperiodpursuanttotherequirementsoffederalsecuritieslawsorfederalorstatebankinglaws(otherthanreportsordocumentsthatBB&TorSunTrust,asthecasemaybe,isnotpermittedtodiscloseunderapplicablelaw),and(ii)allotherinformationconcerningitsbusiness,propertiesandpersonnelassuchpartymayreasonablyrequest.NeitherBB&TnorSunTrustnoranyoftheirrespectiveSubsidiariesshallberequiredtoprovideaccesstoortodiscloseinformationwheresuchaccessordisclosurewouldviolateorprejudicetherightsofBB&T’sorSunTrust’s,asthecasemaybe,customers,jeopardizetheattorney-clientprivilegeoftheinstitutioninpossessionorcontrolofsuchinformation(aftergivingdueconsiderationtotheexistenceofanycommoninterest,jointdefenseorsimilaragreementbetweentheparties)orcontraveneanylaw,rule,regulation,order,judgment,decree,fiduciarydutyorbindingagreemententeredintopriortothedateofthisAgreement.Thepartiesheretowillmakeappropriatesubstitutedisclosurearrangementsundercircumstancesinwhichtherestrictionsoftheprecedingsentenceapply.
(b)EachofBB&TandSunTrustshallholdallinformationfurnishedbyoronbehalfoftheotherpartyoranyofsuchparty’sSubsidiariesorrepresentativespursuanttoSection6.2(a)inconfidencetotheextentrequiredby,andinaccordancewith,theprovisionsoftheconfidentialityagreement,datedJanuary26,2019,betweenBB&TandSunTrust(the“ConfidentialityAgreement”).
(c)Noinvestigationbyeitherofthepartiesortheirrespectiverepresentativesshallaffectorbedeemedtomodifyorwaivetherepresentationsandwarrantiesoftheothersetforthherein.NothingcontainedinthisAgreementshallgiveeitherparty,directlyorindirectly,therighttocontrolordirecttheoperationsoftheotherpartypriortotheEffectiveTime.PriortotheEffectiveTime,eachpartyshallexercise,consistentwiththetermsandconditionsofthisAgreement,completecontrolandsupervisionoveritsanditsSubsidiaries’respectiveoperations.
6.3Shareholders’Approvals.EachofBB&TandSunTrustshallcallameetingofitsshareholders(the“BB&TMeeting”andthe“SunTrustMeeting,”respectively)tobeheldassoonasreasonablypracticableaftertheS-4isdeclaredeffective,forthepurposeofobtaining(a)theRequisiteSunTrustVoteandtheRequisiteBB&TVoterequiredinconnectionwiththisAgreementandtheMergerand(b)ifsodesiredandmutuallyagreed,avoteuponothermattersofthetypecustomarilybroughtbeforeameetingofshareholdersinconnectionwiththeapprovalofamergeragreementorthetransactionscontemplatedthereby,andeachofSunTrustand
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BB&Tshalluseitsreasonablebesteffortstocausesuchmeetingstooccurassoonasreasonablypracticableandonthesamedate.EachofBB&TandSunTrustandtheirrespectiveBoardsofDirectorsshalluseitsreasonablebesteffortstoobtainfromtheshareholdersofBB&TandSunTrust,asapplicable,theRequisiteBB&TVoteandtheRequisiteSunTrustVote,asapplicable,includingbycommunicatingtotherespectiveshareholdersofBB&TandSunTrustitsrecommendation(andincludingsuchrecommendationintheJointProxyStatement)that,inthecaseofBB&T,theshareholdersofBB&TapprovethisAgreement(the“BB&TBoardRecommendation”),andinthecaseofSunTrust,thattheshareholdersofSunTrustapprovethisAgreement(the“SunTrustBoardRecommendation”),BB&TandeachofBB&TandSunTrustandtheirrespectiveBoardsofDirectorsshallnot(i)withhold,withdraw,modifyorqualifyinamanneradversetotheotherpartytheBB&TBoardRecommendation,inthecaseofBB&T,ortheSunTrustBoardRecommendation,inthecaseofSunTrust,(ii)failtomaketheBB&TBoardRecommendation,inthecaseofBB&T,ortheSunTrustBoardRecommendation,inthecaseofSunTrust,intheJointProxyStatement,(iii)adopt,approve,recommendorendorseanAcquisitionProposalorpubliclyannounceanintentiontoadopt,approve,recommendorendorseanAcquisitionProposal,(iv)failtopubliclyandwithoutqualification(A)recommendagainstanyAcquisitionProposalor(B)reaffirmtheBB&TBoardRecommendation,inthecaseofBB&T,ortheSunTrustBoardRecommendation,inthecaseofSunTrust,ineachcasewithinten(10)businessdays(orsuchfewernumberofdaysasremainspriortotheBB&TMeetingortheSunTrustMeeting,asapplicable)afteranAcquisitionProposalismadepublicoranyrequestbytheotherpartytodoso,or(v)publiclyproposetodoanyoftheforegoing(anyoftheforegoinga“RecommendationChange”).However,subjecttoSection8.1andSection8.2,iftheBoardofDirectorsofBB&TorSunTrust,afterreceivingtheadviceofitsoutsidecounseland,withrespecttofinancialmatters,itsfinancialadvisors,determinesingoodfaiththatitwouldmorelikelythannotresultinaviolationofitsfiduciarydutiesunderapplicablelawtomakeorcontinuetomaketheBB&TBoardRecommendationortheSunTrustBoardRecommendation,asapplicable,suchBoardofDirectorsmay,inthecaseofBB&T,priortothereceiptoftheRequisiteBB&TVote,andinthecaseofSunTrust,priortothereceiptoftheRequisiteSunTrustVote,submitthisAgreementtoitsshareholderswithoutrecommendation(althoughtheresolutionsapprovingthisAgreementasofthedatehereofmaynotberescindedoramended),inwhicheventsuchBoardofDirectorsmaycommunicatethebasisforitslackofarecommendationtoitsshareholdersintheJointProxyStatementoranappropriateamendmentorsupplementtheretototheextentrequiredbylaw;providedthatsuchBoardofDirectorsmaynottakeanyactionsunderthissentenceunlessit(A)givestheotherpartyatleastthree(3)businessdays’priorwrittennoticeofitsintentiontotakesuchactionandareasonabledescriptionoftheeventorcircumstancesgivingrisetoitsdeterminationtotakesuchaction(including,intheeventsuchactionistakeninresponsetoanAcquisitionProposal,thelatestmaterialtermsandconditionsandtheidentityofthethirdpartyinanysuchAcquisitionProposal,oranyamendmentormodificationthereof,ordescribeinreasonabledetailsuchothereventorcircumstances)and(B)attheendofsuchnoticeperiod,takesintoaccountanyamendmentormodificationtothisAgreementproposedbytheotherpartyand,afterreceivingtheadviceofitsoutsidecounseland,withrespecttofinancialmatters,itsfinancialadvisors,determinesingoodfaiththatitwouldneverthelessmorelikelythannotresultinaviolationofitsfiduciarydutiesunderapplicablelawtomakeorcontinuetomaketheBB&TBoardRecommendationorSunTrustBoardRecommendation,asthe
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casemaybe.AnymaterialamendmenttoanyAcquisitionProposalwillbedeemedtobeanewAcquisitionProposalforpurposesofthisSection6.3andwillrequireanewnoticeperiodasreferredtointhisSection6.3.BB&TorSunTrustshalladjournorpostponetheBB&TMeetingortheSunTrustMeeting,asthecasemaybe,if,asofthetimeforwhichsuchmeetingisoriginallyscheduledthereareinsufficientsharesofBB&TCommonStockorSunTrustCommonStock,asthecasemaybe,represented(eitherinpersonorbyproxy)toconstituteaquorumnecessarytoconductthebusinessofsuchmeeting,orifonthedateofsuchmeetingSunTrustorBB&T,asapplicable,hasnotreceivedproxiesrepresentingasufficientnumberofsharesnecessarytoobtaintheRequisiteSunTrustVoteortheRequisiteBB&TVote.Notwithstandinganythingtothecontraryherein,unlessthisAgreementhasbeenterminatedinaccordancewithitsterms,(x)theBB&TMeetingshallbeconvenedandthisAgreementshallbesubmittedtotheshareholdersofBB&TattheBB&TMeetingand(y)theSunTrustMeetingshallbeconvenedandthisAgreementshallbesubmittedtotheshareholdersofSunTrustattheSunTrustMeeting,andnothingcontainedhereinshallbedeemedtorelieveeitherBB&TorSunTrustofsuchobligation.
6.4LegalConditionstoMerger.SubjectinallrespectstoSection6.1ofthisAgreement,eachofBB&TandSunTrustshall,andshallcauseitsSubsidiariesto,usetheirreasonablebestefforts(a)totake,orcausetobetaken,allactionsnecessary,properoradvisabletocomplypromptlywithalllegalrequirementsthatmaybeimposedonsuchpartyoritsSubsidiarieswithrespecttotheMergerandtheBankMergerand,subjecttotheconditionssetforthinArticleVIIhereof,toconsummatethetransactionscontemplatedbythisAgreement,and(b)toobtain(andtocooperatewiththeotherpartytoobtain)anymaterialconsent,authorization,orderorapprovalof,oranyexemptionby,anyGovernmentalEntityandanyotherthirdpartythatisrequiredtobeobtainedbySunTrustorBB&ToranyoftheirrespectiveSubsidiariesinconnectionwiththeMerger,theBankMergerandtheothertransactionscontemplatedbythisAgreement.
6.5StockExchangeListing.BB&TshallcausethesharesofBB&TCommonStocktobeissuedintheMergertobeapprovedforlistingontheNYSE,subjecttoofficialnoticeofissuance,priortotheEffectiveTime.
6.6EmployeeMatters.
(a)FromandaftertheEffectiveTime,unlessotherwisemutuallydeterminedbySunTrustandBB&T,BB&TshallprovidegenerallytoemployeesofSunTrustanditsSubsidiarieswhoattheEffectiveTimebecomeemployeesofBB&ToritsSubsidiaries(the“ContinuingEmployees”),employeecompensationandbenefitsundertheBB&TBenefitPlansontermsandconditionsthataresubstantiallythesameasthosethatapplytosimilarlysituatedBB&Temployees;providedthatBB&TmaysatisfyitsobligationunderthisSection6.6(a)foratransitionalperiod(whichtransitionalperiodshallendbythelaterof(i)December31,2019and(ii)thesix(6)monthanniversaryoftheClosingDate)byprovidingcompensationandbenefitsthataresubstantiallythesameintheaggregateasthecompensationandbenefitsprovidedbySunTrustanditsSubsidiariestoContinuingEmployeesimmediatelypriortotheEffectiveTime.PriortotheClosing,SunTrustandBB&Tshallcooperateinreviewing,evaluatingandanalyzingtheBB&TBenefitPlansandSunTrustBenefitPlanswithaviewtowardsdevelopingappropriatenewbenefitplanswithrespecttoemployeesoftheSurvivingEntityanditsSubsidiaries
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(whichshallinanyeventincludetheBB&TCorporationPensionPlanandtheBB&TNon-QualifiedDefinedBenefitPlan)(collectively,the“NewBenefitPlans”)fortheemployeescoveredthereby,whichNewBenefitPlanswill,totheextentpermittedbyapplicablelaw,andamongotherthings,(A)treatsimilarlysituatedemployeesonasubstantiallyequivalentbasis,takingintoaccountallrelevantfactors,includingduties,geographiclocation,tenure,qualificationsandabilities,and(B)notdiscriminatebetweenemployeeswhowerecoveredbyBB&TBenefitPlans,ontheonehand,andthosecoveredbySunTrustBenefitPlans,ontheotherhand,attheEffectiveTime.Notwithstandingtheforegoing,BB&TandSunTrustagreethat,duringtheperiodcommencingattheEffectiveTimeandendingonthefirstanniversarythereof,anycontinuingemployeeofBB&T,SunTrustoranyoftheirrespectiveSubsidiarieswhoisinvoluntarilyterminatedduringsuchone(1)-yearperiodwillbeprovidedwithseveranceasdescribedinSection6.6(a)oftheBB&TDisclosureSchedule.
(b)Forpurposesofeligibility,participation,vestingandbenefitaccrual(exceptnotforpurposesofbenefitaccrualunderanydefinedbenefitpensionplanortotheextentthatsuchcreditwouldresultinaduplicationofbenefits)undertheBB&TBenefitPlans,SunTrustBenefitPlansandtheNewBenefitPlans,servicewithorcreditedbyBB&T,SunTrustoranyoftheirrespectiveSubsidiariesorpredecessorsforContinuingEmployeesorcontinuingemployeesofBB&ToritsSubsidiariesshallbetreatedasservicewithBB&TtothesameextentthatsuchservicewastakenintoaccountundertheanalogousSunTrustBenefitPlanorBB&TBenefitPlanpriortotheEffectiveTime.WithrespecttoanySunTrustBenefitPlan,BB&TBenefitPlanorNewBenefitPlaninwhichanyemployeesofBB&TorSunTrust(ortheirSubsidiaries)priortotheEffectiveTimefirstbecomeeligibletoparticipateonoraftertheEffectiveTime,andinwhichsuchemployeesdidnotparticipatepriortotheEffectiveTime,theSurvivingEntityshall:(i)waiveallpreexistingconditions,exclusionsandwaitingperiodswithrespecttoparticipationandcoveragerequirementsapplicabletosuchemployeesandtheireligibledependents,excepttotheextentsuchpre-existingconditions,exclusionsorwaitingperiodswouldapplyundertheanalogousBB&TBenefitPlanorSunTrustBenefitPlan,asthecasemaybe,and(ii)provideeachsuchemployeeandhisorhereligibledependentswithcreditforanyco-paymentsanddeductiblespaidpriortotheEffectiveTime(or,iflater,priortothetimesuchemployeecommencedparticipationintheNewBenefitPlan)underaBB&TBenefitPlanorSunTrustBenefitPlan(tothesameextentthatsuchcreditwasgivenundertheanalogousSunTrustorBB&TBenefitPlan)insatisfyinganyapplicabledeductibleorout-of-pocketrequirementsunderanySunTrustBenefitPlan,BB&TBenefitPlanorNewBenefitPlaninwhichsuchemployeefirstbecomeeligibletoparticipateaftertheEffectiveTime.EffectiveasofthelaterofJanuary1,2020andthirty(30)daysaftertheEffectiveTimeandsubjecttotheimmediatelyfollowingsentence,theContinuingEmployeesshallbecomeeligibletoparticipateintheBB&TCorporationPensionPlanandtheBB&TNon-QualifiedDefinedBenefitPlanonthesamebasisassimilarlysituatedemployeesofBB&TanditsSubsidiaries,exceptasotherwisemutuallyagreedbyBB&TandSunTrust.Forpurposesoftheforegoing,theSurvivingEntityshallrecognize(1)theservicewithSunTrustanditsSubsidiariesoftheContinuingEmployeesforpurposesofeligibilitytoparticipateandvesting(butnotbenefitaccrual)undertheBB&TCorporationPensionPlanand(2)theserviceoftheContinuingEmployeeswhosatisfytheeligibilityrequirementsoftheBB&TNon-QualifiedDefinedBenefitPlanasineffectimmediatelypriortotheEffectiveTimeandaredesignatedbythecompensationcommitteeoftheBoardofDirectorsoftheSurvivingEntityaseligibletoparticipateinsuchplanforpurposesofeligibilitytoparticipateandvesting(butnotbenefitaccrual)undertheBB&TNon-QualifiedDefinedBenefitPlan.
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(c)TheSurvivingEntityagreestohonorinaccordancewiththeirtermsallBB&TBenefitPlansandSunTrustBenefitPlans.Inaddition,priortotheEffectiveTime,BB&Tmaytakesuchactionasitdeemsnecessary,includingamendingtheBB&TCorporationPensionPlanand/ortheBB&TNon-QualifiedDefinedBenefitPlan,sothat(i)eachparticipantintheBB&TCorporationPensionPlanandBB&TNon-QualifiedDefinedBenefitPlanimmediatelypriortotheEffectiveTimeshallbeentitledtocontinuedbenefitaccrualonabasisnolessfavorablethanineffectimmediatelypriortotheEffectiveTime(includingastoanyrightsorfeatures)forsolongassuchparticipantcontinuesasanemployeeoftheSurvivingEntityoritsSubsidiaries(ortheirrespectivesuccessorsorassigns)and(ii)followingtheEffectiveTime,theBB&TCorporationPensionPlanandBB&TNon-QualifiedDefinedBenefitPlanmaynotbeterminatedoramendedsoastoadverselyimpactanysuchparticipantorthebenefitofanysuchparticipant,includinganyfuturebenefitaccrualsorthevestingorentitlementtosuchfuturebenefitaccruals(includinganyrightsorfeaturesofsuchaccruals).Withoutlimitingtheforegoingandforpurposesofclarity,anyamendmenttoprovidealumpsumcashoutofaparticipant’saccruedpensionbenefitshallbedeemedtoadverselyimpacttheparticipantforpurposesoftheforegoingclause(ii).
(d)IfrequestedbyBB&TinwritingdeliveredtoSunTrustnotlessthanten(10)businessdaysbeforetheClosingDate,theBoardofDirectorsofSunTrust(ortheappropriatecommitteethereof)shalladoptresolutionsandtakesuchcorporateactionasisnecessaryorappropriatetoterminatetheSunTrustBanks,Inc.401(k)Plan(the“SunTrust401(k)Plan”),effectiveasofthedaypriortotheClosingDateandcontingentupontheoccurrenceoftheEffectiveTime.IfBB&TrequeststhattheSunTrust401(k)Planbeterminated,(i)SunTrustshallprovideBB&Twithevidencethatsuchplanhasbeenterminated(theformandsubstanceofwhichshallbesubjecttoreasonablereviewandcommentbyBB&T)notlaterthantwo(2)daysimmediatelyprecedingtheClosingDateand(ii)theContinuingEmployeesshallbeeligibletoparticipate,effectiveasoftheEffectiveTime,ina401(k)plansponsoredormaintainedbyBB&ToroneofitsSubsidiaries(the“BB&T401(k)Plan”),itbeingagreedthatthereshallbenogapinparticipationinatax-qualifieddefinedcontributionplan.BB&TandSunTrustshalltakeanyandallactionsasmayberequired,includingamendmentstotheSunTrust401(k)Planand/ortheBB&T401(k)Plan,topermittheContinuingEmployeestomakerollovercontributionstotheBB&T401(k)Planof“eligiblerolloverdistributions”(withinthemeaningofSection401(a)(31)oftheCode)intheformofcash,notes(inthecaseofloans),BB&TCommonStockoracombinationthereofinanamountequaltothefullaccountbalancedistributedtosuchemployeefromtheSunTrust401(k)Plan.
(e)PriortotheEffectiveTime,theBoardofDirectorsofBB&TshalltakesuchactionasisnecessarytoprovidethatthetransactionscontemplatedbythisAgreementaredeemeda“mergerofequals”forpurposesofeachBB&TBenefitPlanthatprovidestheBoardofDirectorsofBB&Twiththeabilitytodeclarethataparticulartransactionconstitutesa“mergerofequals”andthusdoesnotconstitutea“changeincontrol”,“changeofcontrol”orsimilarconceptundersuchBB&TBenefitPlans(whichdeterminationshallnotberevokedduringthe12-monthperiodfollowingtheEffectiveTime).
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(f)NothinginthisAgreementshallconferuponanyemployee,officer,directororconsultantofBB&TorSunTrustoranyoftheirSubsidiariesoraffiliatesanyrighttocontinueintheemployorserviceoftheSurvivingEntity,SunTrust,BB&ToranySubsidiaryoraffiliatethereof,orshallinterferewithorrestrictinanywaytherightsoftheSurvivingEntity,SunTrust,BB&ToranySubsidiaryoraffiliatethereoftodischargeorterminatetheservicesofanyemployee,officer,directororconsultantofBB&TorSunTrustoranyoftheirSubsidiariesoraffiliatesatanytimeforanyreasonwhatsoever,withorwithoutcause.NothinginthisAgreementshallbedeemedto(i)establish,amend,ormodifyanySunTrustBenefitPlan,BB&TBenefitPlan,NewBenefitPlanoranyotherbenefitoremploymentplan,program,agreementorarrangement,or(ii)alterorlimittheabilityoftheSurvivingEntityoranyofitsSubsidiariesoraffiliatestoamend,modifyorterminateanyparticularSunTrustBenefitPlan,BB&TBenefitPlan,NewBenefitPlanoranyotherbenefitoremploymentplan,program,agreementorarrangementaftertheEffectiveTime.WithoutlimitingthegeneralityofSection9.11,nothinginthisAgreement,expressorimplied,isintendedtoorshallconferuponanyperson,includinganycurrentorformeremployee,officer,directororconsultantofBB&TorSunTrustoranyoftheirSubsidiariesoraffiliates,anyright,benefitorremedyofanynaturewhatsoeverunderorbyreasonofthisAgreement.
6.7Indemnification;Directors’andOfficers’Insurance.
(a)FromandaftertheEffectiveTime,theSurvivingEntityshallindemnifyandholdharmlessandshalladvanceexpensesasincurred,ineachcasetotheextent(subjecttoapplicablelaw)suchpersonsareindemnifiedasofthedateofthisAgreementbySunTrustpursuanttotheSunTrustArticles,theSunTrustBylaws,thegoverningororganizationaldocumentsofanySubsidiaryofSunTrustandanyindemnificationagreementsinexistenceasofthedatehereofanddisclosedinSection6.7(a)oftheSunTrustDisclosureSchedule,eachpresentandformerdirector,officeroremployeeofSunTrustanditsSubsidiaries(ineachcase,whenactinginsuchcapacity)(collectively,the“SunTrustIndemnifiedParties”)againstanycostsorexpenses(includingreasonableattorneys’fees),judgments,fines,losses,damagesorliabilitiesincurredinconnectionwithanythreatenedoractualclaim,action,suit,proceedingorinvestigation,whethercivil,criminal,administrativeorinvestigative,whetherarisingbeforeoraftertheEffectiveTime,arisingoutofthefactthatsuchpersonisorwasadirector,officeroremployeeofSunTrustoranyofitsSubsidiariesandpertainingtomattersexistingoroccurringatorpriortotheEffectiveTime,includingthetransactionscontemplatedbythisAgreement;provided,thatinthecaseofadvancementofexpenses,anySunTrustIndemnifiedPartytowhomexpensesareadvancedprovidesanundertakingtorepaysuchadvancesifitisultimatelydeterminedthatsuchSunTrustIndemnifiedPartyisnotentitledtoindemnification.
(b)Foraperiodofsix(6)yearsaftertheEffectiveTime,theSurvivingEntityshallcausetobemaintainedineffectthecurrentpoliciesofdirectors’andofficers’liabilityinsurancemaintainedbySunTrust(provided,thattheSurvivingEntitymaysubstitutethereforpolicieswithasubstantiallycomparableinsurerofatleastthesamecoverageandamountscontainingtermsandconditionsthatarenolessadvantageoustotheinsured)withrespecttoclaimsarisingfromfactsoreventswhichoccurredatorbeforetheEffectiveTime;provided,however,thattheSurvivingEntityshallnotbeobligatedtoexpend,onanannualbasis,anamountinexcessof300%ofthecurrentannualpremiumpaidasofthedatehereofbySunTrustforsuchinsurance(the
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“PremiumCap”),andifsuchpremiumsforsuchinsurancewouldatanytimeexceedthePremiumCap,thentheSurvivingEntityshallcausetobemaintainedpoliciesofinsurancewhich,intheSurvivingEntity’sgoodfaithdetermination,providethemaximumcoverageavailableatanannualpremiumequaltothePremiumCap.Inlieuoftheforegoing,BB&TorSunTrust,inconsultationwith,butonlyupontheconsentofBB&T,may(andattherequestofBB&T,SunTrustshalluseitsreasonablebesteffortsto)obtainatorpriortotheEffectiveTimeasix(6)-year“tail”policyunderSunTrust’sexistingdirectors’andofficers’insurancepolicyprovidingequivalentcoveragetothatdescribedintheprecedingsentenceifandtotheextentthatthesamemaybeobtainedforanamountthat,intheaggregate,doesnotexceedthePremiumCap.
(c)TheprovisionsofthisSection6.7shallsurvivetheEffectiveTimeandareintendedtobeforthebenefitof,andshallbeenforceableby,eachSunTrustIndemnifiedPartyandhisorherheirsandrepresentatives.IftheSurvivingEntityoranyofitssuccessorsorassigns(i)consolidateswithormergesintoanyotherpersonandisnotthecontinuingorsurvivingentityofsuchconsolidationormerger,or(ii)transfersallorsubstantiallyallofitsassetsordepositstoanyotherpersonorengagesinanysimilartransaction,thenineachsuchcase,theSurvivingEntitywillcauseproperprovisiontobemadesothatthesuccessorsandassignsoftheSurvivingEntitywillexpresslyassumetheobligationssetforthinthisSection6.7.
6.8AdditionalAgreements.IncaseatanytimeaftertheEffectiveTimeanyfurtheractionisnecessaryordesirabletocarryoutthepurposesofthisAgreement(includinganymergerbetweenaSubsidiaryofBB&T,ontheonehand,andaSubsidiaryofSunTrust,ontheotherhand)ortovesttheSurvivingEntitywithfulltitletoallproperties,assets,rights,approvals,immunitiesandfranchisesofanyofthepartiestotheMergerortheBankMerger,theproperofficersanddirectorsofeachpartytothisAgreementandtheirrespectiveSubsidiariesshalltakeallsuchnecessaryactionasmaybereasonablyrequestedbyBB&T.
6.9AdviceofChanges.BB&TandSunTrustshalleachpromptlyadvisetheotherpartyofanyeffect,change,event,circumstance,condition,occurrenceordevelopment(i)thathashadorwouldreasonablybeexpectedtohave,eitherindividuallyorintheaggregate,aMaterialAdverseEffectonitor(ii)thatitbelieveswouldorwouldreasonablybeexpectedtocauseorconstituteamaterialbreachofanyofitsrepresentations,warranties,obligations,covenantsoragreementscontainedhereinthatreasonablycouldbeexpectedtogiverise,individuallyorintheaggregate,tothefailureofaconditioninArticleVII;provided,thatanyfailuretogivenoticeinaccordancewiththeforegoingwithrespecttoanybreachshallnotbedeemedtoconstituteaviolationofthisSection6.9orthefailureofanyconditionsetforthinSection7.2or7.3tobesatisfied,orotherwiseconstituteabreachofthisAgreementbythepartyfailingtogivesuchnotice,ineachcaseunlesstheunderlyingbreachwouldindependentlyresultinafailureoftheconditionssetforthinSection7.2or7.3tobesatisfied;andprovided,further,thatthedeliveryofanynoticepursuanttothisSection6.9shallnotcureanybreachof,ornoncompliancewith,anyotherprovisionofthisAgreementorlimittheremediesavailabletothepartyreceivingsuchnotice.
6.10Dividends.AfterthedateofthisAgreement,eachofBB&TandSunTrustshallcoordinatewiththeotherthedeclarationofanydividendsinrespectofBB&TCommonStockandSunTrustCommonStockandtherecorddatesandpaymentdatesrelatingthereto,itbeingtheintentionofthepartiesheretothatholdersof
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SunTrustCommonStockshallnotreceivetwodividends,orfailtoreceiveonedividend,inanyquarterwithrespecttotheirsharesofSunTrustCommonStockandanysharesofBB&TCommonStockanysuchholderreceivesinexchangethereforintheMerger.
6.11ShareholderLitigation.EachpartyshallgivetheotherpartypromptnoticeofanyshareholderlitigationagainstsuchpartyoritsdirectorsorofficersrelatingtothetransactionscontemplatedbythisAgreement,andshallgivetheotherpartytheopportunitytoparticipate(atsuchother’sparty’sexpense)inthedefenseorsettlementofanysuchlitigation.Eachpartyshallgivetheothertherighttoreviewandcommentonallfilingsorresponsestobemadebysuchpartyinconnectionwithanysuchlitigation,andwillingoodfaithtakesuchcommentsintoaccount.Nopartyshallagreetosettleanysuchlitigationwithouttheotherparty’spriorwrittenconsent,whichconsentshallnotbeunreasonablywithheld,conditionedordelayed;provided,thattheotherpartyshallnotbeobligatedtoconsenttoanysettlementwhichdoesnotincludeafullreleaseofsuchotherpartyanditsaffiliatesorwhichimposesaninjunctionorotherequitablereliefaftertheEffectiveTimeupontheSurvivingEntityoranyofitsaffiliates.
6.12CorporateGovernance;Headquarters.
(a)PriortotheEffectiveTime,theBoardofDirectorsofBB&TshalltakeallactionsnecessarytoadopttheBB&TBylawAmendmentandtheresolutionsreferencedthereinandtoeffecttherequirementsreferencedthereinthataretobeeffectedasoftheEffectiveTime.EffectiveasoftheEffectiveTime,inaccordancewiththeBB&TBylawAmendment,thenumberofdirectorsthatwillcomprisethefullBoardofDirectorsoftheSurvivingEntityandthefullBoardofDirectorsofBB&TSubsidiaryBankshalleachbetwenty-two(22).OfthemembersoftheinitialBoardofDirectorsoftheSurvivingEntityasoftheEffectiveTimeandoftheinitialBoardofDirectorsofBB&TSubsidiaryBankasoftheeffectivetimeoftheBankMerger,oneshallbetheChiefExecutiveOfficerofBB&TasofimmediatelypriortotheEffectiveTime,oneshallbetheChiefExecutiveOfficerofSunTrustasofimmediatelypriortotheEffectiveTime,ten(10)shallbemembersoftheBoardofDirectorsofBB&TasofimmediatelypriortotheEffectiveTime,designatedbyBB&T,andten(10)shallbemembersoftheBoardofDirectorsofSunTrustasofimmediatelypriortotheEffectiveTime,designatedbySunTrust.
(b)Inaccordancewith,andtotheextentprovidedin,theBB&TBylawsAmendment:(i)effectiveasoftheEffectiveTime,Mr.KellyS.KingshallcontinuetoserveasChairmanoftheBoardofDirectorsandChiefExecutiveOfficeroftheSurvivingEntityandBB&TSubsidiaryBank,andMr.WilliamH.Rogers,Jr.shallbecomethePresidentandChiefOperatingOfficeroftheSurvivingEntityandBB&TSubsidiaryBank;(ii)Mr.RogersshallbethesuccessortoMr.KingastheChiefExecutiveOfficeroftheSurvivingEntityandofBB&TSubsidiaryBank,withsuchsuccessiontobecomeeffectiveonSeptember12,2021oranysuchearlierdateasofwhichMr.KingceasesforanyreasontoserveinthepositionofChiefExecutiveOfficeroftheSurvivingEntityorofBB&TSubsidiaryBank,asapplicable(thedateofsuchSurvivingEntitysuccession,the“CEOSuccessionDate”);(iii)subjecttoMr.King’sdeath,resignationordisqualification,fromtheCEOSuccessionDatethroughMarch12,2022,Mr.KingshallserveasExecutiveChairmanoftheSurvivingEntity
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andofBB&TSubsidiaryBank;(iv)Mr.RogersshallbethesuccessortoMr.KingastheChairmanoftheBoardofDirectorsoftheSurvivingEntityandofBB&TSubsidiaryBank,withsuchsuccessiontobecomeeffectiveonMarch12,2022,oranysuchearlierdateasofwhichMr.KingceasesforanyreasontoserveinthepositionofChairmanoftheBoardofDirectorsoftheSurvivingEntityorofBB&TSubsidiaryBank,asapplicable(thedateofsuchSurvivingEntitysuccession,the“ChairmanSuccessionDate”);(v)subjecttoMr.King’sdeath,resignationordisqualification,fromtheChairmanSuccessionDateuntilSeptember12,2022,Mr.KingshallserveasaconsultanttotheSurvivingEntityandtoBB&TSubsidiaryBank;and(vi)subjecttoMr.King’sdeath,resignationordisqualification,Mr.KingwillbenominatedtoserveasadirectoroftheSurvivingEntityandBB&TSubsidiaryBankforeachtermofserviceofdirectorsbeginningatanytimepriortoDecember31,2023.
(c)AsoftheEffectiveTime,(i)theheadquartersoftheSurvivingEntityandBB&TSubsidiaryBankwillbelocatedinCharlotte,NorthCarolina;(ii)thehubfortheSurvivingEntity’sandBB&TSubsidiaryBank’swholesalebusinessshallbelocatedinAtlanta,Georgia;(iii)thehubfortheSurvivingEntity’sandBB&TSubsidiaryBank’sconsumerandcommunitybankingbusinessshallbelocatedinWinston-Salem,NorthCarolina;and(iv)thehubfortheSurvivingEntity’sandBB&TSubsidiaryBank’stechnologyandinnovationoperationsshallbelocatedinCharlotte,NorthCarolina.
(d)AsofandfromtheEffectiveTime,thenameoftheSurvivingEntitywillbeanametobemutuallyagreeduponbySunTrustandBB&TpriortotheClosingDate.
(e)ThebylawsofBB&TSubsidiaryBankineffectastheeffectivetimeoftheBankMergerwillbeconsistentinallrespectswiththeforegoingprovisionsofthisSection6.12.
6.13CommitmentstotheCommunity.FollowingtheEffectiveTime,theSurvivingEntitywillincreasethelevelofphilanthropicandcommunityinvestmentprovidedbySunTrustinAtlanta,GeorgiaandbyBB&TinWinston-Salem,NorthCarolina,respectively,ineachcaserelativetothelevelofsuchinvestmentasofimmediatelypriortotheEffectiveTime.
6.14AcquisitionProposals.
(a)Eachpartyagreesthatitwillnot,andwillcauseeachofitsSubsidiariesanditsandtheirrespectiveofficers,directors,employees,agents,advisorsandrepresentatives(collectively,“Representatives”)notto,directlyorindirectly,(i)initiate,solicit,knowinglyencourageorknowinglyfacilitateanyinquiriesorproposalswithrespecttoanyAcquisitionProposal,(ii)engageorparticipateinanynegotiationswithanypersonconcerninganyAcquisitionProposal,(iii)provideanyconfidentialornonpublicinformationordatato,haveorparticipateinanydiscussionswithanypersonrelatingtoanyAcquisitionProposalor(iv)unlessthisAgreementhasbeenterminatedinaccordancewithitsterms,approveorenterintoanytermsheet,letterofintent,commitment,memorandumofunderstanding,agreementinprinciple,acquisitionagreement,mergeragreementorotheragreement(whetherwrittenororal,bindingornonbinding)(otherthanaconfidentialityagreementreferredtoanenteredintoinaccordancewiththisSection6.14)inconnectionwithorrelatingtoanyAcquisitionProposal.Notwithstandingtheforegoing,intheeventthatafterthedateofthisAgreementandpriortothereceipt
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oftheRequisiteBB&TVote,inthecaseorBB&T,ortheRequisiteSunTrustVote,inthecaseofSunTrust,apartyreceivesanunsolicitedbonafidewrittenAcquisitionProposal,suchpartymay,andmaypermititsSubsidiariesanditsanditsSubsidiaries’Representativesto,furnishorcausetobefurnishedconfidentialornonpublicinformationordataandparticipateinsuchnegotiationsordiscussionswiththepersonmakingtheAcquisitionProposaliftheBoardofDirectorsofsuchpartyconcludesingoodfaith(afterreceivingtheadviceofitsoutsidecounsel,andwithrespecttofinancialmatters,itsfinancialadvisors)thatfailuretotakesuchactionswouldbemorelikelythannottoresultinaviolationofitsfiduciarydutiesunderapplicablelaw;provided,that,priortofurnishinganyconfidentialornonpublicinformationpermittedtobeprovidedpursuanttothissentence,suchpartyshallhaveenteredintoaconfidentialityagreementwiththepersonmakingsuchAcquisitionProposalontermsnolessfavorabletoitthantheConfidentialityAgreement,whichconfidentialityagreementshallnotprovidesuchpersonwithanyexclusiverighttonegotiatewithsuchparty.Eachpartywill,andwillcauseitsRepresentativesto,immediatelyceaseandcausetobeterminatedanyactivities,discussionsornegotiationsconductedbeforethedateofthisAgreementwithanypersonotherthanSunTrustorBB&T,asapplicable,withrespecttoanyAcquisitionProposal.Eachpartywillpromptly(withintwenty-four(24)hours)advisetheotherpartyfollowingreceiptofanyAcquisitionProposaloranyinquirywhichcouldreasonablybeexpectedtoleadtoanAcquisitionProposal,andthesubstancethereof(includingthetermsandconditionsofandtheidentityofthepersonmakingsuchinquiryorAcquisitionProposal),willprovidetheotherpartywithanunredactedcopyofanysuchAcquisitionProposalandanydraftagreements,proposalsorothermaterialsreceivedinconnectionwithanysuchinquiryorAcquisitionProposal,andwillkeeptheotherpartyapprisedofanyrelateddevelopments,discussionsandnegotiationsonacurrentbasis,includinganyamendmentstoorrevisionsofthetermsofsuchinquiryorAcquisitionProposal.EachpartyshalluseitsreasonablebesteffortstoenforceanyexistingconfidentialityorstandstillagreementstowhichitoranyofitsSubsidiariesisapartyinaccordancewiththetermsthereof.AsusedinthisAgreement,“AcquisitionProposal”shallmean,withrespecttoBB&TorSunTrust,asapplicable,otherthanthetransactionscontemplatedbythisAgreement,anyoffer,proposalorinquiryrelatingto,oranythird-partyindicationofinterestin,(i)anyacquisitionorpurchase,directorindirect,oftwenty-fivepercent(25%)ormoreoftheconsolidatedassetsofapartyanditsSubsidiariesortwenty-fivepercent(25%)ormoreofanyclassofequityorvotingsecuritiesofapartyoritsSubsidiarieswhoseassets,individuallyorintheaggregate,constitutemoretwenty-fivepercent(25%)ormoreoftheconsolidatedassetsoftheparty,(ii)anytenderoffer(includingaself-tenderoffer)orexchangeofferthat,ifconsummated,wouldresultinsuchthirdpartybeneficiallyowningtwenty-fivepercent(25%)ormoreofanyclassofequityorvotingsecuritiesofapartyoritsSubsidiarieswhoseassets,individuallyorintheaggregate,constitutetwenty-fivepercent(25%)ormoreoftheconsolidatedassetsoftheparty,or(iii)amerger,consolidation,shareexchange,businesscombination,reorganization,recapitalization,liquidation,dissolutionorothersimilartransactioninvolvingapartyoritsSubsidiarieswhoseassets,individuallyorintheaggregate,constitutetwenty-fivepercent(25%)ormoreoftheconsolidatedassetsoftheparty.
(b)NothingcontainedinthisAgreementshallpreventapartyoritsBoardofDirectorsfromcomplyingwithRule14d-9andRule14e-2undertheExchangeActwithrespecttoanAcquisitionProposal;provided,thatsuchruleswillinnowayeliminateormodifytheeffectthatanyactionpursuanttosuchruleswouldotherwisehaveunderthisAgreement.
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6.15PublicAnnouncements.SunTrustandBB&TagreethattheinitialpressreleasewithrespecttotheexecutionanddeliveryofthisAgreementshallbeareleasemutuallyagreedtobytheparties.Thereafter,eachofthepartiesagreesthatnopublicreleaseorannouncementorstatementconcerningthisAgreementorthetransactionscontemplatedherebyshallbeissuedbyanypartywithoutthepriorwrittenconsentoftheotherparty(whichconsentshallnotbeunreasonablywithheld,conditionedordelayed),except(i)asrequiredbyapplicablelawortherulesorregulationsofanyapplicableGovernmentalEntityorstockexchangetowhichtherelevantpartyissubject,inwhichcasethepartyrequiredtomakethereleaseorannouncementshallconsultwiththeotherpartyabout,andallowtheotherpartyreasonabletimetocommenton,suchreleaseorannouncementinadvanceofsuchissuanceor(ii)forsuchreleases,announcementsorstatementsthatareconsistentwithothersuchreleases,announcementorstatementsmadeafterthedateofthisAgreementincompliancewiththisSection6.15.
6.16ChangeofMethod.SunTrustandBB&Tshallbeempowered,upontheirmutualagreement,atanytimepriortotheEffectiveTime,tochangethemethodorstructureofeffectingthecombinationofSunTrustandBB&T(includingtheprovisionsofArticleI),ifandtotheextenttheybothdeemsuchchangetobenecessary,appropriateordesirable;provided,however,thatnosuchchangeshall(i)alterorchangetheExchangeRatioorthenumberofsharesofBB&TCommonStockreceivedbyholdersofSunTrustCommonStockinexchangeforeachshareofSunTrustCommonStock,(ii)adverselyaffecttheTaxtreatmentofSunTrust’sshareholdersorBB&T’sshareholderspursuanttothisAgreement,(iii)adverselyaffecttheTaxtreatmentofSunTrustorBB&TpursuanttothisAgreementor(iv)materiallyimpedeordelaytheconsummationofthetransactionscontemplatedbythisAgreementinatimelymanner.ThePartiesagreetoreflectanysuchchangeinanappropriateamendmenttothisAgreementexecutedbybothpartiesinaccordancewithSection9.1.
6.17RestructuringEfforts.IfeitherSunTrustorBB&TshallhavefailedtoobtaintheRequisiteSunTrustVoteortheRequisiteBB&TVoteatthedulyconvenedSunTrustMeetingorBB&TMeeting,asapplicable,oranyadjournmentorpostponementthereof,eachofthepartiesshallingoodfaithuseitsreasonablebesteffortstonegotiatearestructuringofthetransactionsprovidedforherein(itbeingunderstoodthatneitherpartyshallhaveanyobligationtoalterorchangeanymaterialterms,includingtheamountorkindoftheconsiderationtobeissuedtoholdersofthecapitalstockofSunTrustasprovidedforinthisAgreement,inamanneradversetosuchpartyoritsshareholders)and/orresubmitthisAgreementandthetransactionscontemplatedhereby(orasrestructuredpursuanttothisSection6.17)toitsrespectiveshareholdersforapproval.
6.18TakeoverStatutes.NoneofSunTrust,BB&TortheirrespectiveBoardsofDirectorsshalltakeanyactionthatwouldcauseanyTakeoverStatutetobecomeapplicabletothisAgreement,theMerger,oranyoftheothertransactionscontemplatedhereby,andeachshalltakeallnecessarystepstoexempt(orensurethecontinuedexemptionof)theMergerandtheothertransactionscontemplatedherebyfromanyapplicableTakeoverStatutenoworhereafterineffect.IfanyTakeoverStatutemaybecome,ormaypurporttobe,applicabletothetransactionscontemplatedhereby,eachpartyandthemembersoftheirrespectiveBoardsofDirectorswillgrantsuchapprovalsandtakesuchactionsasarenecessarysothatthetransactionscontemplatedbythisAgreementmaybeconsummatedaspromptlyaspracticableonthetermscontemplatedherebyand
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otherwiseacttoeliminateorminimizetheeffectsofanyTakeoverStatuteonanyofthetransactionscontemplatedbythisAgreement,including,ifnecessary,challengingthevalidityorapplicabilityofanysuchTakeoverStatute.
6.19TreatmentofSunTrustIndebtedness.UpontheEffectiveTime,BB&TshallassumethedueandpunctualperformanceandobservanceofthecovenantstobeperformedbySunTrustundertheindenturessetforthonSection6.19oftheSunTrustDisclosureSchedule,andthedueandpunctualpaymentoftheprincipalof(andpremium,ifany)andintereston,thenotesgovernedthereby.Inconnectiontherewith,BB&TandSunTrustshallcooperateandusereasonablebesteffortstoexecuteanddeliveranysupplementalindentures,officer’scertificatesorotherdocuments,andthepartiesheretoshallcooperateandusereasonablebesteffortstoprovideanyopinionofcounseltothetrusteethereof,requiredtomakesuchassumptioneffectiveasoftheEffectiveTime.
6.20ExemptionfromLiabilityUnderSection16(b).SunTrustandBB&Tagreethat,inordertomosteffectivelycompensateandretainSunTrustInsiders,bothpriortoandaftertheEffectiveTime,itisdesirablethatSunTrustInsidersnotbesubjecttoariskofliabilityunderSection16(b)oftheExchangeActtothefullestextentpermittedbyapplicablelawinconnectionwiththeconversionofsharesofSunTrustCommonStockandSunTrustPreferredStockandSunTrustPSUAwardsintosharesofBB&TCommonStockandNewBB&TCommonStockintheMergerandtheconversionofSunTrustEquityAwardsintocorrespondingBB&TEquityAwardsintheMerger,andforthatcompensatoryandretentivepurposeagreetotheprovisionsofthisSection6.20.SunTrustshalldelivertoBB&TinareasonablytimelyfashionpriortotheEffectiveTimeaccurateinformationregardingthoseofficersanddirectorsofSunTrustsubjecttothereportingrequirementsofSection16(a)oftheExchangeAct(the“SunTrustInsiders”),andtheBoardofDirectorsofBB&TandofSunTrust,oracommitteeofnon-employeedirectorsthereof(assuchtermisdefinedforpurposesofRule16b-3(d)undertheExchangeAct),shallreasonablypromptlythereafter,andinanyeventpriortotheEffectiveTime,takeallsuchstepsasmayberequiredtocause(inthecaseofSunTrust)anydispositionsofSunTrustCommonStock,SunTrustPreferredStockorSunTrustEquityAwardsbytheSunTrustInsiders,and(inthecaseofBB&T)anyacquisitionsofBB&TCommonStock,NewBB&TPreferredStock,orBB&TEquityAwardsbyanySunTrustInsiderswho,immediatelyfollowingtheMerger,willbeofficersordirectorsoftheSurvivingEntitysubjecttothereportingrequirementsofSection16(a)oftheExchangeAct,ineachcasepursuanttothetransactionscontemplatedbythisAgreement,tobeexemptfromliabilitypursuanttoRule16b-3undertheExchangeActtothefullestextentpermittedbyapplicablelaw.
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ARTICLEVII
CONDITIONSPRECEDENT
7.1ConditionstoEachParty’sObligationtoEffecttheMerger.TherespectiveobligationsofthepartiestoeffecttheMergershallbesubjecttothesatisfactionatorpriortotheEffectiveTimeofthefollowingconditions:
(a)ShareholderApprovals.ThisAgreementshallhavebeenapprovedbytheshareholdersofBB&TbytheRequisiteBB&TVoteandbytheshareholdersofSunTrustbytheRequisiteSunTrustVote.
(b)NYSEListing.ThesharesofBB&TCommonStockthatshallbeissuablepursuanttothisAgreementshallhavebeenauthorizedforlistingontheNYSE,subjecttoofficialnoticeofissuance.
(c)RegulatoryApprovals.(i)AllRequisiteRegulatoryApprovalsshallhavebeenobtainedandshallremaininfullforceandeffectandallstatutorywaitingperiodsinrespectthereofshallhaveexpiredorbeenterminatedand(ii)nosuchRequisiteRegulatoryApprovalshallhaveresultedintheimpositionofanyMateriallyBurdensomeRegulatoryCondition.
(d)S-4.TheS-4shallhavebecomeeffectiveundertheSecuritiesActandnostopordersuspendingtheeffectivenessoftheS-4shallhavebeenissued,andnoproceedingsforsuchpurposeshallhavebeeninitiatedorthreatenedbytheSECandnotwithdrawn.
(e)NoInjunctionsorRestraints;Illegality.Noorder,injunctionordecreeissuedbyanycourtorGovernmentalEntityofcompetentjurisdictionorotherlegalrestraintorprohibitionpreventingtheconsummationoftheMerger,theBankMergeroranyoftheothertransactionscontemplatedbythisAgreementshallbeineffect.Nolaw,statute,rule,regulation,order,injunctionordecreeshallhavebeenenacted,entered,promulgatedorenforcedbyanyGovernmentalEntitywhichprohibitsormakesillegalconsummationoftheMerger,theBankMergeroranyoftheothertransactionscontemplatedbythisAgreement.
7.2ConditionstoObligationsofBB&T.TheobligationofBB&TtoeffecttheMergerisalsosubjecttothesatisfaction,orwaiverbyBB&T,atorpriortotheEffectiveTime,ofthefollowingconditions:
(a)RepresentationsandWarranties.TherepresentationsandwarrantiesofSunTrustsetforthinSection3.2(a)andSection3.8(a)(ineachcaseaftergivingeffecttothelead-intoArticleIII)shallbetrueandcorrect(otherthan,inthecaseofSection3.2(a),suchfailurestobetrueandcorrectasaredeminimis)ineachcaseasofthedateofthisAgreementandasoftheClosingDateasthoughmadeonandasoftheClosingDate(excepttotheextentsuchrepresentationsandwarrantiesspeakasofanearlierdate,inwhichcaseasofsuchearlierdate),andtherepresentationsandwarrantiesofSunTrustsetforthinSection3.1(a),Section3.1(b)(butonlywithrespecttoSunTrustSubsidiaryBank),Section3.2(b)(butonlywithrespecttoSunTrustSubsidiaryBank),Section3.3(a)andSection3.7(readwithoutgivingeffecttoanyqualificationastomaterialityorMaterialAdverseEffectsetforthinsuchrepresentationsorwarrantiesbut,ineachcase,aftergivingeffecttothelead-intoArticleIII)shallbetrueandcorrectinallmaterialrespectsasofthedateofthisAgreementandasofthe
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ClosingDateasthoughmadeonandasoftheClosingDate(excepttotheextentsuchrepresentationsandwarrantiesspeakasofanearlierdate,inwhichcaseasofsuchearlierdate).AllotherrepresentationsandwarrantiesofSunTrustsetforthinthisAgreement(readwithoutgivingeffecttoanyqualificationastomaterialityorMaterialAdverseEffectsetforthinsuchrepresentationsorwarrantiesbut,ineachcase,aftergivingeffecttothelead-intoArticleIII)shallbetrueandcorrectinallrespectsasofthedateofthisAgreementandasoftheClosingDateasthoughmadeonandasoftheClosingDate(excepttotheextentsuchrepresentationsandwarrantiesspeakasofanearlierdate,inwhichcaseasofsuchearlierdate);provided,however,thatforpurposesofthissentence,suchrepresentationsandwarrantiesshallbedeemedtobetrueandcorrectunlessthefailureorfailuresofsuchrepresentationsandwarrantiestobesotrueandcorrect,eitherindividuallyorintheaggregate,andwithoutgivingeffecttoanyqualificationastomaterialityorMaterialAdverseEffectsetforthinsuchrepresentationsorwarranties,hashadorwouldreasonablybeexpectedtohaveaMaterialAdverseEffectonSunTrustortheSurvivingEntity.BB&TshallhavereceivedacertificatedatedasoftheClosingDateandsignedonbehalfofSunTrustbytheChiefExecutiveOfficerortheChiefFinancialOfficerofSunTrusttotheforegoingeffect.
(b)PerformanceofObligationsofSunTrust.SunTrustshallhaveperformedinallmaterialrespectstheobligations,covenantsandagreementsrequiredtobeperformedbyitunderthisAgreementatorpriortotheClosingDate,andBB&TshallhavereceivedacertificatedatedasoftheClosingDateandsignedonbehalfofSunTrustbytheChiefExecutiveOfficerortheChiefFinancialOfficerofSunTrusttosucheffect.
(c)FederalTaxOpinion.BB&TshallhavereceivedtheopinionofWachtell,Lipton,Rosen&Katz,informandsubstancereasonablysatisfactorytoBB&T,datedasoftheClosingDate,totheeffectthat,onthebasisoffacts,representationsandassumptionssetforthorreferredtoinsuchopinion,theMergerwillqualifyasa“reorganization”withinthemeaningofSection368(a)oftheCode.Inrenderingsuchopinion,counselmayrequireandrelyuponrepresentationscontainedincertificatesofofficersofBB&TandSunTrust,reasonablysatisfactoryinformandsubstancetosuchcounsel.
7.3ConditionstoObligationsofSunTrust.TheobligationofSunTrusttoeffecttheMergerisalsosubjecttothesatisfaction,orwaiverbySunTrust,atorpriortotheEffectiveTimeofthefollowingconditions:
(a)RepresentationsandWarranties.TherepresentationsandwarrantiesofBB&TsetforthinSection4.2(a)andSection4.8(a)(ineachcase,aftergivingeffecttothelead-intoArticleIV)shallbetrueandcorrect(otherthan,inthecaseofSection4.2(a),suchfailurestobetrueandcorrectasaredeminimis)ineachcaseasofthedateofthisAgreementandasoftheClosingDateasthoughmadeonandasoftheClosingDate(excepttotheextentsuchrepresentationsandwarrantiesspeakasofanearlierdate,inwhichcaseasofsuchearlierdate),andtherepresentationsandwarrantiesofBB&TsetforthinSection4.1(a),Section4.1(b)(butonlywithrespecttoBB&TSubsidiaryBank),Section4.2(b)(butonlywithrespecttoBB&TSubsidiaryBank),Section4.3(a)andSection4.7(readwithoutgivingeffecttoanyqualificationastomaterialityorMaterialAdverseEffectsetforthinsuchrepresentationsorwarrantiesbut,ineachcase,aftergivingeffecttothelead-intoArticleIV)shallbetrueandcorrectinallmaterialrespectsasofthedateofthisAgreementandasofthe
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ClosingDateasthoughmadeonandasoftheClosingDate(excepttotheextentsuchrepresentationsandwarrantiesspeakasofanearlierdate,inwhichcaseasofsuchearlierdate).AllotherrepresentationsandwarrantiesofBB&TsetforthinthisAgreement(readwithoutgivingeffecttoanyqualificationastomaterialityorMaterialAdverseEffectsetforthinsuchrepresentationsorwarrantiesbut,ineachcase,aftergivingeffecttothelead-intoArticleIV)shallbetrueandcorrectinallrespectsasofthedateofthisAgreementandasoftheClosingDateasthoughmadeonandasoftheClosingDate(excepttotheextentsuchrepresentationsandwarrantiesspeakasofanearlierdate,inwhichcaseasofsuchearlierdate),provided,however,thatforpurposesofthissentence,suchrepresentationsandwarrantiesshallbedeemedtobetrueandcorrectunlessthefailureorfailuresofsuchrepresentationsandwarrantiestobesotrueandcorrect,eitherindividuallyorintheaggregate,andwithoutgivingeffecttoanyqualificationastomaterialityorMaterialAdverseEffectsetforthinsuchrepresentationsorwarranties,hashadorwouldreasonablybeexpectedtohaveaMaterialAdverseEffectonBB&T.SunTrustshallhavereceivedacertificatedatedasoftheClosingDateandsignedonbehalfofBB&TbytheChiefExecutiveOfficerortheChiefFinancialOfficerofBB&Ttotheforegoingeffect.
(b)PerformanceofObligationsofBB&T.BB&Tshallhaveperformedinallmaterialrespectstheobligations,covenantsandagreementsrequiredtobeperformedbyitunderthisAgreementatorpriortotheClosingDate,including,butnotlimitedto,thecovenanttotakeallactionsnecessarytoadopttheBB&TBylawAmendmentandtheresolutionsreferencedthereinandtoeffecttherequirementsreferencedthereinthataretobeeffectedasoftheEffectiveTime,andSunTrustshallhavereceivedacertificatedatedasoftheClosingDateandsignedonbehalfofBB&TbytheChiefExecutiveOfficerortheChiefFinancialOfficerofBB&Ttosucheffect.
(c)FederalTaxOpinion.SunTrustshallhavereceivedtheopinionofSullivan&CromwellLLP,informandsubstancereasonablysatisfactorytoSunTrust,datedasoftheClosingDate,totheeffectthat,onthebasisoffacts,representationsandassumptionssetforthorreferredtoinsuchopinion,theMergerwillqualifyasa“reorganization”withinthemeaningofSection368(a)oftheCode.Inrenderingsuchopinion,counselmayrequireandrelyuponrepresentationscontainedincertificatesofofficersofBB&TandSunTrust,reasonablysatisfactoryinformandsubstancetosuchcounsel.
ARTICLEVIII
TERMINATIONANDAMENDMENT
8.1Termination.ThisAgreementmaybeterminatedatanytimepriortotheEffectiveTime,whetherbeforeorafterreceiptoftheRequisiteSunTrustVoteortheRequisiteBB&TVote:
(a)bymutualwrittenconsentofBB&TandSunTrust;
(b)byeitherBB&TorSunTrustifanyGovernmentalEntitythatmustgrantaRequisiteRegulatoryApprovalhasdeniedapprovaloftheMergerortheBankMergerandsuchdenialhasbecomefinalandnonappealableoranyGovernmentalEntityofcompetentjurisdictionshallhaveissuedafinalandnonappealable
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order,injunction,decreeorotherlegalrestraintorprohibitionpermanentlyenjoiningorotherwiseprohibitingormakingillegaltheconsummationoftheMergerortheBankMerger,unlessthefailuretoobtainaRequisiteRegulatoryApprovalshallbeduetothefailureofthepartyseekingtoterminatethisAgreementtoperformorobservetheobligations,covenantsandagreementsofsuchpartysetforthherein;
(c)byeitherBB&TorSunTrustiftheMergershallnothavebeenconsummatedonorbeforeFebruary7,2020(the“TerminationDate”),unlessthefailureoftheClosingtooccurbysuchdateshallbeduetothefailureofthepartyseekingtoterminatethisAgreementtoperformorobservetheobligations,covenantsandagreementsofsuchpartysetforthherein;
(d)byeitherBB&TorSunTrust(provided,thattheterminatingpartyisnottheninmaterialbreachofanyrepresentation,warranty,obligation,covenantorotheragreementcontainedherein)ifthereshallhavebeenabreachofanyoftheobligations,covenantsoragreementsoranyoftherepresentationsorwarranties(oranysuchrepresentationorwarrantyshallceasetobetrue)setforthinthisAgreementonthepartofSunTrust,inthecaseofaterminationbyBB&T,orBB&T,inthecaseofaterminationbySunTrust,whichbreachorfailuretobetrue,eitherindividuallyorintheaggregatewithallotherbreachesbysuchparty(orfailuresofsuchrepresentationsorwarrantiestobetrue),wouldconstitute,ifoccurringorcontinuingontheClosingDate,thefailureofaconditionsetforthinSection7.2,inthecaseofaterminationbyBB&T,orSection7.3,inthecaseofaterminationbySunTrust,andwhichisnotcuredwithinforty-five(45)daysfollowingwrittennoticetoSunTrust,inthecaseofaterminationbyBB&T,orBB&T,inthecaseofaterminationbySunTrust,orbyitsnatureortimingcannotbecuredduringsuchperiod(orsuchfewerdaysasremainpriortotheTerminationDate);
(e)bySunTrust,if(i)BB&TortheBoardofDirectorsofBB&TshallhavemadeaRecommendationChangeor(ii)BB&TortheBoardofDirectorsofBB&TshallhavebreacheditsobligationsunderSection6.3or6.14inanymaterialrespect;or
(f)byBB&T,if(i)SunTrustortheBoardofDirectorsofSunTrustshallhavemadeaRecommendationChangeor(ii)SunTrustortheBoardofDirectorsofSunTrustshallhavebreacheditsobligationsunderSection6.3or6.14inanymaterialrespect.
8.2EffectofTermination.
(a)IntheeventofterminationofthisAgreementbyeitherBB&TorSunTrustasprovidedinSection8.1,thisAgreementshallforthwithbecomevoidandhavenoeffect,andnoneofBB&T,SunTrust,anyoftheirrespectiveSubsidiariesoranyoftheofficersordirectorsofanyofthemshallhaveanyliabilityofanynaturewhatsoeverhereunder,orinconnectionwiththetransactionscontemplatedhereby,exceptthat(i)Section6.2(b)(AccesstoInformation;Confidentiality),Section6.15(PublicAnnouncements),thisSection8.2andArticleIXshallsurviveanyterminationofthisAgreement,and(ii)notwithstandinganythingtothecontrarycontainedinthisAgreement,neitherBB&TnorSunTrustshallberelievedorreleasedfromanyliabilitiesordamagesarisingoutofitswillfulandmaterialbreachofanyprovisionofthisAgreement.
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(b)(i)IntheeventthatafterthedateofthisAgreementandpriortotheterminationofthisAgreement,abonafideAcquisitionProposalshallhavebeencommunicatedtoorotherwisemadeknowntotheBoardofDirectorsorseniormanagementofSunTrustorshallhavebeenmadedirectlytotheshareholdersofSunTrustoranypersonshallhavepubliclyannounced(andnotwithdrawnatleasttwo(2)businessdayspriortotheSunTrustMeeting)anAcquisitionProposal,ineachcasewithrespecttoSunTrustand(A)(x)thereafterthisAgreementisterminatedbyeitherBB&TorSunTrustpursuanttoSection8.1(c)withouttheRequisiteSunTrustVotehavingbeenobtained(andallotherconditionssetforthinSection7.1andSection7.3weresatisfiedorwerecapableofbeingsatisfiedpriortosuchtermination)or(y)thereafterthisAgreementisterminatedbyBB&TpursuanttoSection8.1(d)asaresultofawillfulbreach,and(B)priortothedatethatistwelve(12)monthsafterthedateofsuchtermination,SunTrustentersintoadefinitiveagreementorconsummatesatransactionwithrespecttoanAcquisitionProposal(whetherornotthesameAcquisitionProposalasthatreferredtoabove),thenSunTrustshall,ontheearlierofthedateitentersintosuchdefinitiveagreementandthedateofconsummationofsuchtransaction,payBB&T,bywiretransferofsame-dayfunds,afeeequalto$1,121,000,000(the“TerminationFee”);provided,thatforpurposesofthisSection8.2(b)(i),allreferencesinthedefinitionofAcquisitionProposalto“twenty-fivepercent(25%)”shallinsteadreferto“fiftypercent(50%).”
(ii)IntheeventthatthisAgreementisterminatedbyBB&TpursuanttoSection8.1(f),thenSunTrustshallpayBB&T,bywiretransferofsame-dayfunds,theTerminationFeewithintwo(2)businessdaysofthedateoftermination.
(c)(i)IntheeventthatafterthedateofthisAgreementandpriortotheterminationofthisAgreement,abonafideAcquisitionProposalshallhavebeencommunicatedtoorotherwisemadeknowntotheBoardofDirectorsorseniormanagementofBB&TorshallhavebeenmadedirectlytotheshareholdersofBB&Toranypersonshallhavepubliclyannounced(andnotwithdrawnatleasttwo(2)businessdayspriortotheBB&TMeeting)anAcquisitionProposal,ineachcasewithrespecttoBB&Tand(A)(x)thereafterthisAgreementisterminatedbyeitherBB&TorSunTrustpursuanttoSection8.1(c)withouttheRequisiteBB&TVotehavingbeenobtained(andallotherconditionssetforthinSection7.1andSection7.2weresatisfiedorwerecapableofbeingsatisfiedpriortosuchtermination)or(y)thereafterthisAgreementisterminatedbySunTrustpursuanttoSection8.1(d)asaresultofawillfulbreach,and(B)priortothedatethatistwelve(12)monthsafterthedateofsuchtermination,BB&TentersintoadefinitiveagreementorconsummatesatransactionwithrespecttoanAcquisitionProposal(whetherornotthesameAcquisitionProposalasthatreferredtoabove),thenBB&Tshall,ontheearlierofthedateitentersintosuchdefinitiveagreementandthedateofconsummationofsuchtransaction,paySunTrusttheTerminationFeebywiretransferofsame-dayfunds;provided,thatforpurposesofthisSection8.2(c)(i),allreferencesinthedefinitionofAcquisitionProposalto“twenty-fivepercent(25%)”shallinsteadreferto“fiftypercent(50%).”
(ii)IntheeventthatthisAgreementisterminatedbySunTrustpursuanttoSection8.1(e),thenBB&TshallpaySunTrust,bywiretransferofsame-dayfunds,theTerminationFeewithintwo(2)businessdaysofthedateoftermination.
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(d)Notwithstandinganythingtothecontraryherein,butwithoutlimitingtherightofanypartytorecoverliabilitiesordamagestotheextentpermittedherein,innoeventshalleitherpartyberequiredtopaytheTerminationFeemorethanonce.
(e)EachofBB&TandSunTrustacknowledgesthattheagreementscontainedinthisSection8.2areanintegralpartofthetransactionscontemplatedbythisAgreement,andthat,withouttheseagreements,theotherpartywouldnotenterintothisAgreement;accordingly,ifBB&TorSunTrust,asthecasemaybe,failspromptlytopaytheamountduepursuanttothisSection8.2,and,inordertoobtainsuchpayment,theotherpartycommencesasuitwhichresultsinajudgmentagainstthenon-payingpartyfortheTerminationFeeoranyportionthereof,suchnon-payingpartyshallpaythecostsandexpensesoftheotherparty(includingattorneys’feesandexpenses)inconnectionwithsuchsuit.Inaddition,ifBB&TorSunTrust,asthecasemaybe,failstopaytheamountspayablepursuanttothisSection8.2,thensuchpartyshallpayinterestonsuchoverdueamountsatarateperannumequaltothe“primerate”publishedintheWallStreetJournalonthedateonwhichsuchpaymentwasrequiredtobemadefortheperiodcommencingasofthedatethatsuchoverdueamountwasoriginallyrequiredtobepaidandendingonthedatethatsuchoverdueamountisactuallypaidinfull.
ARTICLEIX
GENERALPROVISIONS
9.1Amendment.Subjecttocompliancewithapplicablelaw,thisAgreementmaybeamendedbythepartiesheretoatanytimebeforeorafterthereceiptoftheRequisiteBB&TVoteortheRequisiteSunTrustVote;provided,however,thatafterthereceiptoftheRequisiteBB&TVoteortheRequisiteSunTrustVote,theremaynotbe,withoutfurtherapprovaloftheshareholdersofBB&TorSunTrust,asapplicable,anyamendmentofthisAgreementthatrequiressuchfurtherapprovalunderapplicablelaw.ThisAgreementmaynotbeamendedexceptbyaninstrumentinwritingsignedonbehalfofeachofthepartieshereto.
9.2Extension;Waiver.AtanytimepriortotheEffectiveTime,eachofthepartiesheretomay,totheextentlegallyallowed,(a)extendthetimefortheperformanceofanyoftheobligationsorotheractsoftheotherpartyhereto,(b)waiveanyinaccuraciesintherepresentationsandwarrantiesoftheotherpartycontainedhereinorinanydocumentdeliveredbysuchotherpartypursuanthereto,and(c)waivecompliancewithanyoftheagreementsorsatisfactionofanyconditionsforitsbenefitcontainedherein;provided,however,thatafterthereceiptoftheRequisiteBB&TVoteortheRequisiteSunTrustVote,theremaynotbe,withoutfurtherapprovaloftheshareholdersofBB&TorSunTrust,asapplicable,anyextensionorwaiverofthisAgreementoranyportionthereofthatrequiressuchfurtherapprovalunderapplicablelaw.Anyagreementonthepartofapartyheretotoanysuchextensionorwaivershallbevalidonlyifsetforthinawritteninstrumentsignedonbehalfofsuchparty,butsuchextensionorwaiverorfailuretoinsistonstrictcompliancewithanobligation,covenant,agreementorconditionshallnotoperateasawaiverof,orestoppelwithrespectto,anysubsequentorotherfailure.
9.3NonsurvivalofRepresentations,WarrantiesandAgreements.Noneoftherepresentations,warranties,obligations,covenantsandagreementsinthisAgreement(orinanycertificatedeliveredpursuantto
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thisAgreement)shallsurvivetheEffectiveTime,exceptforSection6.7andforthoseotherobligations,covenantsandagreementscontainedhereinwhichbytheirtermsapplyinwholeorinpartaftertheEffectiveTime.
9.4Expenses.ExceptasotherwiseexpresslyprovidedinthisAgreement,allcostsandexpensesincurredinconnectionwiththisAgreementandthetransactionscontemplatedherebyshallbepaidbythepartyincurringsuchexpense;provided,however,thatthecostsandexpensesofprintingandmailingtheJointProxyStatementandallfilingandotherfeespaidtoGovernmentalEntitiesinconnectionwiththeMergerandtheothertransactionscontemplatedherebyshallbeborneequallybyBB&TandSunTrust.
9.5Notices.Allnoticesandothercommunicationshereundershallbeinwritingandshallbedeemedgivenifdeliveredpersonally,bye-mailtransmission(withconfirmation),mailedbyregisteredorcertifiedmail(returnreceiptrequested)ordeliveredbyanexpresscourier(withconfirmation)tothepartiesatthefollowingaddresses(oratsuchotheraddressforapartyasshallbespecifiedbylikenotice):
(a) iftoSunTrust,to:
SunTrustBanks,Inc. 303PeachtreeStreet,N.E. Atlanta,Georgia Attention: EllenFitzsimmons,GeneralCounsel E-mail: [email protected]
Withacopy(whichshallnotconstitutenotice)to:
Sullivan&CromwellLLP 125BroadStreet NewYork,NewYork10004 Attention: H.RodginCohen MitchellS.Eitel Facsimile: (212)558-3588 Email: [email protected] [email protected]
and
(b) iftoBB&T,to:
BB&TCorporation 200WestSecondStreet Winston-Salem,NorthCarolina27101 Attention: RobertJ.Johnson E-mail: [email protected]
Withacopy(whichshallnotconstitutenotice)to:
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Wachtell,Lipton,Rosen&Katz 51West52ndStreet NewYork,NY10019 Attention: EdwardD.Herlihy MatthewM.Guest E-mail: [email protected] [email protected]
9.6Interpretation.ThepartieshaveparticipatedjointlyinnegotiatinganddraftingthisAgreement.Intheeventthatanambiguityoraquestionofintentorinterpretationarises,thisAgreementshallbeconstruedasifdraftedjointlybytheparties,andnopresumptionorburdenofproofshallarisefavoringordisfavoringanypartybyvirtueoftheauthorshipofanyprovisionofthisAgreement.WhenareferenceismadeinthisAgreementtoArticles,Sections,ExhibitsorSchedules,suchreferenceshallbetoanArticleorSectionoforExhibitorScheduletothisAgreementunlessotherwiseindicated.ThetableofcontentsandheadingscontainedinthisAgreementareforreferencepurposesonlyandshallnotaffectinanywaythemeaningorinterpretationofthisAgreement.Wheneverthewords“include,”“includes”or“including”areusedinthisAgreement,theyshallbedeemedtobefollowedbythewords“withoutlimitation.”Theword“or”shallnotbeexclusive.Referencesto“thedatehereof”shallmeanthedateofthisAgreement.AsusedinthisAgreement,the“knowledge”ofSunTrustmeanstheactualknowledgeofanyoftheofficersofSunTrustlistedonSection9.6oftheSunTrustDisclosureSchedule,andthe“knowledge”ofBB&TmeanstheactualknowledgeofanyoftheofficersofBB&TlistedonSection9.6oftheBB&TDisclosureSchedule.Asusedherein,(i)theterm“person”meansanyindividual,corporation(includingnot-for-profit),generalorlimitedpartnership,limitedliabilitycompany,jointventure,estate,trust,association,organization,GovernmentalEntityorotherentityofanykindornature,(ii)an“affiliate”ofaspecifiedpersonisanypersonthatdirectlyorindirectlycontrols,iscontrolledby,orisundercommoncontrolwith,suchspecifiedpersonand(iii)theterm“madeavailable”meansanydocumentorotherinformationthatwas(a)providedbyonepartyoritsrepresentativestotheotherpartyanditsrepresentativesatleastone(1)daypriortothedatehereof,(b)includedinthevirtualdataroomofapartyatleastone(1)daypriortothedatehereofor(c)filedbyapartywiththeSECandpubliclyavailableonEDGARatleastone(1)daypriortothedatehereof.TheSunTrustDisclosureScheduleandtheBB&TDisclosureSchedule,aswellasallotherschedulesandallexhibitshereto,shallbedeemedpartofthisAgreementandincludedinanyreferencetothisAgreement.Nothingcontainedhereinshallrequireanypartyorpersontotakeanyactioninviolationofapplicablelaw.
9.7Counterparts.ThisAgreementmaybeexecutedincounterparts,allofwhichshallbeconsideredoneandthesameagreementandshallbecomeeffectivewhencounterpartshavebeensignedbyeachofthepartiesanddeliveredtotheotherparties,itbeingunderstoodthatallpartiesneednotsignthesamecounterpart.
9.8EntireAgreement.ThisAgreement(includingthedocumentsandinstrumentsreferredtoherein)togetherwiththeConfidentialityAgreementconstitutestheentireagreementamongthepartiesandsupersedesallprioragreementsandunderstandings,bothwrittenandoral,amongthepartieswithrespecttothesubjectmatterhereof.
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9.9GoverningLaw;Jurisdiction.
(a)ThisAgreementshallbegovernedbyandconstruedinaccordancewiththelawsoftheStateofDelaware,withoutregardtoanyapplicableconflictsoflawprinciples(exceptthatmattersrelatingtothefiduciarydutiesoftheBoardofDirectorsofSunTrustshallbesubjecttothelawsoftheStateofGeorgiaandmattersrelatingtothefiduciarydutiesoftheBoardofDirectorsofBB&TshallbesubjecttothelawsoftheStateofNorthCarolina).
(b)EachpartyagreesthatitwillbringanyactionorproceedinginrespectofanyclaimarisingoutoforrelatedtothisAgreementorthetransactionscontemplatedherebyexclusivelyintheDelawareCourtofChanceryandanystateappellatecourttherefromwithintheStateofDelawareor,iftheDelawareCourtofChancerydeclinestoacceptjurisdictionoveraparticularmatter,anyfederalorstatecourtofcompetentjurisdictionlocatedintheStateofDelaware(the“ChosenCourts”),and,solelyinconnectionwithclaimsarisingunderthisAgreementorthetransactionsthatarethesubjectofthisAgreement,(i)irrevocablysubmitstotheexclusivejurisdictionoftheChosenCourts,(ii)waivesanyobjectiontolayingvenueinanysuchactionorproceedingintheChosenCourts,(iii)waivesanyobjectionthattheChosenCourtsareaninconvenientforumordonothavejurisdictionoveranypartyand(iv)agreesthatserviceofprocessuponsuchpartyinanysuchactionorproceedingwillbeeffectiveifnoticeisgiveninaccordancewithSection9.5.
9.10WaiverofJuryTrial.EACHPARTYACKNOWLEDGESANDAGREESTHATANYCONTROVERSYWHICHMAYARISEUNDERTHISAGREEMENTISLIKELYTOINVOLVECOMPLICATEDANDDIFFICULTISSUES,ANDTHEREFOREEACHSUCHPARTYHEREBYIRREVOCABLYANDUNCONDITIONALLYWAIVES,TOTHEEXTENTPERMITTEDBYLAWATTHETIMEOFINSTITUTIONOFTHEAPPLICABLELITIGATION,ANYRIGHTSUCHPARTYMAYHAVETOATRIALBYJURYINRESPECTOFANYLITIGATIONDIRECTLYORINDIRECTLYARISINGOUTOFORRELATINGTOTHISAGREEMENTORTHETRANSACTIONSCONTEMPLATEDBYTHISAGREEMENT.EACHPARTYCERTIFIESANDACKNOWLEDGESTHAT:(I)NOREPRESENTATIVE,AGENTORATTORNEYOFANYOTHERPARTYHASREPRESENTED,EXPRESSLYOROTHERWISE,THATSUCHOTHERPARTYWOULDNOT,INTHEEVENTOFLITIGATION,SEEKTOENFORCETHEFOREGOINGWAIVER,(II)EACHPARTYUNDERSTANDSANDHASCONSIDEREDTHEIMPLICATIONSOFTHISWAIVER,(III)EACHPARTYMAKESTHISWAIVERVOLUNTARILY,AND(IV)EACHPARTYHASBEENINDUCEDTOENTERINTOTHISAGREEMENTBY,AMONGOTHERTHINGS,THEMUTUALWAIVERSANDCERTIFICATIONSINTHISSECTION9.10.
9.11Assignment;Third-PartyBeneficiaries.NeitherthisAgreementnoranyoftherights,interestsorobligationshereundershallbeassignedbyanyofthepartieshereto(whetherbyoperationoflaworotherwise)withoutthepriorwrittenconsentoftheotherparty.Anypurportedassignmentincontraventionhereofshallbenullandvoid.Subjecttotheprecedingsentence,thisAgreementwillbebindingupon,inuretothebenefitofandbeenforceablebythepartiesandtheirrespectivesuccessorsandassigns.ExceptasotherwisespecificallyprovidedinSection6.7,thisAgreement(includingthedocumentsandinstrumentsreferredtoherein)isnotintendedtoconferuponanypersonotherthanthepartiesheretoanyrightsorremedieshereunder,includingthe
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righttorelyupontherepresentationsandwarrantiessetforthherein.TherepresentationsandwarrantiesinthisAgreementaretheproductofnegotiationsamongthepartiesheretoandareforthesolebenefitoftheparties.Anyinaccuraciesinsuchrepresentationsandwarrantiesaresubjecttowaiverbythepartiesheretoinaccordanceherewithwithoutnoticeorliabilitytoanyotherperson.Insomeinstances,therepresentationsandwarrantiesinthisAgreementmayrepresentanallocationamongthepartiesheretoofrisksassociatedwithparticularmattersregardlessoftheknowledgeofanyofthepartieshereto.Consequently,personsotherthanthepartiesmaynotrelyupontherepresentationsandwarrantiesinthisAgreementascharacterizationsofactualfactsorcircumstancesasofthedateofthisAgreementorasofanyotherdate.
9.12SpecificPerformance.ThepartiesheretoagreethatirreparabledamagewouldoccurifanyprovisionofthisAgreementwerenotperformedinaccordancewiththetermshereofand,accordingly,thatthepartiesshallbeentitledtoaninjunctionorinjunctionstopreventbreachesorthreatenedbreachesofthisAgreementortoenforcespecificallytheperformanceofthetermsandprovisionshereof(includingtheparties’obligationtoconsummatetheMerger),inadditiontoanyotherremedytowhichtheyareentitledatlaworinequity.Eachofthepartiesherebyfurtherwaives(a)anydefenseinanyactionforspecificperformancethataremedyatlawwouldbeadequateand(b)anyrequirementunderanylawtopostsecurityorabondasaprerequisitetoobtainingequitablerelief.
9.13Severability.Wheneverpossible,eachprovisionorportionofanyprovisionofthisAgreementshallbeinterpretedinsuchmannerastobeeffectiveandvalidunderapplicablelaw,butifanyprovisionorportionofanyprovisionofthisAgreementisheldtobeinvalid,illegalorunenforceableinanyrespectunderanyapplicablelaworruleinanyjurisdiction,suchinvalidity,illegalityorunenforceabilityshallnotaffectanyotherprovisionorportionofanyprovisioninsuchjurisdiction,andthisAgreementshallbereformed,construedandenforcedinsuchjurisdictionsuchthattheinvalid,illegalorunenforceableprovisionorportionthereofshallbeinterpretedtobeonlysobroadasisenforceable.
9.14ConfidentialSupervisoryInformation.NotwithstandinganyotherprovisionofthisAgreement,nodisclosure,representationorwarrantyshallbemade(orotheractiontaken)pursuanttothisAgreementthatwouldinvolvethedisclosureofconfidentialsupervisoryinformation(includingconfidentialsupervisoryinformationasdefinedin12C.F.R.§261.2(c)andasidentifiedin12C.F.R.§309.5(g)(8))ofaGovernmentalEntitybyanypartytothisAgreementtotheextentprohibitedbyapplicablelaw.Totheextentlegallypermissible,appropriatesubstitutedisclosuresoractionsshallbemadeortakenundercircumstancesinwhichthelimitationsoftheprecedingsentenceapply.
9.15DeliverybyFacsimileorElectronicTransmission.ThisAgreementandanysignedagreementorinstrumententeredintoinconnectionwiththisAgreement,andanyamendmentsorwaiversheretoorthereto,totheextentsignedanddeliveredbymeansofafacsimilemachineorbye-maildeliveryofa“.pdf”formatdatafile,shallbetreatedinallmannerandrespectsasanoriginalagreementorinstrumentandshallbeconsideredtohavethesamebindinglegaleffectasifitweretheoriginalsignedversionthereofdeliveredinperson.Nopartyheretoortoanysuchagreementorinstrumentshallraisetheuseofafacsimilemachineore-maildeliveryofa“.pdf”formatdatafiletodeliverasignaturetothisAgreementoranyamendmentheretoorthefactthatany
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signatureoragreementorinstrumentwastransmittedorcommunicatedthroughtheuseofafacsimilemachineore-maildeliveryofa“.pdf”formatdatafileasadefensetotheformationofacontractandeachpartyheretoforeverwaivesanysuchdefense.
[SignaturePageFollows]
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INWITNESSWHEREOF,SunTrustandBB&ThavecausedthisAgreementtobeexecutedbytheirrespectiveofficersthereuntodulyauthorizedasofthedatefirstabovewritten.
SUNTRUSTBANKS,INC.
By: /s/WilliamH.RogersJr.
Name:WilliamH.RogersJr.Title:CharimanandChiefExecutiveOfficer
BB&TCORPORATION
By: /s/KellyS.King
Name:KellyS.KingTitle:ChairmanandChiefExecutiveOfficer
[SignaturePagetoAgreementandPlanofMerger]
Exhibit A
FormofBB&TBylawAmendment
FORM OF AMENDMENT TO BYLAWS OF BB&T CORPORATION
TheAmendedandRestatedBylaws(the“Bylaws”)ofBB&TCorporation(the“Corporation”)shallbeamendedasfollows,effectiveasoftheEffectiveTime(assuchtermisdefinedintheAgreementandPlanofMerger,datedasofFebruary7,2019,byandbetweentheCorporationandSunTrustBanks,Inc.(the“MergerAgreement”)):
AnewSection14shallbeaddedtoArticleIII,asfollows:
Section14.CEOandChairmanPositionandSuccession;BoardComposition;Headquarters.
(a) TheBoardofDirectorshasresolvedthat,effectiveasoftheEffectiveTime(forallpurposesofthisSection14,asdefinedintheAgreementandPlanofMerger,datedasofFebruary7,2019,byandbetweentheCorporationandSunTrustBanks,Inc.(“SunTrust”),asthesamemaybeamendedfromtimetotime(the“MergerAgreement”)),Mr.KellyS.KingshallcontinuetoserveasChairmanoftheBoardofDirectorsandChiefExecutiveOfficeroftheCorporationandoftheCorporation’swhollyownedsubsidiary,BranchBankingandTrustCompany(“BranchBank”)andMr.WilliamH.Rogers,Jr.shallbecomethePresidentandChiefOperatingOfficeroftheCorporationandofBranchBank.TheBoardofDirectorshasfurtherresolvedthat(i)Mr.RogersshallbethesuccessortoMr.KingastheChiefExecutiveOfficeroftheCorporationandofBranchBank,withsuchsuccessiontobecomeeffectiveonSeptember12,2021oranysuchearlierdateasofwhichMr.KingceasesforanyreasontoserveinthepositionofChiefExecutiveOfficeroftheCorporationorofBranchBank,asapplicable,(thedateofsuchCorporationsuccession,the“CEOSuccessionDate”);(ii)subjecttoMr.King’sdeath,resignationordisqualification,fromtheCEOSuccessionDatethroughMarch12,2022,Mr.KingshallserveasExecutiveChairmanoftheCorporationandBranchBank;(iii)Mr.RogersshallbethesuccessortoMr.KingastheChairmanoftheBoardofDirectorsoftheCorporationandofBranchBank,withsuchsuccessiontobecomeeffectiveonMarch12,2022,oranysuchearlierdateasofwhichMr.KingceasesforanyreasontoserveinthepositionofChairmanoftheBoardofDirectorsoftheCorporationorofBranchBank,asapplicable(thedateofsuchCorporationsuccession,the“ChairmanSuccessionDate”);and(iv)subjecttoMr.King’sdeath,resignationordisqualification,fromtheChairmanSuccessionDateuntilSeptember12,2022,Mr.KingshallserveasaconsultanttotheCorporationandtoBranchBank.TheCorporationmayenterintooramendappropriateagreementsorarrangementswithMr.KingandMr.RogersinconnectionwiththesubjectmatterofthisArticleIII,Section14(a)(anysuchagreementorarrangement,asmaybeamended,supplementedormodifiedfromtimetotime,an“EmploymentAgreement”).
(b) (i)Priortothedatethatisthethird(3rd)anniversaryoftheEffectiveTime(suchdate,the“ExpirationDate”),theremovalofMr.Rogersfrom,orthefailuretoappointorre-electMr.Rogersto,anyofthepositionsspecificallyprovidedforinthisArticleIII,Section14andinanyEmploymentAgreementwithMr.RogersatthetimesspecificallyprovidedforinthisArticleIII,Section14orinanyEmploymentAgreementwithMr.Rogers,(ii)priortotheExpirationDate,theremovalofMr.King
from,orthefailuretoappointorre-electMr.Kingto,anyofthepositionsspecificallyprovidedforinthisArticleIII,Section14andinanyEmploymentAgreementwithMr.KingatthetimesspecificallyprovidedforinthisArticleIII,Section14orinanyEmploymentAgreementwithMr.King,(iii)priortotheExpirationDate,anydeterminationnottonominateMr.RogersasadirectoroftheCorporationorBranchBankor(iv)anydeterminationnottonominateMr.KingasadirectoroftheCorporationorBranchBankforeachtermofserviceofdirectorsbeginningatanytimepriortoDecember31,2023,shalleachrequiretheaffirmativevoteofatleast75%ofthefullBoardofDirectors.
(c) EffectiveasoftheEffectiveTime,theBoardofDirectorsoftheCorporationandtheBoardofDirectorsofBranchBankshallbecomprisedofeleven(11)ContinuingSunTrustDirectors,includingtheChiefExecutiveOfficerofSunTrustasofimmediatelypriortotheEffectiveTime,andeleven(11)ContinuingBB&TDirectors,includingtheChiefExecutiveOfficeroftheCorporationasofimmediatelypriortotheEffectivetime.FromandaftertheEffectiveTimethroughtheExpirationDate:(i)thenumberofdirectorsthatcomprisesthefullBoardofDirectorsoftheCorporationandthefullBoardofDirectorsofBranchBankshalleachbetwenty-two(22);and(ii)novacancyontheBoardofDirectorsortheCorporationorBranchBankcreatedbythecessationofserviceofadirectorshallbefilledbytheapplicableBoardofDirectorsandtheapplicableBoardofDirectorsshallnotnominateanyindividualtofillsuchvacancy,unless(x)suchindividualwouldbeanindependentdirectoroftheCorporationorBranchBank,asapplicable,(y)inthecaseofavacancycreatedbythecessationofserviceofaContinuingSunTrustDirector,notlessthanamajorityoftheContinuingSunTrustDirectorshaveapprovedtheappointmentornomination(asapplicable)oftheindividualappointedornominated(asapplicable)tofillsuchvacancy,inwhichcasetheContinuingBB&TDirectorsshallvotetoapprovetheappointmentornomination(asapplicable)ofsuchindividual,and(z)inthecaseofavacancycreatedbythecessationofserviceofaContinuingBB&TDirector,notlessthanamajorityoftheContinuingBB&TDirectorshaveapprovedtheappointmentornomination(asapplicable)oftheindividualappointedornominated(asapplicable)tofillsuchvacancy,inwhichcasetheContinuingSunTrustDirectorsshallvotetoapprovetheappointmentornomination(asapplicable)ofsuchindividual;provided,thatanysuchappointmentornominationpursuanttoclause(y)or(z)shallbemadeinaccordancewithapplicablelawandtherulesoftheNewYorkStockExchange(orothernationalsecuritiesexchangeonwhichtheCorporation’ssecuritiesarelisted).ForpurposesofthisArticleIII,Section14,theterms“ContinuingSunTrustDirectors”and“ContinuingBB&TDirectors”shallmean,respectively,thedirectorsoftheCorporationandSunTrustwhowereselectedtobedirectorsoftheCorporationandBranchBankbySunTrustortheCorporation,asthecasemaybe,asoftheEffectiveTime,pursuanttoSection6.12(a)oftheMergerAgreement,andanydirectorsoftheCorporationorBranchBank(asapplicable)whoweresubsequentlyappointedornominatedandelectedtofillavacancycreatedbythecessationofserviceofaContinuingSunTrustDirectororaContinuingBB&TDirector,asapplicable,pursuanttothisArticleIII,Section14(c).
(d) TheBoardofDirectorshasresolvedthat,effectiveasoftheEffectiveTimeanduntiltheChairmanSuccessionDate,theleadindependentdirector(the“LeadDirector”)oftheBoardofDirectorsshallbeanindependentdirectorchosenbytheBoardofDirectorsfromamongtheContinuingSunTrustDirectors.AttheChairmanSuccessionDate,theLeadDirectorshallbeanindependentdirectorchosenbytheBoardofDirectorsfromamongtheBB&TContinuingDirectors,andthereaftershallserveinthatcapacitysubjecttothenormalrotationpolicyforLeadDirectorserviceassetforthintheCorporation’sCorporateGovernanceGuidelines,asthenineffect,butfornotlessthantwoyears.
(e) TheChairoftheExecutiveCommitteeoftheBoardofDirectorsshallbeanindependentmemberoftheBoardofDirectors,chosenbythevoteofthemajorityofthefullBoardofDirectors.
(f) (i)TheheadquartersoftheCorporationshallbelocatedinCharlotte,NorthCarolina;(ii)thehubfortheCorporation’swholesalebusinessshallbelocatedinAtlanta,Georgia;(iii)thehubfortheCorporation’sconsumerandcommunitybankingbusinessshallbelocatedinWinston-Salem,NorthCarolina;and(iv)thehubfortheCorporation’stechnologyandinnovationoperationsshallbelocatedinCharlotte,NorthCarolina.
(g) AnydeterminationbytheBoardofDirectorsthatisinconsistentwiththecontentandintentoftheprovisionssetforthinthelasttwosentencesofSection6.6(c)oftheMergerAgreement(whichsectionisattachedheretoasExhibitAforreference),asineffectimmediatelypriortotheEffectiveTime,andtheactionstakenbytheBoardofDirectorsandtheCompensationCommitteeoftheBoardofDirectorson[DATE]infurtherancethereof,shallrequiretheaffirmativevoteofatleast75%ofthefullBoardofDirectors.
(h) IntheeventofanyinconsistencybetweenanyprovisionofthisArticleIII,Section14andanyotherprovisionoftheseBylawsortheCorporation’sotherconstituentdocuments,theprovisionsofthisArticleIII,Section14shallcontrol.TheprovisionsofArticleIII,Section14(f)(i)andthissecondsentenceofthisSection14(h)maybemodified,amendedorrepealed,andanyBylawprovisioninconsistentwithsuchprovisionsmaybeadopted,onlybytheaffirmativevoteofatleast75%ofthefullBoardofDirectorsandsolelyinconnectionwiththeentryintoorconsummationofabusinesscombinationtransactionwithanothercorporation(i)inwhichtheCorporationmergeswithandintosuchothercorporation,(ii)whichisamergerofequalsor(iii)asaresultofwhichtheshareholdersoftheCorporationpriortotheeffectivetimeofthebusinesscombinationholdlessthan60%oftheoutstandingcommonstockofthesurvivingentityinsuchbusinesscombination.TheprovisionsofArticleIII,Section14(e),Section14(g)andthefirstandthirdsentencesofthisSection14(h)maybemodified,amendedorrepealed,andanyBylawprovisioninconsistentwithsuchprovisionsmaybeadopted,onlybytheaffirmativevoteofatleast75%ofthefullBoardofDirectors.UntilDecember31,2023,theprovisionsofArticleIII,Section14(b)(iv)andthisfourthsentenceofthisSection14(h)maybemodified,amendedorrepealed,andanyBylawprovisioninconsistentwithsuchprovisionsmaybeadopted,onlybytheaffirmativevoteofatleast75%ofthefullBoardofDirectors.UntiltheExpirationDate,theprovisionsofthisArticleIII,Section14(otherthanSection14(b)(iv),Section14(e),Section14(f)(i),Section14(g)andthefirstfoursentencesofthisSection14(h),whicharesubjectto
thestandardssetforthintheprecedingsentences)maybemodified,amendedorrepealed,andanyBylawprovisioninconsistentwithsuchprovisionsmaybeadopted,onlybyanaffirmativevoteofatleast75%ofthefullBoardofDirectors.
Exhibit A to Bylaw Amendment
Section 6.6(c) of the Merger Agreement
(c) TheSurvivingEntityagreestohonorinaccordancewiththeirtermsallBB&TBenefitPlansandSunTrustBenefitPlans.Inaddition,priortotheEffectiveTime,BB&Tmaytakesuchactionasitdeemsnecessary,includingamendingtheBB&TCorporationPensionPlanand/ortheBB&TNon-QualifiedDefinedBenefitPlan,sothat(i)eachparticipantintheBB&TCorporationPensionPlanandBB&TNon-QualifiedDefinedBenefitPlanimmediatelypriortotheEffectiveTimeshallbeentitledtocontinuedbenefitaccrualonabasisnolessfavorablethanineffectimmediatelypriortotheEffectiveTime(includingastoanyrightsorfeatures)forsolongassuchparticipantcontinuesasanemployeeoftheSurvivingEntityoritsSubsidiaries(ortheirrespectivesuccessorsorassigns)and(ii)followingtheEffectiveTime,theBB&TCorporationPensionPlanandBB&TNon-QualifiedDefinedBenefitPlanmaynotbeterminatedoramendedsoastoadverselyimpactanysuchparticipantorthebenefitofanysuchparticipant,includinganyfuturebenefitaccrualsorthevestingorentitlementtosuchfuturebenefitaccruals(includinganyrightsorfeaturesofsuchaccruals).Withoutlimitingtheforegoingandforpurposesofclarity,anyamendmenttoprovidealumpsumcashoutofaparticipant’saccruedpensionbenefitshallbedeemedtoadverselyimpacttheparticipantforpurposesoftheforegoingclause(ii).
Exhibit 10.1
EXECUTIONVERSION
AMENDED AND RESTATEDEMPLOYMENT AGREEMENT
ThisAMENDEDANDRESTATEDEMPLOYMENTAGREEMENT(this“Agreement ”)ismadeandenteredintoasofFebruary7,2019,byandamongBB&T CORPORATION ,aNorthCarolinacorporation(“BB&T ”),BRANCHBANKING AND TRUST COMPANY ,aNorthCarolinacharteredcommercialbank(“BBTC ”),andKELLY S. KING ,anindividual(“Executive ”).BB&TandBBTCarecollectivelyreferredtoas“Employer ”.ThisAgreementshallbeeffectiveupontheEffectiveTime(asdefinedinthatcertainAgreementandPlanofMerger,datedasofthedatehereof(asamended,modified,orsupplementedfromtimetotime,the“Merger Agreement ”),byandbetweenBB&TandSunTrustBanks,Inc.,aGeorgiacorporation)(thedateonwhichtheEffectiveTimeoccurs,the“Effective Date ”).IftheEffectiveTimedoesnotoccur,thisAgreementshallbenullandvoidabinitio,andofnofurtherforceoreffect.
RECITALS
WHEREAS ,EmployerandtheirAffiliatesareengagedinthebankingandfinancialservicesbusiness;and
WHEREAS ,Executiveisexperiencedin,andknowledgeableconcerning,thematerialaspectsofsuchbusiness;and
WHEREAS ,ExecutiveispresentlyemployedastheChairmanandChiefExecutiveOfficerofBB&TandBBTCpursuanttothetermsofanAmendedandRestatedEmploymentAgreement,datedasofDecember19,2012(the“Predecessor Agreement ”);and
WHEREAS ,theBoardofDirectorsofeachofBB&TandBBTCdesiretoensurethecontinueddedicationofExecutivefollowingtheMerger(asdefinedintheMergerAgreement);and
WHEREAS ,immediatelypriortotheexecutionanddeliveryoftheMergerAgreement,theBoardofDirectorsofBB&TadoptedaresolutionprovidingforanamendmenttoBB&T’sbylaws(the“Bylaw Amendment ”),tobeeffectiveasoftheEffectiveTime;and
WHEREAS ,EmployerandExecutivedesiretoamendthePredecessorAgreementtosetforththetermsandconditionsofExecutive’semploymentwithandservicetoEmployerfollowingtheMerger;and
WHEREAS ,BB&T,BBTC,andExecutivehavedeterminedthatitisintheirrespectivebestintereststoenterintothisAgreementonthetermsandconditionsassetforthherein.
NOW, THEREFORE ,inconsiderationofthepremisesandthemutualcovenantsandpromisescontainedherein,andforothergoodandvaluableconsideration,thereceiptandsufficiencyofwhichareherebyacknowledged,thepartiesheretoherebyagreeasfollows:
AGREEMENT1. EMPLOYMENT TERMS AND DUTIES.
1.1 E MPLOYMENT . EmployerherebyemploysExecutive,andExecutiveherebyacceptsemploymentbyEmployerduringtheEmploymentTerm(asdefinedbelow)uponthetermsandconditionssetforthinthisAgreement.Executiveagrees,duringtheEmploymentTerm,toserveas(i)anemployeeofEmployerandasanemployeeofone(1)ormoreofEmployer’sAffiliates;and(ii)onsuchcommitteesandtaskforcesofEmployer(including,withoutlimitation,BB&T’sExecutiveManagementTeam),asExecutivemaybeappointedfromtimetotime.DuringtheEmploymentTerm,Executive’sprincipalplaceofemploymentshallbethecorporateheadquartersofBB&TinCharlotte,NorthCarolina,subjecttoreasonablebusinesstravelfromtimetotime.
1.2 D UTIES .
1.2.1 Employment.FromtheEffectiveDateuntilSeptember12,2021(the“CEO Succession Date ”),ExecutiveshallserveasChairmanandChiefExecutiveOfficerofBB&TandBBTC;andfromtheCEOSuccessionDateuntilMarch12,2022(the“Chairman Succession Date ”),ExecutiveshallserveasExecutiveChairmanoftheBoardsofDirectorsofBB&TandBBTC.DuringtheEmploymentTerm,ExecutiveshallreportdirectlytotheBoardsofDirectorsofEmployer.DuringtheEmploymentTerm,theBoardofDirectorsofBB&TorBBTC,asapplicable,shallappointExecutivetosuchpositionsattheappropriatetimeassetforthabove,andtotheextentnecessary,theBoardofDirectorsofBB&TshallcausetheBoardofDirectorsofBBTCtosoact.DuringtheEmploymentTerm,ExecutiveshalldevoteallofExecutive’sbusinesstime,attention,knowledge,andskillssolelytothebusinessandinterestsofEmployerandtheirAffiliatesandshallnotbeotherwiseemployed.ExecutiveshallatalltimescomplywithandbesubjecttosuchpoliciesandproceduresasEmployermayestablishfromtimetotimeincluding,withoutlimitation,conflictofinterestpolicies.DuringtheEmploymentTerm,(i)EmployerandtheirAffiliatesshallbeentitledtoallofthebenefits,profits,andotheremolumentsarisingfromorincidenttoallwork,services,andadviceofExecutive,and(ii)Executiveshallnotbecomeinterested,directlyorindirectly,inanymanner,asapartner,officer,director,stockholder,advisor,employee,orinanyothercapacityinanyotherbusinesssimilartothebusinessofEmployerandtheirAffiliates.Nothingcontainedhereinshallbedeemed,however,topreventorlimittherightofExecutivetoinvestinabusinesssimilartothebusinessofEmployerandtheirAffiliatesifsuchinvestmentislimitedtolessthanonepercent(1%)ofthecapitalstockorothersecuritiesofanycorporationorsimilarorganizationwhosestockorsecuritiesarepubliclyownedorareregularlytradedonanypublicexchange.
1.2.2 BoardService.
(i) FromtheEffectiveTimethroughDecember31,2023,ExecutiveshallcontinuetoserveasamemberoftheBoardofDirectorsofeachofBB&TandBBTC(astheChairmanofsuchBoardsofDirectorsthroughtheChairmanSuccessionDate),andBB&TandBBTC,asapplicable,shallappoint,nominate,andelect,asapplicable,Executivetososerveduringsuchperiod.DuringtheEmploymentTerm,ExecutiveshallserveontheBoardsofDirectorsofEmployerwithoutadditionalcompensation,andwithrespecttoserviceonsuch
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BoardsofDirectorsfollowingtheChairmanSuccessionDate,Executiveshallreceivecompensationonthesamebasisasothernon-employeedirectorsoftheBoardsofDirectorsofBB&TandBBTC.
(ii) WithoutlimitingtheobligationinSection1.2.2(i),thedeterminationbyBB&TtoremoveExecutivefromtheBoardofDirectorsofBBTCortonotreelectExecutivetotheBoardofDirectorsofBBTC,andanydeterminationnottonominateExecutiveasadirectorofBB&TorBBTC,ineachcase,priortoDecember31,2023,shalleachrequiretheaffirmativevoteofatleastseventy-fivepercent(75%)ofthefullBoardofDirectorsofBB&T(or,ifapplicable,theboardofdirectors(orequivalentgoverningbody)oftheultimateparententityofBB&Toritssuccessor)orBBTC(oritssuccessor),asapplicable.ThroughDecember31,2023,theBoardofDirectorsofBB&TshallcauseBBTCandtheBoardofDirectorsofBBTC,asapplicable,tosoact.
1.3 E MPLOYMENT T ERM . SubjecttotheprovisionsofSection1.6,unlessshortenedasprovidedinthisAgreement,thetermofemploymentofExecutiveunderthisAgreementshallcommenceontheEffectiveDateandshallcontinueuntiltheChairmanSuccessionDate(asitmaybeshortenedinaccordancewithSection1.6,the“Employment Term”).UponexpirationoftheEmploymentTermontheChairmanSuccessionDateoranearlierterminationoftheEmploymentTermpursuanttoSection1.6.2(Retirement),theConsultingTerm(asdefinedbelow)shallcommenceasdescribedinSection3.1.
1.4 C OMPENSATION AND B ENEFITS .
1.4.1 BaseSalary. Inconsiderationofallof(i)theservicesrenderedtoEmployerandEmployer’sAffiliateshereunderbyExecutiveduringtheEmploymentTerm,and(ii)Executive’scovenantshereunder,Employershall,duringtheEmploymentTerm,payExecutiveasalaryattheannualrateofOneMillionNinety-SixThousandandFiveHundredDollars($1,096,500)(or,ifgreater,Executive’sannualrateofsalaryasofimmediatelypriortotheEffectiveTime)(the“Base Salary”),payableinequalcashinstallmentsinaccordancewithEmployer’sregularpayrollpractices,butnolessfrequentlythanmonthly.TheannualBaseSalarymaybeincreased,butnotdecreasedwithoutthewrittenconsentofExecutive,fromtimetotimeinthesolediscretionofEmployerandanysuchincreased“BaseSalary”shallthereafterconstitute“BaseSalary”forpurposesofthisAgreement,andmaynotthereafterbereducedwithoutthewrittenconsentofExecutive.
1.4.2 IncentiveCompensation. DuringtheEmploymentTerm,ExecutiveshallcontinuetoparticipateinanybonusandincentiveplansofEmployer,whetheranysuchplanprovidesforawardsincashorsecurities,madeavailabletootherseniorexecutivesofEmployersimilarlysituatedtoExecutive,andontermsandconditionsnolessfavorablethanthosethatapplytotheotherseniorexecutivesofEmployer.Executive’sannualshort-andlong-termincentivecompensationopportunitieswithrespecttoeachfiscalyearofEmployershallbenolessfavorablethantheopportunitiesprovidedtoExecutiveimmediatelypriortotheEffectiveTime.Fortheavoidanceofdoubt,Executiveshallbeeligibletoreceiveequityand/orlong-termcashawardsinthefirstquarterof2022.Thetermsofanyequityand/orlong-termcashawardsgrantedtoExecutiveunderanyincentiveplansduringtheEmploymentTermshallincluderetirementtermsandconditionsthatarenolessfavorabletoExecutivethantheretirementterms
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andconditionsincludedinsimilarawardsgrantedtoExecutivepriortotheEffectiveDate;providedthat,nominimumserviceruleshallapplywithrespecttoanysuchawardsgrantedin2022and,withrespecttoanylong-termcashawards,ExecutiveshallbedeemedtohavereceivedpaymentsofBaseSalarythroughSeptember12,2022(unlesshisemploymentisterminatedpriortotheChairmanSuccessionDateduetohisdeath,Disability,Retirement,orterminationforJustCause).
1.4.3 EmployeeBenefits. DuringtheEmploymentTerm,Executiveshallbeeligibletoparticipateinsuchemployeebenefitsandperquisiteplans,policies,andprogramsofEmployer(suchasretirement,sickleave,vacation,groupdisability,health,life,andaccidentinsurance)thatare,ineachcase,nolessfavorablethantheemployeebenefitandperquisiteplans,policies,andprogramsofEmployerinwhichExecutiveparticipatedasofimmediatelypriortotheEffectiveTime(oranymorefavorableemployeebenefitandperquisiteplans,policies,andprogramsadoptedbyEmployerfollowingtheEffectiveTimeforsimilarlysituatedexecutivesofBB&T(including,withoutlimitation,anytravelpoliciesandprograms)).ExecutiveshallbeeligibletoparticipateinanyretireehealthcareprogrammaintainedbyEmployerandshallbecreditedwithallpriorservicewithEmployer(andanypredecessorandsuccessorentities)forpurposesofhisparticipationandthelevelofbenefits.
1.5 B USINESS E XPENSES . Employershall,uponreceiptfromExecutiveofsupportingreceiptstotheextentrequiredbyapplicableincometaxregulationsandEmployer’sreimbursementpolicies,reimburseExecutiveforallout-of-pocketbusinessexpensesreasonablyincurredbyExecutiveinconnectionwithExecutive’semploymentorserviceshereunder,withsuchreimbursementpoliciestobenolessfavorablethanthoseapplicabletoExecutiveimmediatelypriortotheEffectiveTime.
1.6 T ERMINATION . Executive’semploymentshallterminateupontheoccurrenceofanyoftheeventssetforthinSections1.6.1through1.6.6atanytimeduringtheEmploymentTerm,andtheEmploymentTermshallautomaticallyterminateimmediatelyfollowinganysuchterminationofemployment.
1.6.1 Death. Executive’semploymentshallterminateautomaticallyuponExecutive’sdeath.
1.6.2 Retirement. Executive’semploymentshallterminateautomaticallyuponExecutive’sRetirement.ForpurposesofthisAgreement,Executive’svoluntaryterminationofemploymentatanytimeaftertheEffectiveTime,includingaterminationofemploymentupontheexpirationoftheEmploymentTermontheChairmanSuccessionDate,shallconstituteaterminationofemploymentduetoExecutive’sRetirement.
1.6.3 Disability. SubjecttoSection1.6.8,Executive’semploymentshallterminateimmediatelyuponthereasonabledeterminationbyEmployerthatExecutiveshallhavebeenunabletosubstantiallyperformtheessentialfunctionsofExecutive’sdutiesbyreasonofaphysicalormentaldisability,withorwithoutreasonableaccommodation,foraperiodoftwelve(12)consecutivemonths(“Disability ”);providedthat,priortoanysuchterminationforDisability,theBoardsofDirectorsofEmployershallhavegivenExecutiveatleastthirty(30)days’advancewrittennoticeofEmployer’sintenttoterminateExecutiveduetoDisability,and
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Executiveshallnothavereturnedtofull-timeemploymentbythethirtieth(30th)dayaftersuchnotice(terminationpursuanttothisSection1.6.3beingreferredtohereinasterminationforDisability).
1.6.4 TerminationforJustCause. SubjecttoSection1.6.8,Executive’semploymentshallterminateimmediatelyfollowingnoticeofterminationfor“JustCause”(asdefinedbelow),specifyingthebasisforthedeterminationofsuchJustCause,givenbyEmployer’sBoardsofDirectors(terminationpursuanttothisSection1.6.4beingreferredtohereinasterminationfor“Just Cause ”).“Just Cause ”shallmeanandbelimitedto(i)Executive’swillfulmisconductorgrossnegligencethatcausesmaterialharmtoEmployer,(ii)Executive’sconvictionofafelony,or(iii)Executive’smaterialbreachofthisAgreementorofamaterialprovisionofamaterialpolicyofEmployer;providedthatExecutivehasreceivedwrittennoticefromEmployerofsuchmaterialbreachandsuchbreachremainsuncuredforaperiodofthirty(30)daysafterthedeliveryofsuchnotice.ForpurposesofthisSection1.6.4,noactorfailuretoact,onthepartofExecutive,shallbeconsidered“willful”unlessitisdone,oromittedtobedone,byExecutiveinbadfaithorwithoutareasonablebeliefthatExecutive’sactionoromissionwasinthebestinterestsofEmployer.
1.6.5 TerminationWithoutJustCause. SubjecttoSection1.6.8,Executive’semploymentshallterminateimmediatelyonthedatespecifiedinawrittennoticeofterminationwithoutJustCausefromEmployer’sBoardsofDirectorstoExecutive(terminationpursuanttothisSection1.6.5beingreferredtohereinastermination“Without Just Cause ”).
1.6.6 GoodReasonTermination. Subjecttothefollowing,Executive’semploymentshallterminatethirty(30)daysfollowingthewrittennoticebyExecutivetoEmployer’sBoardsofDirectorsdescribedinthisSection1.6.6(terminationpursuanttothisSection1.6.6beingreferredtohereinas“Good Reason Termination ”).ForpurposesofthisSection1.6.6,aGoodReasonTerminationshalloccurwhenExecutiveprovideswrittennoticetoEmployer’sBoardsofDirectorsofterminationfor“Good Reason ”,which,asusedherein,shallmeantheoccurrenceofanyofthefollowingeventswithoutExecutive’sexpresswrittenconsent:
(i) anychangeinExecutive’stitlesorpositionsfromthosecontemplatedbythisAgreementorfailureoftheBoardsofDirectorsofEmployertoappoint,nominate,orelect,asapplicable,Executivetoanysuchpositions,ascontemplatedbySections1.2.1and1.2.2(i);
(ii) onorpriortotheCEOSuccessionDate,theassignmenttoExecutiveofdutiesinconsistentwiththepositionandstatusofChairmanandChiefExecutiveOfficerofEmployeror,followingtheCEOSuccessionDateandpriortotheChairmanSuccessionDate,theassignmenttoExecutiveofdutiesinconsistentwiththepositionandstatusofExecutiveChairmanofEmployer;
(iii) areductionbyEmployerinExecutive’sannualBaseSalaryasthenineffect;
(iv) theexclusionofExecutivefromparticipationinEmployer’semployeebenefitplans(inwhichExecutivemeetstheparticipationeligibilityrequirements)ineffectasof,
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oradoptedorimplementedonorafter,theEffectiveDate,asthesamemaybeimprovedorenhancedfromtimetotimeduringtheEmploymentTerm;
(v) areductioninExecutive’sincentivecompensationtargets,including,withoutlimitation,equity-basedincentivecompensationtargets;
(vi) arelocationofExecutive’sprincipalplaceofemploymentfromthatsetforthinthisAgreementresultinginamaterialincreaseinExecutive’scommutetoandfromExecutive’sprimaryresidence(forthispurposeaone-wayincreaseinExecutive’scommutebythirty-five(35)milesormoreshallbedeemedmaterial);or
(vii) anypurportedterminationoftheemploymentofExecutivebyEmployerthatisnoteffectedinaccordancewiththisAgreement;
provided,however,thataneventshallnotconstituteGoodReasonunless,withinninety(90)daysoftheinitialexistenceofanevent,ExecutivegivesEmployeratleastthirty(30)days’priorwrittennoticeofsucheventsettingforthadescriptionofthecircumstancesconstitutingGoodReasonandEmployerfailstocuresucheventwithinthethirty-(30-)dayperiodfollowingEmployer’sreceiptofsuchwrittennotice.
1.6.7 NoticeofTermination. AterminationofExecutive’semploymentbyEmployerorExecutiveforanyreasonotherthandeathshallbecommunicatedbyawrittennoticetotheotherparties,whichwrittennoticeshallspecifytheeffectivedateoftermination.
1.6.8 ProceduralRequirements.NotwithstandinganyprovisionofthisAgreementtothecontrary,priortotheChairmanSuccessionDate,nopurportedterminationofExecutive’semploymentbyEmployerforanyreasonshallbeeffective,andExecutive’semploymentshallnotbeterminatedbyEmployer,unlessanduntilthereisdeliveredtoExecutiveacopyofaresolutioneffectuatingsuchterminationthatisdulyadoptedbytheaffirmativevoteofatleastseventy-fivepercent(75%)ofthefullBoardofDirectorsofBB&T(or,ifapplicable,theboardofdirectors(orequivalentgoverningbody)oftheultimateparententityofBB&Toritssuccessor)atameetingcalledanddulyheldforsuchpurpose.
1.7 T ERMINATION C OMPENSATION A ND P OST -T ERMINATION B ENEFITS .
1.7.1 Retirement,TerminationforJustCause,orTerminationforDeath. InthecaseofaterminationofExecutive’semploymenthereunderduetoExecutive’sdeathinaccordancewithSection1.6.1,aterminationofExecutive’semploymentduetoExecutive’sRetirementinaccordancewithSection1.6.2,oraterminationofExecutive’semploymenthereunderforJustCauseinaccordancewithSection1.6.4,(i)Executiveshallnotbeentitledtoreceivepaymentof,andEmployershallhavenoobligationtopay,anyseveranceorsimilarcompensationattributabletosuchtermination(including,withoutlimitation,TerminationCompensation),otherthanBaseSalaryearnedbutunpaid;anybonusesandincentivecompensationfortheprecedingyearthatwaspreviouslyearnedbyExecutivebutunpaidontheTerminationDate;accruedbutunusedvacationtotheextentallowedbyBB&T’svacationpaypolicy;vestedbenefitsunderanyEmployersponsoredemployeebenefitplan;anyunreimbursedbusinessexpensespursuanttoSection1.5hereofincurredbyExecutiveasoftheTerminationDate;and,inthecaseofaterminationofExecutive’semploymentduetoExecutive’sRetirement
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(including,withoutlimitation,upontheChairmanSuccessionDate)ordeath,aproratedannualbonusinrespectoftheTerminationYearequaltotheproductoftheactualannualbonusthatwouldhavebeenearnedbytheExecutiveinrespectoftheTerminationYearhadExecutive’semploymentnotterminatedandafraction,thenumeratorofwhichisthenumberofdayselapsedintheTerminationYearthroughandincludingtheTerminationDateandthedenominatorofwhichisthetotalnumberofdaysintheTerminationYear(whichproratedannualbonusshallbepaidinaccordancewiththeapplicablebonusplanatthesametimeannualbonusesarepaidtoseniorexecutivesofEmployergenerally,butinnoeventlaterthanMarch15ofthecalendaryearfollowingtheTerminationYear);and(ii)exceptforterminationasaresultofExecutive’sdeath,ExecutiveagreestocomplywithExecutive’sSection2covenants(including,withoutlimitation,compliancewiththenoncompetitionandnonsolicitationcovenantsofSection2).
1.7.2 TerminationforDisability. InthecaseofaterminationofExecutive’semploymenthereunderforDisabilityinaccordancewithSection1.6.3,duringthefirsttwelve(12)consecutivemonthsoftheperiodofExecutive’sDisability,Executiveshallcontinuetoearnallcompensation(includingbonusesandincentivecompensation)towhichExecutivewouldhavebeenentitledifExecutivehadnotbeendisabled,suchcompensationtobepaidatthetime,intheamount,andinthemannerprovidedinSection1.4,inclusiveofanycompensationreceivedpursuanttoanyapplicabledisabilityinsuranceplanofEmployer.Thereafter,Executiveshallreceivehismonthlycompensation(asdeterminedinaccordancewithEmployer’sdisabilitypracticesasineffectpriortotheEffectiveTime),withEmployertopayanyportionthatisnotpaidundertheapplicabledisabilityinsuranceplanofEmployer;andExecutiveshallhavenorighttoreceiveanyothercompensation(suchasTerminationCompensation)orotherbenefitsuponorafterExecutive’sTerminationDate.IfadisputearisesbetweenExecutiveandEmployerconcerningExecutive’sDisabilityorabilitytocontinueorreturntotheperformanceofhisdutiesasaforesaid,Executiveshallsubmit,attheexpenseofEmployer,toexaminationofacompetentphysicianmutuallyagreeabletotheparties,andsuchphysician’sopinionastoExecutive’scapabilitytosoperformshallbefinalandbindinguponEmployerandExecutive.IfExecutiveincursaterminationofemploymentpursuanttothisSection1.7.2,ExecutiveshallbesubjecttoalloftheprovisionsofSection2,including,withoutlimitation,compliancewiththenoncompetitionandnonsolicitationprovisionsthereof.
1.7.3 TerminationWithoutJustCause. InthecaseofaterminationofExecutive’semploymenthereunderWithoutJustCauseinaccordancewithSection1.6.5,ExecutiveshallbeentitledtothefollowingfromEmployer:
(i) ExecutiveshallreceiveTerminationCompensationeachmonthduringtheCompensationContinuancePeriod.
(ii) AnyunvestedbenefitsofExecutiveunderanyemployeestock-basedorotherbenefitplanorarrangementshallbecomefullyandimmediatelyvested,andthepaymentordeliveryofsuchawardsorbenefitsshallbeacceleratedtotheextentpermittedbySection409Aorotherapplicablelawandthetermsofsuchplanorarrangement.
(iii) DuringtheCompensationContinuancePeriod,Executiveshalleithercontinuetoparticipate(treatingExecutiveasan“activeemployee”ofEmployerforthispurpose)inthesamegrouphospitalizationplan,healthcareplan,dentalcareplan,lifeorotherinsurance
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ordeathbenefitplan,andanyotherpresentorfuturesimilargroupwelfarebenefitplanorprogramforwhichofficersofEmployergenerallyareeligible,onthesametermsaswereineffect(A)asoftheTerminationDate,or(B)ifsuchplansandprogramsineffectpriortotheEffectiveDatewere,consideredtogetherasawhole,materiallymoregeneroustotheofficersofEmployer,thanasoftheEffectiveDate;or,totheextentsuchparticipationisnotpermittedbyanygroupplaninsurer,undercomparableindividualplansandcoverage(totheextentcommerciallyavailable)atthefullcostofEmployer.
(iv) ExecutiveshallreceivetheConsultingFeeinaccordancewithSection3.6.
TheTerminationCompensationandotherbenefitsprovidedforinthisSection1.7.3(otherthanSection1.7.3(iv))shallbepaidbyEmployerinaccordancewiththestandardpayrollpracticesandproceduresineffectpriortoExecutive’sTerminationDate.IfExecutiveincursaterminationofemploymentpursuanttothisSection1.7.3,ExecutiveshallbesubjecttoalloftheprovisionsofSection2,including,withoutlimitation,compliancewiththenoncompetitionandnonsolicitationprovisionsthereof.IfExecutivebreachesExecutive’sobligationsunderSection2,ExecutiveshallnotbeentitledtoreceiveanyfurtherTerminationCompensationorpaymentsorbenefitspursuanttothisSection1.7.3fromandafterthedateofsuchbreach.
1.7.4 GoodReasonTermination. AGoodReasonTerminationunderSection1.6.6shallentitleExecutivetothefollowingfromEmployer:
(i) ExecutiveshallreceiveTerminationCompensationeachmonthduringtheCompensationContinuancePeriod.
(ii) AnyunvestedbenefitsofExecutiveunderanyemployeestock-basedorotherbenefitplanorarrangementshallbecomefullyandimmediatelyvested,andthepaymentordeliveryofsuchawardsorbenefitsshallbeacceleratedtotheextentpermittedbySection409Aorotherapplicablelawandthetermsofsuchplanorarrangement.
(iii) DuringtheCompensationContinuancePeriod,Executiveshalleithercontinuetoparticipate(treatingExecutiveasan“activeemployee”ofEmployerforthispurpose)inthesamegrouphospitalizationplan,healthcareplan,dentalcareplan,lifeorotherinsuranceordeathbenefitplan,andanyotherpresentorfuturesimilargroupwelfarebenefitplanorprogramforwhichofficersofEmployergenerallyareeligible,onthesametermsaswereineffect(A)asoftheTerminationDate,or(B)ifsuchplansandprogramsineffectpriortotheEffectiveDatewere,consideredtogetherasawhole,materiallymoregeneroustotheofficersofEmployer,thanasoftheEffectiveDate;or,totheextentsuchparticipationisnotpermittedbyanygroupplaninsurer,undercomparableindividualplansandcoverage(totheextentcommerciallyavailable)atthefullcostofEmployer.
(iv) ExecutiveshallreceivetheConsultingFeeinaccordancewithSection3.6.
TheTerminationCompensationandotherbenefitsprovidedforinthisSection1.7.4(otherthanSection1.7.4(iv))shallbepaidbyEmployerinaccordancewiththestandardpayrollpracticesandproceduresineffectpriortoExecutive’sTerminationDate.IfExecutiveincursaterminationofemploymentpursuanttothisSection1.7.4,ExecutiveshallbesubjecttoalloftheprovisionsofSection2,including,withoutlimitation,compliancewiththenoncompetitionand
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nonsolicitationprovisionsthereof.IfExecutivebreachesExecutive’sobligationsunderSection2,ExecutiveshallnotbeentitledtoreceiveanyfurtherTerminationCompensationorpaymentsorbenefitspursuanttothisSection1.7.4fromandafterthedateofsuchbreach.
1.7.5 NoTerminationofContinuingObligations. TerminationofExecutive’semploymentrelationshipwithEmployerinaccordancewiththeapplicableprovisionsofthisAgreementdoesnotterminatethoseobligationsimposedbythisAgreementthatarecontinuingobligations,including,withoutlimitation,Executive’sobligationsunderSection2.AnyprovisionofthisAgreementthatbyitstermsobligatesEmployertomakepaymentssubsequenttoterminationofExecutive’semploymentshallsurviveanysuchtermination.
1.7.6 SERP. ExecutiveisaparticipantintheBB&TNon-QualifiedDefinedBenefitPlan(the“SERP ”).TheSERPwasformerlyknownastheBranchBankingandTrustCompanySupplementalExecutiveRetirementPlan.TheSERPisanon-qualified,unfundedsupplementalretirementplanthatprovidesbenefitstooronbehalfofselectedkeymanagementemployees.ThebenefitsprovidedundertheSERPsupplementtheretirementandsurvivorbenefitspayablefromthePensionPlan.TheprovisionsoftheSERPshallbeandherebyareincorporatedinthisAgreement.TheSERP,asappliedtoExecutive,maynotbeterminated,modified,oramendedwithouttheexpresswrittenconsentofExecutive.Thus,anyamendmentormodificationtotheSERPortheterminationoftheSERPshallbeineffectiveastoExecutiveunlessExecutiveconsentsinwritingtosuchtermination,modification,oramendment.TheSupplementalPensionBenefit(asdefinedintheSERP)ofExecutiveshallnotbeadverselyaffectedbecauseofanymodification,amendment,orterminationoftheSERP.IntheeventofanyconflictbetweenthetermsofthisSection1.7.6andtheSERP,theprovisionsofthisSection1.7.6shallprevail.2. ADDITIONAL COVENANTS OF EXECUTIVE.
2.1 N ONCOMPETITION . ExecutiveacknowledgesandagreesthatthedutiesandresponsibilitiestobeperformedbyExecutiveunderthisAgreementareofaspecialandunusualcharacterthathaveauniquevaluetoEmployerandtheirAffiliates,thelossofwhichcannotbeadequatelycompensatedbydamagesinanyactioninlaw.AsaconsequenceofhisuniquepositionasChairmanandChiefExecutiveOfficerofEmployer,ExecutivealsoacknowledgesandagreesthatExecutivewillhavebroadaccesstoConfidentialInformation,thatConfidentialInformationwillinfactbedevelopedbyExecutiveinthecourseofperformingExecutive’sdutiesandresponsibilitiesunderthisAgreement,andthattheConfidentialInformationfurnishesacompetitiveadvantageinmanysituationsandconstitutes,separatelyandintheaggregate,valuable,special,anduniqueassetsofEmployerandtheirAffiliates.Executivefurtheracknowledgesandagreesthattheuniqueandproprietaryknowledgeandinformationpossessedby,orwhichwillbedisclosedto,ordevelopedby,ExecutiveinthecourseofExecutive’semploymentwillbesuchthatExecutive’sbreachofthecovenantscontainedinthisSection2.1wouldimmeasurablyandirreparablydamageEmployerandtheirAffiliatesregardlessofwhereintheRestrictedAreatheactivitiesconstitutingsuchbreachweretooccur.Thus,ExecutiveacknowledgesandagreesthatitisbothreasonableandnecessaryforthecovenantsinthisSection2.1toapplytoExecutive’sactivitiesthroughouttheRestrictedArea.InrecognitionofthespecialandunusualcharacterofthedutiesandresponsibilitiesofExecutiveunderthisAgreementandasamaterialinducementtoEmployertocontinuetoemployExecutiveinthis
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specialanduniquecapacity,Executivecovenantsandagreesthat,totheextentandsubjecttothelimitationsprovidedinthisSection2,whileExecutiveisemployedbyEmployerandforaone(1)yearperiodfollowingthelaterofExecutive’sTerminationDateandthelastdayoftheConsultingTerm(totheextentExecutiveisprovidingconsultingservicespursuanttoSection3hereof),Executiveshallnot,onExecutive’sownaccountorasanemployee,associate,consultant,partner,agent,principal,contractor,owner,officer,director,member,manager,orstockholderofanyotherPersonwhoisengagedintheBusiness(collectively,the“Restricted Persons ”),directlyorindirectly,alone,for,orincombinationwithanyoneormoreRestrictedPersons,inoneoraseriesoftransactions:
(i) serveinanycapacityofanyPersonwhoisengagedintheBusinessinanystateintheRestrictedAreaandwhoisadirectcompetitorofEmployerorofanyAffiliateofEmployerwhoisalsoengagedintheBusiness;
(ii) provideconsultativeservicestoanyPersonwhoisengagedintheBusinessinanystateintheRestrictedAreaandwhoisadirectcompetitorofEmployerorofanyAffiliateofEmployerwhoisalsoengagedintheBusiness;
(iii) calluponanyofthedepositors,customersorclientsofEmployer(orofanyAffiliatewhoisalsoengagedintheBusiness)whoweresuchatanytimeduringthetwelve-(12-)monthperiodendingontheTerminationDatewhoseneedsExecutivegainedinformationaboutduringExecutive’semploymentwithEmployerforthepurposeofsolicitingorprovidinganyproductorservicesimilartothatprovidedbyEmployerortheirAffiliates;
(iv) solicit,divert,ortakeaway,orattempttosolicit,divertortakeawayanyofthedepositors,customersorclientsofEmployer(orofanyAffiliatewhoisalsoengagedintheBusiness)whoweresuchatanytimeduringthetwelve-(12-)monthperiodendingontheTerminationDatewhoseneedsExecutivegainedinformationaboutduringExecutive’semploymentwithEmployer;or
(v) induceorattempttoinduceanyemployeeofEmployerortheirAffiliatestoterminateemploymentwithEmployerortheirAffiliates.
NothinginthisSection2.1shallbereadtoprohibitaninvestmentdescribedinthelastsentenceofSection1.2.1.
2.2 N ON -D ISCLOSURE O F C ONFIDENTIAL I NFORMATION ; N ON -D ISPARAGEMENT . DuringtheEmploymentTerm,theConsultingTerm,andatanytimethereafter,andexceptasrequiredbyanycourt,supervisoryauthority,oradministrativeagencyorasmaybeotherwiserequiredbyapplicablelaw,Executiveshallnot,withoutthewrittenconsentoftheBoardsofDirectorsofEmployer,orapersonauthorizedthereby,communicate,furnish,divulge,ordisclosetoanyPerson,otherthananemployeeofEmployeroranAffiliatethereof,oraPersontowhomcommunicationordisclosureisreasonablynecessaryorappropriateinconnectionwiththeperformancebyExecutiveofExecutive’sdutiesasanemployeeorconsultantofEmployer,anyConfidentialInformationobtainedbyExecutivewhileintheemployoforwhileprovidingservicestoEmployeroranyAffiliate,unlessanduntilsuchinformationhasbecomeamatterofpublicknowledgeatthetimeofsuchdisclosure.ExecutiveshalluseExecutive’sbesteffortsto
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preventtheremovalofanyConfidentialInformationfromthepremisesofEmployeroranyoftheirAffiliates,exceptasrequiredinconnectionwiththeperformanceofExecutive’sdutiesasanemployeeorconsultantofEmployer.Executiveacknowledgesandagreesthat(i)allConfidentialInformation(whethernoworhereafterexisting)conceived,discovered,ordevelopedbyExecutiveduringtheEmploymentTermortheConsultingTermbelongsexclusivelytoEmployerandnottohim;(ii)thatConfidentialInformationisintendedtoproviderightstoEmployerinadditionto,notinlieuof,thoserightsEmployerandtheirAffiliateshaveunderthecommonlawandapplicablestatutesfortheprotectionoftradesecretsandconfidentialinformation;and(iii)thatConfidentialInformationincludesinformationandmaterialsthatmaynotbeexplicitlyidentifiedormarkedasconfidentialorproprietary.Inaddition,duringtheEmploymentTerm,theConsultingTerm,andatanytimethereafter,Executiveshallnotmakeanydisparagingremarks,oranyremarksthatwouldreasonablybeconstruedasdisparaging,regardingEmployeroranyoftheirAffiliates,ortheirofficers,directors,employees,partners,oragents.Executiveshallnottakeanyactionorprovideinformationorissuestatements,tothemediaorotherwise,orcauseanyoneelsetotakeanyactionorprovideinformationorissuestatements,tothemediaorotherwise,regardingEmployeroranyoftheirAffiliatesortheirofficers,directors,employees,partners,oragents.Notwithstandingtheforegoing,thecovenantssetforthinthisSection2.2arenotintendedto,andshallbeinterpretedinamannerthatdoesnot,limitorrestrictExecutivefromexercisinganylegallyprotectedwhistleblowerrights(includingpursuanttoRule21FpromulgatedundertheSecuritiesExchangeActof1934,asamended).
2.3 U SE O F U NAUTHORIZED S OFTWARE . DuringtheEmploymentTerm,ExecutiveshallnotknowinglyloadanyunauthorizedsoftwareintoExecutive’scomputer(whetherpersonalorownedbyEmployer).ExecutivemayrequestthatEmployerpurchase,register,andinstallcertainsoftwareorotherdigitalintellectualproperty,butExecutivemaynotcopyorinstallsuchsoftwareorintellectualpropertyhimself.ExecutiveacknowledgesthatcertainsoftwareanddigitalintellectualpropertyisConfidentialInformationofEmployerandExecutiveagrees,inaccordancewithSection2.2,tokeepsuchsoftwareandintellectualpropertyconfidentialandnottouseitexceptinfurtheranceofEmployer’sBusinessortheoperationsofEmployeroritsAffiliates.
2.4 R EMOVAL O F M ATERIALS . DuringtheEmploymentTerm,theConsultingTerm,andatanytimethereafter,andexceptasmayberequiredordeemednecessaryorappropriateinconnectionwiththeperformancebyExecutiveofExecutive’sdutiesasanemployeeoforconsultanttoEmployer,Executiveshallnotcopy,disposeof,orremovefromEmployerortheirAffiliatesanydepositor,customer,orclientlists,software,computerprograms,orotherdigitalintellectualproperty,books,records,forms,data,manuals,handbooks,oranyotherpapersorwritingsrelatingtotheBusinessortheoperationsofEmployerortheirAffiliates.
2.5 W ORK P RODUCT . Employeraloneshallbeentitledtoallbenefits,profits,andresultsarisingfromorincidentaltoExecutive’sWorkProduct(asdefinedinthisSection2.5).Tothegreatestextentpossible,anyworkproduct,property,data,documentation,inventions,orinformationormaterialsprepared,conceived,discovered,developed,orcreatedbyExecutiveinconnectionwithperformingExecutive’sresponsibilitiesduringtheEmploymentTermortheConsultingTerm(“Work Product ”)shallbedeemedtobe“workmadeforhire”asdefinedintheCopyrightAct,17U.S.C.A.§101etseq.,asamended,andownedexclusivelybyEmployer.ExecutiveherebyunconditionallyandirrevocablytransfersandassignstoEmployerall
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intellectualpropertyorotherrights,title,andinterestExecutivemaycurrentlyhave(orinthefuturemayhave)byoperationoflaworotherwiseinortoanyWorkProduct.ExecutiveagreestoexecuteanddelivertoEmployeranytransfers,assignments,documents,orotherinstrumentsthatmayreasonablybenecessaryorappropriatetovestcompletetitleandownershipofanyWorkProductandallassociatedrightsexclusivelyinEmployer.Employershallhavetherighttoadapt,change,revise,deletefrom,addto,and/orrearrangetheWorkProductoranypartthereofwrittenorcreatedbyExecutive,andtocombinethesamewithotherworkstoanyextent,andtochangeorsubstitutethetitlethereof,andinthisconnectionExecutiveherebywaivesthe“moralrights”ofauthorsasthattermiscommonlyunderstoodthroughouttheworld,including,withoutlimitation,anysimilarrightsorprinciplesoflawthatExecutivemaynoworlaterhavebyvirtueofthelawofanylocality,state,nation,treaty,convention,orothersource.Unlessotherwisespecificallyagreed,ExecutiveshallnotbeentitledtoanycompensationinadditiontothatprovidedforinthisAgreementforanyexercisebyEmployerofitsrightssetforthinthisSection2.5.IntheeventthatanyWorkProductqualifiesforprotectionundertheUnitedStatesPatentAct,35U.S.C.§1etseq.,asamended,andExecutiveagreestobearthecostofseekingapatentfromtheU.S.PatentOffice,Employeragrees,upontheissuanceofsuchpatentanduponreceiptfromExecutiveofreimbursementofallcostsandexpensesrelatedtoobtainingsuchpatent,toassignthepatenttoExecutive.ExecutiveherebygrantstoEmployeraroyalty-free,perpetual,irrevocablelicensetoanysuchpatentobtainedbyExecutiveinaccordancewiththeprecedingsentence.
2.6 I NTERPRETATION ; R EMEDIES . ConsistentwithSection4.8,thecovenantscontainedinthisSection2(the“Covenants ”)shallbeconstruedandinterpretedinanyjudicialproceedingtopermittheirenforcementtothemaximumextentpermittedbylawandeachoftheCovenantsisseverableandindependentlyenforceablewithoutreferencetotheenforceabilityofanyotherCovenants.Further,ifanyprovisionoftheCovenantsorofthisSection2isheldbyacourtofcompetentjurisdictiontobeoverbroadaswritten,Executivespecificallyagreesthatthecourtshouldmodifysuchprovisioninordertomakeitenforceable,andthatacourtshouldvieweachsuchprovisionasseverableandenforcethoseseverableprovisionsdeemedreasonablebysuchcourt.ExecutiveagreesthattherestraintsimposedbythisSection2arefairandnecessarytopreventExecutivefromunfairlytakingadvantageofcontactsestablished,nurtured,serviced,enhanced,orpromotedandknowledgegainedduringExecutive’semploymentwithorservicestoEmployerandtheirAffiliates,andarenecessaryforthereasonableandproperprotectionofEmployerandtheirAffiliatesandthateachandeveryoneoftherestraintsisreasonablewithrespecttotheactivitiesprohibited,thedurationthereof,theRestrictedArea,thescopethereof,andtheeffectthereofonExecutiveandthegeneralpublic.ExecutiveacknowledgesthattheCovenantswillnotcauseanundueburdenonExecutive.ExecutivefurtheracknowledgesthatviolationofanyoneormoreoftheCovenantswouldimmeasurablyandirreparablydamageEmployerandtheirAffiliates,and,accordingly,ExecutiveagreesthatforanyviolationorthreatenedviolationofanyofsuchCovenants,Employershall,inadditiontoanyotherrightsandremediesavailabletoit,atlaworotherwise(including,withoutlimitation,therecoveryofdamagesfromExecutive),beentitledtospecificperformanceandaninjunctiontobeissuedbyanycourtofcompetentjurisdictionenjoiningandrestrainingExecutivefromcommittinganyviolationorthreatenedviolationoftheCovenants.Executiveherebyconsentstotheissuanceofsuchinjunctionandagreestosubmittotheequitablejurisdictionofanycourtofcompetentjurisdiction,withoutreferencetowhetherExecutiveresidesordoesbusinessinthatjurisdictionatthetimesuchinjunctionissoughtorentered.
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2.7 N OTICE OF C OVENANTS . ExecutiveagreesthatpriortoacceptingemploymentwithanyotherPersonduringtheEmploymentTermorduringthetwo-(2-)yearperiodfollowingtheterminationofhisemploymentwithEmployer,ExecutiveshallprovideEmployerwithwrittennoticeofhisintenttoacceptsuchemployment,whichnoticeshallincludethenameoftheprospectiveemployer,thebusinessengagedinortobeengagedinbytheprospectiveemployer,andthepositionExecutiveintendstoacceptwiththeprospectiveemployer.Inaddition,ExecutiveshallprovidesuchprospectiveemployerwithwrittennoticeoftheexistenceofthisAgreementandtheCovenants.3. CONSULTING TERMS AND DUTIES.
3.1 C ONSULTING T ERM . ThetermofExecutive’sconsultingservicesunderthisAgreementshallcommenceontheChairmanSuccessionDateor,ifearlier,upontheterminationoftheEmploymentTermpursuanttoSection1.6.2(Retirement),andshallcontinueuntilSeptember12,2022(the“Expiration Date ”and,suchperiod,asitmaybeshortenedinaccordancewithSection3.5.1,the“Consulting Term ”).IftheEmploymentTermisterminatedpriortotheChairmanSuccessionDatepursuanttoSection1.6.1(death),1.6.3(Disability),1.6.4(JustCause),1.6.5(WithoutJustCause),or1.6.6(GoodReasonTermination),thentheConsultingTermshallnotcommenceand,inthecaseofsuchaterminationpursuanttoSection1.6.5(WithoutJustCause)or1.6.6(GoodReasonTermination),ExecutiveshallbeentitledtothepaymentssetforthinSection3.6.
3.2 C ONSULTING S ERVICES .DuringtheConsultingTerm,Executiveshallserveasanon-employeeconsultanttoBB&TandBBTCandshallprovidegeneraladvisoryservicesasreasonablyrequestedbytheBoardofDirectorsofBB&Tand/orBBTCandtheChiefExecutiveOfficerofBB&Tand/orBBTCwithrespecttothebusinessofEmployerandshallbeavailabletodedicateuptoeight(8)hoursaweekasExecutiveandEmployermutuallydeemreasonablefortheperformanceoftheconsultingservices;providedthat,notwithstandingtheforegoing,EmployerandExecutiveshallusetheirreasonablebesteffortstoensurethatthelevelofExecutive’sservicesduringtheConsultingTermisconsistentwiththeintentthatExecutive’sterminationofemploymentconstitutesa“separationfromservice”(withinthemeaningofSection409A(asdefinedbelow)).SuchservicesshallbeperformedatsuchlocationsasExecutivereasonablydeemsappropriate.
3.3 R EMUNERATION . InconsiderationoftheservicesrenderedtoEmployerduringtheConsultingTerm,Executiveshallbepaidamonthlyfee(proratedforanypartialmonths)equalto(i)thesumof(A)Executive’sBaseSalaryasineffectimmediatelypriortotheChairmanSuccessionDate(or,ifearlier,asineffectimmediatelypriortoExecutive’sRetirement),and(B)theamountofExecutive’stargetannualcashincentiveawardopportunityasineffectimmediatelypriortotheChairmanSuccessionDate(or,ifearlier,asineffectimmediatelypriortoExecutive’sRetirement)(and,innoeventlessthanthatineffectforthemostrecentlycompletedfiscalyearofEmployerpriortotheChairmanSuccessionDate(or,ifearlier,thedateofExecutive’sRetirement)),dividedby(ii)twelve(12)(the“Consulting Fee ”),payableinarrearsduringtheConsultingTermnolaterthanthefifth(5th)businessdayofeachmonth,withthefirst(1st)suchpaymenttobemadenolaterthanApril7,2022.Inaddition,duringtheConsultingTerm,thebusinessexpensereimbursementprovisionsofSection1.5shallcontinuetoapply.TheConsultingFeeshallbeinadditiontothecompensationpayableto
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Executiveforhisserviceasanon-employeedirectoroftheBoardsofDirectorsofBB&TandBBTC.
3.4 S TATUS AS N ON -E MPLOYEE . EmployerandExecutiveacknowledgeandagreethat,inperformingservicesduringtheConsultingTerm,Executiveshallbeactingandshallactatalltimesasanindependentcontractoronlyandnotasanemployee,agent,partner,orjointventureroforwithEmployerortheirrespectiveaffiliates.ExecutiveacknowledgesthatExecutiveshallbesolelyresponsibleforthepaymentofallfederal,state,local,andforeigntaxesthatarerequiredbyapplicablelawsorregulationstobepaidwithrespecttoallcompensationandbenefitspayableorprovidedpursuanttoSection3.3.
3.5 T ERMINATION OF C ONSULTING T ERM .
3.5.1 Termination.SubjecttoSection3.5.3,eitherEmployerorExecutivemayterminateExecutive’sconsultingservicesandtheConsultingTermatanytimeandforanyreason(ornoreason)byprovidingtheotherpartywiththirty(30)days’advancewrittennoticeofsuchtermination,andExecutive’sconsultingservicesandtheConsultingTermshallautomaticallyterminateuponExecutive’sdeath.
3.5.2 PaymentsuponTermination.UponterminationoftheConsultingTermforanyreason,EmployershallpaytoExecutiveanyearnedbutunpaidConsultingFeesforconsultingservicesrenderedpriortothedateoftheterminationoftheConsultingTermandshallreimburseExecutiveforanybusinessexpensesincurredpriortosuchterminationforwhichExecutivewouldbeentitledtoreimbursementpursuanttoSection1.5.Inaddition,uponaterminationoftheConsultingTermbyEmployerforanyreasonotherthanJustCauseorduetoExecutive’sDisability,ExecutiveshallbeentitledtoalumpsumcashpaymentequaltotheunpaidConsultingFeefortheperiodcommencingonthedateofsuchterminationandendingontheExpirationDate.AnyamountspayableuponterminationoftheConsultingTermshallbepaidwithinten(10)businessdaysfollowingthedateofsuchtermination.
3.5.3 ProceduralRequirements.NotwithstandinganyprovisionofthisAgreementtothecontrary,priortotheExpirationDate,(i)nopurportedterminationofExecutive’sconsultingservicesbyEmployerforanyreasonshallbeeffective,andExecutive’sconsultingservicesshallnotbeterminatedbyEmployer,unlessanduntilthereisdeliveredtoExecutiveacopyofaresolutioneffectuatingsuchterminationthatisdulyadoptedbytheaffirmativevoteofatleastseventy-fivepercent(75%)ofthefullBoardofDirectorsofBB&T(or,ifapplicable,theboardofdirectors(orequivalentgoverningbody)oftheultimateparententityofBB&Toritssuccessor)atameetingcalledanddulyheldforsuchpurpose.
3.6 P AYMENT UPON F AILURE OF C ONSULTING T ERM TO C OMMENCE . IftheEmploymentTermisterminatedpriortotheChairmanSuccessionDatepursuanttoSection1.6.5(WithoutJustCause)or1.6.6(GoodReasonTermination),thenExecutiveshallbeentitledtoalumpsumcashpaymentequaltotheaggregateConsultingFeesthatwouldhavebeenpayableduringtheConsultingTerm,whichamountshallbepaidwithinten(10)businessdaysfollowingthedateofsuchtermination.
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4. MISCELLANEOUS.4.1 N OTICES . Allnotices,requests,andothercommunicationstoanypartyunderthisAgreementmustbeinwriting
(includingtelefacsimiletransmissionorsimilarwriting)andshallbegiventosuchpartyathis,heroritsaddressortelefacsimilenumbersetforthbeloworatsuchotheraddressortelefacsimilenumberassuchpartymayhereafterspecifyforthepurposeofgivingnoticetotheotherparty:
IftotheExecutive:
AttheExecutive’smostrecentaddressonfileattheCompany.
IftoEmployer,to:
BB&TCorporationBranchBankingandTrustCompanyWestSecondStreetWinston-Salem,NC27101Facsimile:(336)733-2189Attention:GeneralCounsel
Eachsuchnotice,request,demandorothercommunicationshallbeeffective(i)ifgivenbymail,seventy-two(72)hoursaftersuchcommunicationisdepositedinthemailswithfirstclasspostageprepaid,addressedasaforesaidor(ii)ifgivenbyanyothermeans,whendeliveredattheaddressspecifiedinthisSection4.1.Deliveryofanynotice,request,demandorothercommunicationbytelefacsimileshallbeeffectivewhenreceivedifreceivedduringnormalbusinesshoursonabusinessday.Ifreceivedafternormalbusinesshours,thenotice,request,demandorothercommunicationwillbeeffectiveat10:00a.m.onthenextbusinessday.
4.2 E NTIRE A GREEMENT . ThisAgreementexpressesthewholeandentireagreementbetweenthepartieswithreferencetotheemploymentandserviceofExecutiveand,effectiveasofandsubjecttotheEffectiveTime,shallsupersedeandreplaceanyprioremploymentagreements(including,withoutlimitation,thePredecessorAgreement),understandings,orarrangements(whetherwrittenororal)amongEmployerandExecutive.
4.3 W AIVER ; M ODIFICATION . NowaiverormodificationofthisAgreementorofanycovenant,condition,orlimitationhereincontainedshallbevalidunlessinwritinganddulyexecutedbythepartytobechargedtherewith.Noevidenceofanywaiverormodificationshallbeofferedorreceivedinevidenceatanyproceeding,arbitration,orlitigationbetweenthepartiesheretoarisingoutoforaffectingthisAgreement,ortherightsorobligationsofthepartieshereunder,unlesssuchwaiverormodificationisinwriting,dulyexecutedasaforesaid.ThepartiesfurtheragreethattheprovisionsofthisSection4.3maynotbewaivedexceptashereinsetforth.
4.4 A MENDMENT . ThisAgreementmaybeamended,supplemented,ormodifiedonlybyawritteninstrumentdulyexecutedbyoronbehalfofeachpartyhereto.Inaddition,consistentwiththeBylawAmendment,nosuchamendment,supplementation,ormodification
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madepriortoDecember31,2023(withrespecttotheprovisionsofSection1.2.2)ormadepriortothethird(3rd)anniversaryoftheEffectiveDate(withrespecttoanyotherprovisionsofthisAgreement)shallbevalidunlesssuchamendment,supplementation,ormodificationisapprovedbytheaffirmativevoteofatleastseventy-fivepercent(75%)ofthefullBoardofDirectorsofBB&T(or,ifapplicable,theboardofdirectors(orequivalentgoverningbody)oftheultimateparententityofBB&Toritssuccessor).
4.5 N O T HIRD -P ARTY B ENEFICIARY . ThetermsandprovisionsofthisAgreementareintendedsolelyforthebenefitofeachpartyhereto,Employer’ssuccessorsorassigns,andExecutive’sheirs,executors,administrators,andlegalrepresentatives,anditisnottheintentionofthepartiestoconferthird-partybeneficiaryrightsuponanyotherPerson.
4.6 N O A SSIGNMENT ; B INDING E FFECT ; N O A TTACHMENT . ThisAgreementandtheobligationsundertakenhereinshallbebindinguponandshallinuretothebenefitofanysuccessorsorassignsofEmployer,andshallbebindinguponandinuretothebenefitofExecutive’sheirs,executors,administrators,andlegalrepresentatives.ExecutiveshallnotbeentitledtoassignordelegateanyofExecutive’sobligationsorrightsunderthisAgreement;provided,however,thatnothinginthisSection4.6shallprecludeExecutivefromdesignatingabeneficiarytoreceiveanybenefitpayableunderthisAgreementuponExecutive’sdeath.ExceptasotherwiseprovidedinthisAgreementorrequiredbyapplicablelaw,norighttoreceivepaymentsunderthisAgreementshallbesubjecttoanticipation,commutation,alienation,sale,assignment,encumbrance,charge,pledge,orhypothecation,ortoexecution,attachment,levy,orsimilarprocessorassignmentbyoperationoflaw,andanyattempt,voluntaryorinvoluntary,toeffectanysuchactionshallbenull,void,andofnoeffect.
4.7 H EADINGS . TheheadingsofparagraphsandsectionshereinareincludedsolelyforconvenienceofreferenceandshallnotcontrolthemeaningorinterpretationofanyoftheprovisionsofthisAgreement.
4.8 S EVERABILITY . EmployerandExecutiveintendallprovisionsofthisAgreementtobeenforcedtothefullestextentpermittedbylaw.Accordingly,ifacourtofcompetentjurisdictiondeterminesthatthescopeand/oroperationofanyprovisionofthisAgreementistoobroadtobeenforcedaswritten,EmployerandExecutiveintendthatthecourtshouldreformsuchprovisiontosuchnarrowerscopeand/oroperationasitdeterminestobeenforceable.If,however,anyprovisionofthisAgreementisheldtobeillegal,invalid,orunenforceableunderpresentorfuturelaw,andnotsubjecttoreformation,then(i)suchprovisionshallbefullyseverable,(ii)thisAgreementshallbeconstruedandenforcedasifsuchprovisionwasneverapartofthisAgreement,and(iii)theremainingprovisionsofthisAgreementshallremaininfullforceandeffectandshallnotbeaffectedbyillegal,invalid,orunenforceableprovisionsorbytheirseverance.
4.9 G OVERNING L AW . ThepartiesintendthatthisAgreementandtheperformancehereunderandallsuitsandspecialproceedingshereundershallbegovernedbyandconstruedinaccordancewithandunderandpursuanttothelawsoftheStateofNorthCarolinawithoutregardtoconflictsoflawprinciplesthereofandthatinanyaction,specialproceeding,orotherproceedingthatmaybebroughtarisingoutof,inconnectionwith,orbyreasonofthisAgreement,thelawsoftheStateofNorthCarolinashallbeapplicableandshallgoverntothe
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exclusionofthelawofanyotherforum.Anyaction,specialproceeding,orotherproceedingwithrespecttothisAgreementshallbebroughtexclusivelyinthefederalorstatecourtsoftheStateofNorthCarolina,andbyexecutionanddeliveryofthisAgreement,ExecutiveandEmployerirrevocablyconsenttotheexclusivejurisdictionofthosecourtsandExecutiveherebysubmitstopersonaljurisdictionintheStateofNorthCarolina.ExecutiveandEmployerirrevocablywaiveanyobjection,includinganyobjectionbasedonlackofjurisdiction,impropervenue,orforumnonconveniens,whicheithermaynoworhereafterhavetothebringingofanyactionorproceedinginsuchjurisdictioninrespecttothisAgreementoranytransactionrelatedhereto.ExecutiveandEmployeracknowledgeandagreethatanyserviceoflegalprocessbymailinthemannerprovidedfornoticesunderthisAgreementconstitutesproperlegalserviceofprocessunderapplicablelawinanyactionorproceedingunderorinrespecttothisAgreement.
4.10 C OUNTERPARTS . ThisAgreementmaybeexecutedinoneormorecounterparts,eachofwhichwillbedeemedanoriginal,butallofwhichtogetherwillconstituteoneandthesameinstrument.
4.11 W ITHHOLDING . Employershalldeductandwithholdallfederal,state,local,andemploymenttaxesandanyothersimilarsumsrequiredbyapplicablelaw,orinaccordancewiththeapplicableprovisionsofEmployer’semployeebenefitplans,tobewithheldfromanypaymentsmadetoExecutiveinrespectofhisemploymentpursuanttothetermsofthisAgreement.
4.12 D EFINITIONS . WhereverusedinthisAgreement,including,butnotlimitedto,theRecitals,thefollowingtermsshallhavethemeaningssetforthbelow(unlessotherwiseindicatedbythecontext)andsuchmeaningsshallbeapplicabletoboththesingularandpluralform(exceptwhereotherwiseexpresslyindicated):
(i) “Affiliate ”meansaPersonorpersonthatdirectlyorindirectlythroughoneormoreintermediaries,controls,iscontrolledby,orisundercommoncontrolwith,anotherPersonorperson.
(ii) “Business ”meansthebankingbusiness,whichbusinessincludes,butisnotlimitedto,theconsumer,savings,andcommercialbankingbusiness;thetrustbusiness;thesavingsandloanbusiness;andthemortgagebankingbusiness.
(iii) “Code ”meanstheInternalRevenueCodeof1986,asamended,andtherulesandregulationsissuedthereunder.
(iv) “Commencement Month ”meansthefirst(1st)dayofthecalendarmonthnextfollowingthemonthinwhichExecutive’sTerminationDateoccurs.
(v) “Compensation Continuance Period ”meansthetimeperiodcommencingwiththeCommencementMonthandendingonthedatethatcoincideswiththeexpirationofthethirty-six(36)consecutivemonthperiodthatbeganwiththeCommencementMonth.
(vi) “Confidential Information ”meansallnon-publicinformationthathasbeencreated,discovered,obtained,developed,orotherwisebecomeknowntoEmployerortheir
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Affiliatesotherthanthroughpublicsources,including,butnotlimitedto,allcompetitively-sensitiveinformation,allinventions,processes,data,computerprograms,software,databases,know-how,digitalintellectualproperty,marketingplans,businessandsalesplansandstrategies,trainingprogramsandprocedures,acquisitionprospects,customerlists,diagramsandchartsandsimilaritems,depositorlists,clientslists,creditinformation,budgets,projections,newproducts,informationcoveredbytheTradeSecretsProtectionAct,N.C.Gen.Stat.,Chapter66,§§152to162,andotherinformationownedbyEmployerortheirAffiliatesthatisnotpublicinformation.
(vii) “Excise Tax ”meanstheexcisetaxonexcessparachutepaymentsunderSection4999oftheCode(oranysuccessororsimilarprovisionthereof),includinganyinterestorpenaltieswithrespecttosuchexcisetax.
(viii) “Pension Plan ”meanstheBB&TCorporationPensionPlan,ataxqualifieddefinedbenefitpensionplan.
(ix) “Person ”meansanyindividual,person,partnership,limitedliabilitycompany,jointventure,corporation,company,firm,group,orotherentity.
(x) “Restricted Area ”meansthecontinentalUnitedStates.
(xi) “Retirement ”and“retires ”meansvoluntaryterminationbyExecutiveofExecutive’semploymentwithEmployeronoraftertheEffectiveTimethatsatisfiestherequirementsforearlyretirementornormalretirementunderthePensionPlan.
(xii) “Termination Compensation ”meansamonthlycashamountequaltoone-twelfth(1/12th)oftheaverageannualcashcompensationreceived(includingcashbonusesandothercash-basedcompensation,includingforthesepurposesamountsearnedorpayablewhetherornotdeferred)byExecutiveduringthethree(3)calendaryearsimmediatelyprecedingthecalendaryearinwhichExecutive’sTerminationDateoccurs.InnoeventshallExecutive’sTerminationCompensationincludeequity-basedcompensation(e.g.,incomerealizedasaresultofExecutive’sexerciseofnonqualifiedstockoptionsorotherstockbasedbenefits).
(xiii) “Termination Date ”meansthedateExecutive’semploymentwithEmployeristerminated,andwhichterminationisa“separationfromservice”withinthemeaningofSection409A.
(xiv) “Termination Year ”meansthecalendaryearinwhichExecutive’sTerminationDateoccurs.
(xv) “Treasury ”meanstheUnitedStatesDepartmentoftheTreasury.
4.13 C ODE S ECTION 409 A .
(i) In General. Totheextentapplicable,thepartiesheretointendthatthisAgreementcomplywithSection409AoftheCodeandallregulations,guidance,orotherinterpretativeauthoritythereunder(“Section 409A ”)oranexemptionorexclusiontherefrom.ThepartiesherebyagreethatthisAgreementshallbeconstruedinamannertocomplywithSection409AandthatshouldanyprovisionbefoundnotincompliancewithSection409A,the
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partiesareherebycontractuallyobligatedtoexecuteanyandallamendmentstothisAgreementdeemednecessaryandrequiredbylegalcounselforEmployertoachievecompliancewithSection409A.
(ii) Specified Employee. NotwithstandinganythingcontainedinthisAgreementtothecontrary,ifatthetimeofExecutive’s“separationfromservice”(asdefinedinSection409A),Executiveisa“specifiedemployee”(withinthemeaningofSection409AandEmployer’sspecifiedemployeeidentificationpolicy)andifanypayment,reimbursement,and/orin-kindbenefitthatconstitutesnonqualifieddeferredcompensation(withinthemeaningofSection409A)isdeemedtobetriggeredbyExecutive’sseparationfromservice,then,totheextentoneormoreexceptionstoSection409Aareinapplicable(including,withoutlimitation,theexceptionunderTreasuryRegulationsSection1.409A-1(b)(9)(iii)relatingtoseparationpayduetoaninvoluntaryseparationfromserviceanditsrequirementthatinstallmentsmustbepaidnolaterthanthelastdayofthesecond(2nd)taxableyearfollowingthetaxableyearinwhichsuchanemployeeincurstheinvoluntaryseparationfromservice),allpayments,reimbursements,andin-kindbenefitsthatconstitutenonqualifieddeferredcompensation(withinthemeaningofSection409A)toExecutiveshallnotbepaidorprovidedtoExecutiveduringthesix-(6-)monthperiodfollowingExecutive’sseparationfromservice,and(i)suchpostponedpaymentand/orreimbursement/in-kindamountsshallbepaidtoExecutiveinalumpsumwithinthirty(30)daysafterthedatethatissix(6)monthsfollowingExecutive’sseparationfromservice;(ii)anyamountspayabletoExecutiveaftertheexpirationofsuchsix-(6-)monthperiodshallcontinuetobepaidtoExecutiveinaccordancewiththetermsoftheEmploymentAgreement;and(iii)totheextentthatanygrouphospitalizationplan,healthcareplan,dentalcareplan,lifeorotherinsuranceordeathbenefitplan,andanyotherpresentorfuturesimilargroupexecutivebenefitplanorprogramoranylumpsumcashoutthereofisnonqualifieddeferredcompensation(withinthemeaningofSection409A),ExecutiveshallpayforsuchbenefitsfromhisTerminationDateuntilthefirst(1st)dayoftheseventh(7th)monthfollowingthemonthofExecutive’sseparationfromservice,atwhichtimeEmployershallreimburseExecutiveforsuchpayments.IfExecutivediesduringsuchsix-(6-)monthperiodandpriortothepaymentofsuchpostponedamountsofnonqualifieddeferredcompensation,anysuchpostponedamountsshallbepaidinalumpsumtoExecutive’sestateor,ifapplicable,toExecutive’sdesignatedbeneficiarywithinthirty(30)daysafterthedateofExecutive’sdeath.
(iii) Reimbursements and In-Kind Benefits. Notwithstandinganyotherprovisionoftheapplicableplansandprograms,allreimbursementsandin-kindbenefitsprovidedunderthisAgreementshallbemadeorprovidedinaccordancewiththerequirementsofSection409A,including,whereapplicable,therequirementthat(i)theamountofexpenseseligibleforreimbursementandtheprovisionofbenefitsinkindduringacalendaryearshallnotaffecttheexpenseseligibleforreimbursementortheprovisionofin-kindbenefitsinanyothercalendaryear;(ii)thereimbursementforaneligibleexpensewillbemadeonorbeforethelastdayofthecalendaryearfollowingthecalendaryearinwhichtheexpenseisincurred;(iii)therighttoreimbursementorrighttoin-kindbenefitisnotsubjecttoliquidationorexchangeforanotherbenefit;and(iv)eachreimbursementpaymentorprovisionofin-kindbenefitshallbeoneofaseriesofseparatepayments(andeachshallbeconstruedasaseparateidentifiedpayment)forpurposesofSection409A.
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(iv) Miscellaneous Section 409A Compliance. AllpaymentstobemadetoExecutiveuponaterminationofemploymentmayonlybemadeupona“separationfromservice”(withinthemeaningofSection409A)ofExecutive;andphrasesinthisAgreementsuchas“terminationofemployment,”“Executive’stermination,”“terminated,”andsimilarphrasesshallmeana“separationfromservice”withinthemeaningofSection409A.ForpurposesofSection409A,(i)eachpaymentmadeunderthisAgreementshallbetreatedasaseparatepayment;(ii)Executivemaynot,directlyorindirectly,designatethecalendaryearofpayment;and(iii)noaccelerationofthetimeandformofpaymentofanynonqualifieddeferredcompensationtoExecutive,oranyportionthereof,shallbepermitted.
4.14 A TTORNEYS ’ F EES . IntheeventanydisputeshallarisebetweenExecutiveandEmployerastothetermsorinterpretationsofthisAgreement,whetherinstitutedbyformallegalproceedingsorotherwise,includinganyactiontakenbyExecutivetoenforcethetermsofthisAgreementorindefendingagainstanyactiontakenbyEmployer,EmployershallreimburseExecutiveforallreasonablecostsandexpenses,includingreasonableattorneys’fees,arisingfromsuchdispute,proceeding,oraction,ifExecutiveshallprevailinanyactioninitiatedbyExecutiveorshallhaveactedreasonablyandingoodfaithindefendingagainstanyactioninitiatedbyEmployer.Suchreimbursementshallbepaidwithinten(10)daysofExecutive’sfurnishingtoEmployerwrittenevidence,whichmaybeintheform,amongotherthings,ofacancelledcheckorreceipt,ofanycostsorexpensesincurredbyExecutive.AnysuchrequestforreimbursementbyExecutiveshallbemadenomorefrequentlythanatsixty(60)dayintervals.
4.15 J OINT AND S EVERAL O BLIGATIONS . Totheextentpermittedbyapplicablelaw,allobligationsofEmployerunderthisAgreementshallbejointandseveral.
4.16 N O E XCISE T AX . AnythinginthisAgreementtothecontrarynotwithstanding,ExecutiveandEmployeragreethatinnoeventshallthepresentvalueofallpayments,distributions,andbenefitsprovided(including,withoutlimitation,theaccelerationofexercisabilityofanystockoption)toExecutiveorforExecutive’sbenefit(whetherpaidorpayableordistributedordistributable)pursuanttothetermsofthisAgreementorotherwisethatconstitutea“parachute payment ”whenaggregatedwithotherpayments,distributions,andbenefitsthatconstitute“parachutepayments,”exceedtwohundredninety-ninepercent(299%)ofExecutive’s“base amount .”Asusedherein,“parachutepayment”hasthemeaningascribedtoitinSection280G(b)(2)oftheCode;and“baseamount”hasthemeaningascribedtoitinSection280GoftheCodeandtheregulationspromulgatedthereunder.Ifthe“present value ”,asdefinedinSections280G(d)(4)and1274(b)(2)oftheCode,ofsuchaggregate“parachutepayments”exceedsthetwohundredninety-ninepercent(299%)limitationsetforthherein,suchpayments,distributions,andbenefitsshallbereducedbyEmployerinaccordancewiththeorderofprioritysetforthbelowsothatsuchreducedamountwillresultinnoportionofthepayments,distributions,andbenefitsbeingsubjecttoExciseTax.AllcalculationsrequiredtobemadeunderthisSection4.16shallbemadebyanynationallyrecognizedaccountingfirmthatisBB&T’soutsideauditorimmediatelypriortotheeventtriggeringthepayment(s),distribution(s),andbenefit(s)describedabove(the“Accounting Firm ”).BB&TshallcausetheAccountingFirmtoprovidedetailedsupportingcalculationstoBB&TandExecutive.AllfeesandexpensesoftheAccountingFirmshallbebornesolelybyBB&T.Suchpayments,distributions,andbenefitswillbereducedbyEmployerinaccordancewiththefollowingorderofpriority:(i)first,“FullCreditPayments”(asdefinedbelow)willbereducedinreversechronologicalordersuch
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thatthepaymentowedonthelatestdatefollowingtheoccurrenceoftheeventtriggeringthereductionwillbethefirst(1st)paymenttobereduceduntilsuchpaymentisreducedtozero,andthenthepaymentowedonthenextlatestdatefollowingtheoccurrenceoftheeventtriggeringthereductionwillbethesecond(2nd)paymenttobereduceduntilsuchpaymentisequaltozero,andsoforth,untilallsuchFullCreditPaymentshavebeenreducedtozero,and(ii)second,“PartialCreditPayments”(asdefinedbelow)willbereducedinreversechronologicalorderinthesamemanneras“FullCreditPayments”arereduced.“Full Credit Payment ”meansapayment,distribution,orbenefit,whetherpaidorpayableordistributedordistributablepursuanttothetermsofthisAgreementorotherwise,thatifreducedinvaluebyonedollar($1.00)reducestheamountofa“parachutepayment”byonedollar($1.00).“Partial Credit Payment ”meansapayment,distribution,orbenefit,whetherpaidorpayableordistributedordistributablepursuanttothetermsofthisAgreementorotherwise,thatifreducedinvaluebyonedollar($1.00)reducestheamountofaparachutepaymentbyanamountthatislessthanonedollar($1.00).Forclarificationpurposesonly,a“PartialCreditPayment”wouldincludeastockoptionastowhichvestingisaccelerateduponaneventthattriggersthereduction,wherethein-the-moneyvalueoftheoptionexceedsthevalueoftheoptionaccelerationthatisaddedtotheparachutepayment.
4.17 S URVIVAL .AnyprovisionofthisAgreementthatbyitstermscontinuesaftertheexpirationoftheEmploymentTerm,theConsultingTerm,ortheterminationofExecutive’semploymentorserviceasaconsultantshallsurviveinaccordancewithitsterms.
4.18 R ECITALS . TheRecitalstothisAgreementareapartofthisAgreement.
[Thebalanceofthispageisintentionallyleftblank.]
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INWITNESSWHEREOF,thepartiesheretohavecausedthisAgreementtobeexecutedasofthedatehereof.
BB&T CORPORATION
By: /s/DarylN.BibleName:DarylN.Bible
Title:SeniorExecutiveVicePresidentandChiefFinancialOfficer
BRANCH BANKING AND TRUSTCOMPANY
By: /s/DarylN.BibleName:DarylN.Bible
Title:SeniorExecutiveVicePresidentandChiefFinancialOfficer
KELLY S. KING
/s/KellyS.KingKellyS.King
[SignaturePagetoAmendedandRestatedEmploymentAgreement]