<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[X] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
BB&T CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
-------------------------------------------------------------------------
(4) Date Filed:
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Notes:
<PAGE>
BB&T CORPORATION
March 16, 1998
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders of
BB&T Corporation scheduled for 11:00 A.M. on Tuesday, April 28, 1998 at the
Norfolk Waterside Marriott Hotel at 235 East Main Street, Norfolk, Virginia.
The matters scheduled for consideration at the meeting are described in detail
in the Notice of Annual Meeting of Shareholders and Proxy Statement. In order
to be sure your shares are voted at the meeting if you cannot attend, please
complete, sign and return the enclosed proxy card as soon as possible.
In compliance with applicable regulations, the Corporation's financial
statements and other required disclosures are presented in its 1997 Annual
Report on Form 10-K, a copy of which follows the Proxy Statement, and which
reflects the Corporation's financial condition on December 31, 1997.
Also included in the package is a Summary 1997 Annual Report to Shareholders
which contains additional information about the Corporation, including a
financial summary, our letter to shareholders and selected financial data. We
believe that this Summary 1997 Annual Report provides our shareholders, the
investment community, and the public with financial and other corporate
information in an understandable and useful manner.
We trust that this presentation will satisfy your informational needs, and
at the same time, provide you with a better understanding of both the
financial history and strategic direction of BB&T Corporation.
Sincerely,
/s/ John A. Allison IV
John A. Allison IV
Chairman and Chief Executive Officer
<PAGE>
BB&T CORPORATION
200 WEST SECOND STREET
WINSTON-SALEM, NORTH CAROLINA 27101
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 28, 1998
TO THE SHAREHOLDERS OF BB&T CORPORATION:
Notice is hereby given that the Annual Meeting of Shareholders of BB&T
Corporation (the "Corporation" or "BB&T") will be held on Tuesday, April 28,
1998 at 11:00 A.M. local time, at the Norfolk Waterside Marriott Hotel located
at 235 East Main Street, Norfolk, Virginia, for the following purposes:
(1) To elect eight Directors for three-year terms expiring in 2001, three
Directors for two-year terms expiring in 2000 and two Directors for
one-year terms expiring in 1999.
(2) To approve an amendment to the Corporation's Articles of Incorporation
to increase its authorized Common Stock from 300,000,000 shares to
500,000,000 shares.
(3) To ratify the reappointment of Arthur Andersen LLP as the Corporation's
independent auditors for 1998.
(4) To transact such other business as may properly come before the
meeting.
Pursuant to the provisions of the North Carolina Business Corporation Act,
March 3, 1998 has been fixed as the record date for the determination of
holders of Common Stock entitled to notice of and to vote at the Annual
Meeting of Shareholders or any adjournment thereof. Accordingly, only
shareholders of record at the close of business on the record date will be
entitled to notice of and to vote at said meeting or any adjournment thereof.
It is important that your shares of the Corporation's Common Stock be
represented at this meeting in order that the presence of a quorum may be
assured.
A copy of the Annual Report on Form 10-K, containing the financial
statements of the Corporation for the year ended December 31, 1997, is
enclosed herewith.
By Order of the Board of Directors
/s/ Jerone C. Herring
Jerone C. Herring
Secretary
March 16, 1998
Even if you plan to attend the meeting in person, please date and execute
the enclosed proxy and mail it promptly. If you attend the meeting, you may
revoke your proxy and vote your shares in person. A postage-paid, return-
addressed envelope is enclosed.
<PAGE>
BB&T CORPORATION
200 WEST SECOND STREET
WINSTON-SALEM, NORTH CAROLINA 27101
PROXY STATEMENT
The enclosed proxy, for use only at the Annual Meeting of Shareholders to be
held April 28, 1998, at 11:00 A.M. local time, and any adjournment thereof, is
solicited on behalf of the Board of Directors of BB&T Corporation
("Corporation" or "BB&T"). The approximate date this proxy material is first
being sent to shareholders is March 16, 1998. Such solicitation is being made
by mail and may be made in person or by fax or telephone by officers or
employees of the Corporation. All expenses incurred in such solicitation will
be paid by the Corporation or its subsidiaries. Banks, brokerage houses and
other institutions, nominees and fiduciaries will be requested to forward the
soliciting material to beneficial owners and to obtain authorization for the
execution of proxies. The Corporation will, upon request, reimburse such
parties for their reasonable expenses in forwarding proxy material to
beneficial owners.
The accompanying proxy is for use at the meeting if a shareholder either
will be unable to attend in person or will attend but wishes to vote by proxy.
The proxy may be revoked by the shareholder at any time before it is exercised
by filing with the Secretary of the Corporation an instrument revoking it,
filing a duly executed proxy bearing a later date or by attending the meeting
and electing to vote in person. All shares of the Corporation's Common Stock
("Common Stock" or "BB&T Common Stock") represented by valid proxies received
pursuant to this solicitation, and not revoked before they are exercised, will
be voted in the manner specified therein. If no specification is made, the
proxies will be voted in favor of: (1) electing eight Directors for three-year
terms expiring in 2001, three Directors for two-year terms expiring in 2000
and two Directors for one-year terms expiring in 1999; (2) approving an
amendment to the Corporation's Articles of Incorporation ("Articles") to
increase its authorized Common Stock from 300,000,000 shares to 500,000,000
shares; and (3) ratifying the reappointment of Arthur Andersen LLP as the
Corporation's independent auditors for 1998. The Corporation has engaged
Morrow & Co. to assist in proxy solicitation for an estimated fee of $8,000,
plus out-of-pocket expenses.
VOTING SECURITIES OUTSTANDING
Pursuant to the provisions of the North Carolina Business Corporation Act,
March 3, 1998 has been fixed as the record date for the determination of
holders of Common Stock entitled to notice of and to vote at the Annual
Meeting of Shareholders. Each share of the Corporation's Common Stock issued
and outstanding on March 3, 1998 is entitled to one vote on all proposals at
the meeting, except that shares held in a fiduciary capacity by Branch Banking
and Trust Company ("BB&T-NC"), Branch Banking and Trust Company of South
Carolina ("BB&T-SC") and Branch Banking and Trust Company of Virginia ("BB&T-
VA") may only be voted in accordance with the instruments creating the
fiduciary capacity. BB&T-NC, BB&T-SC and BB&T-VA are collectively referred to
herein as the "BB&T Bank Subsidiaries". Holders of shares of Common Stock vote
together as a voting group on all such proposals. As of the close of business
on March 3, 1998, there were 142,178,663 shares of Common Stock of the
Corporation outstanding and entitled to vote.
1
<PAGE>
SECURITY OWNERSHIP
The table below sets forth the beneficial ownership of BB&T Common Stock by
all directors and nominees, the Chief Executive Officer and the four next most
highly compensated Executive Officers of BB&T, all current Executive Officers
of BB&T and all Directors and Executive Officers of BB&T as a group as of
March 3, 1998. Unless otherwise indicated, all persons listed below have sole
voting and investment power over all shares beneficially owned. No shareholder
is known to BB&T to be the beneficial owner of more than 5% of the outstanding
BB&T Common Stock as of March 3, 1998.
<TABLE>
<CAPTION>
SHARES OF
NAME OF BENEFICIAL OWNER/ COMMON STOCK PERCENT OF
NUMBER OF PERSONS IN GROUP BENEFICIALLY OWNED(1) COMMON STOCK
- -------------------------- --------------------- ------------
<S> <C> <C>
John A. Allison IV.......................... 273,530 *
Paul B. Barringer........................... 48,308 *
Alfred E. Cleveland......................... 28,008 *
W.R. Cuthbertson, Jr........................ 80,000 *
Ronald E. Deal.............................. 42,669 *
A.J. Dooley, Sr............................. 53,482 *
Tom D. Efird................................ 47,212 *
Paul S. Goldsmith........................... 121,454 *
L. Vincent Hackley.......................... 16,793 *
Ernest F. Hardee............................ 111,599 *
Jane P. Helm................................ 200 *
Richard Janeway, M.D........................ 40,785 *
J. Ernest Lathem, M.D....................... 213,556 *
James H. Maynard............................ 193,162 *
Joseph A. McAleer, Jr....................... 17,155 *
Albert O. McCauley.......................... 15,113 *
L. Glenn Orr, Jr............................ 196,795 *
Richard L. Player, Jr....................... 29,805 *
C. Edward Pleasants, Jr..................... 61,603 *
Nido R. Qubein.............................. 93,948 *
E. Rhone Sasser............................. 190,832 *
Jack E. Shaw................................ 403,130 *
Harold B. Wells............................. 114,222 *
W. Kendall Chalk............................ 105,087 *
Robert E. Greene............................ 49,706 *
Kelly S. King............................... 119,290 *
Morris D. Marley............................ 39,564 *
Scott E. Reed............................... 110,562 *
Henry G. Williamson, Jr..................... 182,960 *
Directors and Executive Officers as a group
(29 persons)............................... 3,000,530 2.11%
</TABLE>
- --------
* Less than 1%.
(1) As reported to BB&T by the Directors and nominees and Executive Officers
(including shares held by spouses, minor children, affiliated companies,
partnerships and trusts over which the named person has beneficial
ownership). The table includes options which become exercisable within 60
days after March 3, 1998 and shares allocated to individual accounts by
the BB&T Corporation 401(k) Savings Plan and by the BB&T Corporation Non-
Qualified Defined Contribution Plan, voting of which is directed by those
named persons and group members who participate in the ESOP and the ESOP
Excess Plan.
2
<PAGE>
PROPOSAL 1--ELECTION OF DIRECTORS
The BB&T Board of Directors consists of 23 persons. The Board is divided
into three classes, each class to be as nearly equal in number as possible.
There are eight nominees for election as Directors who will serve for three-
year terms expiring in 2001, three nominees for election as Directors who will
serve for two-year terms and two nominees for election as Directors who will
serve for one-year terms expiring in 1999. All nominees presently serve as
Directors. During 1997, five of the nominees were initially appointed as
Directors by the Board: Ms. Helm in May; and Messrs. Cleveland, Sasser, Shaw
and Wells in July in connection with the acquisition of United Carolina
Bancshares Corporation ("UCB"). It is intended that the persons named in the
accompanying form of proxy will vote to elect the thirteen nominees listed
below as Directors, unless authority so to vote is withheld. Although
management expects that each of the nominees will be available for election,
in the event a vacancy in the slate of nominees occurs, it is intended that
shares of the Corporation's Common Stock represented by proxies will be voted
for the election of a substitute nominee selected by the persons named in the
accompanying form of proxy. The election of each nominee requires the
affirmative vote of a plurality of the shares of BB&T Common Stock cast in the
election of Directors. Votes that are withheld and shares held in street name
that are not voted in the election of Directors will not be included in
determining the number of votes cast. Holders of BB&T's Common Stock do not
have cumulative voting rights in the election of Directors.
The names of the nominees for election and the other continuing members of
the Board of Directors, their principal occupations and certain other
information with respect to such persons are as follows.
NOMINEES FOR ELECTION AS DIRECTORS FOR THREE-YEAR TERMS EXPIRING IN 2001
<TABLE>
<CAPTION>
DIRECTOR OF
PRINCIPAL OCCUPATION BB&T OR
DURING THE PAST BB&T FINANCIAL
NAME AGE FIVE YEARS; RESIDENCES SINCE(1)
---- --- ---------------------- --------------
<C> <C> <S> <C>
John A. Allison IV(2)...... 49 Chairman and Chief Executive Officer of 1986
BB&T; Chairman and Chief Executive Officer
of BB&T Financial until February 1995;
Winston-Salem, N.C.
W. R. Cuthbertson, Jr.(2).. 67 Retired; prior to June 1995, Senior Vice 1983
President of Branch Banking and Trust
Company; Charlotte, N.C.
Ronald E. Deal(3).......... 54 Chairman of Wesley Hall (furniture 1986
manufacturer); Investor; Hickory, N.C.
Tom D. Efird(2)............ 58 President of Standard Distributors, Inc. 1982
(beverage wholesaler); Gastonia, N.C.
Richard Janeway, M.D.(3)... 65 University Professor of Medicine and 1989
Management, Wake Forest University; prior
to August, 1997, Executive Vice President
for Health Affairs; Professor of Neurology
and Research Associate in Radiology,
Bowman Gray School of Medicine, Wake
Forest University; Winston-Salem, N.C.
James H. Maynard(4)........ 58 Chairman and Chief Executive Officer of 1985
Investors Management Corporation
(restaurants); Raleigh, N.C.
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
DIRECTOR OF
PRINCIPAL OCCUPATION BB&T OR
DURING THE PAST BB&T FINANCIAL
NAME AGE FIVE YEARS; RESIDENCES SINCE(1)
---- --- ---------------------- --------------
<S> <C> <C> <C>
Albert O. McCauley(4)... 57 Secretary and Treasurer, Quick Stop Food 1993
Marts, Inc. (convenience stores);
President and Chief Executive Officer,
McCauley Moving and Storage of
Fayetteville, Inc.; Fayetteville, N.C.
L. Glenn Orr, Jr.(2).... 57 President and Chief Executive Officer of 1982
Orr Management Co. (management
consulting); Chairman Emeritus of the
Corporation; prior to March, 1995,
Chairman, Chief Executive Officer, and
President of the Corporation; Winston-
Salem, N.C.
NOMINEES FOR ELECTION AS DIRECTORS FOR TWO-YEAR TERMS EXPIRING IN 2000
Alfred E. Cleveland(3).. 62 Partner in the law firm of McCoy, Weaver, 1997
Wiggins, Cleveland & Raper; (Attorneys);
Fayetteville, N.C
Jane P. Helm(3)......... 55 Vice Chancellor of Business Affairs, 1997
Appalachian State University; prior to
August, 1994, Associate Dean for Finance
and Administration and Treasurer of New
York University Law School; Boone, N.C.
E. Rhone Sasser(2)...... 61 Retired. Prior to July 1997, Chairman of 1997
the Board, Chief Executive Officer, and
Chairman of the Executive Committee of
UCB, Whiteville, N.C.
NOMINEES FOR ELECTION AS DIRECTORS FOR ONE-YEAR TERMS EXPIRING IN 1999
Jack E. Shaw(4)......... 63 Chief Executive Officer of Shaw Resources, 1997
Inc. (real estate investment and
development); Greenville, S.C.
Harold B. Wells(4)...... 66 President of Wells Chevrolet, Buick, 1997
Pontiac, Oldsmobile, GMC, Inc. (automobile
dealership); Whiteville, N.C.
CONTINUING DIRECTORS FOR TERMS EXPIRING IN 2000
Paul B. Barringer(3).... 67 Chairman and Chief Executive Officer, 1975
Coastal Lumber Company (manufacturer of
diverse wood products); Weldon, N.C.
A. J. Dooley, Sr.(4).... 67 Partner of Dooley, Dooley, Spence, Parker 1994
and Hipp, P.A. (attorneys); Lexington,
S.C.
Paul S. Goldsmith(2).... 64 Chairman and President, William Goldsmith 1970
Company, Inc. (real estate); Greenville,
S.C.
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
DIRECTOR OF
PRINCIPAL OCCUPATION BB&T OR
DURING THE PAST BB&T FINANCIAL
NAME AGE FIVE YEARS; RESIDENCES SINCE(1)
---- --- ---------------------- --------------
<S> <C> <C> <C>
L. Vincent Hackley(4)... 57 Chairman, Character Counts! Coalition 1992
(consultant for public service and ethics
development); prior to June 1997,
President, North Carolina System of
Community Colleges; prior to January 1,
1995, Chancellor and Professor of
Political Science, Fayetteville State
University; Fayetteville, N.C.
Joseph A. McAleer, 48 Chairman and Chief Executive Officer, 1993
Jr.(2)................. Krispy Kreme Doughnut Corporation since
1992; prior thereto President, Chief
Operating Officer and Director, Krispy
Kreme Doughnut Corporation (manufacturer
of doughnuts and doughnut making
equipment); Winston-Salem, N.C.
CONTINUING DIRECTORS FOR TERMS EXPIRING IN 1999
Ernest F. Hardee(3)..... 57 President of Hardee Realty Corp. (real 1995
estate management); Portsmouth, Va.
J. Ernest Lathem, 64 Personal Investments; prior to April 1994, 1987
M.D.(2)................ Medical Director of Prostate Diagnostic
Center; Greenville, S.C.
Richard L. Player, 63 President of Player, Inc. (commercial and 1990
Jr.(3)................. industrial general contractor);
Fayetteville, N.C.
C. Edward Pleasants, 57 President and Chief Executive Officer, 1993
Jr.(2)................. Pleasants Hardware Company (architectural
door and hardware distributor); Winston-
Salem, N.C.
Nido R. Qubein(4)....... 49 Chief Executive Officer, Creative Services, 1990
Inc. (international management
consulting); High Point, N.C.
</TABLE>
- --------
(1) On February 28, 1995, the merger of BB&T Financial Corporation ("BB&T
Financial") into Southern National Corporation ("SNC") (the "BB&T Merger")
was consummated and certain directors of BB&T Financial became directors of
SNC which is now named BB&T Corporation.
(2) Member of the Executive Committee.
(3) Member of the Audit Committee.
(4) Member of the Compensation Committee.
5
<PAGE>
Certain of the above directors and nominees are also directors of other
publicly held companies. Paul B. Barringer has been a director of Sea Pines,
Inc. since 1997. L. Vincent Hackley has been a director of Tyson's Foods, Inc.
since 1994. J. Ernest Lathem, M.D., has been a director of Span-America
Medical Systems, Inc. since 1996. James H. Maynard has been a director of
Investors Management Corporation since 1972 and a director of Golden Corral
Realty Corporation since 1984. L. Glenn Orr, Jr. has been a director of
Highwoods Properties, Inc. and Ladd Furniture Company since 1995 and a
director of Polymer Group, Inc. since 1997. Jack E. Shaw has been a director
of Unitronix Corp. since 1990. Each of these companies has securities
registered under the Securities Exchange Act of 1934 ("Exchange Act").
The BB&T Board has established the Executive Committee, the Audit Committee
and the Compensation Committee and has assigned certain responsibilities to
each of these committees.
The Executive Committee consists of eight directors. This Committee is
generally authorized to have and to exercise all of the powers of the Board
between board meetings. The Executive Committee also serves as the Nominating
Committee for the Board (the "Nominating Committee") and recommends to the
BB&T Board nominees for election as directors and considers the performance of
incumbent directors in determining whether or not to nominate them for re-
election. The Nominating Committee considers written nominations of candidates
for election to the Board submitted by shareholders to the Secretary of BB&T
that are accompanied by biographical material, qualifications and consent of
nominees. Nominations of such candidates must have been received not later
than 60 days prior to one year after the date of the immediately preceding
annual meeting of shareholders, along with such information as was disclosed
in the proxy materials concerning all nominees for director and the
shareholder's name, address and number of shares owned, in order to be
considered for the slate of nominees for election as directors at the next
annual meeting.
The Audit Committee recommends engaging and discharging the independent
auditors; directs and supervises special investigations; reviews with the
independent auditors the plan for and result of the auditing engagement;
reviews the scope and result of BB&T's procedures for internal auditing and
loan review; approves each professional service above certain limits provided
by the independent auditors; considers the range of audit and non-audit fees;
and reviews the adequacy of BB&T's system of internal accounting controls. The
Audit Committee reappointed Arthur Andersen LLP as BB&T's independent auditors
for 1998.
The Compensation Committee recommends to the Board remuneration arrangements
for senior management and directors and adoption and administration of
compensation plans in which officers and directors are eligible to
participate.
All Directors attended at least 75% of the Board meetings and assigned
committee meetings during 1997 except for Mr. Cuthbertson. The Board held
eight meetings during the year; the Executive Committee held three meetings;
the Audit Committee held two meetings; and the Compensation Committee held two
meetings.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under the securities laws of the United States, BB&T's Directors and
Executive Officers are required to report their beneficial ownership of BB&T
Common Stock and any changes in that ownership to the Securities and Exchange
Commission ("Commission"). Specific dates for such reporting have been
established and BB&T is required to report in this Proxy Statement any failure
to file by the established dates during 1997. In 1997, all of these filing
requirements were satisfied by BB&T's Directors and Executive Officers except
Mr. Dooley, who failed to file two reports on a timely basis relating to two
transactions in BB&T Common Stock. In making this statement, BB&T has relied
on the written representations of its incumbent Directors and Executive
Officers and copies of the reports that have been filed with the Commission.
6
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS
The following table presents information relating to total compensation
during the fiscal year ended December 31, 1997, of the Chief Executive Officer
and the six next most highly compensated executive officers of BB&T (the "BB&T
Named Executives"):
BB&T SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
-------------------------------------- -----------------------
AWARDS PAYOUTS
--------------- -------
SECURITIES
UNDERLYING
NAME AND PRINCIPAL OTHER ANNUAL OPTIONS/SARS LTIP ALL OTHER
POSITION YEAR SALARY BONUS COMPENSATION(1) (NO. OF SHARES) PAYOUTS COMPENSATION(2)
------------------ ---- -------- -------- --------------- --------------- ------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
John A. Allison IV...... 1997 $553,669 $509,364 -- 33,115 -- $68,261
Chairman & Chief 1996 486,674 584,009 -- -- -- 40,716
Executive Officer 1995 406,200 191,930 $122,842 42,877 -- 16,248
W. Kendall Chalk........ 1997 $215,500 $165,213 -- 12,384 -- $25,410
Senior Executive 1996 208,000 208,000 -- -- -- 18,107
Vice President 1995 198,492 93,788 $ 62,224 18,401 -- 7,940
Robert E. Greene........ 1997 $216,375 $165,884 -- 12,503 -- $26,952
Senior Executive 1996 210,000 210,000 -- -- -- 17,379
Vice President 1995 163,105 55,000 $ 14,162 14,867 $56,400 21,270
Kelly S. King........... 1997 $270,000 $206,995 -- 15,182 -- $29,970
President 1996 255,000 255,000 -- -- -- 22,125
1995 240,731 113,746 $ 78,282 22,289 -- 9,629
Morris D. Marley........ 1997 $200,250 $153,522 $ 180 11,610 -- $25,489
Senior Executive 1996 195,000 195,000 160 -- -- 17,219
Vice President 1995 185,370 62,600 14,305 16,897 $63,000 12,839
Scott E. Reed........... 1997 $212,500 $162,913 -- 12,205 -- $25,050
Senior Executive 1996 205,000 205,000 $ 24,337 -- -- 17,430
Vice President and 1995 195,050 92,161 73,974 18,084 -- 7,802
Chief Financial Officer
Henry G. Williamson, 1997 $407,500 $312,410 -- 22,029 -- $46,650
Jr..................... 1996 370,000 370,000 -- -- -- 31,467
Chief Operating Officer 1995 326,890 154,456 $119,145 30,218 -- 13,076
</TABLE>
- --------
(1) The compensation shown as "Other Annual Compensation" for 1997 for Mr.
Marley consisted of amounts accrued under and interest earned on deferred
compensation in excess of 120% of the long-term applicable federal rate.
(2) The compensation shown as "All Other Compensation" for 1997 consisted of
the following: (a) BB&T's matching contribution under the BB&T Corporation
401(k) Savings Plan in the amount of $9,500 for each of the named
officers; (b) BB&T's contribution to the BB&T Non-Qualified Defined
Contribution Plan in the amount of $58,761 for Mr. Allison, $15,910 for
Mr. Chalk, $15,963 for Mr. Greene, $20,470 for Mr. King, $14,215 for Mr.
Marley, $15,550 for Mr. Reed, and $37,150 for Mr. Williamson; (c) the
actuarial equivalent of benefits to employees from payment of annual
premiums by BB&T under the split-dollar life insurance program in the
amount of $1,489 for Mr. Greene and $1,774 for Mr. Marley.
7
<PAGE>
The following table provides information concerning options for BB&T Common
Stock exercised by each of the BB&T Named Executives in 1997, and the value of
options held by each at December 31, 1997.
BB&T AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION VALUES
(1)
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT FY- IN-THE-
SHARES END (SHARES) MONEY OPTIONS AT FY-END
ACQUIRED ON VALUE ------------------------- -------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
John A. Allison IV...... 4,845 $262,015 199,823 33,115 $9,162,078 $784,412
W. Kendall Chalk........ 26,630 912,716 64,355 12,384 2,806,132 293,346
Robert E. Greene........ 5,974 201,249 34,387 12,503 1,469,260 296,165
Kelly S. King........... 27,808 984,489 76,661 15,182 3,320,702 359,623
Morris D. Marley........ 12,367 335,237 33,131 11,610 1,373,166 275,012
Scott E. Reed........... 25,102 841,926 63,139 12,205 2,757,194 289,106
Henry G. Williamson,
Jr..................... 22,311 766,523 133,734 22,029 6,040,749 521,812
</TABLE>
- --------
(1) No SARs have been granted to the BB&T Named Executives.
The following table provides information concerning options for BB&T Common
Stock granted to the BB&T Named Executives in 1997.
BB&T OPTION GRANTS IN LAST FISCAL YEAR (1)
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE VALUE AT
ASSUMED ANNUAL
RATES OF STOCK PRICE
APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM
------------------------------------------- ---------------------
NUMBER OF % OF
SECURITIES TOTAL
UNDER- OPTIONS
LYING GRANTED TO
OPTIONS EMPLOYEES EXERCISE
GRANTED (2) IN FISCAL OR BASE EXPIRATION
NAME (SHARES) YEAR PRICE (3) DATE 5% 10%
---- ----------- ---------- --------- ---------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
John A. Allison IV...... 33,115 4.44% $40.375 2/24/07 $ 840,844 $ 2,130,863
W. Kendall Chalk........ 12,384 1.66 40.375 2/24/07 314,450 796,878
Robert E. Greene........ 12,503 1.68 40.375 2/24/07 317,471 804,535
Kelly S. King........... 15,182 2.03 40.375 2/24/07 385,496 976,921
Morris D. Marley........ 11,610 1.56 40.375 2/24/07 294,797 747,073
Scott E. Reed........... 12,205 1.64 40.375 2/24/07 309,905 785,359
Henry G. Williamson,
Jr..................... 22,029 2.95 40.375 2/24/07 559,352 1,417,508
</TABLE>
- --------
(1) No SARs were granted in 1997.
(2) All options were granted February 24, 1997, are exercisable pro rata over
three years and thereafter up to ten years from the date of grant.
(3) Exercise price is equal to market price of BB&T Common Stock on date of
grant.
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The following table provides information concerning LTIP awards during 1997
to the BB&T Named Executives:
LONG-TERM INCENTIVE PLANS--AWARDS IN LAST FISCAL YEAR (1)
<TABLE>
<CAPTION>
PERFORMANCE
NUMBER OF OR OTHER ESTIMATED FUTURE PAYOUTS UNDER
SHARES, UNITS PERIOD UNTIL NON-STOCK PRICE BASED PLANS
OR OTHER MATURATION OR --------------------------------
NAME RIGHTS (SHARES) PAYOUT THRESHOLD TARGET MAXIMUM
---- --------------- ------------- --------------------- ----------
<S> <C> <C> <C> <C> <C>
John A. Allison IV...... 6,348 1997-1999 $ 64,075 $ 256,301 $ 512,602
W. Kendall Chalk........ 1,685 1997-1999 17,008 68,032 136,064
Robert E. Greene........ 1,689 1997-1999 17,048 68,193 136,386
Kelly S. King........... 2,323 1997-1999 23,448 93,791 187,582
Morris D. Marley........ 1,561 1997-1999 15,756 63,025 126,050
Scott E. Reed........... 1,662 1997-1999 16,776 67,103 134,206
Henry G. Williamson
Jr. ................... 3,247 1997-1999 32,774 131,098 262,196
</TABLE>
- --------
(1) For a description of the 1997-1999 LTIP Performance Unit Plan, see
"Compensation Committee Report on Executive Compensation." The performance
criteria is return on equity with a threshold of 12%, a target of 15% and
a maximum of 18%. The award is payable in cash or shares of BB&T Common
Stock at the option of the Compensation Committee.
RETIREMENT PLANS
BB&T Retirement Plan. BB&T has a tax-qualified defined benefit retirement
plan, the BB&T Corporation Pension Plan (the "Retirement Plan"), for eligible
employees. All employees of BB&T and certain subsidiaries who have attained
age 21 are eligible to participate under the Retirement Plan after completing
one year of service. Contributions to the Retirement Plan are computed on an
actuarial basis. A participant's normal annual retirement benefit under the
Retirement Plan at age 65 is an amount equal to 1.0% of the participant's
average compensation, plus .5% of the participant's average compensation in
excess of social security covered compensation times the number of years of
service completed with BB&T and certain subsidiaries up to a maximum of 35
years. A participant's average compensation is his average annual compensation
including salary, wages, overtime, bonuses and incentive compensation, for the
five consecutive years in the last ten years that produce the highest average.
Such annual compensation generally approximates amounts set forth under the
"Salary," "Bonus" and "LTIP Payouts" columns of the Summary Compensation Table
above.
The following table shows the estimated annual benefits payable under the
Retirement Plan upon retirement at age 65 to persons in specified average
compensation and years of service classifications. The amounts shown are based
on a life annuity and are not subject to offsets based upon social security
amounts or other amounts. As of December 31, 1997, for purposes of computing
benefits under the Retirement Plan, age and years of service of the BB&T Named
Executives are as follows: age 49 and 27 years for Mr. Allison; age 52 and 23
years for Mr. Chalk; age 48 and 25 years for Mr. Greene; age 49 and 26 years
for Mr. King; age 47 and 26 years for Mr. Marley; age 49 and 26 years for Mr.
Reed; and age 50 and 26 years for Mr. Williamson.
9
<PAGE>
BB&T CORPORATION
ESTIMATED ANNUAL RETIREMENT BENEFITS
BASED ON YEARS OF CREDITED SERVICE
<TABLE>
<CAPTION>
AVERAGE COMPENSATION FOR 5 CONSECUTIVE
YEARS OF HIGHEST COMPENSATION 10 YEARS 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS
- -------------------------------------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
$ 300,000.............. $ 43,444 $ 65,165 $ 86,887 $108,609 $130,331 $152,053
350,000.............. 50,944 76,415 101,887 127,359 152,831 178,303
400,000.............. 58,444 87,665 116,887 146,109 175,331 204,553
450,000.............. 65,944 98,915 131,887 164,859 197,831 230,803
500,000.............. 73,444 110,165 146,887 183,609 220,331 257,053
550,000.............. 80,944 121,415 161,887 202,359 242,831 283,303
600,000.............. 88,444 132,665 176,887 221,109 265,331 309,553
650,000.............. 95,944 143,915 191,887 239,859 287,831 335,803
700,000.............. 103,444 155,165 206,887 258,609 310,331 362,053
750,000.............. 110,944 166,415 221,887 277,359 332,831 388,303
800,000.............. 118,444 177,665 236,887 296,109 355,331 414,553
850,000.............. 125,944 188,915 251,887 314,859 377,831 440,803
900,000.............. 133,444 200,165 266,887 333,609 400,331 467,053
1,000,000.............. 148,444 222,665 296,887 371,109 445,331 519,553
1,100,000.............. 163,444 245,165 326,887 408,609 490,331 572,053
1,200,000.............. 178,444 267,665 356,887 446,109 535,331 624,553
1,300,000.............. 193,444 290,165 386,887 483,609 580,331 677,053
</TABLE>
- --------
(1) The amounts shown exceed statutory benefit limits and compensation caps
under the Retirement Plan in some instances. To the extent an amount
cannot be earned under the Retirement Plan, it will be earned under BB&T's
Non-Qualified Defined Benefit Plan.
Supplemental Executive Retirement Plan. BB&T maintains the BB&T Corporation
Target Pension Plan, a supplemental executive retirement plan (the "SERP"),
which became effective January 1, 1989. The SERP covers certain management
employees of BB&T and participating subsidiaries as designated by its
administrative committee. Under the SERP, participants who retire either at or
after age 55 with 15 years of service under the Retirement Plan, or at or
after age 65, receive monthly retirement benefits equal to the greater of: (a)
the difference between 55% of "final average monthly earnings," less the
participant's projected monthly benefits under the Retirement Plan and 50% of
the participant's projected monthly "Social Security benefit," as defined in
the SERP; or (b) the difference between the monthly benefit the participant
would have received under the Retirement Plan, but for certain limitations
imposed by the Code and the participant's actual monthly benefit under the
Retirement Plan. Benefits are payable in the form of a joint and 75% survivor
annuity for married participants, and a 10 year certain and life annuity for
unmarried participants and are reduced in the event payment commences prior to
age 65. If the participant dies either while employed by BB&T or a
participating subsidiary, or under a "disability," as defined in the SERP, and
before attaining age 65, his surviving spouse, or if there is none, his
designated beneficiary, receives a monthly benefit for 180 months equal to 20%
of the participant's "final average earnings." If the participant dies while
employed by BB&T or a participating subsidiary and after attaining age 65, his
surviving spouse, if any, receives the SERP retirement benefits which would
have been paid had the participant retired the day before he died. "Final
average earnings" are the participant's average monthly earnings, including
amounts deferred under the BB&T Corporation 401(k) Savings Plan and the BB&T
Corporation Non-Qualified Defined Contribution Plan, for the 60 highest months
out of his or her last 120 months of employment by BB&T or a participating
subsidiary, as the case may be.
Upon a "change in control" of BB&T as defined in the SERP, participants'
SERP benefits become fully accrued and cannot be reduced by amendment or
termination. Such a change of control occurred in February 1995 upon the
consummation of the BB&T Merger. Under the SERP, participants have no interest
in any particular assets of BB&T or its subsidiaries and their right to
benefits is no greater than that of a general unsecured creditor.
10
<PAGE>
Estimated annual benefits generally payable under the SERP upon retirement
at age 65 (without taking into account offsets based upon Social Security
benefits and Retirement Plan benefits) range from $55,000 (based on final
average annual earnings of $100,000) to $178,750 (based on final average
annual earnings of $325,000). Messrs. Greene and Marley are the only BB&T
Named Executives who participate in the SERP.
Other Employee Benefit Plans--BB&T maintains the BB&T Corporation Non-
Qualified Defined Contribution Plan. This plan is an unfunded, excess benefit
plan which provides deferred compensation to certain highly-compensated
employees, including the BB&T Named Executives. The purpose of this plan is to
supplement the benefits under the tax-qualified BB&T 401(k) Savings Plan to
the extent that such benefits are curtailed by the application of certain
limits imposed by the Code. This plan is also intended to provide participants
in BB&T's executive incentive compensation plans with an effective means of
electing to defer on a pre-tax basis a portion of the payments they are
entitled to receive under such plans.
BB&T also maintains the BB&T Corporation Non-Qualified Defined Benefit Plan.
This plan is designed to provide special supplemental retirement benefits to
supplement the benefits payable to participants under the tax-qualified
Retirement Plan. This plan is an unfunded, excess benefit plan maintained for
the purpose of providing deferred compensation to certain highly-compensated
employees, including the BB&T Named Executives. The primary purpose of this
plan is to supplement the benefits payable to participants under the
Retirement Plan to the extent that such benefits are curtailed by application
of certain limitations contained in the Code.
EMPLOYMENT CONTRACTS AND CHANGE IN CONTROL AGREEMENTS
Executive Officer Employment Agreements
In 1994, BB&T Financial and SNC entered into Employment Agreements with 27
of their executive and other senior officers (15 BB&T Financial officers and
12 officers of SNC (prior to the BB&T Merger) (collectively, the "Officers")),
including Messrs. Allison, Chalk, Greene, King, Marley, Reed, and Williamson
(collectively, "Executive Management"), who are currently serving as Executive
Officers of BB&T.
The Employment Agreements provide for five-year terms that are extended
automatically each month (absent contrary notice by either party to the
Employment Agreement). As a result, five years remain on the term of each
Employment Agreement at any time unless either party elects not to extend the
term. The term of any Employment Agreement may not be extended beyond the
month in which the officer reaches age 65, however. The Employment Agreements
provide that the Officers are guaranteed minimum annual salaries equal to
their current annualized base salaries, and continued participation in
specified incentive compensation plans. During the term of the Employment
Agreements, each Officer will be entitled to receive, on the same basis as
other officers, employee pension and welfare benefits and group employee
benefits such as sick leave, vacation, group disability and health, life and
accident insurance and similar indirect compensation that BB&T may from time
to time extend to its officers.
The Employment Agreements also provide that under various circumstances an
Officer may continue to receive compensation and health insurance from BB&T
after the Officer's voluntary termination of employment or after being
terminated by BB&T other than for cause. At any time after the first
anniversary, and until the sixth anniversary of the BB&T Merger, the Officer
voluntarily may terminate his or her employment with BB&T and continue to
receive 60% of the Officer's highest annual cash compensation during any one
of the five years preceding termination (such highest annual cash compensation
being referred to herein as the "Termination Compensation") and health
insurance provided by BB&T until the sixth anniversary of the BB&T Merger,
subject to compliance with non-competition provisions of the Employment
Agreements, described below. In the event the Officer's employment is
terminated by BB&T other than for "just cause" (as defined in the Employment
Agreements), the Officer will be entitled to receive the Termination
Compensation and health insurance for the remainder of the term of the
Employment Agreement, subject to compliance with the non-competition
provisions of the Employment Agreement. In addition, if an Officer is
terminated by BB&T other
11
<PAGE>
than for just cause, BB&T will use its best efforts to accelerate vesting of
any unvested benefits to which the Officer may be entitled under any stock-
based or other benefit plan or arrangement to the extent permitted by the
terms of such plan(s).
The Employment Agreements also provide that if there is a "Change of
Control" (as hereinafter defined) of BB&T or certain of its affiliates, the
Officer will be entitled to: (a) terminate his Employment Agreement
voluntarily for "good reason" (generally defined in the Employment Agreements
to include a reduction in the Officer's status, responsibilities and duties or
salary following the Change of Control); and (b) receive, in a lump sum, an
amount equal to 2.99 times the Termination Compensation. In the event the
Officer is terminated by BB&T for other than just cause or the Officer
terminates his employment for good reason after a Change of Control, the
Officer would also be entitled to accelerated vesting of unvested benefits
under employee stock and benefit plans to the extent permitted by such plans.
A "Change of Control" is deemed to have occurred under the Employment
Agreements if: (a) any person or group acquires 20% or more of the voting
securities of BB&T or specified affiliates; (b) during any two-year period
persons who were directors of BB&T at the beginning of the two-year period
cease to constitute at least two-thirds of the BB&T Board; (c) the
shareholders of BB&T approve any merger or consolidation of BB&T with another
company that would result in less than 80% of the voting securities
outstanding after the merger or consolidation being held by persons who were
shareholders of BB&T immediately prior to the merger or consolidation; (d) the
shareholders of BB&T approve a plan of complete liquidation or an agreement
for the sale of substantially all of BB&T's assets; or (e) any other event
occurs that the BB&T Board determines should constitute a Change of Control.
BB&T also has the right under the Employment Agreements to terminate the
Officer's employment at any time for just cause. If BB&T terminates an
Officer's employment for just cause, such Officer will have no right to
receive compensation or other benefits under the Employment Agreement for any
period after such termination.
The Employment Agreements also provide that under certain circumstances upon
leaving the employment of BB&T, the Officer may not engage directly or
indirectly in the banking, financial services or any other business in which
BB&T is engaged in the states of North Carolina and South Carolina and in any
counties contiguous to any counties located in such states, nor may the
Officer solicit or assist in the solicitation of any depositors or customers
of BB&T or any of BB&T's affiliates or induce any employees to terminate their
employment with BB&T or its affiliates. This non-competition provision will be
effective: (a) if the Officer voluntarily terminates his employment prior to
the first anniversary of the BB&T Merger, until the later of the first
anniversary of the BB&T Merger or the first anniversary of the Officer's
termination; (b) if after the first anniversary of the BB&T Merger the Officer
voluntarily terminates his employment, for such period of time during which
the Officer elects to receive 60% of the Termination Compensation; or (c) if
the Officer is terminated other than for just cause, until the earlier of the
first anniversary of the Officer's termination or the date as of which the
Officer elects to forego receiving the Termination Compensation.
The Employment Agreement of Mr. Allison provides that he will be Chairman of
the BB&T Board and Chief Executive Officer of BB&T for the term of such
Employment Agreement.
Employment Contract Amendments
During 1995, the Compensation Committee employed KPMG Peat Marwick LLP to
make recommendations concerning BB&T's overall compensation plans, including a
review of the foregoing employment contracts (see "--Compensation Committee
Report on Executive Compensation"). The review of the employment contracts by
KPMG Peat Marwick LLP was undertaken primarily in recognition of the contracts
having been negotiated in connection with the negotiations surrounding the
BB&T Merger, and without the advice of compensation consultants. KPMG Peat
Marwick LLP recommended and the Compensation Committee approved amendments to
the employee contracts which (a) fix the minimum salary for the contracts as
the annualized August 1994 salary; (b) increase from 20% to 40% as the
threshold for acquisition of voting securities of BB&T after a merger or
consolidation as a triggering event for change-of-control provisions; (c)
provide up to $20,000 for
12
<PAGE>
outplacement services in the event of termination of employment for certain
specified reasons; (d) specify which employee benefits will be received upon
certain conditions of termination; and (e) specify that in the event payments
under the contract exceed limits established by Section 280(g) of the Code,
relating to parachute payments, contract holders would be entitled to select
the benefits to be received in order to reduce total benefits to the
prescribed statutory limit.
The Compensation Committee and KPMG Peat Marwick LLP believe that the
foregoing amendments more clearly reflect the intent of the parties at the
time the contracts were negotiated and provide benefits more comparable to
industry standards.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
During 1997, the Compensation Committee administered the various incentive
plans of BB&T and fixed the salary for the Chief Executive Officer. BB&T's
incentive plans were established in 1995 based upon a study conducted by KPMG
Peat Marwick ("Peat Marwick"). The Peat Marwick study was conducted in order
to establish a compensation philosophy and practices for BB&T. At the
conclusion of the study, Peat Marwick made recommendations to the Compensation
Committee relating to overall compensation philosophy, appropriate base
salaries, short-term and long-term compensation plans, appropriate goals and
targets for such plans and employment contracts of senior officers of BB&T.
The recommendations of Peat Marwick were implemented in 1995 through
appropriate Compensation Committee, Board of Director or Shareholder action
and have continued to serve as the basis of BB&T's Compensation philosophy.
Compensation Philosophy--As a result of the Peat Marwick study, the
Compensation Committee has adopted a compensation philosophy and guiding
principles for BB&T which consists of the following:
1. Compensation and reward system should be a management tool to achieve
business results;
2. Competitive total compensation opportunities should be provided based
on external competitive performance;
3. Total compensation should be aligned with relative internal
performance; and
4. A commitment should be made to an annual review of a set of guiding
principles for BB&T's total compensation program.
The Compensation Committee approved Peat Marwick's recommendation that
compensation for Executive Management should be positioned to emphasize
variable pay based on performance with base salary below median and cash
incentives above median to result in a total cash compensation at market
median. To achieve this goal, compensation opportunities are compared to a
peer group of publicly-traded bank holding companies with assets between
approximately $18 billion and $32 billion, which is the peer group ("New Peer
Group") in the Performance Graph set forth below. In addition, Peat Marwick
recommended that stock options be used as a core for three-year performance
incentives and that a large portion of total compensation should be "at risk".
BB&T has established incentive compensation programs for Executive
Management, which consists of an annual cash incentive, stock options, three-
year performance-based incentives, and normal employee benefits. These plans
emphasize variable compensation for Executive Management which is tied to the
financial results of BB&T. The Compensation Committee approves, on an annual
basis, target award opportunities for Executive Management and performance
criteria to be utilized in the annual incentive plan and the long-term
incentive plan.
BB&T's compensation philosophy and policies are intended to comply with
Section 162(m) of the Code and related regulations, which establish certain
requirements in order for performance-based compensation in excess of $1
million that is paid to certain executive officers to be deductible by the
Corporation. In establishing and administering BB&T's compensation programs,
the Compensation Committee has intended to comply with the requirements of
Section 162(m), although the Committee intends to retain the flexibility to
pay compensation that is not eligible for favorable treatment under such
section if the Committee determines that it is in the best interest of the
Corporation to do so.
13
<PAGE>
COMPENSATION PLANS
Annual Executive Incentive Plan--In 1995, based on the Peat Marwick study,
the Compensation Committee established the BB&T Short-Term Incentive Plan
("Bonus Plan"), which covers Executive Management and other senior officers
selected by the Compensation Committee. Because of the impact of Section
162(m) of the Code, the Bonus Plan was submitted to shareholders for approval
at the 1996 Annual Shareholders Meeting and was approved. The Compensation
Committee determined that it was appropriate to establish a plan for the year
1997, which would be a continuation of the plan established in 1996.
The Bonus Plan provides cash awards to participants based on the achievement
of performance goals established by the Compensation Committee. Awards are
based on corporate performance, business unit/function performance, individual
performance or any combination of such types of performance. Corporate
performance is determined primarily on the attainment of earnings per share
goals and return on asset goals. Business unit/function performance is
determined primarily on the attainment of financial or non-financial goals,
growth and market share. Individual performance is determined primarily on the
attainment of such business criteria as: process improvement, sales, loan
growth, deposit growth and expense management. The Compensation Committee may,
from time to time, select other performance measures. The size of the cash
awards will be determined by establishing target incentive awards expressed as
a percentage of base salary, up to a maximum amount established by the
Compensation Committee. For 1997, the Compensation Committee provided that the
target incentive award would be established for the Chief Executive Officer at
60% of base salary and for other members of Executive Management at 50% of
base salary. Actual awards are subject to increase or decrease on the basis of
the participant's achievement of the performance goals and can range from 25%
to 200% of the participant's targeted incentive awards. For the Chief
Executive Officer and Executive Management, the Compensation Committee
established corporate performance goals based on earnings per share and return
on assets, with specific goals established by budgeted earnings, industry
standards and other similar factors. In 1997, BB&T achieved the performance
levels specified by the Compensation Committee, such as would permit the Chief
Executive Officer and Executive Management to receive an award of 153% of
their target incentive awards and that amount is shown in the "Bonus" column
of the Summary Compensation Table for the BB&T Named Executives.
Stock Incentive Plan--The Corporation's shareholders have previously
approved the 1995 Omnibus Stock Incentive Plan, as amended and restated
("Stock Plan"). Peat Marwick recommended that this plan be maintained and, at
the 1996 Annual Meeting of Shareholders, additional shares were reserved for
use under this plan. The Stock Plan is administered by the Compensation
Committee in order to benefit BB&T by assisting in recruiting and retaining
employees with ability and initiative, providing greater incentive for
employees of BB&T and associating the interest of employees with those of
BB&T. The Compensation Committee selects individuals who will participate in
the Stock Plan and, from time to time, may grant stock options, stock
appreciation rights, restricted stock awards, performance units and
performance shares to selected participants. Stock options granted under the
Stock Plan may be incentive stock options or non-qualified stock options. A
stock option entitles a participant to purchase shares of common stock of BB&T
at the option price, which is fixed by the Compensation Committee at the time
the option is granted, but cannot be less that 100% of the shares' fair market
value on the date of grant in the case of incentive stock options and not less
than 85% of the shares' fair market value on the date of grant in the case of
non-qualified stock options.
Peat Marwick recommended that option grants be based on competitive market
factors and that the Black-Scholes methodology for computing the value of
options be utilized. The Committee has followed this recommendation. The
Compensation Committee considers the grant of stock options in February of
each year and in February 1997, made grants for 785,828 shares to 356
officers. The awards to the BB&T Named Executives are shown in the Summary
Compensation Table.
Three-Year Long-Term Incentive Plan--Based on Peat Marwick's recommendation,
the Compensation Committee has determined that Executive Management should be
included in a Long-Term Incentive Plan
14
<PAGE>
("LTIP"), and further recommended that a performance unit plan be utilized for
this purpose. In order to permit awards under the LTIP to be made in either
cash or stock, at the option of the Compensation Committee, certain amendments
to the Stock Plan were proposed to and approved by shareholders. Performance
units are performance-based awards payable, in the Compensation Committee's
discretion, in shares of BB&T's Common Stock, cash or a combination of Common
Stock and cash. At the date of grant, the Compensation Committee will
establish for each performance unit (i) a performance target and (ii) an
applicable percentage (which cannot be less than zero, but which can exceed
100% of the value of the performance unit to be paid to the participant based
upon the degree to which the performance target is met). A performance target
is a profitability target which serves as the basis for valuing a performance
unit. A performance target will be based on certain performance criteria
determined by the Compensation Committee and is earned based on the
performance unit value during each of the valuation periods (generally, a
calendar year, following the date of the award). The Compensation Committee
will establish the number of valuation periods applicable to a performance
unit, which number may not be less than three. The value of a performance unit
equals the applicable percentage, as set by the Compensation Committee, times
the fair market value of BB&T's common stock on the date of grant, plus such
other nominal value as may be set by the Compensation Committee. In 1997, the
Compensation Committee established the 1997--1999 performance unit LTIP and
provided that the performance criteria be return on equity. The Compensation
Committee approved a target payout for the Chief Executive Officer of 40% of
average base salary, and for the remainder of Executive Management, 30% of
average base salary. The Compensation Committee established a return on equity
goal of 15% for the three-year period of the LTIP, with a maximum goal of 18%.
Annual Base Salary--The Compensation Committee reviewed the salary range
system previously recommended by Peat Marwick and previously adopted by the
Committee for all employees' base salaries. The Committee reviewed pay grades
and salary ranges previously recommended by Peat Marwick and concluded that
the grades and ranges were appropriate, and that the previously adopted policy
of the Committee of having all employees at the appropriate point within their
salary range in 1997 was appropriate. Based on this review, together with a
review of the Corporation's performance as compared to its new peer group, the
Committee established the base salary of the CEO for 1997 as shown in the
Summary Compensation Table.
Employee Benefit Plans--The Compensation Committee reviewed the various
employee benefit plans maintained by the Corporation which constitute a
portion of the total compensation package available to Executive Management
and all employees of BB&T. These plans consist of a 401(k) Savings Plan (which
permits employees to contribute up to six percent of their compensation with
the Corporation matching their contribution); a retirement plan covering
substantially all employees of the Corporation, including Executive
Management; and a health care plan which provides medical and dental coverage
for all employees. The Compensation Committee concluded that these plans,
which were established based upon recommendations of Peat Marwick, are
consistent with plans provided by peer bank holding companies and industry
standards and that no modification of such plans was necessary in 1997.
Chief Executive Officer's 1997 Compensation--The Chief Executive Officer's
compensation is determined pursuant to the same basic factors as described
above for other members of Executive Management. In establishing the base
salary, incentive and stock awards of the Chief Executive Officer for 1997,
the Committee considered BB&T's overall performance, record of increase in
shareholder value, success in meeting strategic objectives and the general
accomplishments of the incumbent Chief Executive Officer. These factors were
considered in relation to BB&T's financial results for 1997 and in comparison
with the performance of peer organizations. The Chief Executive Officer's base
salary was based upon the pay grades and salary ranges previously recommended
by Peat Marwick and was consistent with the previously adopted policy of the
Compensation Committee of having key employees, including the Chief Executive
Officer, at the appropriate point within their salary range in 1997. Based on
this review and the position in his salary range, the Chief Executive
Officer's base salary for 1997 was established at the amount shown in the
Summary Compensation Table. The Chief Executive Officer's 1997 incentive
compensation and stock awards were based on the same considerations, as
discussed above, as for other member of Executive Management.
15
<PAGE>
CONCLUSION
The Compensation Committee believes that all components of its total
compensation program, both for Executive Management and all employees, is
consistent with market standards and with comparable programs of peer bank
holding companies. The executive compensation programs are based on financial
performance of the Corporation compared to both market medians and peer group
averages and appropriately link executive performance to the annual financial
and operational results of the Corporation and the long-term financial
interests of the shareholders. The Committee believes that the foregoing
compensation philosophy has served and will continue to serve as a basis for
administering the total compensation program of the Corporation, both for
Executive Management and all employees for the foreseeable future. The
directors who constitute the Compensation Committee are:
James H. Maynard, Chairman Nido R. Qubein
A.J. Dooley, Sr. Jack E. Shaw
Dr. L. Vincent Hackley Harold B. Wells
Albert O. McCauley
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Nido R. Qubein, a Director of BB&T and a member of the Compensation
Committee in 1997, is owner of Creative Services, Inc., an international
management consulting firm. BB&T-NC has entered into a consulting services
contract with Creative Services, Inc. under which Creative Services, Inc. is
advising management by providing organizational development expertise,
including the conceptualization and creation of integrated corporate employee
training materials and programs. Creative Services, Inc. was paid $404,662
under this contract in 1997. Management believes this contract is on terms as
favorable as could have been obtained from others.
A. J. Dooley, Sr., a Director of BB&T and a member of the Compensation
Committee in 1997, is a member of Dooley, Dooley, Spencer & Parker, Attorneys-
At-Law. The firm is under retainer to provide legal services to BB&T and its
subsidiaries.
Harold B. Wells, a Director of BB&T and member of the Compensation Committee
in 1997, is the owner of Wells Chevrolet, Buick, Pontiac, Oldsmobile, GMC,
Inc. During 1997, BB&T-N.C. purchased in the ordinary course of business $5.4
million in retail consumer credit contracts from that corporation. In
addition, BB&T purchased in the ordinary course of business $1.7 million in
such contracts from Toby Wells Pontiac-Buick-GMC, LLC, another affiliate of
Mr. Wells.
Messrs. Dooley, Qubein and Wells abstain from voting on matters relating to
stock options and other stock-based incentive plans.
COMPENSATION OF DIRECTORS
General
Non-employee Directors of BB&T receive an annual retainer of $22,500 for
their services as a Director. In addition, such Directors receive $1,500 for
each regular BB&T Board meeting and each committee meeting attended, and
$1,000 for each meeting held by conference telephone in which the Director
participates. Directors who are employees of BB&T do not receive fees for
serving as a Director.
Non-Employee Directors' Deferred Compensation and Stock Option Plan
Effective January 1, 1997, the BB&T Board approved the adoption of the Non-
Employee Directors Deferred Compensation and Stock Option Plan ("Directors
Plan"). The Directors Plan combined into a single plan two previously
established plans, the Stock Option Plan and the Directors Deferred
Compensation Plan. The
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shareholders approved reserving an additional 500,000 shares of BB&T's Common
Stock for use under the Directors Stock Option portion of the Directors Plan
at the April 1997 Annual Shareholders Meeting.
The Directors Deferred Compensation component of the Directors Plan permits
non-employee directors to elect to defer 0%, 50% or 100% of retainer fees,
meeting fees or both into a deferred compensation account. Deferrals are
credited with interest based on either a fixed rate or an index fund, as
elected by the participant. Deferrals are fully vested at all times and are
payable in cash upon the termination of the participant's service (except for
hardship withdrawals in limited circumstances). During 1997, no non-employee
directors of BB&T participated in the Directors Deferred Compensation
component of the Directors Plan.
The Stock Option component of the Directors Plan permits non-employee
directors to elect to defer, prior to the start of the year in which fees are
earned, 0%, 50% or 100% of the directors' retainer fees, annual meeting fees,
or both for the calendar year and apply that percentage toward the grant of
options to purchase shares of BB&T Common Stock. Options are granted on July 1
of each year with respect to deferred retainer fees for the calendar year and
deferred meeting fees earned in the first six months of the year. Options are
granted on December 31 of each year for deferred meeting fees earned in the
second half of the year. The option price for options granted is equal to 75%
of the average market value of BB&T Common Stock on the date of grant.
"Average Market Value" is defined as the average of the closing price of BB&T
Common Stock as reported by the NYSE for the period of 30 consecutive trading
days prior to the date of grant. Options granted under the Directors Plan may
be exercised during the period beginning on a date six months after the date
of grant and ending on the date ten years from the date of grant. In addition,
all outstanding options become fully exercisable in the event of a change of
control of BB&T.
During 1997, the 20 non-employee directors of BB&T who participated in the
Stock Option portion of the Directors Plan were granted options to purchase a
total of 54,929 shares of BB&T Common Stock at an exercise price of $31.88 per
share on July 1, 1997, and were granted options to purchase a total of 11,392
shares of BB&T Common Stock at an exercise price of $45.21 per share on
December 31, 1997. The value of all such options at December 31, 1997, was
$64.06 per share.
Consulting Agreement
Messrs. Deal, Qubein and Dr. Janeway have executed Consulting Agreements
with BB&T to provide consulting services for a period of 10 years following
their retirement. They shall receive a sum equal to the annual retainer paid
to BB&T's Directors in effect at the time they begin such service. The
consultants have agreed not to serve as directors of, or advisers to,
businesses which compete with BB&T during the time they serve as consultants
to BB&T.
TRANSACTIONS WITH OFFICERS AND DIRECTORS
General
A number of BB&T's Directors and officers and their associates are customers
of BB&T's bank subsidiaries. Any extensions of credit made to them are in the
ordinary course of business, are substantially on the same terms, including
interest rates and collateral, as those prevailing at the same time for
comparable transactions with others, and do not involve more than normal risk
of collectibility or present other unfavorable features. None of such credits
are classified as non-accrual, past due, restructured or potential problem.
All outstanding loans to such officers and directors and their associates are
current as to principal and interest. As of December 31, 1997, loans in excess
of $60,000 to directors, executive officers and their interests totaled
approximately $78.4 million, or approximately 3.5% of BB&T's consolidated
shareholders' equity at such date.
Agreement with Mr. Orr
Pursuant to a Settlement and Non-Compete Agreement between L. Glenn Orr, Jr.
and BB&T, effective following the BB&T Merger (the "Orr Settlement
Agreement"), Mr. Orr resigned as an employee and officer of
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BB&T and was retained as a consultant as of May 1, 1995. The Orr Settlement
Agreement settled BB&T's obligations to Mr. Orr under his then existing
employment agreement with BB&T and provides for BB&T to pay Mr. Orr an annual
amount equal to the difference between $1,655,000 and the BB&T-provided
portion of certain benefits payable to Mr. Orr under the following plans of
BB&T: the Retirement Plan, the SERP, the BB&T 401(k) Savings Plan, the Non-
Qualified Defined Contribution Plan, and the Non-Qualified Deferred
Compensation Plan. The Orr Settlement Agreement also provides that Mr. Orr
will serve as a consultant to BB&T for a period of five years following the
BB&T Merger and will not engage directly or indirectly in the banking or
financial services business anywhere in North Carolina or South Carolina (or
in any other state in a county contiguous to North Carolina or South Carolina)
or solicit any depositors or customers of BB&T or its subsidiaries or induce
any employees of BB&T or its subsidiaries to terminate their employment with
BB&T. BB&T also agreed to provide certain miscellaneous benefits to Mr. Orr,
including the continuation for life of certain life and medical insurance
policies, certain moving expenses and country club membership dues and the
purchase of an automobile. The payments provided for under the Orr Settlement
Agreement will be paid to Mr. Orr in equal monthly installments and will
continue for the life of each of Mr. Orr and his current wife, but in no event
for a period of less than fifteen years. To the extent that payments under the
Orr Settlement Agreement cause a "parachute payment," as defined in Code
section 280G(b)(2), BB&T will indemnify Mr. Orr and hold him harmless against
all claims, expenses and excise taxes relating thereto. BB&T has established a
rabbi trust to help assure the payment of BB&T's obligations to Mr. Orr under
the Orr Settlement Agreement. BB&T has placed assets in the rabbi trust
representing partial funding of BB&T's obligations to Mr. Orr under the Orr
Settlement Agreement. In the event of a Change of Control (as defined in the
Orr Settlement Agreement) of BB&T, BB&T may be obligated to contribute
additional assets to the rabbi trust to provide full funding, on an actuarial
basis, of BB&T's obligations to Mr. Orr under the Orr Settlement Agreement.
The Orr Settlement Agreement also provides that BB&T will use its best
efforts, subject to fiduciary duties, to reelect Mr. Orr to the BB&T Board
until his 70th birthday.
Agreement with Mr. Sasser
In connection with the merger of UCB into BB&T, a Settlement and Non-
competition Agreement between E. Rhone Sasser and BB&T (the "Sasser Settlement
Agreement") was entered into effective July 1, 1997. The Sasser Settlement
Agreement settled BB&T's obligations to Mr. Sasser under his then existing
Employment Agreement with UCB and provides that Mr. Sasser will be prohibited
from engaging, directly or indirectly, in the banking or financial services
business anywhere in the states of North Carolina, South Carolina or Virginia,
or in any county contiguous to these states and soliciting any depositors or
customers of BB&T or its subsidiaries or inducing any employees of BB&T or its
subsidiaries to terminate their employment with BB&T for a period of ten
years. The Sasser Settlement Agreement further provides that BB&T will pay
annually to Mr. Sasser the sum of $769,392 (to be adjusted annually in
accordance with the Consumer Price Index) until Mr. Sasser attains the age of
65, at which time Mr. Sasser will receive annually an amount equal to 70% of
the amount paid Mr. Sasser during the final year under the Sasser Settlement
Agreement (estimated to be approximately $623,000), reduced by amounts payable
to Mr. Sasser under the UCB Pension Plan and UCB Benefit Equivalency Plan. The
payments provided for under the Sasser Settlement Agreement will be made to
Mr. Sasser for his life and, after his death, to his current wife for her
life, if she survives him, in the annual amount equal to 35% of the amount
paid Mr. Sasser during the final year under the Sasser Settlement Agreement
(estimated to be approximately $312,000), reduced by amounts payable to Mr.
Sasser's wife under the UCB Pension Plan and the UCB Benefit Equivalency Plan.
If Mr. Sasser dies to prior to age 65, the payments that would otherwise have
been made to him will continue until the date he would have reached age 65, at
which time the payments to his current wife would begin (if she survives to
that date). In addition, Mr. Sasser will be entitled to certain miscellaneous
benefits, including the continuation of certain life, health and welfare
benefits. If any of the amounts payable under the Sasser Settlement Agreement
are subject to, or cause any other payments to be subject to, excess tax under
Section 4999 of the Code as excess parachute payments under Section 280G of
the Code, BB&T will indemnify Mr. Sasser on an after-tax basis for any excess
tax, plus any penalties or interest, plus any excess taxes and income taxes on
the indemnity amounts. The Sasser Settlement Agreement also provides that BB&T
will use its best efforts, subject to fiduciary duties, to re-elect Mr. Sasser
to the BB&T Board of Directors until his 70th birthday.
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Transactions with Affiliates of Mr. Player
During 1997, BB&T paid Player, Inc., an affiliate of Richard L. Player, Jr.,
a Director of BB&T, the sum of $148,005 for renovation costs of three office
locations of BB&T subsidiaries and paid Tri-Player Investments LLC (also an
affiliate of Mr. Player) the sum of $50,723 as rent and related occupancy
expenses for the Westwood Branch and main office buildings of BB&T-NC in
Fayetteville. Management believes that the terms of the agreements with Mr.
Player's affiliates were as favorable to BB&T as could have been obtained from
a non-affiliated party.
Transaction with Affiliate of Mr. Cleveland
Alfred E. Cleveland, a Director of BB&T, is a member of the law firm of
McCoy, Weaver, Wiggins, Cleveland and Raper. The firm was retained to provide
legal services to BB&T and its subsidiaries during 1997.
See "--Compensation Committee Interlocks and Insider Participation."
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PERFORMANCE GRAPH
Set forth below is a graph comparing the total returns (assuming
reinvestment of dividends) of BB&T Common Stock, the S&P 500 Index, and an
Industry Peer Group Index of eleven bank holding companies. The graph assumes
$100 invested on December 31, 1992 in BB&T Common Stock and in each of the
indices. In 1997 the bank holding companies in the Industry Peer Group Index
("New Index") are AmSouth Bancorporation, Crestar Financial Corporation,
Fifth-Third BanCorp, Firstar Corporation, First of America Bank Corporation,
Huntington Bancshares, Inc., Mercantile Bancorporation, Regions Financial
Corporation, SouthTrust Corporation, Summit Bancorp, U.S. Bancorp. Inc. The
1996 Industry Peer Group Index consisted of the following twelve bank holding
companies: AmSouth Corporation, Boatman's Bancshares, Inc., Crestar Financial
Corporation, Fifth-Third BanCorp, Firstar Corporation, First Bank Systems,
Inc., First of America Bank Corporation, Huntington Bancshares, Inc., National
City Corporation, SouthTrust Corporation, Summit Bancorp, U.S. Bancorp. The
graph depicts both peer groups. The New Peer Group which consists of bank
holding companies with assets between approximately $18 billion and $32
billion more closely approximates BB&T's size than does the 1996 Peer Group.
The Compensation Committee utilized the New Peer Group for comparison to BB&T
to determine appropriate levels of compensation for the BB&T Named Executives
in 1997.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG BB&T CORPORATION, THE S&P 500 INDEX, A NEW PEER GROUP AND AN OLD PEER
GROUP
[LINE GRAPH APPEARS HERE]
LEGEND
DATE BB&T CORP. NEW PEER GROUP OLD PEER GROUP S&P 500
- ---- --------- -------------- -------------- -------
12/31/92 100 100 100 100
12/31/93 104 108 108 110
12/31/94 104 106 107 112
12/31/95 148 161 161 153
12/31/96 212 210 216 189
12/31/97 385 364 365 252
* $100 INVESTED ON 12/31/92 IN STOCK OR INDEX -- INCLUDING REINVESTMENT OF
DIVIDENDS.
FISCAL YEAR ENDING DECEMBER 31.
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PROPOSAL 2--APPROVAL OF AMENDMENT TO BB&T CORPORATION ARTICLES OF
INCORPORATION TO INCREASE AUTHORIZED COMMON SHARES
The Board of Directors proposes that the shareholders approve an amendment
to the BB&T Corporation Articles to increase the number of authorized shares
of Common Stock from 300,000,000 shares to 500,000,000 shares. The amendment
would delete the first sentence of Article IV of the BB&T Articles and
substitute the following:
"The Corporation shall have the authority to issue 500,000,000 shares
of Common Stock, par value $5 each, and 5,000,000 shares of Preferred
Stock, par value $5 each."
On March 3, 1998, BB&T had 142,178,663 shares of Common Stock outstanding.
On that date, an additional 15,413,561 shares of Common Stock were reserved
for issuance pursuant to BB&T's stock option and other stock-based incentive
plans and an additional 9,223,464 shares of BB&T Common Stock were reserved
for issuance pursuant to pending or proposed acquisitions.
The additional authorized shares of BB&T Common Stock would be available for
future issuance by BB&T and would give BB&T flexibility in its corporate
planning and in responding to future business developments, including possible
financings and acquisition transactions, stock splits or dividends, issuances
under BB&T's stock-based incentive plans and other general corporate purposes.
The Directors of BB&T have authorized the issuance of Common Stock for such
purposes in the past; however BB&T has no present plans to issue additional
shares of BB&T Common Stock, except as noted above.
Under some circumstances, issuance of additional shares of Common Stock
could dilute the voting rights, equity and earnings per share of existing
shareholders. This increase in authorized but unissued Common Stock could be
considered an anti-takeover measure because the additional authorized but
unissued shares of Common Stock could be used by the Board of Directors to
make a change in control of the Company more difficult. The Board of
Directors' purpose in recommending this proposal is not as an anti-takeover
measure, but for the reasons discussed above.
Authorized shares of Common Stock may be issued by the Board of Directors
from time to time without further shareholder approval, except in situations
where shareholder approval is required by state law or the rules of the New
York Stock Exchange. Shareholders of BB&T have no preemptive right to acquire
additional shares of Common Stock. The Board of Directors believes that an
increase in the number of authorized shares is advisable to give BB&T
additional flexibility. The proposed amendment to the BB&T Articles will be
approved if the votes cast in favor of the proposal exceed the votes cast
opposing it. Proxies which have been marked as abstentions or which have been
designated by brokers as not voted will not be counted in determining the
votes cast on this proposal.
THE BB&T BOARD RECOMMENDS A VOTE "FOR" APPROVAL OF THE PROPOSAL TO AMEND THE
CORPORATION'S ARTICLES.
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PROPOSAL 3--RATIFICATION OF ARTHUR ANDERSEN LLP AS
INDEPENDENT AUDITORS FOR 1998
The Audit Committee has reappointed the firm of Arthur Andersen LLP as
independent auditors to examine the books of BB&T and subsidiaries for the
year 1998, and to report on the consolidated balance sheets, statements of
income and other related statements of BB&T and subsidiaries. Arthur Andersen
LLP has served as independent auditors for BB&T continuously since 1966.
Representatives of Arthur Andersen LLP are expected to be represent at the
BB&T Meeting, will have an opportunity to make a statement if they desire to
do so and will be available to respond to questions posed by the shareholders.
Ratification of the reappointment of Arthur Andersen LLP as BB&T's independent
auditors requires the affirmative vote of a majority of the shares of BB&T
Common Stock voting on such matter.
THE BB&T BOARD RECOMMENDS A VOTE "FOR" APPROVAL OF THE PROPOSAL TO RATIFY
ARTHUR ANDERSEN LLP AS BB&T'S INDEPENDENT AUDITORS FOR 1998.
PROPOSALS FOR 1999 ANNUAL MEETING
Under regulations of the Commission, any shareholder desiring to make a
proposal to be acted upon at the 1999 annual meeting of shareholders must
present such proposal to BB&T at its principal office in Winston-Salem, North
Carolina by November 16, 1998 for the proposal to be considered for inclusion
in BB&T's proxy statement.
In addition to any other applicable requirements, for business to be
properly brought before the annual meeting by a shareholder even if the
proposal is not to be included in BB&T's proxy statement, the BB&T Bylaws
provide that the shareholder must give timely notice in writing to the
Secretary of BB&T at least 60 days prior to the date one year from the date of
the immediately preceding annual meeting. As to each matter, the notice must
contain (a) a brief description of the business desired to be brought before
the annual meeting, (b) the name of, record address of, and class and number
of shares beneficially owned by, the shareholder proposing such business and
(c) any material interest of the shareholder in such business.
OTHER BUSINESS
The BB&T Board knows of no other matter to come before the BB&T Meeting.
However, if any other matter requiring a vote of the shareholders arises, it
is the intention of the persons named in the accompanying proxy to vote such
proxy in accordance with their best judgment.
By Order of the Board of Directors
/s/ John A. Allison IV
John A. Allison IV
Chairman and Chief Executive Officer
Dated: March 16, 1998
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PROXY PROXY
BB&T CORPORATION
ANNUAL MEETING APRIL 28, 1998
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OFBB&T CORPORATION
The undersigned shareholder of BB&T Corporation, a North Carolina
corporation ("BB&T"), appoints John A. Allison IV and Jerone C. Herring, or
either of them, with full power to act alone, the true and lawful attorneys-
in-fact of the undersigned, with full power of substitution and revocation, to
vote all shares of stock of BB&T which the undersigned is entitled to vote at
the annual meeting of shareholders of BB&T to be held at the Norfolk Waterside
Marriott Hotel, 235 East Main Street, Norfolk, Virginia on April 28, 1998, at
11:00 a.m., local time and at any adjournment thereof, with all powers the
undersigned would possess if personally present, as follows:
THIS PROXY WILL BE VOTED "FOR" THE PROPOSALS ON THE REVERSE SIDE IF NO
INSTRUCTION TO THE CONTRARY IS INDICATED. IF ANY OTHER BUSINESS IS PRESENTED
AT THE MEETING, THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE
RECOMMENDATIONS OF MANAGEMENT.
(Continued on reverse side)
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