BB&T CORP, DEF 14A, 1999-03-19

BB&T CORP
DEF 14A, 1999-03-19
NATIONAL COMMERCIAL BANKS

Previous: BB&T CORP, 10-K, 1999-03-19

Next: STERLING BANCORP, DEF 14A, 1999-03-19

<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:

[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))

[X] Definitive Proxy Statement

[X] 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:

-------------------------------------------------------------------------

Notes:

<PAGE>

BB&T CORPORATION

March 19, 1999

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 27, 1999 at the
Mayflower Hotel at 1127 Connecticut Avenue, N.W., Washington, D.C. 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 1998 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, 1998.

Also included in the package is a Summary 1998 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 1998 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 27, 1999

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 27,
1999 at 11:00 A.M. local time, at the Mayflower Hotel located at 1127
Connecticut Avenue, N.W., Washington, D.C., for the following purposes:

(1) To elect seven Directors for three-year terms expiring in 2002.

(2) To ratify the reappointment of Arthur Andersen LLP as the Corporation's
independent auditors for 1999.

(3) To transact such other business as may properly come before the
meeting.

Pursuant to the provisions of the North Carolina Business Corporation Act,
March 2, 1999 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, 1998, is
enclosed herewith.

By Order of the Board of Directors

/s/Jerone C. Herring

Jerone C. Herring
Secretary

March 19, 1999

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 at the Annual Meeting of Shareholders to be held
April 27, 1999, 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 19, 1999. 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 materials 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 seven Directors for three-year
terms expiring in 2002 and (2) ratifying the reappointment of Arthur Andersen
LLP as the Corporation's independent auditors for 1999. The Corporation has
engaged Morrow & Co. to assist in proxy solicitation for an estimated fee of
$7,500, plus out-of-pocket expenses.

Voting Securities Outstanding

Pursuant to the provisions of the North Carolina Business Corporation Act,
March 2, 1999 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 2, 1999 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 2, 1999, there were 290,293,261 shares of Common Stock of the
Corporation outstanding and entitled to vote.

The presence in person or by proxy of a majority of the shares of Common
Stock outstanding on the record date constitutes a quorum for purposes of
conducting business at the Annual Meeting. Once a share is represented for any
purpose at a meeting, it is deemed present for quorum purposes for the
remainder of the meeting and for any adjourned meeting. Abstentions and shares
which are withheld as to voting with respect to one or more of the nominees
for Director will be counted in determining the existence of a quorum.

1
<PAGE>

SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS

The table below sets forth the beneficial ownership of BB&T Common Stock by
all directors and nominees, all named Executive Officers of BB&T (See "Summary
Compensation Table") and all Directors and Executive Officers of BB&T as a
group as of March 2, 1999. 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 2, 1999.

<TABLE>
<CAPTION>
Amount and Nature of Beneficial
Ownership
--------------------------------------
Name of Beneficial Common Stock
Owner/ Common Stock Subject to a Percent of
Number of Persons in Beneficially Right to Common
Group Owned(1) Acquire(2) Stock
-------------------- ------------ ------------ ----------
<S> <C> <C> <C>
John A. Allison IV...................... 194,675 451,437 *
Paul B. Barringer....................... 91,068 29,100 *
Alfred E. Cleveland..................... 56,834(3) 4,216 *
W.R. Cuthbertson, Jr.................... 155,000 -0- *
Ronald E. Deal.......................... 43,606 46,402 *
A.J. Dooley, Sr. ....................... 98,000 12,456 *
Tom D. Efird............................ 70,647(4) 26,372 *
Paul S. Goldsmith....................... 225,732 19,396 *
L. Vincent Hackley...................... 2,561 35,458 *
Jane P. Helm............................ 400 6,120 *
Richard Janeway, M.D. .................. 38,827 46,910 *
J. Ernest Lathem, M.D. ................. 384,558 32,354 *
James H. Maynard........................ 360,179 29,382 *
Joseph A. McAleer, Jr. ................. 9,820 28,796 *
Albert O. McCauley...................... 4,551 30,124 *
Richard L. Player, Jr................... 31,475 24,520 *
C. Edward Pleasants, Jr ................ 98,867 -0- *
Nido R. Qubein.......................... 146,881 45,500 *
E. Rhone Sasser......................... 314,153 10,228 *
Jack E. Shaw............................ 806,260 5,920 *
Harold B. Wells......................... 230,925 5,920 *
W. Kendall Chalk........................ 86,793 148,172 *
Robert E. Greene........................ 31,767 65,704 *
Kelly S. King........................... 88,337 165,148 *
Henry G. Williamson, Jr................. 114,856 269,927 *
Directors and Executive Officers as a
group (28 persons)..................... 3,826,525 1,820,829 2.00%
</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. Also includes shares allocated to individual accounts by the
BB&T Corporation 401(k) Savings Plan and the BB&T Corporation Non-
Qualified Defined Contribution Plan, voting of which is directed by those
named persons and group members who participate in those plans.
(2) Includes options to acquire common shares which are or become exercisable
within 60 days of March 2, 1999.
(3) Mr. Cleveland disclaims beneficial ownership of 3,414 shares owned by his
wife.
(4) Mr. Efird disclaims beneficial ownership of 1,960 shares owned by United
Oil Company of the Carolinas, Inc.

2
<PAGE>

PROPOSAL 1--ELECTION OF DIRECTORS

The BB&T Board of Directors consists of 21 persons. The Board is divided
into three classes, each class to be as nearly equal in number as possible.
There are seven nominees for election as Directors who will serve for three-
year terms expiring in 2002. It is intended that the persons named in the
accompanying form of proxy will vote to elect the seven 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 or to reduce the number of persons to be elected by
the number of persons unable to serve (subject to the requirement that each
class be as nearly equal in number as possible). 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 by a broker, as nominee, 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 2002

<TABLE>
<CAPTION>
Director of
Principal Occupation BB&T or
During the Past BB&T Financial
Name Age Five Years; Residence Since(1)
---- --- --------------------- --------------
<C> <C> <S> <C>
Paul B. Barringer(3)......... 68 Chairman and Chief Executive Officer of 1975
Coastal Lumber Company (manufacturer of
diverse wood products); Weldon, N.C.

J. Ernest Lathem, M.D.(2).... 65 Personal Investments; prior to April 1994, 1987
Medical Director of Prostate Diagnostic
Center; Greenville, S.C.

Richard L. Player, Jr.(2).... 64 President of Player, Inc. (commercial and 1990
industrial general contractor);
Fayetteville, N.C.

C. Edward Pleasants, Jr.(4).. 58 Chairman Emeritus of Pleasants Hardware 1993
Company; prior to January 1999, President
and Chief Executive Officer of Pleasants
Hardware Company (architectural door and
hardware distributor); Winston-Salem, N.C.

Nido R. Qubein(3)............ 50 Chief Executive Officer of Creative 1990
Services, Inc. (international management
consulting); High Point, N.C.

Jack E. Shaw(4).............. 64 Chief Executive Officer of Shaw Resources, 1997
Inc. (real estate investment and
development); Greenville, S.C.

Harold B. Wells(4)........... 67 President of Wells Chevrolet, Buick, 1997
Pontiac, Oldsmobile, GMC, Inc. (automobile
dealership); Whiteville, N.C.
</TABLE>

3
<PAGE>

CONTINUING DIRECTORS FOR TERMS EXPIRING IN 2000

<TABLE>
<CAPTION>
Director of
Principal Occupation BB&T or
During the Past BB&T Financial
Name Age Five Years; Residence Since(1)
---- --- --------------------- --------------
<S> <C> <C> <C>
Alfred E. Cleveland(3).. 63 Member/Manager of McCoy, Weaver, Wiggins, 1997
Cleveland & Raper, PLLC (attorneys); prior
to March 1996, Partner in the law firm of
McCoy, Weaver, Wiggins, Cleveland & Raper;
Fayetteville, N.C.

A.J. Dooley, Sr.(4)..... 67 Retired; prior to July 1995, Partner of 1994
Dooley, Dooley, Spence, Parker and Hipp,
P.A. (attorneys); Lexington, S.C.

Paul S. Goldsmith(2).... 65 Chairman and President of William Goldsmith 1970
Company, Inc. (real estate); Greenville,
S.C.

L. Vincent Hackley(4)... 58 Chairman of Character Counts! Coalition 1992
(consultant for public service and ethics
development); prior to June 1997,
President of North Carolina System of
Community Colleges; prior to January 1,
1995, Chancellor and Professor of
Political Science, Fayetteville State
University, Fayetteville, N.C.

Jane P. Helm(3)......... 56 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.

Joseph A. McAleer, 49 Manager/Member of MACKK, LLC (Krispy Kreme 1993
Jr.(2)................. Doughnut franchisee); prior to February
1998, Chairman and Chief Executive Officer
of Krispy Kreme Doughnut Corporation,
Winston-Salem, N.C.

E. Rhone Sasser(2)...... 62 Retired; prior to July 1997, Chairman of 1997
the Board, Chief Executive Officer, and
Chairman of the Executive Committee of
United Carolina Bancshares Corporation,
Whiteville, N.C.

CONTINUING DIRECTORS FOR TERMS EXPIRING IN 2001

John A. Allison, IV(2).. 50 Chairman and Chief Executive Officer of 1986
BB&T; prior to February 1995, Chairman and
Chief Executive Officer of BB&T Financial;
Winston-Salem, N.C.

W.R. Cuthbertson, 68 Retired; prior to June 1995, Senior Vice 1983
Jr.(2)................. President of Branch Banking and Trust
Company; Charlotte, N.C.
</TABLE>

4
<PAGE>

Tom D. Efird(2)......... 59 President of Standard Distributors, Inc. 1982
(beverage wholesaler); Gastonia, N.C.

Richard Janeway, 66 Executive Vice President for Health Affairs 1989
M.D.(3)................ Emeritus and University Professor of
Medicine and Management, Wake Forest
University School of Medicine; 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)..... 59 Chairman and Chief Executive Officer of 1985
Investors Management Corporation
(restaurants); Raleigh, N.C.

Albert O. McCauley(4)... 58 President and Chief Executive Officer of 1993
McCauley Moving and Storage of
Fayetteville, Inc.; Fayetteville, 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.

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. 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 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 and are
otherwise in accordance with BB&T's bylaws. 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. See "Proposals for 2000 Annual Meeting",
below.

5
<PAGE>

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 1999. See "Proposal 2 --Ratification of Arthur Andersen LLP as Independent
Auditors for 1999", below.

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. See "Compensation Committee Report on Executive Compensation",
below.

All Directors attended at least 75% of the Board meetings and assigned
committee meetings during 1998. 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 by the Commission and BB&T is required to report in this Proxy
Statement any failure to file by the established dates during 1998. In 1998,
all of these filing requirements were satisfied by BB&T's Directors and
Executive Officers except Mr. Player, who failed to file one report on a
timely basis relating to one transaction 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 paid
during the last three calendar years to the Chief Executive Officer and the
four 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 All Other
ame and PrincipalN Other Annual Underlying LTIP Compensation
Position Year Salary ($) Bonus ($) Compensation Options (#) Payouts ($) ($)(1)
- ------------------ ---- ---------- --------- ------------ ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
John A. Allison IV...... 1998 639,000 587,867 -- 184,516 453,780 68,902
Chairman & Chief 1997 553,669 509,364 -- 66,230 -- 68,261
Executive Officer 1996 486,674 584,009 -- -- -- 40,716

Henry G. Williamson,
Jr. ................... 1998 442,500 373,167 -- 67,448 246,500 45,295
Chief Operating 1997 407,500 312,410 -- 44,058 -- 46,650
Officer 1996 370,000 370,000 -- -- -- 31,467

Kelly S. King........... 1998 312,500 239,578 -- 41,934 168,500 31,170
President 1997 270,000 206,995 -- 30,364 -- 29,970
1996 255,000 255,000 -- -- -- 22,125

Robert E. Greene........ 1998 227,500 174,413 -- 16,938 131,200 25,095
Senior Executive 1997 216,375 165,884 -- 25,006 -- 26,952
Vice President 1996 210,000 210,000 -- -- -- 17,379

W. Kendall Chalk........ 1998 227,000 174,030 -- 16,900 130,600 23,533
Senior Executive 1997 215,500 165,213 -- 24,768 -- 25,410
Vice President 1996 208,000 208,000 -- -- -- 18,107
</TABLE>
- --------
(1) The compensation shown as "All Other Compensation" for 1998 consisted of
the following: (i) BB&T's matching contribution under the BB&T Corporation
401(k) Savings Plan in the amount of $9,600 for each of the named
officers; (ii) accruals to the BB&T Corporation Non-Qualified Defined
Contribution Plan in the amount of $59,302 for Mr. Allison, $35,695 for
Mr. Williamson, $21,570 for Mr. King, $14,003 for Mr. Greene, and $13,933
for Mr. Chalk; and (iii) 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 $1,492 for Mr. Greene.

7
<PAGE>

The following table provides information concerning options for BB&T Common
Stock exercised by each of the BB&T Named Executives in 1998, and the value of
options held by each at December 31, 1998.

BB&T Aggregated Option Exercises in Last Fiscal Year and FY-End Option Values
(1)

<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Shares Underlying Unexercised In-the-Money Options a
Acquired on Value Options at FY-End (#) FY-End ($)(3)
Exercise Realized ------------------------- -------------------------
Name (#) ($)(2) Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- --------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
John A. Allison IV...... 41,754 1,254,180 379,746 228,892 11,451,998 2,611,372
Henry G. Williamson,
Jr. ................... 42,246 1,186,659 239,758 96,968 7,085,891 1,222,199
Kelly S. King........... 1,600 43,664 161,742 62,278 4,735,138 799,933
Robert E. Greene........ 25,384 685,759 51,640 33,694 1,397,609 494,950
W. Kendall Chalk........ 2,680 73,137 134,202 33,496 3,941,143 491,376
</TABLE>
- --------
(1) No SARs have been granted to the BB&T Named Executives.
(2) Value represents the difference between the option price and the market
value of the Common Stock on the date of exercise, rounded to the nearest
dollar.
(3) Value represents the difference between the option price and the market
value of the Common Stock on December 31, 1998, rounded to the nearest
dollar.

The following table provides information concerning options for BB&T Common
Stock granted to the BB&T Named Executives in 1998.

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
------------------------------------------ ---------------------
% of Total
Number of Options
Securities Granted to Exercise
Underlying Employees or Base
Options in Fiscal Price Expiration
Name Granted (#) Year ($/Sh) Date 5% ($) 10% ($)
- ---- ----------- ---------- -------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
John A. Allison IV...... 184,516 10.98% $31.000 2/23/2008 3,597,275 9,116,200
Henry G. Williamson,
Jr. ................... 67,448 4.01 31.000 2/23/2008 1,314,948 3,332,337
Kelly S. King........... 41,934 2.50 31.000 2/23/2008 817,534 2,071,792
Robert E. Greene........ 16,938 1.01 31.000 2/23/2008 330,219 836,839
W. Kendall Chalk........ 16,900 1.01 31.000 2/23/2008 329,478 834,962
</TABLE>
- --------
(1) All options (i) are nonqualified stock options, (ii) have an exercise
price equal to the market value on the date of grant, and (iii) are
exercisable over three years in equal installments. No SARs have been
granted to the BB&T Named Executives.

8
<PAGE>

The following table provides information concerning LTIP awards made during
1998 to the BB&T Named Executives:

Long-Term Incentive Plans--Awards in Last Fiscal Year

<TABLE>
<CAPTION>
Performance Estimated Future Payouts under
Number of or Other Non-Stock Price Based Plans
Shares, Units Period Until --------------------------------
or Other Maturation or Threshold Target Maximum
Name Rights (#) Payout ($ or #) ($ or #) ($ or #)
- ---- ------------- ------------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
John A. Allison, IV..... 7,451 1998-2000 $ 67,527 $ 270,106 $ 540,211
Henry G. Williamson,
Jr..................... 3,829 1998-2000 34,701 138,804 277,608
Kelly S. King........... 2,745 1998-2000 24,885 99,539 199,078
Robert E. Greene........ 1,963 1998-2000 17,796 71,183 142,365
W. Kendall Chalk........ 1,959 1998-2000 17,757 71,028 142,055
</TABLE>
- --------
(1) For a description of the 1998-2000 LTIP Performance Unit Plan, see
"Compensation Committee Report on Executive Compensation--Compensation
Plans--Three-Year Long-Term Incentive Plan", below. The performance
criteria is return on equity with a threshold of 13%, a target of 16% and
a maximum of 19%, and the target payment is 40% of average base salary for
the Chief Executive Officer and 30% of average base salary for the other
BB&T Named Executives. 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. For the BB&T Named Executives, such annual
compensation generally approximates amounts set forth under the "Salary,"
"Bonus" and "LTIP Payouts" columns of the Summary Compensation Table above.

The table on Page 10 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, 1998, for purposes of computing
benefits under the Retirement Plan, age and years of service of the BB&T Named
Executives are as follows:

<TABLE>
<CAPTION>
Name Age Years of Service
---- --- ----------------
<S> <C> <C>
John A. Allison, IV..................................... 50 28
Henry G. Williamson, Jr................................. 51 27
Kelly S. King........................................... 50 27
Robert E. Greene........................................ 49 26
W. Kendall Chalk........................................ 53 24
</TABLE>

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>
$500,000................ 73,347 110,020 146,693 183,367 220,040 256,713
600,000................ 88,347 132,520 176,693 220,867 265,040 309,213
700,000................ 103,347 155,020 206,693 258,367 310,040 361,713
800,000................ 118,347 177,520 236,693 295,867 355,040 414,213
900,000................ 133,347 200,020 266,693 333,367 400,040 466,713
1,000,000............... 148,347 222,520 296,693 370,867 445,040 519,213
1,100,000............... 163,347 245,020 326,693 408,367 490,040 571,713
1,200,000............... 178,347 267,520 356,693 445,867 535,040 624,213
1,300,000............... 193,347 290,020 386,693 483,367 580,040 676,713
1,400,000............... 208,347 312,520 416,693 520,867 625,040 729,213
1,500,000............... 223,347 335,020 446,693 558,367 670,040 781,713
1,600,000............... 238,347 357,520 476,693 595,867 715,040 834,213
1,700,000............... 253,347 380,020 506,693 633,367 760,040 886,713
1,800,000............... 268,347 402,520 536,693 670,867 805,040 939,213
1,900,000............... 283,347 425,020 566,693 708,367 850,040 991,713
2,000,000............... 298,347 447,520 596,693 745,867 895,040 1,044,213
2,100,000............... 313,347 470,020 626,693 783,367 940,040 1,096,713
</TABLE>
- --------
(1) The amounts shown exceed statutory benefit and compensation limitations
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 or BB&T's Target Pension Plan, both of
which are discussed below.

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 five highest
years out of the participant's last ten years 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

10
<PAGE>

unsecured creditor. Mr. Greene is the only BB&T Named Executive who
participates in the SERP. His estimated annual benefit payable upon retirement
at normal retirement age is $261,503.

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.

The BB&T Corporation 401(k) Savings Plan is also maintained to provide a
means for substantially all employees of BB&T and its subsidiaries to defer a
portion of their cash compensation on a pre-tax basis. The plan provides for
BB&T to match the employee's contribution with up to six percent of the
employee's compensation.

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 (other than Mr. Greene). 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 Agreements

In 1994, BB&T Financial and SNC entered into Employment Agreements with 27
of their executive and other senior officers, including the BB&T Named
Executives and Sherry A. Kellett, Morris D. Marley and Scott E. Reed
(collectively, "Executive Management"), who are currently serving as Executive
Officers of BB&T. In 1995, the contracts for all of these officers, including
Executive Management, were amended to more clearly reflect the intent of the
parties at the time the contracts were negotiated and to provide benefits more
comparable to industry standards. In 1998, the Employment Agreements for
Executive Management were reviewed and amended in order to provide benefits
more comparable to industry standards for this group of Executive Officers
(see Compensation Committee Report on Executive Compensation on Page 15 of
this Proxy Statement for a description of the 1998 changes). Set forth below
is a description of the Employment Agreements for Executive Management,
including the persons named in the Summary Compensation Table, which describes
the contracts for these Executive Officers, as amended.

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 Executive Officer reaches age 65, however. The Employment
Agreements provide that the Executive Officers are guaranteed minimum annual
salaries equal to their current annual base salaries, and continued
participation in specified incentive compensation plans. During the term of
the Employment Agreements, each Executive Officer will be entitled to receive,
on the same basis as other Executive 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 non-cash
compensation that BB&T may from time to time extend to its Executive Officers.

In the event the Executive Officer's employment is terminated by BB&T other
than for "Just Cause" (as defined in the Employment Agreements), the Executive
Officer will be entitled to receive cash compensation (including salary,
bonuses and deferred compensation) on a monthly basis at the highest rate in
effect over the past five years ("Termination Compensation"), as well as
employee pension and welfare benefits, including

11
<PAGE>

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 Executive Officer is terminated by BB&T other
than "Just Cause", BB&T will use its best efforts to accelerate vesting of any
unvested benefits to which the Executive 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 Executive Officers have the right to terminate their employment
voluntarily at any time for "Good Reason", which is generally defined in the
Employment Agreements to include a reduction in the Executive Officer's
status, responsibilities and duties or salary. If the Executive Officer
voluntarily terminates his employment for "Good Reason", he will be entitled
to receive Termination Compensation for the full five-year term (or until age
65 if that is a shorter period), employee welfare benefits, including health
insurance, outplacement services, and accelerated vesting of unvested benefits
under employee stock and benefit plans to the extent permitted by such plans.

The Employment Agreements also provide that if the Executive Officer is
terminated for any reason (other than "Just Cause") within 12 months after a
"Change of Control" (as hereinafter defined) of BB&T or certain of its
affiliates, the Executive Officer will be entitled to receive Termination
Compensation and the other benefits described above. To the extent that
payments under the Employment Agreements, subsequent to a "Change of Control",
cause an Executive Officer to have excise taxes imposed pursuant to Section
280(g) of the Internal Revenue Code, BB&T will compensate the Executive
Officer for such excise tax. 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 60% 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.
In addition, the BB&T Board can determine, in its discretion, that a
transaction constitutes a "Merger of Equals", even though one or more of the
above definitions of a "Change of Control" is met, and upon such
determination, the Executive Officers will not be entitled to terminate their
Employment Agreement voluntarily and receive continued salary and benefits
unless "Good Reason" exists, which is generally defined in the Employment
Agreements to include a reduction in the Executive Officer's status,
responsibilities and duties or salary.

BB&T also has the right under the Employment Agreements to terminate the
Executive Officer's employment at any time for "Just Cause." If BB&T
terminates an Executive Officer's employment for "Just Cause", such Executive
Officer will have no right to receive any 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 Executive 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
Executive 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 generally will be effective if the Executive Officer is terminated
by BB&T other than for just cause, until the earlier of the first anniversary
of the Executive Officer's termination or the date as of which the Executive
Officer elects to forego receiving the Termination Compensation. This non-
competition provision is not effective if the Executive Officer voluntarily
terminates employment after a "Change of Control".

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.

12
<PAGE>

COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

During 1998, the Compensation Committee administered the various incentive
plans of BB&T and fixed the compensation for the Chief Executive Officer.

Compensation Philosophy--BB&T's compensation philosophy and guiding
principles consist 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 the guiding
principles for BB&T's total compensation program.

Under BB&T's compensation policy, compensation for Executive Management is
structured 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 $20 billion and $38 billion, which
is one of the peer groups ("New Peer Group") in the Performance Graph set
forth below. In addition, stock options comprise the core for long-term
performance incentives and a large portion of total compensation is "at risk".

BB&T has established incentive compensation programs for Executive
Management, which consist of an annual cash incentive, stock options, three-
year performance-based incentives, and normal employee benefits. These
programs 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 policy is based in large part on a study conducted by
KPMG Peat Marwick ("Peat Marwick") in 1995 and updated in 1997. As part of the
study, Peat Marwick has 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 BB&T's senior officers. Peat Marwick's
initial recommendations were implemented by appropriate Compensation
Committee, Board of Director or shareholder action, and the recommendations
have continued to serve as a principal basis of BB&T's compensation program.

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.

Compensation Plans

Annual Executive Incentive Plan--In 1995, BB&T established the BB&T
Corporation 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 1998, which would be a
continuation of the plan established in 1996.

13
<PAGE>

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 is determined by establishing target incentive awards expressed as a
percentage of base salary, up to a maximum amount established by the
Compensation Committee. For 1998, the Compensation Committee provided that the
target incentive award would be established for the Chief Executive Officer at
60% of base salary, for the Chief Operating Officer at 55% 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 1998, BB&T achieved the performance levels specified by
the Compensation Committee, as would entitle the Chief Executive Officer and
Executive Management to receive an award of 153% of their respective target
incentive awards under the terms of the plan. These amounts are shown in the
"Bonus" column of the Summary Compensation Table for the BB&T Named
Executives.

Stock Incentive Plan--BB&T's primary stock incentive plan is the 1995
Omnibus Stock Incentive Plan, as amended and restated ("Stock Plan"), which is
administered by the Compensation Committee. The stock plan is intended 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 per share fair market value on
the date of grant in the case of incentive stock options and not less than 85%
of the per share 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 1998, made grants for 894,111 shares to 628
officers. The awards to the BB&T Named Executives are shown in the Summary
Compensation Table. SARs, performance shares and restricted stock awards were
not granted in 1998. The grant of performance units under the Stock Plan is
discussed below.

Three-Year Long-Term Incentive Plan--In 1996, BB&T established a long-term
performance unit incentive plan ("LTIP"), which operates as a component of the
Stock Plan. 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 establishes 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 is 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
establishes the number of valuation periods applicable to a performance unit,
which number may not be less than three. The

14
<PAGE>

value of a performance unit equals the applicable percentage, as set by the
Compensation Committee, times the fair market value of Common Stock on the
date of grant, plus such other nominal value as may be set by the Compensation
Committee. In 1996, the 1996-1998 performance unit LTIP was established by the
Compensation Committee and provided that the performance criteria be return on
equity for the three-year period, with a target goal of 15% and a superior
goal of 18%. For this three-year period, the Corporation attained a return on
equity of 19.3%, which entitled the participants to receive an award of 200%
of their target payout. The amounts of such awards are shown in the LTIP
payout column of the Summary Compensation Table for the BB&T Named Executives.
In 1998, the Compensation Committee established the 1998-2000 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 16% for the three-year period of the LTIP, with a
maximum goal of 19%.

Annual Base Salary--For 1998, the Compensation Committee reviewed the salary
range system 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. Based on this review, together with a review of the Corporation's
performance as compared to its new peer group (see "Performance Graph",
below), the Committee established the base salary of the CEO as shown in the
Summary Compensation Table.

Employee Benefit Plans--For 1998, 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 eligible 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 1998.

Chief Executive Officer's 1998 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, annual incentive, long-term incentive and stock awards of the Chief
Executive Officer for 1998, 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 1998 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. Based on
this review and the position in his salary range, the Chief Executive
Officer's base salary for 1998 was established at the amount shown in the
Summary Compensation Table. The Chief Executive Officer's 1998 annual
incentive compensation, long-term incentive compensation and stock awards were
based on the same considerations, as discussed above, as for other members of
Executive Management.

Employment Agreements

During 1998, the Compensation Committee reviewed the employment agreements
for Executive Management. These agreements were originally entered into in
1994 and amended in 1995. After consulting with Peat Marwick and other
professionals, certain amendments were recommended based on changes in the
marketplace relative to employment contracts. The Committee approved changing
the contracts of Executive Management to (i) provide for payment of
compensation for the full term of contract (five years or until age 65,
whichever is lesser) upon a change of control in lieu of present maximum of
2.99 times annual compensation, (ii) allow the Executive to terminate
employment after a change of control without meeting any other conditions,

15
<PAGE>

(iii) eliminate the employee's right to voluntarily terminate employment prior
to 2001 and receive 60% of compensation, (iv) provide for continuing accrual
of compensation and service under BB&T's Target Pension Plan or BB&T's Non-
Qualified Defined Benefit Plan, as applicable, following termination under
certain circumstances for any payments received pursuant to the employment
agreement, (v) provide for additional payments to compensate employee for any
taxes imposed on employee pursuant to Section 280(g) of the Internal Revenue
Code, (vi) eliminate provisions restricting employee's right to compete with
the Corporation or its subsidiaries after a change of control, and (vii)
revise the definition of change of control to eliminate any transaction which
the Board of Directors determines is a "merger of equals". The Committee
believes that the foregoing amendments are in the best interests of the
Corporation to ensure the continued loyalty and productivity of Executive
Management.

Conclusion

The Compensation Committee believes that all components of its total
compensation program, both for Executive Management and all employees, are
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:

<TABLE>
<S> <C>
James H. Maynard, Chairman C. Edward Pleasants, Jr.
A.J. Dooley, Sr. Jack E. Shaw
Dr. L. Vincent Hackley Harold B. Wells
Albert O. McCauley
</TABLE>

Compensation Committee Interlocks and Insider Participation

During 1998, Jack E. Shaw, a Director of BB&T and member of the Compensation
Committee in 1998, purchased a building and lot formerly utilized as a BB&T
Bank Subsidiary branch located on Wade Hampton Boulevard, Greenville, South
Carolina, from a BB&T Bank Subsidiary for a price of $230,000. Management
believes that the sales price and other terms were as favorable to BB&T as
could have been obtained from a non-affiliated party.

Harold B. Wells, a Director of BB&T and member of the Compensation Committee
in 1998, is the owner of Wells Chevrolet, Buick, Pontiac, Oldsmobile, GMC,
Inc. During 1998, BB&T-N.C. purchased in the ordinary course of business
$2,716,860 in retail consumer credit contracts from that corporation. In
addition, BB&T-NC purchased in the ordinary course of business $772,393 in
such contracts from Toby Wells Pontiac-Buick-GMC, LLC, another affiliate of
Mr. Wells. Management believes that the terms of these transactions were as
favorable to BB&T as could have been obtained from a non-affiliated entity.

Messrs. Shaw 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 received an annual retainer of $22,500 for
their services as a Director in 1998. In addition, such Directors received
$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 participated. Directors who are employees of BB&T do not receive
fees for serving as a Director.

16
<PAGE>

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. A total of 900,000 shares of Common Stock are authorized
for issuance under the Directors Plan.

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 1998, one non-employee
director 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, 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 1998, the 18 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 62,196 shares of BB&T Common Stock at an exercise price of $24.78 per
share on July 1, 1998, and were granted options to purchase a total of 10,723
shares of BB&T Common Stock at an exercise price of $28.87 per share on
December 31, 1998. The value of all such options at December 31, 1998 was
$40.32 per share.

Consulting Agreement

Messrs. Deal and Qubein and Dr. Janeway have executed Consulting Agreements
with BB&T to provide consulting services for a period of ten years following
their retirement. They will 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 and its subsidiaries during the time they
serve as consultants to BB&T.

Transactions with Executive Officers and Directors

General

A number of BB&T's Directors and Executive 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 Executive Officers and Directors and
their associates are current as to principal and interest. As of December 31,
1998, loans in excess of $60,000 to Directors, Executive Officers and their
interests totaled approximately $69.6 million, or approximately 2.5% of BB&T's
consolidated shareholders' equity at such date.

17
<PAGE>

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 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 is 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 the fiduciary duties of the Board of
Directors, to re-elect Mr. Sasser to the BB&T Board of Directors until his
70th birthday.

Transactions with Affiliates

During 1998, BB&T paid Player, Inc., an affiliate of Richard L. Player, Jr.,
a Director of BB&T, the sum of $377,869 for renovation costs of five office
locations of BB&T Bank Subsidiaries and paid Tri-Player Investments LLC (also
an affiliate of Mr. Player) the sum of $53,443 as rent and related occupancy
expenses for the Westwood Branch and main office buildings of BB&T-NC in
Fayetteville, N.C. 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 other non-affiliated parties.

Nido R. Qubein, a Director of BB&T, 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 $393,935 under this contract in 1998. Management believes this
contract is on terms as favorable as could have been obtained from other non-
affiliated parties.

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 1998.

See "--Compensation Committee Interlocks and Insider Participation."

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 two
Industry Peer Group Indices. The graph assumes $100 invested on December 31,
1993 in BB&T Common Stock and in each of the indices. In 1998 the bank holding
companies in

18
<PAGE>

the Industry Peer Group Index ("New Peer Group") were AmSouth Bancorporation,
Comerica Corporation, Crestar Financial Corporation, Fifth-Third BanCorp,
Firstar Corporation, Huntington Bancshares, Inc., Marshall & Ilsley Financial
Corporation, Mercantile Bancorporation, Regions Financial Corporation,
SouthTrust Corporation, Summit Bancorp and Union Planters Bancorporation. The
1997 Industry Peer Group Index ("Old Peer Group") consisted of the following
bank holding companies: AmSouth Bancorporation, Crestar Financial Corporation,
Fifth-Third BanCorp, Firstar Corporation, First of America Bank Corporation,
Huntington Bancshares, Inc., Merchantile Bancorporation, Regions Financial
Corporation, SouthTrust Corporation, Summit Bancorp and U.S. Bancorp. The
graph depicts both peer groups. The New Peer Group, which consists of bank
holding companies with assets between approximately $20 billion and $38
billion, more closely approximates BB&T's size than does the Old 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 1998.

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

[CHART APPEARS HERE]

19
<PAGE>

PROPOSAL 2--RATIFICATION OF ARTHUR ANDERSEN LLP AS
INDEPENDENT AUDITORS FOR 1999

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 1999, 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 present 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.

OTHER MATTERS

Proposals for 2000 Annual Meeting

Under regulations of the Commission, any shareholder desiring to make a
proposal to be acted upon at the 2000 annual meeting of shareholders must
present such proposal to BB&T at its principal office in Winston-Salem, North
Carolina by November 19, 1999 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 (i) a brief description of the business desired to be brought before
the annual meeting, (ii) the name of, record address of, and class and number
of shares beneficially owned by, the shareholder proposing such business and
(iii) 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

John A. Allison IV
Chairman and Chief Executive Officer

Dated: March 19, 1999

20
<PAGE>

- --------------------------------------------------------------------------------

u FOLD AND DETACH HERE u
PROXY PROXY

BB&T CORPORATION
ANNUAL MEETING APRIL 27, 1999

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 Mayflower Hotel,
1127 Connecticut Avenue, NW, Washington, DC on April 27, 1999, 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 IN ACCORDANCE WITH THE DIRECTIONS OF THE
UNDERSIGNED. IF NO INSTRUCTION TO THE CONTRARY IS GIVEN, THIS PROXY WILL BE
VOTED "FOR" PROPOSALS 1 AND 2 ON THE REVERSE SIDE. 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)
- -------------------------------------------------------------------------------
<PAGE>

Please mark
your vote as
indicated in /X/
this example

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE FOLLOWING PROPOSALS
<TABLE>
<CAPTION>
<S><C>

1. Proposal to elect seven nominees as directors of BB&T for three-year terms
expiring in 2002.
FOR ALL NOMINEES
LISTED (EXCEPT AS WITHHOLD
MARKED TO THE AUTHORITY TO VOTE
CONTRARY BELOW) FOR ALL NOMINEES
Paul B. Barringer Nido R. Qubein
J. Ernest Lathem, M.D. Jack E. Shaw [ ] [ ]
Richard L. Player, Jr. Harold B. Wells
C. Edward Pleasants, Jr.

(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE
THAT NOMINEE'S NAME IN THE FOLLOWING SPACE.)

- -------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
2. Proposal to ratify the reappointment of Arthur Andersen LLP as BB&T's [ ] [ ] [ ]
auditors for 1999.

3. To authorize the attorneys-in-fact to vote in accordance with the
recommendations of management on any other matters that may be submitted to a [ ] [ ] [ ]
vote of shareholders at the BB&T meeting.

THE UNDERSIGNED HEREBY RATIFIES AND CONFIRMS ALL THAT SAID ATTORNEYS-IN-FACT,
OR EITHER OF THEM OR THEIR SUBSTITUTES, MAY LAWFULLY DO OR CAUSE TO BE DONE
HEREOF, AND ACKNOWLEDGES RECEIPT OF THE NOTICE OF THE BB&T MEETING AND THE
PROXY STATEMENT ACCOMPANYING IT.
Dated this day of , 1999.
________________________________________________________________________ (SEAL)
________________________________________________________________________ (SEAL)
PLEASE INSERT DATE OF SIGNING. SIGN EXACTLY AS NAME APPEARS AT LEFT. WHERE
STOCK IS ISSUED IN TWO OR MORE NAMES, ALL SHOULD SIGN. IF SIGNING AS ATTORNEY,
ADMINISTRATOR, EXECUTOR, TRUSTEE OR GUARDIAN, GIVE FULL TITLE AS SUCH. A COR-
PORATION SHOULD SIGN BY AN AUTHORIZED OFFICER AND AFFIX SEAL.

(YOU ARE REQUESTED TO COMPLETE, SIGN AND RETURN THIS PROXY PROMPTLY)

- ------------------------------------------------------------------------------------------------------------------------------------
u FOLD AND DETACH HERE u
</TABLE>