Document:

Exhibit10.40

EXHIBIT 10.40

FIXED $$ DISCOUNTED SHARE BUYBACK (“DSB”) WITH INITIAL DELIVERY

To:    Aaron's, Inc.
309 E. Paces Ferry Road, N.E.
Suite 1100
Atlanta, GA 30305
		
	Attention:
	Gilbert L. Danielson

		
	Phone:
	(404) 231-0011

		
	Fax:
	(404) 240-6520

		
	From:
	WELLS FARGO SECURITIES, LLC,  
solely as agent of Wells Fargo Bank, National Association (in its capacity as agent, the “Agent”)

The purpose of this communication (this “Confirmation”) is to confirm the terms and conditions of the transaction entered into between Wells Fargo Bank, National Association (“Wells Fargo”) and Aaron's, Inc. (“Counterparty”) on the Trade Date specified below (the “Transaction”).  This Confirmation constitutes a “Confirmation” as referred to in the Agreement specified below.  

This Confirmation is subject to, and incorporates, the definitions and provisions contained in the 2002 ISDA Equity Derivatives Definitions (the “Equity Definitions”), as published by the International Swaps and Derivatives Association, Inc. (“ISDA”).  In the event of any inconsistency between the Equity Definitions and this Confirmation, this Confirmation will prevail.

1.    This Confirmation evidences a complete and binding agreement between Wells Fargo and Counterparty as to the terms of the Transaction to which this Confirmation relates.  This Confirmation shall supplement, form a part of, and be subject to an agreement in the form of the 2002 ISDA Master Agreement (the “Agreement”) as if Wells Fargo and Counterparty had executed an agreement in such form (but without any Schedule except for the election of (i) the law (and not the law of conflicts) of the State of New York as the governing law and (ii) United States dollars as the Termination Currency) on the Trade Date.  In the event of any inconsistency between provisions of the Agreement and this Confirmation, this Confirmation will prevail for the purpose of the Transaction to which this Confirmation relates.  The parties hereby agree that no Transaction other than the Transaction to which this Confirmation relates shall be governed by the Agreement.  This Transaction is a Share Forward Transaction within the meaning set forth in the Equity Definitions. For the avoidance of doubt, this Transaction shall not be a Transaction under the ISDA Master Agreement between Wells Fargo Bank, N.A. (formerly First Union National Bank of North Carolina) and Counterparty dated as of June 16, 1993.

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

General Terms:

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	Trade Date:
	December 3, 2013

	 
	 

	Seller:
	Wells Fargo

	 
	 

	Buyer:
	Counterparty

	 
	 

	Shares:
	The common stock of Counterparty (the “Issuer”), par value USD $0.50 per share (New York Stock Exchange ticker symbol: “AAN”)

	 
	 

	Variable Obligation:
	Applicable

	 
	 

	VWAP Price:
	For any Averaging Date, the 10b-18 volume-weighted average price per Share at which the Shares trade for the regular trading session (including any extensions thereof) of the Exchange on such Averaging Date (without regard to pre-open or after hours trading outside of such regular trading session), as reported by Bloomberg at 4:15 p.m. New York City time (or 15 minutes following the end of any extension of the regular trading session) on such Averaging Date, on Bloomberg Page “AAN <Equity> AQR_SEC” (or any successor thereto).  If such price is not reported on such Averaging Date for any reason or is, in the Calculation Agent’s good faith and commercially reasonable discretion, erroneous, such VWAP Price shall be determined by the Calculation Agent in good faith and in a commercially reasonable manner.

	 
	 

	Exchange:
	New York Stock Exchange

	 
	 

	Related Exchange(s):
	All Exchanges

	 
	 

	Prepayment:
	Applicable

	 
	 

	Prepayment Date:
	One Currency Business Day after the Trade Date.

	 
	 

	Prepayment Amount:
	As specified in Appendix A.

	 
	 

	Initial Shares:
	As specified in Appendix A.

	 
	 

	Initial Share Delivery Date:
	The Prepayment Date. On the Initial Share Delivery Date, Seller shall deliver a number of Shares equal to the Initial Shares to Buyer in accordance with Section 9.4 of the Equity Definitions, with the Initial Share Delivery Date deemed to be a “Settlement Date” for purposes of such Section 9.4.

	 
	 

	 
	 

Valuation Terms:

	
		
	Valuation Date:
	As specified in Appendix A.

	 
	 

	Averaging:
	Applicable

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	Averaging Dates:
	As specified in Appendix A.

	 
	 

	Averaging Period:
	All Averaging Dates.

	 
	 

	Settlement Price:
	For the Valuation Date, the arithmetic average of the VWAP Price on each Averaging Date for such Valuation Date minus Price Adjustment.

	 
	 

	Price Adjustment:
	As specified in Appendix A.

	 
	 

	Valuation Disruption:
	The definition of “Market Disruption Event” in Section 6.3(a) of the Equity Definitions is hereby amended by replacing the words “at any time during the one-hour period that ends at the relevant Valuation Time, Latest Exercise Time, Knock-in Valuation Time or Knock-out Valuation Time, as the case may be” with “at any time on any Scheduled Trading Day during the Averaging Period” in the third line thereof.

Section 6.3(d) of the Equity Definitions is hereby amended by deleting the remainder of the provision following the term “Scheduled Closing Time” in the fourth line thereof.
Notwithstanding anything to the contrary in the Equity Definitions, if any Averaging Date in the Averaging Period is a Disrupted Day, the Calculation Agent shall have the option in its commercially reasonable discretion either (i) to elect to extend the Averaging Period by a number of Scheduled Trading Days equal to the number of Disrupted Days during the Averaging Period and/or (ii) to determine that such Averaging Date is a Disrupted Day only in part, in which case the Calculation Agent shall (x) determine the VWAP Price for such Disrupted Day based on Rule 10b-18 eligible transactions in the Shares on such Disrupted Day taking into account the nature and duration of such Market Disruption Event and (y) determine the Settlement Price based on an appropriately weighted average instead of the arithmetic average described under “Settlement Price” below, with such adjustments based on, among other factors, the duration of any Market Disruption Event and the volume, historical trading patterns and price of the Shares and/or (iii) upon prior written notice to the Buyer, to suspend the Averaging Period, as appropriate, until the circumstances giving rise to such suspension have ceased. Any day on which the Exchange is scheduled to close prior to its normal closing time shall be considered a Disrupted Day in whole.  With respect to any determination as described in clause (ii)(y) above, the Calculation Agent shall provide written notice to Buyer setting forth reasonable detail to support the Calculation Agent’s determination of the Settlement Price, it being understood the Calculation Agent shall not be obligated to disclose any proprietary models used by it for such determination or calculation.

	 
	 

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	Additional Market Disruption Events:
	If Seller determines, based upon the advice of counsel and in its good faith and commercially reasonable discretion, on any Scheduled Trading Day during any Averaging Period that a Hedging Disruption (as defined in Section 12.9(a)(v) of the Equity Definitions) has occurred, in each case, Seller shall notify Buyer and a Market Disruption Event shall be deemed to have occurred.  In the event of a Hedging Disruption, Section 12.9(b)(iii) of the Equity Definitions shall not apply.

If on any Averaging Date (i) the trading volume or liquidity of trading in the Shares is materially reduced from levels prevailing on the Trade Date, (ii) the Calculation Agent determines in its commercially reasonable discretion that such reduction has had a materially adverse effect on Seller’s ability to effect a commercially reasonable hedge of its obligations under this Transaction and (iii) the Calculation Agent determines in its commercially reasonable discretion that as a result it would be appropriate to treat such Averaging Date as a Disrupted Day, then Seller shall notify Buyer and a Market Disruption Event shall be deemed to have occurred.

	 
	 

Settlement Terms:

	
		
	Settlement Currency:
	USD

	 
	 

	Settlement Method:
	Physical Settlement; provided that Seller shall not make the representations set forth in Section 9.11 of the Equity Definitions specifically connected to restrictions imposed by applicable securities laws.

On the Settlement Date, Seller shall deliver to Buyer a number of Shares equal to (a) (i) the Prepayment Amount divided by (ii) the Settlement Price as determined on each Valuation Date, minus (b) the Initial Shares (such number of Shares, the “Settlement Amount”), rounded to the nearest whole number of Shares; provided, however, that if the Settlement Amount is less than zero, then Buyer shall deliver to Seller a number of Shares equal to the absolute value of the Settlement Amount (such number of Shares, the “Payment Shares”). The delivery of Shares by Buyer must be done in adherence to Section 12 of this Confirmation.

Notwithstanding the proviso above, if the Settlement Amount is less than zero, Buyer may cash settle its obligation to deliver the Payment Shares by delivering to Seller a notice by no later than the Valuation Date electing to cash settle its obligation to deliver the Payment Shares. Any such cash settlement shall be effected in accordance with “Cash Settlement of Payment Shares” below.

	Excess Dividend Amount:
	For the avoidance of doubt, all references to the Excess Dividend Amount shall be deleted from Section 9.2(a)(iii) of the Equity Definitions.

	

Settlement Date:
	

The date that follows the Valuation Date by one Settlement Cycle.

	 
	 

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	Cash Settlement of Payment Shares:
	If Buyer elects to cash settle its obligation to deliver Payment Shares, then on the Valuation Date a balance (the “Settlement Balance”) shall be created with an initial balance equal to the Payment Shares. On the Settlement Date, Buyer shall deliver to Seller a U.S. dollar amount equal to the Payment Shares multiplied by a price per Share as reasonably determined by the Calculation Agent (such cash amount, the “Initial Cash Settlement Amount”). On the Exchange Business Day immediately following the delivery of the Initial Cash Settlement Amount, Seller shall begin purchasing Shares in a commercially reasonable manner over a period of time to unwind a commercially reasonable hedge position (all such Shares purchased, “Cash Settlement Shares”). At the end of each Exchange Business Day on which Seller purchases Cash Settlement Shares, Seller shall reduce (i) the Settlement Balance by the number of Cash Settlement Shares purchased on such Exchange Business Day and (ii) the Initial Cash Settlement Amount by the aggregate purchase price (including commissions) of the Cash Settlement Shares on such Exchange Business Day. If, on any Exchange Business Day, the Initial Cash Settlement Amount is reduced to or below zero but the Settlement Balance is above zero, the Buyer shall (i) deliver to Seller or as directed by Seller on the next Exchange Business Day after such Exchange Business Day an additional U.S. dollar amount (an “Additional Cash Settlement Amount”) equal to the Settlement Balance as of such Exchange Business Day multiplied by a price per Share as reasonably determined by the Calculation Agent in a commercially reasonable manner. This provision shall be applied successively until the Settlement Balance is reduced to zero. On the Exchange Business Day that the Settlement Balance is reduced to zero, Seller shall return to Buyer any unused portion of the Initial Cash Settlement Amount or the Additional Cash Settlement Amount, as the case may be. For the avoidance of doubt, any purchases of Cash Settlement Shares contemplated by this paragraph shall be made over a period of time commensurate with unwinding commercially reasonable Hedge Positions in accordance with the timing, price and volume restrictions contained in subparagraphs (2), (3), and (4) of paragraph (b) of SEC Rule 10b-18.

Share Adjustments:

	
		
	Potential Adjustment Event:
	Notwithstanding anything to the contrary in Section 11.2(e) of the Equity Definitions, an Extraordinary Dividend shall not constitute a Potential Adjustment Event.

	

Method of Adjustment:
	

Calculation Agent Adjustment; provided that if (i) a Hedging Disruption or liquidity event with respect to the Shares occurs which results in a Market Disruption Event or Disrupted Day as described in Section 2 of this Confirmation or (ii) Seller suspends trading in the Shares for all or any portion of a Scheduled Trading Day within the Averaging Period pursuant to Section 7 of this Confirmation, such event or suspension shall be treated as a Potential Adjustment Event subject to Calculation Agent Adjustment.  In the case of any suspension in trading of the Shares as a result of the provisions set forth in Section 7 of this Confirmation, the Calculation Agent shall make such adjustments prior to the period of suspension to preserve the economics of the transaction. Otherwise, and in all cases of a suspension as contemplated under “Market Disruption Event” above, the Calculation Agent shall make such adjustments promptly following the period of suspension.

	 
	 

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	Extraordinary Dividend:
	For any fiscal quarter, any dividend or distribution on the Shares with an ex-dividend date occurring during such fiscal quarter (other than any dividend or distribution of the type described in Section 11.2(e)(i) or Section 11.2(e)(ii)(A) or (B) of the Equity Definitions) (a “Dividend”) that is either (i) a non-regularly scheduled Dividend or a regularly scheduled Dividend for which the ex-dividend date occurs prior to the Expected Ex-Dividend Date for such calendar quarter or (ii) the amount or value of which (as determined by the Calculation Agent) does not equal the Ordinary Dividend Amount. For the avoidance of doubt, the Calculation Agent shall not make any adjustment for an Ordinary Dividend Amount.

	 
	 

	Ordinary Dividend Amount:
	For any calendar quarter, USD $0.021

	 
	 

	Expected Ex-Dividend Dates:
	As specified in Appendix A

	 
	 

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	Extraordinary Events:
	Upon (x) the occurrence or effective designation of an Early Termination Date in respect of the Transaction or (y) the occurrence of an Extraordinary Event that results in the cancellation or termination of the Transaction pursuant to Section 12.2, 12.3, 12.6 or 12.9 of the Equity Definitions (any such event as described in clause (x) or (y) above, an “Early Termination Event”) (except, in the case of clause (y), an Extraordinary Event that is a Nationalization, Insolvency, a Merger Event or a Tender Offer, in each case, in which the consideration or proceeds to be paid to holders of Shares consists solely of cash), if one party would owe any amount to the other party pursuant to Section 6(d)(ii) of the Agreement or any Cancellation Amount pursuant to Section 12.2, 12.3, 12.6, 12.7, 12.8 or 12.9 of the Equity Definitions (any such amount, a “Payment Amount”), then on the date on which any Payment Amount is due, in lieu of any payment or delivery of such Payment Amount, Counterparty may elect, by prior written notice to Wells Fargo as provided in the succeeding paragraph, that the party owing such amount shall deliver to the other party a number of Shares (or, in the case of a Merger Event, Tender Offer, Nationalization or Insolvency, a number of units, each comprising the number or amount of the securities or property that a hypothetical holder of one Share would receive in such Extraordinary Event (each such unit, an “Alternative Termination Delivery Unit” and, the securities or property comprising such unit, “Alternative Termination Property”)) with a value equal to the Payment Amount, as determined in good faith and a commercially reasonable manner by the Calculation Agent (and the parties agree that, in making such determination of value, the Calculation Agent may take into account a number of factors, including the market price of the Shares or Alternative Termination Property as of the Early Termination Date or the date as of which the Cancellation Amount is determined and, if such delivery is made by Wells Fargo, the prices at which Wells Fargo purchases Shares or Alternative Termination Property to fulfil its delivery obligations, to the extent doing so provides a commercially reasonable result) over a number of Scheduled Trading Days selected by Calculation Agent in good faith and in its commercially reasonable discretion based on the number of Scheduled Trading Days that would be appropriate to unwind a commercially reasonable hedge position; provided that in determining the composition of any Alternative Termination Delivery Unit, if the relevant Extraordinary Event involves a choice of consideration to be received by holders, such holder shall be deemed to have elected to receive the maximum possible amount of cash; provided further that the Calculation Agent shall provide written notice to Buyer setting forth reasonable detail to support the Calculation Agent’s determination of the value of any Shares or Alternative Termination Delivery Units determined as described above, it being understood the Calculation Agent shall not be obligated to disclose any proprietary models used by it for such determination or calculation.

If Counterparty elects for Wells Fargo to settle any Payment Amount owed by Wells Fargo to it in Shares or Alternative Termination Property, then on the date such Payment Amount is due, a settlement balance (the “Settlement Balance”) shall be established with an initial balance equal to the Payment Amount. On such date, Wells Fargo shall commence purchasing Shares or Alternative Termination Property over a commercially reasonable period for delivery to Counterparty and in a commercially reasonable manner to unwind a commercially reasonable hedge position.  At the end of each Scheduled Trading Day on which Wells Fargo purchases Shares or Alternative Termination Property pursuant to this paragraph, Wells Fargo shall reduce the Settlement Balance by the amount paid by Wells Fargo to purchase the Shares or Alternative Termination Property purchased on such Scheduled Trading Day. Wells Fargo shall deliver any Shares or Alternative Termination Property purchased on a Scheduled Trading Day to Counterparty on the third Clearance Business Day following the relevant Scheduled Trading Day.  Wells Fargo shall continue purchasing Shares or Alternative Termination Property over a commercially reasonable period until the Settlement Balance has been reduced to zero.

If Counterparty elects to settle any Payment Amount owed to Wells Fargo in Shares or Alternative Termination Property it must do so in adherence to Section 12 of this Confirmation and in a manner such that the value received by Wells Fargo (net of all commercially reasonable fees, expenses or discounts to compensate Wells Fargo for any discount from the public market price of the Shares incurred on the sale of such Shares in a private placement) is not less than the Payment Amount. For the avoidance of doubt, notwithstanding anything to the contrary in the Definitions or this Confirmation, the Payment Amount will not reflect the value associated with any Dividend or Extraordinary Dividend declared or paid by Counterparty to holders of record of any Shares as of any date occurring on or after the Trade Date and prior to the date on which the Payment Amount is received.

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	Announcement Date:
	The definition of “Announcement Date” in Section 12.1(l) of the Equity Definitions shall be amended by (i) replacing the words “a firm” with the word “any” in the second and fourth lines thereof, (ii) replacing the word “leads to the” in the third and the fifth lines thereof with the words “, if completed, would lead to a”, (iii) replacing the words “voting shares” in the fifth line thereof with the word “Shares”, (iv) inserting the words “by any entity” after the word “announcement” in the second and the fourth lines thereof, (v) inserting the words “or to explore the possibility of engaging in” after the words “engage in” in the second line thereof, (vi) inserting the words “or to explore the possibility of purchasing or otherwise obtaining” after the word “obtain” in the fourth line thereto, (vii) deleting the parenthetical in the fifth line thereof and (viii) adding immediately after the words “Tender Offer” in the fifth line thereof “, and any publicly announced change or amendment to such an announcement (including the announcement of an abandonment of such intention)”. Sections 12.3(a) and 12.3(d) of the Equity Definitions shall each be amended by replacing each occurrence of the words “Tender Offer Date” with “Announcement Date.”

For purposes of this Transaction, the definition of “Merger Date” in Section 12.1(c) of the Equity Definitions shall be amended to read, “Merger Date shall mean the Announcement Date.” For purposes of this Transaction, the definition of “Tender Offer Date” in Section 12.1(e) Equity Definitions shall be amended to read, “Tender Offer Date shall mean the Announcement Date.”

    
Consequences of Merger Events:

	
		
	Share-for-Share:
	Modified Calculation Agent Adjustment

	 
	 

	Share-for-Other:
	Cancellation and Payment (Calculation Agent Determination)

	 
	 

	Share-for Combined:
	Component Adjustment

	 
	 

	New Shares:
	In the definition of “New Shares” in Section 12.1(i) of the Equity Definitions, the text in clause (i) thereof shall be deleted in its entirety and replaced with “publicly quoted, traded or listed on any of the New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or their respective successors).”

Tender Offer:    Applicable    
    

8

Consequences of Tender Offers:

	
		
	Share-for-Share:
	Modified Calculation Agent Adjustment or Cancellation and Payment, at the commercially reasonable election of Wells Fargo.

	 
	 

	Share-for-Other:
	Modified Calculation Agent Adjustment or Cancellation and Payment, at the commercially reasonable election of Wells Fargo.

	 
	 

	Share-for-Combined:
	Modified Calculation Agent Adjustment or Cancellation and Payment, at the commercially reasonable election of Wells Fargo.

	Determining Party:
	Wells Fargo

	 
	 

	Composition of Combined
Consideration:
	

Not Applicable; provided that notwithstanding Sections 12.1(f) and 12.5(b) of the Equity Definitions, to the extent that the composition of the consideration for the relevant Shares in connection with a Merger Event or Tender Offer could be determined by a holder of the Shares, the Calculation Agent shall, in its sole discretion, determine the composition of such consideration for purposes of determining the consequences of such Merger Event or Tender Offer under the Transaction. 

	 
	 

	Nationalization, Insolvency or Delisting:
	

Cancellation and Payment (Calculation Agent Determination)

In addition to the provisions of Section 12.6(a)(iii) of the Equity Definitions, it shall also constitute a Delisting if the Exchange is located in the United States and the Shares are not immediately re-listed, re-traded or re-quoted on any of the New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or their respective successors); if the Shares are immediately re-listed, re-traded or re-quoted on any such exchange or quotation system, such exchange or quotation system shall thereafter be the Exchange.

Additional Disruption Events:

9

	
		
	Change in Law:
	Applicable; provided that Section 12.9(a)(ii)(X) of the Equity Definitions is hereby amended by replacing the word “Shares” with the words “Shares or Hedge Positions”.

	 
	 

	Failure to Deliver:
	Not Applicable

	 
	 

	Hedging Disruption:

Hedging Party:

Loss of Stock Borrow:

Maximum Stock Loan Rate:

Hedging Party:

Increased Cost of Stock Borrow:

Initial Stock Loan Rate:

Hedging Party:
	Applicable

Wells Fargo

Applicable

100 basis points per annum

Wells Fargo

Applicable

50 basis points per annum

Wells Fargo

	 
	 

	Determining Party for all Extraordinary Events:
	

Wells Fargo

Miscellaneous:

	
		
	Non-Reliance:
	Applicable

	 
	 

	Agreements and Acknowledgments Regarding  Hedging Activities:
	Applicable

	 
	 

	Additional Acknowledgments:
	Applicable

	 
	 

3.     Calculation Agent:     Wells Fargo

4.    Account Details:

Wells Fargo’s USD payment instructions:    ABA: 121-000-248
Wells Fargo Bank, National Association
Charlotte, NC
Internal Acct No. 01020304464228  
A/C Name: WFB Equity Derivatives    

Wells Fargo’s delivery instructions:        DTC Number:    2072
Agent ID:        52196
Institution ID:    52196

Counterparty’s payment and
		
	delivery instructions:
	To be advised.

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5.    Offices:

		
	(a)
	The Office of Wells Fargo for the Transaction is:  

Wells Fargo Bank, National Association
375 Park Avenue
New York, NY 10152

For notices with respect to the Transaction:
Wells Fargo Securities, LLC
375 Park Avenue, 4th Floor
MAC J0127-041
New York, NY 10152 
Attention: Derivatives Structuring Group 
Telephone No.: 212-214-6101 
Facsimile No.: 212-214-5913
With a copy to CorpEqDerivSales@wellsfargo.com    
 
Trader’s Contact Information:

Mark Kohn or Head Trader
Telephone: 212-214-6089
Facsimile: 212-214-8914

		
	(b)
	The Office of Counterparty for the Transaction is:  None

For notices with respect to the Transaction:
Aaron's, Inc.
309 E. Paces Ferry Road, N.E.
Suite 110
Atlanta, GA 30305
Telephone No.: 404-231-0011 
Facsimile No.: 404-240-6520 

6.     Additional Provisions.

(a)    Buyer Representations and Agreements.  Buyer represents and warrants to, and agrees with, Seller as follows:

(i)    Public Reports.  As of the Trade Date, Buyer is in compliance with its reporting obligations under the Exchange Act of 1934, as amended (the “Exchange Act”), and all reports and other documents filed by Buyer with the Securities and Exchange Commission (“SEC”) pursuant to the Exchange Act, when considered as a whole (with the most recent such reports and documents deemed to amend inconsistent statements contained in any earlier such reports and documents), do not contain any untrue statement of a material fact or any omission of a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances in which they were made, not misleading.  Without limiting the generality of the foregoing, as of the Trade Date, Buyer is not aware of any material non-public information regarding Buyer or the Shares.

(ii)    Regulation M.  Buyer is not on the Trade Date engaged in a “distribution,” as such term is used in Regulation M that would preclude purchases by Buyer of Shares.  In the event that Buyer reasonably concludes that it or any of its affiliates or agents will take any action that would cause Regulation M to be applicable to 

11

any purchases of Shares, or any security for which the Shares is a “reference security” (as defined in Regulation M), by Buyer or any of its “affiliated purchasers” (as defined in Regulation M) on any day prior to the second Scheduled Trading Day immediately following the Valuation Date, Buyer shall provide Seller at least five Scheduled Trading Days’ written notice of such fact prior to the beginning of the restricted period applicable to such distribution under Regulation M.  Buyer acknowledges that any such action could cause the occurrence of an Additional Market Disruption Event (and, accordingly, a Potential Adjustment Event).  Accordingly, Buyer acknowledges that its actions in relation to any such notice must comply with the standards set forth in Section 6(b)(iii) below.  
(iii)    No Manipulation.  Buyer is not entering into the Transaction to create actual or apparent trading activity in the Shares (or any security convertible into or exchangeable for the Shares) or to raise or depress or otherwise manipulate the price of the Shares (or any security convertible into or exchangeable for the Shares) or otherwise in violation of the Exchange Act and will not engage in any other securities or derivative transaction to such ends.

(iv)    No Distribution.  Buyer is not entering into the Transaction to facilitate a distribution of the Shares (or any security that may be converted into or exercised or exchanged for Shares, or whose value under its terms may in whole or in significant part be determined by the value of the Shares) or in connection with any future issuance of securities.

(v)    Solvency.  As of the Trade Date, the Initial Share Delivery Date, the Prepayment Date and the Settlement Date, (a) the aggregate fair market value of Buyer’s assets will exceed its liabilities (including contingent, subordinated, unmatured and unliquidated liabilities), (b) it has not engaged in and will not engage in any business or transaction after which the property remaining with it will be unreasonably small in relation to its business, (c) it has not incurred and does not intend to incur debts beyond its ability to pay as they mature, and (d) as a result of entering into and performing its obligations under the Transaction, (x) it has not violated and will not violate any relevant state law provision applicable to the acquisition or redemption by an issuer of its own securities and (y) it would not be nor would it be rendered “insolvent” (as such term is defined under Section 101(32) of the U.S. Bankruptcy Code (Title 11 of the United States Code) (the “Bankruptcy Code”)).

(vi)    [Reserved]

(vii)    Tender Offers.  The purchase or writing of the Transaction by Buyer will not violate Rule 13e-1 or Rule 13e-4 under the Exchange Act.

(viii)    Investment Company.  Buyer is not, and after giving effect to the transactions contemplated hereby will not be, required to register as an “investment company” as such term is defined in the Investment Company Act of 1940, as amended.

(ix)    Accounting Treatment.  Without limiting the generality of Section 13.1 of the Equity Definitions, Buyer acknowledges that Seller is not making any representations or warranties with respect to the treatment of the Transaction under any accounting standards including FASB Statements 128, 133, 149 (each as amended), or 150, EITF Issue No. 00-19, 01-6, 03-6 or 07-5 (or any successor issue statements) or under FASB’s Liabilities & Equity Project.

(x)    Authorization and Disclosure.  Upon Seller’s request, prior to the Trade Date, Buyer shall deliver to Seller a resolution of Buyer’s board of directors authorizing the Transaction and such other certificate or certificates as Seller shall reasonably request.  Buyer has publicly disclosed on October 4, 2013 its intention to institute a program for the acquisition of Shares.

(xi)    [Reserved]

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(xii)    Rule 10b-18 purchases.  Buyer represents and warrants to Seller that neither it nor any “affiliated purchaser” (as defined in Rule 10b-18 under the Exchange Act) has made any purchases of blocks pursuant to the proviso in Rule 10b-18(b)(4) under the Exchange Act during either (i) the four full calendar weeks immediately preceding the Trade Date or (ii) during the calendar week in which the Trade Date occurs.

(b)    Rule 10b5-1.  

(i)    Buyer intends the Transaction to comply with the requirements of Rule 10b5-1(c) under the Exchange Act.  Buyer represents that it is entering into the Transaction in good faith and not as part of a plan or scheme to evade the antifraud or anti-manipulation provisions of the federal or applicable state securities laws and that it has not entered into or altered any hedging transaction relating to the Shares corresponding to or offsetting the Transaction.  Buyer represents and warrants that it has consulted with its own advisors as to the legal aspects of its adoption and implementation of the Transaction under Rule 10b5-1 under the Exchange Act.
(ii)    Buyer shall not, at any time during any Averaging Period communicate, directly or indirectly, any material nonpublic information concerning itself or the Shares or purchases or sales of Shares by Seller (or its agent or affiliate) to any Relevant Bank Personnel.  “Relevant Bank Personnel” means any employees or agents of Seller or any affiliate of Seller that Seller has notified Buyer in writing are “Relevant Bank Personnel” ; provided that Wells Fargo may amend the list of Relevant Bank Personnel at any time by delivering a revised list to Counterparty.  “Relevant Bank Personnel” shall initially mean any personnel of the equity derivatives trading group of Seller or its affiliates who are responsible for, or have the ability to influence, the execution of this Transaction and of Wells Fargo’s hedge in relation thereto.

(iii)    Buyer agrees that Buyer shall not enter into or alter any hedging transaction relating to the Shares corresponding to or offsetting the Transaction.  Buyer also acknowledges and agrees that any amendment, modification, waiver or termination of this Confirmation must be effected in accordance with the requirements for the amendment or termination of a “plan” as defined in Rule 10b5-1(c) under the Exchange Act.  Without limiting the generality of the foregoing, any such amendment, modification, waiver or termination shall be made in good faith and not as part of a plan or scheme to evade the prohibitions of Rule 10b-5, and no such amendment, modification, waiver or termination shall be made at any time at which Buyer or any officer, director, manager or similar person of Buyer is aware of any material non-public information regarding Buyer or the Shares.

		
	(iv)
	Buyer acknowledges and agrees that it does not have, and shall not attempt to exercise, any influence over how, when or whether Seller effects any purchases of Shares in connection with the Transaction.

		
	(c) 
	U.S. Private Placement and Other Representations. 

Each party acknowledges that the offer and sale of the Transaction to it is intended to be exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”). Accordingly, each party hereby represents and warrants to the other party as of the date hereof that:

(i)    It is an “accredited investor” (as defined in Regulation D under the Securities Act) and has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of the Transaction, and it is able to bear the economic risk of the Transaction.

		
	(ii)
	It is entering into the Transaction for its own account and not with a view to the distribution or resale of the Transaction or its rights thereunder except pursuant to a registration statement declared effective under, or an exemption from the registration requirements of, the Securities Act.

		
	(iii)
	It is duly organized and validly existing under the laws of the jurisdiction of its organization or incorporation and, if relevant under such laws, in good standing.

13

		
	(iv)
	It has the power to execute this Confirmation and any other documentation relating to this Confirmation to which it is a party, to deliver this Confirmation and any other documentation relating to this Confirmation that it is required by this Confirmation to deliver and to perform its obligations under this Confirmation and has taken all necessary action to authorize such execution, delivery and performance.

		
	(v)
	Such execution, delivery and performance do not violate or conflict with any law applicable to it, any provision of its constitutional documents, any order or judgment of any court or other agency of government applicable to it or any of its assets or any contractual restriction binding on or affecting it or any of its assets.

		
	(vi)
	It is an “eligible contract participant” as defined in the U.S. Commodity Exchange Act (as amended).

(d)    Securities Contract; Swap Agreement.   The parties hereto agree and acknowledge that Seller is a “financial participant” within the meaning of Sections 101(22), 101(53C) and 101(22A) of the Bankruptcy Code. The parties hereto further agree and acknowledge that this Transaction is (i) a “securities contract” as such term is defined in Section 741(7) of the Bankruptcy Code, in which case each payment and delivery made pursuant to this Transaction is a “termination value,” “payment amount” or “other transfer obligation” within the meaning of Section 362 of the Bankruptcy Code and a “settlement payment,” within the meaning of Section 546 of the Bankruptcy Code and (ii) a “swap agreement,” as such term is defined in Section 101(53B) of the Bankruptcy Code, with respect to which each payment and delivery hereunder or in connection herewith is a “termination value,” “payment amount” or “other transfer obligation” within the meaning of Section 362 of the Bankruptcy Code and a “transfer,” as such term is defined in Section 101(54) of the Bankruptcy Code and a “payment or other transfer of property” within the meaning of Sections 362 and 546 of the Bankruptcy Code, and that Seller is entitled to the protections afforded by, among other sections, Sections 362(b)(6), 362(b)(17), 362(o), 546(e), 546(g), 548(d)(2), 555, 560 and 561 of the Bankruptcy Code.

(e)    Bankruptcy Status.  Wells Fargo acknowledges and agrees that this Confirmation is not intended to convey to it rights with respect to the transactions contemplated hereby that are senior to the claims of Counterparty’s common stockholders in the event of Counterparty’s bankruptcy; provided, however, that nothing herein shall be deemed to limit Wells Fargo’s right to pursue remedies in the event of a breach by Counterparty of its obligations and agreements with respect to this Confirmation and the Agreement; and provided, further, that nothing herein shall limit or shall be deemed to limit Wells Fargo’s rights in respect of any transaction other than this Transaction.

(f)    No Collateral or Setoff.  Notwithstanding any provision of this Confirmation, the Agreement, or any other agreement between the parties to the contrary, the obligations of Counterparty under this Transaction are not secured by any collateral.  Wells Fargo agrees not to set off or net amounts due from Counterparty with respect to this Transaction against amounts due from Wells Fargo to Counterparty under obligations other than Equity Contracts.  “Equity Contract” means any transaction relating to Shares between the parties (or any of their affiliates) that qualifies as ‘equity’ under applicable accounting rules.

(g)    Additional Termination Event.  Notwithstanding any other provision hereof, an “Additional Termination Event” shall occur and Counterparty shall be the sole Affected Party pursuant to such Additional Termination Event if on any day occurring after the Trade Date and on or prior to the later of the Valuation Date or, if Buyer has elected to cash settle its obligation to deliver Payment Shares, the Exchange Business Day that the Settlement Balance is reduced to zero (such date, the “Final Termination Date”), Counterparty declares an Extraordinary Dividend with an ex-dividend date on or prior to the Final Termination Date. For the avoidance of doubt, the Extraordinary Dividend shall not constitute a Potential Adjustment Event.

(h)    Maximum Number of Shares. Notwithstanding any provisions of this Confirmation, the Agreement or the Equity Definitions to the contrary, in no event shall the aggregate number of Shares that Counterparty shall be obligated to deliver in connection with this Transaction exceed 8,756,567 Shares, as such number may be proportionately adjusted by the Calculation Agent to reflect stock splits or similar events.  

(i)    Agreements to Deliver Documents.  Each of Buyer and Seller will deliver to the other party, upon execution of this Confirmation, evidence reasonably satisfactory to the other party as to the names, true signatures and authority of the officers or officials signing this Confirmation on its behalf.  Such documents shall be covered by the representation 

14

set forth in Section 3(d) of the Agreement.  In addition, Buyer agrees to complete (accurately and in a manner reasonably satisfactory to the other party), execute, and deliver to Seller, United States Internal Revenue Service Form W-8 or Form W-9, as applicable, or any successor of such form, (i) upon execution of this Confirmation, (ii) promptly upon reasonable demand by Seller, and (iii) promptly upon learning that any such form previously provided by it has become obsolete or incorrect.

(j)    Indemnity.  Buyer shall indemnify and hold harmless Seller and any of its affiliates, directors, officers, employees, partners, controlling entities or agents (each, an “Indemnified Party”) from and against any and all claims, losses, damages and liabilities (including, without limitation, any legal or other expenses reasonably incurred in connection with defending or investigating any such action or claim) (“Losses”) joint and several arising out of or attributable to Buyer’s breach of its representations, warranties or agreements hereunder, except to the extent that such claim, loss, damage, liability or expense is found in a final non-appealable judgment by a court of competent jurisdiction to have resulted solely from the gross negligence or bad faith of any Indemnified Party. This indemnity agreement shall be in addition to any liability that Buyer otherwise may have. The provisions of this paragraph shall survive the termination of this Confirmation.  

(k)    Counterparty Purchases. Without the prior written consent of Wells Fargo, Counterparty shall not, and shall cause its “affiliates” and “affiliated purchasers” (each as defined in Rule 10b-18) not to, directly or indirectly (including, without limitation, by means of a derivative) purchase, offer to purchase, place any bid or limit order that would effect a purchase of, or commence any tender offer relating to, any Shares (or an equivalent interest, including a unit of beneficial interest in a trust or limited partnership or a depository share) or any security convertible into or exchangeable for Shares during the Averaging Period.  During such time, any purchases of Shares (or any security convertible into or exchangeable for Shares) by Counterparty shall be made through Wells Fargo Securities, LLC, which is an affiliate of Wells Fargo.

(l)    Merger-related Transactions.  During the Averaging Period, Counterparty shall (i) notify Wells Fargo prior to the opening of trading in the Shares on any day on which Counterparty makes, or expects to be made, any public announcement (as defined in Rule 165(f) under the Securities Act) of any merger, acquisition, or similar transaction involving a recapitalization relating to Counterparty (other than any such transaction in which the consideration consists solely of cash and there is no valuation period), (ii) promptly notify Wells Fargo following any such announcement that such announcement has been made, and (iii) promptly deliver to Wells Fargo following the making of any such announcement a certificate indicating (A) Counterparty’s average daily Rule 10b-18 purchases (as defined in Rule 10b-18) during the three full calendar months preceding the date of the announcement of such transaction and (B) Counterparty’s block purchases (as defined in Rule 10b-18) effected pursuant to paragraph (b)(4) of Rule 10b-18 during the three full calendar months preceding the date of the announcement of such transaction.  In addition, Counterparty shall promptly notify Wells Fargo of the earlier to occur of the completion of such transaction and the completion of the vote by target shareholders.  Counterparty acknowledges that any such public announcement may cause the terms of the Transaction to be adjusted or terminated. Accordingly, Counterparty acknowledges that its actions in relation to any such announcement or transaction must comply with the standards set forth in Section 6(b) above.  Wells Fargo in a commercially reasonable manner may (i) make adjustments to the terms of the Transaction, including, without limitation, the Price Adjustment and/or suspend the Averaging  Period to preserve the economics of the transaction or (ii) treat the occurrence of such public announcement as an Additional Termination Event with Counterparty as the sole Affected Party and the Transaction hereunder as the Affected Transaction and with the amount under Section 6(e) of the Agreement determined taking into account the fact that the Averaging Period, as the case may be, had fewer Scheduled Trading Days than originally anticipated.

(m)    Acknowledgments and Agreements Regarding Hedging.  Counterparty acknowledges and agrees that (i) during the Averaging Period, Wells Fargo and its affiliates may (x) buy or sell Shares or other securities or buy or sell options or futures contracts or enter into swaps or other derivative securities in order to adjust its hedge position with respect to the Transaction and (y) be active in the market for Shares other than in connection with hedging activities in relation to the Transaction, (ii) Wells Fargo shall make its own determination as to whether, when or in what manner any hedging or market activities in Counterparty’s securities shall be conducted and shall do so in a manner that it deems appropriate to hedge its price and market risk with respect to the Settlement Price and/or the VWAP Price and (iii) any market activities of Wells Fargo and its affiliates with respect to Shares may affect the market price and volatility 

15

of Shares, as well as the Settlement Price and/or the VWAP Price, each in a manner that may be adverse to Counterparty. Wells Fargo agrees with respect to all purchases of Shares made by Wells Fargo during the Averaging Period that it will conduct its purchases in a manner that would not be deemed to constitute a tender offer within the meaning of Section 14(d)(1) of the Exchange Act.  Wells Fargo represents and warrants that it has implemented reasonable policies and procedures, taking into consideration the nature of its business, to ensure that individuals making investment decisions would not violate laws prohibiting trading on the basis of material nonpublic information.

7.    Seller Adjustments.  

In the event that Seller reasonably determines in good faith and based on the advice of counsel, that it is appropriate with regard to any legal, regulatory or self-regulatory requirements or related policies and procedures (whether or not such requirements, policies or procedures are imposed by law or have been voluntarily adopted by Seller, and including, without limitation, Rule 10b-18, Rule 10b-5, Regulation 13D-G and Regulation 14E, “Requirements”), for Seller to refrain from purchasing Shares or to purchase fewer than the number of Shares than a hypothetical purchaser would otherwise reasonably be expected to be purchase in a commercially reasonable manner on any Trading Day during the duration of this Transaction, then Seller may, in its commercially reasonable discretion, elect that Averaging Period be suspended and, if appropriate, extended with regard to any Requirements. Seller shall notify the Issuer upon the exercise of Seller’s rights pursuant to this Section 7 and shall subsequently notify the Issuer on the day Seller believes that the circumstances giving rise to such exercise have changed.  If the Averaging Period is suspended pursuant to this Section 7, at the end of such suspension Seller shall determine the number of Scheduled Trading Days remaining in the Averaging Period, as appropriate, and the terms of this Transaction shall be adjusted by the Calculation Agent. All determinations by Seller shall be made in good faith and a commercially reasonable manner and assuming the Seller maintains a commercially reasonable hedge position.

8.  Special Provisions regarding Acquisition Transaction Announcements.
(a)     If an Acquisition Transaction Announcement occurs on or prior to the Settlement Date, then the Calculation Agent shall make such adjustments to the exercise, settlement, payment or any other terms of the Transaction (including, without limitation, the Price Adjustment) as the Calculation Agent determines appropriate, at such time or at multiple times as the Calculation Agent determines appropriate, to account for the economic effect on such Transaction of such Acquisition Transaction Announcement (provided that adjustments will be made to account solely for changes in price, volatility, stock loan rate and liquidity relevant to the Shares, to the Transaction or to commercially reasonable hedge positions in respect of the Transaction).  If an Acquisition Transaction Announcement occurs after the Trade Date, but prior to the Scheduled Earliest Acceleration Date, the Scheduled Earliest Acceleration Date shall be the date of such Acquisition Transaction Announcement.
 
(b)           “Acquisition Transaction Announcement” means (i) the announcement of an Acquisition Transaction, (ii) an announcement that Buyer or any of its subsidiaries has entered into an agreement, a letter of intent or an understanding designed to result in an Acquisition Transaction, (iii) the announcement of the intention to solicit or enter into, or to explore strategic alternatives or other similar undertaking that may include, an Acquisition Transaction, or (iv) any other announcement that in the reasonable judgment of the Calculation Agent may result in an Acquisition Transaction. For the avoidance of doubt, announcements as used in the definition of Acquisition Transaction Announcement refer to any public announcement whether made by the Buyer or a third party.
 
(c)           “Acquisition Transaction” means (i) any Merger Event (for purposes of this definition the definition of Merger Event shall be read with the references therein to “100%” being replaced by “15%” and to “50%” by “75%” and without reference to the clause beginning immediately following the definition of Reverse Merger therein to the end of such definition), Tender Offer or Merger Transaction or any other transaction involving the merger of Buyer with or into any third party, (ii) the sale or transfer of all or substantially all of the assets of Buyer, (iii) a recapitalization, reclassification, binding share exchange or other similar transaction, (iv) any acquisition, lease, exchange, transfer, disposition (including by way of spin-off or distribution) of assets (including any capital stock or other ownership interests in subsidiaries) or other similar event by Buyer or any of its subsidiaries where the aggregate consideration transferable or receivable by or to Buyer or its subsidiaries exceeds 

16

15% of the market capitalization of Buyer and (v) any transaction in which Buyer or its board of directors has a legal obligation to make a recommendation to its shareholders in respect of such transaction (whether pursuant to Rule 14e-2 under the Exchange Act or otherwise).
9.    Terms Relating to the Agent.
(a)    The Agent is registered as a broker-dealer with the SEC and the Financial Industry Regulatory Authority (FINRA), is acting hereunder for and on behalf of Wells Fargo solely in its capacity as agent for Wells Fargo pursuant to instructions from Wells Fargo, and is not and will not be acting as the Counterparty’s agent, broker, advisor or fiduciary in any respect under or in connection with the Transaction.
(b)    In addition to acting as Wells Fargo’s agent in executing the Transaction, the Agent is authorized from time to time to give written payment and/or delivery instructions to the Counterparty directing it to make its payments and/or deliveries under the Transaction to an account of the Agent for remittance to Wells Fargo (or its designee), and for that purpose any such payment or delivery by the Counterparty to the Agent shall be treated as a payment or delivery to Wells Fargo.
(c)    Except as otherwise provided herein, any and all notices, demands, or communications of any kind transmitted in writing by either Wells Fargo or the Counterparty under or in connection with the Transaction will be transmitted exclusively by such party to the other party through the Agent at the following address:

Wells Fargo Securities, LLC
One Wells Fargo Center
301 South College Street, 7th floor
MAC D1053-070
Charlotte, NC 28202
Attn: Equity Derivatives/Kyle Saunders
DerivativeSupportOperations@WellsFargo.com
 (d)    The Agent shall have no responsibility or liability to Wells Fargo or the Counterparty for or arising from (i) any failure by either Wells Fargo or the Counterparty to perform any of their respective obligations under or in connection with the Transaction, (ii) the collection or enforcement of any such obligations, or (iii) the exercise of any of the rights and remedies of either Wells Fargo or the Counterparty under or in connection with the Transaction.  Each of Wells Fargo and the Counterparty agrees to proceed solely against the other to collect or enforce any such obligations, and the Agent shall have no liability in respect of the Transaction except for its gross negligence or willful misconduct in performing its duties as the agent of Wells Fargo.
(e)    Upon written request, the Agent will furnish to Wells Fargo and the Counterparty the date and time of the execution of the Transaction and a statement as to the source and amount of any remuneration received or to be received by the Agent in connection with the Transaction.

10.     Staggered Settlement. 

Notwithstanding anything to the contrary herein, Wells Fargo may, by prior notice to Counterparty, satisfy its obligation to deliver any Shares or other securities on any date due (an “Original Delivery Date”) by making separate deliveries of Shares or such securities, as the case may be, at more than one time on or prior to such Original Delivery Date, so long as the aggregate number of Shares and other securities so delivered on or prior to such Original Delivery Date is equal to the number required to be delivered on such Original Delivery Date.

11.     Transfer and Assignment.

Notwithstanding anything to the contrary in the Agreement, Wells Fargo may assign, transfer and set over all its rights, title and interest, powers, privileges and remedies under any Transaction, in whole or in part, to an affiliate of Wells Fargo, with the prior written consent of Counterparty.

17

At any time at which the Equity Percentage exceeds 7.5% (an “Excess Ownership Position”) or a Hedging Disruption has occurred and is continuing, if Wells Fargo, in its discretion, is unable to effect a transfer or assignment to a third party after using its commercially reasonable efforts on pricing terms and within a time period reasonably acceptable to Wells Fargo such that an Excess Ownership Position or a Hedging Disruption, as the case may be, no longer exists, Wells Fargo may designate any Scheduled Trading Day as an Early Termination Date with respect to a portion (the “Terminated Portion”) of the Transaction, such that such Excess Ownership Position or Hedging Disruption, as the case may be, no longer exists. In the event that Wells Fargo so designates an Early Termination Date with respect to a portion of the Transaction, a payment or delivery shall be made pursuant to Section 6 of the Agreement and Section 2 of this Confirmation as if (i) an Early Termination Date had been designated in respect of a Transaction having terms identical to the Terminated Portion of the Transaction, (ii) Counterparty shall be the sole Affected Party with respect to such partial termination and (iii) such portion of the Transaction shall be the only Terminated Transaction. The “Equity Percentage” as of any day is the fraction, expressed as a percentage, (A) the numerator of which is the number of Shares that Wells Fargo and any of its affiliates or any other person subject to aggregation with Wells Fargo, for purposes of the “beneficial ownership” test under Section 13 of the Exchange Act or any “group” (within the meaning of Section 13 of the Exchange Act) of which Wells Fargo is or may be deemed to be a part, beneficially owns (within the meaning of Section 13 of the Exchange Act) on such day and (B) the denominator of which is the number of Shares outstanding on such day.

12.     Registration Provisions.

Counterparty hereby agrees that if, in the good faith and commercially reasonable judgment of Wells Fargo, any Shares acquired by Wells Fargo for the purpose of hedging its obligations pursuant to the Transaction or otherwise delivered by the Counterparty to Wells Fargo for any reason hereunder cannot be sold in the public market by Wells Fargo without registration under the Securities Act, Counterparty shall, at its election: (i) in order to allow Wells Fargo to sell such Shares in a registered offering, make available to Wells Fargo an effective registration statement under the Securities Act to cover the resale of such Shares and (A) enter into an agreement, in form and substance satisfactory to Wells Fargo, substantially in the form of an underwriting agreement for a registered offering of similar size, (B) provide accountant’s “comfort” letters in customary form for registered offerings of equity securities of similar size, (C) provide disclosure opinions of nationally recognized outside counsel to Counterparty reasonably acceptable to Wells Fargo, (D) provide other customary opinions, certificates and closing documents customary in form for registered offerings of equity securities of similar size and (E) afford Wells Fargo a reasonable opportunity to conduct a “due diligence” investigation with respect to Counterparty customary in scope for underwritten offerings of equity securities of similar size; provided that if Wells Fargo, in its commercially reasonable discretion, is not satisfied with access to due diligence materials, the results of its due diligence investigation, or the procedures and documentation for the registered offering referred to above, then clause (ii) or clause (iii) of this Section 12 shall apply at the election of Counterparty; (ii) in order to allow Wells Fargo to sell such Shares in a private placement, enter into a private placement agreement substantially similar to private placement purchase agreements customary for private placements of equity securities of similar size, in form and substance satisfactory to Wells Fargo, including customary representations, covenants, blue sky and other governmental filings and/or registrations, indemnities to Wells Fargo, due diligence rights (for Wells Fargo or any designated buyer or buyers of the Shares from Wells Fargo), opinions and certificates and such other documentation as is customary for private placements agreements, all commercially reasonably acceptable to Wells Fargo (in which case, the Calculation Agent shall make any adjustments to the terms of the Transaction that are necessary, using commercially reasonable judgment, to compensate Wells Fargo for any discount from the public market price of the Shares incurred on the sale of such Shares in a private placement); or (iii) purchase the Shares from Wells Fargo at the Volume Weighted Average Price on such Exchange Business Days, and in the amounts, requested by Wells Fargo.  “Volume Weighted Average Price” means, on any Exchange Business Day, the per Share volume-weighted average price as displayed under the heading “Bloomberg VWAP” on Bloomberg page AAN <equity> VAP (or any successor thereto) in respect of the period from 9:30 a.m. to 4:00 p.m. (New York City time) on such Exchange Business Day (or if such volume-weighted average price is unavailable, the market value of one Share on such Exchange Business Day, as determined by the Calculation Agent using a volume-weighted method).

13.     Counterparts.

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This Confirmation may be executed in any number of counterparts, all of which shall constitute one and the same instrument, and any party hereto may execute this Confirmation by signing and delivering one or more counterparts.

14.     Waiver of Trial by Jury.  

EACH PARTY HEREBY IRREVOCABLY WAIVES (ON ITS OWN BEHALF AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ON BEHALF OF ITS STOCKHOLDERS) ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THE TRANSACTION OR THE ACTIONS OF WELLS FARGO, THE AGENT OR THEIR AFFILIATES IN THE NEGOTIATION, PERFORMANCE OR ENFORCEMENT HEREOF.

15.     Adjustments.

For the avoidance of doubt, whenever the Seller, Calculation Agent, Wells Fargo or Determining Party are called upon to make an adjustment or determination pursuant to the terms of this Confirmation or the Definitions to take into account the effect of an event, the Seller, Calculation Agent and Determining shall make such adjustment or determination by reference to the effect of such event on the Hedging Party, assuming that the Hedging Party maintains a commercially reasonable Hedge Position at the time of the event.

Please confirm that the foregoing correctly sets forth the terms of our agreement by executing a copy of this Confirmation and returning it to Wells Fargo’s Structured Derivatives Documentation Unit, Facsimile No. (212) 214-5913.

	
		
	Wells Fargo Bank, National Association
By Wells Fargo Securities, LLC,
acting solely in its capacity as its Agent

By:  ___________________________      By:     ___________________________
   Name: _____________________
Title:  

Wells Fargo Securities, LLC      
acting solely in its capacity as Agent of
 Wells Fargo Bank, National Association

By:  ___________________________      By:     ___________________________
   Name: _____________________
Title:  

	Aaron's, Inc.

By:  ___________________________      By:     ___________________________
   Name: _____________________
Title:  

19

Appendix A

	
		
	Initial Shares:
	[]

	 
	 

	Prepayment Amount:
	USD 125,000,000

	 
	 

	Valuation Date:
	[] (or if such date is not an Exchange Business Day, the next following Exchange Business Day), provided that Seller shall have the right in its absolute discretion, to accelerate the Valuation Date to any date that is on or after []  (or if such date is not an Exchange Business Day, the next following Exchange Business Day) (such date, the “Scheduled Earliest Acceleration Date”), by giving notice prior to 8:00 pm New York City time on the Scheduled Trading Day following such date.

	 
	 

	Averaging Dates:
	For the Valuation Date, each Scheduled Trading Day starting on the first Scheduled Trading Day following the Trade Date and ending on, and including, such Valuation Date.

	 
	 

	Price Adjustment:   
	[]

	 
	 

	Expected Ex-Dividend Dates:
	[]

	 
	 

2012.31.2013 Exhibit 10.1

Exhibit 10.1
SUNTRUST BANKS, INC. ANNUAL INCENTIVE PLAN 
 Amended and Restated January 1, 2014
Section 1.       Name and Purpose 
The name of this Plan is the SunTrust Banks, Inc. Annual Incentive Plan. The purpose of the Plan is to promote the interests of the Corporation and its stockholders through the granting of Awards to select employees of the Corporation and its Subsidiaries in order to motivate and retain superior employees who contribute in a significant manner to the actual financial performance of the Corporation as measured against pre-established financial and other goals. 
Section 2.       Plan History, Term and Amendment 
The Plan was established as the Management Incentive Plan (MIP) and was originally approved by the Corporation’s shareholders in 1995.  The MIP was amended and reapproved by the Corporation’s shareholders in 2000, 2005 and 2010.    Effective January 1, 2012, the MIP was amended to change the name to the Annual Incentive Plan (AIP) and to add “clawback” provisions permitting the Corporation to recover certain amounts previously awarded or paid under the Plan.  The AIP is hereby amended and restated to revise the material terms of the performance goals subject to approval by the Corporation’s shareholders at the annual meeting of shareholders in 2014.  The Plan shall continue for an indefinite term until terminated by the Board; provided, however, that the Corporation and the Committee after such termination shall continue to have full administrative power to take any and all action contemplated by the Plan which is necessary or desirable and to make payment of any Awards earned by Participants during any then unexpired Plan Year. The Board or the Committee may amend the Plan in any respect from time to time. 
Section 3.       Definitions and Construction 
A.   As used in this Plan, the following terms shall have the meanings indicated, unless the context clearly requires another meaning: 
1.         “Award” means the right to receive a cash payment which represents a percentage of a Participant’s Base Wages determined by the Committee in accordance with Section 5 hereof in the event the Corporation, Subsidiary, Business Unit or individual achieves the Financial Goals or other goals established pursuant to Section 5. 
2.         “Base Wages” means the base salary paid to a Participant by the Corporation or a Subsidiary during a Plan Year, excluding bonuses, overtime, commissions and other extra compensation, reimbursed expenses and contributions made by the Corporation or a Subsidiary to this or any other employee benefit plan maintained by the Corporation or a Subsidiary. 
3.         “Board” means the Board of Directors of the Corporation. 
4.         “Business Unit” means a division or other business unit of the Corporation or a Subsidiary designated as a distinct entity for the purpose of setting goals and measuring performance. 
5.         “Code” means the Internal Revenue Code of 1986, as amended. 
6.         “Committee” means the Compensation Committee of the Board or any other Committee of the Board to which the responsibility to administer this Plan is delegated by the Board; such Committee shall consist of at least two members of the Board, who shall not be eligible to receive an Award under the Plan and each of whom shall be a “disinterested” person within the meaning of Rule 16b-3 under the Securities Exchange Act of 1934 and shall be or be treated as an “outside director” for purposes of Code section 162(m). 

7.         “Corporation” means SunTrust Banks, Inc. and any successor. 
8.         “Covered Employee” means for each calendar year the Chief Executive Officer of the Corporation and the other most highly compensated executive officers, as defined under Code section 162(m)(3), whose compensation would be reportable on the “summary compensation table” under the Securities and Exchange Commission’s executive compensation disclosure rules, as set forth in Item 402 of Regulation S-K, 17 C.F.R. 229.402, under the Securities Exchange Act of 1934, if the report was prepared as of the last day of such calendar year. 
9.         “Change in Control” means a change in control of the Corporation of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act of 1934 as in effect at the time of such “change in control”, provided that such a change in control shall be deemed to have occurred at 

such time as (i) any “person” (as that term is used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934), is or becomes the beneficial owner (as defined in Rule 13d-3 under the Securities Exchange Act of 1934) directly or indirectly, of securities representing 20% or more of the combined voting power for election of directors of the then outstanding securities of the Corporation or any successor of the Corporation; (ii) during any period of two (2) consecutive years or less, individuals who at the beginning of such period constitute the Board cease, for any reason, to constitute at least a majority of such Board, unless the election or nomination for election of each new director was approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of the period; (iii) there is a consummation of any reorganization, merger, consolidation or share exchange as a result of which the common stock of the Corporation shall be changed, converted or exchanged into or for securities of another corporation (other than a merger with a wholly-owned subsidiary of the Corporation) or any dissolution or liquidation of the Corporation or any sale or the disposition of 50% or more of the assets or business of the Corporation; or (iv) there is a consummation of any reorganization, merger, consolidation or share exchange unless (A) the persons who were the beneficial owners of the outstanding shares of the common stock of the Corporation immediately before the consummation of such transaction beneficially own more than 65% of the outstanding shares of the common stock of the successor or survivor corporation in such transaction immediately following the consummation of such transaction and (B) the number of shares of the common stock of such successor or survivor corporation beneficially owned by the persons described in Section 3A.9(iv)(A) immediately following the consummation of such transaction is beneficially owned by each such person in substantially the same proportion that each such person had beneficially owned shares of the Corporation’s common stock immediately before the consummation of such transaction, provided (C) the percentage described in Section 3A.9(iv)(A) of the beneficially owned shares of the successor or survivor corporation and the number described in Section 3A.9(iv)(B) of the beneficially owned shares of the successor or survivor corporation shall be determined exclusively by reference to the shares of the successor or survivor corporation which result from the beneficial ownership of shares of common stock of the Corporation by the persons described in Section 3A.9(iv)(A) immediately before the consummation of such transaction. 
10.         “Employment” means continuous employment with the Corporation or a Subsidiary from the beginning to the end of each Plan Year, which continuous employment shall not be considered to be interrupted by transfers between the Corporation and a Subsidiary or between Subsidiaries. 
11.         “Final Value” means the value of an Award determined in accordance with Sections 5 and 6 as the basis for payments to Participants at the end of a Plan Year. 
12.         “Financial Goals” means the financial objectives set by the Committee for each Plan Year pursuant to Section 5 from one or any combination of the following: (i)  return over capital costs; (ii)  total earnings; (iii)  consolidated earnings; (iv) earnings per share ; (v) net earnings; (vi)  earnings before interest expense, taxes, depreciation, amortization and other non-cash items; (vii) earnings before interest and taxes; (viii)   consolidated net income ix) the market capitalization of SunTrust stock;  (x) stock price; (xi)  return on assets; (xii)  total shareholder return (xiii)   expenses or the reduction of expenses; (xiv) revenue growth; (xv) efficiency ratios;  (xvi)  economic value added; )   ;   (xvii) return on equity; (xviii) return on tangible equity; (xix) cash return on equity; (xx) cash return on tangible equity; (xxi) net income available to common shareholders; (xxxii) book value per share; (xxiii) pre-tax income or growth; (xxiv) operating earnings per share of stock or growth (excluding one-time, non-core items); (xxvii) cash earnings per share of stock or growth; (xxvi) cash operating earnings per share of stock or growth (excluding one-time, non-core items); (xxvii) cash return on assets; (xxviii) operating leverage; (xxix) net interest margin; (xxx) Tier 1 capital; (xxxi) risk-adjusted net interest margin; (xxxii) total risk-based capital ratio; (xxxiii) tangible equity and tangible assets; (xxxiv) tangible common equity and tangible assets; (xxxv) tangible book value per share; (xxxvi) loan balances or growth; (xxxvii) deposit balances or growth; (xxxviii) low cost deposit balances or growth; (xxxix) common equity Tier 1; (xl) value at risk; (xli) market value of equity; (xlii) price to earnings ratio;  (xliii) loan to deposit ratio; (xliv) net charge-off  ratio; (xlv) allowance for loan losses to total loans ratio; (xlvi) allowance to nonperforming loan ratio; (xlvii) delinquent loans to total loans ratio; (xlviii) leverage ratio; (xlix) liquidity coverage ratio; (l) dividend payout ratio; (li) credit ratings; (lii) net interest income sensitivity; (liii) pre-provision net revenue; (liv) return on tangible common equity; (lv) any financial metric required to be reported under Basel III, including but not limited to common equity Tier 1 and risk-weighted assets; (lvi) growth or change in any of the foregoing over a specified period of time, (lvii) any measure or ratio calculated using any combination of the foregoing, (lviii) any of the foregoing, as applied to SunTrust and its consolidated subsidiaries, to any accounting segment, line of business or function of SunTrust, or to any specified SunTrust subsidiaries, or (lix) with respect to participants other than Covered Employees, such other financial performance measures deemed appropriate by the Committee. 
13.         “Participant” means a select employee of the Corporation and/or its Subsidiaries who is selected by the Committee or the Committee’s delegate to participate in the Plan based upon the employee’s substantial contributions to the future growth and future profitability of the Corporation and/or its Subsidiaries. 

14.         “Plan” means the SunTrust Banks, Inc. Annual Incentive Plan as amended and restated in this document and all subsequent amendments. 
15.         “Plan Year” means a single calendar year period as set by the Committee which commences on the first day of such period. 
16.         “Proportionate Final Value” means the product of a fraction, the numerator of which is the actual number of days in a Plan Year that an employee was employed by the Corporation or a Subsidiary and the denominator of which is the total number of days in that Plan Year, multiplied by the Final Value of an Award. Alternatively, the Committee may, in its discretion and on a consistent basis for all similarly situated Participants, determine the Proportionate Final Value of an Award as the product of the “specified percent,” if any, determined in accordance with Sections 5 and 6 as the basis for the payment to a Participant at the end of the Plan Year to which the Award relates, multiplied by the Base Wages actually paid to the Participant in such Plan Year. 
17.         “Subsidiary” means any bank, corporation or entity which the Corporation controls either directly or indirectly through ownership of fifty percent (50%) or more of the total combined voting power of all classes of stock of such bank, corporation or entity, except for such direct or indirect ownership by the Corporation while the Corporation or a Subsidiary is acting in a fiduciary capacity with respect to any trust, probate estate, conservatorship, guardianship or agency. 
18.         “Termination Value” means the value of an Award as determined by the Committee, in its absolute discretion, upon the early termination of a Plan Year, which value shall be the basis for the payment of an Award to a Participant, in accordance with Section 8A or 8B of the Plan based on the Participant’s Employment prior to the early termination of such Plan Year. 
B.   In the construction of the Plan, the masculine shall include the feminine and the singular shall include the plural in all instances in which such meanings are appropriate. The Plan and all agreements executed pursuant to the Plan shall be governed by the laws of Georgia (excluding its choice-of-law rules). 
Section 4.       Committee Responsibilities 
A.   The Committee may, from time to time, adopt rules and regulations and prescribe forms and procedures for carrying out the purposes and provisions of the Plan. The Committee shall have the sole and final authority to designate Participants, determine Awards, designate the Plan Year, determine Financial Goals and other goals, determine Final Value of Awards, and answer all questions arising under the Plan, including questions on the proper construction and interpretation of the Plan. Any interpretation, decision or determination made by the Committee shall be final, binding and conclusive upon all interested parties, including the Corporation and its Subsidiaries, Participants and other employees of the Corporation or any Subsidiary, and the successors, heirs and representatives of all such persons. The Committee shall use its best efforts to ensure that Awards to Covered Employees under the Plan qualify as “performance-based compensation” for purposes of Code section 162(m). 
B.   Subject to the express provisions of the Plan and within the first ninety (90) days of a calendar year (or such time as may be permitted for Awards paid for such year to be treated as performance-based compensation under Code section 162(m)), the Committee shall in writing: 
1.         Designate the Plan Year which shall begin on the first day of such year. 
2.         Designate the Participants for each such Plan Year. 
3.         Establish the Financial Goals or other goals for the Corporation, designated Subsidiaries and Business Units and Participants for each such Plan Year. 
4.         Establish the method of calculating the Final Value of each Award. 
5.         Authorize management (a) to notify each Participant that he has been selected as a Participant and to inform him of the Financial Goals or other goals that have been established for such Plan Year and (b) to obtain from him such agreements and powers and designations of beneficiaries as it shall reasonably deem necessary for the administration of the Plan. 
C.   During any Plan Year, the Committee may, if it determines that it will promote the purpose of the Plan, designate as additional Participants any employees of the Corporation and its Subsidiaries who have been hired, transferred or promoted into a position eligible for participation in the Plan. The individual’s designation as a Participant shall be subject to the same restrictions, limitations, Financial Goals or other goals and other conditions as those held by other Participants for the same Plan Year and their participation may be made retroactive to the first day of such Plan Year. 

D.   During any Plan Year, the Committee may, if it determines it will promote the purpose of the Plan, revoke the Committee’s prior designation of an employee as a Participant under the Plan for a Plan Year. 
E.   For Participants other than Covered Employees subject to Section 5A, the Committee may revise the Financial Goals or other goals for any Plan Year to the extent the Committee, in the exercise of its absolute discretion, believes necessary to achieve the purpose of the Plan in light of any unexpected or unusual circumstances or events, including, but not limited to, changes in accounting rules, accounting practices, tax laws and regulations, or in the event of mergers, acquisitions, divestitures, unanticipated increases in Federal Deposit Insurance premiums, and extraordinary or unanticipated economic circumstances. 
F.   The Committee may delegate any of its responsibilities under this Plan to such members of management of the Corporation as the Committee shall select, provided that no such delegation shall be made that has the effect of causing an Award to a Covered Employee to fail to qualify as “performance-based compensation” for purposes of Code section 162 (m). 
Section 5.       Goals 
A.   Financial Goals for Covered Employees 
This Section 5A applies to each Participant who the Committee expects to be a Covered Employee and any other Participant, as determined by the Committee in its discretion. For each Plan Year, the Committee shall establish for each Participant who is expected to be a Covered Employee and, at the Committee’s discretion, for any other Participant one or more Financial Goals. These Financial Goals may be established in any manner the Committee deems appropriate, including achievement on an absolute or a relative basis as compared to peer groups or indexes, and these goals may be established as multiple goals or as alternative goals. The Committee shall determine the Final Value of each Award as a specified percent of the Participant’s Base Wages based on the attainment of such Financial Goals for the Plan Year. The Committee shall fix a minimum Financial Goal for the Plan Year, and the Final Value of an Award shall be equal to zero if the minimum Financial Goal is not achieved. The Committee may also fix a maximum Financial Goal and such other Financial Goals which fall between the maximum and minimum Financial Goals as the Committee shall deem appropriate, with corresponding Final Values for such Awards with respect to the Corporation. Subject to Section 6B, Awards will be determined based upon achieving or exceeding the Financial Goals set by the Committee, and the Committee may establish Financial Goals with the expectation and understanding that the Committee nevertheless will reduce a Covered Employee’s Award based on the achievement of such Financial Goals in accordance with Section 6B to a level commensurate with a Covered Employee’s achievement of other goals set by the Committee. Straight line interpolation will be used to calculate Awards when performance falls between any two specified Financial Goals. In determining whether any Financial Goal has been satisfied, the Committee may exclude any or all extraordinary items (as determined under U.S. generally accepted accounting principles), and any other unusual or non-recurring items, including but not limited to, charges or costs associated with restructurings of the Corporation, discontinued operations and the cumulative effects of accounting changes. In addition, the Committee may adjust any Financial Goal for a Plan Year as it deems equitable to recognize unusual or non-recurring events affecting the Corporation, changes in tax laws or accounting procedures and any other factors as the Committee may determine (including adjustments that would result in the Corporation’s payment of non-deductible compensation). The Committee shall identify any such exclusions and adjustments which the Committee will use to determine whether a Financial Goal has been satisfied by a Covered Employee when the Committee sets the related Financial Goals. No Participant may receive an Award in excess of $5 million for any given Plan Year. 
B.   Goals for Other Participants 
For each Plan Year, the Committee may establish for each Participant (other than a Participant who is expected to be a Covered Employee) goals in addition to or in lieu of any Financial Goals established under Section 5A based on the performance of the Corporation, a Subsidiary, a Business Unit or the individual or any combination of the foregoing. These goals may be established based on a combination of financial measurements and non-financial measurements that are deemed to further corporate objectives, including such measurements as business unit net income, revenue growth, budget management, achievement of talent management objectives, achievement of corporate objectives, individual objectives, and service quality. Straight line interpolation will be used to calculate Awards when results fall between any two specified goals established under this Section 5B. No Participant may receive an Award in excess of $5 million for any given Plan Year. 
Section 6.       Payment of Awards 
A.   Promptly after the date on which the necessary information for a particular Plan Year becomes available, the Committee, or such persons as the Committee shall designate, shall determine in accordance with Section 5 the extent to which the Financial Goals or other goals have been achieved for such Plan Year and authorize the cash payment of the Final Value of an Award, if any, to each Participant. The Committee shall review and ratify the Award determinations and shall certify such 

Award determinations in writing. Payment of Awards shall be made in the year following the relevant Plan Year and as soon as practical after the certification of Awards by the Committee, but no later than March 15 of the year following the Plan Year to which the Award relates. Each Award shall be paid in cash after deducting the amount of applicable Federal, state, and local withholding taxes of any kind required by law to be withheld by the Corporation. All Awards, whether paid currently or paid under any plan which defers payment, shall be payable out of the Corporation’s general assets. Each Participant’s claim, if any, for the payment of an Award, whether made currently or made under any plan which defers payment, shall not be superior to that of any general and unsecured creditor of the Corporation. If an error or omission is discovered in any of the determinations, the Committee shall cause an appropriate equitable adjustment to be made in order to remedy such error or omission. 
 
B.   Notwithstanding the terms of any Award and the achievement of any Performance Goals, the Committee in its sole and absolute discretion may reduce the amount of the Award payable to any Participant for any reason, recognizing on the one hand that the Committee may establish Financial Goals with the expectation and understanding that the Committee nevertheless will reduce a Covered Employee’s Award based on the achievement of such Financial Goals in accordance with this Section 6B to a level commensurate with a Covered Employee’s achievement of other goals set by the Committee and recognizing on the other hand that the Committee may determine (among other things) that the Financial Goals or other goals underlying an Award had become an inappropriate measure of achievement for a Participant, that there was a change in the Participant’s employment status, position or duties or in the Committee’s expectation of his or her level of performance or that the Participant was working for less than the entire Plan Year. 
C.   In accordance with the terms set forth in the SunTrust Banks, Inc. Deferred Compensation Plan, a Participant may elect to defer receipt of a portion of his Award, if any, for each Plan Year, and any such election shall be made in accordance with the procedures and limits established under such deferred compensation plan. 
 
Section 7.       Participation for Less Than a Full Plan Year 
A.   Except as otherwise provided in this Section 7 or in Section 8 or except as otherwise announced by the Committee, an Award to a Participant shall be forfeited if the Participant’s Employment terminates during the Plan Year to which the Award relates or during the period January 1 through the last day of February of the year immediately following the end of the Plan Year to which the Award relates. If a Participant terminates Employment during the period January 1 through the last day of February of the year immediately following the end of the Plan Year to which an Award relates, and if such termination of Employment is because of his death, his disability as described in Section 7C, or his early or normal retirement or a reduction in force which results in a severance benefit payment as described in Section 7D, then the Committee shall waive the Employment condition and authorize the payment of the Award to the Participant based on the Final Value, if any, of his Award, unless the Committee in its discretion feels the Award should be forfeited. No payment is due the Participant for any forfeited Award. 
B.   If a Participant’s Employment terminates prior to the end of any Plan Year on account of his death, the Committee shall waive the Employment condition and shall authorize the payment of an Award on behalf of such Participant in accordance with Section 10B at the end of such Plan Year based on the Proportionate Final Value, if any, of his Award, unless the Committee in its discretion feels the Award should be forfeited. 
C.   If a Participant’s Employment terminates prior to the end of any Plan Year on account of disability under a long-term disability plan maintained by the Corporation or a Subsidiary, the Committee shall waive the Employment condition and shall authorize the payment of an Award to such Participant at the end of such Plan Year based on the Proportionate Final Value, if any, of his Award, unless the Committee in its discretion feels the Award should be forfeited. 
D.   If a Participant’s Employment terminates prior to the end of any Plan Year on account of his early retirement (age 55 plus 5 years of vesting service) or normal retirement (the later of age 65 or 5 years of vesting service) as determined under the terms of the SunTrust Banks, Inc. Retirement Plan, or on account of a reduction in force which results in a severance benefit payment to the Participant pursuant to the terms of the SunTrust Banks, Inc. Severance Pay Plan or any successor to such plan, the Committee shall waive the Employment condition and shall authorize the payment of an Award to such Participant at the end of such Plan Year based on the Proportionate Final Value, if any, of his Award, unless the Committee in its discretion feels the Award should be forfeited. 
 
Section 8.       Premature Satisfaction of Plan Conditions 
A.   In the event a Change in Control occurs prior to the end of any Plan Year, the Committee shall waive any and all Plan conditions and shall authorize the payment of an Award immediately to each Participant based on the Termination Value, if any, of his Award; provided, however, if an Award is then subject to Code section 409A, the payment of such Award 

pursuant to this Section 8A shall not be made unless the Change in Control also constitutes, and such payment is made upon, a change in the ownership or effective control of the Corporation or in the ownership of a substantial portion of the assets of the Corporation within the meaning of Code section 409A(a)(2)(A)(v). 
B.   If a tender or exchange offer is made other than by the Corporation for shares of the Corporation’s stock and results in a “change of ownership or control” within the meaning of Code section 162(m) prior to the end of any Plan Year, the Committee may waive any and all Plan conditions and authorize, at any time after the change in ownership or control and within thirty (30) days following completion of such tender or exchange offer, the payment of an Award immediately to each Participant based on the Termination Value, if any, of his Award; provided, however, if an Award is then subject to Code section 409A, the payment of such Award pursuant to this Section 8B shall not be made unless the tender or exchange offer also constitutes, and such payment is made upon, a change in the ownership or effective control of the Corporation or in the ownership of a substantial portion of the assets of the Corporation within the meaning of Code section 409A(a)(2)(A)(v). 
C.   A Plan Year for an Award shall terminate upon the Committee’s authorization of the payment of such Award during such Plan Year pursuant to this Section 8 and no further payments shall be made for such Plan Year with respect to such Award. 
D.   If vesting of an Award is contingent on the Participant’s Employment during the period January 1 through the last day of February of the year immediately following the end of the Plan Year to which an Award relates, and if a Change in Control occurs during that period or if a tender or exchange offer is made by another corporation during that period, as described in Section 8A or 8B above, the Committee shall, in the event of such Change in Control, or may, at any time after the change in ownership or control and within thirty (30) days following completion of such tender or exchange offer, authorize the payment, at Final Value, of all outstanding Awards to Participants in Employment on the last day of the Plan Year to which the Awards relate. If any Award payable under this Section 8D is then subject to Code section 409A, no payment shall be made unless the Change in Control or such tender or exchange offer, as applicable, also constitutes, and such payment is made upon, a change in the ownership or effective control of the Corporation or in the ownership of a substantial portion of the assets of the Corporation within the meaning of Code section 409A(a)(2)(A)(v). 
Section 9.    Recovery of Awards
By accepting an Award, each Participant agrees to return to the Corporation (or agree to the cancellation of)   all or a portion of any Awards, both paid and unpaid, previously granted to such Participant under the Plan (including forfeiture of amounts voluntarily deferred  into the SunTrust Banks, Inc. Deferred Compensation Plan) based upon a determination made by the Committee  pursuant to Subsections A and B below.  The Committee shall impose a clawback authorized below only to the extent determined appropriate by the Committee. All determinations by the Committee shall be final and binding. All reference to the “Committee” in this Section 9 shall include the Committee and the Committee’s designee..
A.Miscalculation of Performance Metric.  If the Committee determines that a financial metric upon which an Award was based was calculated incorrectly, whether or not the Corporation is required to restate its financial statements and without regard to whether such miscalculation was due to fraud or intentional misconduct, the Committee may require reimbursement of all or part of an Award previously paid to a Participant (including forfeiture of amounts voluntarily deferred into the SunTrust Banks, Inc. Deferred Compensation Plan) and/or authorize the cancellation of unpaid Awards in the amount by which any such Award exceeded a lower payment that would have been made based on the restated financial results. In addition, the Awards are subject to the clawback requirements of (i) Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (regarding recovery of erroneously awarded compensation) and implementing rules and regulations thereunder, (ii) similar rules under the laws of other jurisdictions and (iii) policies adopted by the Corporation to implement such requirements, all to the extent determined by the Committee in its discretion to be applicable to any such Participant. 

B.Detrimental Conduct.  If the Committee in its sole discretion determines that a Participant has engaged in Detrimental Conduct, then such Participant will not be eligible to receive any Awards under the Plan and will be required to repay to the Corporation all or a portion of the Awards previously paid (including forfeiture of amounts voluntarily deferred into the SunTrust banks, Inc. Deferred Compensation Plan) and/or will be subject to cancellation of unpaid Awards to the extent determined appropriate by the Committee. “Detrimental Conduct” means any one of the following: (1) the commission of an act of fraud or dishonesty in the course of the Participants employment; (2) improper conduct by the Participant including, but not limited to, fraud, unethical conduct, falsification of the Corporation’s records, unauthorized removal of  Corporation property or information, theft, violent acts or threats of violence, unauthorized possession of controlled substances on the property of  the Corporation, conduct causing reputational harm to the Corporation or its clients, or the use of Corporation property, facilities or services for unauthorized or illegal purposes; (3) the improper disclosure by the Participant of proprietary, privileged 

or confidential information of the Corporation or a Corporation client or former client or breach of a fiduciary duty owed to the Corporation or a Corporation client or former client; (4) the commission of a criminal act by the Participant, whether or not performed in the workplace, that constitutes a felony or a crime of comparable magnitude under applicable law as determined by the Corporation in its sole discretion, or that subjects, or if generally known, would subject the Corporation to public ridicule or embarrassment; (5) the commission of an act or omission which causes the Participant or the Corporation to be in violation of federal or state securities laws, rules or regulations, and/or the rules of any exchange or association of which the Corporation is a member, including statutory disqualification; (6) the Participant's failure to perform the duties of Participant's job which are set forth in Participant's written job description, written operating policies, inBalance goals or other written document available to Participant and which in each case SunTrust views as being material to Participant's position and the overall business of SunTrust under circumstances where such failure is detrimental to the Corporation; (7) the material breach of a written policy applicable to employees of the Corporation including, but not limited to, the SunTrust Code of Business Conduct and Ethics; (8) an act or omission by the Participant which results or is intended to result in personal gain at the expense of the Corporation; or (9) an other act or omission which constitutes “cause” as that term is defined in an applicable offer letter or other applicable employment agreement between the Corporation and the Participant.
Section 10.       Non-Transferability of Rights and Interests 
A.   A Participant may not alienate, assign, transfer or otherwise encumber his rights and interests under this Plan and any attempt to do so shall be null and void. 
B.   In the event of a Participant’s death, the Committee shall authorize payment of any Award due a Participant under Section 7B to the Participant’s designated beneficiary as specified or, in the absence of such written designation or its effectiveness, then to his estate. Any such designation may be revoked and a new beneficiary designated by the Participant by written instrument delivered to the Committee. 
Section 11.       Limitation of Rights 
Nothing in this Plan shall be construed to give any employee of the Corporation or a Subsidiary any right to be selected as a Participant or to receive an Award or to be granted an Award other than as is provided herein. Nothing in this Plan or any agreement executed pursuant hereto shall be construed to limit in any way the right of the Corporation or a Subsidiary to terminate a Participant’s employment at any time, without regard to the effect of such termination on any rights such Participant would otherwise have under this Plan, or give any right to a Participant to remain employed by the Corporation or a Subsidiary in any particular position or at any particular rate of remuneration.

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