<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
BB&T Financial Corporation
- - - -------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Jerone C. Herring
- - - -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules O-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and O-11.
1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule O-11:/1/
-------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
/1/ Set forth the amount on which the filing fee is calculated and state how it
was determined.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule O-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
-----------------------------------------------
2) Form, Schedule or Registration Statement No.:
-----------------------------------------------
3) Filing Party:
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4) Date Filed:
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<PAGE>
BB&T FINANCIAL CORPORATION
March 15, 1994
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders of BB&T
Financial Corporation scheduled for 11:00 a.m. on Tuesday, April 26, 1994, at
the Capital City Club, Center Plaza, 411 Fayetteville Street Mall, Raleigh,
North Carolina.
The matters scheduled for consideration at the meeting are described in detail
in the Notice of Annual Meeting of Shareholders and Proxy Statement. In order
to be sure your shares are voted at the meeting if you cannot attend, please
complete, sign and return the enclosed proxy card as soon as possible.
The Corporation's audited financial statements and other required disclosures
are presented in the 1993 Annual Report on Form 10-K, a copy of which follows
the Proxy Statement. The Corporation's 1993 Annual Report to shareholders in a
summary format, also included in this package, contains our letter to
shareholders, selected financial data, and a financial summary. We believe that
this approach to communicating with our shareholders, the investment community
and the public provides financial and other corporate information in an
understandable and useful manner.
We trust that this presentation will satisfy your informational needs, and at
the same time provide you with a better understanding of both the financial
history and strategic direction of BB&T Financial Corporation.
Sincerely,
/s/ John A. Allison IV
John A. Allison IV
Chairman of the Board and
Chief Executive Officer
<PAGE>
BB&T FINANCIAL CORPORATION
223 WEST NASH STREET
WILSON, NORTH CAROLINA 27894-1847
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
April 26, 1994
The Annual Meeting of Shareholders of BB&T FINANCIAL CORPORATION will be held
at the Capital City Club, Center Plaza, 411 Fayetteville Street Mall , Raleigh,
North Carolina, on Tuesday, April 26, 1994, at 11:00 a.m., for the following
purposes:
(1) To fix the number of directors to be elected at twenty-seven (27) and
the election of the twenty-four (24) nominees named in the accompanying
Proxy Statement.
(2) To amend the Corporation's Articles of Incorporation to increase the
number of authorized shares of Common Stock from 50,000,000 shares to
100,000,000 shares.
(3) To ratify the action of the Audit Committee of the Board of Directors
in selecting KPMG Peat Marwick as independent auditors for the
Corporation and its subsidiaries for the year 1994.
(4) To transact such other business as may properly come before the Annual
Meeting or any adjournments thereof.
Only shareholders whose names appeared of record on the books of the
Corporation at the close of business on March 7, 1994, will be entitled to
notice of and to vote at the Annual Meeting or any adjournments thereof.
/s/ Jerone C. Herring
Jerone C. Herring
Secretary
DATED: MARCH 15, 1994
YOU ARE REQUESTED TO FILL IN, DATE, SIGN AND RETURN THE PROXY SUBMITTED
HEREWITH IN THE ENCLOSED ENVELOPE. THE GIVING OF SUCH PROXY WILL NOT AFFECT
YOUR RIGHT TO REVOKE SUCH PROXY OR TO VOTE IN PERSON SHOULD YOU LATER DECIDE TO
ATTEND THE MEETING.
<PAGE>
BB&T FINANCIAL CORPORATION
223 WEST NASH STREET
WILSON, NORTH CAROLINA 27894-1847
PROXY STATEMENT
GENERAL
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of BB&T FINANCIAL CORPORATION (hereinafter
sometimes referred to as "Corporation") to be used in voting at the Annual
Meeting of Shareholders of the Corporation to be held at the Capital City Club,
Center Plaza, 411 Fayetteville Street Mall, Raleigh, North Carolina, on
Tuesday, April 26, 1994, at 11:00 a.m., and any adjournments thereof.
The Board of Directors has fixed the close of business on March 7, 1994, as
the record date and time for the determination of shareholders entitled to
notice of and to vote at the Annual Meeting or any adjournments thereof. As of
March 7, 1994, there were 32,141,049 shares of common stock issued and
outstanding which are eligible to be voted on each matter coming before the
meeting. Cumulative voting for the election of directors is not available under
applicable law; therefore, each eligible share is entitled to one vote on each
matter to be voted upon.
This Proxy Statement and the accompanying form of proxy will be mailed to
shareholders commencing March 15, 1994, or as soon thereafter as permitted by
the appropriate regulatory authorities.
Any shareholder who executes the proxy referred to in this Proxy Statement may
revoke it at any time before it is exercised. The proxy may be revoked by
either an instrument revoking it or by a duly executed proxy bearing a later
date filed with the Secretary of the Corporation. The voting of such proxy will
be suspended if the person executing the same attends the meeting and elects to
vote in person. Whether or not you plan to attend, you are urged to sign and
return the enclosed proxy.
SOLICITATION AND EXPENSES
The cost of preparing, assembling and mailing this Proxy Statement and the
form of proxy will be borne by the Corporation. Directors, officers and
employees of the Corporation and its subsidiaries may also solicit proxies
personally or by telephone or telegram; however, no compensation will be paid
for such solicitations. In addition, the Corporation will bear the expenses of
brokerage houses and other custodians, nominees and fiduciaries, who, at the
request of the Corporation, may send proxies and proxy solicitation material to
their principals.
PRINCIPAL SHAREHOLDER
At March 7, 1994, Corporation did not know of any person who was the
beneficial owner of more than 5% of Corporation's voting securities. At such
date, CEDE & Co. was the record owner of 16,034,547 shares of Corporation's
common stock. Management believes that CEDE & Co. has no beneficial interest in
such shares. The shares of Corporation's common stock beneficially owned by all
directors, nominees and Executive Officers of the Corporation as a group are
disclosed in the table of security ownership commencing on page I-6 hereof.
I-1
<PAGE>
MANAGEMENT OF CORPORATION AND BANK
EXECUTIVE OFFICERS
The Executive Officers of the Corporation and of Branch Banking and Trust
Company ("Bank") are:
<TABLE>
<CAPTION>
Name Age Position in Corporation Position in Bank
- - - ---- --- ----------------------- ----------------
<S> <C> <C> <C>
John A. Allison IV 45 Chairman of the Board and Chairman of the Board
Chief Executive Officer and Chief Executive
Officer
Henry G. Williamson, Jr. 46 President and Chief Chief Operating
Operating Officer Officer
Kelly S. King 45 Senior Executive Vice President
President
W. Kendall Chalk 48 Senior Executive Vice Senior Executive Vice
President President
Scott E. Reed 45 Senior Executive Vice Senior Executive Vice
President and Treasurer President
</TABLE>
The above officers have held executive positions with the Corporation or the
Bank for at least the past five years. Officers are elected annually by the
Board of Directors.
BOARD OF DIRECTORS
The business and affairs of the Corporation are governed by the directors who
are elected by the shareholders for a term of one year and until their
successors are elected and qualified. The Board will hold ten regular meetings
and may hold special meetings as necessary. In fiscal 1993, there were eleven
meetings of the Board.
All of the twenty-four (24) persons presently serving as directors of the
Corporation are nominees for election at the Annual Meeting and are identified
under the table beginning on page I-4 of this Proxy Statement (See "Proposal
1--Election of Directors", page I-3). This table includes a description of the
principal occupation and affiliation of the nominees. The nominees represent a
variety of business experiences with respect to responsibility of position, as
well as size and type of business. During fiscal 1993, all persons presently
serving as directors attended at least 75% of the total meetings of the Board
and of standing committees of the Corporation to which they were elected,
except for Mr. Tanner.
The Bank is the principal subsidiary of the Corporation and its business and
affairs are also governed by its Board of Directors. The members of the
Corporation Board constitute the members of the Bank Board. During fiscal 1993,
the Bank directors held ten meetings.
COMMITTEES OF THE BOARD
During fiscal 1993, the Board of Directors of the Corporation had standing
Audit, Executive and Trust Committees to assist in the discharge of its
responsibilities. The memberships of the respective committees are identified
under the table beginning on page I-4 of this Proxy Statement.
The Audit Committee consists of six non-employee directors. This Committee
reviews the results of audits by the Corporation's independent auditors and is
delegated the authority to select, retain or discharge such auditors and to
periodically review the independence of such auditors and the scope and
adequacy of internal accounting controls; to approve the professional services
to be provided, and the cost of such services; and to consult with the
independent auditors as to the results of the auditing engagement. As a result
of the enactment of the Federal Deposit Insurance Corporation Improvement Act
of 1992 ("FDICIA"), the Audit Committee's duties have been significantly
expanded. The Committee is responsible for overseeing the Corporation's
compliance with the new internal control assessments and issuance of
appropriate financial
I-2
<PAGE>
reports and certifications. During fiscal 1993, the Audit Committee initiated
appropriate policies and procedures to insure that the requirements of FDICIA
are met. The Audit Committee holds regular meetings on a quarterly basis and
special meetings as necessary. During 1993, this Committee held four meetings.
The Bank also has an Audit Committee which consists of the same persons who
serve on the Corporation's Audit Committee. The Bank's Audit Committee holds
regular meetings on a quarterly basis and special meetings as necessary. The
primary responsibilities of this Committee are to review the results of audits
by the Bank's internal auditors, to review the loan portfolio, to supervise the
Bank's compliance with the Community Reinvestment Act and to provide for the
examination reports required by the Bank's regulatory authorities. During 1993,
this Committee held four meetings.
The Executive Committee consists of nine directors. This Committee is
generally authorized to have and to exercise all of the powers of the Board of
Directors between meetings of the Board. In addition, this Committee also
performs the duties of a Nominating Committee which include the review of the
qualifications of possible candidates and the determination annually of
director nominees and the recommendation to the Board of candidates to fill any
vacancies on the Board as may occur during the year, and of candidates for
membership on standing committees. The Executive Committee will consider a
candidate for director proposed by any shareholder, provided that supporting
information as to his or her qualifications for nomination as a director is
forwarded to the Chief Executive Officer of the Corporation before the end of
the fiscal year. The Corporation's Executive Committee also serves as a
Compensation Committee which, at least annually, fixes the salary of the
Chairman, reviews all salaries fixed by the Chairman, grants stock option
awards, approves incentive compensation plans and payouts, reviews the various
employee benefit plans and recommends changes to the plans and any new
compensation plans to the Board. This Committee is also responsible for a
review of management perquisites, if any, and the establishing of guidelines
for these types of benefits. In addition, the Committee is responsible for
ensuring that selected branch offices of the Bank are visited annually by a
group of directors who confer with the regional and branch managers, observe
general conditions in such offices and meet with local advisory board members.
Regular meetings are held on a quarterly basis and special meetings as
necessary. During 1993, a total of five meetings of this Committee were held.
The Bank also has an Executive Committee which consists of the same persons who
serve on the Corporation's Executive Committee. The duties of this Committee
include consulting with the Chairman, reviewing the investment portfolio and
considering such other matters as may be submitted. This Committee is empowered
to exercise the authority of the Bank Board between meetings of the Board, and
also serves as a Nominating Committee for the Bank. Meetings are held on a
quarterly basis. During 1993, this Committee held four meetings.
The Trust Committee consists of nine directors. This Committee supervises the
fiduciary activities of the Corporation's subsidiaries. This Committee will
hold regular meetings on a quarterly basis and special meetings as necessary.
During 1993, this Committee held four meetings. The Bank also has a Trust
Committee which supervises its Trust Division activities. This Committee
consists of the same persons who serve on the Corporation's Trust Committee.
Regular meetings of this Committee are held on a quarterly basis and special
meetings as necessary. During 1993, a total of four meetings of this Committee
were held.
Other special committees may be appointed by the Corporation and the Bank
Boards as necessary to assist the respective Boards in the carrying out of
their duties and responsibilities.
PROPOSAL 1--ELECTION OF DIRECTORS
The By-Laws of the Corporation provide for the election of a Board of
Directors to be composed of not more than thirty-five (35) or less than three
(3) members. The Executive Committee has recommended twenty-four (24) nominees
for election as directors, consisting of the present members of the Board of
Directors, to serve until the next annual meeting and until their successors
shall be elected and shall have qualified. In addition, the Executive Committee
has recommended that three (3) vacancies on the Board be created to be filled
in the discretion of the Board prior to the 1995 annual meeting of
shareholders. In connection with the proposed acquisition of L.S.B. Bankshares,
Inc., ("LSB") of Lexington, South Carolina
I-3
<PAGE>
which was announced during 1993, the Corporation has agreed to nominate two of
the present directors of LSB to the Corporation's Board. These appointments
will be effective upon consummation of the proposed acquisition. The nominees,
who will be selected by the Corporation's Board in consultation with the LSB
directors, have not yet been designated. No arrangement or understanding exists
with respect to the manner in which the Board, at its discretion, may fill the
remaining vacancy being created or any other vacancy that may occur during the
year.
The persons nominated below will be elected if they receive a plurality of the
votes cast in the election of directors. Abstentions and shares held in street
name that are not voted in the election of directors will not be included in
determining a plurality. The proxies solicited for this meeting cannot be voted
for a greater number of persons than the number of nominees named. Cumulative
voting in the election of directors is not permitted by applicable law. THE
PERSONS NAMED IN THE FORM OF PROXY WILL VOTE THE PROXY AS SPECIFIED; AND IF NO
SPECIFICATION IS MADE, THE PROXY WILL BE VOTED "FOR" THE ELECTION OF THE
NOMINEES LISTED HEREIN. If any nominee shall become unavailable for any reason,
the persons named in the form of proxy shall vote for a substitute nominee or
vote to reduce the number of directors to be elected as directed by the
Executive Committee of the Corporation.
THE NOMINEES
The following table contains the principal occupation, age, and certain other
information as to the twenty-four (24) nominees who have consented to stand for
election as directors at the Annual Meeting as of December 31, 1993:
<TABLE>
<CAPTION>
Director of
Principal Occupation(s) Corporation
Name During Last Five Years Age Since
---- ----------------------- --- -----------
<C> <S> <C> <C>
Joseph B. Alala, Jr./(1)/ Senior Partner, Alala, Mullen, 60 1983
(A) Holland, and Cooper, P.A.
(Attorneys), Gastonia, N.C.
John A. Allison IV Chairman and Chief Executive 45 1986
(E,T) Officer, BB&T Financial
Corporation, and Chairman and
Chief Executive Officer, Branch
Banking and Trust Company, Wilson,
N.C.
W. Watson Barnes President, Wilson Petroleum 57 1981
(A) Company, Inc. (Distributor of
petroleum products), Wilson, N.C.
Paul B. Barringer President and Chief Executive 63 1975
(T) Officer, Coastal Lumber Company
(Dealer in lumber products),
Weldon, N.C.
Robert L. Brady Senior Vice President, Branch 63 1991
Banking and Trust Company. Prior
to April 1992, President, Gate
City Federal Savings Bank,
Greensboro, N.C.
W. G. Clark III President, Clark Industries, Inc. 60 1981
(T) (Farming), Tarboro, N.C.
Jesse W. Corbett, Jr. Personal Investments, Morehead 57 1981
(E) City, N.C.
W. R. Cuthbertson, Jr. Senior Vice President, Branch 61 1983
(T) Banking and Trust Company,
Charlotte, N.C.
Fred H. Deaton, Jr. Personal Investments, Statesville, 62 1974
(E) N.C.
Joe L. Dudley, Sr. President and Chief Executive 56 1992
(A) Officer, Dudley Products, Inc.
(Hair care products), Greensboro,
N.C.
Tom D. Efird President, Standard Distributors, 54 1982
(E) Inc. (Beverage wholesaler),
Gastonia, N.C.
</TABLE>
I-4
<PAGE>
<TABLE>
<CAPTION>
Director of
Principal Occupation(s) Corporation
Name During Last Five Years Age Since
---- ----------------------- --- -----------
<C> <S> <C> <C>
O. William Fenn, Jr. Director, Furniture Export 67 1991
(E) Office, International Trade
Division, N.C. Department of
Commerce. Prior to April
1992, Vice Chairman, LADD
Furniture Company (Furniture
manufacturer), High Point,
N.C.
James E. Heins Telecommunications 63 1985
(T) Consultant, Pinehurst, N.C.
Prior to August 1991, Vice
President, Government
Relations, ALLTEL Corporation
(Telecommunications),
Sanford, N.C.
Raymond A. Jones, Jr. Personal Investments, 69 1975
(A) Charlotte, N.C.
Kelly S. King Senior Executive Vice 45 1991
President, BB&T Financial
Corporation, and President,
Branch Banking and Trust
Company, Raleigh, N.C.
David R. LaFar III Chairman, LaFar Industries, 64 1990
(E) Inc. (Textile manufacturer),
Gastonia, N.C.
J. Ernest Lathem, M.D. Medical Director, Prostate 60 1987
(T) Diagnostic Center,
Greenville, S.C.
James H. Maynard Chairman and Chief Executive 54 1985
(A) Officer, Investors Management
Corporation (Restaurants),
Raleigh, N.C.
A. Winniett Peters Consultant, Standard 67 1977
(E) Commercial Tobacco Company.
Prior to January 1993,
Chairman of the Board,
Standard Commercial Tobacco
Company (Tobacco processors
and exporters), Wilson, N.C.
Richard L. Player, Jr./(1)/ President, Player, Inc. 59 1990
(E) (Commercial and industrial
general contractor),
Fayetteville, N.C.
S. B. Tanner III Chairman of the Board, Tanner 66 1982
(T) Companies, Inc. (Manufacturer
of ladies' apparel),
Rutherfordton, N.C.
Larry J. Waggoner Real Estate Development and 58 1985
(T) Investments, Naples, Fla.
Prior to August 1991,
President, Rental Towel &
Uniform Service, Inc. (Rental
services), Graham, N.C.
Henry G. Williamson, Jr. President and Chief Operating 46 1986
(E,T) Officer, BB&T Financial
Corporation, and Chief
Operating Officer, Branch
Banking and Trust Company,
Wilson, N.C.
William B. Young, M.D. Retired Specialist in 68 1974
(A) Internal Medicine, Wilson,
N.C.
</TABLE>
- - - --------
A-- Denotes member of Corporation's Audit Committee.
E-- Denotes member of Corporation's Executive Committee.
T-- Denotes member of Corporation's Trust Committee.
(1) For additional information concerning Messrs. Alala and Player, see "Other
Transactions" on page I-15.
I-5
<PAGE>
Each of the above nominees presently serves as a director of the Bank and/or
Branch Banking and Trust Company of South Carolina (hereinafter sometimes
referred to as "South Carolina Bank"), a subsidiary of the Corporation. Such
directors have held these positions for the past five years, except for Messrs.
Player and LaFar (appointed in 1990); Messrs. Brady, Fenn and King (appointed
in 1991); and Mr. Dudley (appointed in 1992).
Certain of the above directors and nominees are also directors of other
publicly held companies. O. William Fenn, Jr. has been a director of Ladd
Furniture Company since 1982. James E. Heins has been a director of Trion, Inc.
since 1980. James H. Maynard has been a director of Investors Management
Corporation since 1972, a director of Golden Corral Realty Corporation since
1984, and a director of Rose's Stores, Inc. since 1989. A. Winniett Peters has
been a director of Standard Commercial Corporation since 1978. Each of these
companies has securities registered under the Securities Exchange Act of 1934.
None of the nominees for directors or the Executive Officers of the
Corporation are related by blood, marriage or adoption to any other nominee or
any Executive Officer of the Corporation or any director or Executive Officer
of a subsidiary, in a degree of kinship of first cousin or nearer.
Under the securities laws of the United States, Corporation's directors and
Executive Officers are required to report their ownership of Corporation's
common stock and any changes in that ownership to the Securities and Exchange
Commission. Specific dates have been established and Corporation is required to
report in this proxy statement any failure to file by the established dates
during 1993. In 1993, all of these filing requirements were satisfied by
Corporation's directors and Executive Officers. In making this statement,
Corporation has relied on the written representations of its incumbent
directors and Executive Officers and copies of the reports that have been filed
with the Commission.
SECURITY OWNERSHIP OF DIRECTOR NOMINEES AND EXECUTIVE OFFICERS
The following table contains certain information relating to the beneficial
ownership of Corporation's common stock by each director nominee, by each
executive officer named in the Summary Compensation Table and by all director
nominees and executive officers as a group, as of December 31, 1993:
<TABLE>
<CAPTION>
Common Stock Beneficially Owned/(1&2)/
----------------------------------------
Percent
Name Shares of Class
- - - ---- ------ --------
<S> <C> <C>
Joseph B. Alala, Jr............... 25,687 .08%
John A. Allison IV................ 95,073 .29
W. Watson Barnes.................. 5,830 .02
Paul B. Barringer................. 8,650 .03
Robert L. Brady................... 53,308 .16
W. Kendall Chalk.................. 44,176 .14
W.G. Clark III.................... 33,535 .10
Jesse W. Corbett, Jr.............. 17,351 .05
W.R. Cuthbertson, Jr./(3)/........ 126,784 .39
Fred H. Deaton, Jr./(4)/.......... 84,979 .26
Joe L. Dudley, Sr................. 510 .01
Tom D. Efird/(5)/................. 20,771 .06
O. William Fenn, Jr............... 13,509 .04
James E. Heins.................... 8,708 .03
Raymond A. Jones, Jr.............. 7,421 .02
Kelly S. King..................... 49,896 .15
David R. LaFar III/(6)/........... 26,818 .08
J. Ernest Lathem, M.D............. 165,687 .51
</TABLE>
I-6
<PAGE>
<TABLE>
<CAPTION>
Common Stock Beneficially Owned/(1&2)/
----------------------------------------
Percent
Name Shares of Class
- - - ---- ------ --------
<S> <C> <C>
James H. Maynard/(7)/...... 68,952 .21%
A. Winniett Peters/(8)/.... 12,070 .04
Richard L. Player,
Jr./(9)/.................. 10,078 .03
Scott E. Reed.............. 47,461 .15
S.B. Tanner III/(10)/.... 9,248 .03
Larry J. Waggoner.......... 10,435 .03
Henry G. Williamson, Jr.... 68,575 .21
William B. Young, M.D...... 32,000 .10
All Director Nominees and
Executive Officers of the
Corporation
as a group (26 persons)... 1,047,512/(11)/ 3.21
</TABLE>
- - - --------
(1) Also included are shares subject to options (presently exercisable or
exercisable within 60 days) granted under the Bank's Long-Term Incentive
Plan discussed later: Messrs. Allison, 54,876 shares; Brady, 7,000 shares;
Chalk, 25,748 shares; Cuthbertson, 10,054 shares; King, 26,668 shares;
Reed, 24,925 shares; and Williamson, 43,891 shares; and for the Executive
Officers as a group (five persons), 176,108 shares.
(2) Beneficial owners have sole voting and dispositive powers with respect to
the shares of stock included in the table, unless beneficial ownership is
disclaimed, except for the following where such powers are shared: Messrs.
Alala, 1,574 shares; Allison, 22,567 shares; Clark, 2,327 shares; Corbett,
16,879 shares; Cuthbertson, 6,000 shares; Deaton, 79,777 shares; King,
1,692 shares; LaFar, 10,133 shares; Reed 4,165 shares; Williamson, 7,599
shares; and Young, 30,006 shares; and for the Executive Officers as a
group (five persons ), 36,023 shares.
(3) Includes 6,000 shares as to which Mr. Cuthbertson has the right to vote
only when Branch Banking and Trust Company, as successor trustee for
certain of Mr. Cuthbertson's children, is legally unable to do so; and
40,090 shares owned by Mr. Cuthbertson's wife, as to which Mr. Cuthbertson
disclaims beneficial ownership.
(4) Includes 2,105 shares owned of record by Mr. Deaton's wife, as to which
Mr. Deaton disclaims beneficial ownership.
(5) Includes 676 shares owned of record by Gastonia United Oil Company, an
affilliate of Mr. Efird's sons, as to which Mr. Efird disclaims beneficial
ownership.
(6) Includes 938 shares owned of record by Mr. LaFar's wife, as to which Mr.
LaFar disclaims beneficial ownership.
(7) Includes 8,545 shares restored by Mr. Maynard's wife, as to which Mr.
Maynard disclaims beneficial ownership.
(8) Includes 572 shares owned of record by Mr. Peter's wife, as to which Mr.
Peters disclaims beneficial ownership.
(9) Includes 1,000 shares owned of record by Mr. Player's wife, as to which
Mr. Player disclaims benefical ownership.
(10) Includes 4,126 shares owned of record by Mr. Tanner's wife, as to which
Mr. Tanner disclaims beneficial ownership.
(11) Includes 64,052 shares owned of record as to which beneficial ownership is
disclaimed.
REPORT OF THE COMPENSATION COMMITTEE
The Bylaws of the Corporation provide that the Executive Committee shall fix
the compensation of the Chief Executive Officer and shall annually review, in
the aggregate, the salaries fixed for other officers by the Chief Executive
Officer. The Bylaws further provide that any employee director who serves on
the Executive
I-7
<PAGE>
Committee is disqualified from acting on any matter relating to compensation.
Accordingly, the Executive Committee when it acts on compensation matters
consists entirely of non-employee directors. These same non-employee directors
also constitute the Compensation Committee which administers all of the benefit
plans of the Corporation, including the long-term incentive plan, which
provides for the granting of stock options to selected officers.
In determining the executive compensation program of the Corporation, the
Committee seeks to establish base salaries for all Executive Officers,
including the Chief Executive Officer, that are competitive with other
institutions of comparable size and geographic location. In addition, the
Committee administers the Corporation's Executive Incentive Compensation Plan
which awards cash bonuses on an annual basis tied to the financial performance
of the Corporation as such performance relates to established financial
criteria. The base salaries and bonuses constitute the total annual cash
compensation of all Executive Officers of the Corporation.
In addition to annual cash compensation, the Committee also administers the
Corporation's Long-Term Incentive Plan, pursuant to which stock options are
granted to those officers selected by the Committee on an annual basis. The
Plan provides for restricted stock grants; however, the Committee has not
elected to make any such grants at this time. The number of stock options
awarded to a participating officer is determined by the officer's level of base
salary and level of responsibility in the Corporation or its subsidiaries. All
awards are granted on an annual basis, become exercisable over a five-year
period, and will expire ten years from the date of grant.
In addition to the foregoing methods of compensation, the Committee
periodically reviews the other "fringe benefit" programs of the Corporation,
which presently include a tax qualified 401(k) Plan, a pension plan, a health
care plan, and other plans or policies relating to employee welfare. These
plans are reviewed periodically by the Committee in order to determine that
they are competitive with similar plans of other financial institutions' and
will promote the objective of providing adequate protection and benefits to all
officers and employees of the Corporation. These plans are not considered as
part of the annual compensation program of Executive Officers.
In administering the Corporation's total compensation program, the Committee
reviews the financial performance of the Corporation for the past year compared
to plans previously adopted by the directors and the projected performance for
the ensuing year as set forth in the Corporation's Corporate Plan and Profit
Plan. In addition, the Committee reviews the ten-year performance record of the
Corporation for earnings, return on assets, return on equity, balance sheet
growth, capitalization, stock price and other selected measures. The Committee
also compares the prior year results to the long-term goal of providing
superior balanced performance by reviewing customer service quality and
investments in the future through people, technology and acquisitions. The
Corporation's performance within these categories determines the level of total
compensation awarded by the Committee.
In February 1994, the Committee reviewed the provisions of Section 162(m)(1)
of the Revenue Reconciliation Act of 1993 ("RRA") which disallows a tax
deduction for any publicly held corporation for remuneration exceeding $1
million in any tax year for the Chief Executive Officer and other executive
officers named in the Summary Compensation Table. The Committee noted that an
exception to non-deductibility is established for "performance based
compensation" if performance goals are set by an independent compensation
committee and the terms of the plan are approved by shareholders. The Committee
recognized that the Chief Executive Officer's taxable remuneration could exceed
$1 million if a significant amount of stock options are exercised because the
options are "non-qualified," which would cause the gain to be taxable at the
time of exercise. However, since no stock options currently exercisable by the
Chief Executive Officer expire until 1997, the probability of exercise is
remote during 1994. Accordingly, no shareholder approval of any plan is being
sought in 1994, but the matter will be considered by the committee for
submission to shareholders in 1995. The Committee recognized that the Long-Term
Incentive Plan (Stock Option Plan) has previously been approved by
shareholders, and until final regulations pursuant to RRA are issued it is
I-8
<PAGE>
unclear if the performance standards in the plan would qualify. Furthermore,
while the performance standards of the Executive Incentive Compensation Plan
(Annual Bonus Plan) would in all probability be specific enough to qualify,
this plan has not been approved by shareholders.
In establishing the Chief Executive Officer's salary, the Committee
additionally reviews salary data supplied by Wyatt Data Services' Financial
Institutions Compensation Survey, which is a compilation of compensation for
comparable positions in selected geographic areas. The Committee reviews such
data for North Carolina banks, as well as data for institutions of similar size
located in the Southeastern United States. The base salary of the Chief
Executive Officer for 1993 was below the median of such institutions, but the
total compensation of such officer was approximately equal to the median. The
Compensation Committee believes that a significant number of the institutions
in the Wyatt Survey are included in the data presented in the Shareholders
Return Performance Graph. In addition, the Committee also considers the
established guideline of the Corporation and its subsidiaries in awarding
salary increases for all officers and employees, which for 1993 was 5%.
The Committee believes that the structure and administration of the
Corporation's total compensation program supports the Corporation's business
mission and strategy of being a pre-eminent provider of quality financial
services to its customers and thereby provides economic benefits for
shareholders and fair treatment to employees. The program further promotes the
Corporation's internal culture and human resource values, which will foster
career opportunities and development of all employees, by encouraging and
rewarding individual performance as well as teamwork among its employees. As an
Executive Officer's level of responsibility increases, a greater portion of
potential total compensation is based on performance incentives and less on
base salary and employee benefits. In addition, the higher an individual rises
in the organization, the greater the mix of compensation shifts to reliance on
the value of the Corporation's common stock through stock option awards, which
aligns the long-term interests of the executive with those of the shareholders.
In administering the annual award of cash bonuses, the Committee establishes
the financial criteria to be utilized and the relative weight of such criteria.
In 1993, the Committee specified that an initial threshold for return on equity
must be attained in order for an award to be earned by any participant. The
amount of any award would be based on the Corporation attaining certain
specified levels of performance as to (i) growth in net income and (ii) growth
in total earning assets. The Committee weighted growth in net income twice as
heavily as growth in total earning assets. In 1993, the Corporation achieved
the performance levels specified by the Committee such as would permit all
participants to receive an award of 110% of their established goals. The
executive officers named in the Summary Compensation Table each had an
established goal of 35% of base salary. Accordingly, each of such officers
received an annual bonus of 38.5% of base salary, and the amount is shown in
column (d) of the Summary Compensation Table on Page I-10.
In administering the award of stock options, the Committee establishes a
target for each participant and then grants an option for the number of shares
of Corporation's stock that will yield the established target, based on the
price per share of the stock on the date of grant. In 1993, the Committee
established a target of 100% of base salary for the Chief Executive Officer and
the other executive officers named in the Summary Compensation Table. The award
and the price per share is shown in the table captioned Option/SAR Grants in
Last Fiscal Year on Page I-11.
In February 1993, the Committee approved a base salary increase of 5% for the
Chief Executive Officer. This increase was consistent with the average increase
for all officers of the Corporation and subsidiaries and was made after due
consideration of the foregoing factors. In addition, the Committee approved
payouts under the various plans set forth above. The tables which follow
reflect the decisions made by the Committee.
The members of the Executive Committee who constituted the Compensation
Committee were:
Paul B. Barringer W. G. Clark III Fred H. Deaton, Jr.
Tom D. Efird David R. LaFar III A. Winniett Peters
Ralph F. Schmidt
I-9
<PAGE>
EXECUTIVE COMPENSATION
The aggregate compensation paid or accrued in 1993 by the Corporation and
subsidiaries for services rendered during 1993 by the Chief Executive Officer
and each of the four most highly compensated Executive Officers of the
Corporation and subsidiaries whose total cash compensation exceeded $100,000
(and constituting all of the Executive Officers of Corporation and subsidiaries
as a group) is set forth in the following table:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
------------------------------ -------------------------------
Awards Payouts
-------------------------------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Other Restricted Securities All
Annual Stock Underlying LTIP Other
Name and Salary Bonus Compensation Awards Options/Sars payouts Compensation(1)
Principal Position Year ($) ($) ($) $ (#) ($) ($)
- - - -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
John A. Allison IV, 1993 $370,388 $142,599 n/a n/a 11,139 $88,038 $14,816
Chairman and Chief 1992 352,750 179,021 n/a n/a 15,987 59,252 15,299
Executive Officer 1991 336,007 184,804 n/a n/a 17,350 19,566 13,440
Henry G. Williamson, 1993 297,413 114,504 n/a n/a 8,944 57,565 11,897
Jr., President and 1992 283,237 143,743 n/a n/a 11,162 39,428 12,284
Chief Operating 1991 269,759 127,596 n/a n/a 11,834 19,068 10,790
Officer
Kelly S. King, 1993 217,875 83,882 n/a n/a 6,553 31,701 8,715
Senior Executive Vice 1992 189,625 96,235 n/a n/a 6,889 21,214 8,185
President 1991 165,750 63,814 n/a n/a 7,169 10,604 7,191
W. Kendall Chalk, 1993 165,850 63,852 n/a n/a 4,988 29,184 6,634
Senior Executive Vice 1992 157,950 80,160 n/a n/a 6,225 19,751 6,850
President 1991 150,447 57,922 n/a n/a 6,600 9,995 6,526
Scott E. Reed, 1993 160,088 61,634 n/a n/a 4,816 28,179 6,406
Senior Executive Vice 1992 152,512 77,400 n/a n/a 6,011 19,385 6,229
President and 1991 145,254 55,923 n/a n/a 6,372 9,995 6,300
Treasurer
</TABLE>
- - - --------
(1) The compensation shown as "All Other Compensation" for 1993 consisted of
the Corporation's matching contribution under the Savings and Thrift Plan
("Thrift Plan"), a qualified defined contribution plan, and the
Corporation's contribution to the Supplemental Executive Retirement Plan
("SERP"), a non-qualified excess benefit plan. The amount of such
compensation for each individual shown in the table is as follows:
<TABLE>
<CAPTION>
Allison Williamson King Chalk Reed
------- ---------- ------ ------ ------
<S> <C> <C> <C> <C> <C>
Thrift Plan Contribution.......... $4,820 $3,870 $4,305 $6,074 $6,406
SERP Contribution................. 9,996 8,027 4,410 560 0
</TABLE>
I-10
<PAGE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The information set forth below reflects the stock options granted during the
past fiscal year to the Chief Executive Officer and the four (4) most highly
compensated Executive Officers (no stock appreciation rights having been
granted):
<TABLE>
<CAPTION>
Potential Realizable Value at
Assumed Annual Rates
of Stock Price Appreciation
Individual Grants for Option Term
- - - --------------------------------------------------------------------------- ------------------------------
(a) (b) (c) (d) (e) (f) (g)
Number of % of
Securities Total
Underlying Options/SARs
Options/SARs Granted to Exercise or
Granted (1) Employees in Base Price Expiration
Name (#) Fiscal Year ($/Sh.) Date 5%($) 10%($)
- - - ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
John A. Allison IV....... 11,139 4.42% $33.250 3/1/03 $232,928 $590,278
Henry G. Williamson, Jr.. 8,944 3.55 33.250 3/1/03 187,028 473,960
Kelly S. King............ 6,553 2.60 33.250 3/1/03 137,030 347,257
W. Kendall Chalk......... 4,988 1.98 33.250 3/1/03 104,304 264,324
Scott E. Reed............ 4,816 1.91 33.250 3/1/03 100,707 255,209
</TABLE>
- - - -------
(1) All options vest pro rata over 5 years and are exercisable during the 10-
year period beginning on the date of grant.
AGGREGATED OPTION/SAR EXERCISED IN LAST FISCAL YEAR AND FY-END OPTION/SAR
VALUES
Set forth below is information concerning the exercise of stock options during
the fiscal year and the year-end value of exercised options by the Chief
Executive Officer and the four (4) most highly compensated Executive Officers
(no stock appreciation rights having been granted or outstanding):
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
Number of Securities Value of Unexercised
Shares Acquired Value Underlying Unexercised Options/ In-the-Money Options/
at Exercise Realized SARs at FY-End (#) SARs at FY-End ($)
Name (#) ($) Exercisable Unexercisable Exercisable Unexercisable
- - - ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
John A. Allison IV...... 0 0 40,078 43,727 $629,437 $390,747
Henry G. Williamson,
Jr..................... 0 0 32,724 32,171 524,033 280,952
Kelly S. King........... 0 0 19,803 20,538 318,693 168,025
W. Kendall Chalk........ 0 0 19,615 17,832 320,105 154,938
Scott E. Reed........... 0 0 18,940 17,302 308,267 150,926
</TABLE>
LONG-TERM INCENTIVE PLAN AWARDS IN 1993
In 1993, no performance unit awards were made under the Long-Term Incentive
Plan because this portion of the plan had been discontinued in 1991. The pay-
outs from previous awards are reflected in column (h) of the Summary
Compensation Table on page I-10.
I-11
<PAGE>
PERFORMANCE
The graph below compares cumulative total shareholder return of Corporation's
common stock, the Nasdaq Stock Market Index (U.S. Companies) and the Nasdaq
Financial Stocks Index for the five year period ended December 31, 1993. The
Corporation believes that this information demonstrates that the compensation
earned by it's Executive Officers compares favorably to the relative increase
in the Corporation's shareholder value.
SHAREHOLDER RETURN PERFORMANCE GRAPH
<TABLE>
[GRAPH APPEARS HERE]
COMPARISON OF FIVE YEAR CUMULATIVE RETURN
AMONG BB&T FINANCIAL CORPORATION, CRSP INDEX FOR NASDAQ STOCK MARKET
AND CRSP INDEX FOR NASDAQ FINANCIAL STOCKS
<CAPTION>
CRSP Index CRSP Index
Measurement period BB&T FINANCIAL for Nasdaq for Nasdaq
(Fiscal year Covered) CORPORATION Stock Market Financial Stocks
- - - --------------------- ----------- ------------ ----------------
<S> <C> <C> <C>
Measurement PT -
12/30/88 $ 100.0 $ 100.0 $ 100.0
FYE 12/29/89 $ 122.1 $ 121.2 $ 115.0
FYE 12/31/90 $ 101.4 $ 103.0 $ 88.1
FYE 12/31/91 $ 146.5 $ 165.2 $ 136.4
FYE 12/31/92 $ 219.3 $ 192.1 $ 194.9
FYE 12/31/93 $ 236.1 $ 219.2 $ 226.4
</TABLE>
NOTES:
A. The lines represent monthly index levels derived from compounded daily
returns that include all dividends.
B. The indexes are reweighted daily, using the market capitalization on
the previous trading day.
C. If the monthly interval, based on the fiscal year-end, is not a trading
day, the preceding trading day is used.
D. The index level for all series was set to 100.0 on 12/30/88.
Prepared by the Center for Research in Security Prices, The University of
Chicago
I-12
<PAGE>
RETIREMENT PLAN
The Bank has a non-contributory Retirement Plan covering substantially all
employees of the Bank and the South Carolina Bank, who meet certain age, tenure
and hours worked criteria. The preceding Summary Compensation Table does not
include the amount of the contribution, payment or accrual for any Executive
Officer, as such amount cannot readily be separately or individually calculated
by the regular actuaries for the Plan. The Retirement Plan provides a
participant with retirement benefits based on average annual salary for the
five consecutive years within the last ten years preceding retirement which
would produce the highest average salary. The maximum annual benefits payable
at normal retirement age to participants in the Retirement Plan, including the
Executive Officers named in the Summary Compensation Table, are illustrated in
the following table:
<TABLE>
<CAPTION>
Estimated Maximum
Annual Retirement Benefits/(1)(2)/
Five-Year (Years of Credited Service)
Average Annual Salary 15 20 25 30 35 40
- - - -------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$125,000 $23,378 $ 31,010 $ 38,643 $ 46,275 $ 53,908 $ 61,540
$150,000 $28,065 $ 37,260 $ 46,455 $ 55,650 $ 64,845 $ 74,040
$175,000 $32,753 $ 43,510 $ 54,268 $ 65,025 $ 75,783 $ 86,540
$200,000 $37,440 $ 49,760 $ 62,080 $ 74,400 $ 86,720 $ 99,040
$225,000 $42,128 $ 56,010 $ 69,893 $ 83,775 $ 97,658 $111,540
$250,000 $46,335 $ 62,260 $ 77,225 $ 93,150 $108,595 $123,560
$275,000 $51,503 $ 68,510 $ 85,518 $102,525 $119,533 $136,540
$300,000 $56,190 $ 74,760 $ 93,330 $111,900 $130,740 $149,040
$325,000 $60,878 $ 81,010 $101,143 $121,275 $141,408 $161,540
$350,000 $65,085 $ 87,260 $108,475 $130,650 $152,345 $173,560
$375,000 $70,253 $ 93,510 $116,768 $140,025 $163,283 $186,540
$400,000 $74,642 $ 99,760 $124,403 $149,600 $174,220 $199,040
$425,000 $79,628 $106,010 $132,393 $158,775 $185,158 $211,540
$450,000 $84,315 $112,260 $140,205 $168,150 $196,095 $224,040
$475,000 $89,003 $118,510 $148,018 $177,525 $207,033 $236,540
$500,000 $93,690 $124,760 $155,830 $186,900 $217,970 $249,040
</TABLE>
- - - --------
(1) Benefits amounts listed are not subject to any deduction for Social
Security benefits or other offset amounts, and are based on a straight life
annuity.
(2) Section 415 of the Internal Revenue Code of 1986, as amended ("Code"),
limits the amount that a highly compensated individual may receive from
the Retirement Plan. In order that no such individual will lose retirement
benefits, any amount that such individual cannot receive from the
Retirement Plan due to such limitation will be paid to the affected
individual from the Bank's Supplemental Executive Retirement Plan.
The compensation covered by the Retirement Plan is gross salary and wages paid
or accrued to the employee (plus any contributions by the employee to any tax-
qualified 401(k) plans), excluding overtime pay, bonuses, fringe benefits and
any other form of additional compensation. The amount of such compensation for
the persons named in the Summary Compensation Table is shown as "salary" in
column (c). Credited years of service under the retirement plan for such
persons are as follows: Messrs. Allison, 23; Williamson, 22; King, 22; Chalk,
19; and Reed, 22.
COMPENSATION OF DIRECTORS
Only directors who are not officers of the Corporation or subsidiaries receive
compensation for their services as a director, except for Robert L. Brady.
During 1993, the directors of the Corporation received a fee of $625 for each
meeting of the Board of Directors and committees they attended plus an annual
retainer of $10,500. Directors of the Bank received a fee of $500 for each
meeting of the Board of Directors and
I-13
<PAGE>
Committees they attended. Directors of the South Carolina Bank received a
retainer of $1,000 per meeting and an additional fee of $500 for each board
meeting they attended. When the various directors of the Corporation performed
the responsibility of visiting branch offices, each director received a fee of
$625 per day. Members of committees of the South Carolina Bank received a fee
of $150 for committee meetings they attended. Directors of the Bank are invited
to attend meetings of the Local Advisory Board for the branch office in the
community in which they reside and are paid the same fee as the local board
members for such branch, which fees range from $50 to $330 depending upon the
size of the office.
The Corporation pays the premium for an insurance policy that provides travel
accident coverage to employees, officers and directors of the Corporation and
subsidiaries. All non-employee directors have $500,000 coverage on a 24-hour
per day basis. Officers with the title of Senior Vice President or higher have
$500,000 coverage and all other officers and employees have $250,000 coverage
while traveling for a business purpose. For 1993, the premium on this policy
was $17,170.
In connection with the August 1991 acquisition of Gate City Federal Savings
Bank, the Corporation entered into employment contracts with six officers,
including director Robert L. Brady. Each such officer was employed for three
years (subject to extension at the option of the Corporation for two additional
one year periods) at a fixed salary, with any increase being subject to an
annual performance review, and without any right to receive a cash bonus. Each
employment agreement provides that the officer will not compete with the
Corporation in Guilford County, Rockingham County or any county contiguous to
either of these counties for a period of three years after termination of
employment. Mr. Brady's contract provided a 1993 salary of $227,102, payment of
certain club dues and the use of a company-owned automobile. In addition, Mr.
Brady was granted an option to purchase 30,000 shares of the Corporation's
common stock at a price of $21.25 per share (the fair market value on the date
of grant) and received a restricted stock award of 18,000 shares. The options
and restricted stock for Mr. Brady were given on a basis consistent with the
grants and awards made to the other five Gate City officers. Both the options
and restricted stock are governed by the BB&T Financial Corporation Special
Purpose Option and Restricted Stock Plan.
In October 1987, the Corporation adopted a Directors Deferred Compensation
Plan ("DDCP"), which was amended January 1, 1988. The DDCP allows a non-
employee director of the Corporation or its subsidiaries to elect annually to
defer all or any portion of his or her compensation as a director to a future
date. Any compensation so deferred is an unfunded, unsecured obligation of the
Corporation. Deferred compensation earns interest, compounded monthly, at an
annual rate of one-half of one percent above the yield on U.S. Treasury Bills
with a maturity of one year, established at the last auction held in November
of each year. In 1993, the rate paid was 4.26%. The balance in a director's
deferred compensation account is payable either in a lump sum or in annual
installments over a period of ten years, according to the selection made by
each participating director. Distribution begins in the January following
termination of a director's service. If service is terminated due to death or
disability, the Administrative Committee of the DDCP may, in its discretion,
pay the entire balance of an account to the director or his designated
beneficiary. During 1993, ten (10) non-employee directors participated in the
DDCP.
NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN
In April 1992, the shareholders approved the Non-Employee Directors Stock
Option Plan ("Director Plan") and authorized 250,000 shares of the
Corporation's common stock to be issued pursuant to the Director Plan. Under
the Director Plan, each non-employee director may file an annual election to
receive non-qualified stock options in lieu of all or a designated portion of
the annual retainer to be earned in the next succeeding year. With respect to
such an election, the number of option shares will equal (a) the elected
portion of the directors annual retainer for the applicable year divided by (b)
25% of the market value of the Corporation's common stock on the date of grant.
The option exercise price will be 75% of the market value of the Corporation's
common stock on the date of grant. The option will be exercisable during the
period beginning six months after the date of grant and ending ten years after
the date of grant.
I-14
<PAGE>
The Director Plan is administered by the Compensation Committee of the Board
of Directors, but the Committee has no discretion in determining who will
receive an option, the number of shares to be allotted a participating director
or the terms of any such option. The Board of Directors may amend or terminate
the Director Plan, subject to shareholder approval if necessary to comply with
tax or regulatory requirements.
During 1993, all eligible non-employee directors elected to participate in the
Director Plan, except Mr. Corbett and Dr. Young. As a result of this
participation level, options for a total of 21,977 shares of the Corporation's
common stock were granted effective July 1, 1993 at an exercise price of $34.38
per share.
OTHER TRANSACTIONS
A number of the Corporation's directors and officers and their associates are
customers of the Bank or the South Carolina Bank. Any extensions of credit made
to them are in the ordinary course of business, are substantially on the same
terms, including interest rates and collateral, as those prevailing at the same
time for comparable transactions with others, and do not involve more than
normal risk of collectibility or present other unfavorable features. None of
such credits are classified as non-accrual, past due, restructured or potential
problem.
No director, nominee, Executive Officer of the Corporation or subsidiaries, 5%
security holder of the Corporation, if any, or any associate of the foregoing
persons had any transaction or series of similar transactions in 1993 which
were in excess of $60,000, or 5% of the consolidated gross revenues of any
party to such transactions for such party's last full fiscal year, and to which
the Corporation or any of its subsidiaries was or is to be a party, except (1)
services rendered as a bank depository of funds, transfer agent or registrar,
or similar such services, (2) where the interest of the specified person arises
solely from the ownership of securities of the Corporation and such person
receives no extra or special benefit not shared on a pro rata basis by all
holders of securities of the class or (3) as otherwise described below.
During 1993, the Bank retained the law firm of Alala, Mullen, Holland and
Cooper, P.A., an affiliate of Joseph B. Alala, Jr., a director of the
Corporation, and the Bank proposes to continue to retain this firm during 1994.
During 1993, the Bank paid Player, Inc., an affiliate of Richard L. Player,
Jr., a director of the Corporation, the sum of $1,171,256 for construction
costs of a new main office in Fayetteville, N.C. In addition, the Bank paid
Player, Inc. $22,207 for other construction and renovation work in connection
with another branch office and paid Tri-Player Investments (also an affiliate
of Mr. Player) the sum of $34,871 as rent and related occupancy expenses for
the Westwood Branch and main office buildings in Fayetteville. Management
believes that the terms of the agreements with Mr. Player's affiliates are as
favorable to the Bank as could have been obtained from a non-affiliated party.
PROPOSAL 2.--AMENDMENT
TO ARTICLES OF INCORPORATION
The Board of Directors of the Corporation has unanimously approved and adopted
and recommends to it's shareholders that they approve an amendment to the
Articles of Incorporation to increase the authorized Common Stock, $2.50 par
value, from 50,000,000 shares to 100,000,000 shares. The Corporation's Articles
of Incorporation also permit the Corporation to issue 4,000,000 shares of
Preferred Stock. As of December 31, 1993, there were 32,476,387 shares of
Common Stock issued and outstanding and an additional 5,202,298 shares of
Common Stock were reserved for issuance in connection with employee benefit
plans and the dividend reinvestment plan and approximately 6,000,000 shares
reserved for issuance in connection with announced acquisitions. Therefore, the
Corporation has 6,321,315 unissued and unreserved shares available for future
issuance. There are no shares of Preferred Stock issued, outstanding or
reserved for issuance. The proposed amendment would not affect the number of
authorized shares of Preferred Stock. Further, the proposed amendment does not
give rise to any dissenter's rights under the applicable corporate laws of
North Carolina if any shareholder entitled to vote should not be in favor of
the proposed amendment.
I-15
<PAGE>
The Board of Directors considers it prudent and in the best interest of the
Corporation to have available a reasonable amount of authorized but unissued
Common Stock, for use primarily for possible future stock distributions, stock
splits, stock dividends, acquisitions, employee benefit plans, the dividend
reinvestment plan, raising of additional capital and other corporate purposes.
The Corporation has no present plans, understandings or agreements to issue any
additional authorized shares of Common Stock, except pursuant to employee
benefit plans, the dividend reinvestment plan and announced acquisitions.
Shareholders should be aware that a possible effect of the proposed increase
in the authorized Common Stock would be a potential dilution of present
stockholders' interest in the Corporation relative to voting power, net income,
and net book value per share of Common Stock, if the Corporation should issue a
substantial number of the newly authorized shares. However, the Corporation
anticipates that it would receive value for any additional shares of stock
issued, thereby reducing or eliminating the economic effect of such dilution to
the shareholders.
The additional shares of Common Stock proposed to be authorized will be of the
same class as the Corporation's existing Common Stock and if issued would
entitle the holders to the same rights and privileges as holders of the shares
of Common Stock presently outstanding. The holders of the Corporation's Common
Stock do not presently have preemptive rights to subscribe for or purchase
additional shares of Common Stock presently authorized. The shareholders also
will have no preemptive rights to subscribe for or purchase any additional
shares of Common Stock to be authorized by the proposed amendment. No
additional shareholder authorization would be necessary prior to any future
issuance of Common Stock, except for certain situations where shareholder
approval may be required under applicable law or National Association of
Security Dealer's rules.
Although the Board of Directors has no present intention of doing so, the
Corporation's authorized but unissued Common Stock and Preferred Stock could be
issued in one or more transactions which would make more difficult or costly,
and less likely, a takeover of the Corporation. The proposed amendment to
increase the number of authorized shares of Common Stock is not being
recommended in response to any specific effort of which the Corporation is
aware to obtain control of the Corporation. Further, the submission of the
proposed amendment is not part of a plan by Corporation's management to adopt a
series of amendments to its Articles of Incorporation or by-laws that may
render the takeover of the Corporation more difficult.
The Corporation has not proposed an increase in the number of authorized
shares of Common Stock since the annual meeting of shareholders in April 1987,
when the Corporation had approximately $4.0 billion in total assets. The
Corporation has increased in size significantly since that time and is engaged
actively in acquiring other financial institutions which involve the issuance
of shares of Common Stock.
Pursuant to the applicable corporate laws of North Carolina, the proposed
amendment to Corporation's Articles of Incorporation will be approved if the
votes cast in favor of the amendment exceed the votes cast against the
amendment. Abstentions and shares held in street names that are not voted on
this matter will not be included in determining the number of votes in favor of
or against this proposal. THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR"
APPROVAL OF THE AMENDMENT TO THE ARTICLES OF INCORPORATION. THE PERSONS NAMED
IN THE FORM OF PROXY WILL VOTE THE PROXY AS SPECIFIED; AND IF NO SPECIFICATION
IS MADE, THE PROXY WILL BE VOTED "FOR" THE AMENDMENT TO THE ARTICLES OF
INCORPORATION.
PROPOSAL 3--RATIFICATION OF
SELECTION OF AUDITORS
The Audit Committee of the Board of Directors has selected the firm of KPMG
Peat Marwick as independent auditors to examine the books of the Corporation
and subsidiaries for the year 1994, and to report on the consolidated balance
sheets, statements of income and other related statements of the Corporation
and subsidiaries. KPMG Peat Marwick has served as independent auditors for the
Bank continuously since 1972. Although shareholder action is not required, the
Corporation desires to obtain from the shareholders an indication of their
approval or disapproval of the Audit Committee's action in selecting
I-16
<PAGE>
KPMG Peat Marwick as the independent auditors of the Corporation and
subsidiaries. It is recommended that the shareholders vote in favor of
ratifying the selection of KPMG Peat Marwick. Pursuant to the applicable
corporate laws of North Carolina, the selection of KPMG Peat Marwick will be
approved if the votes cast in favor of the proposal exceed the votes cast
against the proposal. If the shareholders disapprove this selection, the Audit
Committee of the Board of Directors will reconsider the appointment. KPMG Peat
Marwick has advised that neither such firm nor any member or associate thereof
has any direct or material indirect financial interest in the Corporation or
subsidiaries in the capacity of promoter, underwriter, voting trustee,
director, officer or employee. THE PROXY WILL BE VOTED AS SPECIFIED; AND IF NO
SPECIFICATION IS MADE, THE PROXY WILL BE VOTED "FOR" THIS PROPOSAL.
Representatives of KPMG Peat Marwick are expected to be present at the Annual
Meeting. They will have the opportunity to make a statement if desired and
will be available to respond to appropriate questions raised at the Annual
Meeting.
SUBMISSION OF SHAREHOLDER PROPOSALS
Any shareholder who desires to submit a proposal for inclusion in the Proxy
Statement and form of proxy for the 1995 annual meeting of shareholders must
submit such proposal to the Corporation at its principal office no later than
November 14, 1994.
OTHER MATTERS
The Board of Directors is not aware of any other matters to be presented for
consideration at the Annual Meeting or any adjournments thereof. If any other
matters shall properly come before the meeting, it is intended that the
persons named in the enclosed proxy will vote the shares represented by proxy
in accordance with their judgment, pursuant to the discretionary authority
granted therein.
/s/ John A. Allison
John A. Allison IV
Chairman of the Board
DATED: MARCH 15, 1994
BB&T FINANCIAL CORPORATION IS FURNISHING TO EACH PERSON SOLICITED A COPY OF
ITS ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1993, AS FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION. EXHIBITS TO SUCH FORM 10-K ARE
NOT INCLUDED, BUT THE EXHIBITS MAY BE REQUESTED AND A REASONABLE EXPENSE MAY
BE CHARGED FOR THE FURNISHING OF EXHIBITS TO THE FORM 10-K. SUCH REQUEST
SHOULD BE ADDRESSED TO SCOTT E. REED, SENIOR EXECUTIVE VICE PRESIDENT AND
TREASURER, BB&T FINANCIAL CORPORATION, 223 WEST NASH STREET, WILSON, NORTH
CAROLINA 27894-1847.
I-17
<PAGE>
BB&T FINANCIAL CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
PROXY PROXY
The undersigned hereby appoints JOHN A. ALLISON IV and RUSSELL A. THOMPSON,
JR., and either of them, attorneys and proxies, with power of substitution, to
vote the shares of Corporation's common stock of the undersigned at the regular
Annual Meeting of the Shareholders of the Corporation to be held at the Capital
City Club, Center Plaza, 411 Fayetteville Street Mall, Raleigh, North Carolina,
on Tuesday, April 26, 1994, at 11:00 a.m., and at any adjournments thereof,
upon the following matters:
1. Proposal 1 -- Fixing the number of directors to be elected at twenty-seven
(27) and the election of the twenty-four (24) nominees named in the
accompanying Proxy Statement.
[_] FOR fixing the number of directors at twenty-seven (27) and for electing
as directors the twenty-four (24) nominees listed below (except as
marked to the contrary below).
[_] WITHHOLD AUTHORITY to fix the number of directors at twenty-seven (27)
and to vote for the twenty-four (24) nominees listed below.
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW.)
Joseph B. Alala, Jr. James E. Heins
John A. Allison IV Raymond A. Jones, Jr.
W. Watson Barnes Kelly S. King
Paul B. Barringer David R. LaFar III
Robert L. Brady J. Ernest Lathem, M.D.
W. G. Clark III James H. Maynard
Jesse W. Corbett, Jr. A. Winniett Peters
W. R. Cuthbertson, Jr. Richard L. Player, Jr.
Fred H. Deaton, Jr. S. B. Tanner III
Joe L. Dudley, Sr. Larry J. Waggoner
Tom D. Efird Henry G. Williamson, Jr.
O. William Fenn, Jr. William B. Young, M.D.
2. Proposal 2 -- Approving an amendment to the Corporation's Articles of
Incorporation to increase the number of shares of authorized common stock
from 50,000,000 shares to 100,000,000 shares.
[_] For [_] Against [_] Abstain
(Continued and to be signed on reverse side)
<PAGE>
(Continued from other side)
3. Proposal 3 -- Ratifying the selection of KPMG Peat Marwick as independent
auditors for the Corporation.
[_] For [_] Against [_] Abstain
4. Proposal 4 -- In their discretion, to vote upon such other business as may
properly come before the meeting or any adjournments thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR APPROVAL OF PROPOSALS, 1, 2 AND 3 AND, IN THE DISCRETION OF THE PROXY
HOLDERS, AS TO ANY OTHER MATTERS.
PLEASE MARK, SIGN, DATE AND RETURN Please sign exactly as name
THE PROXY CARD PROMPTLY USING THE appears at left.
ENCLOSED ENVELOPE.
When signing as attorney,
IF YOU ATTEND THE MEETING, YOU MAY executor, administrator, trustee
WITHDRAW YOUR PROXY AND VOTE IN or guardian, please give full
PERSON. title as such. If a corporation,
please sign in full corporate
name by President or other
authorized officer. If a
partnership, please sign in
partnership name by authorized
person.
---------------------------------
Signature
Place
Label ---------------------------------
Here Signature if held jointly
Dated _______________________1994
