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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 13D
Under the Securities Exchange Act of 1934
(AMENDMENT NO. 1)
BB&T Financial Corporation
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(Name of Issuer)
Common Stock, par value $2.50
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(Title of Class of Securities)
00005527L1
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(CUSIP Number)
David L. Craven
Southern National Corporation
200 West 2nd Street
(910) 773-7200
Winston-Salem, North Carolina 27101-4036
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
November 14, 1994
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D and is filing
this schedule because of Rule 13d-1(b)(3) or (4), check the following box [_].
Check the following box if a fee is being paid with the statement [ ]. (A fee is
not required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7).
(Continued on following pages)
Page 1 of 5 Pages
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CUSIP NO. 00005527L1 13D PAGE 2 OF 5 PAGES
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NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Southern National Corporation
I.R.S. No. 56-0939887
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
2 (a) [_]
(b) [_]
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SEC USE ONLY
3
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SOURCE OF FUNDS
4
WC
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CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
5 PURSUANT TO ITEMS 2(d) OR 2(e) [_]
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CITIZENSHIP OR PLACE OF ORGANIZATION
6
North Carolina Corporation
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SOLE VOTING POWER 0*
7
NUMBER OF -----------------------------------------------------------
SHARES SHARED VOTING POWER 0*
BENEFICIALLY 8
OWNED BY
EACH -----------------------------------------------------------
REPORTING SOLE DISPOSITIVE POWER 0*
PERSON 9
WITH
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SHARED DISPOSITIVE POWER 0*
10
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
11 REPORTING PERSON
0*
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CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
12 EXCLUDES CERTAIN SHARES
[X]**
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
19.9%*
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TYPE OF REPORTING PERSON
14
CO
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*Pursuant to a Stock Option Agreement, dated as of July 29, 1994, BB&T has
granted an option to Southern National Corporation, exercisable in certain
events, to purchase up to 7,217,932 shares of BB&T Common Stock (representing
approximately 19.9% of BB&T Common Stock).
**The aggregate amount in row (11) excludes certain shares deemed to be
beneficially owned by certain executive officers and directors of Southern
National Corporation and set forth on Schedule A attached hereto.
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ITEM 4. Purpose of Transaction.
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Item 4 of Schedule 13D is supplemented and amended as follows:
BB&T Financial Corporation ("BB&T") and Southern National Corporation
("SNC") entered into an Amended and Restated Agreement and Plan of
Reorganization (the "Amended Reorganization Agreement"), dated as of October 22,
1994, which amended and restated their Agreement and Plan of Reorganization
(the "Reorganization Agreement"), dated as of July 29, 1994. BB&T and SNC also
adopted an Amended and Restated Plan of Merger (the "Amended Plan") which
amended and restated their plan of merger (the "Plan"), dated as of July 29,
1994. The Amended Reorganization Agreement and the Amended Plan are herein
sometimes referred to collectively as the "Amended Merger Agreements" and the
Reorganization Agreement and the Plan are herein sometimes referred to
collectively as the "Merger Agreements." The Merger Agreements provided for the
merger of SNC with and into BB&T under the name "Southern National Corporation."
The Amended Merger Agreements provide for the merger (the "Merger") of BB&T with
and into SNC under the name "Southern National Corporation." Other than as
described in this Amendment No. 1 to Schedule 13D, the Amended Merger Agreements
are substantially similar to the Merger Agreements as described in Schedule 13D.
Under the Amended Plan, each issued and outstanding share of
common stock of BB&T, par value $2.50 per share (the "BB&T Common Stock"), on
the effective date of the Merger will be converted into 1.45 shares of common
stock of SNC, par value $5.00 per share (the "SNC Common Stock"). The shares of
issued and outstanding SNC 6 3/4% Cumulative Convertible Preferred Stock, Series
A, par value $5.00 per share (the "SNC Series A Preferred Stock"), on the
effective date of the Merger will continue to be shares of capital stock of SNC.
The Amended Reorganization Agreement provides that after the effective
date of the Merger, the Board of Directors of SNC (after such time, the
"Continuing Corporation") shall consist of twelve persons named by the Board of
Directors of SNC.
(Page 3 of 5)
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ITEM 6. Contracts, Arrangements or Understandings with Respect to Securities of
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the Issuer.
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Item 6 of Schedule 13D is supplemented and amended as follows:
Amended Merger Agreements
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Set forth below is a description of selected provisions of the Amended
Merger Agreements that differ from such provisions of the Merger Agreements that
were described in the Schedule 13D filed on August 8, 1994. Such description
is qualified in its entirety by reference to the copies of the Amended Merger
Agreements filed as Exhibits hereto, which are incorporated by reference herein
and made a part hereof.
The Amended Plan provides that, on the effective date of the Merger,
BB&T will be merged with and into SNC under the name "Southern National
Corporation" and each share of BB&T Common Stock outstanding immediately prior
to such date (with certain exceptions) will be converted into 1.45 shares of SNC
Common Stock. Each share of issued and outstanding SNC Series A Preferred Stock
on the effective date of the Merger will continue to be a share of capital stock
of the Continuing Corporation. The Amended Plan also provides that on the
effective date of the Merger BB&T's obligations with respect to stock options
granted under its stock option plans shall be assumed by the Continuing
Corporation, and each stock option outstanding under such plans shall become the
right to receive, upon payment of the adjusted exercise price (which shall equal
the exercise price per share for the options immediately prior to the Merger,
divided by 1.45), the number of shares of SNC Common Stock the option holder
would have received pursuant to the Merger if he or she had exercised his or her
options immediately prior thereto. The number of shares covered by and the
exercise price of outstanding options to purchase shares of SNC Common Stock
granted under SNC's option plans will be unaffected by the Merger.
ITEM 7. Material to be Filed as Exhibits.
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Filed herewith are these exhibits:
1. Amended and Restated Agreement and Plan of Reorganization, dated as
of October 22, 1994.
2. Amended and Restated Plan of Merger, dated as of October 22, 1994.
(Page 4 of 5)
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SIGNATURES
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After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this Amendment No. 1 to Schedule 13D
is true, complete and correct.
Dated: November 28, 1994 SOUTHERN NATIONAL CORPORATION
By: /s/ David L. Craven
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David L. Craven, Secretary
(Page 5 of 5)
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EXHIBIT INDEX
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Exhibit 1 Amended and Restated Agreement and Plan of Reorganization, dated as
of October 22, 1994.
Exhibit 2 Amended and Restated Plan of Merger, dated as of October 22, 1994.
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EXHIBIT 1
AMENDED AND RESTATED
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION ("Reorganization Agreement" or
"Agreement") dated as of July 29, 1994, and amended and restated as of October
22, 1994, among BB&T FINANCIAL CORPORATION ("BB&T"), a North Carolina
corporation having its principal executive offices at 223 West Nash Street,
Wilson, North Carolina 27893 and SOUTHERN NATIONAL CORPORATION ("SNC"), a
North Carolina corporation having its principal executive offices at 500 North
Chestnut Street, Lumberton, North Carolina 28358.
WITNESSETH
WHEREAS, the parties hereto desire to combine their respective businesses;
and
WHEREAS, in furtherance of the combination of their respective businesses,
the parties hereto desire that BB&T shall be merged ("Merger") with and into
SNC, under the name "Southern National Corporation" (SNC as it will exist from
and after the Effective Date being referred to herein as the "Continuing
Corporation"), and that all of the issued and outstanding shares of common
stock of BB&T (other than shares held by dissenting shareholders and
fractional share interests) shall be converted into and exchanged for shares
of common stock of the Continuing Corporation and all outstanding options to
acquire common stock of BB&T shall be converted into options to acquire common
stock of SNC and all of the issued and outstanding shares of capital stock of
SNC shall continue to be issued and outstanding shares of capital stock of the
Continuing Corporation, all pursuant to a Plan of Merger substantially in the
form attached hereto as Annex A ("Plan of Merger"); and
WHEREAS, in furtherance of the combination of their respective businesses,
the parties hereto contemplate that, as soon as practicable after the Merger,
Southern National Bank of North Carolina ("SNBNC"), a wholly owned subsidiary
of SNC, shall be merged ("North Carolina Bank Merger") with and into Branch
Banking and Trust Company ("BB&T-NC"), a wholly owned subsidiary of BB&T,
under the name "Branch Banking and Trust Company" (BB&T-NC as it will exist
from and after the consummation of the North Carolina Bank Merger being
referred to herein as the "NC Continuing Bank"); and
WHEREAS, in furtherance of the combination of their respective businesses,
the parties hereto contemplate that as soon as practicable after the Merger,
Southern National Bank of South Carolina ("SNBSC"), a wholly owned subsidiary
of SNC, shall be merged ("South Carolina Bank Merger") with and into Branch
Banking and Trust Company of South Carolina ("BB&T-SC"), an indirect wholly
owned subsidiary of BB&T, under the name "Branch Banking and Trust Company of
South Carolina" (BB&T-SC as it will exist from and after the consummation of
the South Carolina Bank Merger being referred to herein as the "SC Continuing
Bank"); and
WHEREAS, the parties hereto desire to provide for certain undertakings,
conditions, representations, warranties and covenants in connection with the
transactions contemplated hereby; and
WHEREAS, the parties to the Reorganization Agreement have decided to amend
and restate the Reorganization Agreement as provided herein;
NOW, THEREFORE, in consideration of the premises and of the mutual
representations, warranties and covenants herein contained and intending to be
legally bound hereby, the parties hereto do hereby agree as follows:
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ARTICLE 1.
Definitions
1.1. "Bank Holding Company Act" shall mean the Bank Holding Company Act of
1956, as amended.
1.2. "Bank Merger Agreements" shall have the meaning set forth in Section 4.6
hereof.
1.3. "Bank Mergers" shall mean the North Carolina Bank Merger and the South
Carolina Bank Merger.
1.4. "BB&T Common Stock" shall have the meaning set forth in Section 3.1.
1.5. "BB&T DRP" shall mean BB&T's Dividend Reinvestment and Shareholders
Savings Service.
1.6. "BB&T ERISA Affiliate" shall mean any trade or business, whether or not
incorporated, that together with BB&T or any BB&T Subsidiary would be deemed a
"single employer" within the meaning of Section 4001(b) of ERISA.
1.7. "BB&T Financial Statements" shall mean (i) the consolidated balance
sheets of BB&T as of December 31, 1993 and 1992 and the related consolidated
statements of income, cash flows and changes in shareholders' equity (including
related notes, if any) for each of the three years ended December 31, 1993,
1992 and 1991 as filed by BB&T in SEC Documents and (ii) the consolidated
balance sheets of BB&T and related consolidated statements of income, cash
flows and changes in shareholders' equity (including related notes, if any) as
filed by BB&T in SEC Documents with respect to periods ended subsequent to
December 31, 1993.
1.8. "BB&T Option Agreement" shall mean the Stock Option Agreement dated as
of the date hereof between BB&T and SNC with regard to BB&T Common Stock which
shall be executed immediately after execution of this Reorganization Agreement.
1.9. "BB&T Preferred Stock" shall have the meaning set forth in Section 3.1.
1.10. "BB&T Subsidiary" shall have the meaning set forth in Section 3.3.
1.11. "Closing Date" shall mean the date specified pursuant to Section 4.11
hereof as the date on which the parties hereto shall close the transactions
contemplated herein.
1.12. "Code" shall mean the Internal Revenue Code of 1986, as amended.
1.13. "Commission" shall mean the Securities and Exchange Commission.
1.14. "Communication" shall have the meaning set forth in Section 2.24(e)(i).
1.15. "Continuing Corporation Common Stock" shall mean SNC Common Stock from
and after the Effective Date.
1.16. "Effective Date" shall mean the date specified pursuant to Section 4.11
hereof as the effective date of the Merger.
1.17. "Environmental Claim" shall have the meaning set forth in Section
2.24(e)(ii).
1.18. "Environmental Laws" shall have the meaning set forth in Section
2.24(e)(iii).
1.19. "ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.
1.20. "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
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1.21. "FDIA" shall mean the Federal Deposit Insurance Act, as amended.
1.22. "FDIC" shall mean the Federal Deposit Insurance Corporation.
1.23. "Federal Reserve Board" shall mean the Board of Governors of the
Federal Reserve System.
1.24. "FRB Richmond" shall mean the Federal Reserve Bank of Richmond.
1.25. "Materials of Environmental Concern" shall have the meaning set forth
in Section 2.24(e)(iv).
1.26. "OREO" shall mean real and personal property assets acquired as a
result of foreclosure, deeded in lieu of foreclosure or any other method in
satisfaction of indebtedness.
1.27. "PBGC" shall mean the Pension Benefit Guaranty Corporation.
1.28. "Previously Disclosed" shall mean disclosed in (i) an SEC Document
delivered by one party to the other on or prior to the execution of this
Reorganization Agreement or (ii) a letter from the party delivered and dated
not later than August 15, 1994 making such disclosure specifically referring to
this Agreement and delivered to the other party, provided that such letter (x)
is not materially inconsistent with a letter delivered to the other party and
dated on or prior to the date of this Agreement ("Initial Letter") and (y) does
not by its contents demonstrate that the Initial Letter contained a material
omission or misstatement. Any matter included, whether aggregated or not, in
SNC Financial Statements or BB&T Financial Statements, as the case may be,
shall be deemed to be Previously Disclosed.
1.29. "Proxy Statement" shall mean the joint proxy statement/prospectus (or
similar documents) together with any supplements thereto sent to the
shareholders of BB&T and/or SNC to solicit their votes in connection with this
Agreement and the Plan of Merger.
1.30. "Registration Statement" shall mean the registration statement with
respect to the Continuing Corporation Common Stock to be issued in connection
with the Merger as declared effective by the Commission under the Securities
Act.
1.31. "Rights" shall mean warrants, options, rights, convertible securities
and other arrangements or commitments which obligate an entity to issue or
dispose of any of its capital stock.
1.32. "SEC Documents" shall mean all reports and registration statements
filed, or required to be filed, by a party hereto pursuant to the Securities
Laws.
1.33. "Securities Act" shall mean the Securities Act of 1933, as amended.
1.34. "Securities Laws" shall mean the Securities Act; the Exchange Act; the
Investment Company Act of 1940, as amended; the Investment Advisers Act of
1940, as amended; the Trust Indenture Act of 1939, as amended; and the rules
and regulations of the Commission promulgated thereunder.
1.35. "SNC Common Stock" shall have the meaning set forth in Section 2.1.
1.36. "SNC DRP" shall mean SNC's Dividend Reinvestment Plan.
1.37. "SNC ERISA Affiliate" shall mean any trade or business, whether or not
incorporated, that together with SNC or any SNC Subsidiary would be deemed a
"single employer" within the meaning of Section 4001(b) of ERISA.
1.38. "SNC Financial Statements" shall mean (i) the consolidated balance
sheets of SNC as of December 31, 1993 and 1992 and the related consolidated
statements of income, cash flows and changes in shareholders' equity (including
related notes, if any) for each of the three years ended December 31, 1993,
1992 and 1991
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as filed by SNC in SEC Documents and (ii) the consolidated balance sheets of
SNC and related consolidated statements of income, cash flows and changes in
shareholders' equity (including related notes, if any) as filed by SNC in SEC
Documents with respect to periods ended subsequent to December 31, 1993.
1.39. "SNC Option Agreement" shall mean the Stock Option Agreement dated as
of even date herewith between SNC and BB&T with regard to SNC Common Stock,
which shall be executed immediately after execution of this Reorganization
Agreement.
1.40. "SNC Preferred Stock" shall have the meaning set forth in Section 2.1.
1.41. "SNC Series A Preferred Stock" shall have the meaning set forth in
Section 2.1.
1.42. "SNC Subsidiary" shall have the meaning set forth in Section 2.3.
1.43. "State Boards" shall mean the North Carolina State Banking Commission,
the Savings Institutions Division of the North Carolina Department of Commerce,
the Bureau of Financial Institutions of the Virginia Corporation Commission and
the South Carolina State Board of Financial Institutions.
Other terms used herein are defined in the preamble and the recitals to this
Reorganization Agreement.
ARTICLE 2.
Representations and Warranties of SNC
SNC hereby represents and warrants to BB&T as follows:
2.1. CAPITAL STRUCTURE OF SNC
The authorized capital stock of SNC consists of (i) 120,000,000 shares of
common stock, par value $5.00 per share ("SNC Common Stock"), of which
43,385,610 shares were issued and outstanding and no shares were held in
treasury as of June 30, 1994; and (ii) 5,000,000 shares of preferred stock,
$5.00 par value ("SNC Preferred Stock"), of which 770,000 shares were
designated as 6 3/4% Cumulative Convertible Preferred Stock, Series A ("SNC
Series A Preferred Stock") and were issued and outstanding as of June 30, 1994.
All outstanding shares of SNC Common Stock have been duly authorized and
validly issued, and are fully paid and nonassessable. There are no Rights
authorized, issued or outstanding with respect to the capital stock of SNC and
no written or oral plans, understandings, commitments or contracts to which SNC
or, to SNC's knowledge, any of its affiliates is subject with respect to the
issuance, voting or sale of issued or unissued shares of SNC's capital stock,
except as Previously Disclosed. None of the shares of SNC's capital stock has
been issued in violation of the preemptive rights of any person. The shares of
Continuing Corporation Common Stock to be issued in connection with the Merger
have been duly authorized and, when issued in accordance with the terms of this
Agreement and the Plan of Merger, will be validly issued, fully paid and
nonassessable.
2.2. ORGANIZATION, STANDING AND AUTHORITY OF SNC
SNC is a duly organized corporation, validly existing and in good standing
under the laws of the State of North Carolina. SNC (i) has full corporate power
and authority to carry on its business as now conducted and (ii) is duly
qualified to do business in the states of the United States and foreign
jurisdictions where its ownership or leasing of property or the conduct of its
business requires such qualification and where failure to so qualify would have
a material adverse effect on the financial condition, results of operations or
business of SNC on a consolidated basis. SNC has all federal, state, local and
foreign governmental authorizations and licenses necessary for it to own and
lease its properties and assets and to carry on its business as it is now being
conducted. SNC has delivered to BB&T a true, complete and correct copy of its
Articles of
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Incorporation and of its Bylaws, each as in effect on the date of this
Agreement. SNC is registered as a bank holding company under the Bank Holding
Company Act.
2.3. OWNERSHIP OF THE SNC SUBSIDIARIES; CAPITAL STRUCTURE OF THE SNC
SUBSIDIARIES
SNC does not own, directly or indirectly, 5% or more of the outstanding
capital stock or other voting securities of any corporation, bank or other
organization actively engaged in business except as Previously Disclosed
(collectively the "SNC Subsidiaries" and each individually an "SNC
Subsidiary"). The outstanding shares of capital stock of each SNC Subsidiary
have been duly authorized and are validly issued, and are fully paid and
(subject to 12 U.S.C. (S)55) nonassessable and all such shares are directly or
indirectly owned by SNC free and clear of all liens, claims and encumbrances.
No Rights are authorized, issued or outstanding with respect to the capital
stock of any SNC Subsidiary and there are no agreements, understandings or
commitments relating to the right of SNC to vote or to dispose of said shares.
None of the shares of capital stock of any SNC Subsidiary has been issued in
violation of the preemptive rights of any person.
2.4. ORGANIZATION, STANDING AND AUTHORITY OF THE SNC SUBSIDIARIES
Each SNC Subsidiary is a duly organized corporation, national banking
association, savings institution or savings bank, validly existing and in good
standing under applicable laws. Each SNC Subsidiary (i) has full corporate
power and authority to own, lease and operate its properties and to carry on
its business as now conducted except where the absence of such power or
authority would not have a material adverse effect on the financial condition,
results of operations or business of SNC on a consolidated basis, and (ii) is
duly qualified to do business in the states of the United States and foreign
jurisdictions where its ownership or leasing of property or the conduct of its
business requires such qualification and where failure to so qualify would have
a material adverse effect on the financial condition, results of operations or
business of SNC on a consolidated basis. Each SNC Subsidiary has all federal,
state, local and foreign governmental authorizations and licenses necessary for
it to own or lease its properties and assets and to carry on its business as it
is now being conducted, except where failure to obtain such authorization or
license would not have a material adverse effect on the business of such SNC
Subsidiary.
2.5. AUTHORIZED AND EFFECTIVE AGREEMENT
(a) SNC has all requisite corporate power and authority to enter into, adopt
and perform all of its obligations under this Reorganization Agreement, the
Plan of Merger and the SNC Option Agreement. The execution, adoption and
delivery of this Reorganization Agreement, the Plan of Merger and the SNC
Option Agreement and the consummation of the transactions contemplated hereby
and thereby have been duly and validly authorized by all necessary corporate
action in respect thereof on the part of SNC, except that the affirmative vote
of the shareholders of SNC is required to adopt the Plan of Merger, pursuant to
the North Carolina Business Corporation Act, as amended, and SNC's Articles of
Incorporation and Bylaws.
(b) This Reorganization Agreement, the SNC Option Agreement and the Plan of
Merger constitute legal, valid and binding obligations of SNC enforceable
against it in accordance with their respective terms, subject as to
enforceability, to bankruptcy, insolvency and other laws of general
applicability relating to or affecting creditors' rights and to general equity
principles.
(c) Except as Previously Disclosed, neither the execution, adoption and
delivery of this Reorganization Agreement, the Plan of Merger or the SNC Option
Agreement nor consummation of the transactions contemplated hereby or thereby,
nor compliance by SNC with any of the provisions hereof or thereof shall (i)
conflict with or result in a breach of any provision of the Articles of
Incorporation, Articles of Association or Bylaws of SNC or any SNC Subsidiary,
(ii) constitute or result in a breach of any term, condition or provision of,
or constitute a default under, or give rise to any right of termination,
cancellation or acceleration
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with respect to, or result in the creation of any lien, charge or encumbrance
upon any property or asset of SNC or any SNC Subsidiary pursuant to, any note,
bond, mortgage, indenture, license, agreement or other instrument or
obligation, or (iii) subject to the receipt of all required regulatory
approvals, violate any order, writ, injunction, decree, statute, rule or
regulation applicable to SNC or any SNC Subsidiary.
(d) Except for consents and approvals of or filings with the Federal Reserve
Board, the FDIC, the Commission and the State Boards and any appropriate state
securities authorities, no consents or approvals of or filings or registrations
with any public body or authority are necessary, and no consents or filings or
registrations with any public body or authority are necessary and no consents
or approval of any third parties are necessary, in connection with the
execution and delivery of this Agreement by SNC or the consummation by SNC of
the transactions contemplated hereby or by the Plan of Merger.
2.6. SEC DOCUMENTS; REGULATORY FILINGS
SNC has filed all SEC Documents required by the Securities Laws and such SEC
Documents complied in all material respects with the Securities Laws. Each of
SNC, SNBNC and SNBSC has filed all reports required by statute or regulation to
be filed with any federal or state bank or savings association or savings
institution regulatory agency, and such reports were prepared in accordance
with the applicable statutes, regulations and instructions in all material
respects.
2.7. FINANCIAL STATEMENTS; BOOKS ANDRECORDS; MINUTE BOOKS
The SNC Financial Statements fairly present the consolidated financial
position of SNC as of the dates indicated and the consolidated results of
operations, changes in shareholders' equity and cash flows of SNC for the
periods then ended in conformity with generally accepted accounting principles
applicable to financial institutions applied on a consistent basis except as
disclosed therein. The books and records of SNC and each SNC Subsidiary fairly
reflect the transactions to which it is a party or by which its properties are
subject or bound. Such books and records have been properly kept and maintained
and are in compliance in all material respects with all applicable legal and
accounting requirements. The minute books of SNC and each SNC Subsidiary
contain accurate records of all corporate actions of their respective
shareholders and Boards of Directors (including committees of their Boards of
Directors).
2.8. MATERIAL ADVERSE CHANGE
Except as Previously Disclosed, SNC has not, on a consolidated basis,
suffered any material adverse change in its business, financial condition or
results of operations since December 31, 1993.
2.9. ABSENCE OF UNDISCLOSED LIABILITIES
Neither SNC nor any SNC Subsidiary has any liability (contingent or
otherwise) that is material to SNC on a consolidated basis, or that, when
combined with all similar liabilities, would be material to SNC on a
consolidated basis, except as disclosed in the SNC Financial Statements and
except for liabilities incurred in the ordinary course of business consistent
with past practice since the date of the most recent SNC Financial Statements.
2.10. PROPERTIES
SNC and the SNC Subsidiaries have good title free and clear of all liens,
encumbrances, charges, defaults or equitable interests to all of the properties
and assets, real and personal, reflected on the SNC Financial Statements as of
December 31, 1993 or acquired after such date, except (i) liens for current
taxes not yet due and payable, (ii) pledges to secure deposits and other liens
incurred in the ordinary course of business,(iii) such imperfections of title,
easements and encumbrances, if any, as are not material in character, amount or
extent and (iv) dispositions and encumbrances for adequate consideration in the
ordinary course of business. Each SNC Subsidiary as lessee has the right under
valid and subsisting leases of properties used by
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it in the conduct of its respective business to occupy and use all such
properties as presently occupied and used by it. Each of the real properties
used by each SNC Subsidiary has been maintained in all material respects in
good condition and is suitable for its current use. Each of such properties
conforms in all material respects to currently applicable ordinances,
regulations and zoning requirements and, if required, is occupied pursuant to a
certificate of occupancy authorizing its current use. Since December 31, 1993,
none of such properties which are material to the operation of any SNC
Subsidiary has been damaged by fire, storm or other identifiable event or other
act of God, except to the extent that any property owned or leased by any SNC
Subsidiary if so damaged is insured to the extent necessary to satisfactorily
repair the damaged premises.
2.11. LOANS
(a) Except as Previously Disclosed, to SNC's best knowledge each loan
reflected as an asset in the SNC Financial Statements (i) is evidenced by
notes, agreements or other evidences of indebtedness which are true, genuine
and what they purport to be, (ii) to the extent secured, has been secured by
valid liens and security interests which have been perfected, and (iii) is the
legal, valid and binding obligation of the obligor named therein, enforceable
in accordance with its terms, subject to bankruptcy, insolvency, fraudulent
conveyance and other laws of general applicability relating to or affecting
creditors' rights and to general equity principles. All loans and extensions of
credit which are subject to Regulation O of the Federal Reserve Board which
have been made by SNBNC and SNBSC comply therewith.
(b) The classification on the books and records of SNC and each SNC
Subsidiary that is a banking institution of loans and/or non-performing assets
as nonaccrual, troubled debt restructuring, OREO or other similar
classification, complies in all material respects with generally accepted
accounting principles and applicable regulatory accounting principles.
2.12. ALLOWANCE FOR LOAN LOSSES
The allowance for loan losses reflected on the SNC Financial Statements as of
December 31, 1993 and any SNC Financial Statements, as of their respective
dates, is adequate in all material respects under the requirements of generally
accepted accounting principles and regulatory accounting principles to provide
for reasonably anticipated losses on outstanding loans.
2.13. TAX MATTERS
(a) SNC and each SNC Subsidiary, and each of their respective predecessors,
have timely filed federal income tax returns for each year through December 31,
1992 and have timely filed, or caused to be filed, all other federal and state
tax returns (including, without limitation, estimated tax returns, withholding
tax returns and FICA and FUTA returns) required to have been filed with respect
to SNC or such SNC Subsidiary. SNC has made available to BB&T true and complete
copies of its federal and state income tax returns for the past five years, and
true and complete copies of all correspondence from governmental authorities,
and responses of SNC or any SNC Subsidiary thereto, relating to such federal
and state income tax returns or any other federal, state or other tax filings
within the past five years. All taxes due in respect of the periods covered by
such tax returns have been paid or adequate reserves have been established for
the payment of such taxes and, as of the Closing Date, all taxes due in respect
of any subsequent periods ending on or prior to the Closing Date will have been
paid or adequate reserves will have been established for the payment thereof.
Except as Previously Disclosed, no audit examination or deficiency or refund
litigation with respect to such returns is pending. SNC has been audited by the
IRS through the tax year ended December 31, 1986. Neither SNC nor any SNC
Subsidiary will have as of the Closing Date any material liability for any such
taxes in excess of the amounts so paid or reserves or accruals so established.
(b) All federal, state and local (and, if applicable, foreign) tax returns
filed by SNC and each SNC Subsidiary are complete and accurate in all material
respects. Neither SNC nor any SNC Subsidiary is delinquent in the payment of
any tax, assessment or governmental charge, and, except as Previously
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Disclosed, none of them has requested any extension of time within which to
file any tax returns in respect of any fiscal year or portion thereof which
have not since been filed. No deficiencies for any tax, assessment or
governmental charge have been proposed, asserted or assessed (tentatively or
otherwise) against SNC or any SNC Subsidiary which have not been settled and
paid. Except as Previously Disclosed, there are currently no agreements in
effect with respect to SNC or any SNC Subsidiary to extend the period of
limitations for the assessment or collection of any tax.
(c) SNC and each SNC Subsidiary have timely filed all material information
returns required under Sections 6041-6050N of the Code and any comparable state
laws, and have timely complied in all material respects with the requirements
of Section 3406 of the Code and the regulations thereunder and any comparable
state laws and regulations. Neither SNC nor any SNC Subsidiary has made or
entered into, or holds any asset subject to, a consent filed pursuant to
Section 341(f) of the Code and the regulations thereunder or a "safe harbor
lease" subject to former Section 168(f)(8) of the Code and the regulations
thereunder.
2.14. EMPLOYEE BENEFIT PLANS
(a) SNC has Previously Disclosed true and complete copies of all pension or
profit-sharing plans, any deferred compensation, consulting, bonus or group
insurance contract or any other incentive, stock option, welfare or employee
benefit plan or agreement maintained for the benefit of any employees or former
employees of SNC, any SNC Subsidiary or any SNC ERISA Affiliate (collectively,
the "SNC Plans") together with (i) the most recent actuarial and financial
reports, if any, prepared with respect to each such SNC Plan, (ii) the most
recent annual report, if any, filed with any government agency with respect to
each such SNC Plan, and (iii) all rulings and determination letters and any
open requests for rulings or letters that pertain to any SNC Plan. Except as
Previously Disclosed, no SNC Plan provides health, medical, death or survivor
benefits to any former employee or beneficiary thereof (other than coverage
mandated by applicable law or death or retirement benefits under an employee
pension benefit plan, as defined in Section 3(2) of ERISA).
(b) No liability under Title IV of ERISA has been incurred by SNC, any SNC
Subsidiary or any SNC ERISA Affiliate since the effective date of ERISA that
has not been satisfied in full, and no condition exists that presents a
material risk to SNC, any SNC Subsidiary or any SNC ERISA Affiliate of
incurring a liability under such Title, other than liability for premiums due
the PBGC, which payments have been or will be made when due.
(c) None of the SNC Plans is a "multiemployer plan," as such term is defined
in Section 3(37) of ERISA.
(d) A favorable determination letter has been issued by the Internal Revenue
Service with respect to each SNC Plan that is intended to be a qualified plan
to the effect that such plan is qualified under Section 401 of the Code and tax
exempt under Section 501 of the Code and each such letter has been Previously
Disclosed. No such letter has been revoked or threatened to be revoked and
neither SNC nor any SNC Subsidiary knows of any ground on which such revocation
may be based. Neither SNC nor any SNC Subsidiary has a material liability under
any SNC Plan that is not reflected on the SNC Financial Statements.
(e) Except as Previously Disclosed, each of the SNC Plans has been operated
and administered in all material respects in accordance with applicable laws,
including but not limited to ERISA and the Code.
(f) No prohibited transaction (which shall mean any transaction prohibited by
Section 406 of ERISA and not exempt under Section 408 of ERISA) has occurred
with respect to any SNC Plan (i) which would result in the imposition, directly
or indirectly, of a material excise tax under Section 4975 of the Code or(ii)
the correction of which would have a material adverse effect on the financial
condition, results of operations or business of SNC on a consolidated basis.
(g) Each of the SNC Plans that is intended to satisfy the requirements of
Section 125 or Section 501(c)(9) of the Code satisfies such requirements.
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(h) With respect to each SNC Plan that is subject to Title IV of ERISA, the
present value of accrued benefits under such plan, based upon the actuarial
assumptions used for funding purposes in the most recent actuarial report
prepared by such plan's actuary with respect to such plan, did not, as of its
latest valuation date, exceed the then current value of the assets of such plan
allocable to such accrued benefits and nothing has occurred since such most
recent valuation date with respect to each such plan that adversely affects the
funded status of such plan. No reportable event under Section 4043(b) of ERISA
has occurred with respect to any SNC Plan (other than a reportable event for
which the requirement of notice to the PBGC has been waived by regulation).
(i) There are no actions, suits or claims pending, or to the best knowledge
of SNC, threatened or anticipated (other than routine claims for benefits) by,
on behalf of or against any of the SNC Plans or any trusts related thereto or
against SNC or any SNC Subsidiary with respect to the SNC Plans or any trusts
related thereto.
(j) Except as Previously Disclosed, the consummation of the transactions
contemplated by this Agreement will not (i) entitle any current or former
employee of SNC or any SNC Subsidiary to severance pay, employment compensation
or any other payment, benefit or award or (ii) accelerate the time of payment
or vesting, or increase the amount of any benefit, award or compensation due
any such employee.
2.15. CERTAIN CONTRACTS
(a) Except as Previously Disclosed, neither SNC nor any SNC Subsidiary is a
party to, or is bound by, (i) any material agreement, arrangement or commitment
whether or not made in the ordinary course of business, (ii) any agreement,
indenture or other instrument relating to the borrowing of money by SNC or any
SNC Subsidiary or the guarantee by SNC or any SNC Subsidiary of any such
obligation, (iii) any agreement, arrangement or commitment relating to the
employment of a consultant or the employment, election, retention in office or
severance of any present or former director or officer, (iv) any agreement to
make loans or for the provision, purchase or sale of goods, services or
property between SNC or any SNC Subsidiary and any director or officer of SNC
or any SNC Subsidiary, or any member of the immediate family or affiliate of
any of the foregoing, or (v) any agreement between SNC or any SNC Subsidiary
and any 5% or more shareholder of SNC, in each case other than transactions
entered into in the ordinary course of the banking business of SNBNC or SNBSC
consistent with past practice.
(b) Neither SNC nor any SNC Subsidiary, nor to the knowledge of SNC, the
other party thereto, is in default under any material agreement, commitment,
arrangement, lease, insurance policy or other instrument whether entered into
in the ordinary course of business or otherwise and whether written or oral,
and there has not occurred any event that, with the lapse of time or giving of
notice or both, would constitute such a default, other than defaults of loan
agreements by borrowers from SNBNC or SNBSC in the ordinary course of its
banking business.
(c) Since December 31, 1993, neither SNC nor any SNC Subsidiary has incurred
or paid any obligation or liability that would be material to SNC, except
obligations incurred or paid in connection with transactions in the ordinary
course of business of any SNC Subsidiary consistent with its past practice and
except as Previously Disclosed. Except as Previously Disclosed, from December
31, 1993 to the date hereof, neither SNC nor any SNC Subsidiary has taken any
action that, if taken after the date hereof, would breach any of the covenants
contained in Section 4.7(b) hereof.
2.16. OTHER REAL ESTATE OWNED
(a) Except for liens, security interests, claims, charges, or such other
encumbrances as have been appropriately reserved for in the SNC Financial
Statements or are not material, title to the OREO is good and marketable, and
there are no adverse claims or encumbrances on the OREO.
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(b) All title, hazard and other insurance claims and mortgage guaranty claims
with respect to the OREO have been timely filed and neither SNC nor any SNC
Subsidiary has received any notice of denial of any such claim.
(c) SNC and each SNC Subsidiary are in possession of all of the OREO or, if
any of the OREO remains occupied by the mortgagor, eviction or summary
proceedings have been commenced or rental arrangements providing for market
rental rates have been agreed upon and SNC and/or each SNC Subsidiary are
diligently pursuing such eviction or summary proceedings or such rental
arrangements.
(d) Except as Previously Disclosed, no legal proceeding or quasi-legal
proceeding is pending or, to the knowledge of SNC and each SNC Subsidiary,
threatened concerning any OREO or any servicing activity or omission to provide
a servicing activity with respect to any of the OREO.
2.17. LEGAL PROCEEDINGS
Except as Previously Disclosed, there are no actions, suits, claims,
governmental investigations or proceedings instituted, pending or, to the
knowledge of SNC, threatened (or unasserted but considered probable of
assertion and which if asserted would have at least a reasonable probability of
an unfavorable outcome) against SNC or any SNC Subsidiary or against any asset,
interest or right of SNC or any SNC Subsidiary that would, if determined
adversely to SNC or an SNC Subsidiary, have a material adverse effect on SNC.
To the knowledge of SNC, there are no actual or threatened actions, suits or
proceedings which present a claim to restrain or prohibit the transactions
contemplated herein, the Plan of Merger or the BB&T Option Agreement or to
impose upon BB&T, SNC or any of their respective subsidiaries any material cost
or obligation in connection therewith. Except as Previously Disclosed there are
no actions, suits, claims, governmental investigations or proceedings
instituted, pending or, to the knowledge of SNC, threatened (or unasserted but
considered probable of assertion and which if asserted would have at least a
reasonable probability of an unfavorable outcome) against any present or former
director or officer of SNC that would be reasonably likely to give rise to a
claim for indemnification by such present or former director or officer that
would, if determined adversely to SNC or an SNC Subsidiary, have a material
adverse effect on SNC, and, to the knowledge of SNC, there is no reasonable
basis for any such action, suit or proceeding.
2.18. COMPLIANCE WITH LAWS
SNC and the SNC Subsidiaries are in compliance in all material respects with
all statutes and regulations applicable to the conduct of their business, and
neither SNC nor any SNC Subsidiary has received notification from any agency or
department of federal, state or local government (i) asserting a material
violation of any such statute or regulation, (ii) threatening to revoke any
license, franchise, permit or government authorization or (iii) restricting or
in any way limiting its operations. Neither SNC nor any SNC Subsidiary is
subject to any regulatory or supervisory cease and desist order, agreement,
directive, memorandum of understanding or commitment, and neither of them has
received any communication requesting that they enter into any of the
foregoing. Without limiting the generality of the foregoing, each of SNBNC and
SNBSC has timely filed all currency transaction reports required to be filed
and taken all other actions required under the Currency and Foreign
Transactions Reporting Act, codified at 31 U.S.C. (S)5301 et seq., and its
implementing regulations.
2.19. BROKERS AND FINDERS
Neither SNC nor any SNC Subsidiary, nor any of their respective officers,
directors or employees, has employed any broker, finder or financial advisor or
incurred any liability for any fees or commissions in connection with the
transactions contemplated herein, the Bank Merger Agreement or the Plan of
Merger, except for Lehman Brothers and Wheat, First Securities, Inc.
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2.20. INSURANCE
SNC and each SNC Subsidiary currently maintains insurance in amounts
reasonably necessary for their operations and, to the best knowledge of SNC,
similar in scope and coverage to that maintained by other entities similarly
situated. Neither SNC nor any SNC Subsidiary has received any notice of a
premium increase or cancellation with respect to any of its insurance policies
or bonds, and within the last three years, neither SNC nor any SNC Subsidiary
has been refused any insurance coverage sought or applied for, and SNC has no
reason to believe that existing insurance coverage cannot be renewed as and
when the same shall expire, upon terms and conditions as favorable as those
presently in effect, other than possible increases in premiums or
unavailability in coverage that have not resulted from any extraordinary loss
experience of SNC or any SNC Subsidiary.
2.21. REPURCHASE AGREEMENTS
With respect to all agreements pursuant to which SNC or any SNC Subsidiary
has purchased securities subject to an agreement to resell, if any, SNC or such
SNC Subsidiary, as the case may be, has a valid, perfected first lien or
security interest in the government securities or other collateral securing the
repurchase agreement, and the value of such collateral equals or exceeds the
amount of the debt secured thereby.
2.22. DEPOSIT INSURANCE; FEDERAL RESERVE MEMBERSHIP
The deposits of SNBNC and SNBSC are insured by the FDIC in accordance with
the FDIA, and SNBNC and SNBSC have paid all assessments and filed all reports
required by the FDIA. SNBNC and SNBSC are members of the Federal Reserve System
and have subscribed and paid (or will have done so by the Closing Date) for the
requisite number of shares of capital stock of the FRB Richmond.
2.23. ADMINISTRATION OF TRUST ACCOUNTS
SNBNC and SNBSC have properly administered, in all respects material and
which could reasonably be expected to be material to the business, operations
or financial condition of SNC, SNBNC and SNBSC, taken as a whole, all accounts
for which they act as fiduciaries, including but not limited to accounts for
which they serve as trustees, agents, custodians, personal representatives,
guardians, conservators or investment advisors, in accordance with the terms of
the governing documents and applicable state and federal law and regulation and
common law. Neither SNC, SNBNC or SNBSC, nor any director, officer or employee
of SNC, SNBNC or SNBSC has committed any breach of trust with respect to any
such fiduciary account which is material to or could reasonably be expected to
be material to the business, operations or financial condition of SNC, and
SNBNC and SNBSC, taken as a whole, and the accountings for each such fiduciary
account are true and correct in all material respects and accurately reflect
the assets of such fiduciary account in all material respects.
2.24. ENVIRONMENTAL MATTERS
(a) Except as Previously Disclosed, to the best of SNC's knowledge, neither
SNC nor any SNC Subsidiary owns or leases any properties affected by toxic
waste, radon gas or other hazardous conditions or constructed in part with the
use of asbestos. Each of SNC and the SNC Subsidiaries is in substantial
compliance with all Environmental Laws applicable to real or personal
properties in which it has a direct fee ownership or, with respect to a direct
interest as lessee, applicable to the leasehold premises or, to the best
knowledge of SNC and the SNC Subsidiaries, the premises on which the leasehold
is situated. Neither SNC nor any SNC Subsidiary has received any Communication
alleging that SNC or such SNC Subsidiary is not in such compliance and, to the
best knowledge of SNC and the SNC Subsidiaries, there are no present
circumstances (including Environmental Laws that have been adopted but are not
yet effective) that would prevent or interfere with the continuation of such
compliance.
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(b)(i) There are no legal, administrative, arbitral or other proceedings, or
Environmental Claims or other claims, causes of action or governmental
investigations of any nature, seeking to impose, or that could result in the
imposition, on SNC and the SNC Subsidiaries of any liability arising under any
Environmental Laws pending or, to the best knowledge of SNC and the SNC
Subsidiaries, threatened against (A) SNC or any SNC Subsidiary, (B) any person
or entity whose liability for any Environmental Claim SNC or any SNC Subsidiary
has or may have retained or assumed either contractually or by operation of
law, or (C) any real or personal property which SNC or any SNC Subsidiary owns
or leases, or has been or is judged to have managed or to have supervised or
participated in the management of, which liability might have a material
adverse effect on the business, financial condition or results of operations of
SNC. SNC and the SNC Subsidiaries are not subject to any agreement, order,
judgment, decree or memorandum by or with any court, governmental authority,
regulatory agency or third party imposing any such liability.
(ii) To the best knowledge of SNC and the SNC Subsidiaries, there are no
legal, administrative, arbitral or other proceedings, or Environmental Claims
or other claims, causes of action or governmental investigations of any nature,
seeking to impose, or that could result in the imposition, on SNC or any SNC
Subsidiary of any liability arising under any Environmental Laws pending or
threatened against any real or personal property in which SNC or any SNC
Subsidiary holds a security interest in connection with a loan or a loan
participation which liability might have a material adverse effect on the
business, financial condition or results of operations of SNC. SNC and the SNC
Subsidiaries are not subject to any agreement, order, judgment, decree or
memorandum by or with any court, governmental authority, regulatory agency or
third party imposing any such liability.
(c) With respect to all real and personal property owned or leased by SNC or
any SNC Subsidiary, other than OREO, SNC will have made available to BB&T
before or by September 1, 1994 copies of any environmental audits, analyses and
surveys that have been prepared relating to such properties. With respect to
all OREO held by SNC or any SNC Subsidiary and all real or personal property
which SNC or any SNC Subsidiary has been or is judged to have managed or to
have supervised or participated in the management of, SNC has made available to
BB&T the information relating to such OREO available to SNC. SNC and the SNC
Subsidiaries are in compliance in all material respects with all
recommendations contained in any environmental audits, analyses and surveys
relating to any of the properties, real or personal, described in this
subsection (c).
(d) There are no past or present actions, activities, circumstances,
conditions, events or incidents, including, without limitation, the release,
emission, discharge or disposal of any Materials of Environmental Concern, that
could reasonably form the basis of any Environmental Claim or other claim or
action or governmental investigation that could result in the imposition of any
liability arising under any Environmental Laws currently in effect or adopted
but not yet effective against SNC or any SNC Subsidiary or against any person
or entity whose liability for any Environmental Claim SNC or any SNC Subsidiary
has or may have retained or assumed either contractually or by operation of
law.
(e) For the purpose of this Agreement, the following terms shall have the
following meanings:
(i) "Communication" means a communication which is of a substantive nature
and which is made (A) in writing to SNC or any SNC Subsidiary on the one hand
or to BB&T or any BB&T Subsidiary on the other hand, or (B) orally to a senior
officer of SNC or any SNC Subsidiary or of BB&T or any BB&T Subsidiary, whether
from a governmental authority or a third party.
(ii) "Environmental Claim" means any Communication from any governmental
authority or third party alleging potential liability (including, without
limitation, potential liability for investigatory costs, cleanup costs,
governmental response costs, natural resources damages, property damages,
personal injuries, or penalties) arising out of, based on or resulting from the
presence, or release into the environment, of any Material of Environmental
Concern.
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(iii) "Environmental Laws" means all applicable federal, state and local laws
and regulations, including the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, that relate to pollution or
protection of human health or the environment (including, without limitation,
ambient air, surface water, ground water, land surface or subsurface strata).
This definition includes, without limitation, laws and regulations relating to
emissions, discharges, releases or threatened releases of Materials of
Environmental Concern, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Materials of Environmental Concern.
(iv) "Materials of Environmental Concern" means pollutants, contaminants,
wastes, toxic substances, petroleum and petroleum products and any other
materials regulated under Environmental Laws.
2.25. CERTAIN INFORMATION
When the Registration Statement or any post-effective amendment thereto shall
become effective, and at all times subsequent to such effectiveness up to and
including the time of the later of the SNC and BB&T shareholders' meetings to
vote upon the Merger, such Registration Statement and all amendments or
supplements thereto, with respect to all information set forth therein
furnished by SNC relating to SNC and the SNC Subsidiaries, (i) shall comply in
all material respects with the applicable provisions of the Securities Laws,
and (ii) shall not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements contained therein not misleading.
2.26. INFORMATION IN APPLICATIONS
All information concerning SNC and the SNC Subsidiaries, and their respective
officers, directors and shareholders, included (or submitted for inclusion) in
the applications described in Section 4.3 hereof shall be true, correct and
complete in all material respects.
ARTICLE 3.
Representations and Warranties of BB&T
BB&T hereby represents and warrants to SNC as follows:
3.1. CAPITAL STRUCTURE OF BB&T
The authorized capital stock of BB&T consists of (i) 100,000,000 shares of
common stock, par value $2.50 per share ("BB&T Common Stock"), of which as of
June 30, 1994, 36,271,016 shares were issued and outstanding and none were held
in treasury; and (ii) 4,000,000 shares of nonvoting preferred stock, no par
value ("BB&T Preferred Stock"), none of which have been issued or are
outstanding. All outstanding shares of BB&T Common Stock have been duly
authorized and are validly issued, and are fully paid and nonassessable. There
are no Rights authorized, issued or outstanding with respect to the capital
stock of BB&T and no written or oral plans, understandings, commitments or
contracts to which BB&T or any of its affiliates is subject with respect to the
issuance, voting or sale of issued or unissued shares of BB&T's capital stock,
except for the BB&T DRP and as Previously Disclosed. None of the shares of
BB&T's capital stock has been issued in violation of the preemptive rights of
any person.
3.2. ORGANIZATION, STANDING AND AUTHORITY OF BB&T
BB&T is a duly organized corporation, validly existing and in good standing
under the laws of the State of North Carolina. BB&T (i) has full corporate
power and authority to carry on its business as now conducted and (ii) is duly
qualified to do business in the states of the United States and foreign
jurisdictions where its ownership or leasing of property or the conduct of its
business requires such qualification and where failure
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to so qualify would have a material adverse effect on the financial condition,
results of operations or business of BB&T on a consolidated basis. BB&T has all
federal, state, local and foreign governmental authorizations and licenses
necessary for it to own and lease its properties and assets and to carry on its
business as it is now being conducted. BB&T has delivered to SNC a true,
complete and correct copy of its Articles of Incorporation and of its Bylaws,
each as in effect on the date of this Agreement. BB&T is registered as a bank
holding company under the Bank Holding Company Act.
3.3. OWNERSHIP OF THE BB&T SUBSIDIARIES; CAPITAL STRUCTURE OF THE BB&T
SUBSIDIARIES
BB&T does not own, directly or indirectly, 5% or more of the outstanding
capital stock or other voting securities of any corporation, bank or other
organization actively engaged in business except as Previously Disclosed
(collectively the "BB&T Subsidiaries" and each individually a "BB&T
Subsidiary"). The outstanding shares of capital stock of each BB&T Subsidiary
have been duly authorized and are validly issued, and are fully paid and
nonassessable and all such shares are directly or indirectly owned by BB&T free
and clear of all liens, claims and encumbrances. No Rights are authorized,
issued or outstanding with respect to the capital stock of any BB&T Subsidiary
and there are no agreements, understandings or commitments relating to the
right of BB&T to vote or to dispose of said shares. None of the shares of
capital stock of any BB&T Subsidiary has been issued in violation of the
preemptive rights of any person.
3.4. ORGANIZATION, STANDING AND AUTHORITY OF THE BB&T SUBSIDIARIES
Each BB&T Subsidiary is a duly organized corporation or North Carolina
chartered or South Carolina chartered commercial bank or a North Carolina
chartered savings bank, validly existing and in good standing under applicable
laws. Each BB&T Subsidiary (i) has full corporate power and authority to own,
lease and operate its properties and to carry on its business as now conducted
except where the absence of such power or authority would not have a material
adverse effect on the financial condition, results of operations or business of
BB&T on a consolidated basis, and (ii) is duly qualified to do business in the
states of the United States and foreign jurisdictions where its ownership or
leasing of property or the conduct of its business requires such qualification
and where failure to so qualify would have a material adverse effect on the
financial condition, results of operations or business of BB&T on a
consolidated basis. Each BB&T Subsidiary has all federal, state, local and
foreign governmental authorizations and licenses necessary for it to own or
lease its properties and assets and to carry on its business as it is now being
conducted, except where failure to obtain such authorization or license would
not have a material adverse effect on the business of such BB&T Subsidiary.
3.5. AUTHORIZED AND EFFECTIVE AGREEMENT
(a) BB&T has all requisite corporate power and authority to enter into, adopt
and perform all of its obligations under this Reorganization Agreement, the
Plan of Merger and the BB&T Option Agreement. The execution, adoption and
delivery of this Reorganization Agreement, the Plan of Merger and the BB&T
Option Agreement and the consummation of the transactions contemplated hereby
and thereby have been duly and validly authorized by all necessary corporate
action in respect thereof on the part of BB&T, except that the affirmative vote
of the holders of all outstanding shares of BB&T Common Stock entitled to vote
thereon is required to adopt the Plan of Merger, unless two-thirds of the
entire board of directors of BB&T recommends to the shareholders of BB&T a vote
in favor of the Merger, in which case the affirmative vote of the holders of a
majority of all outstanding shares of BB&T Common Stock entitled to vote
thereon is required to adopt the Plan of Merger, pursuant to the North Carolina
Business Corporation Act, as amended, and BB&T's Articles of Incorporation and
Bylaws.
(b) This Reorganization Agreement, the BB&T Option Agreement and the Plan of
Merger constitute legal, valid and binding obligations of BB&T enforceable
against it in accordance with their respective terms,
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subject as to enforceability, to bankruptcy, insolvency and other laws of
general applicability relating to or affecting creditors' rights and to general
equity principles.
(c) Neither the execution, adoption and delivery of this Reorganization
Agreement, the Plan of Merger or the BB&T Option Agreement, nor consummation of
the transactions contemplated hereby or thereby, nor compliance by BB&T with
any of the provisions hereof or thereof shall (i) conflict with or result in a
breach of any provision of the Articles of Incorporation or Bylaws of BB&T or
any BB&T Subsidiary, (ii) constitute or result in a breach of any term,
condition or provision of, or constitute a default under, or give rise to any
right of termination, cancellation or acceleration with respect to, or result
in the creation of any lien, charge or encumbrance upon any property or asset
of BB&T or any BB&T Subsidiary pursuant to, any note, bond, mortgage,
indenture, license, agreement or other instrument or obligation, or (iii)
subject to the receipt of all required regulatory approvals, violate any order,
writ, injunction, decree, statute, rule or regulation applicable to BB&T or any
BB&T Subsidiary.
(d) Except for consents and approvals of or filings with the Federal Reserve
Board, the FDIC, the Commission and the State Boards and any appropriate state
securities authorities, no consents or approvals of or filings or registrations
with any public body or authority are necessary, and no consents or filings or
registrations with any public body or authority are necessary and no consents
or approval of any third parties are necessary, in connection with the
execution and delivery of this Agreement by BB&T or the consummation by BB&T of
the transactions contemplated hereby or by the Plan of Merger.
3.6. SEC DOCUMENTS; REGULATORY FILINGS
BB&T has filed all SEC Documents required by the Securities Laws and such SEC
Documents complied in all material respects with the Securities Laws. Each of
BB&T, BB&T-NC and BB&T-SC has filed all reports required by statute or
regulation to be filed with any federal or state bank or savings association or
savings institution regulatory agency, and such reports were prepared in
accordance with the applicable statutes, regulations and instructions in all
material respects.
3.7. FINANCIAL STATEMENTS; BOOKS AND RECORDS; MINUTE BOOKS
The BB&T Financial Statements fairly present the consolidated financial
position of BB&T as of the dates indicated and the consolidated results of
operations, changes in shareholders' equity and cash flows of BB&T for the
periods then ended in conformity with generally accepted accounting principles
applicable to financial institutions applied on a consistent basis except as
disclosed therein. The books and records of BB&T and each BB&T Subsidiary
fairly reflect the transactions to which it is a party or by which its
properties are subject or bound. Such books and records have been properly kept
and maintained and are in compliance in all material respects with all
applicable legal and accounting requirements. The minute books of BB&T and each
BB&T Subsidiary contain accurate records of all corporate actions of their
respective shareholders and Boards of Directors (including committees of their
Boards of Directors).
3.8. MATERIAL ADVERSE CHANGE
BB&T has not, on a consolidated basis, suffered any material adverse change
in its business, financial condition or results of operations since December
31, 1993.
3.9. ABSENCE OF UNDISCLOSED LIABILITIES
Neither BB&T nor any BB&T Subsidiary has any liability (contingent or
otherwise) that is material to BB&T on a consolidated basis, or that, when
combined with all similar liabilities, would be material to BB&T on a
consolidated basis, except as disclosed in the BB&T Financial Statements and
except for liabilities incurred in the ordinary course of business consistent
with past practice since the date of the most recent BB&T Financial Statements.
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3.10. PROPERTIES
BB&T and the BB&T Subsidiaries have good title free and clear of all liens,
encumbrances, charges, defaults or equitable interests to all of the properties
and assets, real and personal, reflected on the BB&T Financial Statements as of
December 31, 1993 or acquired after such date, except (i) liens for current
taxes not yet due and payable, (ii) pledges to secure deposits and other liens
incurred in the ordinary course of business, (iii) such imperfections of title,
easements and encumbrances, if any, as are not material in character, amount or
extent and (iv) dispositions and encumbrances for adequate consideration in the
ordinary course of business. Each BB&T Subsidiary as lessee has the right under
valid and subsisting leases of properties used by it in the conduct of its
respective business to occupy and use all such properties as presently occupied
and used by it. Each of the real properties used by any BB&T Subsidiary has
been maintained in all material respects in good condition and is suitable for
its current use by it. Each of such properties conforms in all material
respects to currently applicable ordinances, regulations and zoning
requirements and, if required, is occupied pursuant to a certificate of
occupancy authorizing its current use. Since December 31, 1993, none of such
properties which are material to the operation of any BB&T Subsidiary has been
damaged by fire, storm or other identifiable event or other act of God, except
to the extent that any property owned or leased by any BB&T Subsidiary if so
damaged is insured to the extent necessary to satisfactorily repair the damaged
premises.
3.11. LOANS
(a) Except as Previously Disclosed, to BB&T's best knowledge each loan
reflected as an asset in the BB&T Financial Statements (i) is evidenced by
notes, agreements or other evidences of indebtedness which are true, genuine
and what they purport to be, (ii) to the extent secured, has been secured by
valid liens and security interests which have been perfected, and (iii) is the
legal, valid and binding obligation of the obligor named therein, enforceable
in accordance with its terms, subject to bankruptcy, insolvency, fraudulent
conveyance and other laws of general applicability relating to or affecting
creditors' rights and to general equity principles. All loans and extensions of
credit which are subject to Regulation O of the Federal Reserve Board which
have been made by BB&T-NC and BB&T-SC comply therewith.
(b) The classification on the books and records of BB&T and each BB&T
Subsidiary that is a banking institution of loans and/or non-performing assets
as nonaccrual, troubled debt restructuring, OREO or other similar
classification, complies in all material respects with generally accepted
accounting principles and applicable regulatory accounting policy.
3.12. ALLOWANCE FOR LOAN LOSSES
The allowance for loan losses reflected on the BB&T Financial Statements as
of December 31, 1993 and any BB&T Financial Statements, as of their respective
dates, is adequate in all material respects under the requirements of generally
accepted and regulatory accounting principles to provide for reasonably
anticipated losses on outstanding loans.
3.13. TAX MATTERS
(a) BB&T and each BB&T Subsidiary, and each of their respective predecessors,
have timely filed federal income tax returns for each year through December 31,
1992 and have timely filed, or caused to be filed, all other federal and state
tax returns (including, without limitation, estimated tax returns, withholding
tax returns and FICA and FUTA returns) required to have been filed with respect
to BB&T or such BB&T Subsidiary. BB&T has made available to SNC true and
complete copies of its federal and state income tax returns for the past five
years, and true and complete copies of all correspondence from governmental
authorities, and responses of BB&T or any BB&T Subsidiary thereto, relating to
such federal and state income tax returns or any other federal, state or other
tax filings within the past five years. All taxes due in respect of the periods
covered by such tax returns have been paid or adequate reserves have been
established for the payment of such taxes and, as of the Closing Date, all
taxes due in respect of any subsequent periods ending
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on or prior to the Closing Date will have been paid or adequate reserves will
have been established for the payment thereof. No audit examination or
deficiency or refund litigation with respect to such returns is pending. BB&T
has been audited by the IRS through the tax year ended December 31, 1992.
Neither BB&T nor any BB&T Subsidiary will have as of the Closing Date any
material liability for any such taxes in excess of the amounts so paid or
reserves or accruals so established.
(b) All federal, state and local (and, if applicable, foreign) tax returns
filed by BB&T and each BB&T Subsidiary are complete and accurate in all
material respects. Neither BB&T nor any BB&T Subsidiary is delinquent in the
payment of any tax, assessment or governmental charge, and, except as
Previously Disclosed, none of them has requested any extension of time within
which to file any tax returns in respect of any fiscal year or portion thereof
which have not since been filed. No deficiencies for any tax, assessment or
governmental charge have been proposed, asserted or assessed (tentatively or
otherwise) against BB&T or any BB&T Subsidiary which have not been settled and
paid. There are currently no agreements in effect with respect to BB&T or any
BB&T Subsidiary to extend the period of limitations for the assessment or
collection of any tax.
(c) BB&T and each BB&T Subsidiary have timely filed all material information
returns required under Sections 6041-6050N of the Code and any comparable state
laws, and have timely complied in all material respects with the requirements
of Section 3406 of the Code and the regulations thereunder and any comparable
state and local laws and regulations. Neither BB&T nor any BB&T Subsidiary has
made or entered into, or holds any asset subject to, a consent filed pursuant
to Section 341(f) of the Code and the regulations thereunder or a "safe harbor
lease" subject to former Section 168(f)(8) of the Code and the regulations
thereunder.
3.14. EMPLOYEE BENEFIT PLANS
(a) BB&T has Previously Disclosed true and complete copies of all pension or
profit-sharing plans, any deferred compensation, consulting, bonus or group
insurance contract or any other incentive, stock option, welfare or employee
benefit plan or agreement maintained for the benefit of any employees or former
employees of BB&T, any BB&T Subsidiary or any BB&T ERISA Affiliate
(collectively, the "BB&T Plans") together with (i) the most recent actuarial
and financial reports, if any, prepared with respect to each such BB&T Plan,
(ii) the most recent annual report, if any, filed with any government agency
with respect to each such BB&T Plan, and (iii) all rulings and determination
letters and any open requests for rulings or letters that pertain to any BB&T
Plan. Except as Previously Disclosed, no BB&T Plan provides health, medical,
death or survivor benefits to any former employee or beneficiary thereof (other
than coverage mandated by applicable law or death or retirement benefits under
an employee pension benefit plan, as defined in Section 3(2) of ERISA).
(b) No liability under Title IV of ERISA has been incurred by BB&T, any BB&T
Subsidiary or any BB&T ERISA Affiliate since the effective date of ERISA that
has not been satisfied in full, and no condition exists that presents a
material risk to BB&T, any BB&T Subsidiary or any BB&T ERISA Affiliate of
incurring a liability under such Title, other than liability for premiums due
the PBGC, which payments have been or will be made when due.
(c) None of the BB&T Plans is a "multiemployer plan," as such term is defined
in Section 3(37) of ERISA.
(d) A favorable determination letter has been issued by the Internal Revenue
Service with respect to each BB&T Plan that is intended to be a qualified plan
to the effect that such plan is qualified under Section 401 of the Code and tax
exempt under Section 501 of the Code and each such letter has been Previously
Disclosed. No such letter has been revoked or threatened to be revoked and
neither BB&T nor any BB&T Subsidiary knows of any ground on which such
revocation may be based. Except as Previously Disclosed,
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neither BB&T nor any BB&T Subsidiary has a material liability under any BB&T
Plan that is not reflected on the BB&T Financial Statements.
(e) Each of the BB&T Plans has been operated and administered in all material
respects in accordance with applicable laws, including but not limited to ERISA
and the Code.
(f) No prohibited transaction (which shall mean any transaction prohibited by
Section 406 of ERISA and not exempt under Section 408 of ERISA) has occurred
with respect to any BB&T Plan (i) which would result in the imposition,
directly or indirectly, of a material excise tax under Section 4975 of the Code
or (ii) the correction of which would have a material adverse effect on the
financial condition, results of operations or business of BB&T on a
consolidated basis.
(g) Each of the BB&T Plans that is intended to satisfy the requirements of
Section 125 or Section 501(c)(9) of the Code satisfies such requirements.
(h) With respect to each BB&T Plan that is subject to Title IV of ERISA, the
present value of accrued benefits under such plan, based upon the actuarial
assumptions used for funding purposes in the most recent actuarial report
prepared by such plan's actuary with respect to such plan, did not, as of its
latest valuation date, exceed the then current value of the assets of such plan
allocable to such accrued benefits and nothing has occurred since such most
recent valuation date with respect to each such plan that adversely affects the
funded status of such plan. No reportable event under Section 4043(b) of ERISA
has occurred with respect to any BB&T Plan (other than a reportable event for
which the requirement of notice to the PBGC has been waived by regulation).
(i) There are no actions, suits or claims pending, or to the best knowledge
of SNC, threatened or anticipated (other than routine claims for benefits) by,
on behalf of or against any of the BB&T Plans or any trusts related thereto or
against BB&T or any BB&T Subsidiary with respect to the BB&T Plans or any
trusts related thereto.
(j) Except as Previously Disclosed, the consummation of the transactions
contemplated by this Agreement will not (i) entitle any current or former
employee of BB&T or any BB&T Subsidiary to severance pay, employment
compensation or any other payment, benefit or award or (ii) accelerate the time
of payment or vesting, or increase the amount of any benefit, award or
compensation due any such employee.
3.15. CERTAIN CONTRACTS
(a) Except as Previously Disclosed, neither BB&T nor any BB&T Subsidiary is a
party to, or is bound by, (i) any material agreement, arrangement or commitment
whether or not made in the ordinary course of business, (ii) any agreement,
indenture or other instrument relating to the borrowing of money by BB&T or any
BB&T Subsidiary or the guarantee by BB&T or any BB&T Subsidiary of any such
obligation, (iii) any agreement, arrangement or commitment relating to the
employment of a consultant or the employment, election, retention in office or
severance of any present or former director or officer, (iv) any agreement to
make loans or for the provision, purchase or sale of goods, services or
property between BB&T or any BB&T Subsidiary and any director or officer of
BB&T or any BB&T Subsidiary, or any member of the immediate family or affiliate
of any of the foregoing, or (v) any agreement between BB&T or any BB&T
Subsidiary and any 5% or more shareholder of BB&T, in each case other than
transactions entered into in the ordinary course of the banking business of
BB&T-NC or BB&T-SC consistent with past practice.
(b) Neither BB&T nor any BB&T Subsidiary, nor to the knowledge of BB&T, the
other party thereto, is in default under any material agreement, commitment,
arrangement, lease, insurance policy or other instrument whether entered into
in the ordinary course of business or otherwise and whether written or oral,
and there has not occurred any event that, with the lapse of time or giving of
notice or both, would constitute
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such a default, other than defaults of loan agreements by borrowers from BB&T-
NC or BB&T-SC in the ordinary course of its banking business.
(c) Since December 31, 1993, neither BB&T nor any BB&T Subsidiary has
incurred or paid any obligation or liability that would be material to BB&T,
except obligations incurred or paid in connection with transactions in the
ordinary course of business of the BB&T Subsidiaries consistent with its past
practice and except as Previously Disclosed. Except as Previously Disclosed,
from December 31, 1993 to the date hereof, neither BB&T nor any BB&T Subsidiary
has taken any action that, if taken after the date hereof, would breach any of
the covenants contained in Section 4.8(b) hereof.
3.16. OTHER REAL ESTATE OWNED
(a) Except for liens, security interests, claims, charges, or such other
encumbrances as have been appropriately reserved for in the BB&T Financial
Statements or are not material, title to the OREO is good and marketable, and
there are no adverse claims or encumbrances on the OREO.
(b) All title, hazard and other insurance claims and mortgage guaranty claims
with respect to the OREO have been timely filed and neither BB&T nor any BB&T
Subsidiary has received any notice of denial of any such claim.
(c) BB&T and each BB&T Subsidiary are in possession of all of the OREO or, if
any of the OREO remains occupied by the mortgagor, eviction or summary
proceedings have been commenced or rental arrangements providing for market
rental rates have been agreed upon and BB&T and/or each BB&T Subsidiary are
diligently pursuing such eviction or summary proceedings or such rental
arrangements.
(d) No legal proceeding or quasi-legal proceeding is pending or, to the
knowledge of BB&T and each BB&T Subsidiary, threatened concerning any OREO or
any servicing activity or omission to provide a servicing activity with respect
to any of the OREO.
3.17. LEGAL PROCEEDINGS
Except as Previously Disclosed, there are no actions, suits, claims,
governmental investigations or proceedings instituted, pending or, to the
knowledge of BB&T, threatened (or unasserted but considered probable of
assertion and which if asserted would have at least a reasonable probability of
an unfavorable outcome) against BB&T or any BB&T Subsidiary or against any
asset, interest or right of BB&T or any BB&T Subsidiary that would, if
determined adversely to BB&T or a BB&T Subsidiary, have a material adverse
effect on BB&T. To the knowledge of BB&T, there are no actual or threatened
actions, suits or proceedings which present a claim to restrain or prohibit the
transactions contemplated herein, the Plan of Merger or the SNC Option
Agreement or to impose upon SNC, BB&T or any of their respective subsidiaries
any material cost or obligation in connection therewith. Except as Previously
Disclosed there are no actions, suits, claims, governmental investigations or
proceedings instituted, pending or, to the knowledge of BB&T, threatened (or
unasserted but considered probable of assertion and which if asserted would
have at least a reasonable probability of an unfavorable outcome) against any
present or former director or officer of BB&T that would be reasonably likely
to give rise to a claim for indemnification by such present or former director
or officer that would, if determined adversely to BB&T or a BB&T Subsidiary,
have a material adverse effect on BB&T, and, to the knowledge of BB&T, there is
no reasonable basis for any such action, suit or proceeding.
3.18. COMPLIANCE WITH LAWS
Except as Previously Disclosed, BB&T and the BB&T Subsidiaries are in
compliance in all material respects with all statutes and regulations
applicable to the conduct of their business, and except as Previously
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Disclosed, neither BB&T nor any BB&T Subsidiary has received notification from
any agency or department of federal, state or local government (i) asserting a
material violation of any such statute or regulation, (ii) threatening to
revoke any license, franchise, permit or government authorization or (iii)
restricting or in any way limiting its operations. Except as Previously
Disclosed, neither BB&T nor any BB&T Subsidiary is subject to any regulatory or
supervisory cease and desist order, agreement, directive, memorandum of
understanding or commitment, and neither of them has received any communication
requesting that they enter into any of the foregoing. Without limiting the
generality of the foregoing, each of BB&T-NC and BB&T-SC has timely filed all
currency transaction reports required to be filed and taken all other actions
required under the Currency and Foreign Transactions Reporting Act, codified at
31 U.S.C. (S)5301 et seq., and its implementing regulations.
3.19. BROKERS AND FINDERS
Neither BB&T nor any BB&T Subsidiary, nor any of their respective officers,
directors or employees, has employed any broker, finder or financial advisor or
incurred any liability for any fees or commissions in connection with the
transactions contemplated herein, the Bank Merger Agreement or the Plan of
Merger, except for Lehman Brothers and Merrill Lynch, Pierce, Fenner & Smith
Incorporated ("Merrill Lynch").
3.20. INSURANCE
BB&T and each BB&T Subsidiary currently maintain insurance in amounts
reasonably necessary for their operations and, to the best knowledge of BB&T,
similar in scope and coverage to that maintained by other entities similarly
situated. Neither BB&T nor any BB&T Subsidiary has received any notice of a
premium increase or cancellation with respect to any of its insurance policies
or bonds, and within the last three years, neither BB&T nor any BB&T Subsidiary
has been refused any insurance coverage sought or applied for, and BB&T has no
reason to believe that existing insurance coverage cannot be renewed as and
when the same shall expire, upon terms and conditions as favorable as those
presently in effect, other than possible increases in premiums or
unavailability in coverage that have not resulted from any extraordinary loss
experience of BB&T or any BB&T Subsidiary.
3.21. REPURCHASE AGREEMENTS
With respect to all agreements pursuant to which BB&T or any BB&T Subsidiary
has purchased securities subject to an agreement to resell, if any, BB&T or
such BB&T Subsidiary, as the case may be, has a valid, perfected first lien or
security interest in the government securities or other collateral securing the
repurchase agreement, and the value of such collateral equals or exceeds the
amount of the debt secured thereby.
3.22. DEPOSIT INSURANCE
The deposits of BB&T-NC and BB&T-SC are insured by the FDIC in accordance
with the FDIA, and BB&T-NC and BB&T-SC have paid all assessments and filed all
reports required by the FDIA.
3.23. ADMINISTRATION OF TRUST ACCOUNTS
BB&T-NC and BB&T-SC have properly administered, in all respects material and
which could reasonably be expected to be material to the business, operations
or financial condition of BB&T, BB&T-NC and BB&T-SC, taken as a whole, all
accounts for which they act as fiduciaries, including but not limited to
accounts for which they serve as trustees, agents, custodians, personal
representatives, guardians, conservators or investment advisors, in accordance
with the terms of the governing documents and applicable state and federal law
and regulation and common law. Neither BB&T, BB&T-NC or BB&T-SC, nor any
director, officer or employee of BB&T, BB&T-NC or BB&T-SC has committed any
breach of trust with
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respect to any such fiduciary account which is material to or could reasonably
be expected to be material to the business, operations or financial condition
of BB&T, BB&T-NC and BB&T-SC, taken as a whole, and the accountings for each
such fiduciary account are true and correct in all material respects and
accurately reflect the assets of such fiduciary account in all material
respects.
3.24. ENVIRONMENTAL MATTERS
(a) Except as Previously Disclosed, to the best of BB&T's knowledge, neither
BB&T nor any BB&T Subsidiary owns or leases any properties affected by toxic
waste, radon gas or other hazardous conditions or constructed in part with the
use of asbestos. Each of BB&T and the BB&T Subsidiaries is in substantial
compliance with all Environmental Laws applicable to real or personal
properties in which it has a direct fee ownership or, with respect to a direct
interest as lessee, applicable to the leasehold premises or, to the best
knowledge of BB&T and the BB&T Subsidiaries, the premises on which the
leasehold is situated. Neither BB&T nor any BB&T Subsidiary has received any
Communication alleging that BB&T or such BB&T Subsidiary is not in such
compliance and, to the best knowledge of BB&T and the BB&T Subsidiaries, there
are no present circumstances (including Environmental Laws that have been
adopted but are not yet effective) that would prevent or interfere with the
continuation of such compliance.
(b)(i) There are no legal, administrative, arbitral or other proceedings, or
Environmental Claims or other claims, causes of action or governmental
investigations of any nature, seeking to impose, or that could result in the
imposition, on BB&T and the BB&T Subsidiaries of any liability arising under
any Environmental Laws pending or, to the best knowledge of BB&T and the BB&T
Subsidiaries, threatened against (A) BB&T or any BB&T Subsidiary, (B) any
person or entity whose liability for any Environmental Claim BB&T or any BB&T
Subsidiary has or may have retained or assumed either contractually or by
operation of law, or (C) any real or personal property which BB&T or any BB&T
Subsidiary owns or leases, or has been or is judged to have managed or to have
supervised or participated in the management of, which liability might have a
material adverse effect on the business, financial condition or results of
operations of BB&T. BB&T and the BB&T Subsidiaries are not subject to any
agreement, order, judgment, decree or memorandum by or with any court,
governmental authority, regulatory agency or third party imposing any such
liability.
(ii) To the best knowledge of BB&T and the BB&T Subsidiaries, there are no
legal, administrative, arbitral or other proceedings, or Environmental Claims
or other claims, causes of action or governmental investigations of any nature,
seeking to impose, or that could result in the imposition, on BB&T or any BB&T
Subsidiary of any liability arising under any Environmental Laws pending or
threatened against any real or personal property in which BB&T or any BB&T
Subsidiary holds a security interest in connection with a loan or a loan
participation which liability might have a material adverse effect on the
business, financial condition or results of operations of BB&T. BB&T and the
BB&T Subsidiaries are not subject to any agreement, order, judgment, decree or
memorandum by or with any court, governmental authority, regulatory agency or
third party imposing any such liability.
(c) With respect to all real and personal property owned or leased by BB&T or
any BB&T Subsidiary, other than OREO, BB&T will have made available to SNC
before or by September 1, 1994 copies of any environmental audits, analyses and
surveys that have been prepared relating to such properties. With respect to
all OREO held by BB&T or any BB&T Subsidiary and all real or personal property
which BB&T or any BB&T Subsidiary has been or is judged to have managed or to
have supervised or participated in the management of, BB&T has made available
to SNC the information relating to such OREO available to BB&T. BB&T and the
BB&T Subsidiaries are in compliance in all material respects with all
recommendations contained in any environmental audits, analyses and surveys
relating to any of the properties, real or personal, described in this
subsection (c).
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(d) There are no past or present actions, activities, circumstances,
conditions, events or incidents, including, without limitation, the release,
emission, discharge or disposal of any Materials of Environmental Concern, that
could reasonably form the basis of any Environmental Claim or other claim or
action or governmental investigation that could result in the imposition of any
liability arising under any Environmental Laws currently in effect or adopted
but not yet effective against BB&T or any BB&T Subsidiary or against any person
or entity whose liability for any Environmental Claim BB&T or any BB&T
Subsidiary has or may have retained or assumed either contractually or by
operation of law.
3.25. CERTAIN INFORMATION
When the Registration Statement or any post-effective amendment thereto shall
become effective, and at all times subsequent to such effectiveness up to and
including the time of the later of the SNC and BB&T shareholders' meetings to
vote upon the Merger, such Registration Statement and all amendments or
supplements thereto, with respect to all information set forth therein
furnished by BB&T relating to BB&T and the BB&T Subsidiaries, (i) shall comply
in all material respects with the applicable provisions of the Securities Laws,
and (ii) shall not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements contained therein not misleading.
3.26. INFORMATION IN APPLICATIONS
All information concerning BB&T and the BB&T Subsidiaries, and their
respective officers, directors and shareholders, included (or submitted for
inclusion) in the applications described in Section 4.3 hereof shall be true,
correct and complete in all material respects.
ARTICLE 4.
Covenants
4.1. SHAREHOLDERS' MEETINGS
BB&T and SNC shall submit this Reorganization Agreement and the Plan of
Merger to their respective shareholders for approval at an annual or a special
meeting to be held as soon as practicable. Except to the extent legally
required for the discharge by the boards of directors of their fiduciary duties
as determined by such boards of directors after consultation with such board's
counsel, the boards of directors of SNC and BB&T shall recommend at the
respective shareholders' meetings that the shareholders vote in favor of and
approve the Merger and adopt the Plan of Merger.
4.2. PROXY STATEMENT; REGISTRATION STATEMENT
As promptly as practicable after the date hereof, BB&T and SNC shall
cooperate in the preparation of the Proxy Statement to be mailed to the
shareholders of BB&T and SNC in connection with the Merger and to be filed by
SNC as part of the Registration Statement. SNC will advise BB&T, promptly after
it receives notice thereof, of the time when the Registration Statement or any
post-effective amendment thereto has become effective or any supplement or
amendment has been filed, of the issuance of any stop order, of the suspension
of qualification of the Continuing Corporation Common Stock issuable in
connection with the Merger for offering or sale in any jurisdiction, or the
initiation or threat of any proceeding for any such purpose, or of any request
by the SEC for the amendment or supplement of the Registration Statement or for
additional information. The Continuing Corporation after the Effective Date
shall file a post-effective amendment to the Registration Statement either with
respect to the sale of the shares of Continuing Corporation Common Stock
provided for in the Plan of Merger to the holders of stock options issued by
BB&T or for the resale of such shares by such optionees, as the Continuing
Corporation and such optionees may agree. SNC shall take all actions necessary
to register or qualify the shares of Continuing Corporation
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Common Stock to be issued in the Merger and pursuant to such options pursuant
to all applicable state "blue sky" or securities laws and shall maintain such
registrations or qualifications in effect for all purposes hereof.
4.3. APPLICATIONS
As promptly as practicable after the date hereof, (i) SNC shall submit any
requisite applications for prior approval of the transactions contemplated
herein and in the Plan of Merger to the Federal Reserve Board pursuant to
Section 3 of the Bank Holding Company Act, (ii) each of the parties shall
submit any requisite applications for prior approval of the transactions
contemplated herein and the Plan of Merger to the FDIC and the State Boards,
and (iii) each of the parties hereto shall, and they shall cause their
respective subsidiaries to, submit any applications, notices or other filings
to any other state or federal government agency, department or body the
approval of which is required for consummation of the Merger and the Bank
Mergers. Prior to the making of any such filings with any regulatory authority
or any third persons, BB&T and SNC shall submit to each other the materials to
be filed, mailed or released. Any such materials must be acceptable to both
BB&T and SNC prior to the filings with any regulatory authorities or any third
persons, except to the extent that BB&T or SNC is legally required to proceed
prior to obtaining the acceptance of the other.
4.4. BEST EFFORTS
BB&T, BB&T-NC, BB&T-SC, SNC, SNBNC and SNBSC each shall use its best efforts
in good faith to (i) furnish such information as may be necessary or desirable
in connection with the preparation of the documents referred to in Sections 4.2
and 4.3 above, and (ii) take or cause to be taken all action necessary or
desirable on its part so as to permit consummation of the Merger and the Bank
Mergers at the earliest possible date, including, without limitation, (1)
obtaining the consent or approval of each individual, partnership, corporation,
association or other business or professional entity whose consent or approval
is necessary or desirable for consummation of the transactions contemplated
hereby, and (2) requesting the delivery of appropriate opinions, consents and
letters from its counsel and independent auditors. No party hereto shall take,
or cause or to the best of its ability permit to be taken, any action that
would adversely affect the qualification of the Merger for pooling of interests
accounting treatment; provided that nothing herein contained shall preclude
BB&T from exercising its rights under the SNC Option Agreement or SNC from
exercising its rights under the BB&T Option Agreement.
4.5. INVESTIGATION AND CONFIDENTIALITY
(a) BB&T and SNC each will keep the other advised of all material
developments relevant to its business and to consummation of the transactions
contemplated herein. BB&T and SNC each may make or cause to be made such
investigation of the financial and legal condition of the other as such party
reasonably deems necessary or advisable in connection with the transactions
contemplated herein and in the Plan of Merger, provided, however, that such
investigation shall be reasonably related to such transactions and shall not
interfere unnecessarily with normal operations. BB&T and SNC agree to furnish
the other and the other's advisors with such financial data and other
information with respect to its business and properties as such other party
shall from time to time reasonably request. No investigation pursuant to this
Section 4.5 shall affect or be deemed to modify any representation or warranty
made by, or the conditions to the obligations to consummate the Merger and the
Bank Mergers of, any party hereto.
(b) Each party hereto shall, and shall cause its directors, officers,
attorneys and advisors to, maintain the confidentiality of all information
obtained in such investigation which is not otherwise publicly disclosed by the
other parties, said undertaking with respect to confidentiality to survive any
termination of this Agreement pursuant to Section 6.1 hereof. In the event of
termination of this Agreement each party shall return to the furnishing party
or destroy and certify the destruction of all information previously furnished
by the other party in connection with the transactions contemplated by this
Agreement.
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(c) SNC shall give prompt notice to BB&T, and BB&T shall give prompt notice
to SNC, of (i) the occurrence, or failure to occur, of any event which
occurrence or failure would be likely to cause any representation or warranty
contained in this Agreement to be untrue or inaccurate in any material respect
at any time from the date hereof to the Closing Date and (ii) any material
failure of SNC or BB&T, as the case may be, to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it
hereunder, and each party shall use all reasonable efforts to remedy such
failure.
4.6. PRESS RELEASES
The parties hereto shall agree with each other as to the form and substance
of any press release related to this Reorganization Agreement, the Plan of
Merger and the agreements which shall be acceptable in form to BB&T and SNC to
effect the North Carolina Bank Merger and the South Carolina Bank Merger
(collectively, the "Bank Merger Agreements") or the transactions contemplated
hereby or thereby, and shall consult each other as to the form and substance of
other public disclosures related thereto, provided, however, that nothing
contained herein shall prohibit any party, following notification to the other
parties, from making any disclosure which its counsel deems necessary.
4.7. COVENANTS OF SNC
(a) Prior to the Closing Date, and except as otherwise provided for by this
Reorganization Agreement or consented to or approved by BB&T, SNC shall use its
best efforts to preserve the properties, business and relationships of SNC and
the SNC Subsidiaries with customers, employees and other persons.
(b) Except with the prior written consent of BB&T, between the date hereof
and the Effective Date, SNC and each SNC Subsidiary that is a banking
institution shall not:
(1) carry on its business other than in the usual, regular and ordinary
course in substantially the same manner as heretofore conducted;
(2) in the case of SNC only (a) declare, set aside, make or pay any
dividend or other distribution in respect of SNC Common Stock other than
quarterly cash dividends in an amount per share in excess of $0.20, in a
manner consistent with past practice and in accordance with applicable law,
regulation and contractual and regulatory commitments and in respect of SNC
Series A Preferred Stock as required by SNC's Articles of Incorporation or
(b) make any changes in its dividend record or dividend payment dates;
provided, however, that if the Closing Date shall not have occurred prior
to July 31, 1995, SNC may increase its regular quarterly cash dividends in
a manner and amount consistent with past increases in such dividends;
(3) except as Previously Disclosed, issue any shares of its capital stock
or permit any treasury shares to become outstanding other than pursuant to
the SNC Option Agreement, the SNC DRP or Rights outstanding at the date
hereof, or incur any additional debt obligation or other obligation for
borrowed money in amounts materially in excess of amounts previously
borrowed in the ordinary course of business of SNC and SNC Subsidiaries
consistent with past practice;
(4) issue, grant or authorize any Rights other than pursuant to the SNC
Option Agreement or grants of stock options to its employees in the
ordinary course of business or effect any recapitalization,
reclassification, stock dividend (other than pursuant to the SNC DRP),
stock split or like change in capitalization or redeem, repurchase or
otherwise acquire any shares of its capital stock;
(5) except as Previously Disclosed or as contemplated herein, amend its
Articles of Incorporation, Articles of Association or Bylaws except as
contemplated herein; impose, or suffer the imposition, on any share of
stock held by SNC in any SNC Subsidiary of any lien, charge or encumbrance,
or permit any such lien, charge or encumbrance to exist, except as existing
on the date hereof;
(6) except as Previously Disclosed, merge or consolidate with any other
entity; sell or lease all or any material portion of its assets or
business; except as Previously Disclosed, make any acquisition of all
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or any substantial portion of the business or assets of any other person,
firm, association, corporation or business organization other than in
connection with the collection of any loan or credit arrangement between it
and any other person; enter into or consummate a purchase and assumption
transaction with respect to deposits and liabilities; revoke or surrender
its certificate of authority to maintain, or apply for the relocation of,
any existing branch office or apply for a certificate of authority to
establish a new branch office other than in the ordinary course of
business;
(7) fail to comply in any material respect with any laws, regulations,
ordinances or governmental actions applicable to it and material to the
conduct of its business except where it is in good faith contesting the
validity of any of the foregoing;
(8) liquidate or sell or dispose of any material assets or acquire any
material assets; make any capital expenditures outside the ordinary course
of business; or, except as Previously Disclosed, establish new branches or
other similar facilities or modify any leases or other contracts relating
thereto outside the ordinary course of business;
(9) except as Previously Disclosed or as contemplated by this Agreement,
increase the rate of compensation of, pay or agree to pay any bonus to, or
provide any other employee benefit or incentive to, any of its directors,
officers or employees except in a manner consistent with past practice,
provided, however, that such payments may not increase severance amounts
payable under employment or severance agreements; provided, however, all
amounts covered under SNC's Long-Term and Short-Term Incentive Plans as of
the end of the month prior to the month in which the Closing Date occurs,
at the sole option of SNC, may vest and be paid out immediately; except as
Previously Disclosed or as contemplated by this Agreement, enter into,
modify or extend or permit to be renewed any employment or severance
contracts with any of its present or former directors, officers or
employees; or enter into or modify (except as may be required by applicable
law, for any modification that is not material or to effect normal,
corrective or previously contemplated actions with respect to such plans)
any pension, retirement, stock option, stock purchase, stock appreciation
right, savings, profit sharing, deferred compensation, consulting, bonus,
group insurance or other employee benefit, incentive or welfare contract,
plan or arrangement, or any trust agreement related thereto, in respect of
any of its directors, officers or other employees;
(10) change its lending, investment, asset/liability management or other
material banking policies in any material respect except as may be required
by applicable law;
(11) change its methods of accounting in effect at December 31, 1993, in
any material respect except as required by changes in generally accepted
accounting principles concurred in by its independent certified public
accountants, or change any of its methods of reporting income and
deductions for federal income tax purposes in any material respect from
those employed in the preparation of its federal income tax returns for the
year ended December 31, 1993, except as required by law;
(12) solicit or encourage inquiries or proposals with respect to any
acquisition or purchase of all or a substantial portion of the assets of,
or a substantial equity interest in, SNC, SNBNC or SNBSC or any business
combination with SNC, SNBNC or SNBSC other than as contemplated by this
Reorganization Agreement; or authorize or permit any officer, director,
agent or affiliate of it to do any of the above; or fail to notify BB&T
immediately if any such inquiries or proposals are received by SNC, SNBNC
or SNBSC; or
(13) agree to do any of the foregoing.
4.8. COVENANTS OF BB&T
(a) Prior to the Closing Date, and except as otherwise provided for by this
Reorganization Agreement or consented to or approved by SNC, BB&T shall use its
best efforts to preserve the properties, business and relationships of BB&T and
the BB&T Subsidiaries with customers, employees and other persons.
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(b) Except with the prior written consent of SNC, between the date hereof and
the Effective Date, BB&T and each BB&T Subsidiary that is a banking institution
shall not:
(1) carry on its business other than in the usual, regular and ordinary
course in substantially the same manner as heretofore conducted;
(2) in the case of BB&T only (a) declare, set aside, make or pay any
dividend or other distribution in respect of its capital stock other than
its regular quarterly cash dividends in an amount per share in excess of
$0.29, in a manner consistent with past practice and in accordance with
applicable law, regulation and contractual and regulatory commitments or
(b) make any changes in its dividend record or dividend payment dates;
provided, however, that if the Closing Date shall not have occurred prior
to July 31, 1995, BB&T may increase its regular quarterly cash dividends in
a manner and amount consistent with past increases in such dividends,
except that, if SNC increases its dividend after July 31, 1995, BB&T may
increase its dividend(s) by an amount equal to the increase in the SNC
dividend multiplied by 1.45;
(3) except as Previously Disclosed, issue any shares of its capital stock
or permit any treasury shares to become outstanding other than pursuant to
the BB&T Option Agreement, the BB&T DRP or Rights outstanding at the date
hereof, or incur any additional debt obligation or other obligation for
borrowed money in amounts materially in excess of amounts previously
borrowed in the ordinary course of business of BB&T and the BB&T
Subsidiaries consistent with past practice;
(4) issue, grant or authorize any Rights other than pursuant to the BB&T
Option Agreement, the BB&T DRP or grants of stock options to its employees
in the ordinary course of business or effect any recapitalization,
reclassification, stock dividend, stock split or like change in
capitalization, or redeem, repurchase or otherwise acquire any shares of
its capital stock;
(5) amend its Articles of Incorporation or Bylaws; impose, or suffer the
imposition, on any share of stock held by BB&T in any BB&T Subsidiary of
any lien, charge or encumbrance, or permit any such lien, charge or
encumbrance to exist, except as existing on the date hereof;
(6) except as Previously Disclosed, merge or consolidate with any other
entity; sell or lease all or any material portion of its assets or
business; except as Previously Disclosed, make any acquisition of all or
any substantial portion of the business or assets of any other person,
firm, association, corporation or business organization other than in
connection with the collection of any loan or credit arrangement between it
and any other person; enter into or consummate a purchase and assumption
transaction with respect to deposits and liabilities; revoke or surrender
its certificate of authority to maintain, or apply for the relocation of,
any existing branch office or apply for a certificate of authority to
establish a new branch office other than in the ordinary course of
business;
(7) except as Previously Disclosed, fail to comply in any material
respect with any laws, regulations, ordinances or governmental actions
applicable to it and material to the conduct of its business except where
it is in good faith contesting the validity of any of the foregoing;
(8) liquidate or sell or dispose of any material assets or, except as
Previously Disclosed, acquire any material assets; make any capital
expenditures outside the ordinary course of business; or establish new
branches or other similar facilities or modify any leases or other
contracts relating thereto outside the ordinary course of business;
(9) except as contemplated by this Agreement, increase the rate of
compensation of, pay or agree to pay any bonus to, or provide any other
employee benefit or incentive to, any of its directors, officers or
employees except in a manner consistent with past practice, provided,
however, that such payments may not increase severance amounts payable
under employment or severance agreements; except as Previously Disclosed or
as contemplated by this Agreement, enter into, modify or extend, or permit
to be renewed, any employment or severance contracts with any of its
present or former directors, officers or employees; or, enter into or
modify (except as may be required by applicable law, for any modification
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that is not material or to effect normal, corrective or previously
contemplated actions with respect to such plans) any pension, retirement,
stock option, stock purchase, stock appreciation right, savings, profit
sharing, deferred compensation, consulting, bonus, group insurance or other
employee benefit, incentive or welfare contract, plan or arrangement, or
any trust agreement related thereto, in respect of any of its directors,
officers or other employees;
(10) change its lending, investment, asset/liability management or other
material banking policies in any material respect except as may be required
by applicable law;
(11) change its methods of accounting in effect at December 31, 1993, in
any material respect except as required by changes in generally accepted
accounting principles concurred in by its independent certified public
accountants, or change any of its methods of reporting income and
deductions for federal income tax purposes in any material respect from
those employed in the preparation of its federal income tax returns for the
year ended December 31, 1993, except as required by law;
(12) solicit or encourage inquiries or proposals with respect to any
acquisition or purchase of all or a substantial portion of the assets of,
or a substantial equity interest in, BB&T, BB&T-NC or BB&T-SC or any
business combination with BB&T, BB&T-NC or BB&T-SC other than as
contemplated by this Reorganization Agreement; or authorize or permit any
officer, director, agent or affiliate of it to do any of the above; or fail
to notify SNC immediately if any such inquiries or proposals are received
by BB&T, BB&T-NC or BB&T-SC; or
(13) agree to do any of the foregoing.
4.9. HEADQUARTERS
At the Effective Date, the headquarters of the Continuing Corporation and of
the NC Continuing Bank shall be located at 200 West Second Street, Winston-
Salem, North Carolina.
4.10. DIVIDENDS PRIOR TO THE EFFECTIVE DATE
BB&T and SNC shall coordinate with one another as to the declaration and
payment of cash dividends on the shares of BB&T Common Stock and SNC Common
Stock to be declared prior to the Effective Date to ensure that an equivalent
number of such dividends are declared by BB&T and SNC prior to the Effective
Date.
4.11. CLOSING; CERTIFICATE OF MERGER
The transactions contemplated by this Reorganization Agreement and the Plan
of Merger shall be consummated simultaneously at a closing to be held at such
location as the parties shall agree on the first business day following
satisfaction of the conditions to consummation of the Merger set forth in
Article 5 hereof or such later date within 45 days thereafter as may be agreed
upon by the parties hereto ("Closing Date"). In connection with such Closing,
BB&T and SNC shall execute a certificate of merger and shall cause such
certificate to be delivered to the Secretary of State of the State of North
Carolina. The Merger shall be effective at the time and on the date ("Effective
Date") specified in such certificate of merger. The North Carolina Bank Merger
and the South Carolina Bank Merger are intended to be accomplished as soon as
practicable after the Merger. After the North Carolina Bank Merger, the NC
Continuing Bank shall operate under the name of "Branch Banking and Trust
Company" and after the South Carolina Bank Merger the SC Continuing Bank shall
operate under the name of "Branch Banking and Trust Company of South Carolina"
and utilize all trademarks, service marks and other registered and non-
registered rights, words, symbols and devices related to such names.
4.12. AFFILIATES
BB&T and SNC shall cooperate and use their best efforts to identify those
persons who may be deemed to be "affiliates" of BB&T or SNC within the meaning
of Rule 144 or 145 promulgated by the Commission
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under the Securities Act, as appropriate, or by whom the transfer of Continuing
Corporation Common Stock following consummation of the Merger may adversely
affect the accounting for the Merger as a pooling of interests. SNC and BB&T
shall use their best efforts to cause each person so identified to deliver to
BB&T or SNC, no later than 30 days prior to the Effective Date, a written
agreement providing that such person will not dispose of any SNC Common Stock,
BB&T Common Stock or Continuing Corporation Common Stock except in compliance
with the Securities Act, the rules and regulations promulgated thereunder and
the Commission's rules relating to pooling of interests accounting treatment.
Shares of Continuing Corporation Common Stock issued to such affiliates in
exchange for BB&T Common Stock shall not be transferable until such time as
financial results covering at least 30 days of combined operations of SNC and
BB&T have been published within the meaning of Section 201.01 of the
Commission's Codification of Financial Reporting Policies, regardless of
whether each such affiliate has provided the written agreement referred to in
this section.
4.13. BOARD OF DIRECTORS
(a) From and after the Effective Date and until the first meeting of
shareholders of the Continuing Corporation called to elect directors following
the Merger (the "First Shareholders' Meeting"), the Board of Directors of the
Continuing Corporation shall consist of 24 persons, of which 12 shall be
persons named by the Board of Directors of BB&T ("BB&T Nominees") and 12 shall
be persons named by the Board of Directors of SNC ("SNC Nominees") (in each
case as identified by each party by letter to the other dated as of the date of
this Amended and Restated Agreement). If prior to the Effective Date (i) any of
the BB&T Nominees or the SNC Nominees becomes unable or unwilling to serve as a
director of the Continuing Corporation, or (ii) either BB&T or SNC determines
to replace a BB&T Nominee or an SNC Nominee, the party that designated such
individual may name a replacement to become a director of the Continuing
Corporation after the Effective Date.
(b) John A. Allison IV shall be elected Chairman of the Board of the
Continuing Corporation. If for any reason John A. Allison IV is unavailable to
serve in that capacity at the Effective Date, the Chairman of the Board of the
Continuing Corporation shall be selected by mutual agreement of the Boards of
Directors of BB&T and SNC. If the Boards of Directors of BB&T and SNC are
unable to agree upon a Chairman of the Board after reasonable effort to do so,
then either party may upon written notice to the other terminate this
Agreement.
(c) The members of the Nominating Committee of the Continuing Corporation
Board shall nominate for reelection, at the First Shareholders' Meeting, as
directors to serve on the Continuing Corporation Board of Directors the BB&T
Nominees and such of the SNC Nominees as may be required to be reelected at
such meeting (or their designated replacements pursuant to Section 4.13(a)).
The terms of those directors of the Continuing Corporation to be elected at the
First Shareholders' Meeting whose terms of office expire at the First
Shareholders' Meeting shall be allocated as designated by BB&T and SNC,
provided that the terms of the same number of SNC Nominees and BB&T Nominees
(including those SNC Nominees, if any, whose terms do not expire at the First
Shareholders' Meeting) will expire in each applicable year. If after the
Effective Date and prior to the First Shareholders' Meeting, any of the BB&T
Nominees or the SNC Nominees becomes unable or unwilling or is otherwise
ineligible to serve as a director of the Continuing Corporation, the remaining
BB&T Nominees or SNC Nominees, as the case may be, may name a replacement to be
nominated by the Nominating Committee for election at the First Shareholders'
Meeting.
(d) The Board of Directors of the NC Continuing Bank following the North
Carolina Bank Merger shall be comprised of current BB&T and SNC directors who
do not serve as directors of the Continuing Corporation and such other persons
as may be determined at the time the North Carolina Bank Merger is effected.
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(e) Subject to the fiduciary duties of the Continuing Corporation directors,
L. Glenn Orr, Jr. andJohn A. Allison will be elected as members of the
Executive Committee of the Continuing Corporation's Board of Directors for as
long as they are directors of the Continuing Corporation.
(f) As soon as practicable after the Effective Date, each Committee of the
Board of Directors of the Continuing Corporation shall be reconstituted so as
to consist of an equal number of BB&T Nominees and SNC Nominees.
(g) At the Effective Date and until consummation of the North Carolina Bank
Merger, John A. Allison IV and L. Glenn Orr, Jr. shall each serve on the Boards
of Directors of BB&T-NC and SNBNC and, after the consummation of the North
Carolina Bank Merger, on the Board of Directors of NC Continuing Bank. At the
Effective Date and until consummation of the South Carolina Bank Merger, John
A. Allison IV and L. Glenn Orr, Jr. shall each serve on the Boards of Directors
of BB&T-SC and SNBSC and, after the consummation of the South Carolina Bank
Merger, on the Board of Directors of SC Continuing Bank.
4.14. MANAGEMENT; EMPLOYEES; EMPLOYEE BENEFITS
(a) From and after the Effective Date, the Chief Executive Officer of the
Continuing Corporation shall be John A. Allison IV. If for any reason John A.
Allison IV is unavailable to serve in that capacity at the Effective Date, the
Chief Executive Officer of the Continuing Corporation shall be selected by
mutual agreement of the Boards of Directors of BB&T and SNC. If the Boards of
Directors of BB&T and SNC are unable to agree upon a Chief Executive Officer
after reasonable efforts to do so, then either party may terminate this
Agreement. From and after the Effective Date, Henry G. Williamson, Jr. shall be
the Chief Administrative Officer, John R. Spruill shall be the Chief Financial
Officer, and each of W. Kendall Chalk, Robert E. Greene, Kelly S. King, Morris
D. Marley, Scott E. Reed and Michael W. Sperry shall be Executive Vice
Presidents of the Continuing Corporation. The principal officers of the NC
Continuing Bank and the SC Continuing Bank from and after the consummation of
the North Carolina Bank Merger and the South Carolina Bank Merger,
respectively, shall be as provided in the Bank Merger Agreements. No officer of
BB&T-NC, SNBNC, BB&T-SC or SNBSC shall have his or her title or position
altered automatically as a result of the Bank Mergers; provided, however, that
nothing in this Section 4.14(a) shall affect the rights of the NC Continuing
Bank and the SC Continuing Bank to alter such titles and positions of such
officers following the Bank Mergers.
(b) It is the intention of the parties hereto that after the Effective Date,
all directors, officers and employees of the Continuing Corporation and its
subsidiaries will be entitled to participate in compensation, benefit, welfare
and related plans, programs or arrangements made available to similarly
situated directors, officers and employees under the same terms and conditions,
notwithstanding such individuals' prior affiliation with BB&T or SNC. The
parties agree to work together prior to the Effective Date to develop and
design such plans, programs and arrangements, and to prepare for the
implementation of such plans, programs and arrangements following the Effective
Date. It is also anticipated that any such plans, programs or arrangements to
be effective after the Effective Date shall provide that, for purposes of
determining eligibility for and vesting of such employee benefits only (and not
for pension benefit or other accrual purposes), service with SNC or an SNC
Subsidiary, on the one hand, or BB&T or a BB&T Subsidiary, on the other hand,
prior to the Effective Date shall be treated as service with an "employer" to
the same extent as if such persons had been employees of BB&T or a BB&T
Subsidiary or of SNC or an SNC Subsidiary, as appropriate.
(c) After the Effective Date, as provided in the Plan of Merger, the
obligations under any stock option plans of BB&T shall be assumed by SNC, and
no further options shall be granted under such plan, and all
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officers and employees of the Continuing Corporation shall be eligible to
participate in SNC's stock option plans notwithstanding such individuals' prior
affiliation with BB&T or SNC.
4.15. INDEMNIFICATION
Except as may be limited by applicable law, from and after the Effective
Date, and after the effective date of the Bank Mergers, as applicable, the
Continuing Corporation and the NC Continuing Bank and the SC Continuing Bank
shall maintain all rights of indemnification existing in favor of the former
employees, agents, officers and directors of BB&T, SNBNC and SNBSC,
respectively, on terms no less favorable than those provided in the Articles of
Incorporation and Bylaws of BB&T, SNBNC and SNBSC, as applicable, or otherwise
in effect on the date of this Agreement for a period of not less than six years
from the Effective Date with respect to matters occurring prior to the
Effective Date.
ARTICLE 5.
Conditions Precedent
5.1. CONDITIONS PRECEDENT--MUTUAL
The respective obligations of BB&T and SNC to effect the Merger shall be
subject to satisfaction or waiver of the following conditions at or prior to
the Closing Date:
(a) All corporate action necessary to authorize the execution, delivery and
performance of this Reorganization Agreement, the Plan of Merger, the Bank
Merger Agreements and consummation of the transactions contemplated hereby and
thereby shall have been duly and validly taken, and all required shareholder
approvals shall have been duly received;
(b) The parties hereto shall have received all regulatory approvals required
or mutually deemed necessary in connection with the transactions contemplated
by this Reorganization Agreement, the Plan of Merger, and the Bank Merger
Agreements, and all notice periods and waiting periods required after the
granting of any such approvals shall have passed and all conditions contained
in any such approval required to have been satisfied prior to consummation of
such transactions shall have been satisfied, provided, however, that no such
approval shall have imposed any condition or requirement which, in the
reasonable opinion of the Board of Directors of either BB&T or SNC so
materially and adversely affects the anticipated economic and business benefits
to such party of the transactions contemplated by this Agreement as to render
consummation of such transactions inadvisable;
(c) The parties hereto shall have received from counsel or a tax advisor,
which counsel or tax advisor shall be satisfactory to each of SNC and BB&T (and
SNC and BB&T each may elect to use separate counsel or tax advisor(s)), an
opinion satisfactory in form and substance to BB&T and SNC, to the effect that
the Merger when consummated in accordance with the terms hereof and the Plan of
Merger, and the Bank Mergers when consummated in accordance with the terms of
the Bank Merger Agreements, will constitute reorganizations within the meaning
of Section 368(a) of the Code, that no gain or loss will be recognized by BB&T
or SNC on consummation of the Merger, that no gain or loss will be recognized
by BB&T-NC, BB&T-SC, SNBNC and SNBSC on consummation of the Bank Mergers, and
that the exchange of BB&T Common Stock for SNC Common Stock will not give rise
to recognition of gain or loss for federal income tax purposes to the
shareholders of BB&T, except with respect to the receipt of cash in lieu of a
fractional share of SNC Common Stock, and the Bank Mergers will not give rise
to recognition of gain or loss for federal income tax purposes to SNC;
(d) The Registration Statement (including any post-effective amendment
thereto) shall be effective under the Securities Act, and no proceeding shall
be pending or to the knowledge of SNC threatened by the Commission to suspend
the effectiveness of such Registration Statement, and SNC shall have received
all
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state securities or "Blue Sky" permits or other authorizations, or
confirmations as to the availability of an exemption from registration
requirements as may be necessary, and no proceedings shall be pending or to the
knowledge of SNC threatened by any state "Blue Sky" securities administrator to
suspend the effectiveness of such Registration Statement;
(e) Except as Previously Disclosed, to the extent that any lease, license,
loan, financing agreement or other contract or agreement to which any party
hereto of any of its subsidiaries, as the case may be, is a party requires the
consent of or waiver from the other party thereto as a result of the
transactions contemplated by this Agreement, such consent or waiver shall have
been obtained, unless the failure to obtain such consent or waiver would not
have a material adverse effect on the consolidated financial condition of such
party from that reflected in the December 31, 1993 financial statements
included in the SNC Financial Statements as to SNC and the SNC Subsidiaries and
the BB&T Financial Statements as to BB&T and the BB&T Subsidiaries, following
consummation of the Merger and the Bank Mergers; and
(f) None of the parties hereto or to the Bank Merger Agreements shall be
subject to any order, decree or injunction of a court or agency of competent
jurisdiction, which enjoins or prohibits the consummation of the transactions
contemplated by this Reorganization Agreement, the Plan of Merger and the Bank
Merger Agreements and there shall be no action or proceeding by or before any
such court or agency that, in the judgment of SNC or BB&T, with the advice of
its respective counsel, shall present a bona fide claim to restrain, prohibit
or invalidate the transactions contemplated hereby;
(g) Dissenters' rights pursuant to Section 55-13-02 of the North Carolina
Business Corporation Act with respect to the Merger shall not have been
exercised by the holders of more than 10% of either (i) the outstanding SNC
Common Stock and SNC Series A Preferred Stock in the aggregate or (ii) the BB&T
Common Stock. For purposes of calculating the aggregate amount of SNC Common
Stock and SNC Series A Preferred Stock for which dissenters' rights have been
exercised, the SNC Series A Preferred Stock will be counted assuming that all
shares of the SNC Series A Preferred Stock had been converted into SNC Common
Stock in accordance with SNC's Articles of Incorporation on the date that SNC's
shareholders vote on the Merger.
5.2. CONDITIONS PRECEDENT--BB&T
The obligations of BB&T to effect the Merger and of BB&T-NC and BB&T-SC to
effect the Bank Mergers shall be subject to satisfaction of the following
additional conditions at or prior to the Closing Date unless waived by BB&T
pursuant to Section 6.4 hereof:
(a) The representations and warranties of SNC set forth in Article 2
hereof shall be true and correct in all material respects as of the date of
this Reorganization Agreement and as of the Closing Date as though made on
and as of the Closing Date (or on the date when made in the case of any
representation and warranty which specifically relates to an earlier date),
except as otherwise contemplated by this Reorganization Agreement or
consented to in writing by BB&T;
(b) SNC, SNBNC and SNBSC shall have in all material respects performed
all obligations and complied with all covenants required by this
Reorganization Agreement, the Plan of Merger and the Bank Merger
Agreements;
(c) SNC shall have delivered to BB&T a certificate, dated the Closing
Date and signed by its President and Chief Executive Officer and by its
Chief Financial Officer to the effect that the conditions set forth in this
section have been satisfied;
(d) BB&T shall have received an opinion of counsel to SNC, which counsel
shall be reasonably satisfactory to BB&T, dated the Closing Date, as to
such matters as BB&T may reasonably request with respect to the
transactions contemplated hereby, by the Plan of Merger, the Bank Merger
Agreements and the SNC Option Agreement;
(e) BB&T shall have received an opinion from KPMG Peat Marwick LLP that
the Merger shall qualify for the pooling-of-interests method of accounting;
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(f) Neither SNC, SNBNC nor SNBSC shall have experienced or suffered any
material adverse change in its business, operations, assets or condition
(financial or other) since the date hereof;
(g) BB&T shall have received the opinion of Lehman Brothers and Merrill
Lynch as of or immediately prior to the effective date of the Registration
Statement, to the effect that certain terms of the Merger are fair from a
financial point of view to the BB&T shareholders; and
(h) Current BB&T officers as Previously Disclosed shall have executed
employment agreements substantially in the form provided in Exhibit 5.2(h)
to this Agreement
5.3. CONDITIONS PRECEDENT--SNC
The obligations of SNC to effect the Merger and of SNBNC and of SNBSC to
effect the Bank Mergers shall be subject to satisfaction of the following
additional conditions at or prior to the Closing Date unless waived by SNC
pursuant to Section 6.4 hereof:
(a) The representations and warranties of BB&T set forth in Article 3
hereof shall be true and correct in all material respects as of the date of
this Reorganization Agreement and as of the Closing Date as though made on
and as of the Closing Date (or on the date when made in the case of any
representation and warranty which specifically relates to an earlier date),
except as otherwise contemplated by this Reorganization Agreement or
consented to in writing by SNC;
(b) BB&T, BB&T-NC and BB&T-SC shall have in all material respects
performed all obligations and complied with all covenants required by this
Reorganization Agreement, the Plan of Merger and the Bank Merger
Agreements;
(c) BB&T shall have delivered to SNC a certificate, dated the Closing
Date and signed by its Chairman and Chief Executive Officer and by its
Chief Financial Officer to the effect that the conditions set forth in this
section have been satisfied;
(d) SNC shall have received an opinion of counsel to BB&T, which counsel
shall be reasonably satisfactory to SNC, dated the Closing Date, as to such
matters as SNC may reasonably request with respect to the transactions
contemplated hereby and by the Plan of Merger, the Bank Merger Agreements
and the BB&T Option Agreement;
(e) SNC shall have received an opinion from Arthur Andersen & Co. LLP
that the Merger shall qualify for the pooling-of-interests method of
accounting;
(f) Neither BB&T, BB&T-NC nor BB&T-SC shall have experienced or suffered
any material adverse change in its business, operations, assets or
condition (financial or other) since the date hereof;
(g) SNC shall have received the opinion of Lehman Brothers and Wheat,
First Securities, Inc. as of or immediately prior to the effective date of
the Registration Statement, to the effect that certain terms of the Merger
are fair from a financial point of view to the SNC shareholders;
(h) Current SNC officers as Previously Disclosed shall have terminated
any and all employment, severance or similar agreements with SNC or any SNC
Subsidiary and shall have executed employment agreements substantially in
the form provided in Exhibit 5.2(h) to this Agreement; and
(i) L. Glenn Orr, Jr. shall have entered into an agreement with the terms
provided for in Exhibit 5.3(i) to this Agreement.
ARTICLE 6.
Termination, Waiver and Amendment
6.1. TERMINATION
This Reorganization Agreement, the Plan of Merger and the Bank Merger
Agreements may be terminated, either before or after approval by the
shareholders of BB&T or SNC:
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(a) At any time on or prior to the Effective Date, by the mutual consent
in writing of the parties hereto;
(b) At any time on or prior to the Closing Date, by BB&T in writing, if
SNC has, or by SNC in writing, if BB&T has, in any material respect,
breached (i) any covenant or agreement contained herein, in the Plan of
Merger or in the Bank Merger Agreements or (ii) any representation or
warranty contained herein, and in either case if such breach has not been
cured by the earlier of 30 days after the date on which written notice of
such breach is given to the party committing such breach or the Closing
Date;
(c) On the Closing Date, by any party hereto in writing, if any of the
conditions precedent set forth in Article 5 hereof with respect to such
party have not been satisfied or fulfilled;
(d) At any time, by any party hereto in writing, if the applications for
prior approval referred to in Section 4.3 hereof have been denied, and the
time period for appeals and requests for reconsideration has run;
(e) At any time, by any party hereto in writing, if the shareholders of
SNC or BB&T do not approve the transactions contemplated herein at the
special meetings duly called for that purpose;
(f) By any party hereto in writing, if the Closing Date has not occurred
by the close of business on July 31, 1995; provided, however, such date
shall be extended until December 31, 1995, if the reason for failure of the
Closing to have occurred by July 31, 1995 is that any regulatory approval
contemplated by Section 4.3 has not been received;
(g) At any time prior to September 22, 1994 by BB&T in writing, if BB&T
determines in its sole good faith judgment that the financial condition,
business or prospects of SNC, SNBNC or SNBSC are materially adversely
different from what was reasonably expected by BB&T after the performance
of its due diligence prior to the execution of this Agreement; provided
that BB&T shall inform SNC upon such termination as to the reasons for
BB&T's determination; and, provided further, that this Section 6.1(g) shall
not limit in any way the due diligence investigation of SNC, SNBNC and
SNBSC which BB&T may perform or otherwise affect any other rights which
BB&T has after the date hereof and after September 22, 1994, under the
terms of this Agreement;
(h) At any time prior to September 22, 1994, by SNC in writing, if SNC
determines in its sole good faith judgment that the financial condition,
business or prospects of BB&T, BB&T-NC or BB&T-SC are materially adversely
different from what was reasonably expected by SNC after the performance of
its due diligence prior to the execution of this Agreement; provided that
SNC shall inform BB&T upon such termination as to the reasons for SNC's
determination; and, provided further, that this Section 6.1(h) shall not
limit in any way the due diligence investigation of BB&T, BB&T-NC and BB&T-
SC which SNC may perform or otherwise affect any other rights which SNC has
after the date hereof and after September 22, 1994, under the terms of this
Agreement; or
(i) By either BB&T or SNC if, in the event John A. Allison IV is
unavailable to serve as Chairman of the Board of Directors and Chief
Executive Officer of the Continuing Corporation at such time as the parties
are otherwise prepared to consummate the Merger, and the BB&T Board of
Directors and the SNC Board of Directors are unable, after reasonable
efforts, to mutually agree upon a person to serve as Continuing Corporation
Chairman and a person to serve as Continuing Corporation Chief Executive
Officer.
6.2. EFFECT OF TERMINATION
In the event this Reorganization Agreement and the Plan of Merger are
terminated pursuant to Section 6.1 hereof, this Agreement, the Plan of Merger
and the Bank Merger Agreements shall become void and have no effect, except
that (i) the provisions relating to confidentiality and expenses set forth in
Sections 4.5 and 7.1 hereof, respectively, shall survive any such termination
and (ii) a termination pursuant to Section 6.1(b)(i) shall not relieve the
breaching party from liability for an uncured willful breach of such covenant
or agreement giving rise to such termination.
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6.3. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS
All representations, warranties and covenants in this Reorganization
Agreement, the Plan of Merger and the Bank Merger Agreements or in any
instrument delivered pursuant hereto or thereto shall expire on, and be
terminated and extinguished at, the Effective Date and from and after the
Effective Date, none of the parties hereto shall have any liability to the
other on account of any breach or failure of any of these representations,
warranties or covenants, other than covenants that by their terms are to
survive or be performed after the Effective Date, provided that no such
representations, warranties or covenants shall be deemed to be terminated or
extinguished so as to deprive BB&T or SNC (or any director, officer or
controlling person thereof) of any defense in law or equity which otherwise
would be available against the claims of any person, including, without
limitation, any shareholder or former shareholder of either BB&T or SNC, the
aforesaid representations, warranties and covenants being material inducements
to the consummation by BB&T, SNC, BB&T-NC, SNBNC, BB&T-SC and SNBSC of the
transactions contemplated herein and in the Bank Merger Agreements.
6.4. WAIVER
Except with respect to any required shareholder or regulatory approval, BB&T
and SNC respectively, by written instrument signed by an executive officer of
such party, may at any time (whether before or after approval of this
Reorganization Agreement and the Plan of Merger by the shareholders of BB&T and
SNC) extend the time for the performance of any of the obligations or other
acts of BB&T, BB&T-NC or BB&T-SC, on the one hand, or SNC, SNBNC or SNBSC, on
the other hand, and may waive (i) any inaccuracies of such parties in the
representations or warranties contained in this Agreement, the Plan of Merger,
the Bank Merger Agreements or any document delivered pursuant hereto or
thereto, (ii) compliance with any of the covenants, undertakings or agreements
of such parties, or satisfaction of any of the conditions precedent to its
obligations, contained herein, in the Plan of Merger or in the Bank Merger
Agreements or (iii) the performance by such parties of any of its obligations
set out herein or therein; provided, however, that no such waiver executed
after approval of this Reorganization Agreement and the Plan of Merger by the
shareholders of BB&T and/or SNC shall alter the number of shares of SNC Common
Stock into which each share of BB&T Common Stock shall be converted pursuant to
the Merger.
6.5. AMENDMENT OR SUPPLEMENT
This Reorganization Agreement, the Plan of Merger and the Bank Merger
Agreements may be amended or supplemented at any time by mutual agreement of
the parties hereto, in the case of this Reorganization Agreement, or thereto,
in the case of the Plan of Merger and the Bank Merger Agreements, respectively.
Any such amendment or supplement must be in writing and approved by their
respective boards of directors and/or officers authorized thereby and shall be
subject to the proviso in Section 6.4 hereof.
ARTICLE 7.
Miscellaneous
7.1. EXPENSES
(a) Except as provided in Section 7.1(b) below, each party hereto shall bear
and pay all costs and expenses incurred by it in connection with the
transactions contemplated in this Reorganization Agreement, including fees and
expenses of its own financial consultants, accountants and counsel, except that
BB&T and SNC each shall bear and pay 50% of the fees of Lehman Brothers and 50%
of all printing costs.
(b) Notwithstanding the provisions of Section 7(a) hereof, if for any reason
this Reorganization Agreement is terminated by any party before the closing of
the transactions contemplated hereby is concluded, each of SNC and BB&T shall
bear and pay one-half of the reasonable and actual out of pocket
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costs and expenses incurred by the parties in connection with this Agreement,
including the fees and expenses of consultants, printers and persons involved
in the transactions contemplated by this Reorganization Agreement, the
preparation of the Registration Statement and Proxy Statement, the solicitation
of proxies and the registration under the Securities Act of the Continuing
Corporation Common Stock, (except that the fees and expenses for paying
employees and of investment bankers, accountants, and counsel shall not be
subject to this Section 7.1(b)), provided that if this Reorganization
Agreement, the Plan of Merger and the Bank Merger Agreements are terminated by
SNC or BB&T pursuant to Section 6.1(b) hereof, in either case because of a
willful breach by the other of any representation, warranty, covenant,
undertaking or restriction as set forth in Section 6.1(b), and provided further
that the terminating party shall not have been in breach of any representation
and warranty (in any material respect), covenant, undertaking or restriction
contained herein, in the Plan of Merger or in the Bank Merger Agreements, then
the breaching party shall bear and pay all such costs and expenses. Final
settlement with respect to the payment of such fees and expenses by the parties
shall be made within thirty days of the termination of this Reorganization
Agreement, the Plan of Merger and the Bank Merger Agreements.
7.2. ENTIRE AGREEMENT
This Reorganization Agreement, the Plan of Merger, the BB&T Option Agreement,
the SNC Option Agreement and the Bank Merger Agreements contain the entire
agreement between the parties with respect to the transactions contemplated
hereunder and thereunder and supersede all prior arrangements or understandings
with respect thereto, written or oral, other than documents referred to herein
or therein. The terms and conditions of this Reorganization Agreement and the
Plan of Merger shall inure to the benefit of and be binding upon the parties
hereto and thereto and their respective successors. Nothing in this
Reorganization Agreement or the Plan of Merger, expressed or implied, is
intended to confer upon any party, other than the parties hereto and thereto,
and their respective successors, any rights, remedies, obligations or
liabilities.
7.3. NO ASSIGNMENT
No party hereto may assign any of its rights or obligations under this
Reorganization Agreement to any other person.
7.4. NOTICES
All notices or other communications which are required or permitted hereunder
shall be in writing and sufficient if delivered personally or sent by facsimile
transmission or overnight express or by registered or certified mail, postage
prepaid, addressed as follows:
If to BB&T:
BB&T Financial Corporation
223 West Nash Street
Wilson, North Carolina 27893
Attention: John A. Allison IV
Facsimile No.: (919) 399-4895
With a required copy to:
Arnold & Porter
1200 New Hampshire Ave., N.W.
Washington, D.C. 20036
Attention: L. Stevenson Parker
Facsimile No.: (202) 872-6720
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If to SNC:
Southern National Corporation
200 West Second Street
Winston-Salem, North Carolina 27101
Attention: L. Glenn Orr, Jr.
Facsimile No.: (910) 773-7203
With a required copy to:
Hunton & Williams
951 E. Byrd Street
Richmond, Virginia 23219
Attention: David M. Carter
Facsimile No.: (804) 788-8218
7.5. CAPTIONS
The captions contained in this Reorganization Agreement are for reference
purposes only and are not part of this Reorganization Agreement.
7.6. COUNTERPARTS
This Reorganization Agreement may be executed in any number of counterparts,
and each such counterpart shall be deemed to be an original instrument, but all
such counterparts together shall constitute but one agreement.
7.7. GOVERNING LAW
This Reorganization Agreement shall be governed by and construed in
accordance with the laws of the State of North Carolina applicable to
agreements made and entirely to be performed within such jurisdiction, without
regard to the conflict of laws principles thereof, except to the extent federal
law may be applicable.
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IN WITNESS WHEREOF, the parties hereto, intending to be legally bound hereby,
have caused this Reorganization Agreement to be executed in counterparts by
their duly authorized officers and their corporate seal to be hereunto affixed
and attested by their officers thereunto duly authorized, all as of the day and
year first above written.
Attest:
BB&T Financial Corporation
_____________________________________ By __________________________________
Secretary John A. Allison IV
Chairman of the Board and
Chief Executive Officer
(SEAL)
Attest:
Southern National Corporation
_____________________________________ By __________________________________
Secretary L. Glenn Orr, Jr.
Chairman, President and
Chief Executive Officer
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<PAGE>
EXHIBIT 2
PLAN OF MERGER OF
SOUTHERN NATIONAL CORPORATION WITH AND INTO
BB&T FINANCIAL CORPORATION
PLAN OF MERGER ("Plan of Merger") dated as of July 29, 1994, and as amended
and restated as of October 22, 1994, by and between SOUTHERN NATIONAL
CORPORATION ("SNC"), a North Carolina corporation having its registered office
at 500 North Chestnut Street, Lumberton, North Carolina 28358, and BB&T
FINANCIAL CORPORATION ("BB&T"), a North Carolina corporation having its
registered office at 223 West Nash Street, Wilson, North Carolina 27893.
W I T N E S S E T H
WHEREAS, the respective Boards of Directors of SNC and BB&T deem the merger
of BB&T with and into SNC, under and pursuant to the terms and conditions
herein set forth or referred to, desirable and in the best interests of the
respective corporations and their respective shareholders, and the respective
Boards of Directors of SNC and BB&T have adopted resolutions approving this
Plan of Merger and an Agreement and Plan of Reorganization dated as of even
date herewith ("Reorganization Agreement");
WHEREAS, the Board of Directors of SNC has directed that this Plan of Merger
be submitted to the shareholders of SNC; and
WHEREAS, the Board of Directors of BB&T has directed that this Plan of Merger
be submitted to the shareholders of BB&T;
NOW, THEREFORE, in consideration of the premises and of the mutual agreements
herein contained, the parties hereto do hereby agree that the Plan of Merger
shall be as follows:
ARTICLE I.
Merger
Subject to the terms and conditions of this Plan of Merger and the
Reorganization Agreement, on the Effective Date (as hereinafter defined), BB&T
shall be merged with and into SNC, pursuant to the provisions of, and with the
effect provided in, Section 55-11-06 of the North Carolina Business Corporation
Act (said transaction being hereinafter referred to as the "Merger"). On the
Effective Date, the separate existence of BB&T shall cease and SNC, as the
surviving entity, shall continue unaffected and unimpaired by the Merger and
shall operate under the name "Southern National Corporation." (SNC as existing
on and after the Effective Date being hereinafter sometimes referred to as the
"Surviving Corporation.")
ARTICLE II.
Articles of Incorporation and Bylaws
Upon the Effective Date, the Articles of Incorporation and the Bylaws of the
Surviving Corporation shall be the Articles of Incorporation and Bylaws of SNC;
except that Article IV of SNC's Articles of Incorporation shall be amended by
deleting the first sentence of such Article and substituting the following:
"The Corporation shall have the authority to issue 300,000,000 shares
of Common Stock, par value $5 each, and 5,000,000 shares of Preferred
Stock, par value $5 each."
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ARTICLE III.
Board of Directors and Officers
1. From and after the Effective Date and until the first meeting of
shareholders of the Surviving Corporation called to elect directors following
the Merger (the "First Shareholders' Meeting"), the Board of Directors of the
Surviving Corporation shall consist of 24 persons, of which 12 shall be persons
named by the Board of Directors of BB&T ("BB&T Nominees") and 12 shall be
persons named by the Board of Directors of SNC ("SNC Nominees") (in each case
as identified by each party by letter to the other dated October 22, 1994). If
prior to the Effective Date (i) any of the BB&T Nominees or the SNC Nominees
becomes unable or unwilling to serve as a director of the Surviving
Corporation, or (ii) either BB&T or SNC determines to replace a BB&T Nominee or
an SNC Nominee, the party that designated such individual may name a
replacement to become a director of the Surviving Corporation after the
Effective Date. The members of the Nominating Committee of the Surviving
Corporation Board shall nominate for reelection, at the First Shareholders'
Meeting, as directors to serve on the Surviving Corporation Board of Directors
the BB&T Nominees and such of the SNC Nominees as may be required to be
reelected at such meeting (or their designated replacements pursuant to Section
4.13(a)). The terms of those directors of the Surviving Corporation to be
elected whose terms of office expire at the First Shareholders' Meeting shall
be allocated as designated by BB&T and SNC, provided that the terms of the same
number of SNC Nominees and BB&T Nominees (including those SNC Nominees, if any
whose terms do not expire at the First Shareholders' Meeting) will expire in
each applicable year. If after the Effective Date and prior to the First
Shareholders' Meeting, any of the BB&T Nominees or the SNC Nominees becomes
unable or unwilling or is otherwise ineligible to serve as a director of the
Surviving Corporation, the remaining BB&T Nominees or SNC Nominees, as the case
may be, may name a replacement to be nominated by the Nominating Committee for
election at the First Shareholders' Meeting. It is intended by the parties
hereto that following the Effective Date John A. Allison IV shall serve as
Chairman of the Board of the Surviving Corporation. If for any reason John A.
Allison IV is unavailable to serve as Chairman of the Board of the Surviving
Corporation at the Effective Date, the Chairman of the Board of the Surviving
Corporation shall be selected by mutual agreement of the Boards of Directors of
BB&T and SNC.
2. From and after the Effective Date, the Chief Executive Officer of the
Surviving Corporation shall be John A. Allison IV, to serve until his successor
is duly elected and qualified. If for any reason John A. Allison IV is
unavailable to serve as Chief Executive Officer of the Surviving Corporation at
the Effective Date, the Board of Directors of BB&T and SNC shall mutually agree
upon the person to serve as the Chief Executive Officer of the Surviving
Corporation. From and after the Effective Date, Henry G. Williamson, Jr. shall
be the Chief Administrative Officer, John R. Spruill shall be the Chief
Financial Officer, and each of W. Kendall Chalk, Robert E. Greene, Kelly S.
King, Morris D. Marley, Scott E. Reed and Michael W. Sperry shall be Executive
Vice Presidents of the Surviving Corporation. All other officers of the
Surviving Corporation shall be elected by the Board of Directors of the
Surviving Corporation.
ARTICLE IV.
Capital
1. The designation and number of outstanding shares of capital stock of BB&T
as of June 30, 1994 was as follows: (a) 36,271,016 shares of common stock, par
value $2.50 per share ("BB&T Common Stock"); and (b) no shares of Preferred
Stock. Each share of BB&T Common Stock is entitled to vote with respect to the
Merger. Such number of outstanding shares of BB&T Common Stock may be changed
prior to the Effective Date as a result of the exercise of stock options or
other rights, the sale of such shares by BB&T pursuant to its Dividend
Reinvestment Plan, the issuance of shares pursuant to its pending acquisition
of Commerce Bank, upon the repurchase by BB&T of such shares, or as otherwise
may be permitted pursuant to the Reorganization Agreement.
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2. The designation and number of outstanding shares of capital stock of SNC
as of June 30, 1994 was as follows: (a) 43,385,610 shares of common stock, par
value $5.00 per share ("SNC Common Stock" until the "Effective Date" and
"Surviving Corporation Common Stock" from and after the Effective Date) and(b)
770,000 shares of 6 3/4% Cumulative Convertible Preferred Stock, Series A,
$5.00 par value ("SNC Series A Preferred Stock"). Shares of capital stock of
SNC shall be entitled to vote with respect to the Merger as required by North
Carolina law. Such number of outstanding shares of SNC Common Stock and SNC
Series A Stock may be changed prior to the Effective Date as a result of the
exercise of stock options, the sale of such shares by SNC pursuant to its
Dividend Reinvestment Plan, the conversion of shares of SNC Series A Preferred
Stock, or other rights or upon the repurchase by SNC of shares of SNC Common
Stock. The number of outstanding shares of SNC Series A Preferred Stock may be
changed prior to the Effective Date as a result of the conversion of such
shares into shares of SNC Common Stock or upon the repurchase by SNC of such
shares.
3. The shares of capital stock of SNC issued and outstanding immediately
prior to the Effective Date shall, on the Effective Date, continue to be issued
and outstanding capital stock of the Surviving Corporation.
ARTICLE V.
Conversion and Exchange of SNC
Shares; Fractional Share Interests
1. On the Effective Date, each share of BB&T Common Stock outstanding
immediately prior to the Effective Date (except as provided in Paragraphs 3, 5,
and 7 of this Article) shall by virtue of the Merger be converted into 1.45
shares of Surviving Corporation Common Stock and shall no longer be shares of
common stock of BB&T.
2. On the Effective Date, all shares of BB&T Common Stock authorized but
unissued shall be canceled and no cash, stock or other property shall be
delivered in exchange therefor.
3. On and after the Effective Date, each holder of a certificate or
certificates theretofore representing outstanding shares of BB&T Common Stock
(any such certificate being hereinafter referred to as a "BB&T Certificate")
may surrender the same to the Surviving Corporation or its agent for
cancellation and each such holder shall be entitled upon such surrender to
receive in exchange therefor certificate(s) representing the number of whole
shares of Surviving Corporation Common Stock to which such holder is entitled
as provided herein and a check in an amount (subject to applicable withholding
taxes) equal to the amount of cash in lieu of a fractional share, without
interest, to which such holder is entitled as provided in Paragraph 7 of this
Article. Until so surrendered, each BB&T Certificate shall be deemed for all
purposes to evidence ownership of the number of whole shares of Surviving
Corporation Common Stock into which the shares represented by such Certificates
have been changed or converted as aforesaid. BB&T Certificates surrendered for
exchange by any person who is an "affiliate" of BB&T for purposes of Rule
145(c) under the Securities Act of 1933, as amended, shall not be exchanged for
certificates representing shares of Surviving Corporation Common Stock until
the Surviving Corporation has received the written agreement of such person
contemplated by Section 4.12 of the Reorganization Agreement. If any
certificate for shares of Surviving Corporation Common Stock is to be issued in
a name other than that in which a BB&T Certificate surrendered for exchange is
issued, the BB&T Certificate so surrendered shall be properly endorsed and
otherwise in proper form for transfer and the person requesting such exchange
shall affix any requisite stock transfer tax stamps to the BB&T Certificate
surrendered or provide funds for their purchase or establish to the
satisfaction of the Surviving Corporation or its agent that such taxes are not
payable.
4. Upon the Effective Date, the stock transfer books of BB&T shall be closed
and no transfer of BB&T Common Stock shall thereafter be made or recognized.
Any other provision of this Plan of Merger
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notwithstanding, neither the Surviving Corporation or its agent nor any party
to the Merger shall be liable to a holder of BB&T Common Stock for any amount
paid or property delivered in good faith to a public official pursuant to any
applicable abandoned property, escheat or similar law.
5. No conversion under Paragraph 1 of this Article V shall be made in respect
of any share of BB&T Common Stock as to which a BB&T shareholder has elected to
exercise dissenters' rights pursuant to Section 55-13-02 of the North Carolina
Business Corporation Act, as amended, if any, until such time as such
shareholder shall have effectively lost dissenters' rights.
6. In the event that during the period commencing on the date hereof and
ending on the Effective Date, the outstanding shares of SNC Common Stock shall
have been increased, decreased or changed into or exchanged for a different
number or kind of shares or securities by reorganization, recapitalization,
reclassification, stock dividend (other than pursuant to the Dividend
Reinvestment Plan), stock split or other like changes in BB&T's capitalization,
all without SNC's receiving consideration therefor, then an appropriate and
proportionate adjustment shall be made in the number and kind of shares of
Surviving Corporation Common Stock to be thereafter delivered to BB&T
shareholders pursuant to this Plan of Merger.
7. Notwithstanding any other provision hereof, each holder of shares of BB&T
Common Stock who would otherwise have been entitled to receive a fraction of a
share of Surviving Corporation Common Stock (after taking into account all BB&T
Certificates delivered by such holder) shall receive, in lieu thereof, upon
presentation of such BB&T Certificates, cash in an amount (subject to
applicable withholding taxes) equal to such fractional part of a share of
Surviving Corporation Common Stock multiplied by the market value of such
Surviving Corporation Common Stock. The market value of one share of Surviving
Corporation Common Stock on the Effective Date shall be the closing price of
SNC Common Stock as reported on the New York Stock Exchange Composite
Transactions Listing (as reported in the Wall Street Journal, or if not
reported thereby, any other authoritative source selected by the Surviving
Corporation) on the last business day preceding such date (or, if no such price
is reported on such date, on the next preceding business day when such price is
reported). No such holder shall be entitled to dividends, voting rights or any
other shareholder right in respect of any fractional share.
8. On the Effective Date, options to purchase shares of BB&T Common Stock
issued pursuant to BB&T's stock option plans shall be converted, without any
action on the part of the holders thereof, into options to acquire, upon
payment of the adjusted exercise price (which shall equal the exercise price
per share for the options immediately prior to the Merger, divided by 1.45),
the number of shares of SNC Common Stock the option holder would have received
pursuant to the Merger if he or she had exercised his or her options
immediately prior thereto. The conversion provided for any option in this
Paragraph 8 that is an "incentive stock option" within the meaning of Section
422 of the Internal Revenue Code of 1986, as amended ("Code") shall in all
events comply with the requirements of Section 424(a) of the Code, including
the requirement that such converted options shall not give to the holder
thereof any benefits additional to those which such holder had prior to such
conversion under the option as originally granted.
ARTICLE VI.
Effective Date of the Merger
Articles of Merger evidencing the transactions contemplated herein shall be
delivered to the North Carolina Secretary of State for filing as provided in
the Reorganization Agreement. The Merger shall be effective at the time and on
the date specified in such Articles of Merger (such date and time being herein
referred to as the "Effective Date").
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ARTICLE VII.
Further Assurances
If at any time the Surviving Corporation shall consider or be advised that
any further assignments, conveyances or assurances are necessary or desirable
to vest, perfect or confirm in the Surviving Corporation title to any property
or rights of BB&T, or otherwise carry out the provisions hereof, the proper
officers and directors of BB&T, as of the Effective Date, and thereafter the
officers of the Surviving Corporation acting on behalf of BB&T, shall execute
and deliver any and all proper assignments, conveyances and assurances, and do
all things necessary or desirable to vest, perfect or confirm title to such
property or rights in the Surviving Corporation and otherwise carry out the
provisions hereof.
ARTICLE VIII.
Conditions Precedent
The obligations of BB&T and SNC to effect the Merger as herein provided shall
be subject to satisfaction, unless duly waived, of the conditions set forth in
the Reorganization Agreement.
ARTICLE IX.
Termination
Anything contained in this Plan of Merger to the contrary notwithstanding,
and notwithstanding adoption hereof by the shareholders of SNC and BB&T, this
Plan of Merger may be terminated and the Merger abandoned as provided in the
Reorganization Agreement. If the Reorganization Agreement is terminated, then
this Plan of Merger shall terminate.
ARTICLE X.
Miscellaneous
1. This Plan of Merger may be amended or supplemented at any time prior to
its Effective Date by mutual agreement of BB&T and SNC. Any such amendment or
supplement must be in writing and approved by their respective Boards of
Directors and/or by officers authorized thereby and shall be subject to the
proviso in Section 6.4 of the Reorganization Agreement.
2. Any notice or other communication required or permitted under this Plan of
Merger shall be given, and shall be effective, in accordance with the
provisions of the Reorganization Agreement.
3. The headings of the several Articles herein are inserted for convenience
of reference only and are not intended to be a part of or to affect the meaning
or interpretation of this Plan of Merger.
4. This Plan of Merger shall be governed by and construed in accordance with
the laws of the State of North Carolina applicable to agreements made and
entirely to be performed in such jurisdiction, except to the extent Federal law
may be applicable.
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