SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. )
BB&T Financial Corporation
(Name of Issuer)
Common Stock, par value $2.50
(Title of Class of Securities)
00005527L1
(CUSIP Number)
David L. Craven
Southern National Corporation
200 West 2nd Street
(919) 773-7200
Winston-Salem, North Carolina 27101-4036
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
(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 14 Pages)
CUSIP No. 00005527L1 13D Page 2 of 15 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Southern National Corporation
I.R.S. No. 56-0939887
2 CHECK THE APPROPRIATE BOX IF (a)
A MEMBER OF A GROUP (b)
3 SEC USE ONLY
4 SOURCE OF FUNDS
WC
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
North Carolina corporation
NUMBER OF SHARES 7 SOLE VOTING POWER 0*
BENEFICIALLY OWNED 8 SHARED VOTING POWER 0*
BY EACH REPORTING 9 SOLE DISPOSITIVE POWER 0*
PERSON WITH 10 SHARED DISPOSITIVE POWER 0*
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON
0*
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES X**
13 PERCENT OF CLASS REPRESENTED IN ROW (11)
19.9*
14 TYPE OF REPORTING PERSON
CO
*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.
ITEM 1. Security and Issuer.
The title of the class of equity securities to which
this Schedule relates is BB&T Financial Corporation common stock,
par value $2.50 per share ("BB&T Common Stock"). BB&T Financial
Corporation, a North Carolina corporation, is a bank holding
company with its principal office located in Wilson, North
Carolina ("BB&T"). The address of BB&T's principal executive
offices is 223 West Nash Street, Wilson, North Carolina 27893.
ITEM 2. Identity and Background.
The following information is given with respect to the
persons filing this Statement:
(a) Southern National Corporation, a North Carolina
corporation ("SNC").
(b) The principal executive offices of SNC are located
at 200 West 2nd Street, Winston-Salem, North Carolina 27101.
(c) SNC is a bank holding company doing business
through wholly-owned financial institution banks in North and
South Carolina.
(d) SNC has not, during the last five years, been
convicted in a criminal proceeding.
(e) SNC has not, during the last five years, been a
party to a civil proceeding of a judicial or administrative body
of competent jurisdiction and as a result was or is subject to a
judgment, decree or final order enjoining future violations of,
or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect to
such laws.
(f) Not applicable to SNC.
The name, business address, present principal
occupation or employment and the name, principal business and
address of any corporation or other organization in which such
employment is conducted, of the directors, and executive officers
of SNC are as follows:
DIRECTORS OF SOUTHERN NATIONAL CORPORATION
William F. Black Luther C. Boliek
Retired Vice Chairman, Southern
3000 Round Hill Rd. National Corporation
Greensboro, NC 27408 200 West 2nd Street
Winston-Salem, NC 27101-4036
Gary E. Carlton Ronald E. Deal
President and Chief Operating Investor; Chairman of
Officer of Southern National Wesley Hall
Bank of North Carolina; 1460 Sixth Street Circle, N.W.
Executive Vice President of Hickory, NC 28601
Southern National Corporation;
Vice Chairman of Southern
National Bank of South Carolina
200 West 2nd Street
Winston-Salem, NC 27101-4036
William N. Geiger, Jr. Paul S. Goldsmith
Chairman of Development President of William
Properties, Incorporated Goldsmith Co., Inc.
1201 Main Street, Suite 1910 P.O. Box 1827
Columbia SC 29201 Greenville, SC 29602
James A. Hardison, Jr. Dr. Lloyd Vincent Hackley
Executive Vice President of Chancellor; Professor of
Southern National Bank of Political Science,
North Carolina Fayetteville State
P.O. Box 111 University; Vice
Wadesboro, NC 28170 President For Student and
Special Programs,
University of North Carolina
1200 Murchison Road
Fayetteville, NC 28301-4298
Donald Hiscott Richard Janeway, M.D.
President and Chief Executive Executive Vice President for
Officer of SGH Healthcare Health Affairs and Executive
Corporation Dean; Professor of Neurology
P.O. Box 1408 and Research Associate
Lumberton, NC 28358 in Radiology, Bowman
Gray School of Medicine,
Wake Forest University
Medical Center Boulevard
Winston-Salem, NC 27157-1003
Joseph A. McAleer Albert O. McCauley
Chief Executive Officer and Secretary and Treasurer of
Director of Krispy Kreme Quick Stop Food Marts, Inc.
Doughnut Corporation P.O. Box 654
1814 Ivy Avenue Fayetteville, NC 28302
Winston-Salem, NC 27105
Dickson McLean, Jr. Charles E. Nichols
President of McLean, Stacy, Of Counsel
Henry & McLean, Slaughter Nichols, Caffrey, Hill,
& Ramsaur, P.A. Evans & Murrelle
Attorneys-at-Law Attorneys-at-Law
P.O. Box 1087 P.O. Box 989
Lumberton, NC 28359 Greensboro, NC 27402
L. Glenn Orr, Jr. C. Edward Pleasants
Chairman, Chief Executive President and Chief Executive
Officer, and President of Officer of Pleasants Hardware
Southern National Corporation; Company
Chairman and Chief Executive P.O. Box 5745
Officer of Southern National Winston-Salem, NC 27113-5745
Bank of North Carolina;
Chairman of Southern National
Bank of South Carolina
200 West 2nd Street
Winston-Salem, NC 27101-4036
Nido R. Qubein Ted R. Reynolds
Chief Executive Officer of Senior Partner of Reynolds,
Creative Services, Inc. Bartko & Pendergrass,
P.O. Box 6008 Attorneys-at-Law
High Point, NC 27262 P.O. Box 26506
Raleigh, NC 27611
A. Bruce Williams A. Tab Williams, Jr.
Retired Chairman and Chief Executive
1504 Camelia Circle Officer of A.T. Williams
Fairmont, NC 28340 Oil Company
P.O. Box 7287
Winston-Salem, NC 27109
Edward M. Williams T.H. Yancey
President of Father George Secretary and Treasurer of
Mill Fabric Shop, Inc. Yancy Motors, Inc.
P.O. Box 280 P.O. Box 627
Sanford, NC 27330 Oxford, NC 27565
Robert H. Yeargin
Chairman and Chief Executive
Officer of Yeargin
Properties, Inc.
115 Edinburgh Court
Greenville, SC 29607
EXECUTIVE OFFICERS OF
SOUTHERN NATIONAL CORPORATION
(excluding directors)
Lee Cory David L. Craven
President and Chief Senior Vice President and
Executive Officer of Secretary of Southern National
Southern National Bank of Corporation and of Southern
South Carolina National Bank of North
P.O. Box 687 Carolina
Columbia, SC 29202 200 West 2nd Street
Winston-Salem, NC 27101-4036
Robert E. Greene Sherry A. Kellett
Executive Vice President of Vice President and Controller
Southern National Corporation of Southern National Bank of
200 West 2nd Street North Carolina
Winston-Salem, NC 27101-4036 200 West 2nd Street
Winston-Salem, NC 27101-4036
Morris D. Marley
Executive Vice President, Michael W. Sperry
Chief Investment Officer and Executive Vice President and
Treasurer of Southern National Chief Credit Officer of
Bank of North Carolina Southern National Corporation;
200 West 2nd Street Executive Vice President of
Winston-Salem, NC 27101-4036 Southern National Bank of
North Carolina; Senior
Executive Vice President of
Southern National Bank of
South Carolina
200 West 2nd Street
Winston-Salem, NC 27101-4036
John R. Spruill C. Royce Hough
Executive Vice President and Executive Vice President of
Chief Financial Officer of Southern National Corporation
Southern National Corporation; 200 West 2nd Street
Senior Executive Vice President Winston-Salem, NC 27101-4036
of Southern National Bank of
North Carolina and Southern
National Bank of South Carolina
200 West 2nd Street
Winston-Salem, NC 27101-4036
To the knowledge of SNC, none of such persons has,
during the last five years, been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors)
or has been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result was
or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities
subject to, federal or state securities laws or finding any
violation with respect to such laws.
To the knowledge of SNC, all such persons are citizens
of the United States of America.
ITEM 3. Source and Amount of Funds or Other Consideration.
Any purchase by SNC of the BB&T Common Stock covered by
this Schedule would be made from working capital. The total
amount of such funds to be utilized for such purpose would not
exceed $221,049,167.50.
ITEM 4. Purpose of Transaction.
On July 29, 1994, SNC and BB&T entered into a
definitive Agreement and Plan of Merger (the "Plan") pursuant to
an Agreement and Plan of Reorganization, dated July 29, 1994 (the
"Reorganization Agreement"), providing for, among other things,
the merger of SNC with and into BB&T, with BB&T as the surviving
institution. This merger of equals, unanimously approved by the
boards of directors of both companies, will be accomplished
through a merger to be accounted for as a pooling of interests in
which BB&T shareholders will receive 1.45 shares of common stock
of the resulting company for each share of BB&T Common Stock.
SNC shareholders will receive 1.00 share of common stock of the
resulting company for each share of SNC common stock, par value
$5.00 per share. The transaction will be structured as a tax-
free exchange. The combined company will have approximately 103
million shares outstanding after taking into account pending
acquisitions. The transaction is subject to receipt of all
necessary regulatory and shareholder approvals and certain other
conditions. SNC cannot acquire more than 5% of BB&T's voting
securities without the prior approval of the Board of Governors
of the Federal Reserve System.
As an inducement to SNC to enter into the Plan, SNC and
BB&T entered into a Stock Option Agreement (the "Option
Agreement") whereby BB&T granted SNC an option (the "BB&T
Option") to purchase 7,217,932 shares (the "BB&T Option Shares")
of BB&T Common Stock at an exercise price of $30.625 per share,
subject to adjustment as provided therein, payable in cash. The
BB&T Option Shares, if issued pursuant to the Option Agreement,
would represent approximately 19.9% of the BB&T Common Stock then
issued and outstanding, without giving effect to the issuance of
any BB&T Common Stock subject to the BB&T Option.
Set forth below is a description of selected provisions
of the Option Agreement. Such description is qualified in its
entirety by reference to the copy of the Option Agreement filed
as an exhibit hereto, which is incorporated by reference herein
and made a part hereof to the same extent as though set forth
herein in full.
Subject to compliance with applicable law and
regulation, SNC may exercise the BB&T Option, in whole or in
part, at any time or from time to time upon or after the
occurrence of a Purchase Event as defined below. As used in the
Option Agreement, "Purchase Event" means any one of the following
events:
(i) BB&T, Branch Banking and Trust Company
("BB&T-NC") or Branch Banking and Trust Company of South
Carolina ("BB&T-SC"), without having received SNC's
prior written consent, shall have entered into an
agreement with any person (other than BB&T, BB&T-NC or
BB&T-SC, to (x) merge or consolidate, or enter into any
similar transaction, with BB&T, BB&T-NC or BB&T-SC,
except as contemplated in the Reorganization Agreement
(including Previously Disclosed transactions), (y)
purchase, lease or otherwise acquire all or
substantially all of the assets of BB&T, BB&T-NC or
BB&T-SC or (z) purchase or otherwise acquire (including
by way of merger, consolidation, share exchange or any
similar transactions) securities representing 10% or
more of the voting power of BB&T, BB&T-NC or BB&T-SC;
(ii) any person (other than BB&T, or BB&T-NC or
BB&T-SC in a fiduciary capacity, or SNC, or Southern
National Bank of North Carolina or Southern National
Bank of South Carolina in a fiduciary capacity) shall
have acquired beneficial ownership or the right to
acquire beneficial ownership of 15% or more of the
outstanding shares of BB&T Common Stock after the date
of the Option Agreement (the term "beneficial ownership"
for purposes of the Option Agreement having the meaning
assigned thereto in Section 13(d) of the Exchange Act
and the regulations promulgated thereunder);
(iii) any person (other than BB&T, BB&T-NC or
BB&T-SC) shall have made a bona fide proposal to BB&T by
public announcement or written communication that is or
becomes the subject of public disclosure to acquire
BB&T, BB&T-NC or BB&T-SC by merger, consolidation,
purchase of all or substantially all of its assets or
any other similar transaction, and following such bona
fide proposal the shareholders of BB&T vote not to adopt
the Plan; or
(iv) BB&T shall have willfully breached any
Specified Covenant (as defined in the Option Agreement)
following a bona fide proposal to BB&T-NC, BB&T-SC or
BB&T to acquire BB&T, BB&T-NC or BB&T-SC by merger,
consolidation, purchase of all or substantially all of
its assets or any other similar transaction, which
breach would entitle SNC to terminate the Merger
Agreements (as defined in the Option Agreement) (without
regard to the cure periods provided for herein) and such
breach shall not have been cured prior to the Notice
Date (as defined below).
In the event SNC wishes to exercise the BB&T Option, it
shall send to BB&T a written notice (the date of which being
herein referred to as "Notice Date") specifying (i) the total
number of shares it will purchase pursuant to such exercise, and
(ii) a place and date not earlier than three business days nor
later than 60 business days from the Notice Date for the closing
of such purchase ("Closing Date"); provided that if prior
notification to or approval of any federal or state regulatory
agency is required in connection with such purchase, SNC shall
promptly file the required notice or application for approval and
shall expeditiously process the same and the period of time that
otherwise would run pursuant to this sentence shall run instead
from the date on which any required notification period has
expired or been terminated or such approval has been obtained and
any requisite waiting period shall have passed.
The BB&T Option shall expire and terminate, to the
extent not previously exercised, upon the earlier of:
(i) the Effective Date of the Merger (as defined
in the Option Agreement);
(ii) termination of the Merger Agreements in
accordance with the provisions thereof (other than a
termination resulting from a willful breach by BB&T of
any Specified Covenant or, following the occurrence of
a Purchase Event, failure of BB&T's shareholders to
approve the Merger Agreements by the vote required
under applicable law or under BB&T's Certificate of
Incorporation); and
(iii) 12 months after termination of the Merger
Agreements due to a willful breach by BB&T of any
Specified Covenant or, following the occurrence of a
Purchase Event, failure of BB&T's shareholders to
approve the Merger Agreements by the vote required
under applicable law or under BB&T's Certificate of
Incorporation; and provided further that any such
exercise shall be subject to compliance with applicable
provisions of law.
In the event of any change in BB&T Common Stock by
reason of stock dividends, split-ups, mergers, recapitalizations,
combinations, exchanges of shares or the like, the type and
number of shares subject to the BB&T Option, and the purchase
price per share, as the case may be, shall be adjusted
appropriately. In the event that any additional shares of BB&T
Common Stock are issued or otherwise become outstanding after the
date of this Option Agreement (other than pursuant to this Option
Agreement), the number of shares of BB&T Common Stock subject to
the BB&T Option shall be adjusted so that, after such issuance,
it equals 19.9% of the number of shares of BB&T Common Stock then
issued and outstanding pursuant to the BB&T Option.
Neither of the parties hereto may assign any of its
rights or obligations under this Option Agreement or the BB&T
Option created hereunder to any other person, without the express
written consent of the other party, except that in the event a
Purchase Event shall have occurred and be continuing SNC may
assign in whole or in part its rights and obligations hereunder;
provided, however, that to the extent required by applicable
regulatory authorities, SNC may not assign its rights under the
BB&T Option except in (i) a widely dispersed public distribution,
(ii) a private placement in which no one party acquires the right
to purchase in excess of 2% of the voting shares of BB&T, (iii)
an assignment to a single party (e.g., a broker or investment
banker) for the purpose of conducting a widely dispersed public
distribution on SNC's behalf, or (iv) any other manner approved
by applicable regulatory authorities.
The Reorganization Agreement and the Option Agreement
are attached as exhibits and are incorporated herein by reference
and made a part hereof to the same extent as if set forth herein
in full. The above summary does not purport to be complete and
is subject to and qualified in its entirety by reference to the
Reorganization Agreement and the Option Agreement.
Except as set forth above and below, neither SNC, nor
to the knowledge of SNC, any executive officer or director of
SNC, has any plans or proposals that relate to or would result
in:
(a) the acquisition by any person of additional
securities of BB&T, or the disposition of securities of BB&T;
(b) an extraordinary corporate transaction, such as a
merger, reorganization or liquidation, involving BB&T or any of
its subsidiaries;
(c) a sale or transfer of a material amount of assets
of BB&T or any of its subsidiaries;
(d) any change in the present board of directors or
management of BB&T, including any plans or proposals to change
the number or term of directors to fill any existing vacancies on
the board;
(e) any material change in the present capitalization
or dividend policy of BB&T;
(f) any other material change in BB&T's business or
corporate structure;
(g) changes in BB&T's charter, bylaws or instruments
corresponding thereto or other actions which may impede the
acquisition of control of BB&T by any person;
(h) causing a class of securities of BB&T to be
delisted from a national securities exchange or to cease to be
authorized to be quoted in an inter-dealer quotation system of a
registered national securities association;
(i) a class of equity securities of BB&T to become
eligible for termination of registration pursuant to Section
12(g)(4) of the 1934 Act; or
(j) any action similar to those enumerated above.
SNC reserves the right to change its intentions with
respect to any or all of the foregoing and its right to act
either alone or together with any other person or group.
ITEM 5. Interest in Securities of Issuer.
(a) An aggregate of 7,217,932 shares of BB&T Common
Stock, or 16.6% of the then issued and outstanding shares of BB&T
Common Stock giving effect to the issuance of BB&T Common Stock
subject to the BB&T Option, would be owned by Southern National
upon exercise of the BB&T Option. Neither SNC nor any director
or officer of SNC identified in Item 2 hereof owns any other
shares of BB&T Common Stock and does not have the right to
purchase any other shares of BB&T Common Stock, except as set
forth on the attached Schedule A, which lists SNC directors and
officers owning shares of BB&T Common Stock.
(b) SNC does not possess sole or shared voting and
dispositive power over any of the shares of BB&T Common Stock
covered by this Schedule.
(c) No transactions in BB&T Common Stock other than
those reported in this Schedule have been effected by SNC or any
director or officer of SNC identified in Item 2 hereof within the
past 60 days, except as set forth on the attached Schedule A,
which lists SNC directors and officers owning shares of BB&T
Common Stock.
(d) Not applicable.
(e) Not applicable.
ITEM 6. Contracts, Arrangements or Understandings with Respect
to Securities of the Issuer.
See Item 4 hereof for a description of the Option
Agreement, the Reorganization Agreement and the Plan.
ITEM 7. Material to be Filed as Exhibits.
Filed herewith are these exhibits:
(a) Agreement and Plan of Reorganization, dated July
29, 1994, between SNC and BB&T.
(b) Stock Option Agreement, dated as of July 29, 1994,
between SNC and BB&T.
SIGNATURES
After reasonable inquiry and to the best of my
knowledge and belief, I certify that the information set forth in
this Schedule 13D is true, complete and correct.
Dated: August 8, 1994 SOUTHERN NATIONAL CORPORATION
By: /s/ David L. Craven
David L. Craven, Secretary
SCHEDULE A
SCHEDULE OF SNC DIRECTORS OWNING
BB&T FINANCIAL CORPORATION SHARES 1
Total
Director Shares Other Beneficial Ownership Ownership
William F. Black 0 0 0
Luther C. Boliek 0 0 0
Gary E. Carlton 0 0 0
Ronald E. Deal 4,993 Sara, daughter - 375 shares 16,764
Ann, daughter - 375 shares
Ronald E. Deal, trustee for
Max E. Deal - 11,021 shares
Spouse - 566 shares
William N. Geiger, Jr. 0 Spouse - 566 shares 566
Paul S. Goldsmith 257 William Goldsmith Agency - 8,179
7,232 shares
William Goldsmith Company -
690 shares
Dr. Lloyd Vincent
Hackley 0 0 0
James A. Hardison, Jr. 0 0 0
Donald Hiscott 0 0 0
Richard Janeway, M.D. 0 0 0
Joseph A. McAleer, Jr. 0 0 0
Albert O. McCauley 0 0 0
Dickson McLean, Jr. 0 Janet McLean - 100 shares 100
Charles E. Nichols 0 0 0
L. Glenn Orr, Jr. 0 0 0
C. Edward Pleasants,
Jr. 0 0 0
Nido R. Qubein 14,160 0 14,160
Ted R. Reynolds 0 0 0
A. Bruce Williams 0 0 0
A. Tab Williams, Jr. 15,740 0 15,740
E. M. Williams 0 0 0
T. H. Yancey 0 Ruth, wife - 400 shares 1,900
William H. Yancey, son -
1,500 shares
Robert Y. Yeargin 0 0 0
- ---------------------
1 No shares have been purchased within sixty days prior to July
29, 1994
SCHEDULE OF SNC OFFICERS OWNING
BB&T FINANCIAL CORPORATION SHARES 1
Total
Officer Shares Other Beneficial Ownership Ownership
L. Glenn Orr, Jr. 0 0 0
Gary E. Carlton 0 0 0
John R. Spruill 0 Daughter - 120 shares 120
Michael W. Sperry 0 0 0
G. Lee Cory 0 Cora Lee Cory (Spouse) - 150
150 shares
David L. Craven 0 0 0
Robert E. Greene 0 0 0
C. Royce Hough 0 0 0
Sherry A. Kellett 0 0 0
Morris D. Marley 1 0 1
- --------------------
1 No shares have been purchased within sixty days prior to July
29, 1994
<PAGE>
EXECUTION DRAFT
AGREEMENT AND PLAN OF REORGANIZATION
BETWEEN
BB&T FINANCIAL CORPORATION
AND
SOUTHERN NATIONAL CORPORATION
July 29, 1994
TABLE OF CONTENTS
Page
ARTICLE I. DEFINITIONS..................................... 2
ARTICLE II. REPRESENTATIONS AND WARRANTIES OF SNC........... 6
2.1. Capital Structure of SNC............................ 6
2.2. Organization, Standing and
Authority of SNC.................................... 7
2.3. Ownership of the SNC Subsidiaries;
Capital Structure of the SNC
Subsidiaries........................................ 7
2.4. Organization, Standing and Authority
of the SNC Subsidiaries ............................ 8
2.5. Authorized and Effective Agreement.................. 8
2.6. SEC Documents; Regulatory Filings................... 10
2.7. Financial Statements; Books and
Records; Minute Books............................... 10
2.8. Material Adverse Change............................. 10
2.9. Absence of Undisclosed Liabilities.................. 10
2.10. Properties.......................................... 11
2.11. Loans............................................... 11
2.12. Allowance for Loan Losses........................... 12
2.13. Tax Matters......................................... 12
2.14. Employee Benefit Plans.............................. 13
2.15. Certain Contracts................................... 15
2.16. Other Real Estate Owned............................. 16
2.17. Legal Proceedings................................... 17
2.18. Compliance with Laws................................ 18
2.19. Brokers and Finders................................. 18
2.20. Insurance........................................... 18
2.21. Repurchase Agreements............................... 19
2.22. Deposit Insurance; Federal
Reserve Membership.................................. 19
2.23. Administration of Trust Accounts.................... 19
2.24. Environmental Matters............................... 20
2.25. Certain Information................................. 22
2.26. Information in Applications......................... 23
ARTICLE III.REPRESENTATIONS AND WARRANTIES OF BB&T........... 23
3.1. Capital Structure of BB&T........................... 23
3.2. Organization, Standing and
Authority of BB&T................................... 23
3.3. Ownership of the BB&T Subsidiaries;
Capital Structure of the BB&T
Subsidiaries........................................ 24
3.4. Organization, Standing and Authority
of the BB&T Subsidiaries............................ 24
3.5. Authorized and Effective Agreement.................. 25
3.6. SEC Documents; Regulatory Filings................... 26
3.7. Financial Statements; Books and
Records; Minute Books............................... 26
3.8. Material Adverse Change............................. 27
3.9. Absence of Undisclosed Liabilities.................. 27
3.10. Properties.......................................... 27
3.11. Loans............................................... 28
3.12. Allowance for Loan Losses........................... 28
3.13. Tax Matters......................................... 29
3.14. Employee Benefit Plans.............................. 30
3.15. Certain Contracts................................... 32
3.16. Other Real Estate Owned............................. 33
3.17. Legal Proceedings................................... 34
3.18. Compliance with Laws................................ 34
3.19. Brokers and Finders................................. 35
3.20. Insurance........................................... 35
3.21. Repurchase Agreements............................... 35
3.22. Deposit Insurance................................... 36
3.23. Administration of Trust Accounts.................... 36
3.24. Environmental Matters............................... 36
3.25. Certain Information................................. 38
3.26. Information in Applications......................... 38
ARTICLE IV. COVENANTS....................................... 39
4.1. Shareholders' Meetings.............................. 39
4.2. Proxy Statement; Registration
Statement........................................... 39
4.3. Applications........................................ 40
4.4. Best Efforts........................................ 40
4.5. Investigation and Confidentiality................... 41
4.6. Press Releases...................................... 42
4.7. Covenants of SNC.................................... 42
4.8. Covenants of BB&T................................... 45
4.9. Headquarters........................................ 48
4.10. Dividends Prior to the Effective Date............... 48
4.11. Closing; Certificate of Merger...................... 48
4.12. Affiliates.......................................... 49
4.13. Board of Directors.................................. 49
4.14. Management; Employees; Employee
Benefits............................................ 51
4.15. Indemnifications.................................... 52
4.16. Charter and Bylaws of Continuing
Corporation......................................... 52
4.17. NYSE Listing........................................ 52
ARTICLE V. CONDITIONS PRECEDENT.............................. 53
5.1. Conditions Precedent - Mutual....................... 53
5.2. Conditions Precedent - BB&T......................... 55
5.3. Conditions Precedent - SNC.......................... 56
ARTICLE VI. TERMINATION, WAIVER AND AMENDMENT................ 58
6.1. Termination......................................... 58
6.2. Effect of Termination............................... 59
6.3. Survival of Representations,
Warranties and Covenants............................ 60
6.4. Waiver.............................................. 60
6.5. Amendment or Supplement............................. 61
ARTICLE VII. MISCELLANEOUS................................... 61
7.1. Expenses............................................ 61
7.2. Entire Agreement.................................... 62
7.3. No Assignment....................................... 62
7.4. Notices............................................. 63
7.5. Captions............................................ 63
7.6. Counterparts........................................ 63
7.7. Governing Law....................................... 64
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION ("Reorganization
Agreement" or "Agreement") dated as of July 29, 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 200 West Second Street, Winston-Salem, North
Carolina 27101.
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 SNC shall
be merged ("Merger") with and into BB&T, with its name to be
changed to "Southern National Corporation" (BB&T 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 and preferred stock of SNC
(other than shares held by dissenting shareholders) shall be
converted into and exchanged for shares of common stock or
preferred stock of the Continuing Corporation and all outstanding
options to acquire common stock of SNC shall be converted into
options to acquire common stock of BB&T and all of the issued and
outstanding shares of capital stock of BB&T shall continue to be
issued and outstanding shares of capital stock of the Continuing
Corporation (as adjusted as provided herein), 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 SC 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;
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:
ARTICLE I.
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 2.25(e)(i).
1.15. "Continuing Corporation Common Stock" shall mean BB&T
Common Stock from and after the Effective Date.
1.16. "Continuing Corporation Preferred Stock" shall mean the
preferred stock of the Continuing Corporation to be designated as
"6-3/4% Cumulative Convertible Preferred Stock."
1.17. "Effective Date" shall mean the date specified pursuant
to Section 4.11 hereof as the effective date of the Merger.
1.18. "Environmental Claim" shall have the meaning set forth
in Section 2.24(e)(ii).
1.19. "Environmental Laws" shall have the meaning set forth in
Section 2.24(e)(iii).
1.20. "ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended.
1.21. "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
1.22. "FDIA" shall mean the Federal Deposit Insurance Act, as
amended.
1.23. "FDIC" shall mean the Federal Deposit Insurance
Corporation.
1.24. "Federal Reserve Board" shall mean the Board of
Governors of the Federal Reserve System.
1.25. "FRB Richmond" shall mean the Federal Reserve Bank of
Richmond.
1.26. "Materials of Environmental Concern" shall have the
meaning set forth in Section 2.24(e)(iv).
1.27. "NYSE" shall mean the New York Stock Exchange.
1.28. "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.
1.29. "PBGC" shall mean the Pension Benefit Guaranty
Corporation.
1.30. "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.
1.31. "Proxy Statement" shall mean the joint proxy
statement/prospectus (or similar documents) together with any
supplements thereto sent to the shareholders of SNC and/or BB&T
to solicit their votes in connection with this Agreement and the
Plan of Merger.
1.32. "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.
1.33. "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.
1.34. "SEC Documents" shall mean all reports and registration
statements filed, or required to be filed, by a party hereto
pursuant to the Securities Laws.
1.35. "Securities Act" shall mean the Securities Act of 1933,
as amended.
1.36. "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.
1.37. "SNC Common Stock" shall have the meaning set forth in
Section 2.1.
1.38. "SNC DRP" shall mean SNC's Dividend Reinvestment Plan.
1.39. "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.
1.40. "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 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.
1.41. "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.
1.42. "SNC Preferred Stock" shall have the meaning set forth
in Section 2.1.
1.43. "SNC Series A Preferred Stock" shall have the meaning
set forth in Section 2.1.
1.44. "SNC Subsidiary" shall have the meaning set forth in
Section 2.3.
1.45. "State Boards" shall mean the North Carolina State
Banking Commission, the Savings Institutions Division of the
North Carolina Department of Commerce 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 II.
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.
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
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. Section 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 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 AND RECORDS; 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
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
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.
(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.
(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. Section 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.
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.
(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.
(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 III.
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. 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.
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 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, 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 ANDRECORDS; 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.
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
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, 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 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 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. Section 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 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).
(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 BB&T as part of the Registration
Statement. BB&T will advise SNC, 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 and Preferred 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 SNC or for the
resale of such shares by such optionees, as the Continuing
Corporation and such optionees may agree. BB&T shall take all
actions necessary to register or qualify the shares of Continuing
Corporation Common Stock and Preferred 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) BB&T
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.
(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, 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 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 shall 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.
(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
except as contemplated herein; 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 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 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 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 SNC 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, the Board of
Directors of the Continuing Corporation shall consist of 22
persons, of which 11 shall be persons named by the Board of
Directors of BB&T and 11 shall be persons named by the Board of
Directors of SNC. 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. The terms of the
directors of the Continuing Corporation after the Effective Date
shall be allocated, prior to the mailing of the Proxy Statement,
so that, as nearly as practicable, the terms of the same number
of persons designated as directors by BB&T and by SNC,
respectively, will expire in each applicable year. If prior to
the Effective Date (i) any of the individuals named by either
BB&T or SNC to serve on the Board of Directors of the Continuing
Corporation following the Effective Date becomes unable or
unwilling to serve as a director of the Continuing Corporation,
or (ii) either BB&T or SNC determines to replace an individual
named by such party to serve on the Board of Directors of the
Continuing Corporation, the party that designated such individual
may name a replacement to become a director of the Continuing
Corporation after the Effective Date. 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.
(b) Subject to the fiduciary duties of the Continuing
Corporation directors, L. Glenn Orr, Jr. and John 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.
(c) At the Effective Date each Committee of the Board of
Directors of Continuing Corporation shall consist of an equal
number of Directors who were BB&T Directors prior to the Merger
and Directors who were SNC Directors prior to the Merger.
(d) 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.
(e) The persons to be named by BB&T and SNC as members of
the Board of Directors of the Continuing Corporation after the
Effective Date shall be so named prior to the first filing of a
regulatory application contemplated by Section 4.3 or the
Registration Statement, subject to receipt of the consent of such
individuals to be so named.
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 Chairman of the Board 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, 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, 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 SNC shall
be assumed by BB&T, and no further options shall be granted under
such plan, and all officers and employees of the Continuing
Corporation shall be eligible to participate in BB&T'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, 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 SNC, SNBNC and
SNBSC, respectively, on terms no less favorable than those
provided in the Articles of Incorporation and Bylaws of SNC or in
the Articles of Association and Bylaws of SNBNC or SNBSC, 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.
4.16. CHARTER AND BYLAWS OF CONTINUING CORPORATION
Prior to the Closing, the parties may agree on revisions
to the Articles of Incorporation and Bylaws of the Continuing
Corporation, which would include an amendment to provide for a
classified Board of Directors and related provisions. The
parties may also consider and propose arrangements regarding
change in control provisions and such additional provisions and
arrangements as may be mutually agreeable.
4.17. NYSE LISTING
BB&T and SNC shall use their best efforts to obtain the
approval of the NYSE to the listing on the NYSE of the Continuing
Corporation Common Stock and the Continuing Corporation Preferred
Stock.
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 SNC Common Stock
for BB&T Common Stock, and SNC Series A Preferred Stock for
Continuing Corporation Preferred Stock, will not give rise to
recognition of gain or loss for federal income tax purposes to
the shareholders of SNC and the Bank Mergers will not give rise
to recognition of gain or loss for federal income tax purposes to
BB&T;
(d) The parties hereto shall have received an opinion from
a public accounting firm mutually agreed upon by the parties that
the Merger shall qualify for the pooling-of-interests method of
accounting;
(e) 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 BB&T threatened by the Commission to suspend the
effectiveness of such Registration Statement, and BB&T shall have
received all 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 BB&T
threatened by any state "Blue Sky" securities administrator to
suspend the effectiveness of such Registration Statement;
(f) 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;
(g) 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; and
(h) The Continuing Corporation Common Stock and the
Continuing Corporation Preferred Stock shall have been approved
for listing on the NYSE.
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) BB&T shall have received from Arthur Andersen & Co. a
letter dated not more than five days prior to (i) the effective
date of the Registration Statement and (ii) the Closing Date,
with respect to certain financial information regarding SNC, each
in form and substance which is customary in transactions of the
nature contemplated by this Agreement;
(d) 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;
(e) 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;
(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
the terms of the Merger are fair from a financial point of view
to the BB&T shareholders;
(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; and
(i) 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% in the aggregate of either the outstanding SNC Common Stock
and SNC Series A Preferred Stock or the BB&T Common Stock.
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) SNC shall have received from KPMG Peat Marwick a
letter dated not more than five days prior to (i) the effective
date of the Registration Statement and (ii) the Closing Date,
with respect to certain financial information regarding BB&T,
each in form and substance which is customary in transactions of
the nature contemplated by this Agreement;
(d) BB&T shall have delivered to SNC 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;
(e) 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;
(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 the 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;
(i) 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% in the aggregate of either the outstanding SNC Common Stock
and SNC Series A Preferred Stock or the BB&T Common Stock; and
(j) L. Glenn Orr, Jr. shall have entered into an agreement
with the terms provided for in Exhibit 5.3(j) 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:
(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 meeting 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 15, 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 15, 1994, under the terms of this Agreement;
(h) At any time prior to September 15, 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 15, 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.
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 BB&T Common Stock and BB&T Preferred
Stock into which each share of SNC Common Stock and SNC Series A
Preferred Stock and 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 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
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.
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
(SEAL) Chief Executive Officer
Attest SOUTHERN NATIONAL CORPORATION
______________________ By__________________________
Secretary L. Glenn Orr, Jr.
Chairman, President and
Chief Executive Officer
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, by and between SOUTHERN NATIONAL CORPORATION ("SNC"), a
North Carolina corporation having its registered office at 200
West Second Street, Winston-Salem, North Carolina 27101, and BB&T
FINANCIAL CORPORATION ("BB&T"), a North Carolina corporation
having its registered office at 223 West Nash Street, Wilson,
North Carolina 27893.
WITNESSETH
WHEREAS, the respective Boards of Directors of SNC and
BB&T deem the merger of SNC with and into BB&T, 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), SNC shall be merged with and into BB&T,
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 SNC shall cease
and BB&T, as the surviving entity, shall continue unaffected and
unimpaired by the Merger and shall operate under the name
"Southern National Corporation." (BB&T 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 BB&T.
ARTICLE III.
BOARD OF DIRECTORS AND OFFICERS
1. From and after the Effective Date, the directors of the
Surviving Corporation, who shall hold office until the expiration
of their respective terms or until their successors are duly
elected and qualified, shall be the eleven persons designated by
the Board of Directors of BB&T and the eleven persons designated
by the Board of Directors of SNC pursuant to the Reorganization
Agreement, or any persons chosen to replace such designated
persons pursuant to the Reorganization Agreement and the Articles
of Incorporation and Bylaws of the Surviving Corporation.
The directors of the Surviving Corporation shall be divided into
three classes as nearly equal in number as possible, as provided
in the Reorganization Agreement. 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, 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 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") 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 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.
2. 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" until the Effective Date and "Surviving
Corporation Common Stock" from and after the Effective Date); 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, or upon the
repurchase by BB&T of such shares.
3. The shares of capital stock of BB&T 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 SNC Common Stock
outstanding immediately prior to the Effective Date (except as
provided in Paragraphs 4, 8, and 9 of this Article) shall by
virtue of the Merger be converted into 1.0 share of Surviving
Corporation Common Stock and shall no longer be shares of common
stock of SNC.
2. On the Effective Date, each share of BB&T Common Stock
outstanding immediately prior to the Effective Date shall by
virtue of the Merger be converted into 1.45 shares of Surviving
Corporation Common Stock.
3. On the Effective Date, each share of SNC Series A
Preferred Stock outstanding immediately prior to the Effective
Date shall be converted into one share of Surviving Corporation
Series A Preferred Stock, designated as "6 3/4% Cumulative
Convertible Preferred Stock, Series A," with the same terms,
designations, preferences, limitations, privileges, and relative
rights as the SNC Series A Preferred Stock.
4. On the Effective Date, all shares of SNC Common Stock
or SNC Series A Preferred Stock authorized but unissued shall be
canceled and no cash, stock or other property shall be delivered
in exchange therefor.
5. On and after the Effective Date, each holder of a
certificate or certificates theretofore representing outstanding
shares of SNC Common Stock or SNC Series A Preferred Stock (any
such certificate being hereinafter referred to as a "SNC
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 shares of Surviving
Corporation Common Stock or Surviving Corporation Series A
Preferred Stock to which such holder is entitled as provided
herein. Until so surrendered, each SNC Certificate shall be
deemed for all purposes to evidence ownership of the number of
shares of Surviving Corporation Common Stock or Surviving
Corporation Series A Preferred Stock into which the shares
represented by such SNC Certificates have been changed or
converted as aforesaid. SNC Certificates surrendered for
exchange by any person who is an "affiliate" of SNC 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 or Surviving Corporation
Series A Preferred 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 or Surviving
Corporation Series A Preferred Stock is to be issued in a name
other than that in which a SNC Certificate surrendered for
exchange is issued, the SNC 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 SNC 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.
6. 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 equal to the amount of cash in lieu of a
fractional share, without interest, to which such holder is
entitled. 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. If any certificate for shares of
Surviving 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.
7. Upon the Effective Date, the stock transfer books of
SNC shall be closed and no transfer of SNC Common Stock or SNC
Series A Preferred Stock shall thereafter be made or recognized.
Any other provision of this Plan of Merger notwithstanding,
neither the Surviving Corporation or its agent nor any party to
the Merger shall be liable to a holder of SNC Common Stock or SNC
Series A Preferred 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.
8. No conversion under Paragraph 1 of this Article V shall
be made in respect of any share of SNC Common Stock or SNC Series
A Preferred Stock as to which an SNC shareholder has, or 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.
9. In the event that during the period commencing on the
date hereof and ending on the Effective Date, the outstanding
shares of BB&T 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 BB&T'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 SNC and BB&T
shareholders pursuant to this Plan of Merger.
10. 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 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 BB&T Common Stock as reported by
the National Market System of the National Association of
Securities Dealers' Automated Quotation System 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.
11. On the Effective Date, SNC's obligations with respect
to stock options granted under its stock option plans shall be
assumed by the Surviving Corporation and each stock option
outstanding under such plans shall become the right to receive,
upon payment of the exercise price, a number of shares of
Surviving Corporation Common Stock equal to the number of shares
of SNC Common Stock covered by such options; provided, however,
that in respect of any stock option which is an "incentive stock
option" within the meaning of Section 422 of the Internal Revenue
Code of 1986, as amended ("Code"), the conversion hereinabove
provided for shall 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.
12. 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 and exchanged, 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 the Exchange Ratio in Article V, paragraph 2), the
number of shares of BB&T 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; provided, however,
that in respect of any stock option which is an "incentive stock
option" within the meaning of Section 422 of the Internal Revenue
Code of 1986, as amended ("Code"), the conversion hereinabove
provided for shall 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").
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
SNC, or otherwise carry out the provisions hereof, the proper
officers and directors of SNC, as of the Effective Date, and
thereafter the officers of the Surviving Corporation acting on
behalf of SNC, 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.
<PAGE>
STOCK OPTION AGREEMENT
This STOCK OPTION AGREEMENT ("Option Agreement") dated as
of July 29, 1994, between BB&T FINANCIAL CORPORATION ("BB&T"), a
North Carolina corporation registered as a bank holding company
under the Bank Holding Company Act of 1956, as amended ("Bank
Holding Company Act"), and SOUTHERN NATIONAL CORPORATION ("SNC"),
a North Carolina corporation registered as a bank holding company
under the Bank Holding Company Act.
WITNESSETH
WHEREAS, the Boards of Directors of the parties hereto
have approved an Agreement and Plan of Reorganization
("Reorganization Agreement") and have adopted a related Plan of
Merger dated as of the date hereof (together referred to herein
as the "Merger Agreements"), providing for certain transactions
pursuant to which SNC would be merged with and into BB&T; and
WHEREAS, as a condition to and as consideration for SNC's
entry into the Merger Agreements and to induce such entry, BB&T
has agreed to grant to SNC the option set forth herein to
purchase authorized but unissued shares of BB&T Common Stock;
NOW, THEREFORE, in consideration of the premises herein
contained, the parties agree as follows:
1. DEFINITIONS.
Capitalized terms defined in the Merger Agreements and
used herein shall have the same meanings as in the Merger
Agreements.
2. GRANT OF OPTION.
Subject to the terms and conditions set forth herein, BB&T
hereby grants to SNC an option ("Option") to purchase up to
7,217,932 shares of BB&T Common Stock, at a price of $30.625 per
share payable in cash as provided in Section 4 hereof; provided,
however, that in the event BB&T issues or agrees to issue any
shares of BB&T Common Stock (other than as permitted under the
Merger Agreements) at a price less than $30.625 per share (as
adjusted pursuant to Section 6 hereof), the exercise price shall
be equal to such lesser price. Notwithstanding anything else in
this Agreement to the contrary, the number of shares of BB&T
Common Stock subject to the Option shall be reduced to such
lesser number, if any, as may from time-to-time be necessary, but
only for so long as may be necessary, to cause SNC not to be
subject to the provisions of Section 55-9-01 et seq. of, or
deemed to own "control shares" of BB&T within the meaning of
Section 55-9A-01 of, the North Business Corporation Act, as
amended.
3. EXERCISE OF OPTION.
(a) Unless SNC shall have breached in any material
respect any material covenant or representation contained in the
Reorganization Agreement and such breach has not been cured, SNC
may exercise the Option, in whole or part, at any time or from
time to time if a Purchase Event (as defined below) shall have
occurred and be continuing; provided that to the extent the
Option shall not have been exercised, it shall terminate and be
of no further force and effect (i) on the Effective Date of the
Merger or (ii) upon termination of the Merger Agreements in
accordance with the provisions thereof (other than a termination
resulting from a willful breach by BB&T of any Specified Covenant
or, following the occurrence of a Purchase Event, failure of
BB&T's shareholders to approve the Merger Agreements by the vote
required under applicable law or under BB&T's Certificate of
Incorporation), or (iii) 12 months after termination of the
Merger Agreements due to a willful breach by BB&T of any
Specified Covenant or, following the occurrence of a Purchase
Event, failure of BB&T's shareholders to approve the Merger
Agreements by the vote required under applicable law or under
BB&T's Certificate of Incorporation; and provided further that
any such exercise shall be subject to compliance with applicable
provisions of law.
(b) As used herein, a "Purchase Event" shall mean
any of the following events or transactions occurring after the
date hereof:
(i) BB&T, Branch Banking and Trust Company
("BB&T-NC") or Branch Banking and Trust
Company of South Carolina ("BB&T-SC"),
without having received SNC's prior
written consent, shall have entered into
an agreement with any person (other than
BB&T, BB&T-NC or BB&T-SC, to (x) merge or
consolidate, or enter into any similar
transaction, with BB&T, BB&T-NC or
BB&T-SC, except as contemplated in the
Reorganization Agreement (including
Previously Disclosed transactions),
(y) purchase, lease or otherwise acquire
all or substantially all of the assets of
BB&T, BB&T-NC or BB&T-SC or (z) purchase
or otherwise acquire (including by way of
merger, consolidation, share exchange or
any similar transaction) securities
representing 10% or more of the voting
power of BB&T, BB&T-NC or BB&T-SC;
(ii) any person (other than BB&T, or BB&T-NC or
BB&T-SC in a fiduciary capacity, or SNC,
or Southern National Bank of North
Carolina or Southern National Bank of
South Carolina in a fiduciary capacity)
shall have acquired beneficial ownership
or the right to acquire beneficial
ownership of 15% or more of the
outstanding shares of BB&T Common Stock
after the date hereof (the term
"beneficial ownership" for purposes of
this Option Agreement having the meaning
assigned thereto in Section 13(d) of the
Exchange Act and the regulations
promulgated thereunder);
(iii) any person (other than BB&T, BB&T-NC or
BB&T-SC) shall have made a bona fide
proposal to BB&T by public announcement or
written communication that is or becomes
the subject of public disclosure to
acquire BB&T, BB&T-NC or BB&T-SC by
merger, consolidation, purchase of all or
substantially all of its assets or any
other similar transaction, and following
such bona fide proposal the shareholders
of BB&T vote not to adopt the Plan of
Merger; or
(iv) BB&T shall have willfully breached any
Specified Covenant following a bona fide
proposal to BB&T-NC, BB&T-SC or BB&T to
acquire BB&T, BB&T-NC or BB&T-SC by
merger, consolidation, purchase of all or
substantially all of its assets or any
other similar transaction, which breach
would entitle SNC to terminate the Merger
Agreements (without regard to the cure
periods provided for therein) and such
breach shall not have been cured prior to
the Notice Date (as defined below).
If more than one of the transactions giving rise to a Purchase
Event under this Section 3(b) is undertaken or effected, then all
such transactions shall give rise only to one Purchase Event,
which Purchase Event shall be deemed continuing for all purposes
hereunder until all such transactions are abandoned. As used in
this Option Agreement, "person" shall have the meanings specified
in Sections 3(a)(9) and 13(d)(3) of the Exchange Act.
(c) In the event SNC wishes to exercise the
Option, it shall send to BB&T a written notice (the date of which
being herein referred to as "Notice Date") specifying (i) the
total number of shares it will purchase pursuant to such
exercise, and (ii) a place and date not earlier than three
business days nor later than 60 business days from the Notice
Date for the closing of such purchase ("Closing Date"); provided
that if prior notification to or approval of any federal or state
regulatory agency is required in connection with such purchase,
SNC shall promptly file the required notice or application for
approval and shall expeditiously process the same and the period
of time that otherwise would run pursuant to this sentence shall
run instead from the date on which any required notification
period has expired or been terminated or such approval has been
obtained and any requisite waiting period shall have passed.
(d) As used herein, "Specified Covenant" means any
covenant contained in Sections 4.1, 4.4 or 4.11, or subsections
(2), (3), (4), (5), (6), (12) and, to the extent applicable to
the foregoing subsections, (14) of Section 4.8(b) of the
Reorganization Agreement.
4. PAYMENT AND DELIVERY OF CERTIFICATES.
(a) At the closing referred to in Section 3
hereof, SNC shall pay to BB&T the aggregate purchase price for
the shares of BB&T Common Stock purchased pursuant to the
exercise of the Option in immediately available funds by a wire
transfer to a bank account designated by BB&T.
(b) At such closing, simultaneously with the
delivery of funds as provided in subsection (a), BB&T shall
deliver to SNC a certificate or certificates representing the
number of shares of BB&T Common Stock purchased by SNC, and SNC
shall deliver to BB&T a letter agreeing that SNC will not offer
to sell or otherwise dispose of such shares in violation of
applicable law or the provisions of this Option Agreement.
(c) Certificates for BB&T Common Stock delivered
at a closing hereunder may be endorsed with a restrictive legend
which shall read substantially as follows:
"The transfer of the shares represented by
this certificate is subject to certain
provisions of an agreement between the
registered holder hereof and BB&T Financial
Corporation and to resale restrictions
arising under the Securities Act of 1933, as
amended, a copy of which agreement is on file
at the principal office of BB&T Financial
Corporation. A copy of such agreement will
be provided to the holder hereof without
charge upon receipt by BB&T Financial
Corporation of a written request."
It is understood and agreed that the above legend shall be
removed by delivery of substitute certificate(s) without such
legend if SNC shall have delivered to BB&T a copy of a letter
from the staff of the Commission, or an opinion of counsel, in
form and substance satisfactory to BB&T, to the effect that such
legend is not required for purposes of the Securities Act.
5. REPRESENTATIONS.
BB&T hereby represents, warrants and covenants to SNC as
follows:
(a) BB&T shall at all times maintain sufficient
authorized but unissued shares of BB&T Common Stock so that the
Option may be exercised without authorization of additional
shares of BB&T Common Stock.
(b) The shares to be issued upon due exercise, in
whole or in part, of the Option, when paid for as provided
herein, will be duly authorized, validly issued, fully paid and
nonassessable.
6. ADJUSTMENT UPON CHANGES IN CAPITALIZATION.
In the event of any change in BB&T Common Stock by reason
of stock dividends, split-ups, mergers, recapitalizations,
combinations, exchanges of shares or the like, the type and
number of shares subject to the Option, and the purchase price
per share, as the case may be, shall be adjusted appropriately.
In the event that any additional shares of BB&T Common Stock are
issued or otherwise become outstanding after the date of this
Option Agreement (other than pursuant to this Option Agreement),
the number of shares of BB&T Common Stock subject to the Option
shall be adjusted so that, after such issuance, it equals 19.9%
of the number of shares of BB&T Common Stock then issued and
outstanding without giving effect to any shares subject or issued
pursuant to the Option. Nothing contained in this Section 6
shall be deemed to authorize BB&T to breach any provision of the
Merger Agreements.
7. REGISTRATION RIGHTS.
BB&T shall, if requested by SNC, as expeditiously as
possible file a registration statement on a form of general use
under the Securities Act if necessary in order to permit the sale
or other disposition of the shares of BB&T Common Stock that have
been acquired upon exercise of the Option in accordance with the
intended method of sale or other disposition requested by SNC.
SNC shall provide all information reasonably requested by BB&T
for inclusion in any registration statement to be filed
hereunder. BB&T will use its best efforts to cause such
registration statement first to become effective and then to
remain effective for such period not in excess of 270 days from
the day such registration statement first becomes effective as
may be reasonably necessary to effect such sales or other
dispositions. The first registration effected under this Section
7 shall be at BB&T's expense except for underwriting commissions
and the fees and disbursements of SNC's counsel attributable to
the registration of such BB&T Common Stock. A second
registration may be requested hereunder at SNC's expense. In no
event shall BB&T be required to effect more than two
registrations hereunder. The filing of any registration
statement hereunder may be delayed for such period of time as may
reasonably be required to facilitate any public distribution by
BB&T of BB&T Common Stock. If requested by SNC, in connection
with any such registration, BB&T will become a party to any
underwriting agreement relating to the sale of such shares, but
only to the extent of obligating itself in respect of
representations, warranties, indemnities and other agreements
customarily included in such underwriting agreements. Upon
receiving any request from SNC or assignee thereof under this
Section 7, BB&T agrees to send a copy thereof to SNC and to any
assignee thereof known to BB&T, in each case by promptly mailing
the same, postage prepaid, to the address of record of the
persons entitled to receive such copies.
8. SEVERABILITY.
If any term, provision, covenant or restriction contained
in this Option Agreement is held by a court or a federal or state
regulatory agency of competent jurisdiction to be invalid, void
or unenforceable, the remainder of the terms, provisions and
covenants and restrictions contained in this Option Agreement
shall remain in full force and effect, and shall in no way be
affected, impaired or invalidated. If for any reason such court
or regulatory agency determines that the Option will not permit
the holder to acquire the full number of shares of BB&T Common
Stock provided in Section 2 hereof (as adjusted pursuant to
Section 6 hereof), it is the express intention of BB&T to allow
the holder to acquire or to require BB&T to repurchase such
lesser number of shares as may be permissible, without any
amendment or modification hereof.
9. MISCELLANEOUS.
(a) EXPENSES. Except as otherwise provided herein,
each of the parties hereto shall bear and pay all costs and
expenses incurred by it or on its behalf in connection with the
transactions contemplated hereunder, including fees and expenses
of its own financial consultants, investment bankers, accountants
and counsel.
(b) ENTIRE AGREEMENT. Except as otherwise expressly
provided herein, this Option Agreement contains the entire
agreement between the parties with respect to the transactions
contemplated hereunder and supersedes all prior arrangements or
understandings with respect thereto, written or oral. The terms
and conditions of this Option Agreement shall inure to the
benefit of and be binding upon the parties hereto and their
respective successors and assigns. Nothing in this Option
Agreement, expressed or implied, is intended to confer upon any
party, other than the parties hereto, and their respective
successors and assigns, any rights, remedies, obligations or
liabilities under or by reason of this Option Agreement, except
as expressly provided herein.
(c) ASSIGNMENT. Neither of the parties hereto may
assign any of its rights or obligations under this Option
Agreement or the Option created hereunder to any other person,
without the express written consent of the other party, except
that in the event a Purchase Event shall have occurred and be
continuing SNC may assign in whole or in part its rights and
obligations hereunder; provided, however, that to the extent
required by applicable regulatory authorities, SNC may not assign
its rights under the Option except in (i) a widely dispersed
public distribution, (ii) a private placement in which no one
party acquires the right to purchase in excess of 2% of the
voting shares of BB&T, (iii) an assignment to a single party
(e.g., a broker or investment banker) for the purpose of
conducting a widely dispersed public distribution on SNC's
behalf, or (iv) any other manner approved by applicable
regulatory authorities.
(d) NOTICES. All notices or other communications
which are required or permitted hereunder shall be in writing and
sufficient if delivered in the manner and to the addresses
provided for in or pursuant to Section 7.4 of the Reorganization
Agreement.
(e) COUNTERPARTS. This Option 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.
(f) SPECIFIC PERFORMANCE. The parties agree that
damages would be an inadequate remedy for a breach of the
provisions of this Option Agreement by either party hereto and
that this Option Agreement may be enforced by either party hereto
through injunctive or other equitable relief.
(g) GOVERNING LAW. This Option 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 state and such federal laws
as may be applicable.
<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has
executed this Option Agreement as of the day and year first
written above.
BB&T FINANCIAL CORPORATION
By:
Name:
Title:
SOUTHERN NATIONAL CORPORATION
By:
Name:
Title:
