UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

Form 8-K

 

 

Current Report

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

June 3, 2019 (May 28, 2019)

Date of Report (Date of earliest event reported)

 

 

BB&T Corporation

(Exact name of registrant as specified in its charter)

 

 

 

North Carolina   1-10853   56-0939887

(State or other jurisdiction

of incorporation)

 

(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 the registrant 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))

Securities registered pursuant to Section 12(b) of the Exchange Act:

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange

on which registered

Common Stock, $5 par value   BBT   New York Stock Exchange
Depositary Shares each representing 1/1,000th interest in a share of Series D Non-Cumulative Perpetual Preferred Stock   BBT PrD   New York Stock Exchange
Depositary Shares each representing 1/1,000th interest in a share of Series E Non-Cumulative Perpetual Preferred Stock   BBT PrE   New York Stock Exchange
Depositary Shares each representing 1/1,000th interest in a share of Series F Non-Cumulative Perpetual Preferred Stock   BBT PrF   New York Stock Exchange
Depositary Shares each representing 1/1,000th interest in a share of Series G Non-Cumulative Perpetual Preferred Stock   BBT PrG   New York Stock Exchange
Depositary Shares each representing 1/1,000th interest in a share of Series H Non-Cumulative Perpetual Preferred Stock   BBT PrH   New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 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 transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

 

 

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

In connection with integration planning for the proposed merger of equals (the “Merger”) between BB&T Corporation (“BB&T”) and SunTrust Banks, Inc. (“SunTrust”), with BB&T as the surviving entity (the “Combined Company”), on May 28, 2019, BB&T entered into certain agreements with each of Daryl N. Bible, Donna C. Goodrich, Christopher L. Henson and Clarke R. Starnes, III, all of whom are named executive officers of BB&T (collectively, the “Executives”). These agreements were designed to promote retention and to incentivize efforts to consummate and achieve the anticipated benefits of the proposed Merger. The Compensation Committee of the BB&T Board of Directors (the “Compensation Committee”) approved the entry into these agreements, in each case subject to the applicable individual’s continued service through the closing of the Merger. If the merger agreement providing for the Merger is terminated prior to the closing for any reason, each of these agreements will automatically terminate and be of no further force or effect.

Synergy Incentive Awards

The Compensation Committee approved the grant of cash retention incentive awards (the “Synergy Incentive Awards”) to the Executives to incentivize their efforts and continued employment through the closing of the Merger and the post-Merger integration period. The Synergy Incentive Awards will vest and be paid in two installments, subject to the closing of the Merger and the Executive’s continued employment through the following applicable dates:

 

  •  

33% will vest on the earlier of (i) the date on which the conversion of the bank systems of the banking operations of BB&T and SunTrust is determined to be successfully completed and (ii) August 1, 2021 (the “First Vesting Date”); and

 

  •  

67% will vest on January 15, 2022 (the “Second Vesting Date”).

If the Executive experiences a severance qualifying termination (for Ms. Goodrich and Mr. Henson, which would not include a “good reason” termination due to a change in duties as a result of the change in her or his position at the closing of the Merger) prior to the First Vesting Date, only the first installment of the Synergy Incentive Award will vest and be paid, and the second installment will be forfeited. If Messrs. Bible and Starnes (who are retirement eligible for purposes of the existing BB&T compensation plans and arrangements) retire after August 1, 2021 and remain employed and in good standing through his scheduled retirement date, the second installment of the Synergy Incentive Award will fully vest and be paid on the originally scheduled payment date. The amount of the Synergy Incentive Award for each of the Executives is as follows: Mr. Bible, $3,110,400; Ms. Goodrich, $2,575,380; Mr. Henson, $4,162,500; and Mr. Starnes, $3,110,400. In addition, the Synergy Incentive Award letters with Ms. Goodrich and Mr. Henson affirm the waiver of the “good reason” termination right due to the change in position and related duties in connection with the Merger and set forth the Executive’s new position, reporting relationship and principal work location with the Combined Company, and, in the case of Ms. Goodrich, target total direct compensation of approximately $2,292,000 for the 2019 and 2020 fiscal years.

The form of Synergy Incentive Award letter for Messrs. Bible and Starnes is attached hereto as Exhibit 10.1, the Synergy Incentive Award letter for Ms. Goodrich is attached hereto as Exhibit 10.2 and the Synergy Incentive Award letter for Mr. Henson is attached hereto as Exhibit 10.3.

Amendments to Existing BB&T Employment Agreements

Each Executive also entered into an amendment to his or her existing BB&T employment agreement (the “Amendment”), pursuant to which certain rights or benefits thereunder were modified or clarified. In the case of each of Ms. Goodrich and Mr. Henson, the Amendment also waives her or his right to terminate employment for “good reason” under the employment agreement and other BB&T plans or arrangements

 

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that contain a similar right, as a result of the transition to a new position with the Combined Company. In consideration for the waiver of this right, each of Ms. Goodrich and Mr. Henson may elect to terminate for good reason during two window periods following the closing of the Merger (June 1, 2021 through August 31, 2021 and November 1, 2021 through November 30, 2021). If Ms. Goodrich or Mr. Henson were to die prior to December 1, 2021, the severance would be paid to her or his estate. Each Amendment provides for additional changes to the employment agreements with the Executives, including the following:

 

  •  

clarifies that upon a termination without cause or for good reason (a “qualifying termination”), equity and long-term cash incentive awards automatically vest (other than the Synergy Incentive Award, which will be governed by its terms);

 

  •  

provides for a pro rata annual bonus based on actual performance in the year of a qualifying termination that occurs prior to January 1, 2022;

 

  •  

provides that the severance period is 36 months, without regard to the Executive’s age;

 

  •  

provides that the Executive’s severance is the greater of the severance calculated based on the Executive’s pre-Merger compensation and the severance calculated at the time of the Executive’s qualifying termination, and clarifies that such calculation does not include the Synergy Incentive Award; and

 

  •  

eliminates the noncompetition covenant upon a qualifying termination.

The form of the Amendment to the employment agreement with each of Messrs. Bible and Starnes is attached hereto as Exhibit 10.4, and the form of the Amendment to the Employment Agreement with each of Ms. Goodrich and Mr. Henson is attached hereto as Exhibit 10.5.

The foregoing summary of the Synergy Incentive Award letters and the Amendments does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the applicable agreements, forms of which are attached hereto as Exhibits 10.1, 10.2, 10.3, 10.4 and 10.5 and incorporated herein by reference.

ITEM 9.01. Financial Statements and Exhibits.

(d) Exhibits

 

Exhibit
No. 		  

Description of Exhibit

10.1    Form of Synergy Incentive Award Letter with each of Daryl N. Bible and Clarke R. Starnes, III
10.2    Synergy Incentive Award Letter with Donna C. Goodrich
10.3    Synergy Incentive Award Letter with Christopher L. Henson
10.4    Form of First Amendment to Employment Agreement with each of Daryl N. Bible and Clarke R. Starnes, III
10.5    Form of First Amendment to Employment Agreement with each of Donna C. Goodrich and Christopher L. Henson

Cautionary Note Regarding Forward-Looking Statements

This communication contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 regarding the financial condition, results of operations, business plans and the future performance of BB&T and 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-looking statements. These forward-looking statements are based on BB&T’s and SunTrust’s current expectations and assumptions regarding BB&T’s and SunTrust’s businesses, the economy, and other future conditions. Because forward-looking statements relate to future results and occurrences, they are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict. Many possible events or factors could affect

 

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BB&T’s or SunTrust’s future financial results and performance and could cause actual results or performance to differ materially from anticipated results or performance. Such risks and uncertainties include, among others: the occurrence of any event, change or other circumstances that could give rise to the right of one or both of the parties to terminate the definitive merger agreement between 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 approvals may result in the imposition of conditions that could adversely affect the combined company or the expected benefits of the transaction) 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 result of the impact of, or problems arising from, the integration of the two companies or as a result of the strength of the economy and competitive factors in the areas where BB&T and SunTrust do business, the possibility that the transaction may be more expensive to complete than anticipated, including as a result of unexpected factors or events, diversion of management’s attention from ongoing business operations and opportunities, potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of the transaction, the ability to complete the transaction and integration of BB&T and SunTrust successfully, and the dilution caused by BB&T’s issuance of additional shares of its capital stock in connection with the transaction. Except to the extent required by applicable law or regulation, each of BB&T and SunTrust disclaims any obligation to update such factors or to publicly announce the results of any revisions to any of the forward-looking statements included herein to reflect future events or developments. Further information regarding BB&T, SunTrust and factors which could affect the forward-looking statements contained herein can be found in BB&T’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018 and its other filings with the Securities and Exchange Commission (“SEC”), and in SunTrust’s Annual Report on Form 10-K for the fiscal year ended December 31, 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 has filed with the SEC a registration statement on Form S-4 to register the shares of BB&T’s capital stock to be issued in connection with the Merger. The registration statement includes a joint proxy statement/prospectus which will be sent to the shareholders of BB&T and SunTrust 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 FORM S-4 AND ANY OTHER RELEVANT DOCUMENTS FILED OR TO BE FILED WITH THE SEC IN CONNECTION WITH THE PROPOSED TRANSACTION BECAUSE THESE DOCUMENTS DO AND WILL CONTAIN IMPORTANT INFORMATION 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 the SEC 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 at http://bbt.com/ under the tab “About BB&T” and then under the heading “Investor Relations” or, alternatively, by directing a request 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 website at 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.

 

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Participants in the Solicitation

BB&T, SunTrust and certain of their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of BB&T and SunTrust in connection with the proposed transaction under the rules of the SEC. Certain information regarding the interests of these participants and a description of their direct and indirect interests, by security holdings or otherwise, will be included in the joint proxy statement/prospectus regarding the proposed transaction when it becomes available. Additional information about BB&T, and its directors and executive officers, may be found in the definitive proxy statement of BB&T relating to its 2019 Annual Meeting of Shareholders filed with the SEC on March 19, 2019, 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 2019 Annual Meeting of Shareholders filed with the SEC on March 8, 2019, and other documents filed by SunTrust with the SEC. These documents can be obtained free of charge from the sources described above.

 

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

BB&T CORPORATION

            (Registrant)

By:   /s/ Cynthia B. Powell
Name:   Cynthia B. Powell
Title:   Executive Vice President and Corporate Controller (Principal Accounting Officer)

Date: June 3, 2019

 

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Exhibit 10.1

 

LOGO     Branch Banking & Trust Co.                

 

May 28, 2019

[ Name ]

Winston-Salem, NC 27101

Dear [ Name ],

As you know, BB&T Corporation (“ BB&T ”) and SunTrust Banks, Inc. (“ SunTrust ”) have announced that they will merge as provided in the Agreement and Plan of Merger, dated as of February 7, 2019 (the “ Merger ”). You are a valued executive, and we hope that you will play a key role in the integration and ongoing leadership of BB&T and SunTrust (the “ Combined Company ”). Because retaining your services is an essential consideration for us, we are providing you with the opportunity to earn the cash award described in this letter (this “ Letter ”).

Synergy Incentive Award . Pursuant to the terms of this Letter, you are awarded a cash retention incentive award in the aggregate amount of $3,110,400 (the “ Synergy Incentive ”).

Vesting and Payment. The Synergy Incentive will vest in two installments, with $1,036,800 vesting on the earlier of (i) the date on which the conversion of the bank systems of the banking operations of BB&T and SunTrust is determined to be successfully completed (as determined by the Chief Executive Officer of the Combined Company in consultation with the Compensation Committee of the Board of Directors of the Combined Company, subject only to the requirement that a single and uniform determination will be applicable to all Synergy Incentive arrangements) and (ii) August 1, 2021 (the “ First Vesting Date ”), and $2,073,600 vesting on January 15, 2022 (the “ Second Vesting Date ,” and each, a “ Vesting Date ”), subject to your continued employment with the Combined Company (or its affiliates) in good standing on the applicable Vesting Date (and provided that you have not delivered notice of termination for any reason to the Combined Company prior to the applicable Vesting Date). If, prior to a Vesting Date, your employment terminates for any reason (other than as provided below, including due to your retirement), you will not be entitled to any then-unvested portion of the Synergy Incentive and it will be forfeited; provided that, if, prior to the First Vesting Date, your employment is terminated by the Combined Company Without Just Cause or by you due to a Good Reason Termination (each as defined in the 2008 Amended and Restated Employment Agreement between you, BB&T and Branch Banking and Trust Company, as amended), the first installment of your Synergy Incentive will vest as of your date of termination, and the second installment will be forfeited. The vested portion of the Synergy Incentive will be paid to you in a lump sum within fifteen (15) business days of the applicable Vesting Date or your date of termination if vesting of the first installment occurs due to a termination of employment.

Retirement. You will not forfeit the second installment of the Synergy Incentive if, after August 1, 2021, you provide the Combined Company at least sixty (60) days’ advance written notice of your intent to retire prior to

the Second Vesting Date. If you exercise this retirement election and remain employed in good standing through your scheduled retirement date, the second installment of the Synergy Incentive will fully vest on the date of your retirement, although it will not be paid until the originally scheduled payment date following the Second Vesting Date as set forth above (other than in the case of your death following your providing notice of the retirement election, in which case, the unpaid portion of the Synergy Incentive will be paid within fifteen (15) business days of the date of your death).

Effectiveness . This Letter will become effective on the closing of the Merger. If your employment terminates for any reason before the closing of the Merger or the Merger is abandoned and does not occur, this Letter will automatically terminate and be of no further force or effect and neither of us will have any obligations under it.

Miscellaneous .

 

  •  

The Synergy Incentive is neither intended nor should be construed as being an addition to base salary or included in calculations of salary increases, annual or other incentive payment opportunities or awards or severance or termination pay.

 

  •  

Nothing herein shall confer upon you any additional right to remain in the employ or service of BB&T or the Combined Company, and nothing herein shall further restrict the ability of the BB&T or the Combined Company from terminating your service.

 

  •  

Neither you, nor any person claiming under you, shall have the power to anticipate, encumber or dispose of any right, title, interest or benefit hereunder in any manner or at any time, until the same shall have been actually distributed free and clear of the terms of this Letter.

 

  •  

The Combined Company is authorized to withhold from the Synergy Incentive, all amounts of withholding and other taxes due in connection with the payment of the Synergy Incentive.

 

  •  

This Letter is intended to be exempt from, or comply with, Section 409A of the Internal Revenue Code of 1986, as amended (the “ Code ”), and shall at all times be administered and interpreted in accordance with such intent. Any payments that qualify for the “short-term deferral” exception shall be paid no later than March 15 of the calendar year following the year in which vesting occurs. Each payment under this letter shall be treated as a separate payment for purposes of Section 409A of the Code. You shall have no binding right to distributions made to you in error or any right to designate the time of payment of any portion of the Synergy Incentive.

 

  •  

This Letter shall be governed by the laws of the State of North Carolina, without giving effect to conflicts of law principles.

 

  •  

This Letter shall inure to the benefit of you and your heirs and beneficiaries. This Letter shall be binding on and inure to the benefit of BB&T and the Combined Company and their respective successors and assigns, whether by merger, sale of assets or otherwise.

 

  •  

This Letter represents the complete understanding of the parties with respect to the subject matter hereof, and supersedes all prior and contemporaneous discussions and agreements between any parties with respect to such subject matter. This Letter can be amended on by a writing executed by both parties.

*                *                 *

We appreciate your efforts leading up to the Merger and look forward to your continued contribution. Please sign this Letter and return it to Suzanne Hinchliffe.

 

Sincerely,
 
Name:   Kelly S. King
Title:   Chairman and Chief Executive Officer

I agree with and accept the terms and conditions of this Letter:

 

 

 

Name: [ Name ]
Date: May 28, 2019

Exhibit 10.2

 

LOGO     Branch Banking & Trust Co.                

 

May 28, 2019

Donna C. Goodrich

Winston-Salem, NC 27101

Dear Donna,

As you know, BB&T Corporation (“ BB&T ”) and SunTrust Banks, Inc. (“ SunTrust ”) have announced that they will merge as provided in the Agreement and Plan of Merger, dated as of February 7, 2019 (the “ Merger ”). You are a valued executive, and we hope that you will play a key role in the integration and ongoing leadership of BB&T and SunTrust (the “ Combined Company ”). Because retaining your services is an essential consideration for us, we are providing you with the opportunity to earn the cash award described in this letter (this “ Letter ”). This Letter also confirms our discussions regarding your ongoing position with the Combined Company as of the closing of the Merger and the changes we have agreed to with respect to your existing arrangements in support of your position.

Your Position Following the Merger. Effective as of the closing of the Merger, notwithstanding anything to the contrary in the 2008 Amended and Restated Employment Agreement between you, BB&T and Branch Banking and Trust Company, as amended (the “ Employment Agreement ”), you will have the position, reporting relationship, principal work location and compensation set forth on the attached Annex . As set forth in Item 1 of the First Amendment (the “ First Amendment ”) to the Employment Agreement, dated as of the date hereof, you agree that you will not terminate your employment for a Good Reason Termination (as defined in the Employment Agreement) pursuant to the Duties Trigger (as defined in the First Amendment) as a result of the change in your position (and associated duties) as set forth in this Letter, other than during a Window Period (as defined in the First Amendment). Consistent with BB&T’s practice today, the other terms and conditions of your employment, including your eligibility for incentive awards, will be subject to the terms of the applicable plans or programs as in effect from time to time.

Synergy Incentive Award . Pursuant to the terms of this Letter, you are awarded a cash retention incentive award in the aggregate amount of $2,575,380 (the “ Synergy Incentive ”).

Vesting and Payment. The Synergy Incentive will vest in two installments, with $858,460 vesting on the earlier of (i) the date on which the conversion of the bank systems of the banking operations of BB&T and SunTrust is determined to be successfully completed (as determined by the Chief Executive Officer of the Combined Company in consultation with the Compensation Committee of the Board of Directors of the Combined Company, subject only to the requirement that a single and uniform determination will be applicable to all Synergy Incentive arrangements) and (ii) August 1, 2021 (the “ First Vesting Date ”), and $1,716,920 vesting on January 15, 2022 (the “ Second Vesting Date ,” and each, a “ Vesting Date ”), subject to your continued employment with the Combined Company (or its affiliates) in good standing on the applicable Vesting Date (and provided that you have not delivered notice of termination for any reason to the Combined

Company prior to the applicable Vesting Date). If, prior to a Vesting Date, your employment terminates for any reason (other than as provided below), you will not be entitled to any then-unvested portion of the Synergy Incentive and it will be forfeited; provided that, if, prior to the First Vesting Date, your employment is terminated by the Combined Company Without Just Cause or by you due to a Good Reason Termination (other than pursuant to the Duties Trigger as a result of the change in your position as set forth herein) (each as defined in the Employment Agreement), the first installment of your Synergy Incentive will vest as of your date of termination, and the second installment will be forfeited. The vested portion of the Synergy Incentive will be paid to you in a lump sum within fifteen (15) business days of the applicable Vesting Date or your date of termination if vesting of the first installment occurs due to a termination of employment.

Effectiveness . This Letter will become effective on the closing of the Merger. If your employment terminates for any reason before the closing of the Merger or the Merger is abandoned and does not occur, this Letter will automatically terminate and be of no further force or effect and neither of us will have any obligations under it.

Miscellaneous .

 

  •  

The Synergy Incentive is neither intended nor should be construed as being an addition to base salary or included in calculations of salary increases, annual or other incentive payment opportunities or awards or severance or termination pay.

 

  •  

Nothing herein shall confer upon you any additional right to remain in the employ or service of BB&T or the Combined Company, and nothing herein shall further restrict the ability of the BB&T or the Combined Company from terminating your service.

 

  •  

Neither you, nor any person claiming under you, shall have the power to anticipate, encumber or dispose of any right, title, interest or benefit hereunder in any manner or at any time, until the same shall have been actually distributed free and clear of the terms of this Letter.

 

  •  

The Combined Company is authorized to withhold from the Synergy Incentive, all amounts of withholding and other taxes due in connection with the payment of the Synergy Incentive.

 

  •  

This Letter is intended to be exempt from, or comply with, Section 409A of the Internal Revenue Code of 1986, as amended (the “ Code ”), and shall at all times be administered and interpreted in accordance with such intent. Any payments that qualify for the “short-term deferral” exception shall be paid no later than March 15 of the calendar year following the year in which vesting occurs. Each payment under this letter shall be treated as a separate payment for purposes of Section 409A of the Code. You shall have no binding right to distributions made to you in error or any right to designate the time of payment of any portion of the Synergy Incentive.

 

  •  

This Letter shall be governed by the laws of the State of North Carolina, without giving effect to conflicts of law principles.

 

  •  

This Letter shall inure to the benefit of you and your heirs and beneficiaries. This Letter shall be binding on and inure to the benefit of BB&T and the Combined Company and their respective successors and assigns, whether by merger, sale of assets or otherwise.

 

  •  

This Letter represents the complete understanding of the parties with respect to the subject matter hereof, and supersedes all prior and contemporaneous discussions and agreements between any parties with respect to such subject matter. This Letter can be amended on by a writing executed by both parties.

We appreciate your efforts leading up to the Merger and look forward to your continued contribution. Please sign this Letter and return it to Suzanne Hinchliffe.

 

Sincerely,
/s/ Kelly S. King
Name:   Kelly S. King
Title:   Chairman and Chief Executive Officer

I agree with and accept the terms and conditions of this Letter:

 

/s/ Donna C. Goodrich
Name: Donna C. Goodrich
Date: May 28, 2019

A NNEX

Name : Donna C. Goodrich

Position : Treasurer

Reporting Relationship(s) : Chief Financial Officer

Primary Work Location : Charlotte, NC

Target Total Direct Compensation : (i) each of 2019 and 2020 fiscal years, $2,292,782 (with compensation mix to remain unchanged), and (ii) January 1, 2021 through March 1, 2022, subject to adjustment based on market data for the position, but in no event will base salary be reduced from that in effect prior to the Merger.

Exhibit 10.3

 

LOGO     Branch Banking & Trust Co.                

 

May 28, 2019

Christopher L. Henson

Winston-Salem, NC 27101

Dear Chris,

As you know, BB&T Corporation (“ BB&T ”) and SunTrust Banks, Inc. (“ SunTrust ”) have announced that they will merge as provided in the Agreement and Plan of Merger, dated as of February 7, 2019 (the “ Merger ”). You are a valued executive, and we hope that you will play a key role in the integration and ongoing leadership of BB&T and SunTrust (the “ Combined Company ”). Because retaining your services is an essential consideration for us, we are providing you with the opportunity to earn the cash award described in this letter (this “ Letter ”). This Letter also confirms our discussions regarding your ongoing position with the Combined Company as of the closing of the Merger.

Your Position Following the Merger. Effective as of the closing of the Merger, notwithstanding anything to the contrary in the 2008 Amended and Restated Employment Agreement between you, BB&T and Branch Banking and Trust Company, as amended (the “ Employment Agreement ”), you will be a member of the executive management team of the Combined Company, serving as the Head of Banking and Insurance. In this position, you will report directly to the Chief Executive Officer and your principal work location will be Charlotte, North Carolina. As set forth in Item 1 of the First Amendment (the “ First Amendment ”) to the Employment Agreement, dated as of the date hereof, you agree that you will not terminate your employment for a Good Reason Termination (as defined in the Employment Agreement) pursuant to the Duties Trigger (as defined in the First Amendment) as a result of the change in your position (and associated duties) as set forth in this Letter, other than during a Window Period (as defined in the First Amendment). Consistent with BB&T’s practice today, the other terms and conditions of your employment, including your eligibility for incentive awards, will be subject to the terms of the applicable plans or programs as in effect from time to time.

Synergy Incentive Award . Pursuant to the terms of this Letter, you are awarded a cash retention incentive award in the aggregate amount of $4,162,500 (the “ Synergy Incentive ”).

Vesting and Payment. The Synergy Incentive will vest in two installments, with $1,387,500 vesting on the earlier of (i) the date on which the conversion of the bank systems of the banking operations of BB&T and SunTrust is determined to be successfully completed (as determined by the Chief Executive Officer of the Combined Company in consultation with the Compensation Committee of the Board of Directors of the Combined Company, subject only to the requirement that a single and uniform determination will be applicable to all Synergy Incentive arrangements) and (ii) August 1, 2021 (the

“ First Vesting Date ”), and $2,775,000 vesting on January 15, 2022 (the “ Second Vesting Date ,” and each, a “ Vesting Date ”), subject to your continued employment with the Combined Company (or its affiliates) in good standing on the applicable Vesting Date (and provided that you have not delivered notice of termination for any reason to the Combined Company prior to the applicable Vesting Date). If, prior to a Vesting Date, your employment terminates for any reason (other than as provided below), you will not be entitled to any then-unvested portion of the Synergy Incentive and it will be forfeited; provided that, if, prior to the First Vesting Date, your employment is terminated by the Combined Company Without Just Cause or by you due to a Good Reason Termination (other than pursuant to the Duties Trigger as a result of the change in your position as set forth herein) (each as defined in the Employment Agreement), the first installment of your Synergy Incentive will vest as of your date of termination, and the second installment will be forfeited. The vested portion of the Synergy Incentive will be paid to you in a lump sum within fifteen (15) business days of the applicable Vesting Date or your date of termination if vesting of the first installment occurs due to a termination of employment.

Effectiveness . This Letter will become effective on the closing of the Merger. If your employment terminates for any reason before the closing of the Merger or the Merger is abandoned and does not occur, this Letter will automatically terminate and be of no further force or effect and neither of us will have any obligations under it.

Miscellaneous .

 

  •  

The Synergy Incentive is neither intended nor should be construed as being an addition to base salary or included in calculations of salary increases, annual or other incentive payment opportunities or awards or severance or termination pay.

 

  •  

Nothing herein shall confer upon you any additional right to remain in the employ or service of BB&T or the Combined Company, and nothing herein shall further restrict the ability of the BB&T or the Combined Company from terminating your service.

 

  •  

Neither you, nor any person claiming under you, shall have the power to anticipate, encumber or dispose of any right, title, interest or benefit hereunder in any manner or at any time, until the same shall have been actually distributed free and clear of the terms of this Letter.

 

  •  

The Combined Company is authorized to withhold from the Synergy Incentive, all amounts of withholding and other taxes due in connection with the payment of the Synergy Incentive.

 

  •  

This Letter is intended to be exempt from, or comply with, Section 409A of the Internal Revenue Code of 1986, as amended (the “ Code ”), and shall at all times be administered and interpreted in accordance with such intent. Any payments that qualify for the “short-term deferral” exception shall be paid no later than March 15 of the calendar year following the year in which vesting occurs. Each payment under this letter shall be treated as a separate payment for purposes of Section 409A of the Code. You shall have no binding right to distributions made to you in error or any right to designate the time of payment of any portion of the Synergy Incentive.

 

  •  

This Letter shall be governed by the laws of the State of North Carolina, without giving effect to conflicts of law principles.

 

  •  

This Letter shall inure to the benefit of you and your heirs and beneficiaries. This Letter shall be binding on and inure to the benefit of BB&T and the Combined Company and their respective successors and assigns, whether by merger, sale of assets or otherwise.

  •  

This Letter represents the complete understanding of the parties with respect to the subject matter hereof, and supersedes all prior and contemporaneous discussions and agreements between any parties with respect to such subject matter. This Letter can be amended on by a writing executed by both parties.

*                *                 *

We appreciate your efforts leading up to the Merger and look forward to your continued contribution. Please sign this Letter and return it to Suzanne Hinchliffe.

 

Sincerely,

/s/ Kelly S. King

Name:   Kelly S. King
Title:   Chairman and Chief Executive Officer

I agree with and accept the terms and conditions of this Letter:

 

/s/ Christopher L. Henson
Name: Christopher L. Henson
Date: May 28, 2019

Exhibit 10.4

FIRST AMENDMENT TO

2008 AMENDED AND RESTATED

EMPLOYMENT AGREEMENT

This First Amendment (this “ Amendment ”) to the 2008 Amended and Restated Employment Agreement, effective as of November 13, 2008 (the “ Employment Agreement ”), by and among BB&T Corporation (“ BB&T ”), Branch Banking and Trust Company and [ Name ] (“ Executive ”), is entered into as of May 28, 2019, and amends the Employment Agreement with effect upon, and subject to, the consummation of the transactions (the “ Merger ”) contemplated by the Agreement and Plan of Merger, dated as of February 7, 2019, by and between BB&T and SunTrust Banks, Inc. (the “ Merger Agreement ”). Capitalized terms used herein without definitions have the meanings ascribed to such terms in the Employment Agreement.

WHEREAS, Executive is party to the Employment Agreement, which, pursuant to the Notice of Non-Extension of Term, dated as of March 1, 2019, will expire on March 1, 2022, unless earlier terminated in accordance with Section 1.6 of the Employment Agreement;

WHEREAS, in furtherance of the retention and integration planning associated with the Merger, the Compensation Committee of the Board of Directors of BB&T has determined that it is in the best interests of BB&T and its shareholders to amend the Employment Agreement to modify and clarify the intent of certain provisions; and

WHEREAS, this Amendment shall be entered into as of the date first above written and be binding as of such date, but shall only become effective as of upon, and subject to, the consummation of the Merger, provided that as of such date, Executive has remained in continuous employment with Employer.

NOW, THEREFORE, for good and valuable consideration, the parties hereto agree as follows:

 

1.

The parenthetical in Section  1.7.3(i) of the Agreement is hereby amended in its entirety to read as follows:

(including, without limitation, compliance with the nonsolicitation covenants of Sections 2.1(iii), (iv) and (v), it being agreed that the noncompetition covenants of Sections 2.1(i) and (ii) shall not apply upon a termination Without Just Cause)

 

2.

The parenthetical in Section  1.7.4(i) of the Agreement is hereby amended in its entirety to read as follows:

(including, without limitation, compliance with the nonsolicitation covenants of Sections 2.1(iii), (iv) and (v), it being agreed that the noncompetition covenants of Sections 2.1(i) and (ii) shall not apply upon a Good Reason Termination)

 

3.

Each of Section  1.7.3(ii) , Section  1.7.4(ii) and Section  1.7.5(ii) of the Agreement is hereby amended in its entirety to read as follows:

(ii) Any unvested benefits of Executive under any employee stock-based, cash long-term incentive performance awards or other benefit plan or arrangement (other than the award under the synergy incentive award letter between Executive and BB&T dated May 28, 2019 (the “ Synergy Letter ”), which will vest and be payable in accordance with the terms of the Synergy Letter) shall become fully and immediately vested, with performance awards for which the

performance period is not complete as of the Termination Date to be earned as provided in the applicable award agreement, and the payment or delivery of such awards or benefits shall be accelerated to the extent permitted by Section 409A or other applicable law and the terms of such plan or arrangement.

 

4.

Each of Section  1.7.3 and Section  1.7.4 of the Agreement is hereby amended to add the following clause (v) immediately following clause (iv) of such Sections 1.7.3 and 1.7.4:

(v) If the Termination Date occurs prior to the payment of the annual bonus in respect of the Termination Year (other than with respect to a termination in 2022, in which case, Executive shall be eligible for a full annual cash bonus in respect of the 2021 year, but not an annual bonus, prorated or otherwise, in respect of the 2022 year), Executive shall receive an annual bonus in respect of the Termination Year, prorated if the Termination Date occurs prior to December 31 of such year (the “ Prorated Annual Bonus ”). Any such Prorated Annual Bonus shall equal the product of (A) the actual annual bonus that would have been earned by Executive in respect of the Termination Year had Executive’s employment not terminated and (B) a fraction, the numerator of which is the number of days elapsed in the Termination Year through and including the Termination Date, and the denominator of which is the total number of days in the Termination Year. Any Prorated Annual Bonus shall be paid in accordance with the applicable bonus plan at the same time annual bonuses are paid to senior executives of Employer generally, but in no event later than March 15 of the calendar year following the Termination Year.

 

5.

Section  2.1 of the Agreement is hereby amended to add the following immediately after the end of the last sentence thereof:

Notwithstanding anything to the contrary contained herein, including clause (iii) of the last sentence of Section 1.7.1, the noncompetition covenants of Sections 2.1(i) and (ii) shall not apply upon a termination Without Just Cause or a Good Reason Termination, and for the avoidance of doubt, in the event of a termination of employment for any reason following March 1, 2022, the obligations under Section 2.1 of the Employment Agreement shall be inapplicable.

 

6.

Section  3.12(f) of the Agreement is hereby amended in its entirety to read as follows:

f. “Compensation Continuance Period” means the time period commencing with the Commencement Month and ending on the date that coincides with the expiration of the thirty-six (36)- consecutive-month period which began with the Commencement Month.

 

7.

Section  3.12(n) of the Agreement is hereby amended in its entirety to read as follows:

n. “ Termination Compensation ” means a monthly cash amount equal to one-twelfth (1/12th) of the highest amount of the annual cash compensation (including cash bonuses and other cash-based compensation, including for these purposes amounts earned or payable whether or not deferred) received by Executive during any one of the three (3) calendar years immediately preceding the calendar year in which Executive’s Termination Date occurs or, if higher, during any one of the three (3) calendar years immediately preceding the calendar year in which the date of consummation of the merger of BB&T and SunTrust Banks, Inc. (the “ Merger ”) occurs (such highest amount, the “ Highest Prior Year Compensation ”); p rovided that, if the cash compensation received by Executive during the Termination Year exceeds the Highest Prior Year Compensation the cash compensation received by Executive during the Termination Year shall be deemed to be Executive’s highest amount of annual cash compensation for purposes of

 

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calculating the Termination Compensation. In no event shall Executive’s Termination Compensation include equity-based compensation (e.g., income realized as a result of Executive’s exercise of non-qualified stock options or other stock-based benefits) or any retention or integration bonus awarded in connection with the Merger, including the award under the Synergy Letter.

 

8.

The [ Sixth] 1 [ Fifth] 2 Whereas Clause in the Recitals of the Agreement and Section  4 of the Agreement are hereby deleted in their entirety.

 

9.

This Amendment shall be binding on the parties hereto effective as of the date hereof but shall only become effective as of upon, and subject to, the consummation of the Merger, provided that as of such date, Executive has remained in continuous employment with Employer. If the Merger is abandoned and the Merger Agreement is terminated in accordance with its terms, this Amendment shall be of no force.

 

10.

In all other respects, the parties hereby ratify and affirm the terms of the Agreement. This Amendment may be executed in several counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same agreement.

 

1  

Mr. Bible

2  

Mr. Starnes

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed as of the date hereof.

 

BB&T CORPORATION
 
Name:   Kelly S. King
Title:   Chairman and Chief Executive Officer

 

BRANCH BANKING AND TRUST

  COMPANY

 
Name:   Kelly S. King
Title:   Chairman and Chief Executive Officer
[NAME]

 

 

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Exhibit 10.5

FIRST AMENDMENT TO

2008 AMENDED AND RESTATED

EMPLOYMENT AGREEMENT

This First Amendment (this “ Amendment ”) to the 2008 Amended and Restated Employment Agreement, effective as of November 13, 2008 (the “ Employment Agreement ”), by and among BB&T Corporation (“ BB&T ”), Branch Banking and Trust Company and [ Name ] (“ Executive ”), is entered into as of May 28, 2019, and amends the Employment Agreement with effect upon, and subject to, the consummation of the transactions (the “ Merger ”) contemplated by the Agreement and Plan of Merger, dated as of February 7, 2019, by and between BB&T and SunTrust Banks, Inc. (the “ Merger Agreement ”). Capitalized terms used herein without definitions have the meanings ascribed to such terms in the Employment Agreement.

WHEREAS, Executive is party to the Employment Agreement, which, pursuant to the Notice of Non-Extension of Term, dated as of March 1, 2019, will expire on March 1, 2022, unless earlier terminated in accordance with Section 1.6 of the Employment Agreement;

WHEREAS, in furtherance of the retention and integration planning associated with the Merger, the Compensation Committee of the Board of Directors of BB&T has determined that it is in the best interests of BB&T and its shareholders to amend the Employment Agreement to modify and clarify the intent of certain provisions; and

WHEREAS, this Amendment shall be entered into as of the date first above written and be binding as of such date, but shall only become effective as of upon, and subject to, the consummation of the Merger, provided that as of such date, Executive has remained in continuous employment with Employer.

NOW, THEREFORE, for good and valuable consideration, the parties hereto agree as follows:

 

1.

Section  1.6.7 of the Agreement is hereby amended to add the following immediately after the end of the last sentence thereof:

Notwithstanding the foregoing, Executive hereby waives any right Executive may have to terminate employment for Good Reason under this Agreement or any other plan or arrangement of or with BB&T or its Affiliates containing such term or a similar term, in each case, as a result of the assignment to Executive of duties inconsistent with the position and status as [a Senior Executive Vice President] 1 [Chief Operating Officer] 2 of Employer (the “ Duties Trigger ”) due to the changes in Executive’s position effective as of the date of consummation of the merger of BB&T and SunTrust Banks, Inc. (the “ Merger ”, and the date of consummation of the Merger, the “ Closing Date ”) as reflected in the synergy incentive award letter between Executive and BB&T dated May 28, 2019 (the “ Synergy Letter ”); provided, however , that, subject to Executive’s continued employment in good standing with Employer through the applicable notice date during the periods set forth below, Executive shall have the right to provide notice of a Good Reason Termination based on the Duties Trigger due to the changes in Executive’s position as reflected in the Synergy Letter, during the following two periods after the Closing Date: (i) June 1, 2021 through August 31, 2021 and (ii) November 1, 2021 through November 30, 2021 (each, a “ Window Period ”). If Executive provides a notice of a Good Reason Termination during a Window Period, Employer shall not have the right to cure the circumstances giving rise to the

 

1  

Ms. Goodrich

2  

Mr. Henson

Good Reason Termination due to the changes in Executive’s position as reflected in the Synergy Letter, and the Termination Date shall be the date mutually agreed between Executive and Employer, which shall be no earlier than ten (10) business days following the date of delivery of such notice and no later than (A) September 30, 2021, in the case of notice delivered during the Window Period ending August 31, 2021, or (B) December 31, 2021, in the case of notice delivered during the Window Period ending November 30, 2021.

 

2.

Section  1.7.1 of the Agreement is hereby amended to add the following immediately after the end of the last sentence thereof:

In addition, if following the Closing Date and prior to December 1, 2021, Executive experiences a termination of employment due to death, whether or not Executive has previously received a notice of termination Without Just Cause from Employer or provided Employer with a notice of a Good Reason Termination, Executive’s estate or beneficiary, as applicable, shall be entitled to receive the Termination Compensation in a lump sum (discounted based on the then-applicable rate for lump sum distributions under the Pension Plan) within thirty (30) days of the Executive’s death.

 

3.

The parenthetical in Section  1.7.3(i) of the Agreement is hereby amended in its entirety to read as follows:

(including, without limitation, compliance with the nonsolicitation covenants of Sections 2.1(iii), (iv) and (v), it being agreed that the noncompetition covenants of Sections 2.1(i) and (ii) shall not apply upon a termination Without Just Cause)

 

4.

The parenthetical in Section  1.7.4(i) of the Agreement is hereby amended in its entirety to read as follows:

(including, without limitation, compliance with the nonsolicitation covenants of Sections 2.1(iii), (iv) and (v), it being agreed that the noncompetition covenants of Sections 2.1(i) and (ii) shall not apply upon a Good Reason Termination)

 

5.

Each of Section  1.7.3(ii) , Section  1.7.4(ii) and Section  1.7.5(ii) of the Agreement is hereby amended in its entirety to read as follows:

(ii) Any unvested benefits of Executive under any employee stock-based, cash long-term incentive performance awards or other benefit plan or arrangement (other than the award under the Synergy Letter, which will vest and be payable in accordance with the terms of the Synergy Letter) shall become fully and immediately vested, with performance awards for which the performance period is not complete as of the Termination Date to be earned as provided in the applicable award agreement, and the payment or delivery of such awards or benefits shall be accelerated to the extent permitted by Section 409A or other applicable law and the terms of such plan or arrangement.

 

6.

Each of Section  1.7.3 and Section  1.7.4 of the Agreement is hereby amended to add the following clause (v) immediately following clause (iv) of such Sections 1.7.3 and 1.7.4:

(v) If the Termination Date occurs prior to the payment of the annual bonus in respect of the Termination Year (other than with respect to a termination in 2022, in which case, Executive shall be eligible for a full annual cash bonus in respect of the 2021 year, but not an annual bonus, prorated or otherwise, in respect of the 2022 year), Executive shall receive an

 

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annual bonus in respect of the Termination Year, prorated if the Termination Date occurs prior to December 31 of such year (the “ Prorated Annual Bonus ”). Any such Prorated Annual Bonus shall equal the product of (A) the actual annual bonus that would have been earned by Executive in respect of the Termination Year had Executive’s employment not terminated and (B) a fraction, the numerator of which is the number of days elapsed in the Termination Year through and including the Termination Date, and the denominator of which is the total number of days in the Termination Year. Any Prorated Annual Bonus shall be paid in accordance with the applicable bonus plan at the same time annual bonuses are paid to senior executives of Employer generally, but in no event later than March 15 of the calendar year following the Termination Year.

 

7.

Section  2.1 of the Agreement is hereby amended to add the following immediately after the end of the last sentence thereof:

Notwithstanding anything to the contrary contained herein, including clause (iii) of the penultimate sentence (taking into account the amendment in Item 2 above) of Section 1.7.1, the noncompetition covenants of Sections 2.1(i) and (ii) shall not apply upon a termination Without Just Cause or a Good Reason Termination, and for the avoidance of doubt, in the event of a termination of employment for any reason following March 1, 2022, the obligations under Section 2.1 of the Employment Agreement shall be inapplicable.

 

8.

Section  3.12(f) of the Agreement is hereby amended in its entirety to read as follows:

f. “Compensation Continuance Period” means the time period commencing with the Commencement Month and ending on the date that coincides with the expiration of the thirty-six (36)- consecutive-month period which began with the Commencement Month.

 

9.

Section  3.12(n) of the Agreement is hereby amended in its entirety to read as follows:

n. “ Termination Compensation ” means a monthly cash amount equal to one-twelfth (1/12th) of the highest amount of the annual cash compensation (including cash bonuses and other cash-based compensation, including for these purposes amounts earned or payable whether or not deferred) received by Executive during any one of the three (3) calendar years immediately preceding the calendar year in which Executive’s Termination Date occurs or, if higher, during any one of the three (3) calendar years immediately preceding the calendar year in which the Closing Date occurs (such highest amount, the “ Highest Prior Year Compensation ”); p rovided that, if the cash compensation received by Executive during the Termination Year exceeds the Highest Prior Year Compensation the cash compensation received by Executive during the Termination Year shall be deemed to be Executive’s highest amount of annual cash compensation for purposes of calculating the Termination Compensation. In no event shall Executive’s Termination Compensation include equity-based compensation (e.g., income realized as a result of Executive’s exercise of non-qualified stock options or other stock-based benefits) or any retention or integration bonus awarded in connection with the Merger, including the award under the Synergy Letter.

 

10.

The [ Fifth ] 3 [ Sixth ] 4 Whereas Clause in the Recitals of the Agreement and Section  4 of the Agreement are hereby deleted in their entirety.

 

3  

Ms. Goodrich

4  

Mr. Henson

 

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11.

This Amendment shall be binding on the parties hereto effective as of the date hereof but shall only become effective as of upon, and subject to, the consummation of the Merger, provided that as of such date, Executive has remained in continuous employment with Employer. If the Merger is abandoned and the Merger Agreement is terminated in accordance with its terms, this Amendment shall be of no force.

 

12.

In all other respects, the parties hereby ratify and affirm the terms of the Agreement. This Amendment may be executed in several counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same agreement.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed as of the date hereof.

 

BB&T CORPORATION
 
Name:   Kelly S. King
Title:   Chairman and Chief Executive Officer

 

BRANCH BANKING AND TRUST

  COMPANY

 
Name:   Kelly S. King
Title:   Chairman and Chief Executive Officer
[NAME]

 

 

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