Common use of Significant Actions Clause in Contracts

Significant Actions. (a) Until the First Threshold Date, neither the Company nor any member of the Company Group shall take, or be permitted to take, any of the following actions without the written approval of RBS: (i) establish, adopt or approve any annual budget of the Company for any fiscal year; (ii) approve or adopt any amendment or modification to any approved annual budget of the Company to the extent presented to the Company Board, or any committee thereof, for approval; (iii) (A) terminate the Company’s Chief Executive Officer, Chief Financial Officer or Chief Risk Officer or (B) appoint a new Chief Executive Officer, Chief Financial Officer or Chief Risk Officer of the Company; or (iv) enter into any agreement to do any of the foregoing in Section 5.05(a)(i)-(iii). (b) Until the Second Threshold Date, neither the Company nor any member of the Company Group shall take, or be permitted to take, any of the following actions without the written approval of RBS: (i) make material changes to the scope or nature of the Company Business; (ii) enter into any direct or indirect transactions between, on the one hand, the Company or any Subsidiary of the Company and, on the other hand, (A) any Significant Stockholder or Affiliate or related Person of any Significant Stockholder (except for any transactions with such persons as clients or customers of the Company in the ordinary course of business of the Company Business on terms that are substantially the same as those prevailing at the time for comparable ordinary course transactions with or involving unaffiliated clients or customers of the Company or any Subsidiary), (B) any Affiliate of the Company (other than any wholly owned Subsidiary of the Company) or any joint venture (whether or not such joint venture is subject to RBS approval pursuant to Section 5.05(b)(v)) (except for any transactions where any such Affiliate or such joint ventures are clients or customers of the Company in the ordinary course of business of the Company Business on terms that are substantially the same as those prevailing at the time for comparable ordinary course transactions with or involving unaffiliated clients or customers of the Company or any Subsidiary); provided that any transaction to which clause (C) below is applicable shall be reviewed under that clause, or (C) any officer or director of the Company or any Subsidiary of the Company, including the modification or amendment of any existing agreement or arrangement (other than ordinary course remuneration or benefit matters, including the making of any loans to officers or directors in accordance with applicable Law, including Regulation O of the Federal Reserve Board (12 C.F.R. Part 215)); (iii) any merger, consolidation, business combination or similar transaction (or any amendment to or termination of an agreement to enter into such a transaction) involving the Company, CBNA or CBPA, on the one hand, and any other Person, on the other hand; provided that any transaction to which clause (iv) or (v) below is applicable shall be reviewed under that clause; (iv) any acquisition, transfer or disposition by the Company or any Subsidiary of the Company of securities, assets or liabilities, whether in a single transaction or series of related transactions (and whether effected by way of merger, consolidation, purchase, sale or other form of transfer) with a purchase price (in excess of book value) of above $500 million or where the book value of securities, assets or liabilities so acquired, transferred or disposed exceeds $4 billion; provided that: (A) subject to Section 5.06, during the period beginning on the Effective Date and ending on the first date on which RBS would no longer be considered to exercise control over the Company for EU regulatory purposes (with control being as defined in Article 3(2) of Council Regulation 139/2004/EC of 20 January 2004 on the control of concentrations between undertakings) (the “EU Control Period”), in addition to any other approval of RBS required under this Section 5.05(b)(iv), RBS’s written approval shall be required for (i) any acquisition by the Company or any of its Subsidiaries of any Financial Institution or any package of assets and liabilities that together constitutes a business equivalent to a Financial Institution or (ii) any other acquisitions by the Company or any of its Subsidiaries the purpose of which is to expand its activities outside of its business model, if the aggregate purchase price (in excess of book value) of all acquisitions described in (i) and (ii) above during the EU Control Period exceeds $125 million in the aggregate for all such acquisitions; and (B) (x) any acquisition by the Company or any wholly owned Subsidiary of the Company of securities, assets or liabilities of the Company or any wholly owned Subsidiary of the Company and (y) any disposition of securities, assets or liabilities by the Company or any wholly owned Subsidiary of the Company to the Company or any wholly owned Subsidiary of the Company shall not require such written approval of RBS; (v) entry into any joint venture or similar transaction with any Person (other than the Company or a wholly owned Subsidiary of the Company) where any such joint venture or other entity formed by such transaction has assets or liabilities with a book value in excess of $4 billion; (vi) the issuance of any Capital Stock of the Company or of any Subsidiary of the Company, other than (A) issuances to the Company or any of the Company’s wholly owned Subsidiaries, (B) issuances of the capital stock of a newly formed joint venture entity or the entity in a similar transaction otherwise permitted pursuant to Section 5.05(b)(v) to the parties to the joint venture or similar transaction; or (C) (1) any proposed issuance further to the grants of incentive- or equity-based awards in respect of Common Stock or (2) issuances of Common Stock upon the exercise of stock options or stock appreciation rights or the vesting, delivery or settlement of any equity-based awards in respect of Capital Stock of the Company (including Common Stock) or any Subsidiary of the Company (including issuances pursuant to sales to satisfy taxes relating to the exercise, vesting, delivery or settlement thereof), in each case under these sub-clauses (C)(1) and (C)(2), to a current, new, or former officer, director, employee or consultant of the Company or any member of the Company Group pursuant to any incentive or equity compensation plan, employment agreement or other arrangement approved by the Company Board or a duly authorized committee thereof and provided that (x) the aggregate number of shares of Common Stock of the Company underlying any such equity-based awards shall not exceed the number of shares of Common Stock equal to 12 percent of the number of shares of Common Stock of the Company issued and outstanding as of the pricing date of the IPO (such number of shares of Common Stock shall be inclusive of any “substitute awards” (as defined under the terms of any applicable plan) and shall be subject to adjustment, if any, under the terms of the applicable plan) and (y) any such grants or issuances shall be in compliance with the Remuneration Governance Procedures; (vii) any increase in the limits under, or changes in the metrics relating to, the Company Funding and Liquidity Metrics, provided that, notwithstanding Section 5.07, for so long as an individual designated by RBS is a member of the Company ALCO pursuant to Section 5.04(d), any approval of RBS required under this Section 5.05(b)(vii) shall be evidenced in a writing signed by such member of the Company ALCO; (viii) the commencement of any liquidation, dissolution or voluntary bankruptcy, administration, recapitalization or reorganization of the Company or any of its Subsidiaries in any form of transaction, making arrangements with creditors, or consenting to the entry of an order for relief in any involuntary case, or taking the conversion of an involuntary case to a voluntary case, or consenting to the appointment or taking possession by a receiver, trustee or other custodian for all or substantially all of its property, or seeking the protection of any applicable bankruptcy or insolvency law, other than any such actions with respect to a non-material Subsidiary where, in the good faith judgment of the Board, the maintenance or preservation of such Subsidiary is no longer desirable in the conduct of the Company Business; or (ix) the entering into of any agreement to do any of the foregoing in Section 5.05(b)(i)-(viii). (c) Until the Final Withdrawal Date, the Company Group Policy Framework shall be amended only upon the mutual consent of the Parties (with the written consent of one Policy Representative of each of the Company and RBS evidencing the consent of the Company and RBS, respectively); provided that, after the First Threshold Date, the consent of RBS shall not be required for any de minimis amendment to a policy within the Company Group Policy Framework, provided, further, that the Company shall deliver written notice to each of RBS’s Policy Representatives of any proposed amendment to any policy within the Company Group Policy Framework at least seven (7) Business Days before such amendment is sought to be adopted, such notice to specify whether or not the Company considers such amendment to be de minimis. (d) Until the Deconsolidation Date, neither the Company nor any member of the Company Group shall sell, assign, dispose of or otherwise transfer the economic interest in the securities described on Schedule 5.05(d) hereto or any participation or interest therein (whether legal, beneficial or otherwise), whether directly or indirectly (including pursuant to a derivative transaction), or agree or commit to do any of the foregoing, unless the Company delivers written notice to RBS of any such transaction at least five (5) Business Days before consummating such transaction or agreeing to consummate such transaction. (e) Neither the Company nor any member of the Company Group shall sell, assign, dispose of or otherwise transfer the economic interest in any securities classified in the consolidated financial statements of the Company as held-to-maturity securities or any participation or interest therein (whether legal, beneficial or otherwise), whether directly or indirectly (including pursuant to a derivative transaction) unless the Company delivers written notice to RBS of any such transaction at least five (5) Business Days before consummating such transaction or agreeing to consummate such transaction, such notice to include a confirmation from the Company Auditors that such transaction will not require the reclassification of the Company’s portfolio of held-to-maturity securities under U.S. GAAP or IFRS.