<PAGE>
As Filed with the Securities and Exchange Commission on November 10, 1999
Registration No. 333-
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
BB&T CORPORATION
(Exact name of registrant as specified in its charter)
6060
North Carolina (Primary Standard Industrial 56-0939887
(State or other Classification Code Number) (I.R.S. Employer
jurisdiction Identification Number)
of incorporation or ---------------
organization)
200 West Second Street
Winston-Salem, North Carolina 27101
(336) 733-2000
(Address, including Zip Code, and telephone number, including
area code, of registrant's principal executive offices)
Jerone C. Herring, Esq.
200 West Second Street, 3rd Floor
Winston-Salem, North Carolina 27101
(336) 733-2180
(Name, address, including Zip Code, and telephone number,
including area code, of agent for service)
---------------
The Commission is requested to send copies of
all communications to:
Peter A. Zorn, Esq. Ralph F. MacDonald, III, Esq.
Womble Carlyle Sandridge & Rice, Alston & Bird LLP
PLLC 1201 West Peachtree Street
200 West Second Street, 17th Floor Atlanta, Georgia 30309-3424
Winston-Salem, North Carolina 27101 (404) 881-7000
(336) 721-3600
---------------
Approximate date of commencement of proposed sale of the securities to the
public: As soon as practicable after the effective date of this Registration
Statement.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance
with General Instruction G, check the following box: [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering: [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: [_]
---------------
CALCULATION OF REGISTRATION FEE
<TABLE>
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
<CAPTION>
Proposed Proposed
Title of each class of maximum maximum
securities to be Amount to be offering price aggregate Amount of
registered registered per unit offering price registration fee
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value
$5.00 per share(1)..... 17,628,703 (2) $624,681,167.40(3) $80,069.86(4)
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
</TABLE>
(1) Each share of the registrant's common stock includes one preferred share
purchase right.
(2) Not applicable.
(3) Computed in accordance with Rule 457(f) based on the average of the high
($18.44) and low ($18.13) sales price of the common stock of Premier
Bancshares, Inc. on November 5, 1999 as reported on The New York Stock
Exchange, Inc. and based on $60.00 per share of the Series A Redeemable
Preferred Stock of Premier Bancshares, Inc., the book value as of November
5, 1999.
(4) Pursuant to Rule 457(b), the registration fee has been reduced by an
amount equal to the fee of $93,591.50 paid upon the filing with the
Commission of the preliminary proxy materials of Premier Bancshares, Inc.
on October 15, 1999.
The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this
registration statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the registration statement
shall become effective on such date as the Commission, acting pursuant to
Section 8(a), may determine.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
PREMIER BANCSHARES, INC.
950 E. Paces Ferry Road
Atlanta, Georgia 30326
----------------------------------------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON JANUARY 7, 2000
----------------------------------------------
TO THE SHAREHOLDERS OF PREMIER BANCSHARES, INC.:
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders (the
"Meeting") of Premier Bancshares, Inc., a Georgia corporation ("Premier"),
will be held at Swissotel Atlanta, 3391 Peachtree Road, Atlanta, Georgia
30326, on Friday, January 7, 2000 at 10:00 a.m. Eastern Time, for the
following purposes:
1. To consider and vote upon a proposal to approve the Agreement and Plan
of Reorganization, dated as of July 28, 1999 (the "Merger Agreement"),
between Premier and BB&T Corporation, a North Carolina corporation
("BB&T"), and a related plan of merger, pursuant to which Premier will
merge with and into BB&T (the "Merger"). In the Merger, each share of
common stock of Premier outstanding at the effective time will be
converted into the right to receive 0.5155 of a share of common stock of
BB&T and each share of preferred stock of Premier outstanding at the
effective time will be converted into the right to receive a number of
shares of common stock of BB&T to be determined as described in the
accompanying proxy statement/prospectus plus, in each case, cash in lieu
of any fractional share of BB&T common stock. A copy of the Merger
Agreement and the plan of merger set forth therein is attached to the
accompanying proxy statement/prospectus as Appendix A.
2. To transact such other business as may be properly brought before the
Meeting or at any and all adjournments or postponements thereof.
Each holder of shares of the preferred stock of Premier has the right to
dissent to the merger and to demand payment of the fair value of all, but not
less than all, of such shares of preferred stock in the event the Merger
Agreement is approved and the Merger is consummated. The right of any holder
of Premier preferred stock to dissent requires strict compliance with the
provisions of Sections 14-2-1301 through 14-2-1332 of the Georgia Business
Corporation Code (the "GBCC"), the full text of which is attached to the
accompanying proxy statement/prospectus as Appendix B. Any holder of shares of
the preferred stock of Premier who is considering exercising his or her rights
of dissent and appraisal under the GBCC should consult his or her legal
advisor. Holders of Premier common stock do not have dissenters' rights under
the GBCC.
Shareholders of Premier of record at the close of business on November 5,
1999 are entitled to notice of and to vote at the Meeting. You are cordially
invited to attend the Meeting in person; however, whether or not you plan to
attend, we urge you to complete, date and sign the accompanying proxy card and
to return it promptly in the enclosed postage prepaid envelope.
BY ORDER OF THE BOARD OF DIRECTORS
Atlanta, Georgia Barbara J. Burtt
November 18, 1999 Secretary
Please complete, sign, date and return the enclosed proxy card promptly
whether or not you plan to be present at the Meeting. Failure to return a
properly executed proxy or to vote at the Meeting will have the same effect as
a vote against the Merger Agreement and the plan of merger. Please do not send
in any certificates for your shares at this time.
<PAGE>
[LOGO OF PREMIER]
SPECIAL MEETING OF SHAREHOLDERS
MERGER PROPOSAL--YOUR VOTE IS VERY IMPORTANT
The Board of Directors of Premier Bancshares, Inc. has approved a merger
combining Premier and BB&T Corporation. In the merger:
. holders of Premier common stock will receive 0.5155 of a share of BB&T
common stock for each share of Premier common stock that they own; and
. holders of Premier preferred stock will receive a number of shares of
BB&T common stock equal to the quotient of $60.00 divided by the average
closing price of BB&T common stock over a five-day period ending on the
trading day prior to the date on which the merger is completed for each
share of Premier preferred stock that they own.
Holders of shares of Premier common stock and Premier preferred stock generally
will not recognize gain or loss for federal income tax purposes on the BB&T
common stock they receive.
The merger will join Premier's strengths as a community bank covering the
metropolitan Atlanta area with BB&T's position as a leading bank throughout the
Carolinas, Virginia, the District of Columbia and parts of Maryland and
Georgia, enabling the combined company to offer Premier's customers a broad
range of financial products and services.
At the special meeting, you will consider and vote on the merger agreement.
The merger cannot be completed unless holders of at least a majority of the
shares of Premier common stock and Premier preferred stock, voting together as
a single voting group, approve it. Premier's Board of Directors believes the
merger is in the best interests of Premier shareholders and recommends that
shareholders vote to approve the merger agreement. No vote of BB&T shareholders
is required to approve the merger agreement.
BB&T common stock is listed on the New York Stock Exchange under the symbol
"BBT." On November 5, 1999, the closing price of BB&T common stock was $36.81,
making the value of 0.5155 of a share of BB&T common stock (which is what
Premier shareholders will receive for each share of Premier common stock) equal
to $18.65. The closing price of Premier common stock on that date was $18.19.
These prices will, however, fluctuate between now and the merger.
The special meeting will be held on January 7, 2000 at Swissotel Atlanta,
3391 Peachtree Road, Atlanta, Georgia 30326.
This proxy statement/prospectus provides you with detailed information about
the proposed merger. We encourage you to read this entire document carefully.
In addition, this proxy statement/prospectus incorporates important business
and financial information about BB&T and Premier from other documents that we
have not included in the proxy statement/prospectus. You may obtain copies of
these other documents without charge by requesting them in writing or by
telephone at any time prior to January 2, 2000 from the appropriate company at
the following addresses:
Shareholder ReportingBarbara J. Burtt
BB&T Corporation Corporate Secretary
Post Office Box 1290 Premier Bancshares, Inc.
Winston-Salem, North 950 E. Paces Ferry Road
Carolina 27102 Atlanta, Georgia 30326
(336) 733-3021 (404) 814-3090
Whether or not you plan to attend the meeting, if you are a holder of Premier
common stock or Premier preferred stock please take the time to vote by
completing and mailing the enclosed proxy card to us. If you fail to return
your proxy card or vote in person, the effect will be the same as a vote
against the merger agreement. Your vote is very important. You can revoke your
proxy by writing to Premier's Secretary at any time before the meeting or by
attending the meeting and voting in person.
On behalf of the Board of Directors of Premier, I urge you to vote "FOR"
approval and adoption of the merger agreement.
/s/ Darrell D. Pittard
Darrell D. Pittard
Chairman of the Board of Directors and Chief Executive Officer
Neither the Securities and Exchange Commission nor any state securities
regulators have approved or disapproved of the BB&T common stock to be
issued in the merger or determined if this proxy statement/prospectus is
accurate or adequate. Any representation to the contrary is a criminal
offense.
This proxy statement/prospectus is dated November 10, 1999 and is expected to
be first mailed to shareholders of Premier on or about November 18, 1999.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
A WARNING ABOUT FORWARD-LOOKING INFORMATION................................
SUMMARY.................................................................... 1
MEETING OF SHAREHOLDERS.................................................... 9
General.................................................................. 9
Record Date, Voting Rights and Vote Required............................. 9
Voting and Revocation of Proxies......................................... 10
Solicitation of Proxies.................................................. 10
Recommendation of the Premier Board...................................... 10
THE MERGER................................................................. 11
General.................................................................. 11
Background of and Reasons for the Merger................................. 11
Opinion of Financial Advisor to Premier.................................. 15
Exchange Ratio........................................................... 21
Exchange of Premier Stock Certificates................................... 22
The Merger Agreement..................................................... 23
Interests of Certain Persons in the Merger............................... 28
Rights of Dissenting Preferred Shareholders.............................. 32
Trust Preferred Securities............................................... 34
Regulatory Considerations................................................ 34
Material Federal Income Tax Consequences of the Merger................... 35
Accounting Treatment..................................................... 36
Effect on Employees, Employee Benefit Plans and Stock Options............ 37
Restrictions on Resales by Affiliates.................................... 38
INFORMATION ABOUT BB&T..................................................... 39
General.................................................................. 39
Operating Subsidiaries................................................... 39
Acquisitions............................................................. 40
Capital.................................................................. 41
Deposit Insurance Assessments............................................ 41
INFORMATION ABOUT PREMIER.................................................. 42
DESCRIPTION OF BB&T CAPITAL STOCK.......................................... 43
General.................................................................. 43
BB&T Preferred Stock..................................................... 43
Shareholder Rights Plan.................................................. 43
Other Anti-Takeover Provisions........................................... 46
COMPARISON OF SHAREHOLDERS' RIGHTS......................................... 46
Authorized Capital Stock................................................. 47
Special Meetings of Shareholders and Action by Shareholders without a
Meeting................................................................. 47
Directors................................................................ 47
Dividends and Other Distributions........................................ 48
Shareholder Nominations and Shareholder Proposals........................ 49
Exculpation and Indemnification.......................................... 50
Mergers, Share Exchanges and Sales of Assets............................. 50
Anti-takeover Statutes................................................... 51
Amendments to Articles of Incorporation and Bylaws....................... 51
Shareholders' Rights of Dissent and Appraisal............................ 52
Liquidation Rights....................................................... 53
SHAREHOLDER PROPOSALS...................................................... 53
</TABLE>
i
<PAGE>
<TABLE>
<S> <C>
OTHER BUSINESS.............................................................. 54
LEGAL MATTERS............................................................... 54
EXPERTS..................................................................... 54
WHERE YOU CAN FIND MORE INFORMATION......................................... 54
</TABLE>
Appendix A--Agreement and Plan of Reorganization and Plan of Merger
Appendix B--Sections 14-2-1301 through 14-2-1332 of the Georgia Business
Corporation Code
Appendix C--Opinion of Donaldson, Lufkin & Jenrette Securities Corporation
ii
<PAGE>
A WARNING ABOUT FORWARD-LOOKING INFORMATION
BB&T and Premier have each made forward-looking statements in this document
and in other documents to which this document refers that are subject to risks
and uncertainties. These statements are based on the beliefs and assumptions
of the management of BB&T and Premier, and on information currently available
to them or, in the case of information that appears under the heading "The
Merger--BB&T's Reasons for the Merger" on page 14, information that was
available to management of BB&T as of the date of the merger agreement, and
should be read in connection with the notices about forward-looking statements
made by each of BB&T and Premier in their reports filed under the Securities
Exchange Act of 1934. Forward-looking statements include the information
concerning possible or assumed future results of operations of BB&T or Premier
set forth under "Summary," "The Merger--Background of, and Reasons for, the
Merger" and "The Merger--BB&T's Reasons for the Merger" and statements
preceded by, followed by or that include the words "believes," "expects,"
"assumes," "anticipates," "intends," "plans," "estimates" or other similar
expressions. See "Where You Can Find More Information" on page 54.
BB&T and Premier have made statements in this document regarding estimated
earnings per share of BB&T and Premier on a stand-alone basis, expected cost
savings from the merger, estimated restructuring charges relating to the
merger, estimated increases in Premier's net interest margin, the anticipated
accretive effect of the merger and BB&T's anticipated performance in future
periods. With respect to estimated cost savings and restructuring charges,
BB&T has made assumptions about, among other things, the extent of operational
overlap between BB&T and Premier, the amount of general and administrative
expense consolidation, costs relating to converting Premier's bank operations
and data processing to BB&T's systems, the size of anticipated reductions in
fixed labor costs, the amount of severance expenses, the extent of the charges
that may be necessary to align the companies' respective accounting reserve
policies and the costs related to the merger. The realization of cost savings
and the amount of restructuring charges are subject to the risk that the
foregoing assumptions are inaccurate, and actual results may be materially
different from those expressed or implied by the forward-looking statements.
Any statements in this document about the anticipated accretive effect of
the merger and BB&T's anticipated performance in future periods are subject to
risks relating to, among other things, the following:
1. expected cost savings from the merger or other previously announced
mergers may not be fully realized or realized within the expected time-
frame;
2. the loss of deposits, customers or revenues following the merger or
other previously announced mergers may be greater than expected;
3. competitive pressures among depository and other financial institutions
may increase significantly;
4. costs or difficulties related to the integration of the businesses of
BB&T and its merger partners, including Premier, may be greater than
expected;
5. changes in the interest rate environment may reduce margins, the volumes
of loans made or the values of loans held;
6. general economic or business conditions, either nationally or in the
states or regions in which BB&T and Premier do business, may be less
favorable than expected, resulting in, among other things, a
deterioration in credit quality or a reduced demand for credit;
7. legislative or regulatory changes, including changes in accounting
standards, may adversely affect the businesses in which BB&T and Premier
are engaged;
8. adverse changes may occur in the securities markets; and
9. competitors of BB&T and Premier may have greater financial resources and
develop products that enable those competitors to compete more
successfully than BB&T and Premier.
Management of each of BB&T and Premier believes the forward-looking
statements about its company are reasonable; however, shareholders of Premier
should not place undue reliance on them. Forward-looking statements are not
guarantees of performance. They involve risks, uncertainties and assumptions.
The future results and shareholder values of BB&T following completion of the
merger may differ materially from those expressed or implied in these forward-
looking statements. Many of the factors that will determine these results and
values are beyond BB&T's and Premier's ability to control or predict.
iii
<PAGE>
SUMMARY
This summary highlights selected information from this proxy
statement/prospectus and may not contain all of the information that is
important to you. To understand the merger fully and for a more complete
description of the legal terms of the merger, you should read carefully this
entire document and the documents to which we refer you. See "Where You Can
Find More Information" on page 54.
Exchange Ratio for Holders of Premier Common Stock to be 0.5155 of a Share of
BB&T Common Stock for each Share of Premier Common Stock
If the merger is completed and you own Premier common stock, you will
receive 0.5155 of a share of BB&T common stock, together with related rights,
for each share of Premier common stock you own, plus cash instead of any
fractional share. See "Description of BB&T Capital Stock" on page 43.
On November 5, 1999, the closing price of BB&T common stock was $36.19,
making the value of 0.5155 of a share of BB&T common stock (which is what you
will receive for each share of Premier common stock that you own) equal to
$18.65. Because the market price of BB&T stock fluctuates, you will not know
when you vote what the shares will be worth when issued in the merger.
Exchange Ratio for Holders of Premier Preferred Stock to be based on a Fixed
Pricing Period (Page 21)
If the merger is completed and you own Premier preferred stock, you will
receive a number of shares of BB&T common stock equal to the quotient of
$60.00 (which is the liquidation value of Premier preferred stock) divided by
the average closing price per share of BB&T common stock on the New York Stock
Exchange for the five trading days ending on the trading day preceding the day
on which the merger is completed (computed to the nearest ten-thousandth of a
share) for each share of Premier preferred stock that you own, plus cash
instead of any fractional share.
No Federal Income Tax on Shares Received in Merger (Page 35)
You generally will not recognize gain or loss for federal income tax
purposes on the shares of BB&T common stock you receive in the merger. BB&T's
attorneys have issued a legal opinion to this effect, which we have included
as an exhibit to the registration statement filed with the SEC for the shares
to be issued in the merger. You will be taxed, however, on any cash that you
receive instead of any fractional share of BB&T common stock and, if you hold
shares of Premier preferred stock and you properly exercise your right to
dissent to the merger, you will generally be taxed on the cash that you
receive. Tax matters are complicated, and the tax consequences of the merger
may vary among shareholders. We urge you to contact your own tax advisor to
understand fully how the merger will affect you.
BB&T Dividend Policy Following the Merger
BB&T currently pays quarterly dividends of $.20 per share of common stock.
BB&T expects that it will continue to pay at least this amount in quarterly
dividends, but may change that policy based on business conditions, BB&T's
financial condition and earnings or other factors.
Premier Board Recommends Shareholder Approval (Page 13)
The Premier Board of Directors believes that the merger is in the best
interests of Premier shareholders and recommends that you vote "FOR" approval
of the merger agreement. The Premier Board believes that, as a result of the
merger, you will have less financial risk and will experience greater value,
including cash dividends, than you would if Premier remained independent.
Exchange Ratio Fair to Common Shareholders According to Premier's Financial
Advisor (Page 15)
Donaldson, Lufkin & Jenrette Securities Corporation (DLJ) has given an
opinion to the Premier Board that, as of July 28, 1999, which is when the
Premier Board approved the merger agreement and the merger, the exchange ratio
for Premier common stock in the merger was fair from a
1
<PAGE>
financial point of view to you as holders of Premier common stock. The full
text of this opinion is attached as Appendix C to this proxy statement/
prospectus. We encourage you to read the opinion carefully. See "The Merger--
Opinion of Financial Advisor to Premier" on page 15.
Meeting to be held January 7, 2000 (Page 9)
Premier will hold the special shareholders' meeting at 10:00 a.m. on Friday,
January 7, 2000 at Swissotel Atlanta, 3391 Peachtree Road, Atlanta, Georgia
30326. At the meeting, you will vote on the merger agreement and conduct any
other business that properly arises.
The Companies (Page 39)
BB&T Corporation
200 West Second Street
Winston-Salem, NC 27101
(336) 733-2000
BB&T is a multi-bank holding company with more than $41.6 billion in assets.
It is the sixth largest bank holding company in the Southeast and, through its
banking and thrift subsidiaries, operates 622 branch offices in the Carolinas,
Virginia, Maryland, Washington, D.C., Georgia, West Virginia and Kentucky.
BB&T ranks second in deposit market share in North Carolina and third in South
Carolina and maintains a significant market presence in Virginia, as well as
in Maryland, Georgia and Washington, D.C.
Premier Bancshares, Inc.
950 E. Paces Ferry Road
Atlanta, GA 30326
(404) 814-3090
Premier, with approximately $2 billion in assets, is the holding company for
32 banking offices and 17 mortgage banking offices in the metropolitan Atlanta
area and in Georgia, Alabama, South Carolina, Florida and Tennessee.
The Merger (Page 11)
In the merger, Premier will merge into BB&T, and Premier's financial
institution and mortgage banking subsidiaries, through which it operates, will
become wholly owned subsidiaries of BB&T. If the Premier shareholders approve
the merger agreement at the special meeting, we currently expect to complete
the merger in the first quarter of 2000.
We have attached the merger agreement and the related plan of merger
(Appendix A) at the back of this proxy statement/prospectus. We encourage you
to read the merger agreement, as it is the legal document that governs the
merger.
Majority Premier Shareholder Vote Required (Page 9)
Approval of the merger agreement requires the affirmative vote of the
holders of at least a majority of the outstanding shares of Premier common
stock and Premier preferred stock, voting together as a single voting group.
If you fail to vote, it will have the effect of a vote against the merger
agreement and the merger. The directors and executive officers of Premier
together own about 16% of the shares entitled to be cast at the meeting, and
we expect them to vote their shares in favor of the merger agreement and the
merger.
Brokers who hold shares of Premier common stock or Premier preferred stock
as nominees will not have authority to vote them with respect to the merger
unless the beneficial owners of those shares provide voting instructions.
The merger does not require the approval of BB&T's shareholders.
Record Date Set at November 5, 1999; One Vote per Share of Premier Common
Stock or Premier Preferred Stock (Page 9)
If you owned shares of Premier common stock or Premier preferred stock at
the close of business on November 5, 1999, the record date, you are entitled
to vote on the merger agreement and other proper matters that may be
considered at the meeting, if any.
On the record date, there were 32,246,717 shares of Premier common stock
outstanding and 40,770 shares of Premier preferred stock outstanding. You will
have one vote at the meeting for each share of Premier common stock or Premier
preferred stock that you owned on the record date.
2
<PAGE>
Monetary Benefits to Management (Page 28)
When considering the recommendation of the Premier Board, you should be aware
that some of Premier's directors and officers have interests in the merger that
differ from the interests of other Premier shareholders. Darrell D. Pittard,
Premier's Chairman and Chief Executive Officer, has agreed to a 5-year
employment agreement with Branch Banking and Trust Company, BB&T's North
Carolina banking subsidiary, pursuant to which he will receive a base salary of
$430,600 and be eligible to receive a bonus and to be granted stock options
annually. Robert C. Oliver, Premier's President and Chief Operating Officer,
has agreed to a 4-year employment agreement with Branch Banking and Trust
Company, pursuant to which he will receive a base salary of $302,600. In
addition, it is anticipated that Sandra Fuller, George Henderson, George
Phelps, Henley VanSant and Brian Schmitt will enter into three-year employment
agreements with Branch Banking and Trust Company at their current salaries.
As more fully described in this proxy statement/prospectus, the employment
agreements for Mr. Pittard and Mr. Oliver provide, subject to satisfaction of
certain conditions, for their receipt of "success payments" upon completion of
specified events relating to the merger and the subsequent conversion of the
systems of Premier and its banking subsidiaries to those of BB&T. Mr. Pittard's
employment agreement provides for an additional "success payment" because
Premier's acquisitions of other banking institutions, which were pending as of
the date of the merger agreement, have been completed.
Also, Mr. Pittard will be named Chief Executive Officer of Premier Lending
Corporation, will be elected to the board of Branch Banking and Trust Company
and will be named Chairman of Branch Banking and Trust Company's advisory board
for the Atlanta region.
The Premier Board was aware of these and other interests and considered them
when it approved and adopted the merger agreement.
Conditions that Must be Satisfied for the Merger to Occur (Page 23)
The following conditions must be met for us to complete the merger:
. approval of the merger agreement by the Premier shareholders;
. the absence of legal restraints that prevent the completion of the
merger;
. receipt of a legal opinion concerning the tax consequences of the
merger;
. the continuing accuracy of the parties' representations in the merger
agreement;
. the continuing effectiveness of the registration statement filed with
the SEC;
. the ability to account for the merger as a pooling of interests;
. the absence of any withdrawal or modification of the opinion of DLJ to
the effect that the exchange ratio for Premier common stock was fair,
from a financial point of view, to the holders of Premier common stock;
and
. the continuous employment by Premier of Darrell D. Pittard until
completion of the merger.
In addition, we cannot complete the merger unless we obtain the approval of
the Board of Governors of the Federal Reserve System, the Georgia Department of
Banking and Finance and the Virginia Bureau of Financial Institutions. In
October 1999, BB&T filed the required applications seeking approval of the
merger. Although we believe the regulatory approvals will be received in a
timely manner, we cannot be certain when or if we will obtain them.
Termination and Amendment of the Merger Agreement (Page 26)
We can agree at any time to terminate the merger agreement without completing
the merger. Either company can also terminate the merger agreement in the
following circumstances:
. the merger is not completed by March 31, 2000;
. any of the conditions that must be satisfied to complete the merger is
not met; or
. the other company violates, in a material way, any of its
representations, warranties or obligations under the merger agreement.
3
<PAGE>
Generally, the company seeking to terminate cannot itself be in violation of
the merger agreement in a way that would allow the other party to terminate.
In addition, the merger agreement can be terminated by:
. BB&T, if the Premier Board withdraws its recommendation or refuses to
recommend to the Premier shareholders that they vote to approve the
merger or recommends to the Premier shareholders that they vote to
approve an agreement, plan or transaction involving the sale of all or a
substantial portion of the equity interests or assets of Premier or a
Premier subsidiary to, or a business combination with, a party other
than BB&T or a BB&T subsidiary; or
. Premier, if the Premier Board determines in good faith to enter into an
agreement, plan or transaction as described above that does not
represent a breach of the merger agreement.
We can agree to amend the merger agreement in any way, except that after the
shareholders' meeting we cannot decrease the number of shares of BB&T common
stock you will receive in the merger. Either company can waive any of the
requirements of the other company contained in the merger agreement, except
that neither company can waive any required regulatory approval. Neither
company intends to waive the condition that it receives a tax opinion. If a
tax opinion is not available and the Premier Board determines to proceed with
the merger, Premier will resolicit its shareholders.
Termination Fee (Page 28)
As a condition to its offer to acquire Premier, and to discourage other
companies from offering to acquire Premier, BB&T required Premier to agree to
pay to BB&T a termination fee of $10 million if the merger agreement is
terminated for certain reasons, including:
. the Premier shareholders do not vote to approve the merger and either:
. prior to the Premier shareholders' meeting, the Premier Board
withdrew its recommendation or refused to recommend to the Premier
shareholders that they vote to approve the merger, or
. at the time of the shareholders' meeting, a proposal or offer existed
involving the sale of all or a substantial portion of the equity
interests or assets of Premier or a Premier subsidiary to, or a
business combination with, a party other than BB&T or a BB&T
subsidiary.
. the Premier Board withdraws its recommendation or refuses to recommend
to the Premier shareholders that they vote to approve the merger or
recommends to the Premier shareholders that they vote to approve an
agreement, plan or transaction arising out of a proposal or offer as
described above;
. Premier breaches the merger agreement by entertaining a proposal or
offer described above;
. Premier determines in good faith to enter into an agreement, plan or
transaction arising out of a proposal or offer as described above that
is permitted by the merger agreement; or
. DLJ withdraws or modifies its opinion to the effect that the exchange
ratio for Premier common stock was fair, from a financial point of view,
to you as holders of Premier common stock.
BB&T to Use Pooling-of-Interests Accounting Treatment (Page 36)
BB&T will account for the merger as a pooling of interests. This will
enhance future earnings by avoiding the creation of goodwill relating to the
merger and will enable BB&T to avoid charges against future earnings that
would result from amortizing goodwill. This accounting method also means that,
after the merger, BB&T will report financial results as if Premier had always
been combined with BB&T.
Appraisal Rights for Preferred Shareholders but not for Common Shareholders
(Page 32)
Under Georgia law, if you are a holder of Premier common stock you have no
right to an
4
<PAGE>
appraisal of your shares in connection with the merger.
However, if you are a holder of Premier preferred stock and you do not vote
for the merger and you properly exercise rights to dissent to the merger and
to demand the "fair value" of your shares of Premier preferred stock, you may
have the right to obtain a cash payment for the "fair value" of your shares.
To exercise these rights, a holder of Premier preferred stock must comply with
the procedural requirements of the Georgia Business Corporation Code, the
relevant sections of which we have attached to this proxy statement/prospectus
as Appendix B. We cannot predict what the "fair value" of Premier preferred
stock resulting from the required appraisal proceedings would be. Failure to
take timely and properly any of the steps required under the GBCC may result
in a loss of dissenters' rights.
Share Price Information (Page 6)
Premier common stock and BB&T common stock are both listed on the New York
Stock Exchange. On July 28, 1999, the last full trading day before public
announcement of the proposed merger, Premier common stock closed at $19.88 and
BB&T common stock closed at $36.63. On November 5, 1999, Premier common stock
closed at $18.19 and BB&T common stock closed at $36.81.
Listing of BB&T Stock
BB&T will list the shares of its common stock to be issued in the merger on
the New York Stock Exchange.
5
<PAGE>
Comparative Market Prices and Dividends
BB&T common stock is listed on the NYSE under the symbol "BBT." Premier
common stock is listed on the NYSE under the symbol "PMB."/1/ Premier preferred
stock is not publicly traded. The table below shows the high and low closing
prices of BB&T common stock and Premier common stock and cash dividends paid
per share for the last two fiscal years plus the interim period. For BB&T,
prices reflect a 2-for-1 stock split on August 3, 1998, and for Premier, prices
reflect a 3-for-2 stock split on January 23, 1998. The merger agreement
restricts Premier's ability to increase dividends. See page 25.
<TABLE>
<CAPTION>
BB&T Premier
--------------------------- ---------------------------
High Low Cash Dividend High Low Cash Dividend
------ ------ ------------- ------ ------ -------------
<S> <C> <C> <C> <C> <C> <C>
Quarter Ended
March 31, 1999......... $40.44 $34.94 $.175 $25.31 $19.00 $.09
June 30, 1999.......... 40.25 33.81 .175 21.50 15.83 .09
September 30, 1999..... 36.63 30.50 .20 19.88 14.94 .09
December 31, 1999
(through November 5,
1999)................. 36.81 30.38 .20 18.19 15.44 --
Quarter Ended
March 31, 1998......... 33.84 29.03 .155 29.69 14.00 .13
June 30, 1998.......... 34.06 32.03 .155 29.00 23.13 .05
September 30, 1998..... 36.03 28.00 .175 28.50 20.00 .05
December 31, 1998...... 40.63 27.31 .175 27.69 16.38 .08
For year 1998.......... 40.63 27.31 .66 29.69 14.00 .31
Quarter Ended
March 31, 1997......... 20.38 17.63 .135 9.46 7.66 .05
June 30, 1997.......... 23.56 17.88 .135 11.67 9.17 .04
September 30, 1997..... 27.56 22.66 .155 14.17 9.83 .04
December 31, 1997...... 32.50 25.97 .155 17.92 12.83 .02
For year 1997.......... 32.50 17.63 .58 17.92 7.66 .15
</TABLE>
The table below shows the closing price of BB&T common stock and Premier
common stock on July 28, 1999, the last full trading day before public
announcement of the proposed merger.
<TABLE>
<S> <C>
BB&T historical.................................................. $36.63
Premier historical............................................... $19.88
Premier pro forma equivalent*.................................... $18.88
</TABLE>
- --------
* calculated by multiplying BB&T's per share closing price by an exchange ratio
of 0.5155
/1/Premier common stock has been listed on the NYSE since June 1, 1999. From
January 1997 to May 31, 1999, Premier common stock was listed on the American
Stock Exchange under the symbol "PMB" and from January 1995 to January 1997,
Premier common stock was listed on the Nasdaq Small Cap Market under the
symbol "FABC."
6
<PAGE>
Selected Consolidated Financial Data
We are providing the following information to help you analyze the financial
aspects of the merger. We derived this information from audited financial
statements for 1994 through 1998 and unaudited financial statements for the
nine months ended September 30, 1999. The information provided for BB&T has
been restated to include the accounts of MainStreet Financial Corporation,
First Citizens Corporation and Mason-Dixon Bancshares, Inc., which were
acquired by BB&T on March 5, 1999, July 9, 1999 and July 14, 1999,
respectively, in transactions accounted for as poolings of interests. The
information provided for Premier has been restated to include the accounts of
North Fulton Bancshares, Inc., which was acquired by Premier on August 31,
1999, in a transaction accounted for as a pooling of interests. The information
provided for Premier does not, however, reflect the impact of its recently
completed acquisitions of Bank Atlanta and Farmers & Merchants Bank. This
information is only a summary, and you should read it in conjunction with our
historical financial statements (and related notes) contained in the annual and
quarterly reports and other documents that we have filed with the SEC. See
"Where You Can Find More Information" on page 54. You should not rely on the
nine-month information as being indicative of results expected for the entire
year or for any future interim period.
BB&T--Historical Financial Information
<TABLE>
<CAPTION>
As of/For the Nine
Months Ended
September 30, As of/For the Years Ended December 31,
----------------------- ----------------------------------------------------------
1999 1998 1998 1997 1996 1995 1994
----------- ----------- ----------- ---------- ----------- ----------- -----------
(Dollars in thousands, except for per share amounts)
<S> <C> <C> <C> <C> <C> <C> <C>
Net interest income..... $ 1,122,435 $ 1,013,950 $ 67,191 $1,267,848 $ 1,158,858 $ 42,397 $ 33,687
Net income.............. 439,104 392,397 527,254 394,661 14,307 11,851 300,262
Basic earnings per
share.................. 0.48 1.26 1.68 1.26 1.19 .84 .97
Diluted earnings per
share.................. 0.48 0.64 1.65 1.24 1.17 .82 .94
Cash dividends paid per
share.................. .55 .485 .66 .58 .50 0.06 .37
Book value per share.... 9.72 9.57 5.28 8.59 7.91 7.69 6.87
Total assets............ 41,649,596 37,419,848 37,903,119 4,421,182 30,301,706 28,343,959 26,545,187
Long-term debt.......... 6,321,643 134,922 5,300,536 3,918,156 2,485,710 42,283 30,807
Premier--Historical Financial Information
<CAPTION>
As of/For the Nine
Months Ended
September 30, As of/For the Years Ended December 31,
----------------------- ----------------------------------------------------------
1999 1998 1998 1997 1996 1995 1994
----------- ----------- ----------- ---------- ----------- ----------- -----------
(Dollars in thousands, except for per share amounts)
<S> <C> <C> <C> <C> <C> <C> <C>
Net interest income..... $ 53,674 $ 50,162 $ 67,191 $ 60,459 $ 49,215 $ 42,397 $ 33,687
Net income.............. 13,566 18,058 22,331 19,412 14,307 11,851 6,773
Basic earnings per
share.................. 0.48 0.65 0.81 0.71 0.53 0.45 0.28
Diluted earnings per
share.................. 0.48 0.64 0.79 0.69 0.52 0.44 0.27
Cash dividends declared
per share.............. 0.27 0.24 0.31 0.15 0.17 0.06 0.03
Book value per share.... 5.32 5.14 5.28 4.74 4.10 3.73 3.20
Total assets............ 1,693,318 1,586,177 1,694,168 1,421,182 1,225,600 1,012,457 815,330
Long-term debt.......... 219,650 134,922 198,621 74,225 42,724 42,283 30,807
</TABLE>
7
<PAGE>
Comparative Per Share Data
We have summarized below the per share information for our companies on a
historical, pro forma combined and equivalent basis. You should read this
information in conjunction with our historical financial statements (and
related notes) contained in the annual and quarterly reports and other
documents we have filed with the SEC. See "Where You Can Find More Information"
on page 54.
The BB&T pro forma information gives effect to the merger accounted for as a
pooling of interests, assuming that 0.5155 of a share of BB&T common stock is
issued for each outstanding share of Premier common stock. Premier equivalent
share amounts are calculated by multiplying the pro forma basic and diluted
earnings per share, BB&T's historical per share dividend and the pro forma
shareholders' equity by the exchange ratio of 0.5155 of a share of BB&T common
stock so that the per share amounts equate to the respective values for one
share of Premier common stock. You should not rely on the pro forma information
as being indicative of the historical results that we would have had if we had
been combined or the future results that we will experience after the merger,
nor should you rely on the nine-month information as being indicative of
results expected for the entire year or for any future interim period.
<TABLE>
<CAPTION>
As of/For the
As of/For the Year Ended
Nine Months Ended December 31,
September 30, -----------------
1999 1998 1997 1996
----------------- ----- ----- -----
<S> <C> <C> <C> <C>
Earnings per common share
Basic
BB&T historical.......................... $1.39 $1.68 $1.26 $1.19
Premier historical....................... .48 .81 .71 .53
Pro forma combined....................... 1.37 1.68 1.27 1.18
Premier pro forma equivalent............. .71 .87 .65 .61
Diluted
BB&T historical.......................... 1.36 1.65 1.24 1.17
Premier historical....................... .48 .79 .69 .52
Pro forma combined....................... 1.34 1.64 1.25 1.16
Premier pro forma equivalent............. .69 .85 .64 .60
Cash dividends declared per common share
BB&T historical............................ .55 .66 .58 .50
Premier historical......................... .27 .31 .15 .17
Pro forma combined......................... .55 .66 .58 .50
Premier pro forma equivalent............... .28 .34 .30 .26
Shareholders' equity per common share
BB&T historical............................ 9.72 9.62 8.59 7.91
Premier historical......................... 5.32 5.28 4.74 4.10
Pro forma combined......................... 9.75 9.64 8.62 7.97
Premier pro forma equivalent............... 5.03 4.97 4.44 4.11
</TABLE>
8
<PAGE>
MEETING OF SHAREHOLDERS
General
We are providing this proxy statement/prospectus to Premier shareholders of
record as of November 5, 1999, along with a form of proxy that the Premier
Board is soliciting for use at a special meeting of shareholders of Premier to
be held on Friday, January 7, 2000 at 10:00 a.m., Eastern Time, at Swissotel
Atlanta, 3391 Peachtree Road, Atlanta, Georgia 30326. At the meeting, the
shareholders of Premier will vote upon a proposal to approve the merger
agreement, dated as of July 28, 1999, pursuant to which Premier would merge
with and into BB&T. Proxies may be voted on other matters that may properly
come before the meeting, if any, at the discretion of the proxy holders. The
Premier Board knows of no such other matters except those incidental to the
conduct of the meeting. The merger agreement and the related plan of merger
are attached as Appendix A.
Whether or not you expect to attend the meeting, your vote is important. We
request holders of the common stock or the preferred stock of Premier to
complete, date and sign the accompanying proxy and return it promptly to
Premier in the enclosed postage prepaid envelope.
Record Date, Voting Rights and Vote Required
Only the holders of Premier common stock or Premier preferred stock on the
record date are entitled to receive notice of and to vote at the meeting. On
the record date, there were 32,246,717 shares of Premier common stock
outstanding, held by approximately 2,935 holders of record, and 40,770 shares
of Premier preferred stock outstanding, held by approximately 119 holders of
record. Each such share of Premier common stock and Premier preferred stock is
entitled to one vote on each matter submitted at the meeting.
Approval of the merger agreement and the plan of merger requires the
affirmative vote of the holders of at least a majority of the outstanding
shares of Premier common stock and Premier preferred stock, voting together as
a single voting group. If you do not vote your shares, it will have the same
effect as a vote "against" the merger agreement and the plan of merger.
The proposal to adopt the merger agreement and the plan of merger is a "non-
discretionary" item, meaning that brokerage firms may not vote shares in their
discretion on behalf of a client if the client has not given voting
instructions. Accordingly, shares held in street name that have been
designated by brokers on proxy cards as not voted with respect to that
proposal ("broker shares") will not be counted as votes cast on it. Shares
with respect to which proxies have been marked as abstentions also will not be
counted as votes cast on that proposal.
Action on other matters, if any, that are properly presented at the meeting
for consideration of the shareholders will be approved if a quorum is present
and the votes in favor of the matter constitute a majority of the shares
represented at the meeting and entitled to vote. A quorum will be present if a
majority of the outstanding shares of Premier common stock and Premier
preferred stock entitled to vote, taken together, are represented at the
meeting in person or by proxy. Shares with respect to which proxies have been
marked as abstentions and broker shares will be treated as shares present for
purposes of determining whether a quorum is present. The Premier Board is not
aware of any other business to be presented at the meeting other than matters
incidental to the conduct of the meeting.
Because approval of the merger agreement and the plan of merger requires the
affirmative vote of the holders of at least a majority of the outstanding
shares of Premier common stock and Premier preferred stock, voting together as
a single voting group, abstentions and broker shares will have the same effect
as votes against the merger. Accordingly, the Premier Board urges you to
complete, date and sign the accompanying proxy and return it promptly in the
enclosed postage prepaid envelope.
You should not send in your stock certificates with your proxy cards. See
"The Merger--Exchange of Premier Stock Certificates" on page 22.
9
<PAGE>
If you are a holder of Premier preferred stock, you do not vote for the
merger and you properly exercise rights to dissent to the merger and to demand
the "fair value" of your shares of Premier preferred stock, you may have the
right to obtain a cash payment for the "fair value" of your shares. If you are
a holder of Premier common stock, you do not have this right. See "The
Merger--Rights of Dissenting Preferred Shareholders" on page 32.
As of the record date, the directors and executive officers of Premier and
their affiliates beneficially owned a total of 4,468,318 shares, or 16%, of
the issued and outstanding shares of Premier common stock (exclusive of shares
that may be acquired pursuant to the exercise of stock options) and no shares
of Premier preferred stock. As of the record date, the directors and executive
officers of BB&T, their affiliates, BB&T and its subsidiaries owned a total of
less than 1% of the outstanding shares of Premier common stock and none of the
outstanding shares of Premier preferred stock.
Voting and Revocation of Proxies
The shares of Premier common stock and Premier preferred stock represented
by properly completed proxies received at or before the time for the meeting
(or any adjournment) will be voted as directed by the shareholders unless
revoked as described below. If no instructions are given, executed proxies
will be voted "FOR" approval of the merger agreement and the plan of merger.
Proxies marked "FOR" approval of the merger agreement and the plan of merger
and executed but unmarked proxies will be voted in the discretion of the proxy
holders named therein as to any proposed adjournment of the meeting. Proxies
which are voted "AGAINST" approval of the merger agreement and the plan of
merger will not be voted in favor of any motion to adjourn the meeting to
solicit more votes in favor of the merger. If any other matters are properly
presented at the meeting and voted upon, the proxies solicited hereby will be
voted on those matters at the discretion of the proxy holders named therein.
Your attendance at the meeting will not automatically revoke your proxy. You
may, however, revoke a proxy any time before its exercise by filing a written
notice of revocation with, or by delivering a duly executed proxy bearing a
later date to, the Secretary of Premier at Premier's principal executive
offices before the meeting, or by attending the meeting and voting in person
by written ballot.
Solicitation of Proxies
BB&T and Premier will each pay 50% of the cost of printing this proxy
statement/prospectus, and Premier will pay all other costs of soliciting
proxies. Directors, officers and other employees of Premier or its
subsidiaries may solicit proxies personally, by telephone or facsimile or
otherwise. None of these people will receive any special compensation for
solicitation activities. Premier will arrange with brokerage firms and other
custodians, nominees and fiduciaries for the forwarding of solicitation
material to the beneficial owners of stock held of record by such persons, and
Premier will reimburse these record holders for their reasonable out-of-pocket
expenses. In addition, Premier intends to use the services of Regan &
Associates, a professional proxy solicitation firm, to help with soliciting
proxies for the meeting, at an estimated cost of $6,000 plus out-of-pocket
expenses.
Recommendation of the Premier Board
The Premier Board has adopted the merger agreement and the plan of merger
and believes that the proposed transaction is fair to and in the best
interests of Premier and its shareholders. The Premier Board recommends that
Premier's shareholders vote "FOR" approval of the merger agreement and the
plan of merger. See "The Merger--Background of and Reasons for the Merger" on
page 11.
10
<PAGE>
THE MERGER
The following information describes the material aspects of the merger. This
description does not purport to be complete and is qualified in its entirety
by reference to the appendices to this proxy statement/prospectus, including
the merger agreement and the plan of merger, which are attached to this proxy
statement/prospectus as Appendix A and incorporated herein by reference. All
shareholders are urged to read the appendices in their entirety.
General
In the merger, Premier will be merged with and into BB&T and BB&T will be
the surviving corporation. Shareholders of Premier will receive shares of the
common stock of BB&T in exchange for their shares of Premier common stock or
Premier preferred stock. During the third quarter of 2000, BB&T intends to
merge Premier's subsidiary financial institutions into one or more
subsidiaries of BB&T.
Background of and Reasons for the Merger
Background of the Merger
Premier was formed as the holding company for Premier Lending Corporation
and Allatoona Federal Savings Bank in 1995 and has conducted its business
since that date. In August 1996, Premier merged with First Alliance, and in
January 1997, its common stock began trading on the American Stock Exchange.
In June 1997, Premier completed its merger with Central and Southern Holding
Company and in October of that year completed the acquisition of Traditional
Mortgage, a mortgage operation which had offices in Mobile, Alabama,
Jacksonville, Florida and the Atlanta area. Since December 1997, Premier has
continued to expand its metropolitan Atlanta operations with the acquisition
of Citizens Gwinnett Bankshares, Lanier Bank and Trust Company, Button
Gwinnett Financial Corporation, The Bank Holding Company and Frederica Bank &
Trust. In addition, Premier has opened mortgage and construction lending
offices in southeastern markets including Augusta, Georgia, Warner Robins,
Georgia, St. Simons Island, Georgia, Charlotte, North Carolina, Charleston,
South Carolina and Chattanooga, Tennessee, and has full service banking
operations on St. Simons Island, Georgia. Premier acquired North Fulton
Bancshares, Inc., Atlanta, Georgia on August 31, 1999, Bank Atlanta, Decatur,
Georgia on October 27, 1999 and Farmers and Merchants Bank, Summerville,
Georgia, on November 5, 1999. Premier has therefore grown rapidly over the
last five years primarily through its strategic acquisitions. Premier was
established with a view to building an Atlanta-centered franchise which would
ultimately become part of a regional bank's network. This intent and the
potential benefit to their shareholders was made clear to prospective targets.
Pursuant to an engagement letter dated May 28, 1998 (as modified by a letter
dated July 27, 1999), Premier engaged Brown, Burke Capital Partners, Inc. to
act as its financial advisor in connection with Premier's consideration of a
possible sale of all or substantially all of its stock or assets. Brown, Burke
had often advised Premier as to acquisitions and financial strategy generally.
As part of this process, Brown, Burke conducted preliminary discussions on
Premier's behalf with various financial institutions to assist Premier in
assessing its strategic options. A number of institutions were contacted,
including more than eight regional bank holding companies, including BB&T. On
July 23, 1998, Mr. Pittard advised the Premier Board, which was meeting in
executive session, that several of these regional banks had expressed an
interest in Premier and its performance. Management therefore determined that
invitations to meet should be extended and Mr. Pittard, Mr. Oliver and former
director Mr. Glenn White met with the chief executive officers of several of
these institutions to hold further preliminary discussions regarding Premier
and its franchise. Management believed that, unless Premier merged with a
larger institution, a number of facilities and internal systems would require
substantial capital and personnel expenditures of up to $4 million a year in
order to service the company as it grew, and that these systems would not
necessarily add value to a potential acquiror.
11
<PAGE>
Brown, Burke arranged follow-up meetings between Premier and several of the
institutions. Although the reaction was generally positive from each of the
interested parties, most expressed general concerns regarding the integration
risk involved in acquiring an entity which itself had been so acquisitive in
the recent past and which was involved in the process of converting its
targets' data processing systems to a common platform. There was also some
concern regarding the overall unseasoned nature of Premier's franchise, the
high level of volatile mortgage banking income and the high market valuation
of Premier's stock. Of the institutions involved in the follow-up discussions,
BB&T expressed the most substantive ongoing interest, particularly after
Premier completed its acquisition of Button Gwinnett Financial Corporation in
July 1998.
On August 14, 1998, BB&T delivered a nonbinding letter of interest to Brown,
Burke proposing an acquisition of Premier. However, that same day, BB&T was
contacted by a banking organization that it had attempted to acquire for some
time and withdrew its letter to Premier to pursue the other acquisition.
However, Brown, Burke continued to have ongoing general discussions during the
latter half of 1998 with other institutions that had expressed an interest in
the Atlanta market. In October and November 1998, senior management of BB&T
met with representatives of Premier and conducted a tour of Premier's
facilities and markets. BB&T determined that it did not wish to pursue further
negotiations with Premier at that time due to the integration risk associated
with the data processing conversions of Premier's pending or recently
completed acquisitions. Premier decided at this time that it would be
advisable to also have the benefit of advice from a Wall Street investment
bank and entered into an engagement letter dated October 6, 1998 (as modified
by a letter dated July 26, 1999) with Donaldson, Lufkin & Jenrette Securities
Corporation (DLJ) in connection with a possible sale of the assets or stock of
Premier.
During the first half of 1999, the executive committee of the Premier Board
met on several occasions to discuss the strategic alternatives available to
Premier. Management explained that Premier had reached the stage in its
development which required it either to make considerable capital investments
to consolidate its franchise, including the development of a central
operations center and investments in technology, or to pursue a combination of
Premier with a more substantial and mature institution that could provide such
services.
In addition, management believed that the proposed abolition of the pooling-
of-interests method of accounting for mergers could adversely affect the
premiums paid in banking acquisitions. The timing of any decision to sell
would therefore be affected by the proposed accounting change. In June 1999,
the Premier Board announced that second quarter earnings would be
significantly short of analysts' forecasts because of lower profits from
mortgage lending and commercial banking, and this factor promoted more serious
consideration of the expressions of interest.
Premier completed the conversion of all of its 1998 acquisitions to the
FiServ operating system on May 7, 1999.
In May 1999, as part of its ongoing discussions with potentially interested
parties, Brown, Burke became aware of an increased level of interest from two
other regional financial institutions, which signed confidentially agreements
and entered into further discussions with Premier. One of those institutions
later conducted due diligence at Premier.
In early July 1999, BB&T and one other interested party performed on site
due diligence.
On July 20, 1999, BB&T and the two other remaining interested parties
submitted their indications of interest in acquiring Premier.
Premier's alternatives were discussed fully, including the viability of
remaining independent, at a series of executive committee meetings held on
July 13, 20 and 22, 1999. At the Premier Board meeting held on July 22, 1999,
both Brown, Burke and DLJ made presentations to the Premier Board, and DLJ
concluded that the exchange ratio for Premier common stock offered by BB&T was
fair, from a financial point of view, to the holders of Premier common stock.
Following the review of Brown, Burke's and DLJ's presentations, the Premier
12
<PAGE>
Board concluded that BB&T's stock had more potential for a higher return than
Premier's stock if Premier remained independent. See "--Opinion of Financial
Advisor to Premier" on page 15.
The Premier Board authorized Mr. Pittard to negotiate with BB&T. The Premier
Board also appointed a three-member independent committee to analyze any
proposal which was deemed appropriate by the Premier Board and to review and
report on the fairness opinion to be produced by DLJ.
On July 28, 1999, the Premier Board's independent committee met with Brown,
Burke and DLJ, reviewed their analyses and accepted the DLJ fairness opinion.
This was followed by a meeting of the Premier Board at which, after
considering the advice of both Brown, Burke and DLJ, the Premier Board
determined that BB&T's offer represented a "financial upgrade" for Premier's
shareholders and that from a financial point of view the transaction was
compelling. BB&T's more diverse business was also attractive in current market
conditions, especially given Premier's reliance on mortgage banking
operations. The Premier Board also considered management's projections and the
challenges to be faced if Premier were to attempt to become a $3 to $5 billion
company, including the required technology investments and the volatility
associated with mortgage banking earnings, and the effect that a slow-down in
the economy would have on the real estate markets in general. DLJ stated that
it was of the opinion that the exchange ratio for Premier common stock was
fair, from a financial point of view, to the holders of Premier common stock.
The independent committee, after hearing the investment bankers' analyses and
asking questions, accepted DLJ's fairness opinion, and the Premier Board voted
to accept the terms of BB&T's offer, with only one negative vote, and
authorized the signing of the definitive agreement.
Premier's Reasons for the Merger and Recommendation of Directors.
The Premier Board of Directors, with the assistance of outside financial and
legal advisors, evaluated the financial, legal and market considerations
bearing on the decision to recommend the merger. The terms of the merger,
including the purchase price, are a result of arm's-length negotiations
between representatives of Premier and BB&T. In reaching its conclusion that
the merger agreement is in the best interest of Premier and its shareholders,
the Premier Board carefully considered, without assigning any relative or
specific values, the following material factors:
. the financial terms of the proposed merger, including that Premier
shareholders will not recognize any gain or loss for federal income tax
purposes on the receipt of BB&T common stock in the merger;
. a comparison of the terms of the proposed merger with comparable
transactions, both in the Southeast and elsewhere;
. information concerning the business, financial condition, results of
operations and prospects of Premier and BB&T;
. competitive factors and trends toward consolidation in the banking
industry;
. the review by the Premier Board with its legal and financial advisors of
the provisions of the merger agreement;
. the opinion rendered by DLJ to the Premier Board that the exchange ratio
for Premier common stock to be received in the merger was fair, from a
financial point of view, to the holders of the Premier common stock;
. the advice of Brown, Burke; and
. alternatives to the merger, including proceeding on a stand-alone basis,
in light of economic conditions and the prospects of the mortgage
banking business and competition in the financial services area.
The Premier Board also considered the separate agreements and benefits
proposed for employees and management and concluded that those terms were
reasonable. See "--Interests of Certain Persons In the Merger" on page 28.
13
<PAGE>
While each member of the Premier Board individually considered the foregoing
and other factors, the Premier Board did not collectively assign any specific
or relative weights to the factors considered and did not make any
determination with respect to any individual factor. The Premier Board
collectively made its determination with respect to the merger based on the
conclusion reached by its members, in light of the factors that each of them
considered appropriate, that the merger is in the best interests of the
Premier shareholders.
Your Board of Directors Recommends That You Vote "FOR" the Merger Agreement
and the Merger.
BB&T's Reasons for the Merger
One of BB&T's announced objectives is to pursue in-market and contiguous
state acquisitions of banks and thrifts within the $250 million to $10 billion
range. BB&T's management believes that Premier is a quality institution with a
strong commitment to personal service and that its acquisition by BB&T
represents a substantial and beneficial expansion of BB&T's franchise into the
rapidly growing, metropolitan Atlanta area, the largest metropolitan
statistical area in the Southeast and a major financial center. BB&T's
management further believes that the merger will benefit Premier's customers
by giving them access to a broader product line that includes insurance,
mutual funds, annuities, and trust, retail brokerage, investment banking,
treasury and international banking services.
In connection with BB&T's consideration of the merger, its management
analyzed certain investment criteria designed to assess the impact of the
merger on BB&T and its shareholders. For the purpose of this analysis, BB&T
made the following assumptions:
. BB&T's and Premier's 1999 earnings per share on a stand-alone basis
would be in line with the estimates published following the release of
their second quarter results by First Call Corporation.
. BB&T's earnings per share on a stand-alone basis for 2000 and subsequent
years would increase at an assumed annual rate, determined solely for
the purpose of assessing the impact of the merger as described above, of
approximately 9%.
. Premier's earnings on a stand-alone basis for periods after 1999 would
increase at an assumed rate, determined solely for the purpose of
assessing the impact of the merger as described above, of approximately
12% from 2000 through 2009, before applying the effect of the
assumptions described below.
. Annual cost savings of approximately $18.9 million, or 25% of Premier's
expense base, would be realized as a result of the merger.
. Premier's core net interest margin (non-fully taxable equivalent) would
be maintained annually at current levels.
. BB&T would be able to enhance performance through effective management
of Premier's balance sheet.
Using the above assumptions, BB&T analyzed the merger to determine whether
it would have an accretive or dilutive effect on estimated earnings per share,
return on equity, return on assets and book value per share. This analysis
indicated that the merger would be accretive to estimated earnings per share
and return on assets in 2000 and to book value in all years. BB&T excluded
from calculations of earnings per share, return on equity and return on assets
the effect of an estimated one-time charge of $24.0 million, after income tax
benefits, related to consummating the merger.
In addition to the analysis described above, BB&T performed an internal rate
of return analysis for this transaction. The purpose of this analysis was to
determine if the projected performance of Premier, after applying the
assumptions described above, would conform to BB&T's criteria. BB&T's current
minimum internal rate of return requirement for this type of investment is
15%. The analysis performed in connection with the Premier merger indicated
that the projected internal rate of return is 16.18%.
14
<PAGE>
None of the above information has been updated since the date of the merger
agreement. There can be no certainty that the results reflected in the above
information will be achieved or that actual results will not vary materially
from the estimated results. For more information concerning the factors that
could affect actual results, see "A Warning About Forward-Looking Information"
on page iii.
Opinion of Financial Advisor to Premier
Premier engaged DLJ to act as financial advisor with respect to possible
business combinations. Premier's decision to engage DLJ was based upon DLJ's
qualifications, expertise and reputation and standing as a major Wall Street
investment banking firm, as well as upon its senior bankers' familiarity and
prior experience with Premier.
On July 28, 1999, DLJ rendered to the Premier Board its oral opinion, which
DLJ subsequently confirmed in writing, to the effect that, based upon
assumptions, limitations and qualifications set forth in its opinion, as of
July 28, 1999, the exchange ratio for Premier common stock was fair from a
financial point of view to the holders of the Premier common stock. The DLJ
opinion does not address the fairness of the exchange ratio for Premier
preferred stock.
You should consider the following when reading the discussion of the DLJ
opinion in this document:
. The following description of the DLJ opinion is qualified by reference
to the full opinion located in Appendix C to this proxy
statement/prospectus. We urge you to read carefully the entire DLJ
opinion.
. The DLJ opinion was necessarily based on economic, market, financial and
other conditions as they existed on the date of the opinion and on the
information made available to DLJ as of that date and DLJ does not have
any obligation to update, revise or reaffirm its opinion.
. DLJ expressed no opinion as to the prices at which the Premier common
stock or the BB&T common stock will actually trade at any time.
. The DLJ opinion does not address the relative merits of the merger and
the other business strategies considered by the Premier Board, nor does
it address the Premier Board's decision to proceed with the merger.
. The DLJ opinion does not constitute a recommendation to any shareholder
as to how he or she should vote on the proposed transaction.
In arriving at its opinion, DLJ, among other things:
. reviewed the merger agreement;
. reviewed financial and other information that was publicly available or
furnished to DLJ by Premier and BB&T, including I/B/E/S earnings
estimates (I/B/E/S is a data service that monitors and publishes
compilations of earnings estimates by selected analysts);
. reviewed information provided during discussions with management of both
Premier and BB&T including financial projections of Premier provided by
Premier's management and cost savings and operating synergies provided
by Premier's management;
. compared financial and securities data of Premier and BB&T with various
other companies whose securities are traded in public markets;
. reviewed the historical stock prices and trading volumes of Premier
common stock and BB&T common stock;
. reviewed prices and premiums paid in other business combinations; and
. conducted such other financial studies, analyses and investigations as
DLJ deemed appropriate for purposes of its opinion.
In rendering the DLJ opinion, DLJ relied upon and assumed the accuracy and
completeness of all of the financial and other information that was available
to it from public sources, that was provided to DLJ by Premier
15
<PAGE>
or its representatives, or that was otherwise reviewed by DLJ. DLJ also
assumed that Premier was not aware of any information prepared by it or its
other representatives that might be material to DLJ's opinion that was not
made available to DLJ. In particular, DLJ relied upon the estimates of the
management of Premier of the cost savings and operating synergies achievable
as a result of the merger and upon the discussion of these cost savings and
operating synergies with management of Premier. With respect to the financial
projections that DLJ reviewed, including cost savings and operating synergies,
DLJ assumed that they were reasonably prepared on a basis reflecting the best
currently available estimates and judgment of the management of Premier as to
the future operating and financial performance of Premier and the combined
company.
DLJ is not expert in the evaluation of loan and lease portfolios for
purposes of assessing the adequacy of the allowances for losses with respect
to these portfolios and assumed, with the consent of the Premier Board, that
these allowances for each of Premier and BB&T were in the aggregate adequate
to cover all losses with respect to these portfolios. In addition, DLJ did not
review individual credit files nor did DLJ make an independent evaluation or
appraisal of the assets and liabilities (including any hedge or derivative
positions) of Premier or BB&T or any of their subsidiaries and DLJ was not
furnished with any evaluation or appraisal. DLJ did not assume any
responsibility for making any independent evaluation of any assets or
liabilities or for making any independent verification of any of the
information reviewed by it. DLJ assumed that the merger will qualify as a
pooling-of-interests transaction. DLJ also assumed that the transaction will
qualify as a tax-free reorganization for federal income tax purposes and that
all material governmental, regulatory or other consents and approvals
necessary for the consummation of the merger will be obtained without any
adverse effect on Premier, BB&T or on the anticipated benefits of the merger.
DLJ, as part of its investment banking services, is regularly engaged in the
valuation of businesses and securities in connection with mergers,
acquisitions, underwritings, sales and distributions of listed and unlisted
securities, private placements and valuations for corporate and other
purposes. In the ordinary course of its business, DLJ and its affiliates may
actively trade the securities of Premier and BB&T for their own account and
for the accounts of its customers, and, accordingly, may at any time hold a
long or short position in those securities. DLJ has performed investment
banking and other services for Premier and BB&T in the past and has been
compensated for those services.
Premier has agreed to pay DLJ a transaction fee with respect to a business
combination of (1) $500,000 which was paid at the time DLJ notified the
Premier Board that it was prepared to deliver its opinion, (2) $500,000 which
was paid on October 15, 1999 and (3) the greater of (A) 0.55% of the aggregate
amount of consideration received by Premier and its shareholders, treating any
shares issuable upon exercise of options, warrants or other rights of
conversion as outstanding, or (B) 55% of the total investment banking fees
paid by Premier in connection with the merger. Any fees paid to DLJ under
items (1) and (2) will be credited against any fees payable under item (3).
Premier has also agreed to reimburse DLJ for all out-of-pocket expenses,
including the reasonable fees and expenses of counsel up to $25,000, and to
indemnify DLJ against certain liabilities, including liabilities under the
federal securities laws.
The following is a summary of the material financial analyses DLJ used in
connection with providing its opinion to the Premier Board and does not
purport to be a complete description of the analyses performed by DLJ. The
following quantitative information, to the extent it is based on market data,
is based on market data as it existed at or about July 26, 1999 and is not
necessarily indicative of current market conditions. You should understand
that the order of the analyses (and the corresponding results) described does
not represent the relative importance or weight given to these analyses by
DLJ. The summaries of financial analyses include information presented in
tabular format. The tables should be read together with the text of those
summaries.
Business Review. DLJ analyzed the different business lines comprising BB&T's
business. In this regard, DLJ reviewed selected five-year historical
consolidated financial information of each of BB&T's business lines, both in
dollar terms and as a percentage of total consolidated results, in order to
assess BB&T's business lines and the diversity of its business performance.
DLJ also reviewed BB&T's operating profitability and growth performance during
the period. In addition, DLJ considered:
16
<PAGE>
. BB&T's loan and deposit composition, based on the dollar value of loans
and deposits;
. BB&T's deposit market share, based on the dollar value of deposits, in
the states in which BB&T operates;
. BB&T's acquisition history for the last three years; and
. research analysts' estimates and recommendations with respect to BB&T
common stock.
DLJ also analyzed BB&T's ranking as of June 30, 1999 within the top U.S.
commercial bank holding companies with respect to BB&T's:
. market capitalization;
. total assets;
. return on average common equity, excluding non-recurring items;
. return on average assets, excluding non-recurring items;
. net interest margin;
. ratio of loans to deposits;
. ratio of non-interest income to total revenues; and
. efficiency ratio (calculated as overhead expenses divided by net
interest income plus non-interest income, each as determined by DLJ)
In addition, DLJ reviewed selected three-year historical consolidated
financial information of Premier. DLJ also reviewed Premier's operating
profitability and growth performance during this period. In addition, DLJ
further considered Premier's loan and deposit composition, based on the dollar
value of loans and deposits.
DLJ also compared operating data statistics of Premier, BB&T and publicly
available information for a southeastern regional bank peer group that DLJ
selected and deemed to be relevant and comparable to Premier. The operating
data statistics that DLJ reviewed included:
. total assets;
. last 12 months' income;
. last 12 months' profitability ratios as DLJ deemed to be relevant;
. capital ratios that DLJ deemed to be relevant; and
. credit ratios that DLJ deemed to be relevant.
The southeastern regional bank peer group used to evaluate Premier included
the following selected public banking institutions with assets between $1.0
billion and $3.0 billion as of March 31, 1999:
. Anchor Financial Corporation . Farmers Capital Bank
. Area Bancshares Corporation Corporation
. Carolina First Corporation . First Charter Corporation
(South Carolina) . Mid-Atlantic Bancorp
. Century South Banks, Inc. . Republic Bancorp, Inc.
. City Holding Company . Triangle Bancorp, Inc.
. Community Trust Bancorp, Inc. . WesBanco, Inc.
. F&M National Corporation
Historical Stock Price Performance Analysis. DLJ reviewed the daily closing
price per share of BB&T common stock for the one-year and three-year periods
ended July 26, 1999 and reviewed the daily closing price per share of Premier
common stock for the one-year period ended July 26, 1999. DLJ compared the
closing price per share of BB&T common stock and Premier common stock for the
one-year period. For BB&T, DLJ also reviewed the ratio of its closing stock
price on July 26, 1999 to the 52-week high and low prices. DLJ noted that
17
<PAGE>
BB&T's common stock closing price of $36.00 on July 26, 1999 represented 88.6%
of the 52-week high price and 131.8% of the 52-week low price.
Contribution Analysis. DLJ computed the contribution of Premier and BB&T to
various elements of the combined entity's income statement, balance sheet and
market capitalization, excluding estimated cost savings and operating
synergies. Projected earnings were based on I/B/E/S earnings estimates and
long-term growth rates and operating adjustments as provided by Premier's
management. The following table compares the pro forma ownership of Premier
and BB&T shareholders in the combined company based upon the exchange ratio
with each company's respective contribution to each element of this analysis:
<TABLE>
<CAPTION>
Pro Forma Ownership of Pro Forma Ownership of
BB&T Shareholders in the Premier Shareholders in the
Combined Company Combined Company
------------------------ ---------------------------
<S> <C> <C>
Implied pro forma
ownership................ 95.3% 4.7%
<CAPTION>
BB&T Contribution to Premier Contribution to
Combined Company Combined Company
------------------------ ---------------------------
<S> <C> <C>
Income Statement
12 months normalized net
income at June 30,
1999................... 95.8% 4.2%
Estimated 1999 net
income................. 96.1% 3.9%
Estimated forward 12
months net income...... 96.2% 3.8%
Estimated 2000 net
income................. 96.2% 3.8%
Estimated 2001 net
income................. 96.1% 3.9%
Estimated 2002 net
income................. 95.9% 4.1%
Estimated 2003 net
income................. 95.8% 4.2%
Estimated 2004 net
income................. 95.7% 4.3%
Balance Sheet as of June
30, 1999
Total loans............. 94.4% 5.6%
Total assets............ 95.7% 4.3%
Total deposits.......... 94.5% 5.5%
Tangible common equity.. 93.7% 6.3%
Common equity........... 94.6% 5.4%
Total tangible equity... 93.7% 6.3%
Total equity............ 94.6% 5.4%
Market Capitalization
based on:
Closing price on July
26, 1999............... 95.1% 4.9%
1-month average of
closing prices ending
July 26, 1999.......... 95.4% 4.6%
3-month average of
closing prices ending
July 26, 1999.......... 95.1% 4.9%
6-month average of
closing prices ending
July 26, 1999.......... 95.1% 4.9%
1-year average of
closing prices ending
July 26, 1999.......... 94.6% 5.4%
</TABLE>
Comparable Trading Valuation Analysis. DLJ compared selected operating and
stock market results of Premier, breaking out Premier's lending subsidiary as
well as analyzing Premier on a consolidated basis, to the southeastern
regional bank peer group discussed above. The valuation analysis compared
Premier with the low, medium and high multiples of the peer group. In
addition, DLJ analyzed BB&T and Premier compared with the S&P 500 and the S&P
bank index and, for Premier, the southeastern regional bank peer group on the
basis of a total return analysis for the year-to-date, one-year, three-year
and, for BB&T, five-year periods.
18
<PAGE>
The following table compares selected information derived by DLJ for Premier
and the median of the southeastern regional bank peer group:
<TABLE>
<CAPTION>
Pricing Multiples
---------------------------------------------------------------------
Forward Forward Price/ Tangible Book
Price/Earnings Cash Earnings Book Value Value
------------------- ---------------- ---------------- ---------------
<S> <C> <C> <C> <C>
Premier................. 22.2x 21.9x 3.38x 3.47x
Southeastern Peer Group
Median................. 16.0x 15.2x 1.99x 2.23x
<CAPTION>
Last 12 Months Operating Statistics
---------------------------------------------------------------------
Return on Common
Return on Assets/1/ Equity/1/ Efficiency Ratio Fee Based Ratio
------------------- ---------------- ---------------- ---------------
<S> <C> <C> <C> <C>
Premier................. 1.39% 14.84% 63.7% 37.8%
Southeastern Peer Group
Median................. 1.11% 11.15% 60.1% 19.4%
</TABLE>
- --------
/1/calculated using net income normalized by excluding nonrecurring and
extraordinary items
Comparable Transactions Analysis. DLJ analyzed publicly available
financial, operating and stock market information for selected comparable
domestic commercial bank merger transactions between $250.0 million and $1.0
billion in transaction value that were announced from January 1, 1997 through
July 26, 1999. DLJ calculated the median values of all of these transactions
taken together as well as the median values of selected comparable domestic
commercial bank merger transactions greater than $100.0 million in transaction
value that were announced from January 1, 1997 through July 26, 1999. The
following table compares information derived by DLJ with respect to the merger
and these medians:
<TABLE>
<CAPTION>
Selected Selected
1997-1999 1997-1999
Transactions Transactions
($250 million- (over $100.0
$1.0 billion) million) The Merger
-------------- ------------ ----------
<S> <C> <C> <C>
Implied premium of offer price to
market price on last trading day
prior to announcement............... 15.9% 21.5% (3.3)%
Ratio of implied offer price to:
Book value per share................. 3.07x 2.97x 3.27x
Tangible book value per share...... 3.31x 3.16x 3.35x
Latest 12 months earnings per
share............................. 24.4x 24.0x 22.3x
Forward 12 months earnings per
share............................. 20.7x 20.6x 19.9-21.5x
</TABLE>
Discounted Dividend Analysis. DLJ performed discounted dividend analyses to
estimate a range of present values per share of Premier common stock assuming
Premier continued to operate as a stand-alone entity. These analyses were
conducted both with and without applying the cost savings and revenue
enhancements estimated by Premier's management. These ranges were determined
by adding (1) the present value of the estimated future dividend stream that
Premier could generate through December 31, 2003 and (2) the present value of
the "terminal value" of Premier's common stock at December 31, 2003.
DLJ determined the range of present values per share of Premier common stock
using the terminal year multiples and discount rates that DLJ viewed as
appropriate for companies with Premier's risk characteristics. DLJ used
Premier management's earnings estimates for 1999 and 2000. For periods after
2000, earnings were grown at Premier management's estimated long-term growth
rate, adjusted to reflect an assumed constant ratio of tangible common equity
to assets which DLJ viewed as appropriate.
In calculating a terminal value of Premier common stock at December 31,
2003, DLJ applied multiples ranging from 15.0x to 19.0x to forecasted cash
earnings for 2004. The dividend stream and terminal values were then
discounted back to June 30, 1999 using discount rates ranging from 11.6% to
15.6%. Based on these assumptions, the stand-alone present value of Premier
common stock ranged from $12.98 to $18.92 per share.
19
<PAGE>
DLJ also calculated the present value of Premier common stock using
management's assumptions provided to DLJ as it prepared its analyses with
respect to merger costs savings and revenue enhancements, including the phase-
in period for achieving them. Based on these assumptions, the present value of
Premier common stock ranged from $16.61 to $23.21.
The discounted dividend analyses are not necessarily indicative of actual
values or actual future results and do not purport to reflect the prices at
which any securities may trade at the present time or at any time in the
future. Dividend discount analyses are a widely used valuation methodology,
but the results of this methodology are highly dependent upon the numerous
assumptions that must be made, including earnings growth rates, dividend
payout rates, terminal values and discount rates.
Break-Even Growth Analysis. DLJ performed a break-even growth analysis to
estimate a range of compound annual growth in earnings over Premier
management's estimated 1999 earnings at different terminal multiples that
would be necessary to provide Premier's shareholders with the same present
value as an acquisition at $18.56 per share.
In calculating the terminal values of Premier common stock in 2004, DLJ
applied assumed terminal multiples ranging from 15.0x to 19.0x earnings in
2004. These earnings were based on Premier's last 12 months' earnings and
determined by DLJ using Premier management's estimates. DLJ then discounted
these terminal values back to July 26, 1999 using a discount rate of 11.6%,
which rate reflects Premier's average cost of capital, as determined by DLJ.
DLJ determined that the compound annual growth rate of earnings over 1999
estimated earnings necessary to provide Premier's shareholders with the same
present value as an acquisition at $18.56 per share ranged from 21.3% to 14.7%
over the next five years.
Pro Forma Merger Analysis. DLJ analyzed the pro forma financial impact
through 2002 of the merger on both BB&T's and Premier's fully diluted earnings
per share on both a generally accepted accounting principles basis and a cash
basis and on the book value per share and the tangible book value per share.
For purposes of these analyses, DLJ assumed that the merger would close in the
first quarter of 2000. For BB&T, DLJ used I/B/E/S earnings estimates for 1999
and 2000 and I/B/E/S estimated long-term growth rate estimates for later
years. For Premier, DLJ used Premier management's earnings estimates for 1999
and 2000. For periods after 2000, earnings were grown at Premier management's
estimated growth rates with operating adjustments provided to DLJ by Premier
management. DLJ performed this analysis using Premier management's assumptions
provided to DLJ as it prepared its analyses with respect to merger cost
savings (including the phase-in period for achieving them), revenue
enhancements and the anticipated pre-tax restructuring charge. DLJ's analyses
of the merger from Premier's perspective showed that the merger, compared to
the continued operation of Premier on a stand-alone basis, would be accretive
to Premier's GAAP estimated earnings, cash earnings and dividends per share
starting in 2000 and dilutive to Premier's book value per share and tangible
book value per share through 2002. DLJ's analyses of the merger from BB&T's
perspective showed that the merger, compared to the continued operation of
BB&T on a stand-alone basis, would be accretive to BB&T's GAAP estimated
earnings, cash earnings, tangible book value per share and dividends per share
starting in 2000 and dilutive to BB&T's book value per share through 2002.
The preparation of a fairness opinion is a complex process involving various
determinations as to the most appropriate and relevant methods of financial
analysis and the application of these methods to the particular circumstances.
Therefore, it is not necessarily susceptible to partial analysis or summary
description. Selecting portions of the analyses summarized above, without
considering these analyses as a whole, could create an incomplete view of the
processes underlying DLJ's opinion. In arriving at its fairness
determinations, DLJ considered the results of all these analyses and did not
attribute any particular weight to any factor or analysis considered by it.
Instead, DLJ made its determinations as to fairness on the basis of its
experience and professional judgment after considering the results of all
those analyses. No company or transaction used in the above analyses as a
comparison is directly comparable to Premier or BB&T or the merger. The
analyses were prepared solely for purposes of DLJ providing its opinion to the
Premier Board as to the fairness of the exchange ratio from a financial point
of view and do not purport to be appraisals or necessarily reflect the prices
at which
20
<PAGE>
businesses or securities actually may be sold. Analyses based upon forecasts
of future results are not necessarily indicative of actual future results,
which may be significantly more or less favorable than suggested by those
analyses. Because these analyses are inherently subject to uncertainty, being
based upon numerous factors or events beyond the control of the parties or
their respective advisors, none of Premier, BB&T, DLJ or any other person
assumes responsibility if future results are materially different from those
forecast.
As described above, DLJ's opinion to the Premier Board was among many
factors taken into consideration by the Premier Board in making its
determination to approve the merger agreement. Consequently, the analyses
described above should not be viewed as determinative of the Premier Board's
or Premier's management's opinion with respect to the value of Premier, a
combination of Premier and BB&T, or of whether the Premier Board or Premier's
management would have been willing to agree to a different exchange ratio.
Premier placed no limits on the scope of the analysis performed, or opinion
expressed, by DLJ.
Agreement with Brown, Burke
Premier has agreed to pay Brown, Burke a fee for its services in connection
with the business combination between Premier and BB&T, including the
investment banking and financial advisory services performed during 1999. The
fee to be paid shall be the greater of (a) 0.45% of the fair market value of
the total consideration received by Premier's shareholders and optionholders
in connection with the BB&T transaction, or (b) 45% of the total fees for
services and financial advice paid to both Brown, Burke and DLJ in connection
with the BB&T transaction. Of the amount to be paid to Brown, Burke, $250,000,
which is non-refundable, was paid upon execution of the engagement letter
dated July 27, 1999 and the remainder is payable at the times when fees are
paid to DLJ in connection with the BB&T transaction. Any partial payments made
to DLJ will also be made to Brown, Burke in the same proportion as the total
fees payable in connection with the BB&T transaction. Brown, Burke will also
be reimbursed for its reasonable out-of-pocket expenses, including legal
expenses, incurred in connection with the BB&T transaction, up to a maximum of
$25,000.
Exchange Ratio
At the effective time of the merger, Premier will be merged with and into
BB&T, and BB&T will be the surviving corporation in the merger. In the merger,
each share of Premier common stock outstanding at the effective time will be
converted into the right to receive BB&T common stock at the exchange ratio of
0.5155 of a share of BB&T common stock for each share of Premier common stock
and each share of Premier preferred stock outstanding at the effective time
will be converted into the right to receive a number of shares of BB&T common
stock equal to the quotient of $60.00 divided by the average closing price per
share of BB&T common stock on the New York Stock Exchange for the five trading
days ending on the trading day preceding the day on which the merger is
completed.
You should be aware that the actual market value of a share of BB&T common
stock at the effective time and at the time certificates for those shares are
delivered following surrender and exchange of your certificates for shares of
Premier common stock or Premier preferred stock may be more or less than the
average closing price per share of BB&T common stock at any other time,
including the five-day pricing period used to determine the exchange ratio for
Premier preferred stock. You are urged to obtain information on the market
value of BB&T common stock that is more recent than that provided in this
proxy statement/prospectus. See "Summary--Comparative Market Prices and
Dividends" on page 6.
No fractional shares of BB&T common stock will be issued in the merger. If
you hold shares of Premier common stock or Premier preferred stock and would
otherwise be entitled to a fractional share of BB&T common stock in the
merger, you will be paid an amount in cash determined by multiplying the
fractional part of the share of BB&T common stock by the average closing price
per share of BB&T common stock over the five-day pricing period.
21
<PAGE>
Exchange of Premier Stock Certificates
At the effective time, by virtue of the merger and without any action on the
part of Premier or the Premier shareholders, shares of Premier common stock
and Premier preferred stock will be converted into and will represent the
right to receive, upon surrender of the certificate representing such shares
as described below, whole shares of BB&T common stock and cash instead of any
fractional share interest. Promptly after the effective time, BB&T will
deliver or mail to you a form of letter of transmittal and instructions for
surrender of your Premier stock certificates. When you properly surrender your
certificates or provide other satisfactory evidence of ownership, and return
the letter of transmittal duly executed and completed in accordance with its
instructions and any other documents as may be reasonably requested, BB&T will
promptly deliver to you the merger consideration to which you are entitled
(and, if you hold Premier common stock, any declared and unpaid dividends or,
if you hold Premier preferred stock, any accrued and unpaid dividends).
You should not send in your stock certificates until you receive the letter
of transmittal and instructions.
Until surrendered as described above, each outstanding Premier stock
certificate will be deemed upon the effective time for all purposes to
represent only the right to receive the merger consideration and any declared
and unpaid dividends (in the case of Premier common stock) or accrued and
unpaid dividends (in the case of Premier preferred stock). No interest will be
paid or accrued on any cash payable for fractional shares as part of the
merger consideration (or on any dividend or other distribution) upon the
surrender of the certificate or certificates representing shares of Premier
common stock or Premier preferred stock. With respect to any Premier stock
certificate that has been lost or destroyed, BB&T will pay the merger
consideration attributable to such certificate upon receipt of a surety bond
or other adequate indemnity, as required in accordance with BB&T's standard
policy, and evidence reasonably satisfactory to BB&T of ownership of the
shares in question. At the effective time, Premier's transfer books will be
closed and no transfer of the shares of Premier common stock or Premier
preferred stock will be made.
BB&T will pay any dividends or other distributions with a record date before
the effective time that have been declared or made by Premier in respect of
shares of Premier common stock in accordance with the terms of the merger
agreement and that remain unpaid at the effective time. In addition, Premier
will pay a per share dividend in respect of shares of Premier preferred stock
for the calendar year in which the merger is completed equal to the product of
$4.80 times a fraction, the numerator of which is the number of days in the
calendar year through the date on which the merger is completed and the
denominator of which is the number of days in that calendar year. This payment
will constitute the sole right of the holders of the Premier preferred stock
to a dividend with respect to such Premier preferred stock for the calendar
year.
To the extent permitted by law, you will be entitled to vote after the
effective time at any meeting of BB&T shareholders the number of whole shares
of BB&T common stock into which your shares of Premier common stock or Premier
preferred stock are converted, regardless of whether you have exchanged your
Premier stock certificates for BB&T stock certificates. Whenever a dividend or
other distribution is declared by BB&T on the BB&T common stock, the record
date for which is after the effective time, the declaration will include
dividends or other distributions on all shares of BB&T common stock issuable
pursuant to the merger agreement, but after the effective time no dividend or
other distribution payable to the holders of record of BB&T common stock as of
any time after the effective time will be delivered to you until you surrender
your Premier stock certificate for exchange as described above. Upon surrender
of your Premier stock certificate, both the BB&T common stock certificate and
any undelivered dividends and cash payments payable under the merger agreement
(without interest) will be delivered and paid to you with respect to each
share of Premier common stock or Premier preferred stock represented by your
certificate.
22
<PAGE>
The Merger Agreement
Effective Date and Time of the Merger
The merger agreement provides that the closing of the merger will take place
on the business day designated by BB&T that is within 30 days following the
satisfaction of the conditions to the completion of the merger, or a later
date mutually acceptable to the parties. The effective time will occur at the
time and date specified in the articles of merger to be filed with the
Secretary of State of North Carolina and the Secretary of State of Georgia. It
is currently anticipated that the filing of the articles of merger will take
place as soon as practicable following the date on which the merger agreement
and the plan of merger is approved by the Premier shareholders and all other
conditions to the respective obligations of BB&T and Premier to complete the
merger have been satisfied. If the merger is approved at the meeting, it is
currently anticipated that the filing of the articles of merger and the
effective time will occur during the first quarter of 2000.
Conditions to the Merger
The obligations of BB&T and Premier to carry out the merger are subject to
satisfaction (or, if permissible, waiver) of the following conditions at or
before the effective time:
. all corporate action necessary to authorize the performance of the
merger agreement and the plan of merger must have been duly and validly
taken, including the approval by the shareholders of Premier of the
merger agreement and the plan of merger;
. BB&T's registration statement on Form S-4 relating to the merger
(including any post-effective amendments) must be effective under the
Securities Act of 1933, as amended, no proceedings may be pending or
threatened by the SEC to suspend the effectiveness of the registration
statement and the BB&T common stock to be issued in the merger must
either have been registered or be subject to exemption from registration
under applicable state securities laws;
. the parties must have received from all applicable regulatory
authorities the approvals required in connection with the transactions
provided in the merger agreement, all notice periods and waiting periods
required with respect to the approvals must have passed and all
approvals must be in effect;
. neither BB&T nor Premier nor any of their respective subsidiaries may be
subject to any order, decree or injunction of a court or agency of
competent jurisdiction that enjoins or prohibits completion of the
transactions provided in the merger agreement;
. Premier and BB&T must have received an opinion of BB&T's legal counsel,
Womble Carlyle Sandridge & Rice, PLLC, in form and substance
satisfactory to Premier and BB&T, substantially to the effect that the
merger will constitute one or more reorganizations under Section 368 of
the Internal Revenue Code of 1986, as amended, that the shareholders of
Premier will not recognize any gain or loss to the extent that they
exchange shares of Premier common stock or Premier preferred stock for
shares of BB&T common stock and that neither Premier nor BB&T will
recognize any gain or loss solely as a result of the merger; and
. BB&T must have received letters from Arthur Andersen, LLP, dated as of
the filing of the registration statement and as of the effective time,
to the effect that the merger will qualify for pooling-of-interests
accounting treatment.
The obligations of Premier to carry out the transactions in the merger
agreement are also subject to the satisfaction of the following additional
conditions at or before the effective time, unless, where permissible, waived
by Premier:
. BB&T must have performed in all material respects all obligations and
complied in all material respects with all covenants required by the
merger agreement;
. the shares of BB&T common stock to be issued in the merger must have
been approved for listing on the NYSE, subject to official notice of
issuance;
23
<PAGE>
. Premier must have received certain closing certificates and legal
opinions from BB&T and its counsel; and
. DLJ must not have withdrawn or modified its opinion that the exchange
ratio for Premier common stock was fair, from a financial point of view,
to the holders of Premier common stock.
In addition, all representations and warranties of BB&T will be evaluated as
of the date of the merger agreement and at the effective time as though made
at the effective time (or on the date designated, in the case of any
representation and warranty that specifically relates to an earlier date),
except as otherwise provided in the merger agreement or consented to in
writing by Premier. The representations and warranties of BB&T concerning
. its capitalization,
. its and its subsidiaries' organization and authority to conduct
business,
. its authorization of, and the binding nature of, the merger agreement
and
. the absence of any conflict between the transactions in the merger
agreement and BB&T's articles of incorporation or bylaws
must be true and correct (except for inaccuracies that are de minimis in
amount). Moreover, there must not be any inaccuracies in the representations
and warranties of BB&T in the merger agreement such that the aggregate effect
of such inaccuracies has, or is reasonably likely to have, a material adverse
effect on BB&T.
The obligations of BB&T to carry out the transactions in the merger
agreement are also subject to satisfaction of the following additional
conditions at or before the effective time, unless, where permissible, waived
by BB&T:
. no regulatory approval may have imposed any condition or requirement
that, in the reasonable opinion of the BB&T Board, would have, or is
reasonably likely to have, a material adverse effect on the business or
economic benefits to BB&T of the transactions in the merger agreement;
. Premier must have performed in all material respects all of its
obligations and complied in all material respects with all of its
covenants required by the merger agreement;
. BB&T must have received agreements from certain affiliates of Premier
concerning the shares of BB&T common stock to be received by them;
. BB&T must have received certain closing certificates and legal opinions
from Premier and its counsel; and
. Darrell D. Pittard must have remained employed by Premier until the
effective time of the merger.
In addition, all representations and warranties of Premier will be evaluated
at the date of the merger agreement and at the effective time as though made
on and at the effective time (or on the date designated, in the case of any
representation and warranty that specifically relates to an earlier date),
except as otherwise provided in the merger agreement or consented to in
writing by BB&T. The representations and warranties of Premier concerning
. its capitalization,
. its and its subsidiaries' organization and authority to conduct
business,
. its ownership of its subsidiaries,
. its authorization of, and the binding nature of, the merger agreement,
. the absence of conflict between the transactions in the merger agreement
and Premier's articles of incorporation or bylaws,
. its forbearance from taking any actions that would negatively affect the
pooling-of-interests accounting treatment for, or the tax-free elements
of, the merger or the receipt of necessary regulatory approvals and
24
<PAGE>
. actions taken to exempt the merger from any applicable anti-takeover
laws
must be true and correct (except for inaccuracies that are de minimis in
amount). Moreover, there must not be any inaccuracies in the representations
and warranties of Premier in the merger agreement such that the effect of such
inaccuracies individually or in the aggregate has, or is reasonably likely to
have, a material adverse effect on Premier.
Conduct of Premier's and BB&T's Business Prior to the Effective Time of the
Merger
Except with the prior consent of BB&T, before the effective time of the
merger, Premier and its subsidiaries may not:
. carry on its business except in the ordinary course and in substantially
the same manner as previously conducted, or establish or acquire any new
subsidiary or engage in any new type of activity or expand any existing
activities;
. declare or pay any distribution on its capital stock, other than
regularly scheduled quarterly dividends of $0.09 per share payable with
respect to Premier common stock and the annual dividend of $4.80 per
share payable with respect to Premier preferred stock for the calendar
year 1999, in each case payable on record dates and in amounts
consistent with past practice (except that, unless otherwise agreed, (a)
any dividend declared or payable in the quarterly period during which
the effective time occurs may be declared with a record date before the
effective time only if the normal record date for payment of the
corresponding quarterly dividend on BB&T common stock is before the
effective time and (b) with respect to the Premier preferred stock for
the calendar year 2000, any dividend payable shall be as described in
this proxy statement/prospectus under the heading "The Merger--Exchange
of Premier Stock Certificates" on page 22);
. issue any shares of capital stock, except pursuant to outstanding
options or pursuant to its acquisitions of North Fulton Bancshares,
Inc., Farmers & Merchants Bank and Bank Atlanta;
. issue or authorize any rights to acquire capital stock or effect any
recapitalization, reclassification, stock dividend, stock split or
similar change in capitalization;
. amend its articles of incorporation or bylaws;
. impose or permit the imposition or existence of any lien, charge or
encumbrance on any share of stock held by it in any Premier subsidiary
or release any material right or cancel or compromise any debt or claim,
in each case other than in the ordinary course of business or in
connection with deposits, repurchase agreements, bankers acceptances or
other indebtedness permitted under the merger agreement, "treasury tax
and loan" accounts established in the ordinary course of business, or
the satisfaction of legal requirements in the exercise of trust powers;
. except for the acquisitions of North Fulton Bancshares, Inc., Farmers &
Merchants Bank and Bank Atlanta, merge with any other entity or permit
any other entity to merge into it (except for a merger of Premier
subsidiaries), acquire control over any other entity (except as a result
of foreclosure or in a fiduciary capacity) or dispose of any assets or
acquire any assets, in each case other than in the ordinary course of
its business consistent with past practice;
. fail to comply in any material respect with any legal requirements
applicable to it and to the conduct of its business;
. increase the compensation of any of its directors, officers or employees
(excluding increases resulting from the exercise of outstanding
compensatory stock options), or pay or agree to pay any bonus or provide
any new employee benefit or incentive, except for increases or payments
required by law or by existing contracts or made in the ordinary course
under existing arrangements;
25
<PAGE>
. enter into or substantially modify (except as may be required by law)
any employee benefit, incentive or welfare arrangement, or any related
trust agreement, relating to any of its directors, officers or other
employees (other than renewal of any of arrangement consistent with past
practice);
. solicit inquiries or proposals with respect to, furnish any information
relating to, or participate in any discussions concerning, any other
business combination with Premier or any Premier subsidiary, or fail to
notify BB&T immediately if any such inquiry or proposal is received, any
such information is requested or required or any such discussions are
sought (except that this would not apply to or restrict the furnishing
of information, negotiations or discussions following an unsolicited
offer if Premier is advised by legal counsel that in its opinion the
failure to furnish information or negotiate is likely to constitute a
breach of the fiduciary duty of the Premier Board to the Premier
shareholders);
. enter into (a) any material agreement or commitment other than in the
ordinary course or as contemplated by the merger agreement, (b) any
agreement, indenture or other instrument other than in the ordinary
course relating to the borrowing of money by Premier or a Premier
subsidiary or guarantee by Premier or a Premier subsidiary of any
obligation, (c) any agreement or commitment relating to the employment
or severance of a consultant or the employment, severance or retention
in office of any director, officer or employee (except for the election
of directors or the reappointment of officers in the normal course) or
(d) any contract, agreement or understanding with a labor union;
. change its lending, investment or asset liability management policies in
any material respect, except as required by applicable law, regulation
or directives;
. change its methods of accounting in effect at December 31, 1998, except
as required by changes in accounting principles agreed with by BB&T, or
change any of its federal income tax reporting methods from those used
in the preparation of its tax returns for the year ended December 31,
1998, except as required by changes in law;
. incur any new commitments for capital expenditures or obligations to
make capital expenditures in excess of $100,000 for any one expenditure
or $500,000 in the aggregate;
. incur any new indebtedness other than deposits, advances from the
Federal Home Loan Bank or Federal Reserve Bank and reverse repurchase
arrangements, in each case in the ordinary course;
. take any action that is reasonably likely to (a) cause the merger not to
be accounted for as a pooling of interests or not to constitute one or
more tax-free reorganizations as determined in good faith by BB&T, (b)
result in any inaccuracy of a representation or warranty that would
permit termination of the merger agreement or (c) cause any of the
conditions to the merger to fail to be satisfied;
. dispose of any material assets other than in the ordinary course; or
. agree to do any of the foregoing.
Except with the prior consent of Premier, before the effective time, neither
BB&T nor any subsidiary of BB&T may take any action that is reasonably likely
to
. cause the merger not to constitute a pooling of interests or a tax-free
reorganization,
. result in any inaccuracy of a representation or warranty that would
allow for termination of the merger agreement,
. cause any of the conditions precedent to the transactions contemplated
by the merger agreement to fail to be satisfied or
. fail to comply in any material respect with any laws, regulations,
ordinances or governmental actions applicable to it and to the conduct
of its business.
Waiver; Amendment; Termination; Expenses
Except with respect to any required regulatory approval, BB&T or Premier may
at any time (whether before or after approval of the merger agreement and the
plan of merger by the Premier shareholders) extend the time
26
<PAGE>
for the performance of any of the obligations or other acts of the other party
and may waive (a) any inaccuracies of the other party in the representations
or warranties contained in the merger agreement, the plan of merger or any
document delivered pursuant thereto, (b) compliance with any of the covenants,
undertakings or agreements of the other party, or satisfaction of any of the
conditions precedent to its obligations, contained in the merger agreement or
in the plan of merger or (c) the performance by the other party of any of its
obligations set out in the merger agreement or in the plan of merger. The
parties may also mutually amend or supplement the merger agreement in writing
at any time. However, no extension, waiver, amendment or supplement which
would modify either the amount or the form of the consideration to be provided
to holders of Premier common stock or Premier preferred stock upon completion
of the merger will be made after the Premier shareholders approve the merger
agreement and the plan of merger.
If any of the conditions to the obligation of either party to complete the
merger is not fulfilled, that party will consider the materiality of such
nonfulfillment. In the case of the nonfulfillment of a condition to Premier's
obligations, Premier will, if it determines it appropriate under the
circumstances, resolicit shareholder approval of the merger agreement and the
plan of merger and provide appropriate information concerning the obligation
that has not been satisfied.
The merger agreement may be terminated, and the merger may be abandoned:
. at any time before the effective time, by the mutual consent in writing
of BB&T and Premier;
. at any time before the effective time, by either party (a) in the event
of a material breach by the other party of any covenant or agreement
contained in the merger agreement or (b) in the event of an inaccuracy
of any representation or warranty of the other party contained in the
merger agreement that would provide the nonbreaching party the ability
to refuse to complete the merger under the applicable standard in the
merger agreement (see "--Conditions to the Merger"); and, in either
case, if the breach or inaccuracy has not been cured by the earlier of
30 days following notice of the breach or inaccuracy to the party
committing it or the effective time;
. at any time before the effective time, by either party in writing, if
any of the conditions precedent to the obligations of the other party to
complete the transactions contemplated by the merger agreement cannot be
satisfied or fulfilled before the effective time, and the party giving
the notice is not in material breach of any of its representations,
warranties, covenants or undertakings;
. at any time, by either party in writing, if any of the applications for
prior regulatory approval are denied and the time period for appeals and
requests for reconsideration has run; provided, that the applicant has
used all reasonable efforts to promptly pursue the appeals and requests;
. at any time, by either party in writing, if the shareholders of Premier
do not approve the merger agreement and the plan of merger;
. at any time following March 31, 2000, by either party in writing, if the
effective time has not occurred by the close of business on such date
and the party giving the notice is not in material breach of any of its
representations, warranties, covenants or undertakings;
. at any time, by BB&T in writing, if the Premier Board withdraws its
recommendation or refuses to recommend to the Premier shareholders that
they vote to approve the merger or recommends to the Premier
shareholders that they vote to approve an agreement, plan or transaction
involving an offer to acquire or purchase all or a substantial portion
of the equity interests or assets of Premier or a Premier subsidiary by,
or for Premier or a Premier subsidiary to enter into a business
combination with, a party other than BB&T or a BB&T subsidiary (a
"Premier Acquisition Proposal"); or
. at any time, by Premier in writing, if the Premier Board determines in
good faith to enter into an agreement, plan or transaction involving a
Premier Acquisition Proposal permitted under the merger agreement.
If the merger agreement is terminated pursuant to any of the provisions
described above, both the merger agreement and the plan of merger will become
void and have no effect, except that (a) provisions in the merger
27
<PAGE>
agreement relating to confidentiality, expenses and the termination fee (as
described below) will survive the termination and (b) a termination for an
uncured breach of a covenant or agreement or inaccuracy in a representation or
warranty will not relieve the breaching party from liability for that breach
or inaccuracy.
Each party will pay the expenses it incurs in connection with the merger
agreement and the merger, except that printing expenses and SEC filing fees
incurred in connection with the registration statement and this proxy
statement/prospectus will be paid 50% by BB&T and 50% by Premier.
Termination Fee
If the merger agreement is terminated:
. by either BB&T or Premier, if the shareholders of Premier do not approve
the merger agreement and the plan of merger and (a) at the time of the
Premier shareholders' meeting (or at any adjournment) a Premier
Acquisition Proposal exists or (b) prior to the shareholders' meeting,
the Premier Board withdraws its recommendation or refuses to recommend
to the Premier shareholders that they vote to approve the merger
agreement and plan of merger;
. by BB&T, if the Premier Board withdraws its recommendation or refuses to
recommend to the Premier shareholders that they vote to approve the
merger or recommends to the Premier shareholders that they vote to
approve an agreement, plan or transaction arising out of or implementing
a Premier Acquisition Proposal;
. by BB&T, if Premier breaches its covenant not to solicit inquiries or
proposals with respect to, furnish any information relating to, or
participate in any discussions concerning, any business combination with
Premier or any Premier subsidiary, or fails to notify BB&T immediately
if any inquiry or proposal is received, any information is requested or
required or any discussions are sought, in any case in a way that would
give BB&T the right to terminate the merger agreement;
. by Premier, if the Premier Board determines in good faith to enter into
an agreement, plan or transaction involving a Premier Acquisition
Proposal permitted under the merger agreement; or
. by Premier, if DLJ withdraws or modifies its opinion to the effect that
the exchange ratio for Premier common stock was fair, from a financial
point of view, to the holders of Premier common stock
then Premier will pay to BB&T not later than two business days after the date
of termination, as compensation for the merger not becoming effective, by wire
transfer of immediately available funds, a termination fee equal to $10
million plus, if Premier fails promptly to pay any portion of the termination
fee when due, BB&T's costs and expenses (including reasonable attorneys' fees)
incurred to collect the termination fee, together with interest from the due
date for payment until the actual date of payment at the prime rate of Branch
Banking and Trust Company, BB&T's North Carolina banking subsidiary, on the
due date for payment plus two percentage points. The termination fee will be
payable without regard to any other expenses to be paid in connection with the
merger.
Interests of Certain Persons in the Merger
Certain members of Premier's management have interests in the merger that
are in addition to their interests as Premier shareholders. The Premier Board
was aware of these factors and considered them, among other matters, in
approving the merger agreement and the merger.
Employment Agreements
In connection with the merger and at BB&T's request, Darrell D. Pittard and
Robert C. Oliver have entered into employment agreements with Branch Banking
and Trust Company, BB&T's North Carolina banking subsidiary ("BB&T-NC"). Each
employment agreement will become effective, if at all, at the effective time
of the merger, conditional on Mr. Pittard or Mr. Oliver, as the case may be,
continuing as an employee of Premier
28
<PAGE>
through the close of business on the day immediately preceding the effective
time of the merger. The employment agreements provide for the employment of
each of Mr. Pittard and Mr. Oliver as an Executive Vice President of BB&T-NC
and Mr. Pittard's employment agreement provides for him to be named Chief
Executive Officer of Premier Lending Corporation.
In addition, it is anticipated that, at the effective time, BB&T-NC will
enter into three-year employment agreements with each of Sandra Fuller, George
Henderson and George Phelps, Henley VanSant and Brian Schmitt. The employment
agreements will provide for each of these individuals (1) to be officers of
BB&T-NC, (2) to receive a base salary at least equal to that previously
received from Premier, such salary to be reviewed in accordance with BB&T-NC's
standard policies and procedures for, and at the same frequency as, similarly
situated officers, (3) to be entitled to participate in any bonus or incentive
plan, whether it provides for awards in cash or securities, made available to
similarly situated officers, or other similar plans for which he or she may
become eligible and designated a participant, and (4) to receive employee
pension and welfare benefits and group employee benefits such as sick leave,
vacation, group disability and health, dental, life and accident insurance and
similar indirect compensation that may be extended to similarly situated
officers. In addition, these employment agreements will provide for the
payment of an additional amount equal to the value of certain benefits lost as
a result of the merger. See "Effect on Employees, Employee Benefit Plans and
Stock Options" on page 37.
Mr. Pittard's employment agreement is for a term of five years and provides
that he will receive a base salary of $430,600, subject to review each year in
accordance with BB&T-NC's annual salary plan. In addition, Mr. Pittard's
employment agreement provides that:
. he will be eligible to receive an annual bonus payment calculated at a
target level of 25% of his base salary (with a maximum bonus payment not
to exceed 50% of his base salary) pursuant to the terms of BB&T's
Amended and Restated Short Term Incentive Plan; the targets for
achieving various levels of his annual bonus will be determined in good
faith by BB&T for each year;
. he will be granted annually stock options having a value of 42% of his
base salary at the time of the grant under BB&T's Amended and Restated
1995 Omnibus Stock Incentive Plan;
. BB&T-NC will continue to pay the premiums on the term life insurance
policy currently maintained for him by Premier, which provides for a
death benefit of $750,000; and
. subject to the conditions set forth below, if the following tasks are
completed, BB&T-NC will pay to him the following special amounts:
. $576,840, conditional upon completion of the merger, payable no
later than the close of the calendar quarter in which the effective
time occurs;
. $576,840, conditional upon completion of Premier's acquisitions of
North Fulton Bancshares, Inc., Farmers & Merchants Bank and Bank
Atlanta (all of which have already been completed) payable no later
than the close of the calendar quarter in which the effective time
occurs; and
. $576,840, conditional upon completion of conversion of the operating
systems of Premier to the operating systems of BB&T-NC, payable no
later than the close of the calendar quarter in which the conversion
is completed.
Mr. Oliver's employment agreement is for a term of four years and provides
for him to receive a base salary of $302,600. In addition, Mr. Oliver's
employment agreement provides that:
. BB&T-NC will continue to pay the premiums on the term life insurance
policy currently maintained for him by Premier, which provides for a
death benefit of $750,000; and
. subject to the conditions set forth below, if the following tasks are
completed, BB&T-NC will pay to him the following special amounts:
. $382,424, conditional upon completion of the merger, payable no
later than the close of the calendar quarter in which the effective
time occurs; and
. $382,424, conditional upon completion of conversion of the operating
systems of Premier to the operating systems of BB&T-NC, payable no
later than the close of the calendar quarter in which the conversion
is completed.
29
<PAGE>
However, if, prior to completion of any one or more of the above tasks, the
employment of either of Mr. Pittard or Mr. Oliver is terminated by BB&T-NC for
cause, or voluntarily by him (excluding termination for "Good Reason" within
12 months following a "Change of Control," in each case as defined below), the
person whose employment has terminated will not be entitled to receive the
payment corresponding to any uncompleted task. The foregoing payments are not
otherwise conditional upon continuation of employment with BB&T-NC and shall
not be deemed to be compensation or otherwise taken into account for purposes
of determining benefits or contributions in behalf of Mr. Pittard or Mr.
Oliver under any retirement or other plan, program or arrangement of BB&T-NC.
Mr. Pittard and Mr. Oliver will each receive employee pension and welfare
benefits and group employee benefits such as sick leave, vacation, group
disability and health, dental, life and accident insurance and similar
indirect compensation on the same basis as other similarly situated officers
of BB&T-NC.
The employment agreements for Mr. Pittard, Mr. Oliver, Ms. Fuller and
Messrs. Henderson, Phelps, VanSant and Schmitt each provides that, if BB&T-NC
terminates his or her employment other than because of disability or for
cause, he or she will, if he or she complies with certain noncompetition
provisions, be entitled to receive an annual amount equal to the highest
amount of cash compensation (including bonuses) received during any of the
preceding three calendar years (but, in the case of Mr. Pittard and Mr.
Oliver, excluding the success payments described above) for the remainder of
what would otherwise have been the original term of the agreement
("Termination Compensation"). In addition, he or she would continue to receive
health insurance coverage and other group employee benefits from BB&T-NC on
the same terms as were in effect before the termination, either under BB&T-
NC's plans or comparable coverage, during the time payments of Termination
Compensation are made.
The employment agreements for Mr. Pittard, Mr. Oliver, Ms. Fuller and
Messrs. Henderson, Phelps, VanSant and Schmitt each provides that he or she
may voluntarily terminate employment for "Good Reason" (defined below) until
twelve months after a "Change of Control" (defined below) of BB&T-NC or BB&T
and (a) be entitled to receive in a lump sum (1) any compensation due but not
yet paid through the date of termination and (2) instead of any further salary
payments from the date of termination to the end of the term of the agreement,
an amount equal to the Termination Compensation times 2.99, and (b) continue
to receive health insurance coverage and other group employee benefits for the
remainder of the term of the employment agreement as it existed prior to such
termination on the same terms as were in effect either (1) at the date of
termination or (2) at the date of the Change of Control, if the plans and
programs in effect before the Change of Control were, considered together as a
whole, materially more generous to the officers of BB&T-NC than such plans and
programs at the date of termination.
"Good Reason" means any of the following events occurring without the
consent of the particular employee in question:
. the assignment to him or her of duties inconsistent with the position
and status of his or her title;
. a reduction in his or her pay grade or base salary as then in effect, or
the exclusion of him or her from participation in benefit plans in which
he or she previously participated as in effect at the effective time of
the merger;
. an involuntary relocation of him or her more than 100 miles (30 miles in
the case of Mr. Pittard or Mr. Oliver) from the location where he or she
worked immediately before a Change in Control, or the breach by BB&T-NC
of any material provision of his or her employment agreement; or
. any purported termination by BB&T-NC of his or her employment not
effected in accordance with his or her employment agreement.
A "Change of Control" would be deemed to occur if
. any person or group of persons (as defined in the Securities Exchange
Act of 1934, as amended) together with its affiliates, excluding
employee benefit plans of BB&T-NC or BB&T, is or becomes
30
<PAGE>
the beneficial owner of securities of BB&T-NC or BB&T representing 20%
or more of the combined voting power of BB&T-NC's or BB&T's then
outstanding securities;
. as a result of a tender offer or exchange offer for the purchase of
securities of BB&T-NC or BB&T (other than an offer by BB&T for its own
securities), or as a result of a proxy contest, merger, consolidation or
sale of assets, or as a result of any combination of the foregoing,
individuals who at the beginning of any two-year period constitute the
BB&T Board, plus new directors whose election or nomination for election
by BB&T's shareholders is approved by a vote of at least two-thirds of
the directors still in office who were directors at the beginning of the
two-year period, cease for any reason during the two-year period to
constitute at least two-thirds of the members of the BB&T Board;
. the shareholders of BB&T approve a merger or consolidation of BB&T with
any other corporation or entity, regardless of which entity is the
survivor, other than a merger or consolidation that would result in the
voting securities of BB&T outstanding immediately beforehand continuing
to represent (either by remaining outstanding or by being converted into
voting securities of the surviving entity) at least 40% of the combined
voting power of the voting securities of BB&T or the other surviving
entity outstanding immediately after the merger or consolidation;
. the shareholders of BB&T approve a plan of complete liquidation or
winding-up of BB&T or an agreement for the sale or disposition by BB&T
of all or substantially all of BB&T's assets; or
. any other event occurs that the BB&T Board determines should constitute
a Change of Control.
The employment agreements for Ms. Fuller and Messrs. Henderson, Phelps,
VanSant and Schmitt each provides that he or she may voluntarily terminate
employment with BB&T-NC at any time during the term of his employment
agreement. In such event (if there is no Good Reason), and if he or she
complies with certain noncompetition provisions, he or she would be entitled
to receive, for one year after the effective date of such termination, the
excess of (i) the sum of (A) his or her base salary on the last day of the
month preceding the effective date of such termination plus (B) the amount of
any cash bonus or other cash compensation received by him or her from BB&T-NC
in the twelve months ended on the effective date of such termination over (ii)
the gross compensation, if any, earned by, or payable to, him or her (whether
or not deferred) during such one-year period from any other employer.
If any of the payments to be made under the employment agreements would
constitute a "parachute payment," as defined in Section 280G of the Internal
Revenue Code, the payments would be reduced by the smallest amount necessary
so that no portion of such payments would be a "parachute payment." A
"parachute payment" generally is a payment which is contingent on a change in
the control of the corporation and the present value of which equals or exceed
three times the "base amount," which is generally defined as the executive's
annualized includable compensation for the "base period," which is generally
the most recent five taxable years ending before the date of the change in
control. Sections 280G and 4999 of the Internal Revenue Code generally provide
that if "parachute payments" are paid to an individual, everything above the
base amount will be subject to a 20% excise tax payable by the individual (in
addition to the payment of regular income taxes on the payments), as well as
be nondeductible by the employer for federal income tax purposes.
The employment agreements for Mr. Pittard, Mr. Oliver, Ms. Fuller and
Messrs. Henderson, Phelps, VanSant and Schmitt will, at the effective time of
the merger, supersede any of their existing employment agreements and change
of control arrangements with Premier or its subsidiaries.
BB&T-NC's Advisory Boards and Board of Directors
BB&T believes that it is important and in its best interest to preserve,
facilitate and enhance its operations in the State of Georgia and the
operations of BB&T-NC, and to have Darrell D. Pittard as an officer and
director. Accordingly, at the effective time of the merger, BB&T-NC will name
Mr. Pittard as Chairman of its advisory board for the Atlanta region and will
elect him to its board of directors, to serve until its next annual meeting
(subject to the right of removal for cause) and thereafter so long as he is
elected and qualifies. Members of the
31
<PAGE>
BB&T-NC board of directors receive an annual retainer of $5,000 plus $1,000
for each meeting attended and members of the BB&T-NC advisory board for the
State of Georgia receive a fee of $1,000 per meeting attended, except that
none of the foregoing fees are to be paid to any member of the BB&T-NC board
or any member of any of its advisory boards who is also an employee of BB&T or
an affiliate of BB&T.
Indemnification of Directors and Officers
The merger agreement provides that BB&T or one of its subsidiaries will
maintain for three years after the effective time directors' and officers'
liability insurance covering directors and officers of Premier for acts or
omissions occurring before the effective time. This insurance will provide at
least the same coverage and amounts as contained in Premier's policy on the
date of the merger agreement, unless the annual premium on the policy would
exceed 150% of the annual premium payments on Premier's policy, in which case
BB&T would maintain the most advantageous policies of directors' and officers'
liability insurance obtainable for a premium equal to that amount. BB&T has
also agreed to indemnify, defend and hold harmless the present and former
directors, officers and employees of Premier and its subsidiaries against all
liabilities, including any direct or indirect, primary or secondary,
liability, indebtedness, obligation, penalty, cost, expense (including without
limitation all costs of investigation and defense), claim, action,
investigation or proceeding, of any type, whether accrued, absolute or
contingent, liquidated or unliquidated, matured or unmatured, and in each case
including reasonable attorneys' fees and charges, arising out of actions or
omissions arising out of the indemnified party's service or services as
directors, officers or employees of Premier and its subsidiaries or, at the
request of Premier or a Premier subsidiary, of another corporation,
partnership, joint venture, trust or other enterprise occurring at or prior to
the effective time of the merger (including the transactions contemplated by
the merger agreement) to the fullest extent permitted under Part 5 of Article
8 of the North Carolina Business Corporation Act (including Section 55-8-57),
including provisions relating to advances of expenses incurred in the defense
of any claims, demands, actions, causes of action, complaints, governmental or
other examination, investigation, prosecution or hearing, or any other
proceedings, investigations or inquiries, whether or not BB&T or any of its
subsidiaries is insured against any such matter.
Rights of Dissenting Preferred Shareholders
The following summary is not a complete statement of the provisions of
Georgia law relating to the appraisal rights of shareholders and is qualified
in its entirety by reference to the provisions of Sections 14-2-1301 through
14-2-1332 of the Georgia Business Corporation Code which is attached in full
as Appendix B to this proxy statement/prospectus. You are urged to read
Appendix B in its entirety.
Pursuant to the provisions of the GBCC, if the merger is consummated, any
preferred shareholder of record of Premier who objects to the merger and who
fully complies with Sections 14-2-1301 through 14-2-1332 of the GBCC will be
entitled to demand and receive payment in cash of an amount equal to the fair
value of all, but not less than all, of his or her shares of Premier preferred
stock. A preferred shareholder of record may assert dissenters' rights as to
fewer than all of the preferred shares registered in his or her name only if
he or she dissents with respect to all shares beneficially owned by any one
beneficial owner and notifies Premier in writing of the name and address of
each person on whose behalf he or she asserts dissenters' rights. For the
purpose of determining the amount to be received in connection with the
exercise of statutory dissenters' rights, the fair value of a dissenting
shareholder's Premier preferred stock equals the value of the preferred shares
immediately before the effective date of the merger, excluding any
appreciation or depreciation in anticipation of the merger. Holders of Premier
common stock do not have dissenters' rights under the GBCC. See "Comparison of
Shareholders Rights--Rights of Dissent and Appraisal" on page 52.
Any Premier preferred shareholder desiring to receive payment of the fair
value of his or her Premier preferred stock must:
. deliver to Premier, prior to the shareholder vote on the merger
agreement and plan of merger, a written notice of his or her intent to
demand payment for his or her preferred shares if the merger is
consummated;
32
<PAGE>
. not vote his or her preferred shares in favor of the merger agreement;
and
. demand payment and deposit his or her preferred stock certificates with
BB&T in accordance with the terms of a dissenters' notice to be sent to
all dissenting preferred shareholders within 10 days after the merger is
consummated.
All written communications from preferred shareholders with respect to the
exercise of appraisal rights should be mailed before the effective time of the
merger to Premier Bancshares, Inc., 950 E. Paces Ferry Road, Atlanta, Georgia
30326, Attention: Secretary and after the effective time of the merger to BB&T
Corporation, 200 West Second Street, Winston-Salem, North Carolina 27101,
Attention: General Counsel and Secretary. Voting against, abstaining from
voting or failing to vote on the proposal to approve the merger agreement and
plan of merger is not enough to satisfy the requirements of the GBCC. You must
also comply with all of the conditions relating to the separate written notice
of intent to dissent to the merger, the separate written demand for payment of
the fair value of shares of Premier preferred stock and the deposit of the
stock certificates.
The dissenters' notice sent to dissenting preferred shareholders will
specify the dates and place for receipt of the payment demand and the deposit
of the Premier preferred stock certificates. Within 10 days after the
effective date of the merger or after BB&T's receipt of a payment demand from
a dissenting preferred shareholder who has complied with the statutory
requirements, whichever is later, BB&T shall offer to pay the dissenter the
fair value of his or her preferred shares, plus accrued interest. BB&T's offer
will be accompanied by:
. Premier's balance sheet as of the end of a fiscal year ended not more
than 16 months before the date of making an offer, an income statement
for that year, a statement of changes in shareholders' equity for that
year and the latest available interim financial statements, if any;
. an explanation of how the interest was calculated;
. a statement of the dissenting preferred shareholder's right to demand
payment of a different amount under Section 14-2-1327 of the GBCC; and
. a copy of the dissenters' rights provisions of the GBCC.
If the dissenting preferred shareholder accepts BB&T's offer by written
notice to BB&T within 30 days after the offer, or is deemed to have accepted
the offer by failing to respond to BB&T's offer, BB&T must make payment to the
dissenting preferred shareholder for his or her preferred shares within 60
days after making the offer or the effective date or the merger, whichever is
later. Upon payment of the agreed upon value, the dissenting preferred
shareholder will cease to have any interest in his or her shares of Premier
preferred stock.
If within 30 days after BB&T offers payment for the preferred shares of a
dissenting preferred shareholder, he or she does not accept the estimate of
fair value of the preferred shares and interest due on that fair value and
demands payment of his or her own estimate of the fair value of the preferred
shares and interest due, then BB&T, within 60 days after receiving the payment
demand of a different amount from the dissenting preferred shareholder, must
file an action in a court of competent jurisdiction in Fulton County, Georgia,
requesting that the fair value of the dissenting preferred shareholder's
shares be determined. BB&T must make all dissenting preferred shareholders
whose demands remain unsettled parties to the proceeding. If BB&T does not
begin the proceeding within the 60-day period, it shall be required to pay the
amount demanded by each dissenting preferred shareholder whose demand remains
unsettled.
Premier preferred shareholders should note that cash paid to dissenting
preferred shareholders in satisfaction of the fair value of their preferred
shares will be recognized as gain or loss for federal income tax purposes. See
"--Federal Income Tax Consequences of the Merger" on page 35.
Failure by a Premier preferred shareholder to follow the steps required by
the GBCC for perfecting appraisal rights may result in the loss of such
rights. In view of the complexity of these provisions and the
33
<PAGE>
requirement that they be strictly complied with, if you hold Premier preferred
stock and are considering dissenting from the approval and adoption of the
merger agreement and exercising your appraisal rights under the GBCC, you
should consult your legal advisors.
Trust Preferred Securities
Upon completion of the merger, the 9.00% Trust Preferred Securities issued
by Premier's affiliate, Premier Capital Trust I, will remain outstanding and
BB&T will assume Premier's obligations with respect to them.
Regulatory Considerations
Bank holding companies (such as BB&T and Premier) and their depository
institution subsidiaries are highly regulated institutions, with numerous
federal and state laws and regulations governing their activities. Among these
laws and regulations are requirements of prior approval by applicable
government regulatory authorities in connection with acquisition and merger
transactions such as the merger, as summarized below. In addition, these
institutions are subject to ongoing supervision, regulation and periodic
examination by various federal and state financial institution regulatory
agencies. Detailed discussions of this ongoing regulatory oversight and the
laws and regulations under which it is carried out can be found in the Annual
Reports on Form 10-K of BB&T and of Premier incorporated by reference in this
proxy statement/prospectus. Those discussions are qualified in their entirety
by the actual language of the laws and regulations, which are subject to
change based on possible future legislation and action by regulatory agencies.
See "Where You Can Find More Information" on page 54.
The merger and the subsidiary bank mergers are subject to regulatory
approvals, as set forth below. To the extent that the following information
describes statutes and regulations, it is qualified in its entirety by
reference to those particular statutes and regulations.
The Merger
The merger is subject to approval by the Board of Governors of the Federal
Reserve System under the Bank Holding Company Act of 1956. In considering the
approval of a transaction such as the merger, this Act requires the Federal
Reserve to review the financial and managerial resources and future prospects
of the bank holding companies and the banks concerned and the convenience and
needs of the communities to be served. The Federal Reserve also is required to
evaluate whether the merger would result in a monopoly or would be in
furtherance of any combination or conspiracy or attempt to monopolize the
business of banking in any part of the United States or otherwise would
substantially lessen competition or tend to create a monopoly or which in any
manner would be in restraint of trade, unless it finds the anti-competitive
effects of the proposed transaction are clearly outweighed in the public
interest by the probable effect of the transaction in meeting the convenience
and needs of the communities to be served.
Where a transaction, such as the merger, involves the acquisition by a bank
holding company of a bank located in a state other than the home state of the
bank holding company (in this case North Carolina), the Bank Holding Company
Act authorizes the Federal Reserve to approve the transaction without regard
to whether the transaction is prohibited under the laws of any state, provided
the bank holding company is adequately capitalized and adequately managed and
certain other limitations are not exceeded. BB&T is considered well-
capitalized and well-managed under the Federal Reserve's Regulation Y, and the
transaction does not exceed the other limitations.
The Georgia Department of Banking and Finance also must approve the merger
under the bank holding company act provisions of the Financial Institutions
Code of Georgia, which permit an out-of-state bank holding company to acquire
a bank having banking offices in Georgia. In evaluating the transaction, the
Department will consider the effect of the transaction upon competition, the
convenience and needs of the communities to be served, the financial history
of the acquiring holding company and the bank to be acquired, the condition of
the acquiring holding company and the bank to be acquired including capital,
management and earnings prospects, the existence of insider transactions, the
adequacy of disclosure of the terms of the acquisition and the equitable
treatment of the minority shareholders of the bank to be acquired.
34
<PAGE>
BB&T also is required to provide notice to the Virginia Bureau of Financial
Institutions under the bank holding company act provisions of the Virginia
Code, which permit an out-of-state bank holding company that controls a
Virginia bank, such as BB&T, to acquire a bank outside of Virginia, such as
Premier Bank, if the Bureau approves the transaction. The Bureau is required
to approve the transaction if it determines that the transaction would not be
detrimental to the safety and soundness of the Virginia bank.
All of the required applications and notices for the merger have been
submitted to the appropriate regulatory agencies. BB&T currently expects that
the necessary approvals will be received in time to complete the merger in the
first quarter of 2000 and has no reason to believe that they will be subject
to any adverse conditions that would cause BB&T to abandon the merger as
permitted by the merger agreement. There can be no assurance, however, that
one or more of the regulatory agencies or the U.S. Department of Justice or a
state attorney general will not challenge the merger (or the subsidiary bank
mergers discussed below) or, if such a challenge is made, as to the results
thereof.
The Subsidiary Bank Mergers
Although not required by the terms of the merger agreement or the plan of
merger and not a condition to the merger, BB&T expects to effect the mergers
of Premier's banking subsidiaries into BB&T-NC during the third quarter of
2000. The subsidiary bank mergers are each subject to approval of the Federal
Deposit Insurance Corporation under the Bank Merger Act. In granting its
approval under the Bank Merger Act, the FDIC must consider the financial and
managerial resources and future prospects of the existing and proposed
institutions and the convenience and needs of the communities to be served.
Further, the FDIC may not approve any subsidiary bank merger if it would
result in a monopoly, if it would be in furtherance of any combination or
conspiracy to monopolize or to attempt to monopolize the business of banking
in any part of the United States, if the effect of the subsidiary bank merger
in any section of the country may be to substantially lessen competition or to
tend to create a monopoly or if it would be in any other manner in restraint
of trade, unless the FDIC finds that the anticompetitive effects of the
subsidiary bank merger are clearly outweighed in the public interest by the
probable effect of such merger in meeting the convenience and needs of the
communities to be served. In addition, the FDIC must take into account the
record of performance of the existing and proposed institutions under the
Community Reinvestment Act of 1977 in meeting the credit needs of the
community, including low- and moderate-income neighborhoods, served by the
institutions. Applicable regulations also require publication of notice of the
applications for approval of the subsidiary bank mergers and an opportunity
for the public to comment on the applications in writing and to request a
hearing.
The North Carolina Commissioner of Banks also must approve the subsidiary
bank mergers under the bank merger act provisions of the North Carolina
General Statutes. In its review of the subsidiary bank mergers, the N.C.
Commissioner is required to consider whether the interests of the depositors,
creditors and shareholders of each institution are protected, whether the
merger is in the public interest and whether the merger is for legitimate
purposes.
BB&T-NC also is required under Georgia law to provide prior notice of the
subsidiary bank mergers to the Georgia Department of Banking and Finance.
Material Federal Income Tax Consequences of the Merger
The following is a summary description of the material anticipated federal
income tax consequences of the merger generally applicable to the shareholders
of Premier and to BB&T and Premier. This summary is not intended to be a
complete description of all of the federal income tax consequences of the
merger. No information is provided with respect to the tax consequences of the
merger under any other tax laws, including applicable state, local and foreign
tax laws. In addition, the following discussion may not be applicable with
respect to certain specific categories of shareholders, including but not
limited to persons who are corporations, trusts, dealers in securities,
financial institutions, insurance companies or tax exempt organizations;
persons who
35
<PAGE>
are not United States citizens or resident aliens or domestic entities
(partnerships or trusts); persons who are subject to alternative minimum tax
(to the extent that tax affects the tax consequences of the merger) or are
subject to the "golden parachute" provisions of the Internal Revenue Code (to
the extent that tax affects the tax consequences of the merger); persons who
acquired Premier common stock or Premier preferred stock pursuant to employee
stock options or otherwise as compensation if such shares are subject to any
restriction related to employment; persons who do not hold their shares as
capital assets; or persons who hold their shares as part of a "straddle" or
"conversion transaction." No ruling has been or will be requested from the IRS
with respect to the tax effects of the merger. The federal income tax laws are
complex, and a shareholder's individual circumstances may affect the tax
consequences to the shareholder. Consequently, each Premier shareholder is
urged to consult his or her own tax advisor regarding the tax consequences,
including the applicable United States federal, state, local, and foreign tax
consequences, of the merger to him or her.
In the opinion of Womble Carlyle Sandridge & Rice, PLLC, counsel to BB&T:
(a) the merger will constitute a reorganization under Section 368 of the
Internal Revenue Code; (b) no gain or loss will be recognized by BB&T or
Premier by reason of the merger; (c) the shareholders of Premier will
recognize no gain or loss for federal income tax purposes to the extent BB&T
common stock is received in the merger in exchange for Premier common stock or
Premier preferred stock; (d) a shareholder of Premier who receives cash
instead of a fractional share of BB&T common stock will recognize gain or loss
as if the shareholder received the fractional share and it was then redeemed
for cash in an amount equal to the amount paid by BB&T in respect of the
fractional share; (e) a shareholder of Premier who owns Premier preferred
stock and who receives a cash payment pursuant to the exercise of dissenters'
rights will generally recognize capital gain or loss in an amount equal to the
difference between the amount received and his or her basis in the Premier
preferred stock surrendered and ordinary income on any interest received with
respect to the preferred stock; (f) the tax basis in the BB&T common stock
received by a shareholder (including any fractional share interest deemed
received) will be the same as the tax basis in the Premier common stock or
Premier preferred stock surrendered in exchange therefor; and (g) the holding
period for BB&T common stock received (including any fractional share interest
deemed received) in exchange for shares of Premier common stock or Premier
preferred stock will include the period during which the shareholder held the
shares of Premier common stock or Premier preferred stock surrendered in
exchange, provided that the Premier common stock or Premier preferred stock
was held as a capital asset at the effective time.
The completion of the merger is conditioned upon the receipt by BB&T and
Premier of the legal opinion of Womble Carlyle Sandridge & Rice, PLLC, counsel
to BB&T, dated as of the closing date, to the effect of items (a), (b) and (c)
as described above. Neither party intends to waive this condition. If the tax
opinion is not available and the Premier Board determines to proceed with the
merger, Premier will resolicit its shareholders.
Accounting Treatment
It is anticipated that the merger will be accounted for as a pooling-of-
interests transaction under generally accepted accounting principles. Under
this accounting method, holders of Premier common stock will be deemed to have
combined their existing voting common stock interest with that of holders of
BB&T common stock by exchanging their Premier shares for shares of BB&T common
stock. Accordingly, the book value of the assets, liabilities and
shareholders' equity of Premier, as reported on its consolidated balance
sheet, will be carried over to the consolidated balance sheet of BB&T, and no
goodwill will be created. BB&T will be able to include in its consolidated
income the consolidated income of Premier for the entire fiscal year in which
the merger occurs; however, certain expenses incurred to effect the merger
must be treated by BB&T as current charges against income rather than
adjustments to its balance sheet. The unaudited pro forma financial
information contained in this proxy statement/prospectus has been prepared
using the pooling-of-interests method of accounting. If the merger does not
qualify for pooling-of-interests accounting treatment, BB&T may, in its
discretion, terminate the transaction.
36
<PAGE>
Effect on Employees, Employee Benefit Plans and Stock Options
Employees
As soon as practicable following the effective time of the merger and
consistent with its past practice, BB&T will provide to the officers and
employees of Premier and Premier's banking subsidiaries benefits under
employee benefit and welfare plans, on terms and conditions which, when taken
as a whole, are substantially similar to those currently provided by BB&T and
its subsidiaries to their similarly situated officers and employees.
Each employee of Premier or a Premier subsidiary at the effective time who
becomes an employee of BB&T or a BB&T subsidiary immediately following the
effective time (a "transferred employee") who was a participant in a 401(k)
plan of Premier or a Premier subsidiary immediately prior to the effective
time will be eligible at the effective time to participate in BB&T's 401(k)
plan (subject to BB&T's right to amend or terminate such plan), as amended or
succeeded. For purposes of administering BB&T's 401(k) plan, service by a
transferred employee with Premier and the Premier Subsidiaries will be deemed
to be service with the employer entity for participation and vesting purposes,
but not for purposes of benefit accrual.
Each transferred employee will be eligible to participate in the group
hospitalization, medical, dental, life, disability and other welfare benefit
plans and programs available to employees of BB&T or its subsidiary, subject
to the terms of the plans and programs. In applying such plans and programs,
service with Premier and the Premier subsidiaries will be deemed to be service
with the BB&T employer for the purpose of determining eligibility to
participate and vesting (if applicable) in such welfare plans and programs,
but not for the purpose of computing benefits, if any, determined in whole or
in part with reference to service.
Each transferred employee who is terminated after the effective time
(excluding any employee who has in effect at the time of termination an
employment or special termination agreement that, if in effect prior to the
effective time, was disclosed to BB&T as of the date of the merger agreement)
will be entitled to severance pay in accordance with BB&T's general severance
policy if and to the extent such employee is entitled to severance pay under
the policy. An employee's service with Premier or a Premier subsidiary will be
treated as service with BB&T for purposes of determining the amount of
severance pay, if any, under BB&T's severance policy.
BB&T has agreed to honor all employment agreements, severance agreements and
deferred compensation and individualized benefit agreements that Premier and
its subsidiaries have with their current and former employees and directors
and which have been disclosed to BB&T, except to the extent any such
agreements are superseded or terminated at or after the effective time. Except
for the agreements described in the preceding sentence, 401(k) plans
maintained by Premier and any of its subsidiaries, stock option and other
employee benefit plans of Premier and its subsidiaries will be either
terminated or merged into comparable BB&T plans at or following the effective
time, as determined by BB&T.
Premier will take all action necessary to terminate the Premier Bancshares,
Inc. Stock Purchase Plan as of December 31, 1999, and no purchases of shares
of Premier common stock will be made under the Stock Purchase Plan after the
effective time.
Stock Options
At the effective time, each stock option then outstanding, whether or not
exercisable, granted:
. under Premier's 1997 Stock Option Plan, 1995 Stock Option Plan, 1993
Employee Stock Option Plan, Frederica Bank and Trust Directors Stock
Option Plan, Amended and Restated Directors' Deferred Stock Unit Plan or
Directors' Stock Option Plan;
. under any stock option or other similar plan maintained by or for any of
North Fulton Bancshares, Inc., Farmers & Merchants Bank and Bank Atlanta
(or their subsidiaries) and disclosed to BB&T as of the date of the
merger agreement; or
37
<PAGE>
. otherwise pursuant to any award or agreement to acquire shares of
Premier common stock
will be converted into rights with respect to BB&T common stock. Unless it
elects to substitute options as described below, BB&T will assume each of
these stock options in accordance with the terms of the applicable Premier
stock option plan (or in accordance with the terms of the award or agreement
governing such stock option), except that (a) BB&T and the compensation
committee of the BB&T Board will be substituted for Premier and Premier's
Compensation Committee administering the stock option plans, (b) each stock
option may be exercised solely for shares of BB&T common stock, (c) the number
of shares of BB&T common stock subject to each stock option will be the number
of whole shares (omitting any fractional share) determined by multiplying the
number of shares of Premier common stock subject to the stock option by 0.5155
and (d) the per share exercise price for each stock option will be adjusted by
dividing the per share exercise price for the stock option by 0.5155 and
rounding up to the nearest cent.
As an alternative to assuming the stock options, BB&T may choose to
substitute options under the BB&T Corporation 1995 Omnibus Stock Incentive
Plan or any other comparable plan for all or a part of the stock options,
subject to the adjustments described in (c) and (d) in the preceding paragraph
and the condition that the substituted options continue in effect on the same
terms and conditions as provided in the stock option agreement and the stock
option plan governing the option.
Each stock option that is an incentive stock option will be adjusted as
required by Section 424 of the Internal Revenue Code to continue as an
incentive stock option and not to constitute a modification, extension or
renewal within the meaning of Section 424(h) of the Internal Revenue Code.
BB&T has reserved and will continue to reserve adequate shares of BB&T
common stock for the exercise of any converted or substitute options. As soon
as practicable after the effective time, if it has not already done so, BB&T
will file a registration statement under the Securities Act with respect to
the shares of BB&T common stock subject to converted or substitute options and
will use its reasonable efforts to maintain the effectiveness of the
registration statement (and maintain the current status of the related
prospectus or prospectuses) for so long as the converted or substitute options
remain outstanding.
BB&T will deliver to each participant in the stock option plans who receives
converted or substitute options an appropriate notice setting forth the
participant's rights with respect to the converted or substitute options.
Based on stock options outstanding as of the date of the merger agreement
and subsequent exercises, options to purchase an aggregate of approximately
1,792,395 shares of Premier common stock may be outstanding at the effective
time. Any shares of Premier common stock issued pursuant to the exercise of
stock options under the stock option plans before the effective time will be
converted into shares of BB&T common stock and cash instead of any fractional
share interest in the same manner as other outstanding shares of Premier
common stock.
Restrictions on Resales by Affiliates
All shares of BB&T common stock issuable in the merger will be registered
under the Securities Act and will be freely transferable, except that any
shares received by "persons" who are deemed to be "affiliates" (as these terms
are defined under the Securities Act) of Premier at the effective time may be
resold by them (a) only in transactions registered under the Securities Act or
permitted by the resale provisions of Rule 145 under the Securities Act or as
otherwise permitted by the Securities Act and (b) following the publication of
financial results of at least 30 days of post-merger combined operations of
BB&T and Premier (as required by the SEC's Accounting Series Release Nos. 130
and 135). Persons who may be deemed affiliates of Premier generally include
individuals or entities that directly, or indirectly through one or more
intermediaries, control, are controlled by or are under common control with
Premier and include directors and certain executive officers of Premier. The
restrictions on resales by an affiliate extend also to related parties of the
affiliate, including his or her spouse, relatives and spouse's relatives who
in each case live in the same home as the affiliate.
38
<PAGE>
The merger agreement requires Premier to use its reasonable best efforts to
cause each of its affiliates to deliver to BB&T a written agreement to the
effect generally that he or she will not offer or otherwise dispose of any
shares of BB&T common stock issued to that person in the merger, except in
compliance with (a) the Securities Act and the related rules and regulations
and (b) the requirements of the accounting releases described above, including
the prohibitions on sales, dispositions, hedging transactions and reductions
in the risk of holding Premier stock by affiliates within 31 days prior to
completion of the merger.
INFORMATION ABOUT BB&T
General
BB&T is a multi-bank holding company headquartered in Winston-Salem, North
Carolina. BB&T conducts operations in North Carolina, South Carolina,
Virginia, Maryland, the District of Columbia, Georgia, West Virginia and
Kentucky primarily through its commercial banking and thrift subsidiaries and,
to a lesser extent, through its other subsidiaries. Substantially all of
BB&T's loans are to businesses and individuals in the Carolinas, Virginia,
Maryland, the District of Columbia, Georgia, West Virginia and Kentucky.
BB&T's principal commercial bank subsidiaries are 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"). The principal assets of BB&T are all of the
issued and outstanding shares of common stock of BB&T-NC, BB&T Financial
Corporation of South Carolina, Greenville, South Carolina (which in turn owns
all of the issued and outstanding shares of BB&T-SC), BB&T Financial
Corporation of Virginia (which in turn owns all of the issued and outstanding
shares of BB&T-VA) and Scott and Stringfellow, Inc.
Operating Subsidiaries
BB&T-NC, BB&T's largest subsidiary, is the oldest bank in North Carolina and
currently operates through 341 banking offices throughout North Carolina and
57 offices in metropolitan Washington, D.C. and Maryland. BB&T-NC provides a
wide range of banking services in its local market for retail and commercial
customers, including small and mid-size businesses, public agencies and local
governments, trust customers, and individuals. BB&T Leasing Corporation, a
wholly owned subsidiary of BB&T-NC, located in Charlotte, North Carolina,
offers lease financing to commercial businesses and municipal governments.
BB&T Investment Services, Inc., also a wholly owned subsidiary of BB&T-NC,
located in Charlotte, North Carolina, offers customers investment
alternatives, including discount brokerage services, fixed-rate and variable-
rate annuities, mutual funds, and government and municipal bonds. BB&T
Insurance Services, Inc., located in Raleigh, North Carolina, is also a
subsidiary of BB&T-NC and offers life, property and casualty and title
insurance on an agency basis. Another subsidiary of BB&T-NC is Prime Rate
Premium Finance Corporation, Inc., which provides insurance premium financing
and services to customers in Virginia and the Carolinas.
BB&T-SC serves South Carolina through 90 banking offices. BB&T-SC provides a
wide range of banking services in its local market for retail and commercial
customers, including small and mid-size businesses, public agencies, local
governments, trust customers and individuals. BB&T-SC's subsidiaries include
BB&T Investment Services of South Carolina, Inc., which is licensed as a
general broker/dealer of securities and is currently engaged in retailing of
mutual funds, U.S. Government securities, municipal securities, fixed and
variable insurance annuity products and unit investment trusts.
BB&T-VA offers a full range of commercial and retail banking services
through 104 banking offices in the Hampton Roads and Richmond areas and the
southern, central, southwestern and northeastern regions of Virginia.
Regional Acceptance Corporation, of Greenville, North Carolina, was acquired
on September 1, 1996. RAC, which has 28 branch offices in North Carolina,
South Carolina, Tennessee and Virginia, specializes in indirect financing for
consumer purchases of mid-model and late-model used automobiles.
39
<PAGE>
Scott & Stringfellow, Inc., acquired on March 26, 1999, provides services in
retail brokerage, institutional equity and debt underwriting, investment
advice, corporate finance, equity trading and equity research and, on May 5,
1999, was merged with another subsidiary of BB&T, Craigie Incorporated, which
specialized in the origination, trading and distribution of fixed income
securities and equity products in both the public and private capital markets.
Phillips Factors Corporation buys and manages account receivables primarily
in the furniture, textiles and home furnishings-related industries. W.E.
Stanley & Company, Inc. is primarily engaged in actuarial and employee group,
health and welfare benefit plan consulting, plan administration, and the
design, communication and administration of all types of corporate retirement
plans. Sheffield Financial Corp. specializes in loans to small commercial lawn
care businesses across the country. BB&T Bankcard Corporation is a special
purpose credit card bank.
Acquisitions
BB&T's profitability and market share have been enhanced through both
internal growth and acquisitions of both financial and nonfinancial
institutions during recent years. BB&T's most recent acquisitions include the
following:
On March 5, 1999, BB&T acquired MainStreet Financial Corporation. With
approximately $2 billion in assets, MainStreet operated 46 full-service
banking offices in Virginia and three in Maryland and provided full-service
banking and trust services throughout Virginia, southern Maryland and
metropolitan Washington, D.C.
BB&T acquired Scott & Stringfellow Financial, Inc., the holding company of
Scott & Stringfellow, Inc., on March 26, 1999. Scott & Stringfellow has 32
offices in the Carolinas, Virginia and West Virginia and manages more than $10
billion in total assets for clients.
On July 9, 1999, BB&T acquired First Citizens Corporation in a tax-free
transaction accounted for as a pooling of interests. First Citizens operated
13 banking offices and one mortgage loan office in the south metropolitan
Atlanta area.
On July 14, 1999, BB&T acquired Mason-Dixon Bancshares, Inc. in a tax-free
transaction accounted for as a pooling of interests. Mason-Dixon's branch
network included 23 banking offices, 12 consumer finance offices and three
mortgage loan offices in Maryland and extends BB&T's presence in the
economically strong markets in central Maryland.
On August 27, 1999, BB&T acquired Matewan Bancshares Inc. in a tax-free
transaction. Through its banking subsidiaries, Matewan National Bank and
Matewan FSB, Matewan operated 22 banking offices and one mortgage loan office
in southwestern Virginia, southern West Virginia and eastern Kentucky. BB&T's
acquisition of Matewan expands its franchise into southern West Virginia and
eastern Kentucky.
On April 28, 1999, BB&T announced that it had agreed to buy First Liberty
Financial Corp. in a tax-free transaction to be accounted for as a pooling of
interests. In the transaction, First Liberty shareholders would receive not
less than 0.85 or more than 0.87 of a share of common stock of BB&T, depending
on the average reported closing price of BB&T common stock over a ten-day
pricing period ending shortly before the closing. First Liberty operates 38
banking offices and 13 consumer finance offices in Georgia and Tennessee and
its acquisition by BB&T is expected to expand BB&T's presence in economically
strong Georgia markets. The transaction is expected to close in the fourth
quarter of 1999.
BB&T expects to continue to take advantage of the consolidation of the
financial services industry by developing its franchise through the
acquisition of financial institutions. Such acquisitions may entail the
payment by BB&T of consideration in excess of the book value of the underlying
net assets acquired, may result in the issuance of additional shares of BB&T
capital stock or the incurring of additional indebtedness by BB&T,
40
<PAGE>
and could have a dilutive effect on the per share earnings or book value of
BB&T common stock. Moreover, acquisitions sometimes result in significant
front-end charges against earnings, although cost savings, especially incident
to in-market acquisitions, are frequently anticipated.
Capital
The Federal Reserve has established a minimum requirement for a bank holding
company's ratio of capital to risk-weighted assets (including on-balance sheet
activities and certain off-balance sheet activities, such as standby letters
of credit) of 8%. At least half of a bank holding company's total capital is
required to be composed of common equity, retained earnings, and qualifying
perpetual preferred stock, less certain intangibles. This is called Tier 1
capital. The remainder may consist of certain subordinated debt, certain
hybrid capital instruments and other qualifying preferred stock, and a limited
amount of the loan loss allowance. This is called Tier 2 capital. Tier 1
capital and Tier 2 capital combined are referred to as total capital. At
September 30, 1999, BB&T's Tier 1 and total capital ratios were 9.4% and
13.4%, respectively. Since January 1, 1998, the Federal Reserve has required
bank holding companies that engage in trading activities to adjust their risk-
based capital to take into consideration market risk that may result from
movements in market prices of covered trading positions in trading accounts,
or from foreign exchange or commodity positions, whether or not in trading
accounts, including changes in interest rates, equity prices, foreign exchange
rates or commodity prices. Any capital required to be maintained pursuant to
these provisions may consist of new "Tier 3 capital" consisting of forms of
short term subordinated debt. In addition, the Federal Reserve has issued a
policy statement, pursuant to which a bank holding company that is determined
to have weaknesses in its risk management processes or a high level of
interest rate risk exposure may be required to hold additional capital.
The Federal Reserve also has established minimum leverage ratio requirements
for bank holding companies. These requirements provide for a minimum leverage
ratio of Tier 1 capital to adjusted average quarterly assets equal to 3% for
bank holding companies that meet specified criteria, including that they have
the highest regulatory rating. All other bank holding companies generally are
required to maintain a leverage ratio of from at least 100 to 200 basis points
above the stated minimum. BB&T's leverage ratio at September 30, 1999 was
6.6%. Bank holding companies experiencing internal growth or making
acquisitions are expected to maintain strong capital positions substantially
above the minimum supervisory levels without significant reliance on
intangible assets. Furthermore, these capital requirements indicate that the
Federal Reserve will continue to consider a "tangible Tier 1 leverage ratio"
(deducting all intangibles) in evaluating proposals for expansion or new
activity.
The FDIC has adopted minimum risk-based and leverage ratio regulations to
which BB&T's state bank subsidiaries are subject that are substantially
similar to those requirements established by the Federal Reserve. The Office
of the Comptroller of the Currency also has similar regulations that would
apply to BB&T's national bank subsidiaries. Under federal banking laws,
failure to meet the minimum regulatory capital requirements could subject a
banking institution to a variety of enforcement remedies available to federal
regulatory authorities, including, in the most severe cases, the termination
of deposit insurance by the FDIC and placing the institution into
conservatorship or receivership. The capital ratios of each of BB&T's bank
subsidiaries exceeded all minimum regulatory capital requirements as of
September 30, 1999.
Deposit Insurance Assessments
The deposits of each of BB&T's bank subsidiaries are insured by the FDIC up
to the limits required by law. A majority of the deposits of the banks are
subject to the deposit insurance assessments of the Bank Insurance Fund of the
FDIC. However, approximately 34% of the deposits of BB&T-NC and BB&T-SC and a
portion of the deposits of BB&T-VA (related to the banks' acquisition of
various savings associations) are subject to assessments imposed by the
Savings Association Insurance Fund of the FDIC.
For the semi-annual period beginning June 30, 1999, the effective rate of
assessments imposed on all FDIC deposits for deposit insurance ranges from 0
to 27 basis points per $100 of insured deposits, depending on the
41
<PAGE>
institution's capital position and other supervisory factors. However, because
legislation enacted in 1996 requires that both SAIF-insured and BIF-insured
deposits pay a pro rata portion of the interest due on the obligations issued
by the Financing Corporation, the FDIC is currently assessing BIF-insured
deposits an additional 1.184 basis points per $100 of deposits, and SAIF-
insured deposits an additional 5.920 basis points per $100 of deposits, in
each case on an annualized basis, to cover those obligations.
Additional information about BB&T can be found in BB&T's Annual Report on
Form 10-K for the fiscal year ended December 31, 1998, Quarterly Reports on
Form 10-Q for the quarters ended March 31, June 30 and September 30, 1999, and
Current Reports on Form 8-K dated January 8, 1999, January 14, 1999, January
27, 1999 (two filings), January 28, 1999, February 25, 1999 (amended on April
28, 1999), April 9, 1999, April 12, 1999, April 28, 1999 (three filings),
April 30, 1999, July 14, 1999, July 29, 1999, September 3, 1999 and October
12, 1999, all of which are incorporated by reference in this proxy
statement/prospectus. See "Where You Can Find More Information" on page 54.
INFORMATION ABOUT PREMIER
General
Premier is a bank holding company headquartered in Atlanta, Georgia. Premier
conducts operations primarily in the metropolitan Atlanta area and also has
significant operations in other areas of Georgia, as well as a limited
presence in Alabama, Florida, North Carolina, South Carolina and Tennessee.
Premier operates primarily through its principal commercial bank subsidiary,
Premier Bank.
Principal Commercial Bank Subsidiary
Premier Bank currently operates through 21 commercial banking offices in
Georgia. Premier Bank is a Georgia chartered commercial bank that provides a
wide range of banking services in its local markets for retail and commercial
customers, including small and mid-size businesses, public agencies and local
governments and individuals. In addition, Premier Lending Corporation, a
wholly owned subsidiary of Premier Bank, operates a total of 15 offices
throughout the Southeast. Premier Lending is a Georgia corporation that
operates primarily as a mortgage banker and acts as an intermediary between
purchasers of residential real estate or homeowners refinancing their
residences and correspondent or institutional investors seeking to purchase
mortgage loan investments.
Recently Completed Acquisitions
On August 31, 1999, Premier completed the acquisition of North Fulton
Bancshares, Inc., a Georgia corporation that is the holding company for Milton
National Bank in Roswell, Georgia, in a stock transaction accounted for as a
pooling of interests.
On October 27, 1999, Premier completed the acquisition of Bank Atlanta, a
Georgia chartered commercial bank located in Decatur, Georgia, in a stock
transaction accounted for as a pooling of interests.
On November 5, 1999, Premier completed the acquisition of Farmers &
Merchants Bank, a Georgia chartered commercial bank located in Summerville,
Georgia, in a stock transaction accounted for as a purchase.
Additional information about Premier can be found in Premier's Annual Report
on Form 10-K for the fiscal year ended December 31, 1998, Quarterly Reports on
Form 10-Q for the quarters ended March 31, June 30 and September 30, 1999, and
Current Reports on Form 8-K dated April 9, 1999, April 27, 1999, May 27, 1999,
42
<PAGE>
August 3, 1999 and November 9, 1999, all of which are incorporated by
reference in this proxy statement/prospectus. See "Where You Can Find More
Information" on page 54.
DESCRIPTION OF BB&T CAPITAL STOCK
General
The authorized capital stock of BB&T consists of 500,000,000 shares of BB&T
common stock, par value $5.00 per share and 5,000,000 shares of preferred
stock, par value $5.00 per share. As of November 4, 1999, there were
318,556,636 shares of BB&T common stock issued and outstanding. There were no
shares of BB&T preferred stock issued and outstanding as of such date,
although 2,000,000 shares of BB&T preferred stock have been designated as
Series B Junior Participating Preferred Stock and are reserved for issuance in
connection with BB&T's shareholder rights plan. See "--Shareholder Rights
Plan" on page 43. Based on the number of shares of Premier common stock and
Premier preferred stock outstanding at the record date (and assuming that the
average closing price per share of BB&T common stock over the five-day pricing
period is equal to the closing price of BB&T common stock on the record date),
it is estimated that approximately 16,689,637 shares of BB&T common stock
would be issued in the merger.
BB&T Common Stock
Each share of BB&T common stock is entitled to one vote on all matters
submitted to a vote at any meeting of shareholders. Holders of BB&T common
stock are entitled to receive dividends when, as, and if declared by the BB&T
Board out of funds legally available therefor and, upon liquidation, to
receive pro rata all assets, if any, of BB&T available for distribution after
the payment of necessary expenses and all prior claims. Holders of BB&T common
stock have no preemptive rights to subscribe for any additional securities of
any class that BB&T may issue, nor any conversion, redemption or sinking fund
rights. Holders of BB&T common stock have no right to cumulate votes in the
election of directors. The rights and privileges of holders of BB&T common
stock are subject to any preferences that the BB&T Board may set for any
series of BB&T preferred stock that BB&T may issue in the future. The terms of
the BB&T Junior Preferred Stock reserved for issuance in connection with
BB&T's shareholder rights plan provide that the holders will have rights and
privileges that are substantially identical to those of holders of BB&T common
stock.
The transfer agent and registrar for BB&T common stock is BB&T-NC. BB&T
intends to apply for the listing on the NYSE, subject to official notice of
issuance, of the shares of BB&T common stock to be issued in the merger.
BB&T Preferred Stock
Under BB&T's articles of incorporation, BB&T may issue shares of BB&T
preferred stock in one or more series as may be determined by the BB&T Board
or a duly authorized committee. The BB&T Board or committee may also
establish, from time to time, the number of shares to be included in each
series and may fix the designation, powers, preferences and rights of the
shares of each such series and any qualifications, limitations or restrictions
thereof, and may increase or decrease the number of shares of any series
without any further vote or action by the shareholders. Any BB&T preferred
stock issued may rank senior to BB&T common stock with respect to the payment
of dividends or amounts paid upon liquidation, dissolution or winding up of
BB&T, or both. In addition, any shares of BB&T preferred stock may have class
or series voting rights. Under certain circumstances, the issuance of BB&T
preferred stock or the existence of the unissued BB&T preferred stock may tend
to discourage or render more difficult a merger or other change in control of
BB&T. See "--Shareholder Rights Plan" on page 43.
Shareholder Rights Plan
BB&T has adopted a shareholder rights plan pursuant to which holders of
shares of BB&T common stock also hold rights to purchase securities or other
property that may be exercised upon the occurrence of certain
43
<PAGE>
"triggering events." Shareholder rights plans such as BB&T's plan are intended
to encourage potential hostile acquirors of a target corporation to negotiate
with the board of directors of the target corporation in order to avoid
occurrence of the "triggering events" specified in such plans. Shareholder
rights plans are intended to give the directors of a target corporation the
opportunity to assess the fairness and appropriateness of a proposed
transaction in order to determine whether or not it is in the best interests
of the corporation and its shareholders. Notwithstanding these purposes and
intentions of shareholder rights plans, such plans, including that of BB&T,
could have the effect of discouraging a business combination that shareholders
believe to be in their best interests. The provisions of BB&T's shareholder
rights plan are discussed below.
On December 17, 1996, the BB&T Board declared a dividend distribution of one
right for each outstanding share of BB&T common stock to shareholders of
record at the close of business on January 17, 1997. One right will also be
distributed for each share of BB&T common stock issued between January 17,
1997 and the occurrence of a "distribution date" (described in the next
paragraph). Each right entitles the registered holder to purchase from BB&T a
unit consisting of one-hundredth of a share of BB&T Junior Preferred Stock at
a Purchase Price of $145.00 per unit, subject to adjustment, or, under certain
circumstances, other securities or property. The description and terms of the
rights are set forth in the rights agreement, dated as of December 17, 1996,
between BB&T and BB&T-NC in the capacity of rights agent.
Initially, the rights will be attached to all BB&T common stock certificates
representing shares then outstanding, and no separate rights certificates will
be distributed. A "distribution date" will occur, and the rights will separate
from shares of BB&T common stock, upon the earliest of (a) 10 business days
following a public announcement that a person or group of affiliated or
associated persons (an "acquiring person") has acquired, or obtained the right
to acquire, beneficial ownership of 20% or more of the outstanding shares of
BB&T common stock, (b) 10 business days following the commencement of a tender
offer or exchange offer that would if completed result in a person or group
beneficially owning 20% or more of such outstanding shares of BB&T common
stock or (c) 10 business days after the BB&T Board declares any person to be
an "adverse person," as described in the following paragraph.
The BB&T Board will declare a person to be an adverse person upon its
determinations (a) that the person, alone or together with its affiliates and
associates, has or will become the beneficial owner of 10% or more of the
outstanding shares of BB&T common stock (provided that any such determination
will not be effective until such person has in fact become the beneficial
owner of 10% or more of the outstanding shares of BB&T common stock) and (b)
following consultation with such persons as the BB&T Board deems appropriate,
that (1) the beneficial ownership by the person is intended to cause, is
reasonably likely to cause or will cause BB&T to repurchase the BB&T common
stock beneficially owned by the person or to cause pressure on BB&T to take
action or enter into a transaction or series of transactions intended to
provide the person with short-term financial gain under circumstances where
the BB&T Board determines that the best long-term interests of BB&T and its
shareholders would not be served by taking the action or entering into such
transactions or series of transactions at that time or (2) the beneficial
ownership is causing or is reasonably likely to cause a material adverse
impact (including, but not limited to, impairment of relationships with
customers or impairment of BB&T's ability to maintain its competitive
position) on the business or prospects of BB&T or (3) the beneficial ownership
otherwise is determined to be not in the best interests of BB&T and its
shareholders, employees, customers and communities in which BB&T and its
subsidiaries do business.
The rights are not exercisable until the distribution date and will expire
at the close of business on December 31, 2006, subject to extension by the
BB&T Board, or unless earlier redeemed by BB&T as described below.
As soon as practicable after the distribution date, rights certificates will
be mailed to holders of record of BB&T common stock as of the close of
business on the distribution date and, thereafter, the separate rights
certificates alone will represent the rights. Except for certain issuances in
connection with outstanding options and convertible securities and as
otherwise determined by the BB&T Board, only shares of BB&T common stock
issued before the distribution date will be issued with rights.
44
<PAGE>
If the BB&T Board determines that a person is an adverse person or, at any
time following the distribution date, a person becomes the beneficial owner of
25% or more of the then outstanding shares of BB&T common stock, each holder
of a right will thereafter have the right to receive at the time specified in
the rights agreement, (a) upon exercise and payment of the exercise price,
BB&T common stock (or, in certain circumstances, cash, property or other
securities of BB&T) having a value equal to two times the exercise price of
the right or (b) at the discretion of the BB&T Board, upon exercise and
without payment of the exercise price, BB&T common stock (or, in certain
circumstances, cash, property or other securities of BB&T) having a value
equal to the difference between the exercise price of the right and the value
of the consideration that would be payable under clause (a). Following any of
the events set forth in this paragraph, all rights that are, or (under certain
circumstances specified in the rights agreement) were, beneficially owned by
any acquiring person or adverse person will be null and void. Rights will not
become exercisable, however, until such time as they are no longer redeemable
by BB&T as set forth below.
For example, at an exercise price of $145.00 per right, each right not owned
by an acquiring person or an adverse person (or by certain related parties)
following a triggering event would entitle its holder to purchase $290.00
worth of BB&T common stock (or other consideration, as noted above) for
$145.00. Assuming that the BB&T common stock had a per share value of $36.25
at such time, the holder of each valid right would be entitled to purchase
eight shares of BB&T common stock for $145.00. Alternatively, at the
discretion of the BB&T Board, each right following an event set forth in the
preceding paragraph, without payment of the exercise price, would entitle its
holder to BB&T common stock (or other consideration, as noted above) worth
$145.00.
If, at any time following the date on which there has been a public
announcement that an acquiring person has acquired, or obtained the right to
acquire, beneficial ownership of 20% or more of the outstanding shares of BB&T
common stock, (a) BB&T is acquired in a merger, statutory share exchange or
other business combination transaction in which BB&T is not the surviving
corporation or (b) 50% or more of BB&T's assets or earning power is sold or
transferred, each holder of a right (except rights that previously have been
voided as set forth above) will thereafter have the right to receive, upon
exercise, common stock of the acquiring company having a value equal to two
times the exercise price of the right. The Purchase Price payable, and the
number of Units of BB&T Junior Preferred Stock or other securities or property
issuable, upon exercise of the rights are subject to adjustment from time to
time to prevent dilution if certain events occur.
In general, BB&T may redeem the rights in whole, but not in part, at a price
of $0.01 per right at any time until 10 business days following the earlier of
the stock acquisition date or the effective date of any declaration by the
BB&T Board that any person is an adverse person. After the redemption period
has expired, BB&T's right of redemption may be reinstated if an acquiring
person or adverse person reduces his or her beneficial ownership to less than
10% of the outstanding shares of BB&T common stock in a transaction or series
of transactions not involving BB&T and if there are no other acquiring persons
or adverse persons.
Until a right is exercised, the holder will have no rights as a shareholder
of BB&T, including, without limitation, the right to vote or to receive
dividends. While the distribution of the rights will not be taxable to
shareholders or to BB&T, shareholders may, depending upon the circumstances,
recognize taxable income if the rights become exercisable for stock (or other
consideration) of BB&T or for common stock of the acquiring company.
Other than those provisions relating to the principal economic terms of the
rights, any of the provisions of the rights agreement may be amended by the
BB&T Board before the distribution date. After the distribution date, the
provisions of the rights agreement may be amended by the BB&T Board in order
to cure any ambiguity, to make changes that do not adversely affect the
interests of holders of rights (excluding the interests of any acquiring
person or adverse person) or to shorten or lengthen any time period under the
rights agreement; provided, however, that no amendment to adjust the time
period governing redemption may be made when the rights are not redeemable.
45
<PAGE>
The rights agreement is filed as an exhibit to a registration statement on
Form 8-A dated January 10, 1997 that has been filed by BB&T with the SEC. This
registration statement and the rights agreement are incorporated by reference
in this proxy statement/prospectus, and reference is made to them for the
complete terms of the rights agreement and the rights. The foregoing
discussion is qualified in its entirety by reference to the rights agreement.
See "Where You Can Find More Information" on page 54.
Other Anti-Takeover Provisions
Provisions of the North Carolina Business Corporation Act and BB&T's
articles of incorporation and bylaws described below may be deemed to have an
anti-takeover effect and, together with the ability of the BB&T Board to issue
shares of BB&T preferred stock and to set the voting rights, preferences and
other terms thereof, may delay or prevent takeover attempts not first approved
by the BB&T Board. These provisions also could delay or deter the removal of
incumbent directors or the assumption of control by shareholders. BB&T
believes that these provisions are appropriate to protect the interests of
BB&T and its shareholders.
Control Share Acquisition Act
The Control Share Acquisition Act of the NCBCA may make an unsolicited
attempt to gain control of BB&T more difficult by restricting the right of
certain shareholders to vote newly acquired large blocks of stock. For a
description of this statute, see "Comparison of Shareholders' Rights--Anti-
takeover Statutes" on page 51.
Provisions Regarding the BB&T Board
BB&T's articles of incorporation and bylaws separate the BB&T Board into
classes and permit the removal of directors only for cause. This could make it
more difficult for a third party to acquire, or discourage a third party from
acquiring, control of BB&T. For a description of such provisions, see
"Comparison of Shareholders' Rights--Directors" on page 47.
Meeting of Shareholders; Shareholders' Nominations and Proposals
Under BB&T's bylaws, meetings of the shareholders may be called only by the
Chief Executive Officer, President, Secretary or the BB&T Board. Shareholders
of BB&T may not request that a special meeting of shareholders be called. This
provision could delay until the next annual shareholders' meeting shareholder
actions that are favored by the holders of a majority of the outstanding
voting securities of BB&T.
The procedures governing the submission of nominations for directors and
other proposals by shareholders may also have a deterrent effect on
shareholder actions designed to result in change of control in BB&T. See
"Comparison of Shareholders' Rights--Shareholder Nominations and Shareholder
Proposals" on page 49.
COMPARISON OF SHAREHOLDERS' RIGHTS
At the effective time, holders of Premier common stock and Premier preferred
stock will become shareholders of BB&T. The following is a summary of material
differences between the rights of holders of BB&T common stock and holders of
Premier common stock. Since BB&T is organized under the laws of the State of
North Carolina and Premier is organized under the laws of the State of
Georgia, differences in the rights of holders of BB&T common stock and those
of holders of Premier common stock arise from differing provisions of the
NCBCA and the GBCC in addition to differing provisions of their respective
articles of incorporation and bylaws.
The following summary does not purport to be a complete statement of the
provisions affecting, and differences between, the rights of holders of BB&T
common stock and holders of Premier common stock. The identification of
specific provisions or differences is not meant to indicate that other equally
or more significant
46
<PAGE>
differences do not exist. This summary is qualified in its entirety by
reference to the NCBCA and the GBCC and the governing corporate instruments of
BB&T and Premier, to which the shareholders of Premier are referred.
Authorized Capital Stock
BB&T
BB&T's authorized capital stock consists of 500,000,000 shares of BB&T
common stock and 5,000,000 shares of BB&T preferred stock. BB&T's articles of
incorporation authorize the BB&T Board to issue shares of BB&T preferred stock
in one or more series and to fix the designation, powers, preferences, and
rights of the shares of BB&T preferred stock in each series. As of November 4,
1999, there were 318,556,636 shares of BB&T common stock outstanding. No
shares of BB&T preferred stock were issued and outstanding as of that date,
although 2,000,000 shares of BB&T preferred stock have been designated as BB&T
Junior Preferred Stock and are reserved for issuance in connection with BB&T's
shareholder rights plan. See "Description of BB&T Capital Stock--Shareholder
Rights Plan" on page 43.
Premier
Premier's authorized capital stock consists of 60,000,000 shares of Premier
common stock, par value $1.00 per share and 2,000,000 shares of Premier
preferred stock. Premier's articles of incorporation, similar to those of
BB&T, authorize its board of directors to issue shares of Premier preferred
stock in one or more series and to fix the designation, powers, preferences,
and relative rights of each such series. As of November 5, 1999, there were
32,246,717 shares of Premier common stock outstanding and 40,770 shares of
Premier preferred stock, $60.00 par value per share, outstanding.
Special Meetings of Shareholders and Action by Shareholders without a Meeting
BB&T
Special meetings of the shareholders of BB&T may be called at any time by
BB&T's Chief Executive Officer, President or Secretary or by the BB&T Board.
Under the NCBCA, shareholders of a North Carolina corporation may take action
without a meeting by one or more written consents signed by all shareholders
entitled to vote on the matter in question, provided that any required notice
is given to any shareholders not entitled to vote on such matter.
Premier
Special meetings of the shareholders of Premier may be called at any time by
the Premier Board, its President, and at the written request of any one or
more shareholders owning an aggregate of 25% or more of Premier's outstanding
capital stock. The GBCC, like the NCBCA, permits actions required or permitted
to be taken at a shareholder meeting to be taken without a meeting by one or
more written consents signed by all of the shareholders entitled to vote on
the matter, provided that these shareholders have received any materials that
would have been included in the notice of a meeting concerning the action in
question.
Directors
BB&T
BB&T's articles of incorporation and bylaws provide for a board of directors
having not less than three nor more than 30 members as determined from time to
time by vote of a majority of the members of the BB&T Board or by resolution
of the shareholders of BB&T. Currently, the BB&T Board consists of 21
directors. The BB&T Board is divided into three classes, with directors
serving staggered three-year terms. Under BB&T's articles of incorporation and
bylaws, BB&T directors may be removed only for cause and only by the vote of a
47
<PAGE>
majority of the outstanding shares entitled to vote in the election of
directors. Holders of BB&T common stock do not have cumulative voting rights
in the election of directors.
Premier
Premier's bylaws provide that its board of directors will consist of not
less than 4 nor more than 19 directors. The number of directors may be fixed
or changed from time to time, within this range, by Premier's shareholders or
its board of directors. The Premier board of directors presently consists of
15 members.
Unlike BB&T, Premier does not have a classified board of directors, and
Premier's directors serve only one-year terms. The effect of BB&T having a
classified board of directors is that only approximately one-third of the
members of the board are elected each year. Consequently, two annual meetings
will likely be required to change a majority of the members of BB&T's board of
directors. In contrast, it is possible to change Premier's entire board in a
single election.
Premier's bylaws provide that a director may be removed from office at a
meeting the purpose of which was disclosed in the notice to shareholders. Upon
such notice, shareholders may remove any director (a) without cause, only upon
the affirmative votes of two-thirds of the issued and outstanding shares of
Premier, and (b) with cause, only upon the affirmative vote of a majority of
Premier's issued and outstanding shares. Premier's bylaws define cause to
mean: (i) the adjudication of such director as incompetent by a court having
jurisdiction in the matter, (ii) the conviction of such director of a felony,
(iii) the failure of such director to accept office either in writing or by
attendance at no less than one of the first two meetings of the board of
directors following his or her election, or (iv) the failure of such director
to attend regular meetings of the board of directors for six consecutive
meetings without having been excused by the board of directors.
Directors of both BB&T and Premier may be removed from office for cause by a
vote of a majority of the issued and outstanding shares of the corporation.
However, only Premier's directors may be removed without cause, although a
vote of two-thirds of Premier's issued and outstanding shares will be
required. The result of permitting the removal of Premier's directors without
cause, is that the directors of BB&T are afforded greater protection against
their removal by shareholder vote than are their counterparts at Premier.
Holders of Premier common stock, like BB&T's shareholders, do not have
cumulative voting rights in the election of directors.
Dividends and Other Distributions
BB&T
The NCBCA prohibits a North Carolina corporation from making any
distributions to shareholders, including the payment of cash dividends, that
would render it insolvent or unable to meet its obligations as they become due
in the ordinary course of business. BB&T is not subject to any other express
regulatory restrictions on payments of dividends and other distributions. The
ability of BB&T to pay distributions to the holders of BB&T common stock will
depend, however, to a large extent upon the amount of dividends its bank
subsidiaries, which are subject to restrictions imposed by regulatory
authorities, pay to BB&T. In addition, the Federal Reserve could oppose a
distribution by BB&T if it determined that such a distribution would harm
BB&T's ability to support its bank subsidiaries. There can be no assurances
that dividends will be paid in the future. The declaration, payment and amount
of any such future dividends would depend on business conditions, operating
results, capital, reserve requirements and the consideration of other relevant
factors by the BB&T Board.
Premier
Premier's articles of incorporation provide that, subject to GBCC
limitations, the board of directors will have the power to distribute a
portion of Premier's assets, in cash or in property, to Premier's shareholders
out of Premier's capital surplus. The GBCC, similar to the NCBCA, forbids any
distribution which, after being given
48
<PAGE>
effect, would leave the corporation unable to pay its debts as they become due
in the usual course of business. Additionally, the GBCC provides that no
distribution shall be made if, after giving it effect, the corporation's total
assets would be less than the sum of its total liabilities plus the amount
that would be needed to satisfy any preferential rights upon dissolution.
Premier's outstanding shares of preferred stock have such preferential
dissolution rights. The holders of Premier's shares of preferred stock are
entitled to receive, upon voluntary or involuntary liquidation, dissolution or
winding up of the corporation, an amount equal to $60 per share of preferred
stock prior to any distribution of any assets or surplus funds to the holders
of Premier's common stock. Premier's articles of incorporation also reflect a
dividend preference in favor of the preferred shareholders who are entitled to
receive a cumulative dividend of 8% of the $60 par value of the shares of
preferred stock each year from Premier's current earnings or undivided
profits.
Presently, BB&T has no shares of preferred stock issued and outstanding, and
Premier has 40,770 shares of preferred stock issued and outstanding with an
aggregate liquidation preference of $2,446,200, plus accrued but unpaid
dividends. The effect of this difference is that the holders of Premier common
stock will receive distributions only after the holders of Premier preferred
stock have received their preferred dividend, while BB&T's common shareholders
are not subject to any similar distribution preference.
Shareholder Nominations and Shareholder Proposals
BB&T
BB&T's bylaws establish advance notice procedures for shareholder proposals
and the nomination, other than by or at the direction of the BB&T Board or one
of its committees, of candidates for election as directors. BB&T's bylaws
provide that a shareholder wishing to nominate a person as a candidate for
election to the BB&T Board must submit the nomination in writing to the
Secretary of BB&T at least 60 days before the one year anniversary of the most
recent annual meeting of shareholders, together with biographical information
about the candidate and the shareholder's name and shareholdings. Nominations
not made in accordance with the foregoing provisions may be ruled out of order
by the presiding officer or the chairman of the meeting. In addition, a
shareholder intending to make a proposal for consideration at a regularly
scheduled annual meeting of shareholders that is not intended to be included
in the proxy statement for such meeting must notify the Secretary of BB&T in
writing at least 60 days before the one year anniversary of the most recent
annual meeting of shareholders of the shareholder's intention. The notice must
contain: (a) a brief description of the proposal, (b) the name and
shareholdings of the shareholder submitting the proposal and (c) any material
interest of the shareholder in the proposal.
In accordance with SEC Rule 14a-8 under the Securities Exchange Act,
shareholder proposals intended to be included in the proxy statement and
presented at a regularly scheduled annual meeting must be received by BB&T at
least 120 days before the anniversary of the date that the previous year's
proxy statement was first mailed to shareholders. As provided in the SEC
rules, if the annual meeting date has been changed by more than 30 days from
the date of the prior year's meeting, or for special meetings, the proposal
must be submitted within a reasonable time before BB&T begins to print and
mail its proxy materials.
Premier
Premier's articles of incorporation and bylaws do not contain similar
provisions to those of BB&T governing the notice and procedural requirements
for shareholder nominations of directors. Consequently, Premier's shareholders
are subject to fewer restrictions concerning nomination of candidates for
director than BB&T's shareholders.
Premier's bylaws provide that any proposal to be presented by a Premier
shareholder at the annual meeting of shareholders must be received at
Premier's principal executive offices to the attention of the Corporate
Secretary not later than 120 days before the anniversary of the mailing date
of the corporation's proxy statement for the previous year's annual
shareholder meeting. Notice of such a proposal to be brought before an annual
49
<PAGE>
meeting must include: (i) a brief description of the business desired to be
brought before the annual meeting and the reasons therefor; (ii) the name and
address of the shareholder giving notice, the classes and number of shares
owned of record or beneficially by the shareholder; and (iii) any material
interest of the shareholder in the proposal other than his interest as a
shareholder.
Premier's bylaws also establish advance notice requirements for proposals to
be presented by a shareholder at a special meeting of the shareholders. Such
proposals must be received at the principal executive offices of Premier to
the attention of the Corporate Secretary within a reasonable time before the
printing and mailing of proxy materials in connection with that special
shareholder meeting. The notice requirements relating to both annual and
special shareholder meetings set forth in Premier's bylaws are subject to SEC
Rule 14a-8.
Exculpation and Indemnification
BB&T
The NCBCA requires that a director of a North Carolina corporation discharge
his or her duties as a director (a) in good faith, (b) with the care an
ordinarily prudent person in a like position would exercise under similar
circumstances and (c) in a manner the director reasonably believes to be in
the best interests of the corporation. The NCBCA expressly provides that a
director facing a change of control situation shall not be subject to any
different duties or a higher standard of care. BB&T's articles of
incorporation provide that, to the fullest extent permitted by applicable law,
no director of BB&T will have any personal liability for monetary damage for
breach of a duty as a director. BB&T's bylaws require BB&T to indemnify its
directors and officers against liabilities arising out of each person's status
as a director or officer, excluding any liability relating to activities that
were at the time taken known or believed by such person to be clearly in
conflict with the best interests of BB&T.
Premier
The GBCC requires that a director discharge his or her duties as director
subject to several general standards of care. Each director must act in a
manner he or she believes in good faith to be in the best interests of the
corporation. Additionally, a director must exercise the care of an ordinarily
prudent person in a like position and in similar circumstances. Premier's
articles of incorporation provide that, to the extent permitted by law, no
director will be liable to Premier or its shareholders for monetary damages
for breach of his or her duty of care or other duty as a director.
Consistent with the GBCC, Premier's bylaws provide that Premier may
indemnify or obligate itself to indemnify an individual made a party to a
proceeding because he or she is or was a director, officer, employee or agent
of Premier. Premier may indemnify these individuals for reasonable expenses,
judgments, fines, penalties and amounts paid in settlement that are incurred
in connection with the proceeding if the individual acted in a manner that he
or she believed in good faith to be in or not opposed to the best interests of
Premier and, in the case of any criminal proceeding, if he or she had no
reasonable cause to believe his or her conduct was unlawful. To the extent
that a director, officer, employee or agent of Premier has been successful, on
the merits or otherwise, in defending any proceeding to which he or she was a
party, or in defending any claim, issue or matter in the proceeding, because
he or she is or was a director, officer, employee or agent of Premier, Premier
will indemnify the director, officer, employee or agent against reasonable
expenses he or she incurred in connection with the proceeding.
Mergers, Share Exchanges and Sales of Assets
BB&T
The NCBCA generally requires that any merger, share exchange or sale of all
or substantially all the assets of a corporation otherwise than in the
ordinary course of business must be approved by the affirmative vote of the
majority of the issued and outstanding shares of each voting group entitled to
vote. Approval of a merger by
50
<PAGE>
the shareholders of the surviving corporation is not required in certain
instances, however, including (as in the case of the merger with Premier) a
merger in which the number of voting shares outstanding immediately after the
merger, plus the number of voting shares issuable as a result of the merger,
does not exceed by more than 20% the number of voting shares outstanding
immediately before the merger. BB&T is also subject to certain statutory anti-
takeover provisions. See "--Anti-takeover Statutes" below.
Premier
Neither Premier's articles of incorporation nor bylaws contain specific
provisions governing the approval of business combinations or the disposition
of assets. As a result, the GBCC governs the approval of such transactions. It
generally provides that approval of these transactions requires a
recommendation by the board of directors to the shareholders and approval by
the shareholders by a majority of all the votes entitled to be cast by all
shares entitled to vote on the transaction.
Anti-takeover Statutes
BB&T
The North Carolina Control Share Acquisition Act applies to BB&T. This Act
is designed to protect shareholders of publicly owned North Carolina
corporations based within the state against certain changes in control and to
provide shareholders with the opportunity to vote on whether to afford voting
rights to certain types of shareholders. The Act is triggered upon the
acquisition by a person of shares of voting stock of a covered corporation
that, when added to all other shares beneficially owned by the person, would
result in that person holding one-fifth, one-third or a majority of the voting
power in the election of directors. Under the Act, the shares acquired that
result in the crossing of any of these thresholds have no voting rights until
they are conferred by the affirmative vote of the holders of a majority of all
outstanding voting shares, excluding those shares held by any person involved
or proposing to be involved in the acquisition of shares in excess of the
thresholds, any officer of the corporation and any employee of the corporation
who is also a director of the corporation. If voting rights are conferred on
the acquired shares, all shareholders of the corporation have the right to
require that their shares be redeemed at the highest price paid per share by
the acquiror for any of the acquired shares.
The North Carolina Shareholder Protection Act requires that certain business
combinations with existing shareholders either be approved by a supermajority
of the other shareholders or meet certain "fair price" requirements. BB&T has
elected to opt out of the North Carolina Shareholder Protection Act, as
permitted by that Act.
Premier
The GBCC provides for voting rules and fair price requirements involving
business combinations with "interested shareholders," but Premier has not
adopted these requirements in its bylaws and is not subject to the GBCC's fair
price requirements.
Amendments to Articles of Incorporation and Bylaws
BB&T
The NCBCA provides generally that a North Carolina corporation's articles of
incorporation may be amended only upon approval by a majority of the votes
cast within each voting group entitled to vote. BB&T's articles of
incorporation and bylaws also require the affirmative vote of more than two-
thirds of the outstanding shares entitled to vote to approve an amendment that
would amend, alter or repeal the provisions of the articles of incorporation
or bylaws relating to classification and staggered terms of the BB&T Board,
removal of directors or any requirement for a supermajority vote on such an
amendment. The NCBCA provides that a North Carolina corporation's bylaws may
be amended by its shareholders, and BB&T's articles of incorporation authorize
the BB&T Board to amend BB&T's bylaws.
51
<PAGE>
Premier
Premier's articles of incorporation and bylaws do not address the means by
which they may be amended; accordingly, the provisions of the GBCC govern
their amendment. The GBCC provides that a Georgia corporation's articles of
incorporation may be amended if the amendment is approved by a majority of the
votes entitled to be cast on the amendment by each voting group entitled to
vote on the amendment. The GBCC further states that generally a corporation's
bylaws may be amended, repealed, or new bylaws adopted by the corporation's
board of directors or its shareholders. If a quorum is present, a plurality of
those shares voting is sufficient to amend, repeal, or adopt a bylaw. The GBCC
also sets forth several bylaws which are beyond the authority of the board of
directors to adopt, amend, or repeal. Shareholders alone, for instance, are
entitled to adopt, amend, or repeal bylaws limiting the authority of the board
of directors or establishing staggered terms for directors. Similarly,
shareholders alone may adopt a bylaw fixing a greater quorum or voting
requirement for shareholders than would normally be required.
The effect of BB&T's more stringent voting requirements for the amendment of
its articles and bylaws relating to classification and staggered terms of the
BB&T board of directors, removal of directors, or any amendment requiring a
supermajority vote on such an amendment is to make any change in these areas
more difficult for BB&T's shareholders than would be the case for Premier's
shareholders.
Shareholders' Rights of Dissent and Appraisal
BB&T
The NCBCA provides that dissenters' rights are not available to the holders
of shares of a corporation, such as BB&T, that are either listed on a national
securities exchange or held by more than 2,000 record shareholders by reason
of a merger, share exchange or sale or exchange of property unless (a) the
articles of incorporation of the corporation that issued the shares provide
otherwise or (b) in the case of a merger or share exchange, the holders of the
shares are required to accept anything other than (1) cash, (2) shares in
another corporation that are either listed on a national securities exchange
or held by more than 2,000 record shareholders or (3) a combination of cash
and such shares. BB&T's articles of incorporation do not authorize any special
dissenters' rights.
Premier
The GBCC, like the NCBCA, does not allow a right to dissent to shareholders
holding securities that are either listed on a national securities exchange or
held by more than 2,000 shareholders unless those shareholders are required
under the plan of merger or share exchange to accept shares in a company that
is not either listed on a national securities exchange or held of record by
more than 2,000 shareholders. Holders of Premier common stock do not have
appraisal rights in connection with the BB&T merger because, as of the record
date, shares of Premier common stock were listed on the New York Stock
Exchange and the shares of BB&T common stock are held by at least 2,000 record
shareholders. Holders of Premier preferred stock are entitled to appraisal
rights in connection with the BB&T merger because Premier preferred stock is
neither held of record by more than 2,000 shareholders nor traded on any
national securities exchange. See "The Merger--Rights of Dissenting Preferred
Shareholders" on page 32.
Under the GBCC (subject to certain exceptions, including the exception
described in the preceding paragraph), any shareholder of a Georgia
corporation who objects to a merger and who fully complies with all of the
dissenters' provisions shall be entitled to demand and receive payment for all
(but not less than all) of his or her shares if the proposed merger is
consummated. A shareholder who objects to a merger and desires to receive
payment of the "fair value" of his or stock:
. must file a written objection to the merger with the corporation either
prior to the shareholders' meeting, or at the meeting but before the
vote is taken, and the written objection must contain a statement that
the shareholder intends to demand payment for his or her shares if the
merger is approved;
52
<PAGE>
. must either abstain from voting or vote against approval of the merger;
and
. must demand payment and deposit his or her certificate(s) in accordance
with the terms of the dissenters' notice sent to the dissenting
shareholder following approval of the merger.
If all of the above conditions are satisfied in full, the resulting
corporation is required to make a written offer within 10 days of receiving
the payment demand, or within 10 days after the consummation of the merger,
whichever is later, to each dissenting shareholder to purchase all of the
shareholder's shares at a specific price. If the resulting corporation and any
dissenting shareholder are unable to agree on the fair value of the shares
within 60 days of the receipt of the payment demand, the resulting corporation
will commence a proceeding in the superior court of the county in which the
resulting corporation has a registered office to determine the rights of the
dissenting shareholder and the fair value of his or her shares. The court may
appoint appraisers to receive evidence and to recommend a decision on fair
value.
Liquidation Rights
BB&T
In the event of the liquidation, dissolution or winding-up of the affairs of
BB&T, holders of outstanding shares of BB&T common stock are entitled to
share, in proportion to their respective interests, in BB&T's assets and funds
remaining after payment, or provision for payment, of all debts and other
liabilities of BB&T.
Because BB&T is a bank holding company, its rights, the rights of its
creditors and of its shareholders, including the holders of the shares of any
BB&T preferred stock that may be issued, to participate in the assets of any
subsidiary upon the latter's liquidation or recapitalization may be subject to
the prior claims of (a) the subsidiary's creditors, except to the extent that
BB&T may itself be a creditor with recognized claims against the subsidiary,
and (b) any interests in the liquidation accounts established by savings
associations or savings banks acquired by BB&T for the benefit of eligible
account holders in connection with conversion of the savings associations from
mutual to stock form.
Premier
In the event of the liquidation, dissolution or winding up of the affairs of
Premier, after the payment in full of debts and other liabilities, including
the payment of $60.00 in respect of each outstanding share of Premier
preferred stock, the remaining net assets would be distributed to the
shareholders in proportion to their respective interests.
Like BB&T, Premier is a bank holding company, and its rights and the rights
of its creditors and of its shareholders to participate in the assets of any
subsidiary upon liquidation or recapitalization may be subject to the prior
claims of the subsidiary's creditors, except to the extent that Premier may
itself be a creditor with recognized claims against the subsidiary.
SHAREHOLDER PROPOSALS
In the event that the merger is not completed, any proposal which a
shareholder wishes to have presented at the next annual meeting of
shareholders and included in Premier's proxy materials must be received at the
main office of Premier, 950 E. Paces Ferry Road, Atlanta, Georgia 30326, no
later than December 25, 1999. If such proposal is in compliance with all of
the requirements of Rule 14a-8 of the Securities Exchange Act, it will be
included in Premier's proxy statement and set forth on the form of proxy
issued for the next annual meeting of shareholders, if applicable.
Shareholders wishing to present proposals at such meeting (but not include
them in Premier's proxy materials) must also give notice of such proposals to
Premier no later than March 9, 2000. It is urged that any proposals be sent by
certified mail, return receipt requested.
53
<PAGE>
OTHER BUSINESS
The Premier Board is not aware of any business to come before the meeting
other than those matters described in this proxy statement/prospectus.
However, if any other matters should properly come before the meeting, it is
intended that the proxies solicited hereby will be voted with respect to those
other matters in accordance with the judgment of the persons voting the
proxies.
LEGAL MATTERS
The validity of the shares of BB&T common stock offered by this proxy
statement/prospectus will be passed upon by Womble Carlyle Sandridge & Rice,
PLLC, Washington, D.C., as counsel to BB&T. As of the date of this proxy
statement/prospectus, certain members of Womble Carlyle Sandridge & Rice, PLLC
owned an aggregate of approximately 38,000 shares of BB&T common stock.
EXPERTS
The consolidated financial statements of BB&T Corporation and its
subsidiaries which are incorporated by reference in this proxy
statement/prospectus from BB&T's Current Report on Form 8-K dated September 3,
1999, which restates the consolidated financial statements that are
incorporated by reference from BB&T's Annual Report on Form 10-K for the year
ended December 31, 1998 to reflect the acquisitions by BB&T of MainStreet
Financial Corporation on March 5, 1999, First Citizens Corporation on July 9,
1999 and Mason-Dixon Bancshares, Inc. on July 14, 1999, have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
reports with respect thereto, and are incorporated by reference herein in
reliance upon the authority of said firm as experts in giving said reports.
Ernst & Young LLP, independent auditors, have audited Premier's consolidated
financial statements for the two years ended December 31, 1998 and 1997,
included in its Annual Report on Form 10-K for the year ended December 31,
1998, as set forth in their report, which is incorporated by reference in this
proxy statement/prospectus. Premier's financial statements are incorporated by
reference in reliance on Ernst & Young LLP's report, given on their authority
as experts in accounting and auditing.
Mauldin & Jenkins, LLC, independent auditors, audited Premier's consolidated
statements of income, stockholders' equity and cash flows for the year ended
December 31, 1996, included in Premier's Annual Report on Form 10-K for the
year ended December 31, 1998, as set forth in their report, which is
incorporated by reference in this proxy statement/prospectus. Premier's
financial statements are incorporated by reference in reliance on Mauldin &
Jenkins, LLC's report, given on their authority as experts in accounting and
auditing.
WHERE YOU CAN FIND MORE INFORMATION
BB&T and Premier file annual, quarterly and special reports, proxy
statements and other information with the SEC. You may read and copy any
reports, statements or certain other information that the companies file with
the SEC at the SEC's public reference rooms in Washington, D.C., New York, New
York and Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further
information on the public reference rooms. These SEC filings are also
available to the public from commercial document retrieval services and at the
Internet world wide web site maintained by the SEC at "http://www.sec.gov."
Reports, proxy statements and other information should also be available for
inspection at the offices of the NYSE.
BB&T has filed the registration statement to register with the SEC the BB&T
common stock to be issued to Premier shareholders in the merger. This proxy
statement/prospectus is a part of that registration statement and constitutes
a prospectus of BB&T. As allowed by SEC rules, this proxy statement/prospectus
does not contain all the information you can find in BB&T's registration
statement or the exhibits to the registration statement.
54
<PAGE>
The SEC allows Premier and BB&T to "incorporate by reference" information
into this proxy statement/prospectus, which means that the companies can
disclose important information to you by referring you to another document
filed separately with the SEC. The information incorporated by reference is
considered part of this proxy statement/prospectus, except for any information
superseded by information contained directly in this proxy
statement/prospectus or in later filed documents incorporated by reference in
this proxy statement/prospectus.
This proxy statement/prospectus incorporates by reference the documents set
forth below that Premier and BB&T have previously filed with the SEC. These
documents contain important information about Premier and BB&T and their
businesses.
BB&T SEC Filings (File No. 1-10853)
<TABLE>
<S> <C>
Annual Report on Form 10-K For the fiscal year ended December 31, 1998
Quarterly Reports on Form 10-Q For the fiscal quarters ended March 31, 1999,
June 30, 1999 and September 30, 1999
Current Reports on Form 8-K Filed January 8, 1999, January 14, 1999,
January 27, 1999 (two filings), January 28,
1999, February 25, 1999 (amended on April 28,
1999), April 9, 1999, April 12, 1999, April
28, 1999 (three filings), April 30, 1999,
July 14, 1999, July 29, 1999, September 3,
1999 and October 12, 1999
Registration Statement on Form Filed January 10, 1997
8-A (concerning BB&T's
shareholder rights plan)
Premier SEC Filings (File No. 1-12625)
Annual Report on Form 10-K For the fiscal year ended December 31, 1998
Quarterly Reports on Form 10-Q For the fiscal quarters ended March 31, 1999,
June 30, 1999 and September 30, 1999
Current Reports on Form 8-K Filed April 9, 1999, April 27, 1999, May 27,
1999, August 3, 1999 and November 9, 1999
Registration Statement on Form Dated May 27, 1999
8-A/A (describing Premier
common stock)
</TABLE>
Premier and BB&T also incorporate by reference additional documents that may
be filed with the SEC between the date of this proxy statement/prospectus and
the completion of the merger or the termination of the merger agreement. These
include periodic reports, such as Annual Reports on Form 10-K, Quarterly
Reports on Form 10-Q and Current Reports on Form 8-K, as well as proxy
statements.
BB&T has supplied all information contained or incorporated by reference in
this proxy statement/prospectus relating to BB&T, and Premier has supplied all
such information relating to Premier before the merger.
If you are a shareholder, we may have sent you some of the documents
incorporated by reference, but you can obtain any of them through the
companies, the SEC or the SEC's Internet web site as described above.
Documents incorporated by reference are available from the companies without
charge, excluding all exhibits except those that the companies have
specifically incorporated by reference in this proxy statement/prospectus.
Shareholders may obtain documents incorporated by reference in this proxy
statement/prospectus by requesting them in writing or by telephone from the
appropriate company at the following addresses:
55
<PAGE>
Shareholder Reporting Barbara J. Burtt
BB&T Corporation Corporate Secretary
Post Office Box 1290 Premier Bancshares, Inc.
Winston-Salem, North Carolina 27102 950 E. Paces Ferry Road
(336) 733-3021 Atlanta, Georgia 30326
(404) 814-3090
If you would like to request documents from us, please do so by January 2,
1999 to receive them before the meeting.
You should rely only on the information contained or incorporated by
reference in this proxy statement/prospectus. BB&T and Premier have not
authorized anyone to provide you with information that is different from what
is contained in this proxy statement/prospectus. This proxy
statement/prospectus is dated November 10, 1999. You should not assume that
the information contained in this proxy statement/prospectus is accurate as of
any date other than that date. Neither the mailing of this proxy
statement/prospectus to shareholders nor the issuance of BB&T common stock in
the merger creates any implication to the contrary.
56
<PAGE>
APPENDIX A
AGREEMENT AND PLAN OF REORGANIZATION
BETWEEN
PREMIER BANCSHARES, INC.
and
BB&T CORPORATION
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I
DEFINITIONS.............................................................. A-1
1.1 Definitions.......................................................... A-1
1.2 Terms Defined Elsewhere.............................................. A-4
ARTICLE II
THE MERGER............................................................... A-5
2.1 Merger............................................................... A-5
2.2 Filing; Plan of Merger............................................... A-5
2.3 Effective Time....................................................... A-5
2.4 Closing.............................................................. A-5
2.5 Effect of Merger..................................................... A-6
2.6 Further Assurances................................................... A-6
2.7 Merger Consideration................................................. A-6
2.8 Conversion of Shares; Payment of Merger Consideration................ A-7
2.9 Conversion of Stock Options.......................................... A-8
2.10 Assumption of Trust Preferred Obligations........................... A-9
2.11 Merger of Subsidiaries.............................................. A-9
2.12 Anti-Dilution....................................................... A-9
2.13 Dissenting Shares................................................... A-9
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PREMIER................................ A-9
3.1 Capital Structure.................................................... A-9
3.2 Organization, Standing and Authority................................. A-10
3.3 Ownership of Subsidiaries............................................ A-10
3.4 Organization, Standing and Authority of the Subsidiaries............. A-10
3.5 Authorized and Effective Agreement................................... A-11
3.6 Securities Filings; Financial Statements; Statements True............ A-11
3.7 Minute Books......................................................... A-12
3.8 Adverse Change....................................................... A-12
3.9 Absence of Undisclosed Liabilities................................... A-12
3.10 Properties.......................................................... A-12
3.11 Environmental Matters............................................... A-12
3.12 Loans; Allowance for Loan Losses.................................... A-13
3.13 Tax Matters......................................................... A-13
3.14 Employees; Compensation; Benefit Plans.............................. A-14
3.15 Certain Contracts................................................... A-16
3.16 Legal Proceedings; Regulatory Approvals............................. A-17
3.17 Compliance with Laws; Filings....................................... A-17
3.18 Brokers and Finders................................................. A-17
3.19 Repurchase Agreements; Derivatives.................................. A-17
3.20 Deposit Accounts.................................................... A-18
3.21 Related Party Transactions.......................................... A-18
3.22 Certain Information................................................. A-18
3.23 Tax and Regulatory Matters.......................................... A-18
3.24 State Takeover Laws; No Rights Plan................................. A-18
3.25 Labor Relations..................................................... A-18
3.26 No Right to Dissent................................................. A-19
3.27 Fairness Opinion.................................................... A-19
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BB&T................................... A-19
4.1 Capital Structure of BB&T............................................ A-19
4.2 Organization, Standing and Authority of BB&T......................... A-19
4.3 Authorized and Effective Agreement................................... A-19
4.4 Organization, Standing and Authority of BB&T Subsidiaries............ A-20
4.5 Securities Documents; Statements True................................ A-20
4.6 Certain Information.................................................. A-20
4.7 Tax and Regulatory Matters........................................... A-20
4.8 Adverse Change....................................................... A-21
4.9 Rights Agreement..................................................... A-21
ARTICLE V
COVENANTS................................................................ A-21
5.1 Premier Shareholder Meeting.......................................... A-21
5.2 Registration Statement; Proxy Statement/Prospectus................... A-21
5.3 Plan of Merger; Reservation of Shares................................ A-22
5.4 Additional Acts...................................................... A-22
5.5 Efforts to Consummate................................................ A-22
5.6 Certain Accounting Matters, Lending Policies......................... A-22
5.7 Access to Information................................................ A-23
5.8 Press Releases....................................................... A-23
5.9 Forbearances of Premier.............................................. A-23
5.10 Employment Agreements............................................... A-25
5.11 Affiliates.......................................................... A-25
5.12 Section 401(k) Plan; Other Employee Benefits........................ A-25
5.13 Directors and Officers Protection................................... A-26
5.14 Forbearances of BB&T................................................ A-27
5.15 Reports............................................................. A-27
5.16 Exchange Listing.................................................... A-27
5.17 Board of Directors.................................................. A-27
5.18 Completion of Bank Mergers.......................................... A-28
ARTICLE VI
CONDITIONS PRECEDENT..................................................... A-28
6.1 Conditions Precedent--BB&T and Premier............................... A-28
6.2 Conditions Precedent--Premier........................................ A-28
6.3 Conditions Precedent--BB&T........................................... A-29
ARTICLE VII
TERMINATION, DEFAULT, WAIVER AND AMENDMENT............................... A-30
7.1 Termination.......................................................... A-30
7.2 Effect of Termination................................................ A-31
7.3 Survival of Representations, Warranties and Covenants................ A-31
7.4 Waiver............................................................... A-31
7.5 Amendment or Supplement.............................................. A-31
7.6 Termination Fee...................................................... A-31
ARTICLE VIII
MISCELLANEOUS............................................................ A-32
8.1 Expenses............................................................. A-32
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
8.2 Entire Agreement..................................................... A-32
8.3 No Assignment........................................................ A-32
8.4 Notices.............................................................. A-33
8.5 Specific Performance................................................. A-33
8.6 Captions............................................................. A-33
8.7 Counterparts......................................................... A-34
8.8 Governing Law........................................................ A-34
</TABLE>
<TABLE>
<S> <C>
ANNEXES
Annex A Plan of Merger
Annexes B-1 and B-2 Employment Agreements with Officers (omitted)
Annex C Matters to be Covered in Opinion of BB&T's Counsel (omitted)
Annex D Matters to be Covered in Opinion of Premier's Counsel (omitted)
</TABLE>
iii
<PAGE>
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION ("Agreement"), dated as of July
28, 1999, is by and between PREMIER BANCSHARES, INC. ("Premier"), a Georgia
corporation having its principal office at Atlanta, Georgia, and BB&T
CORPORATION ("BB&T"), a North Carolina corporation having its principal office
at Winston-Salem, North Carolina;
R E C I T A L S:
The parties believe it is in their respective best interests that Premier be
merged with and into BB&T (said transaction being hereinafter referred to as
the "Merger") pursuant to a plan of merger (the "Plan of Merger")
substantially in the form attached as Annex A hereto, and the parties desire
to provide for certain undertakings, conditions, representations, warranties
and covenants in connection with the transactions contemplated hereby.
Now, Therefore, in consideration of the premises and of the mutual
representations, warranties, covenants and agreements herein contained, and
intending to be legally bound hereby, the parties hereto agree as follows:
ARTICLE I
Definitions
1.1 Definitions
When used herein, the capitalized terms set forth below shall have the
following meanings:
"Affiliate" means, with respect to any Person, any Person, who directly or
indirectly, through one or more intermediaries, controls or is controlled by,
or is under common control with such Person and, without limiting the
generality of the foregoing, includes any executive officer or director of
such Person.
"Articles of Merger" shall mean the Articles of Merger required to be filed
with the office of the Secretary of State of North Carolina, as provided in
Section 55-11-05 of the NCBCA, and with the office of the Secretary of State
of Georgia, as provided in Section 14-2-1105 of the GBCC.
"Bank Holding Company Act" shall mean the Federal Bank Holding Company Act
of 1956, as amended.
"BB&T Common Stock" shall mean the shares of voting common stock, par value
$5.00 per share, of BB&T, with rights attached issued pursuant to Rights
Agreement dated December 17, 1996 between BB&T and Branch Banking and Trust
Company, as Rights Agent, relating to BB&T's Series B Junior Participating
Preferred Stock, $5.00 par value per share.
"BB&T Subsidiaries" shall mean all bank Subsidiaries of BB&T at the
Effective Time.
"Business Day" shall mean all days other than Saturdays, Sundays and Federal
Reserve holidays.
"CERCLA" shall mean the Comprehensive Environmental Response Compensation
and Liability Act, as amended (42 U.S.C. 9601 et seq.).
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Commission" shall mean the Securities and Exchange Commission.
"CRA" shall mean the Community Reinvestment Act of 1977, as amended.
A-1
<PAGE>
"Disclosed" shall mean disclosed in the Premier Disclosure Memorandum,
referencing the Section number herein pursuant to which such disclosure is
being made.
"Environmental Claim" means any notice from any governmental authority or
third party alleging potential liability (including, without limitation,
potential liability for investigatory costs, cleanup or remediation costs,
governmental response costs, natural resources damages, property damages,
personal injuries or penalties) arising out of, based upon, or resulting from
a violation of the Environmental Laws or the presence or release into the
environment of any Hazardous Substances.
"Environmental Laws" means all applicable federal, state and local laws and
regulations, as amended, relating to pollution or protection of human health
or the environment (including ambient air, surface water, ground water, land
surface, or subsurface strata) and which are administered, interpreted, or
enforced by the United States Environmental Protection Agency and state and
local agencies with jurisdiction over and including common law in respect of,
pollution or protection of the environment, including without limitation
CERCLA, the Resource Conservation and Recovery Act, as amended, 42 U.S.C. 6901
et seq., and other laws and regulations relating to emissions, discharges,
releases, or threatened releases of any Hazardous Substances, or otherwise
relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport, or handling of any Hazardous Substances.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
"FDIC" shall mean the Federal Deposit Insurance Corporation.
"Federal Reserve Board" shall mean the Board of Governors of the Federal
Reserve System.
"Financial Advisors" shall mean Donaldson, Lufkin & Jenrette Securities
Corporation and Brown, Burke Capital Partners, Inc.
"Financial Statements" shall mean (a) with respect to BB&T, (i) the
consolidated balance sheet (including related notes and schedules, if any) of
BB&T as of December 31, 1998, 1997, and 1996, and the related consolidated
statements of income, shareholders' equity and cash flows (including related
notes and schedules, if any) for each of the three years ended December 31,
1998, 1997, and 1996, as filed by BB&T in Securities Documents and (ii) the
consolidated balance sheets of BB&T (including related notes and schedules, if
any) and the related consolidated statements of income, shareholders' equity
and cash flows (including related notes and schedules, if any) included in
Securities Documents filed by BB&T with respect to periods ended subsequent to
December 31, 1998, and (b) with respect to Premier, (i) the consolidated
statements of financial condition (including related notes and schedules, if
any) of Premier as of December 31, 1998, December 31, 1997 and December 31,
1996, and the related consolidated statements of income and retained earnings,
and cash flows (including related notes and schedules, if any) for each of the
three years ended December 31, 1998, December 31, 1997 and December 31, 1996
as filed by Premier in Securities Documents, (ii) the consolidated statements
of financial condition of Premier (including related notes and schedules, if
any) and the related consolidated statements of income and retained earnings,
and cash flows (including related notes and schedules, if any) included in
Securities Documents filed by Premier with respect to periods ended subsequent
to December 31, 1998 and (iii) the Press Release of Premier dated June 21,
1999.
"GAAP" shall mean generally accepted accounting principles applicable to
financial institutions and their holding companies, as in effect at the
relevant date.
"GBCC" shall mean the Georgia Business Corporation Code, as amended.
"Hazardous Substances" means any substance or material (i) identified as
such in CERCLA; (ii) determined to be toxic, a pollutant or a contaminant
under CERCLA or any other applicable federal, state or
A-2
<PAGE>
local statute, law, ordinance, rule or regulation, including but not limited
to petroleum products; (iii) asbestos; and (iv) poly-chlorinated biphiphenyls.
"IRS" shall mean the Internal Revenue Service.
"Knowledge" shall mean, as used with respect to a Person (including
references to such Person being aware of a particular matter), the personal
knowledge after due inquiry of the chairman, president, chief financial
officer, chief accounting officer, chief operating officer, chief credit
officer, general counsel, any assistant or deputy general counsel, or any
senior, executive or other vice president of such Person.
"Material Adverse Effect" on BB&T or Premier shall mean an event, fact,
change, or occurrence which, individually or together with any other event,
fact, change or occurrence, (i) has a material adverse effect on the financial
condition, results of operations, business or business prospects of BB&T and
the BB&T Subsidiaries taken as a whole, or Premier and the Premier
Subsidiaries taken as a whole, or (ii) materially impairs the ability of BB&T
or Premier to perform its obligations under this Agreement or to consummate
the Merger and the other transactions contemplated by this Agreement; provided
that "Material Adverse Effect" shall not be deemed to include the impact of
(a) actions and omissions of BB&T or Premier taken with the prior written
consent of the other in contemplation of the transactions contemplated hereby
and (b) the direct effects of compliance with this Agreement on the operating
performance of the parties, including expenses incurred by the parties in
consummating the transactions contemplated by this Agreement or relating to
any litigation or proceedings arising as a result of the Merger.
"NCBCA" shall mean the North Carolina Business Corporation Act, as amended.
"NYSE" shall mean the New York Stock Exchange, Inc.
"Pending Acquisitions" shall mean, collectively, the proposed acquisitions
by Premier of North Fulton Bancshares, Inc., Roswell, Georgia, Farmers &
Merchants Bank, Summerville, Georgia and Bank Atlanta, Decatur, Georgia.
"Person" shall mean any individual, corporation, partnership, limited
liability company, joint venture, trust, association, unincorporated
organization, agency, other entity or groups of entities, or governmental
body.
"Premier Common Stock" shall mean the shares of voting common stock, par
value $1.00 per share, of Premier.
"Premier Disclosure Memorandum" shall mean the written information in one or
more documents, each of which is entitled "Premier Disclosure Memorandum" and
dated and delivered by Premier to BB&T prior to the date of execution of this
Agreement, and describing in reasonable detail the matters contained therein.
Each disclosure made therein shall specifically reference each Section of this
Agreement under which such disclosure is made and relevant. Information
disclosed with respect to one Section shall not be deemed to be disclosed for
purposes of any other Section not specifically referenced.
"Premier Preferred Stock" shall mean the shares of nonvoting Series A
Redeemable Preferred Stock, $60.00 par value, of Premier.
"Premier Subsidiaries" shall mean Premier Bank, Premier Lending Corporation,
PMB Holdings, Inc. and any and all other Subsidiaries of Premier as of the
date hereof and any corporation, bank, savings association, or other
organization acquired as a Subsidiary of Premier after the date hereof and
held as a Subsidiary by Premier at the Effective Time.
"Proxy Statement/Prospectus" shall mean the proxy statement and prospectus,
together with any supplements or amendments thereto, to be sent to
shareholders of Premier to solicit their votes in connection with a proposal
to approve this Agreement and the Plan of Merger.
A-3
<PAGE>
"Registration Statement" shall mean the registration statement of BB&T as
declared effective by the Commission under the Securities Act, including any
post-effective amendments or supplements thereto as filed with the Commission
under the Securities Act, with respect to the BB&T Common Stock to be issued
in connection with the transactions contemplated by this Agreement.
"Rights" shall mean warrants, options, rights, convertible securities and
other arrangements or commitments which obligate an entity to issue or dispose
of any of its capital stock or other ownership interests (other than rights
pursuant to the Rights Agreement described under the definition of "BB&T
Common Stock"), and stock appreciation rights, performance units and similar
stock-based rights whether or not they obligate the issuer thereof to issue
stock or other securities or to pay cash.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Securities Documents" shall mean all reports, proxy statements,
registration statements and all similar documents filed, or required to be
filed, pursuant to the Securities Laws, including but not limited to periodic
and other reports filed pursuant to Section 13 of the Exchange Act.
"Securities Laws" shall mean the Securities Act; the Exchange Act; the
Investment Company Act of 1940, as amended; the Investment Advisers Act of
1940, as amended; the Trust Indenture Act of 1939 as amended; and the rules
and regulations of the Commission promulgated thereunder.
"Stock Option" shall mean, collectively, any option granted under the Stock
Option Plans, or otherwise pursuant to any award or agreement, outstanding and
unexercised on the date hereof to acquire shares of Premier Common Stock,
aggregating 1,975,935 shares.
"Stock Option Plans" shall mean the following plans maintained by Premier:
1997 Stock Option Plan, 1995 Stock Option Plan, 1993 Employee Stock Option
Plan, Frederica Bank and Trust Directors Stock Option Plan, Amended and
Restated Directors' Deferred Stock Unit Plan and Directors' Stock Option Plan
and any stock option or other similar plans maintained by or for any of the
institutions (or their Subsidiaries) party to the Pending Acquisitions and
Disclosed.
"Subsidiaries" shall mean all those corporations, associations, or other
business entities of which the entity in question either owns or controls 50%
or more of the outstanding equity securities either directly or through an
unbroken chain of entities as to each of which 50% or more of the outstanding
equity securities is owned directly or indirectly by its parent, but excluding
equity securities owned or controlled in a fiduciary capacity or acquired
through foreclosure or enforcement of any lien.
"TILA" shall mean the Truth in Lending Act, as amended.
1.2 Terms Defined Elsewhere
The capitalized terms set forth below are defined in the following sections:
<TABLE>
<S> <C>
Agreement Introduction
BB&T Introduction
BB&T Option Plan Section 2.9(a)
Closing Section 2.4
Closing Date Section 2.4
Closing Value Section 2.7(b)
Common Exchange Ratio Section 2.7(a)
Constituent Corporations Section 2.1
Effective Time Section 2.3
Employer Entity Section 5.12(b)
</TABLE>
A-4
<PAGE>
<TABLE>
<S> <C>
Indenture Section 2.10
Merger Recitals
Merger Consideration Section 2.7(a)
PBGC Section 3.14(b)(iv)
Plan Section 3.14(b)(i)
Plan of Merger Recitals
Preferred Exchange Ratio Section 2.7(a)
Premier Introduction
Premier Acquisition Proposal Section 7.1(g)
Premier Capital Trust Section 2.10
Surviving Corporation Section 2.1(a)
Termination Fee Section 7.6(a)
Transferred Employee Section 5.12(b)
Trust Preferred Section 2.10
</TABLE>
ARTICLE II
The Merger
2.1 Merger
BB&T and Premier are constituent corporations (the "Constituent
Corporations") to the Merger as contemplated by the NCBCA and the GBCC. At the
Effective Time:
(a) Premier shall be merged with and into BB&T in accordance with the
terms of this Agreement and the applicable provisions of the NCBCA and the
GBCC, with BB&T being the surviving corporate entity (hereinafter sometimes
referred to as the "Surviving Corporation").
(b) The separate existence of Premier shall cease and the Merger shall in
all respects have the effect provided in Section 2.5.
(c) The Articles of Incorporation of BB&T at the Effective Time shall
become the Articles of Incorporation of the Surviving Corporation.
(d) The Bylaws of BB&T at the Effective Time shall become the Bylaws of
the Surviving Corporation.
2.2 Filing; Plan of Merger
The Merger shall not become effective unless this Agreement and the Plan of
Merger are duly approved by shareholders holding at least a majority of the
shares of Premier Common Stock and Premier Preferred Stock, voting together as
a single voting group. Upon fulfillment or waiver of the conditions specified
in Article VI and provided that this Agreement has not been terminated
pursuant to Article VII, the Constituent Corporations will cause the Articles
of Merger to be executed and filed with the Secretary of State of North
Carolina and the Secretary of State of Georgia, as provided in Section 55-11-
05 of the NCBCA and Section 14-2-1105 of the GBCC, respectively. The Plan of
Merger is attached hereto and incorporated herein by reference, and adoption
of this Agreement by the Boards of Directors of the Constituent Corporations
and approval by the shareholders of Premier shall constitute adoption and
approval of the Plan of Merger.
2.3 Effective Time
The Merger shall be effective at the day and hour specified in the Articles
of Merger as filed as provided in Section 2.2 (herein sometimes referred to as
the "Effective Time").
2.4 Closing
The closing of the transactions contemplated by this Agreement (the
"Closing") shall take place at the offices of Womble Carlyle Sandridge & Rice,
PLLC, Winston-Salem, North Carolina, at 10:00 a.m., or such
A-5
<PAGE>
other place as BB&T and Premier may agree, on the date designated by BB&T
which is within thirty days following the satisfaction of the conditions to
Closing set forth in Article VI (other than the delivery of certificates,
opinions and other instruments and documents to be delivered at the Closing),
or such later date as the parties may otherwise agree (the "Closing Date").
2.5 Effect of Merger
From and after the Effective Time, the separate existence of Premier shall
cease, and the Surviving Corporation shall thereupon and thereafter, possess
all of the rights, privileges, immunities and franchises, of a public as well
as a private nature, of each of the Constituent Corporations; and all
property, real, personal and mixed, and all debts due on whatever account, and
all other choses in action, and each and every other interest of or belonging
to or due to each of the Constituent Corporations shall be taken and deemed to
be transferred to and vested in the Surviving Corporation without further act
or deed; and the title to any real estate or any interest therein vested in
either of the Constituent Corporations shall not revert or be in any way
impaired by reason of the Merger. The Surviving Corporation shall thenceforth
be responsible for all the liabilities, obligations and penalties of each of
the Constituent Corporations; and any claim, existing action or proceeding,
civil or criminal, pending by or against either of the Constituent
Corporations may be prosecuted as if the Merger had not taken place, or the
Surviving Corporation may be substituted in its place; and any judgment
rendered against either of the Constituent Corporations may be enforced
against the Surviving Corporation. Neither the rights of creditors nor any
liens upon the property of either of the Constituent Corporations shall be
impaired by reason of the Merger.
2.6 Further Assurances
If, at any time after the Effective Time, the Surviving Corporation shall
consider or be advised that any further deeds, assignments or assurances in
law or any other actions are necessary, desirable or proper to vest, perfect
or confirm of record or otherwise, in the Surviving Corporation, the title to
any property or rights of the Constituent Corporations acquired or to be
acquired by reason of, or as a result of, the Merger, the Constituent
Corporations agree that such Constituent Corporations and their proper
officers and directors shall and will execute and deliver all such proper
deeds, assignments and assurances in law and do all things necessary,
desirable or proper to vest, perfect or confirm title to such property or
rights in the Surviving Corporation and otherwise to carry out the purpose of
this Agreement, and that the proper officers and directors of the Surviving
Corporation are fully authorized and directed in the name of the Constituent
Corporations or otherwise to take any and all such actions.
2.7 Merger Consideration
(a) As used herein, the term "Merger Consideration" shall mean the portion
of a share of BB&T Common Stock to be exchanged for each share of Premier
Common Stock and the number of shares of BB&T Common Stock to be exchanged for
each share of Premier Preferred Stock issued and outstanding as of the
Effective Time and cash (without interest) to be payable in exchange for any
fractional share of BB&T Common Stock which would otherwise be distributable
to a Premier shareholder as provided in Section 2.7(b). The portion of a share
of BB&T Common Stock to be issued for each issued and outstanding share of
Premier Common Stock (the "Common Exchange Ratio") shall be .5155. The number
of shares of BB&T Common Stock (computed to the nearest ten thousandth of a
share) to be issued for each issued and outstanding share of Premier Preferred
Stock (the "Preferred Exchange Ratio") shall equal the quotient of $60.00
divided by the Closing Value (as defined in Section 2.7(b)).
(b) The amount of cash payable with respect to any fractional share of BB&T
Common Stock shall be determined by multiplying the fractional part of such
share by the Closing Value. The "Closing Value" shall mean the average closing
price per share of BB&T Common Stock on the NYSE Composite Transaction List
(as reported by The Wall Street Journal--Eastern Edition) for the five trading
days (determined by excluding days on which the NYSE is closed) ending on the
calendar day preceding the Effective Time.
A-6
<PAGE>
2.8 Conversion of Shares; Payment of Merger Consideration
(a) At the Effective Time, by virtue of the Merger and without any action on
the part of Premier or the holders of record of Premier Common Stock or
Premier Preferred Stock, each share of Premier Common Stock and each share of
Premier Preferred Stock issued and outstanding immediately prior to the
Effective Time shall be converted into and shall represent the right to
receive, upon surrender of the certificate representing such share of Premier
Common Stock or Premier Preferred Stock (as provided in subsection (d) below),
the Merger Consideration.
(b) Each share of BB&T Common Stock issued and outstanding immediately prior
to the Effective Time shall continue to be issued and outstanding.
(c) Until surrendered, each outstanding certificate which prior to the
Effective Time represented one or more shares of Premier Common Stock or
Premier Preferred Stock shall be deemed upon the Effective Time for all
purposes to represent only the right to receive the Merger Consideration and
any declared and unpaid dividends (in the case of Premier Common Stock) or
accrued and unpaid dividends (in the case of Premier Preferred Stock). No
interest will be paid or accrued on any cash payable for fractional shares as
part of the Merger Consideration (or on any dividend or other distribution)
upon the surrender of the certificate or certificates representing shares of
Premier Common Stock or Premier Preferred Stock. With respect to any
certificate for Premier Common Stock or Premier Preferred Stock that has been
lost or destroyed, BB&T shall pay the Merger Consideration attributable to
such certificate upon receipt of a surety bond or other adequate indemnity as
required in accordance with BB&T's standard policy, and evidence reasonably
satisfactory to BB&T of ownership of the shares represented thereby. Upon and
after the Effective Time, Premier's transfer books shall be closed and no
transfer of the shares of Premier Common Stock or Premier Preferred Stock
outstanding immediately prior to the Effective Time shall be made.
(d) Promptly after the Effective Time, BB&T shall cause to be delivered or
mailed to each Premier shareholder a form of letter of transmittal and
instructions for use in effecting the surrender of the certificates which,
immediately prior to the Effective Time, represented any shares of Premier
Common Stock or Premier Preferred Stock. Upon proper surrender of such
certificates or other evidence of ownership meeting the requirements of
Section 2.8(c), together with such letter of transmittal duly executed and
completed in accordance with the instructions thereto, and such other
documents as may be reasonably requested, BB&T shall promptly cause the
transfer to the persons entitled thereto of the Merger Consideration and any
declared and unpaid dividends (in the case of Premier Common Stock) or accrued
and unpaid dividends (in the case of Premier Preferred Stock).
(e) The Surviving Corporation shall pay any dividends or other distributions
with a record date prior to the Effective Time which have been declared or
made by Premier in respect of shares of Premier Common Stock in accordance
with the terms of this Agreement and which remain unpaid at the Effective
Time, subject to compliance by Premier with Section 5.9(b). At the time of the
Closing and incident thereto, Premier shall pay a per share dividend in
respect of shares of Premier Preferred Stock for the calendar year in which
the Closing Date occurs equal to the product of $4.80 times a fraction, the
numerator of which is the number of days in the calendar year through the
Closing Date and the denominator of which is the number of days in such
calendar year. Such payment shall constitute the sole right of the holders of
the Premier Preferred Stock to a dividend with respect to such Premier
Preferred Stock for such calendar year. To the extent permitted by law, former
shareholders of record of Premier shall be entitled to vote after the
Effective Time at any meeting of BB&T shareholders the number of whole shares
of BB&T Common Stock into which their respective shares of Premier Common
Stock or Premier Preferred Stock are converted, regardless of whether such
holders have exchanged their certificates representing Premier Common Stock or
Premier Preferred Stock for certificates representing BB&T Common Stock in
accordance with the provisions of this Agreement. Whenever a dividend or other
distribution is declared by BB&T on the BB&T Common Stock, the record date for
which is at or after the Effective Time, the declaration shall include
dividends or other distributions on all shares of BB&T Common
A-7
<PAGE>
Stock issuable pursuant to this Agreement, but no dividend or other
distribution payable to the holders of record of BB&T Common Stock as of any
time subsequent to the Effective Time shall be delivered to the holder of any
certificate representing Premier Common Stock or Premier Preferred Stock until
such holder surrenders such certificate for exchange as provided in this
Section 2.8. Upon surrender of such certificate, both the BB&T Common Stock
certificate and any undelivered dividends and cash payments payable hereunder
(without interest) shall be delivered and paid with respect to the shares of
Premier Common Stock or Premier Preferred Stock represented by such
certificate.
2.9 Conversion of Stock Options
(a) At the Effective Time, each Stock Option then outstanding (and which, by
its terms existing as of the date hereof, does not lapse on or before the
Effective Time), whether or not then exercisable, shall be converted into and
become rights with respect to BB&T Common Stock, and BB&T shall assume each
Stock Option in accordance with the terms of the Stock Option Plans or in
accordance with the terms of the award or agreement governing such Stock
Option, except that from and after the Effective Time (i) BB&T and its
Compensation Committee shall be substituted for Premier and Premier's
Compensation Committee administering the Stock Option Plans, (ii) each Stock
Option assumed by BB&T may be exercised solely for shares of BB&T Common
Stock, (iii) the number of shares of BB&T Common Stock subject to each such
Stock Option shall be the number of whole shares of BB&T (omitting any
fractional share) determined by multiplying the number of shares of Premier
Common Stock subject to such Stock Option immediately prior to the Effective
Time by the Common Exchange Ratio, and (iv) the per share exercise price under
each such Stock Option shall be adjusted by dividing the per share exercise
price under each such Stock Option by the Common Exchange Ratio and rounding
up to the nearest cent. Notwithstanding the foregoing, BB&T may at its
election substitute as of the Effective Time options under the BB&T
Corporation 1995 Omnibus Stock Incentive Plan or any other duly adopted
comparable plan (in either case, the "BB&T Option Plan") for all or a part of
the Stock Options, subject to the following conditions: (A) the requirements
of (iii) and (iv) above shall be met; (B) such substitution shall not
constitute a modification, extension or renewal (within the meaning of Section
424(h) of the Code) of any of the Stock Options which are incentive stock
options; and (C) the substituted options shall continue in effect on the same
terms and conditions as provided in the Stock Options and the Stock Option
Plans. Each grant of a converted or substitute option to any individual who
subsequent to the Merger will be a director or officer of BB&T as construed
under Commission Rule 16b-3 shall, as a condition to such conversion or
substitution, be approved in accordance with the provisions of Rule 16b-3.
Each Stock Option which is an incentive stock option shall be adjusted as
required by Section 424 of the Code, and the Regulations promulgated
thereunder, so as to continue as an incentive stock option under Section
424(a) of the Code, and so as not to constitute a modification, extension, or
renewal of the option within the meaning of Section 424(h) of the Code. BB&T
and Premier agree to take all necessary steps to effectuate the foregoing
provisions of this Section 2.9. BB&T has reserved and shall continue to
reserve adequate shares of BB&T Common Stock for delivery upon exercise of any
converted or substitute options. As soon as practicable after the Effective
Time, if it has not already done so, BB&T shall file a registration statement
on Form S-3 or Form S-8, as the case may be (or any successor or other
appropriate forms), with respect to the shares of BB&T Common Stock subject to
converted or substitute options and shall use its reasonable efforts to
maintain the effectiveness of such registration statement (and maintain the
current status of the prospectus or prospectuses contained therein) for so
long as such converted or substitute options remain outstanding. With respect
to those individuals, if any, who subsequent to the Merger may be subject to
the reporting requirements under Section 16(a) of the Exchange Act, BB&T shall
administer the Stock Option Plans assumed pursuant to this Section 2.9 (or the
BB&T Option Plan, if applicable) in a manner that complies with Rule 16b-3
promulgated under the Exchange Act to the extent necessary to preserve for
such individuals the benefits of Rule 16b-3 to the extent such benefits were
available to them prior to the Effective Time. Premier hereby represents that
the Stock Option Plans in their current forms comply with Rule 16b-3 to the
extent, if any, required as of the date hereof.
(b) As soon as practicable following the Effective Time, BB&T shall deliver
to the participants receiving converted options under the BB&T Option Plan an
appropriate notice setting forth such participant's rights pursuant thereto.
A-8
<PAGE>
2.10 Assumption of Trust Preferred Obligations
BB&T acknowledges that Premier's affiliate, Premier Capital Trust I
("Premier Capital Trust") holds 9.00% Trust Preferred Securities (the "Trust
Preferred") issued by Premier pursuant to an Indenture (the "Indenture")
between Premier and State Street Bank and Trust Company, as trustee, dated as
of November 13, 1997. BB&T shall upon the Effective Time expressly assume all
of Premier's obligations under the Indenture (including, without limitation,
being substituted for Premier) and execute any and all documents, instruments
and agreements, including any supplemental indentures, required by Article XII
of the Indenture or the Trust Preferred and thereafter shall perform all of
Premier's obligations with respect to the Trust Preferred Securities.
2.11 Merger of Subsidiaries
In the event that BB&T shall request, Premier shall take such actions, and
shall cause the Premier Subsidiaries to take such actions, as may be required
in order to effect, as soon as practicable after the Effective Time, the
merger of one or more of the Premier Subsidiaries with and into, in each case,
one of the BB&T Subsidiaries. Such mergers shall be subject to the condition
that the Merger has been completed and shall automatically be terminated in
the event this Agreement is terminated.
2.12 Anti-Dilution
In the event BB&T changes the number of shares of BB&T Common Stock issued
and outstanding prior to the Effective Time as a result of a stock split,
stock dividend or other similar recapitalization, and the record date thereof
(in the case of a stock dividend) or the effective date thereof (in the case
of a stock split or similar recapitalization for which a record date is not
established) shall be prior to the Effective Time, the Common Exchange Ratio
and the Preferred Exchange Ratio shall be proportionately adjusted.
2.13 Dissenting Shares
Any holder of shares of Premier Preferred Stock who shall have exercised
rights to dissent with respect to the Merger in accordance with the GBCC and
who has properly exercised such shareholder's rights to demand payment of the
"fair value" of the shareholder's shares (the "Dissenting Shares") as provided
in the GBCC (the "Dissenting Shareholder") shall thereafter have only such
rights, if any, as are provided a Dissenting Shareholder in accordance with
the GBCC and shall have no rights to receive the Merger Consideration under
Sections 2.7 and 2.8 (provided, that nothing contained herein shall limit such
Dissenting Shareholder's rights to the payment of all accrued and unpaid
dividends); provided, however, that if a Dissenting Shareholder shall withdraw
(in accordance with the GBCC) the demand for such appraisal or shall become
ineligible for such appraisal, then such Dissenting Shareholder's Dissenting
Shares automatically shall cease to be Dissenting Shares and shall be
converted into and represent only the right to receive from the Surviving
Corporation, upon surrender of the certificate representing the Dissenting
Shares, the Merger Consideration provided for in Section 2.7 and accrued and
unpaid dividends as provided in Section 2.8(c) and Section 2.8(e).
ARTICLE III
Representations and Warranties of Premier
Except as Disclosed, Premier represents and warrants to BB&T as follows (the
representations and warranties herein of Premier are made subject to the
applicable standard set forth in Section 6.3(a), and no such representation or
warranty shall be deemed to be inaccurate unless the inaccuracy would permit
BB&T to refuse to consummate the Merger under such applicable standard):
3.1 Capital Structure
The authorized capital stock of Premier consists of 60,000,000 shares of
Premier Common Stock and 2,000,000 shares of Premier Preferred Stock. Premier
has 26,128,000 shares of Premier Common Stock issued
A-9
<PAGE>
and outstanding and 40,770 shares of Premier Preferred Stock issued and
outstanding. No other classes of capital stock of Premier, common or
preferred, are authorized, issued or outstanding; provided, however, that
Premier Capital Trust has issued and outstanding 9.00% Cumulative Trust
Preferred Securities with an aggregate liquidation amount of $28.75 million.
All outstanding shares of Premier Common Stock have been duly authorized and
are validly issued, fully paid and nonassessable. No shares of capital stock
have been reserved for any purpose, except for (i)shares of Premier Common
Stock reserved in connection with the Stock Option Plans, and (ii) 5,921,666*
shares of Premier Common Stock to be issued in consummating the Pending
Acquisitions (including Premier options to be issued incident to such
transactions). Premier has granted options to acquire 1,975,935 shares of
Premier Common Stock under the Stock Option Plans or outstanding agreements
and awards, which options remain outstanding as of the date hereof. Except as
set forth in this Section 3.1, there are no Rights authorized, issued or
outstanding with respect to, nor are there any agreements, understandings or
commitments relating to the right of any Premier shareholder to own, to vote
or to dispose of, the capital stock of Premier. Holders of Premier Common
Stock do not have preemptive rights.
3.2 Organization, Standing and Authority
Premier is a corporation duly organized, validly existing and in good
standing under the laws of the State of Georgia, with full corporate power and
authority to carry on its business as now conducted and to own, lease and
operate its properties and assets. Premier is not required to be qualified to
do business in any other state of the United States or foreign jurisdiction.
3.3 Ownership of Subsidiaries
Section 3.3 of the Premier Disclosure Memorandum lists all of the Premier
Subsidiaries and, with respect to each, its jurisdiction of organization,
jurisdictions in which it is qualified or otherwise licensed to conduct
business, the number of shares or ownership interests owned by Premier
(directly or indirectly), the percentage ownership interest so owned by
Premier and its business activities. The outstanding shares of capital stock
of the Premier Subsidiaries are validly issued and outstanding, fully paid and
nonassessable (except pursuant to state and federal laws applicable to
depository institutions, including 12 U.S.C. 55), and all such shares are
directly or indirectly owned by Premier free and clear of all liens, claims
and encumbrances or preemptive rights of any person other than Premier or a
Premier Subsidiary. No Rights are authorized, issued or outstanding with
respect to the capital stock of the Premier Subsidiaries, and there are no
agreements, understandings or commitments obligating Premier to issue, to vote
or to dispose of capital stock or other equity interests of the Premier
Subsidiaries. None of the shares of capital stock of the Premier Subsidiaries
have been issued in violation of the preemptive rights of any person. Neither
Premier nor any Premier Subsidiary owns 5% or more of the voting capital stock
or other voting securities or voting ownership interests of any corporation,
partnership, joint venture, or other organization (other than the Premier
Subsidiaries).
3.4 Organization, Standing and Authority of the Subsidiaries
Each Premier Subsidiary which is a depository institution is a Georgia
chartered bank with its deposits insured by the FDIC. Each of the Premier
Subsidiaries is validly existing and in good standing under the laws of its
jurisdiction of organization. Each of the Premier Subsidiaries has full power
and authority to carry on its business as now conducted. Each Premier
Subsidiary is in good standing in the States of the United States and foreign
jurisdictions where the character of its assets or the nature or conduct of
its business requires it to be qualified or licensed to transact business as a
foreign corporation. No Premier Subsidiary is engaged in any type of
nonbanking or nonmortgage activities that have not been Disclosed.
- --------
*Premier has reserved an additional 252,945 shares which a re subject to
issuance pursuant to Section 3.1(d) of the Agreement and Plan of
Reorganization between Premier, PMB Acquisition Corp. II and Bank Atlanta
dated May 20, 1999, if the conditions set forth in such Section are met.
A-10
<PAGE>
3.5 Authorized and Effective Agreement
(a) Premier has all requisite corporate power and authority to enter into
and (subject to receipt of all necessary governmental and regulatory approvals
and the receipt of approval of the Premier shareholders of this Agreement and
the Plan of Merger) to perform all of its obligations under this Agreement.
The execution and delivery of this Agreement and the Articles of Merger
(including the Plan of Merger incorporated by reference therein), and
consummation of the transactions contemplated hereby and thereby, have been
duly and validly authorized by all necessary corporate action, except, in the
case of this Agreement and the Plan of Merger, the approval of the Premier
shareholders to the extent required by applicable law and the rules and
regulations of the NYSE. This Agreement and the Plan of Merger constitute
legal, valid and binding obligations of Premier, and each is enforceable
against Premier in accordance with its terms and conditions, in each such case
subject to (i) bankruptcy, fraudulent transfer, insolvency, moratorium,
reorganization, conservatorship, receivership, or other similar laws from time
to time in effect relating to or affecting the enforcement of the rights of
creditors of FDIC-insured institutions or the enforcement of creditors' rights
generally; and (ii) general principles of equity (whether applied in a court
of law or in equity).
(b) Neither the execution and delivery of this Agreement or the Articles of
Merger, nor consummation of the transactions contemplated hereby or thereby,
nor compliance by Premier with any of the provisions hereof or thereof, shall
(i) conflict with or result in a breach of any provision of the Articles of
Incorporation or bylaws of Premier or any Premier Subsidiary, (ii) constitute
or result in a breach of any term, condition or provision of, or constitute a
default under, or give rise to any right of termination, cancellation or
acceleration with respect to, or result in the creation of any lien, charge or
encumbrance upon any property or asset of Premier or any Premier Subsidiary
pursuant to, any note, bond, mortgage, indenture, license, permit, contract,
agreement or other instrument or obligation, or (iii) subject to receipt of
all required governmental or regulatory approvals, violate any order, writ,
injunction, decree, statute, rule or regulation applicable to Premier or any
Premier Subsidiary.
(c) Other than in connection or compliance with the provisions of the
federal securities laws, applicable state corporate and securities laws and
the rules of the NYSE, and other than consents and approvals required from
governmental or regulatory authorities (as provided in Section 5.4(b)), and
other than notices to or filings with the Internal Revenue Service or the PBGC
with respect to any employee benefit plans, or under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, no notice to, filing with, or consent or
approval of, any public body or authority is necessary for the consummation by
Premier of the Merger and the other transactions contemplated by this
Agreement.
3.6 Securities Filings; Financial Statements; Statements True
(a) Premier has timely filed all Securities Documents required by the
Securities Laws to be filed since December 31, 1995. Premier has Disclosed or
made available to BB&T a true and complete copy of each Securities Document
filed by Premier with the Commission after December 31, 1995 and prior to the
date hereof, which are all of the Securities Documents that Premier was
required to file during such period. At the time they were filed (or, if
amended or superseded by a filing prior to the date of this Agreement, on the
date of such filing), such Securities Documents complied with the Securities
Laws as then in effect and did not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
(b) The Financial Statements of Premier fairly present or will fairly
present, as the case may be, the consolidated financial position of Premier
and the Premier Subsidiaries as of the dates indicated and the consolidated
statements of income and retained earnings, changes in shareholders' equity
and statements of cash flows for the periods then ended (subject, in the case
of unaudited interim statements, to the absence of notes and to normal year-
end audit adjustments that are not material in amount or effect) in conformity
with GAAP applied on a consistent basis, except as may be indicated in the
notes applicable thereto.
(c) No statement, certificate, instrument or other writing furnished or to
be furnished hereunder by Premier or any Premier Subsidiary to BB&T contains
or will contain any untrue statement of a material fact or will omit
A-11
<PAGE>
to state a material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.
3.7 Minute Books
The minute books of Premier and each of the Premier Subsidiaries contain or
will contain at Closing accurate records of all meetings and other corporate
actions of their respective shareholders and Boards of Directors (including
committees of the Board of Directors), and the signatures contained therein
are the true signatures of the persons whose signatures they purport to be.
3.8 Adverse Change
Since December 31, 1998, Premier and the Premier Subsidiaries have not
incurred any liability, whether accrued, absolute or contingent, except as
disclosed in the most recent Premier Financial Statements, or entered into any
transactions with Affiliates (or any Affiliate of an Affiliate that is natural
person), other than between or among Premier and Premier Subsidiaries, in each
case other than in the ordinary course of business consistent with past
practices, nor has there been any adverse change or any fact or event
involving a prospective adverse change in the business, financial condition,
results of operations or business prospects of Premier or any of the Premier
Subsidiaries.
3.9 Absence of Undisclosed Liabilities
All liabilities (including contingent liabilities) of Premier and the
Premier Subsidiaries are disclosed in the most recent Financial Statements of
Premier or are normally recurring business obligations incurred in the
ordinary course of its business since the date of Premier's most recent
Financial Statements.
3.10 Properties
(a) Premier and the Premier Subsidiaries have good and marketable title,
free and clear of all liens, encumbrances, charges, defaults or equitable
interests, to all of the properties and assets, real and personal, tangible
and intangible, reflected in the Financial Statements of Premier as of
December 31, 1998 or acquired after such date, except for (i) liens,
encumbrances, charges and equitable interests identified in the Premier
Financial Statements, (ii) liens for current taxes not yet due and payable,
(iii) pledges to secure deposits, repurchase agreements and federal funds
purchased and other liens incurred in the ordinary course of Premier's banking
and mortgage banking businesses, (iv) such imperfections of title, easements
and encumbrances, if any, as are not material in character, amount or extent
and (v) dispositions and encumbrances for reasonably adequate consideration in
the ordinary course of business.
(b) All leases and licenses pursuant to which Premier or any Premier
Subsidiary, as lessee or licensee, leases or licenses rights to real or
personal property are valid and enforceable in accordance with their
respective terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, receivership, conservatorship,
moratorium, or other laws affecting the enforcement of creditors' rights
generally and except for general principles of equity (whether applied in a
court or law or in equity).
3.11 Environmental Matters
(a) Premier and the Premier Subsidiaries are and at all times have been in
compliance with all Environmental Laws. Neither Premier nor any Premier
Subsidiary has received any communication alleging that Premier or the Premier
Subsidiary is not in such compliance, and, to the Knowledge of Premier, there
are no present circumstances that would prevent or interfere with the
continuation of such compliance.
(b) There are no Environmental Claims, neither Premier nor any Premier
Subsidiary has received notice of any pending Environmental Claims, and, to
the Knowledge of Premier, there are no conditions or facts existing which are
reasonably likely to result in legal, administrative, arbitral or other
proceedings asserting
A-12
<PAGE>
Environmental Claims or governmental investigations of any nature seeking to
impose, or that could result in the imposition of, liability arising under any
Environmental Laws upon (i) Premier or any Premier Subsidiary, (ii) any person
or entity whose liability for any Environmental Claim Premier or any Premier
Subsidiary has or may have retained or assumed, either contractually or by
operation of law, (iii) any real or personal property owned or leased by
Premier or any Premier Subsidiary, or any real or personal property which
Premier or any Premier Subsidiary has or is judged to have managed or
supervised or participated in the management of, or (iv) any real or personal
property in which Premier or any Premier Subsidiary holds a security interest
securing a loan recorded on the books of Premier or any Premier Subsidiary.
Neither Premier nor any Premier Subsidiary is subject to any agreement, order,
judgment, decree or memorandum by or with any court, governmental authority,
regulatory agency or third party imposing any liability on Premier or a
Premier Subsidiary under any Environmental Laws.
(c) Premier and the Premier Subsidiaries are in compliance with all
recommendations contained in any environmental audits, analyses and surveys
received by Premier relating to all real and personal property owned or leased
by Premier or any Premier Subsidiary and all real and personal property of
which Premier or any Premier Subsidiary has or is judged to have managed or
supervised or participated in the management of.
(d) To the Knowledge of Premier, there are no past or present actions,
activities, circumstances, conditions, events or incidents that could
reasonably form the basis of any Environmental Claim or governmental
investigation that could result in the imposition of any liability arising
under any Environmental Laws, against Premier or any Premier Subsidiary or
against any person or entity whose liability for any Environmental Claim
Premier or any Premier Subsidiary has or may have retained or assumed, either
contractually or by operation of law.
3.12 Loans; Allowance for Loan Losses
(a) All of the loans on the books of Premier and the Premier Subsidiaries
are valid and properly documented and were made in the ordinary course of
business, and the security therefor, if any, is valid and properly perfected.
Neither the terms of such loans, nor any of the loan documentation, nor the
manner in which such loans have been administered and serviced, nor Premier's
procedures and practices of approving or rejecting loan applications, violates
any federal, state or local law, rule, regulation or ordinance applicable
thereto, including, without limitation, the TILA, Regulations O and Z of the
Federal Reserve Board, the CRA, the Equal Credit Opportunity Act, as amended,
and state laws, rules and regulations relating to consumer protection,
installment sales and usury.
(b) In the good faith opinion of the management of Premier, the allowances
for loan losses reflected on the consolidated balance sheets included in the
Financial Statements of Premier are adequate as of their respective dates
under the requirements of GAAP and applicable regulatory requirements and
guidelines.
3.13 Tax Matters
(a) Premier and the Premier Subsidiaries and each of their predecessors have
timely filed (or requests for extensions have been timely filed and any such
extensions either are pending or have been granted and have not expired) all
federal, state and local (and, if applicable, foreign) tax returns required by
applicable law to be filed by them (including, without limitation, estimated
tax returns, income tax returns, information returns, and withholding and
employment tax returns) and have paid, or where payment is not required to
have been made, have set up an appropriate reserve or accrual for the payment
of, all taxes required to be paid in respect of the periods covered by such
returns and, as of the Effective Time, will have paid, or where payment is not
required to have been made, will have set up an appropriate reserve or accrual
for the payment of, all taxes for any subsequent periods ending on or prior to
the Effective Time. Neither Premier nor any Premier Subsidiary has or will
have any liability for any such taxes in excess of the amounts so paid or
reserves or accruals so established. Premier and the Premier Subsidiaries have
paid, or where payment is not required to have been made have set up an
adequate reserve or accrual for payment of, all taxes required to be paid or
accrued for the preceding or current fiscal year for which a return is not yet
due.
A-13
<PAGE>
(b) All federal, state and local (and, if applicable, foreign) tax returns
filed by Premier and the Premier Subsidiaries are complete and accurate.
Neither Premier nor any Premier Subsidiary is delinquent in the payment of any
tax, assessment or governmental charge. No deficiencies for any tax,
assessment or governmental charge have been proposed, asserted or assessed
(tentatively or otherwise) against Premier or any Premier Subsidiary which
have not been settled and paid. There are currently no agreements in effect
with respect to Premier or any Premier Subsidiary to extend the period of
limitations for the assessment or collection of any tax. No audit examination
or deficiency or refund litigation with respect to such returns is pending.
(c) Deferred taxes have been provided for in accordance with GAAP
consistently applied.
(d) Neither Premier nor any of the Premier Subsidiaries is a party to any
tax allocation or sharing agreement or has been a member of an affiliated
group filing a consolidated federal income tax return (other than a group the
common parent of which was Premier or a Premier subsidiary) or has any
liability for taxes of any person (other than Premier and the Premier
Subsidiaries) under Treasury Regulation Section 1.1502-6 (or any similar
provision of state, local or foreign law) as a transferee or successor or by
contract or otherwise.
(e) Each of Premier and the Premier Subsidiaries is in compliance with, and
its records contain all information and documents (including properly
completed IRS Forms W-9) necessary to comply with, all applicable information
reporting and tax withholding requirements under federal, state, and local tax
laws, and such records identify with specificity all accounts subject to
backup withholding under Section 3406 of the Code.
(f) Neither Premier nor any of the Premier Subsidiaries has made any
payments, is obligated to make any payments, or is a party to any contract
that could obligate it to make any payments that would be disallowed as a
deduction under Section 280G or 162(m) of the Code.
3.14 Employees; Compensation; Benefit Plans
(a) Compensation. Premier has Disclosed a complete and correct list of the
name, age, position, rate of compensation and any incentive compensation
arrangements, bonuses or commissions or fringe or other benefits, whether
payable in cash or in kind, of each person to whom Premier or any Premier
Subsidiary pays or provides, or has an obligation, agreement (written or
unwritten), policy or practice of paying or providing, retirement, health or
welfare benefits of any kind or description whatsoever for reasons other than
service as an employee of Premier or a Premier Subsidiary (including, without
limitation, directors, shareholders, independent contractors, consultants and
agents).
(b) Employee Benefit Plans.
(i) Premier has Disclosed an accurate and complete list of all Plans, as
defined below, contributed to, maintained or sponsored by Premier or any
Premier Subsidiary, to which Premier or any Premier Subsidiary is obligated
to contribute or has any liability or potential liability, whether direct
or indirect, including all Plans contributed to, maintained or sponsored by
each member of the controlled group of corporations, within the meaning of
Sections 414(b), 414(c), 414(m) and 414(o) of the Code, of which Premier or
any Premier Subsidiary is a member. For purposes of this Agreement, the
term "Plan" shall mean a plan, arrangement, agreement or program described
in the foregoing provisions of this Section 3.14(b)(i) and which is: (A) a
profit-sharing, deferred compensation, bonus, stock option, stock purchase,
pension, retainer, consulting, retirement, severance, welfare or incentive
plan, agreement or arrangement, whether or not funded and whether or not
terminated, (B) an employment agreement, (C) a personnel policy or fringe
benefit plan, policy, program or arrangement providing for benefits or
perquisites to current or former employees, officers, directors or agents,
whether or not funded, and whether or not terminated, including, without
limitation, benefits relating to automobiles, clubs, vacation, child care,
parenting, sabbatical, sick leave, severance, medical, dental,
hospitalization, life insurance and other types of insurance, or (D) any
other employee benefit plan as defined in Section 3(3) of ERISA, whether or
not funded and whether or not terminated.
A-14
<PAGE>
(ii) Neither Premier nor any Premier Subsidiary contributes to, has an
obligation to contribute to or otherwise has any liability or potential
liability with respect to (A) any multiemployer plan as defined in Section
3(37) of ERISA, (B) any plan of the type described in Sections 4063 and
4064 of ERISA or in Section 413 of the Code (and regulations promulgated
thereunder), or (C) any plan which provides health, life insurance,
accident or other "welfare-type" benefits to current or future retirees or
former employees or directors, their spouses or dependents, other than in
accordance with Section 4980B of the Code or applicable state continuation
coverage law.
(iii) None of the Plans obligates Premier or any Premier Subsidiary to
pay separation, severance, termination or similar-type benefits solely as a
result of any transaction contemplated by this Agreement or solely as a
result of a "change in control," as such term is used in Section 280G of
the Code (and regulations promulgated thereunder).
(iv) Each Plan, and all related trusts, insurance contracts and funds,
has been maintained, funded and administered in compliance in all respects
with its own terms and in compliance in all respects with all applicable
laws and regulations, including but not limited to ERISA and the Code. No
actions, suits, claims, complaints, charges, proceedings, hearings,
examinations, investigations, audits or demands with respect to the Plans
(other than routine claims for benefits) are pending or, to Premier's
Knowledge, threatened, and there are no facts which are reasonably likely
to give rise to any actions, suits, claims, complaints, charges,
proceedings, hearings, examinations, investigations, audits or demands. No
Plan that is subject to the funding requirements of Section 412 of the Code
or Section 302 of ERISA has incurred any "accumulated funding deficiency"
as such term is defined in such Sections of ERISA and the Code, whether or
not waived, and each Plan currently meets the funding standards required
under Title I of ERISA and Section 412 of the Code. No liability to the
Pension Benefit Guaranty Corporation ("PBGC") (except for routine payment
of premiums) has been or is expected to be incurred with respect to any
Plan that is subject to Title IV of ERISA, no reportable event (as such
term is defined in Section 4043 of ERISA) for which the PBGC has not waived
notice has occurred with respect to any such Plan, and the PBGC has not
commenced or threatened the termination of any Plan. None of the assets of
Premier or any Premier Subsidiary is the subject of any lien arising under
Section 302(f) of ERISA or Section 412(n) of the Code, neither Premier nor
any Premier Subsidiary has been required to post any security pursuant to
Section 307 of ERISA or Section 401(a)(29) of the Code, and there are no
facts which are reasonably likely to give rise to such lien or such posting
of security. No event has occurred and no condition exists that would
subject Premier or any Premier Subsidiary to any tax under Sections 4971,
4972, 4976, 4977 or 4979 of the Code or to a fine or penalty under Section
502(c) of ERISA.
(v) Each Plan that is intended to be qualified under Section 401(a) of
the Code, and each trust (if any) forming a part thereof, has received a
favorable determination letter from the IRS as to the qualification under
the Code of such Plan and the tax exempt status of such related trust or is
still within the remedial amendment period following its adoption, and
nothing has occurred since the date of such determination letter that is
reasonably likely to affect adversely the qualification of such Plan or the
tax exempt status of such related trust.
(vi) No underfunded "defined benefit plan" (as such term is defined in
Section 3(35) of ERISA) has been, during the five years preceding the
Closing Date, transferred out of the controlled group of corporations
(within the meaning of Sections 414(b), (c), (m) and (o) of the Code) of
which Premier or any Premier Subsidiary is a member or was a member during
such five-year period.
(vii) As of December 31, 1998, the fair market value of the assets of
each Plan that is a tax qualified defined benefit plan equaled or exceeded,
and as of the Closing Date will equal or exceed, the present value of all
vested and nonvested liabilities thereunder determined in accordance with
reasonable actuarial methods, factors and assumptions applicable to a
defined benefit plan on an ongoing basis. With respect to each Plan that is
subject to the funding requirements of Section 412 of the Code and Section
302 of ERISA, all required contributions for all periods ending prior to or
as of the Closing Date (including periods from the first day of the then-
current plan year to the Closing Date and including all quarterly
contributions required in accordance with Section 412(m) of the Code) shall
have been made. With respect to each other
A-15
<PAGE>
Plan, all required payments, premiums, contributions, reimbursements or
accruals for all periods ending prior to or as of the Closing Date shall
have been made. No tax qualified Plan has any unfunded liabilities.
(viii) No prohibited transaction (which shall mean any transaction
prohibited by Section 406 of ERISA and not exempt under Section 408 of
ERISA or Section 4975 of the Code, whether by statutory, class or
individual exemption) has occurred with respect to any Plan which would
result in the imposition, directly or indirectly, of any excise tax,
penalty or other liability under Section 4975 of the Code or Section 409 or
502(i) of ERISA. Neither Premier nor, to the Knowledge of Premier, any
Premier Subsidiary, any trustee, administrator or other fiduciary of any
Plan, or any agent of any of the foregoing has engaged in any transaction
or acted or failed to act in a manner that could subject Premier or any
Premier Subsidiary to any liability for breach of fiduciary duty under
ERISA or any other applicable law.
(ix) With respect to each Plan, all reports and information required to
be filed with any government agency or distributed to Plan participants and
their beneficiaries have been duly and timely filed or distributed.
(x) Premier and each Premier Subsidiary has been and is presently in
compliance with all of the requirements of Section 4980B of the Code.
(xi) Neither Premier nor any Premier Subsidiary has a liability as of
December 31, 1998 under any Plan that, to the extent disclosure is required
under GAAP, is not reflected on the consolidated balance sheet included in
the Financial Statements of Premier as of December 31, 1998 or otherwise
Disclosed.
(xii) Neither the consideration nor implementation of the transactions
contemplated under this Agreement will increase (A) Premier's or any
Premier Subsidiary's obligation to make contributions or any other payments
to fund benefits accrued under the Plans as of the date of this Agreement
or (B) the benefits accrued or payable with respect to any participant
under the Plans (except to the extent benefits may be deemed increased by
accelerated vesting, accelerated allocation of previously unallocated Plan
assets or by the conversion of all stock options in accordance with Section
2.9 hereof).
(xiii) With respect to each Plan, Premier has Disclosed or made available
to BB&T, true, complete and correct copies of (A) all documents pursuant to
which the Plans are maintained, funded and administered, including summary
plan descriptions, (B) the three most recent annual reports (Form 5500
series) filed with the IRS (with attachments), (C) the three most recent
actuarial reports, if any, (D) the three most recent financial statements,
(E) all governmental filings for the last three years, including, without
limitation, excise tax returns and reportable events filings, and (F) all
governmental rulings, determinations, and opinions (and pending requests
for governmental rulings, determinations, and opinions) during the past
three years.
(xiv) Each of the Plans as applied to Premier and any Premier Subsidiary
may be amended or terminated at any time by action of Premier's Board of
Directors, or such Premier's Subsidiary's Board of Directors, as the case
may be, or a committee of such Board of Directors or duly authorized
officer, in each case subject to the terms of the Plan and compliance with
applicable laws and regulations (and limited, in the case of multiemployer
plans, to termination of the participation of Premier or a Premier
Subsidiary thereunder).
3.15 Certain Contracts
With respect to each contract of Premier and the Premier Subsidiaries, and
except as disclosed in the most recent of the Premier Financial Statements:
(i) the contract is in full force and effect; (ii) neither Premier nor any
Premier Subsidiary is in default thereunder; (iii) neither Premier nor any
Premier Subsidiary has repudiated or waived any provision of any such
contract; and (iv) to the Knowledge of Premier, no other party to any such
contract is in default in any respect or has repudiated any provision
thereunder. Premier has Disclosed each agreement, arrangement or commitment,
written or oral, relating to the employment of a consultant, independent
contractor or agent, or the employment, election or retention in office of any
present or former director or officer, which cannot be terminated within less
than 30 days after the Closing Date by Premier or any Premier Subsidiary
(without payment of any penalty or cost), or that provides benefits which are
contingent, or the application of
A-16
<PAGE>
which is altered, upon the occurrence of a transaction involving Premier of
the nature contemplated by this Agreement, and each agreement or plan, written
or oral, including any stock option plan, stock appreciation rights plan,
restricted stock plan or stock purchase plan, any of the benefits of which
will be increased, or the vesting of the benefits of which will be
accelerated, by the occurrence of any of the transactions contemplated by this
Agreement or the value of any of the benefits of which will be calculated on
the basis of any of the transactions contemplated by this Agreement.
3.16 Legal Proceedings; Regulatory Approvals
Premier has not received notice of any actions, suits, claims, governmental
investigations or proceedings that have been instituted or are pending or
threatened against Premier or any Premier Subsidiary or against any asset,
interest, plan or right of Premier or any Premier Subsidiary, or, to the
Knowledge of Premier, against any officer, director or employee of any of them
in their capacity as such. Premier has not received notice of any actions,
suits or proceedings that have been instituted or are pending or threatened
against any present or former director or officer of Premier or any Premier
Subsidiary that are reasonably likely to give rise to a claim against Premier
or any Premier Subsidiary for indemnification. There are no actual or, to the
Knowledge of Premier, threatened actions, suits or proceedings which present a
claim to restrain or prohibit the transactions contemplated herein. To the
Knowledge of Premier, no fact or condition relating to Premier or any Premier
Subsidiary exists (including, without limitation, noncompliance with the CRA)
that would prevent Premier or BB&T from obtaining all of the federal and state
regulatory approvals contemplated herein.
3.17 Compliance with Laws; Filings
Each of Premier and each Premier Subsidiary is in compliance with all
statutes and regulations (including, but not limited to, the CRA, the TILA and
regulations promulgated thereunder, and other consumer banking laws), and has
obtained and maintained all permits, licenses and registrations applicable to
the conduct of its business, and neither Premier nor any Premier Subsidiary
has received notification that has not lapsed, been withdrawn or abandoned by
any agency or department of federal, state or local government (i) asserting a
violation or possible violation of any such statute or regulation, (ii)
threatening to revoke any permit, license, registration, or other government
authorization, or (iii) restricting or in any way limiting its operations as
presently conducted. Neither Premier nor any Premier Subsidiary is subject to
any cease and desist order, agreement, directive, memorandum of understanding
or commitment from any applicable regulatory authority, and none of them has
received any communication from any applicable regulatory authority requesting
that it enter into any of the foregoing. Since December 31, 1995, each of
Premier and each Premier Subsidiary has filed all reports, registrations,
notices and statements, and any amendments thereto, that it was required to
file with federal and state regulatory authorities, including, without
limitation, the FDIC, Federal Reserve Board and applicable state regulators.
Each such report, registration, notice and statement, and each amendment
thereto, complied with applicable legal requirements.
3.18 Brokers and Finders
Neither Premier nor any Premier Subsidiary, nor any of their respective
officers, directors or employees, has employed any broker, finder or financial
advisor or incurred any liability for any fees or commissions in connection
with the transactions contemplated herein, in the Plan of Merger, except for
obligations to the Financial Advisors, the nature and extent of which have
been Disclosed, for investment banking services, and except for fees to
accountants and lawyers.
3.19 Repurchase Agreements; Derivatives
(a) With respect to all agreements currently outstanding pursuant to which
Premier or any Premier Subsidiary has purchased securities subject to an
agreement to resell, Premier or the Premier Subsidiary has a valid, perfected
first lien or security interest in the securities or other collateral securing
such agreement, and the value of such collateral equals or exceeds the amount
of the debt secured thereby. All agreements currently
A-17
<PAGE>
outstanding pursuant to which Premier or any Premier Subsidiary has sold
securities subject to an agreement to repurchase reflect arms' length
transactions, and, with respect to such agreements, Premier and the Premier
Subsidiaries have pledged only the amount of collateral required by the terms
thereof. Neither Premier nor any Premier Subsidiary has pledged collateral in
excess of the amount required under any interest rate swap or other similar
agreement currently outstanding.
(b) Neither Premier nor any Premier Subsidiary is a party to or has agreed
to enter into an exchange-traded or over-the-counter swap, forward, future,
option, cap, floor, or collar financial contract, or any other interest rate
or foreign currency protection contract not identified in the Financial
Statements, which is a financial derivative contract (including various
combinations thereof), except for options, forwards and commitments entered
into in the ordinary course of its mortgage and other lending businesses
consistent with past practice and current policy.
3.20 Deposit Accounts
The deposit accounts of the Premier Subsidiaries that are depository
institutions are insured by the FDIC to the maximum extent permitted by
federal law, and the Premier Subsidiaries have paid all deposit insurance
premiums and assessments.
3.21 Related Party Transactions
Neither Premier nor any Premier Subsidiary is a party to any existing
transaction or outstanding investment, loan or loan guarantee with or for the
benefit of any Affiliate (or any Affiliate of an Affiliate that is a natural
person) or 5% or greater shareholder of Premier that was made or entered into
(i) other than in the ordinary course of business or (ii) on terms less
favorable to Premier than it could have obtained from unrelated parties.
3.22 Certain Information
When the Proxy Statement/Prospectus is mailed to shareholders of Premier,
and at the time of the meeting of shareholders of Premier to vote on the Plan
of Merger, the Proxy Statement/Prospectus, as amended or supplemented, with
respect to all information set forth therein provided by Premier, (i) shall
comply with the applicable provisions of the Securities Laws, and (ii) shall
not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements contained therein, in light of the circumstances in which they were
made, not misleading.
3.23 Tax and Regulatory Matters
Neither Premier nor any Premier Subsidiary has taken or agreed to take any
action, nor has Knowledge of any fact or circumstance, which is reasonably
likely to (i) cause the Merger not to be accounted for as a pooling-of-
interests or not to constitute a reorganization under Section 368(a) of the
Code or (ii) impede or delay receipt of any consents of regulatory authorities
referred to in Section 5.4(b) or result in failure of the condition in Section
6.3(b).
3.24 State Takeover Laws; No Rights Plan
Premier and each Premier Subsidiary have taken, or as soon as practicable
after the date hereof will take, all necessary action, if any, to exempt the
transactions contemplated by this Agreement from any applicable moratorium,
fair price, business combination, control share or other anti-takeover laws,
and no such laws shall be activated or applied as a result of such
transactions. Premier has no shareholder rights plan.
3.25 Labor Relations
Neither Premier nor any Premier Subsidiary is the subject of any claim or
allegation that it has committed an unfair labor practice (within the meaning
of the National Labor Relations Act or comparable state law) or
A-18
<PAGE>
seeking to compel it to bargain with any labor organization as to wages or
conditions of employment, nor is Premier or any Premier Subsidiary party to
any collective bargaining agreement. There is no strike or other labor dispute
involving Premier or any Premier Subsidiary, pending or threatened, or to the
Knowledge of Premier, is there any activity involving any employees of Premier
or any Premier Subsidiary seeking to certify a collective bargaining unit or
engaging in any other organization activity.
3.26 No Right to Dissent
Nothing in the Articles of Incorporation or the Bylaws of Premier or any
Premier Subsidiary provides or would provide to any person (other than the
holders of Premier Preferred Stock), including without limitation the holders
of Premier Common Stock, upon execution of this Agreement or the Plan of
Merger and consummation of the transactions contemplated hereby and thereby,
rights of dissent and appraisal of any kind.
3.27 Fairness Opinion
Premier has received from at least one of the Financial Advisors an opinion
that, as of the date hereof, the Merger Consideration is fair to the
shareholders of Premier from a financial point of view.
ARTICLE IV
Representations and Warranties of BB&T
BB&T represents and warrants to Premier as follows (the representations and
warranties herein of BB&T are made subject to the applicable standard set
forth in Section 6.2(a), and no such representation or warranty shall be
deemed to be inaccurate unless the inaccuracy would permit Premier to refuse
to consummate the Merger under such applicable standard):
4.1 Capital Structure of BB&T
The authorized capital stock of BB&T consists of (i) 5,000,000 shares of
preferred stock, par value $5.00 per share, of which 2,000,000 shares have
been designated as Series B Junior Participating Preferred Stock and the
remainder are undesignated, and none of which shares are issued and
outstanding, and (ii) 500,000,000 shares of BB&T Common Stock of which
306,051,309 shares were issued and outstanding on June 30, 1999. All
outstanding shares of BB&T Common Stock have been duly authorized and are
validly issued, fully paid and nonassessable. The shares of BB&T Common Stock
reserved as provided in Section 5.3 are free of any Rights and have not been
reserved for any other purpose, and such shares are available for issuance as
provided pursuant to the Plan of Merger. Holders of BB&T Common Stock do not
have preemptive rights. All shares of BB&T Common Stock to be issued in the
Merger will be, upon issuance, duly authorized, validly issued, fully paid and
nonassessable.
4.2 Organization, Standing and Authority of BB&T
BB&T is a corporation duly organized, validly existing and in good standing
under the laws of the State of North Carolina, with full corporate power and
authority to carry on its business as now conducted and to own, lease and
operate its assets, and is duly qualified to do business in the states of the
United States where its ownership or leasing of property or the conduct of its
business requires such qualification. BB&T is registered as a bank holding
company under the Bank Holding Company Act.
4.3 Authorized and Effective Agreement
(a) BB&T has all requisite corporate power and authority to enter into and
(subject to receipt of all necessary government and regulatory approvals)
perform all of its obligations under this Agreement. The execution and
delivery of this Agreement and consummation of the transactions contemplated
hereby have been
A-19
<PAGE>
duly and validly authorized by all necessary corporate action in respect
thereof on the part of BB&T. This Agreement and the Plan of Merger attached
hereto constitute legal, valid and binding obligations of BB&T, and each is
enforceable against BB&T in accordance with its terms, in each case subject to
(i) bankruptcy, insolvency, moratorium, reorganization, conservatorship,
receivership or other similar laws in effect from time to time relating to or
affecting the enforcement of the rights of creditors; and (ii) general
principles of equity.
(b) Neither the execution and delivery of this Agreement or the Articles of
Merger, nor consummation of the transactions contemplated hereby, nor
compliance by BB&T with any of the provisions hereof or thereof shall (i)
conflict with or result in a breach of any provision of the Articles of
Incorporation or bylaws of BB&T or any BB&T Subsidiary, (ii) constitute or
result in a breach of any term, condition or provision of, or constitute a
default under, or give rise to any right of termination, cancellation or
acceleration with respect to, or result in the creation of any lien, charge or
encumbrance upon any property or asset of BB&T or any BB&T Subsidiary pursuant
to, any note, bond, mortgage, indenture, license, agreement or other
instrument or obligation, or (iii) violate any order, writ, injunction,
decree, statute, rule or regulation applicable to BB&T or any BB&T Subsidiary.
(c) Other than consents or approvals required from, or notices to,
regulatory authorities as provided in Section 5.4(b), no notice to, filing
with, or consent of, any public body or authority is necessary for the
consummation by BB&T of the Merger and the other transactions contemplated in
this Agreement.
4.4 Organization, Standing and Authority of BB&T Subsidiaries
Each of the BB&T Subsidiaries is duly organized, validly existing and in
good standing under applicable laws. BB&T owns, directly or indirectly, all of
the issued and outstanding shares of capital stock of each of the BB&T
Subsidiaries. Each of the BB&T Subsidiaries (i) has full power and authority
to carry on its business as now conducted and (ii) is duly qualified to do
business in the states of the United States and foreign jurisdictions where
its ownership or leasing of property or the conduct of its business requires
such qualification.
4.5 Securities Documents; Statements True
BB&T has timely filed all Securities Documents required by the Securities
Laws to be filed since December 31, 1995. As of their respective dates of
filing, such Securities Documents complied with the Securities Laws as then in
effect, and did not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. No statement, certificate, instrument or other writing
furnished or to be furnished hereunder by BB&T or any other BB&T Subsidiary to
Premier contains or will contain any untrue statement of material fact or will
omit to state a material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.
4.6 Certain Information
When the Proxy Statement/Prospectus is mailed, and at all times subsequent
to such mailing up to and including the time of the meeting of shareholders of
Premier to vote on the Merger, the Proxy Statement/Prospectus and all
amendments or supplements thereto, with respect to all information set forth
therein relating to BB&T, (i) shall comply with the applicable provisions of
the Securities Laws, and (ii) shall not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein
or necessary to make the statements contained therein, in light of the
circumstances in which they were made, not misleading.
4.7 Tax and Regulatory Matters
Neither BB&T nor any BB&T Subsidiary has taken or agreed to take any action,
and has no Knowledge of any fact or circumstance, which is reasonably likely
to (i) cause the Merger not to be accounted for as a pooling-
A-20
<PAGE>
of-interests or not to constitute a reorganization under Section 368(a) of the
Code or (ii) impede or delay receipt of any consents of regulatory authorities
referred to in Section 5.4(b) or result in failure of the condition in Section
6.3(b).
4.8 Adverse Change
Since December 31, 1998, except as disclosed in the most recent BB&T
Financial Statements, there has not been any adverse change or any fact or
event involving a prospective adverse change in the business, financial
condition, results of operations or business prospects of BB&T and any of the
BB&T Subsidiaries taken as a whole.
4.9 Rights Agreement
Execution of this Agreement and consummation of the Merger and the other
transactions contemplated by this Agreement will not result in the grant of
any rights to any person under the Rights Agreement described in the
definition of BB&T Common Stock.
ARTICLE V
Covenants
5.1 Premier Shareholder Meeting
Premier shall submit this Agreement and the Plan of Merger to its
shareholders for approval at a meeting to be held as soon as practicable
following the effectiveness of the Registration Statement, and by approving
execution of this Agreement, the Board of Directors of Premier agrees that it
shall, at the time the Proxy Statement/Prospectus is mailed to the
shareholders of Premier, recommend that Premier's shareholders vote for such
approval; provided, that the Board of Directors of Premier may withdraw,
modify or refuse to make such recommendation only if the Board of Directors
shall determine in good faith (after determining that any bona fide proposal
from a third party other than BB&T for a business combination with Premier has
the required financing committed and that all legal and regulatory
requirements are likely to be met) that such recommendation should not be made
in light of its fiduciary duty to Premier's shareholders following
consideration of (i) written advice of legal counsel to the effect that making
such recommendation or failing to withdraw or modify such recommendation is
likely to constitute a breach of the fiduciary duty of such Board to the
shareholders of Premier and (ii) either (A) the withdrawal, or material
modification that results in a revocation, of the opinion referenced in
Section 3.27 by the Financial Advisor that gave such opinion or (B) the
delivery to the Premier Board of Directors of written advice from either
Financial Advisor that the Merger Consideration is either not fair or is
inadequate to the shareholders of Premier from a financial point of view.
5.2 Registration Statement; Proxy Statement/Prospectus
As promptly as practicable after the date hereof, BB&T shall prepare and
file the Registration Statement with the Commission. Premier will furnish to
BB&T the information required to be included in the Registration Statement
with respect to its business and affairs before it is filed with the
Commission and again before any amendments are filed, and shall have the right
to review and consult with BB&T on the form of, and any characterizations of
such information included in, the Registration Statement prior to the filing
with the Commission. Such Registration Statement, at the time it becomes
effective and on the Effective Time, shall in all material respects conform to
the requirements of the Securities Act and the applicable rules and
regulations of the Commission. The Registration Statement shall include the
form of Proxy Statement/Prospectus. BB&T and Premier shall use all reasonable
efforts to cause the Proxy Statement/Prospectus to be approved by the
Commission for mailing to the Premier shareholders, and such Proxy
Statement/Prospectus shall, on the date of mailing, conform in all material
respects to the requirements of the Securities Laws and the applicable rules
and regulations of the Commission thereunder. Premier shall cause the Proxy
Statement/Prospectus to be mailed to
A-21
<PAGE>
shareholders in accordance with all applicable notice requirements under the
Securities Laws, the GBCC and the rules and regulations of the NYSE.
5.3 Plan of Merger; Reservation of Shares
At the Effective Time, the Merger shall be effected in accordance with the
Plan of Merger. In connection therewith, BB&T has adopted the Plan of Merger
and agrees to pay or cause to be paid when due the Merger Consideration. BB&T
has reserved for issuance such number of shares of BB&T Common Stock as shall
be necessary to pay the Merger Consideration and agrees not to take any action
that would cause the aggregate number of authorized shares of BB&T Common
Stock available for issuance hereunder not to be sufficient to effect the
Merger. If at any time the aggregate number of shares of BB&T Common Stock
reserved for issuance hereunder is not sufficient to effect the Merger, BB&T
shall take all appropriate action as may be required to increase the number of
shares of BB&T Common Stock reserved for such purpose.
5.4 Additional Acts
(a) Premier agrees to take such actions requested by BB&T as may be
reasonably necessary to modify the structure of, or to substitute parties to
(so long as such substitute is BB&T or a BB&T Subsidiary) the transactions
contemplated hereby, provided that such modifications do not change the Merger
Consideration, prevent the fulfillment of conditions precedent to the Closing
or abrogate the covenants and other agreements contained in this Agreement,
including, without limitation, the covenants set forth in Section 4.7.
(b) As promptly as practicable after the date hereof, BB&T and, to the
extent required, Premier shall submit notice or applications for prior
approval of the transactions contemplated herein to the Federal Reserve Board,
the Georgia Department of Banking and Finance and any other federal, state or
local government or regulatory agency, department or body to which notice is
required or from which approval is required for consummation of the Merger and
the other transactions contemplated hereby. Premier shall cooperate with BB&T
in making all such filings. Premier and BB&T each represents and warrants to
the other that all information included (or submitted for inclusion)
concerning it, its respective Subsidiaries, and any of its respective
directors, officers and shareholders, shall be true, correct and complete in
all material respects as of the date presented. Upon request, the parties
shall deliver to each other copies of all filings, correspondence and orders
to and from all regulatory authorities and the Commission in connection with
the Merger.
(c) BB&T agrees that its Board of Directors or authorized Board committee
shall approve prior to the Effective Time each grant of a converted option (as
described in Section 2.9(a)) to any individual who, subsequent to consummation
of the Merger, will be a director or officer of BB&T under Rule 16b-3 of the
Exchange Act.
5.5 Efforts to Consummate
Each of BB&T and Premier (subject to the provisions of Section 5.1) shall
use, and shall cause each of their respective Subsidiaries to use, all
reasonable efforts in good faith to (i) furnish such information as may be
required in connection with and otherwise cooperate in the preparation and
filing of the documents referred to in Sections 5.2 and 5.4 or elsewhere
herein, and (ii) take or cause to be taken all action necessary or desirable
on its part to fulfill the conditions in Article VI, including, without
limitation, executing and delivering, or causing to be executed and delivered,
such representations, certificates and other instruments or documents as may
be reasonably requested by BB&T's legal counsel for such counsel to issue the
opinion contemplated by Section 6.1(e), and to consummate the transactions
herein contemplated at the earliest possible date. Neither BB&T nor Premier
shall take, or cause, or to the best of its ability permit to be taken, any
action that would substantially delay or impair the prospects of completing
the Merger pursuant to this Agreement and the Plan of Merger.
5.6 Certain Accounting Matters, Lending Policies
Premier shall cooperate with BB&T concerning (i) accounting and financial
matters necessary or appropriate to facilitate the Merger (taking into account
BB&T's policies, practices and procedures), including, without
A-22
<PAGE>
limitation, issues arising in connection with record keeping, loan
classification, valuation adjustments, levels of loan loss reserves and other
accounting practices, and (ii) Premier's lending, investment or asset
liability management policies; provided, that (A) any action taken pursuant to
this Section 5.6 shall not be deemed to constitute or result in the breach of
any representation, warranty or agreement of Premier contained in this
Agreement and (B) no action shall be required to be taken by Premier pursuant
to this Section 5.6 unless and until BB&T agrees in writing that it believes
that all conditions to its obligation to consummate the Merger set forth in
Sections 6.1 and 6.3 (other than the delivery of certificates, opinions and
other instruments and documents to be delivered at the Closing or otherwise to
be dated at the Effective Time, the delivery of which shall continue to be a
condition to BB&T's obligation to consummate the Merger) have been satisfied
or waived.
5.7 Access to Information
Premier and BB&T will each keep the other advised of all material
developments relevant to its business and the businesses of its Subsidiaries,
and to consummation of the Merger, and each shall provide to the other, upon
request, reasonable details of any such development. Upon reasonable notice,
Premier shall afford to representatives of BB&T access, during normal business
hours during the period prior to the Effective Time, to all of the properties,
books, contracts, commitments and records of Premier and the Premier
Subsidiaries and, during such period, shall make available all information
concerning their businesses as may be reasonably requested. BB&T shall make
available to representatives of Premier access to information consistent with
access provided by BB&T in the past to other corporations similarly situated
and shall make available representatives of BB&T to answer any questions that
Premier or its representatives may have. No investigation pursuant to this
Section 5.7 shall affect or be deemed to modify any representation or warranty
made by, or the conditions to the obligations hereunder of, either party
hereto. Each party hereto shall, and shall cause each of its directors,
officers, attorneys and advisors to, maintain the confidentiality of all
information obtained hereunder which is not otherwise publicly disclosed by
the other party, said undertakings with respect to confidentiality to survive
any termination of this Agreement pursuant to Section 7.1. The parties
acknowledge and reaffirm their obligations under the Confidentiality Agreement
dated August 12, 1998. In the event of the termination of this Agreement, each
party shall return to the other party upon request all confidential
information previously furnished in connection with the transactions
contemplated by this Agreement.
5.8 Press Releases
BB&T and Premier shall agree with each other as to the form and substance of
any press release related to this Agreement and the Plan of Merger or the
transactions contemplated hereby and thereby, and consult with each other as
to the form and substance of other public disclosures related thereto;
provided, that nothing contained herein shall prohibit either party, following
notification to the other party, from making any disclosure which in the
opinion of its counsel is required by law.
5.9 Forbearances of Premier
Except with the prior written consent of BB&T, between the date hereof and
the Effective Time, Premier shall not, and shall cause each of the Premier
Subsidiaries not to:
(a) carry on its business other than in the usual, regular and ordinary
course in substantially the same manner as heretofore conducted, or
establish or acquire any new Subsidiary or engage in any new type of
activity or expand any existing activities;
(b) declare, set aside, make or pay any dividend or other distribution in
respect of its capital stock, other than regularly scheduled quarterly
dividends of $.09 per share payable with respect to Premier Common Stock
and the annual dividend of $4.80 per share payable with respect to Premier
Preferred Stock for the calendar year 1999 (if the Closing occurs after
December 31, 1999), in each case payable on record dates and in amounts
consistent with past practices; provided that (i) any dividend declared or
payable on the shares of Premier Common Stock for the quarterly period
during which the Effective Time occurs shall, unless otherwise agreed upon
in writing by BB&T and Premier, be declared with a record date prior to the
A-23
<PAGE>
Effective Time only if the normal record date for payment of the
corresponding quarterly dividend to holders of BB&T Common Stock is before
the Effective Time and (ii) with respect to the Premier Preferred Stock for
the year 1999 (if the Effective Time occurs on or prior to December 31,
1999) or for the year 2000 (if the Effective Time occurs after December 31,
1999), any dividend payable shall be as provided in Section 2.8(e);
(c) issue any shares of its capital stock (including treasury shares),
except pursuant to outstanding Stock Options and the Pending Acquisitions;
(d) issue, grant or authorize any Rights or effect any recapitalization,
reclassification, stock dividend, stock split or like change in
capitalization;
(e) amend its Articles of Incorporation or Bylaws;
(f) impose or permit imposition, of any lien, charge or encumbrance on
any share of stock held by it in any Premier Subsidiary, or permit any such
lien, charge or encumbrance to exist; or waive or release any material
right or cancel or compromise any debt or claim, in each case other than in
the ordinary course of business or in connection with deposits, repurchase
agreements, bankers acceptances or other indebtedness permitted under
Section 5.9(p), "treasury tax and loan" accounts established in the
ordinary course of business, or the satisfaction of legal requirements in
the exercise of trust powers.
(g) except for the Pending Acquisitions, merge with any other entity or
permit any other entity to merge into it (except for a merger of Premier
Subsidiaries), or consolidate with any other entity; acquire control over
any other entity (except as a result of foreclosure or in a fiduciary
capacity); or liquidate, sell or otherwise dispose of any assets or acquire
any assets other than in the ordinary course of its business consistent
with past practices;
(h) fail to comply in any material respect with any laws, regulations,
ordinances or governmental actions applicable to it and to the conduct of
its business;
(i) increase the rate of compensation of any of its directors, officers
or employees (excluding increases in compensation resulting from the
exercise of compensatory stock options outstanding as of the date of this
Agreement), or pay or agree to pay any bonus to, or provide any new
employee benefit or incentive to, any of its directors, officers or
employees, except for increases or payments required by law or by existing
contracts or made in the ordinary course of business consistent with past
practice pursuant to plans or arrangements in effect on the date hereof;
(j) enter into or substantially modify (except as may be required by
applicable law or regulation) any pension, retirement, stock option, stock
purchase, stock appreciation right, savings, profit sharing, deferred
compensation, consulting, bonus, group insurance or other employee benefit,
incentive or welfare contract, plan or arrangement, or any trust agreement
related thereto, in respect of any of its directors, officers or other
employees; provided, however, that this subparagraph shall not prevent
renewal of any of the foregoing consistent with past practice;
(k) solicit or encourage inquiries or proposals with respect to, furnish
any information relating to, or participate in any negotiations or
discussions concerning, any acquisition or purchase of all or a substantial
portion of the assets of, or a substantial equity interest in, Premier or
any Premier Subsidiary or any business combination with Premier or any
Premier Subsidiary other than as contemplated by this Agreement; or
authorize any officer, director, agent or affiliate of Premier or any
Premier Subsidiary to do any of the above; or fail to notify BB&T
immediately if any such inquiry or proposal is received, any such
information is requested or required, or any such negotiations or
discussions are sought to be initiated; provided, that this subsection (k)
shall not apply to or restrict the furnishing of information, negotiations
or discussions following an unsolicited offer if, as a result of such
offer, Premier is advised in writing by legal counsel that in its opinion
the failure to so furnish information or negotiate is likely to constitute
a breach of the fiduciary duty of Premier's Board of Directors to the
Premier shareholders;
(l) enter into (i) any material agreement, arrangement or commitment not
made in the ordinary course of business or contemplated by this Agreement,
(ii) any agreement, indenture or other instrument not made
A-24
<PAGE>
in the ordinary course of business relating to the borrowing of money by
Premier or a Premier Subsidiary or guarantee by Premier or a Premier
Subsidiary of any obligation, (iii) any agreement, arrangement or
commitment relating to the employment or severance of a consultant or the
employment, severance, election or retention in office of any present or
former director, officer or employee (this clause shall not apply to the
election of directors by shareholders or the reappointment of officers in
the normal course), or (iv) any contract, agreement or understanding with a
labor union;
(m) change its lending, investment or asset liability management policies
in any material respect, except as may be required by applicable law,
regulation, or directives;
(n) change its methods of accounting in effect at December 31, 1998,
except as required by changes in GAAP concurred in by BB&T, which
concurrence shall not be unreasonably withheld, or change any of its
methods of reporting income and deductions for federal income tax purposes
from those employed in the preparation of its federal income tax returns
for the year ended December 31, 1998, except as required by changes in law
or regulation;
(o) incur any new commitments for capital expenditures or obligation to
make capital expenditures in excess of $100,000, for any one expenditure,
or $500,000, in the aggregate;
(p) incur any indebtedness other than deposits, advances from the Federal
Home Loan Bank or Federal Reserve Bank and reverse repurchase arrangements
in the ordinary course of business;
(q) take any action which is reasonably likely to (i) cause the Merger
not to be accounted for as a pooling-of-interests or not to constitute a
reorganization under Section 368(a) of the Code as determined in good faith
by BB&T, (ii) result in any inaccuracy of a representation or warranty
herein which would allow for a termination of this Agreement, or (iii)
cause any of the conditions precedent to the transactions contemplated by
this Agreement to fail to be satisfied;
(r) dispose of any material assets other than in the ordinary course of
business; or
(s) agree to do any of the foregoing.
5.10 Employment Agreements
Concurrently with the execution hereof, BB&T has requested that Darrell D.
Pittard and Robert Oliver enter into Employment Agreements substantially in
the forms attached hereto as Annexes B-1 and B-2, respectively, such
Employment Agreements to be conditional on consummation of, and become
effective as of the Effective Time of, the Merger.
5.11 Affiliates
Premier shall use its reasonable best efforts to cause all persons who are
Affiliates of Premier to deliver to BB&T promptly following the date hereof a
written agreement, in a form reasonably acceptable to BB&T, providing that
such person will not dispose of BB&T Common Stock received in the Merger
except in compliance with the Securities Act and the rules and regulations
promulgated thereunder and except as consistent with qualifying the
transactions contemplated hereby for pooling-of-interests accounting
treatment, and in any event shall use its reasonable best efforts to cause
such affiliates to deliver to BB&T such written agreement prior to the Closing
Date.
5.12 Section 401(k) Plan; Other Employee Benefits
(a) As soon as practicable following the Effective Time and consistent with
past practice, and not in limitation of its obligations under Section 5.10 and
subsection (d) hereof, and except as otherwise provided in the Employment
Agreements attached as Annexes B-1 and B-2, BB&T shall provide to the officers
and employees of Premier and Premier's banking Subsidiaries benefits under
employee benefit and welfare plans, on terms and conditions which when taken
as a whole are substantially similar to those currently provided by the BB&T
and its subsidiaries to their similarly situated officers and employees.
A-25
<PAGE>
(b) Each "Transferred Employee" (defined as an employee of Premier or a
Premier Subsidiary at the Effective Time who becomes an employee immediately
following the Effective Time of BB&T or a BB&T Subsidiary ("Employer Entity"))
who was a participant in a 401(k) plan of Premier or a Premier Subsidiary
immediately prior to the Effective Time shall be eligible at the Effective
Time to participate in BB&T's 401(k) plan (subject to BB&T's right to amend or
terminate such plan), as amended or succeeded. For purposes of administering
BB&T's 401(k) plan, service by a Transferred Employee with Premier and the
Premier Subsidiaries shall be deemed to be service with the Employer Entity
for participation and vesting purposes, but not for purposes of benefit
accrual.
(c) Each Transferred Employee shall be eligible to participate in the group
hospitalization, medical, dental, life, disability and other welfare benefit
plans and programs available to employees of the Employer Entity, subject to
the terms of such plans and programs. In applying such plans and programs,
service with Premier and the Premier Subsidiaries shall be deemed to be
service with the Employer Entity for the purpose of determining eligibility to
participate and vesting (if applicable) in such welfare plans and programs,
but not for the purpose of computing benefits, if any, determined in whole or
in part with reference to service.
(d) Each Transferred Employee who is terminated by an Employer Entity
subsequent to the Effective Time, excluding any employee who has in effect at
the time of termination an employment or special termination agreement (but,
with respect to such an agreement in effect prior to the Effective Time, only
if it is Disclosed), shall be entitled to severance pay in accordance with
BB&T's general severance policy as set forth in BB&T's letter to Premier dated
July 20, 1999, if and to the extent that such employee is entitled to
severance pay under such policy. Such employee's service with Premier or a
Premier Subsidiary shall be treated as service with BB&T for purposes of
determining the amount of severance pay, if any, under BB&T's severance
policy.
(e) BB&T agrees to honor all employment agreements, severance agreements and
deferred compensation and individualized benefit agreements that Premier and
the Premier Subsidiaries have with their current and former employees and
directors and which have been Disclosed to BB&T pursuant to this Agreement,
except to the extent any such agreements shall be superseded (by the
Employment Agreements described in Section 5.10) or terminated (in accordance
with their terms) at the Closing or following the Closing Date. Except for the
agreements described in the preceding sentence, 401(k) plans maintained by
Premier and any Premier Subsidiary, the Stock Option Plans and other employee
benefit plans of Premier and the Premier Subsidiaries shall be either
terminated or merged into comparable BB&T plans as of or following the
Effective Time, as determined by BB&T.
(f) Notwithstanding and without limiting the generality of Section 5.12(e),
as soon as practicable following the date hereof, Premier shall take any and
all action necessary to terminate the Premier Bancshares, Inc. Stock Purchase
Plan, and no purchases of shares of Premier Common Stock shall be made under
the Stock Purchase Plan after the Effective Time.
5.13 Directors and Officers Protection
BB&T or a BB&T Subsidiary shall provide and keep in force for a period of
three years after the Effective Time directors' and officers' liability
insurance providing coverage to directors and officers of Premier for acts or
omissions occurring prior to the Effective Time. Such insurance shall provide
at least the same coverage and amounts as contained in Premier's policy on the
date hereof; provided, that in no event shall the annual premium on such
policy exceed 150% of the annual premium payments on Premier's policy in
effect as of the date hereof (the "Maximum Amount"). If the amount of the
premiums necessary to maintain or procure such insurance coverage exceeds the
Maximum Amount, BB&T shall use its reasonable efforts to maintain the most
advantageous policies of directors' and officers' liability insurance
obtainable for a premium equal to the Maximum Amount. Notwithstanding the
foregoing, BB&T further agrees to indemnify, defend and hold harmless the
present and former directors, officers and employees of Premier and the
Premier Subsidiaries (each, an "Indemnified Party") against all liabilities
(which, for purposes of this Section 5.13, shall mean and include any direct
or indirect, primary or secondary, liability, indebtedness, obligation,
penalty, cost, expense, including
A-26
<PAGE>
without limitation all costs of investigation and defense, claim, action,
investigation or proceeding, of any type, whether accrued, absolute or
contingent, liquidated or unliquidated, matured or unmatured, and in each case
including reasonable attorneys' fees and charges, arising out of actions or
omissions arising out of the Indemnified Party's service or services as
directors, officers or employees of Premier and the Premier Subsidiaries or,
at the request of Premier or a Premier Subsidiary, of another corporation,
partnership, joint venture, trust or other enterprise occurring at or prior to
the Effective Time (including the transactions contemplated by this Agreement)
to the fullest extent permitted under Part 5 of Article 8 of the NCBCA
(including Section 55-8-57), including provisions relating to advances of
expenses incurred in the defense of any claims, demands, actions, causes of
action, complaints, governmental or other examination, investigation,
prosecution or hearing, or any other proceedings, investigations or inquiries,
whether or not BB&T or any BB&T Subsidiary is insured against any such matter.
5.14 Forbearances of BB&T
Except with the prior written consent of Premier, neither BB&T nor any BB&T
Subsidiary shall take any action which is reasonably likely to (i) cause the
business combination contemplated hereby not to be accounted for as a pooling-
of-interests or not to constitute a reorganization under Section 368(a) of the
Code; (ii) result in any inaccuracy of a representation or warranty herein
which would allow for termination of this Agreement; (iii) cause any of the
conditions precedent to the transactions contemplated by this Agreement to
fail to be satisfied; or (iv) fail to comply in any material respect with any
laws, regulations, ordinances or governmental actions applicable to it and to
the conduct of its business.
5.15 Reports
Each of Premier and BB&T shall file (and shall cause the Premier
Subsidiaries and the BB&T Subsidiaries, respectively, to file), between the
date of this Agreement and the Effective Time, all reports required to be
filed by it with the Commission and any other regulatory authorities having
jurisdiction over such party, and shall deliver to BB&T or Premier, as the
case may be, copies of all such reports promptly after the same are filed. If
financial statements are contained in any such reports filed with the
Commission, such financial statements will fairly present the consolidated
financial position of the entity filing such statements as of the dates
indicated and the consolidated results of operations, changes in shareholders'
equity, and cash flows for the periods then ended in accordance with
applicable Commission rules and regulations or GAAP (subject in the case of
interim financial statements to the absence of notes and to normal recurring
year-end adjustments that are not material). As of their respective dates,
such reports filed with the Commission will comply in all material respects
with the Securities Laws and will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. Any financial
statements contained in any other reports to a regulatory authority other than
the Commission shall be prepared in accordance with requirements applicable to
such reports.
5.16 Exchange Listing
BB&T shall use its reasonable best efforts to list, prior to the Effective
Time, on the NYSE, subject to official notice of issuance, the shares of BB&T
Common Stock to be issued to the holders of Premier Common Stock pursuant to
the Merger, and BB&T shall give all notices and make all filings with the NYSE
required in connection with the transactions contemplated herein.
5.17 Board of Directors
BB&T believes that it is important and in its best interest to preserve,
facilitate and enhance its operations in the State of Georgia and the
operations of Branch Banking and Trust Company, a North Carolina banking
corporation which will become by merger BB&T's sole Georgia bank, and to have
Darrell D. Pittard as an officer and director thereof. Accordingly, as of the
Effective Time, Branch Banking and Trust Company shall name
A-27
<PAGE>
Mr. Pittard as Vice-Chairman of its Advisory Board for the State of Georgia
and shall elect him to its Board of Directors, to serve until its next annual
meeting (subject to the right of removal for cause) and thereafter so long as
he is elected and qualifies.
5.18 Completion of Bank Mergers
Prior to the Effective Time, Premier shall complete the Pending Acquisitions
in accordance with the terms of the documents governing each such Pending
Acquisition on the date hereof. BB&T shall cooperate with Premier in good
faith to help resolve any issues that may arise following the date hereof
related to the closing of any of the Pending Acquisitions.
ARTICLE VI
Conditions Precedent
6.1 Conditions Precedent--BB&T and Premier
The respective obligations of BB&T and Premier to effect the transactions
contemplated by this Agreement shall be subject to satisfaction or waiver of
the following conditions at or prior to the Effective Time:
(a) All corporate action necessary to authorize the execution, delivery
and performance of this Agreement and the Plan of Merger, and consummation
of the transactions contemplated hereby and thereby, shall have been duly
and validly taken, including, without limitation, the approval by the
shareholders of Premier of the Agreement and the Plan of Merger;
(b) The Registration Statement (including any post-effective amendments
thereto) shall be effective under the Securities Act, no proceedings shall
be pending or, to the Knowledge of BB&T, threatened by the Commission to
suspend the effectiveness of such Registration Statement and the BB&T
Common Stock to be issued as contemplated in the Plan of Merger shall have
either been registered or be subject to exemption from registration under
applicable state securities laws;
(c) The parties shall have received from all applicable regulatory
authorities the approvals required in connection with the transactions
contemplated by this Agreement and the Plan of Merger, all notice periods
and waiting periods with respect to such approvals shall have passed and
all such approvals shall be in effect;
(d) None of BB&T, any of the BB&T Subsidiaries, Premier or any of the
Premier Subsidiaries shall be subject to any order, decree or injunction of
a court or agency of competent jurisdiction which enjoins or prohibits
consummation of the transactions contemplated by this Agreement; and
(e) Premier and BB&T shall have received an opinion of BB&T's legal
counsel, in form and substance satisfactory to Premier and BB&T,
substantially to the effect that (i) the Merger will constitute one or more
reorganizations under Section 368(a) of the Code, (ii) the shareholders of
Premier will not recognize any gain or loss to the extent that such
shareholders exchange shares of Premier Common Stock or Premier Preferred
Stock for shares of BB&T Common Stock and (iii) neither BB&T nor Premier
will recognize any gain or loss solely as the result of the Merger.
(f) BB&T shall have received letters, dated as of the date of filing of
the Registration Statement with the Commission and as of the Effective
Time, addressed to BB&T, in form and substance reasonably satisfactory to
BB&T, from Arthur Andersen, LLP to the effect that the Merger will qualify
for pooling-of-interests accounting treatment.
6.2 Conditions Precedent--Premier
The obligations of Premier to effect the transactions contemplated by this
Agreement shall be subject to the satisfaction of the following additional
conditions at or prior to the Effective Time, unless waived by Premier
pursuant to Section 7.4:
A-28
<PAGE>
(a) All representations and warranties of BB&T shall be evaluated as of
the date of this Agreement and as of the Effective Time as though made on
and as of the Effective Time (or on the date designated in the case of any
representation and warranty which specifically relates to an earlier date),
except as otherwise contemplated by this Agreement or consented to in
writing by Premier. The representations and warranties of BB&T set forth in
Sections 4.1, 4.2 (except as relates to qualification), 4.3(a), 4.3(b)(i)
and 4.4 (except as relates to qualification) shall be true and correct
(except for inaccuracies which are de minimis in amount). In each and every
case, there shall not exist inaccuracies in the representations and
warranties of BB&T set forth in this Agreement (including the
representations and warranties set forth in Sections 4.1, 4.2, 4.3(a),
4.3(b)(i) and 4.4) such that the aggregate effect of such inaccuracies has,
or is reasonably likely to have, a Material Adverse Effect on BB&T;
(b) BB&T shall have performed in all material respects all obligations
and complied in all material respects with all covenants required by this
Agreement;
(c) BB&T shall have delivered to Premier a certificate, dated the Closing
Date and signed by its Chairman or President or an Executive Vice
President, to the effect that the conditions set forth in Sections 6.1(a),
6.1(b), 6.1(c), 6.1(d), 6.2(a) and 6.2(b) hereof, to the extent applicable
to BB&T, have been satisfied and that there are no actions, suits, claims,
governmental investigations or procedures instituted, pending or, to the
best of such officer's Knowledge, threatened that are reasonably likely to
have a Material Adverse Effect on BB&T or that present a claim to restrain
or prohibit the transactions contemplated herein or in the Plan of Merger;
(d) Premier shall have received opinions of counsel to BB&T as to the
matters described in Annex C hereto;
(e) The shares of BB&T Common Stock issuable pursuant to the Merger shall
have been approved for listing on the NYSE, subject to official notice of
issuance; and
(f) The Financial Advisor who gave the opinion referred to in Section
3.27 shall not have withdrawn or modified its opinion that the Merger is
fair, from a financial point of view, to Premier's shareholders.
6.3 Conditions Precedent--BB&T
The obligations of BB&T to effect the transactions contemplated by this
Agreement shall be subject to satisfaction of the following additional
conditions at or prior to the Effective Time, unless waived by BB&T pursuant
to Section 7.4:
(a) All representations and warranties of Premier shall be evaluated as
of the date of this Agreement and as of the Effective Time as though made
on and as of the Effective Time (or on the date designated in the case of
any representation and warranty which specifically relates to an earlier
date), except as otherwise contemplated by this Agreement or consented to
in writing by BB&T. The representations and warranties of Premier set forth
in Sections 3.1, 3.2 (except the last sentence thereof), 3.3, 3.4 (except
the last sentence thereof), 3.5(a), 3.5(b)(i) and 3.24 shall be true and
correct (except for inaccuracies which are de minimis in amount). In each
and every case, there shall not exist inaccuracies in the representations
and warranties of Premier set forth in this Agreement (including the
representations and warranties set forth in the Sections designated in the
preceding sentence) such that the effect of such inaccuracies individually
or in the aggregate has, or is reasonably likely to have, a Material
Adverse Effect on Premier and the Premier Subsidiaries taken as a whole;
(b) No regulatory approval shall have imposed in connection with the
transactions contemplated hereby any condition or requirement which, in the
reasonable opinion of the Board of Directors of BB&T, would have, or is
reasonably likely to have, a Material Adverse Effect on the business or
economic benefits to BB&T of the transactions contemplated by this
Agreement;
(c) Premier shall have performed in all material respects all obligations
and complied in all material respects with all covenants required by this
Agreement;
(d) Premier shall have delivered to BB&T a certificate, dated the Closing
Date and signed by its Chairman or President, to the effect that the
conditions set forth in Sections 6.1(a), 6.1(c), 6.1(d), 6.3(a) and
A-29
<PAGE>
6.3(c) hereof, to the extent applicable to Premier, have been satisfied and
that there are no actions, suits, claims, governmental investigations or
procedures instituted, pending or, to the best of such officer's Knowledge,
threatened that are reasonably likely to have a Material Adverse Effect on
Premier or that present a claim to restrain or prohibit the transactions
contemplated herein or in the Plan of Merger;
(e) BB&T shall have received opinions of counsel to Premier as to the
matters described in Annex D hereto; and
(f) BB&T shall have received the written agreements from Affiliates as
specified in Section 5.11 hereof to the extent necessary, in the reasonable
judgment of BB&T, to ensure that the Merger will be accounted for as a
pooling-of-interests under GAAP and to promote compliance with Rule 145
promulgated by the Commission.
(g) Darrell D. Pittard shall have (i) continued in the employment of
Premier until the Effective Time, and (ii) as of the Effective Time shall
have entered into one or more mutually satisfactory agreements or
arrangements providing for his employment by Branch Banking and Trust
Company (or another Subsidiary of BB&T) and setting forth covenants not to
compete with BB&T and its Subsidiaries.
ARTICLE VII
Termination, Default, Waiver and Amendment
7.1 Termination
This Agreement may be terminated:
(a) At any time prior to the Effective Time, by the mutual consent in
writing of the parties hereto.
(b) At any time prior to the Effective Time, by either party (i) in the
event of a material breach by the other party of any covenant or agreement
contained in this Agreement, or (ii) in the event of an inaccuracy of any
representation or warranty of the other party contained in this Agreement,
which inaccuracy would provide the nonbreaching party the ability to refuse
to consummate the Merger under the applicable standard set forth in Section
6.2(a) hereof in the case of Premier and Section 6.3(a) hereof in the case
of BB&T; and, in the case of (i) or (ii), if such breach or inaccuracy has
not been cured by the earlier of thirty days following written notice of
such breach to the party committing such breach or the Effective Time.
(c) At any time prior to the Effective Time, by either party hereto in
writing, if any of the conditions precedent to the obligations of the other
party to consummate the transactions contemplated hereby cannot be
satisfied or fulfilled prior to the Closing Date, and the party giving the
notice is not in material breach of any of its representations, warranties,
covenants or undertakings herein.
(d) At any time, by either party hereto in writing, if any of the
applications for prior approval referred to in Section 5.4 hereof are
denied, and the time period for appeals and requests for reconsideration
has run; provided, that the applicant has used all reasonable effort to
promptly prosecute such appeals and requests.
(e) At any time, by either party hereto in writing, if the shareholders
of Premier do not approve the Agreement and the Plan of Merger.
(f) At any time following March 31, 2000 by either party hereto in
writing, if the Effective Time has not occurred by the close of business on
such date, and the party giving the notice is not in material breach of any
of its representations, warranties, covenants or undertakings herein.
(g) At any time prior to the Effective Time, by BB&T in writing, if the
Board of Directors of Premier shall have withdrawn its recommendation or
refused to recommend to the shareholders of Premier that they vote to
approve the Plan of Merger as required by Section 5.1 or shall have
recommended to the shareholders of Premier approval of an agreement, plan
or transaction arising out of or implementing any proposal or offer to
acquire or purchase all or a substantial portion of the assets of, or a
substantial equity interest in, Premier or any Premier Subsidiary
(including, without limitation, a tender offer or exchange offer
A-30
<PAGE>
to purchase Premier Common Stock) or any business combination with Premier
or any Premier Subsidiary other than with BB&T or a BB&T Subsidiary (any
such proposal or offer, "Premier Acquisition Proposal").
(h) At any time prior to the Effective Time, by Premier in writing, if
the Board of Directors of Premier shall have determined in good faith to
enter into an agreement, plan or transaction arising out of or implementing
a Premier Acquisition Proposal that did not arise from a breach of Section
5.1 or Section 5.9(k).
7.2 Effect of Termination
In the event this Agreement and the Plan of Merger is terminated pursuant to
Section 7.1, both this Agreement and the Plan of Merger shall become void and
have no effect, except that (i) the provisions hereof relating to
confidentiality, the Termination Fee and expenses set forth in Sections 5.7,
7.6 and 8.1, respectively, shall survive any such termination and (ii) a
termination pursuant to Section 7.1(b) shall not relieve the breaching party
from liability for a breach of the covenant, agreement, representation or
warranty giving rise to such termination.
7.3 Survival of Representations, Warranties and Covenants
All representations, warranties and covenants in this Agreement or the Plan
of Merger or in any instrument delivered pursuant hereto or thereto shall
expire on, and be terminated and extinguished at, the Effective Time, other
than covenants that by their terms are to be performed after the Effective
Time (including Sections 5.7, 5.13 and 5.17), provided that no such
representations, warranties or covenants shall be deemed to be terminated or
extinguished so as to deprive BB&T or Premier (or any director, officer or
controlling person thereof) of any defense at law or in equity which otherwise
would be available against the claims of any person, including, without
limitation, any shareholder or former shareholder of either BB&T or Premier,
the aforesaid representations, warranties and covenants being material
inducements to consummation by BB&T and Premier of the transactions
contemplated herein.
7.4 Waiver
Except with respect to any required regulatory approval, each party hereto,
by written instrument signed by an executive officer of such party, may at any
time (whether before or after approval of the Agreement and the Plan of Merger
by the Premier shareholders) extend the time for the performance of any of the
obligations or other acts of the other party hereto and may waive (i) any
inaccuracies of the other party in the representations or warranties contained
in this Agreement, the Plan of Merger or any document delivered pursuant
hereto or thereto, (ii) compliance with any of the covenants, undertakings or
agreements of the other party, or satisfaction of any of the conditions
precedent to its obligations, contained herein or in the Plan of Merger, or
(iii) the performance by the other party of any of its obligations set out
herein or therein; provided that no such extension or waiver, or amendment or
supplement pursuant to this Section 7.4, executed after approval by the
Premier shareholders of this Agreement and the Plan of Merger, shall reduce
either the Common Exchange Ratio, the Preferred Exchange Ratio or the payment
terms for fractional interests.
7.5 Amendment or Supplement
This Agreement or the Plan of Merger may be amended or supplemented at any
time in writing by mutual agreement of BB&T and Premier, subject to the
proviso to Section 7.4.
7.6 Termination Fee
(a) In the event that this Agreement is terminated:
(i) by either BB&T or Premier pursuant to Section 7.1(e) and (A) at the
time of the meeting of the Premier shareholders referred to in Section 5.1
(or at any adjournment thereof) a Premier Acquisition
A-31
<PAGE>
Proposal exists or (B) prior to such shareholders' meeting, Premier's Board
of Directors shall have withdrawn its recommendation or refused to
recommend to the shareholders of Premier that they vote to approve the Plan
of Merger;
(ii) by BB&T pursuant to Section 7.1(g); or
(iii) by BB&T pursuant to Section 7.1(b) or Section 7.1(c) (solely with
respect to a breach by Premier of Section 5.9(k));
(iv) by Premier pursuant to Section 7.1(c) (solely with respect to the
failure of the condition set forth in Section 6.2(f) to be satisfied);
(v) by Premier pursuant to Section 7.1(h)
then Premier shall promptly, but in no event later than two business days
after the date of such termination, pay to BB&T as compensation for the Merger
not becoming effective a termination fee equal to $10 million (the
"Termination Fee") by wire transfer of immediately available funds. The
Termination Fee shall be payable without regard to any expenses to be paid
pursuant to Section 8.1.
(b) Premier acknowledges that the agreements contained in Section 7.6(a) are
an integral part of the transactions contemplated by this Agreement and that,
without these agreements, BB&T would not enter into this Agreement;
accordingly, if Premier fails promptly to pay any amount due pursuant to
Section 7.6(a), and, in order to obtain such payment, BB&T commences a suit
which results in a judgment against Premier for all or a substantial portion
of the payment set forth in Section 7.6(a), Premier shall pay to BB&T its
costs and expenses (including reasonable attorneys' fees) in connection with
such suit, together with interest on the Premier Termination Fee from the date
for payment until the date of such payment at the prime rate of Branch Banking
and Trust Company in effect on the date such payment was required to be made
plus two percentage points.
ARTICLE VIII
Miscellaneous
8.1 Expenses
Each party hereto shall bear and pay all costs and expenses incurred by it
in connection with the transactions contemplated by this Agreement, including,
without limitation, fees and expenses of its own financial consultants,
accountants and counsel; provided, however, that the filing fees and printing
costs incurred in connection with the Registration Statement and the Proxy
Statement/Prospectus shall be borne 50% by BB&T and 50% by Premier.
8.2 Entire Agreement
This Agreement, including the Annexes attached hereto and the Premier
Disclosure Memorandum delivered pursuant hereto, contains the entire agreement
between the parties with respect to the transactions contemplated hereunder
and thereunder and supersedes all arrangements or understandings with respect
thereto, written or oral, entered into on or before the date hereof, except
for the Confidentiality Agreement between the parties hereto dated August 12,
1998, which remains in full force and effect. The terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the parties hereto
and their respective successors. Nothing in this Agreement, expressed or
implied, is intended to confer upon any party, other than the parties hereto,
and their respective successors, any rights, remedies, obligations or
liabilities, except for the rights of directors and officers of Premier to
enforce rights in Sections 5.13 and 5.17.
8.3 No Assignment
Except for a substitution of parties pursuant to Section 5.4(a), none of the
parties hereto may assign any of its rights or obligations under this
Agreement to any other person, except upon the prior written consent of each
other party.
A-32
<PAGE>
8.4 Notices
All notices or other communications which are required or permitted
hereunder shall be in writing and sufficient if delivered personally or sent
by nationally recognized overnight express courier or by facsimile
transmission, addressed or directed as follows:
If to Premier:
Premier Bancshares, Inc.
950 E. Paces Ferry Road
Atlanta, Georgia 30326
Telephone: 404-814-3090
Fax: 404-816-4314
With a required copy to:
Ralph F. MacDonald, III
Alston & Bird LLP
1201 West Peachtree Street
Atlanta, Georgia 30309-3424
Telephone: 404-881-7000
Fax: 404-881-4777
If to BB&T:
Scott E. Reed
150 Premier Stratford Road
4th Floor
Winston-Salem, North Carolina 27104
Telephone: 336-733-3088
Fax: 336-733-2296
With a required copy to:
William A. Davis, II
Womble Carlyle Sandridge & Rice, PLLC
200 West Second Street
Winston-Salem, North Carolina 27102
Telephone: 336-721-3624
Fax: 336-733-8364
Any party may by notice change the address to which notice or other
communications to it are to be delivered.
8.5 Specific Performance
Premier acknowledges that the Premier Common Stock and the Premier business
and assets are unique, and that if Premier fails to consummate the
transactions contemplated by this Agreement such failure will cause
irreparable harm to BB&T for which there will be no adequate remedy at law.
BB&T shall be entitled, in addition to its other remedies at law, to specific
performance of this Agreement if Premier shall, without cause, refuse to
consummate the transactions contemplated by this Agreement.
8.6 Captions
The captions contained in this Agreement are for reference only and are not
part of this Agreement.
A-33
<PAGE>
8.7 Counterparts
This Agreement may be executed in any number of counterparts, and each such
counterpart shall be deemed to be an original instrument, but all such
counterparts together shall constitute but one agreement.
8.8 Governing Law
This Agreement shall be governed by and construed in accordance with the laws
of the State of North Carolina, without regard to the principles of conflicts
of laws, except to the extent federal law may be applicable.
[remainder of page intentionally left blank]
A-34
<PAGE>
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound
hereby, have caused this Agreement to be executed in counterparts by their
duly authorized officers, all as of the day and year first above written.
BB&T Corporation
/s/ John A. Allison IV
By: _________________________________
Name: John A. Allison IV
Title: Chairman and Chief
Executive Officer
Premier Bancshares, Inc.
/s/ Darrell D. Pittard
By: _________________________________
Name: Darrell D. Pittard
Title: Chairman and Chief
Executive Officer
A-35
<PAGE>
APPENDIX B
TITLE 14, CHAPTER 2, ARTICLE 13
OF THE
GEORGIA BUSINESS CORPORATION CODE
RELATING TO
RIGHTS OF DISSENTING SHAREHOLDERS
<PAGE>
CHAPTER 2 OF TITLE 14 OF THE GEORGIA BUSINESS CORPORATION CODE
Part 1. Right to Dissent And Obtain Payment For Shares
(S) 14-2-1301. Definitions.
As used in this article, the term:
a. "Beneficial shareholder" means the person who is a beneficial owner of
shares held in a voting trust or by a nominee as the record shareholder.
b. "Corporate Action" means the transaction or other action by the
corporation that creates dissenters' rights under the Code Section 14-2-
1302.
c. "Corporation" means the issuer of shares held by a dissenter before
the corporate action, or the surviving or acquiring corporation by merger
or share exchange of that issuer.
d. "Dissenter" means a shareholder who is entitled to dissent from
corporate action under Code Section 14-2-1302 and who exercises that right
when and in the manner required by Code Sections 14-2-1320 through 14-2-
1327.
e. "Fair value," with respect to a dissenter's shares, means the value of
the shares immediately before the effectuation of the corporate action to
which the dissenter objects, excluding any appreciation or depreciation in
anticipation of the corporate action.
f. "Interest" means interest from the effective date of the corporate
action until the date of payment, at a rate that is fair and equitable
under all the circumstances.
g. "Record shareholder" means the person in whose name shares are
registered in the records of a corporation or the beneficial owner of
shares to the extent of the rights granted by a nominee certificate on file
with a corporation.
h. "Shareholder" means the record shareholder or the beneficial
shareholder.
(S) 14-2-1302. Right to Dissent.
(a) A record shareholder of the corporation is entitled to dissent from, and
obtain payment of the fair value of his shares in the event of, any of the
following corporate actions:
(1) Consummation of a plan of merger to which the corporation is a party:
(A) If approval of the shareholders of the corporation is required
for the merger by Code Section 14-2-1103 or 14-2-1104 or the articles
of incorporation and the shareholder is entitled to vote on the merger;
or
(B) If the corporation is a subsidiary that is merged with its parent
under Code Section 14-2-1104;
(2) Consummation of a plan of share exchange to which the corporation is
a party as the corporation whose shares will be acquired, if the
shareholder is entitled to vote on the plan;
(3) Consummation of a sale or exchange of all or substantially all of the
property of the corporation if a shareholder vote is required on the sale
or exchange pursuant to Code Section 14-2-1202, but not including a sale
pursuant to court order or a sale for cash pursuant to a plan by which all
or substantially all of the net proceeds of the sale will be distributed to
the shareholders within one year after the date of sale;
(4) An amendment of the articles of incorporation that materially and
adversely affects rights in respect of a dissenter's shares because it:
(A) Alters or abolishes a preferential right of the shares;
(B) Creates, alters, or abolishes a right in respect of redemption,
including a provision respecting a sinking fund for the redemption or
repurchase, of the shares;
B-1
<PAGE>
(C) Alters or abolishes a preemptive right of the holder of the
shares to acquire shares or other securities;
(D) Excludes or limits the right of the shares to vote on any matter,
or to cumulate votes, other than a limitation by dilution through
issuance of shares or other securities with similar voting rights;
(E) Reduces the number of shares owned by the shareholder to a
fraction of a share if the fractional share so created is to be
acquired for cash under Code Section 14-2-604; or
(F) Cancels, redeems, or repurchases all or part of the shares of the
class; or
(5) Any corporate action taken pursuant to a shareholder vote to the
extent that Article 9 of this chapter, the articles of incorporation,
bylaws, or a resolution of the board of directors provides that voting or
nonvoting shareholders are entitled to dissent and obtain payment for their
shares.
(b) A shareholder entitled to dissent and obtain payment for his shares
under this article may not challenge the corporate action creating his
entitlement unless the corporate action fails to comply with the procedural
requirements of this chapter or the articles of incorporation or bylaws of the
corporation or the vote required to obtain approval of the corporation action
was obtained by fraudulent and deceptive means, regardless of whether the
shareholder has exercised dissenter's rights.
(c) Notwithstanding any other provision of this article, there shall be no
right of dissent in favor of the holder of shares of any class or series
which, at the record date fixed to determine the shareholders entitled to
receive notice of and to vote at a meeting at which a plan of merger or share
exchange or a sale or exchange of property or an amendment of the articles of
incorporation is to be acted on, were either listed on a national securities
exchange or held of record by more than 2,000 shareholders, unless:
(1) In the case of a plan of merger or share exchange, the holders of
shares of the class or series are required under the plan of merger or
share exchange to accept for their shares anything except shares of the
surviving corporation or another publicly held corporation which at the
effective date of the merger or share exchange are either listed on a
national securities exchange or held of record by more than 2,000
shareholders, except for scrip or cash payments in lieu of fractional
shares; or
(2) The articles of incorporation or a resolution of the board of
directors approving the transaction provides otherwise.
(S) 14-2-1303. Dissent by Nominees and Beneficial Owners.
A record shareholder may assert dissenters' rights as to fewer than all the
shares registered in his name only if he dissents with respect to all shares
beneficially owned by any one beneficial shareholder and notifies the
corporation in writing of the name and address of each person on whose behalf
he asserts dissenters' rights. The rights of a partial dissenter under this
Code section are determined as if the shares as to which he dissents and his
other shares were registered in the names of different shareholders.
Part 2. Procedure For Exercise of Dissenters' Rights
(S) 14-2-1320. Notice of Dissenters' Rights.
(a) If proposed corporate action creating dissenters' rights under Code
Section 14-2-1302 is submitted to a vote at a shareholders' meeting, the
meeting notice must state that shareholders are or may be entitled to assert
dissenters' rights under this article and be accompanied by a copy of this
article.
(b) If corporate action creating dissenter's rights under Code Section 14-2-
1302 is taken without a vote of shareholders, the corporation shall notify in
writing all shareholders entitled to assert dissenters' rights that the action
was taken and send them the dissenter's notice described in Code Section 14-2-
1322 no later than ten days after the corporate action was taken.
B-2
<PAGE>
(S) 14-2-1321. Notice of Intent to Demand Payment.
(a) If proposed corporate action creating dissenters' rights under Code
Section 14-2-1302 is submitted to a vote at a shareholders' meeting, a record
shareholder who wishes to assert dissenters' rights:
(1) must deliver to the corporation before the vote is taken written
notice of his intent to demand payment for his shares if the proposed
action is effectuated; and
(2) must not vote his shares in favor of the proposed action.
(b) A record shareholder who does not satisfy the requirements of subsection
(a) of this Code section is not entitled to payment for his shares under this
article.
(S) 14-2-1322. Dissenters' Notice.
(a) If proposed corporate action created dissenters' rights under Code
Section 14-2-1302 is authorized at a shareholders' meeting, the corporation
shall deliver a written dissenters' notice to all shareholders who satisfied
the requirements of Code Section 14-2-1321.
(b) The dissenters' notice must be sent no later than ten days after the
corporate action was taken and must;
(1) State where the payment demand must be sent and where and when
certificates for certificated shares must be deposited;
(2) Inform holders of uncertificated shares to what extent transfer of
the shares will be restricted after the payment demand is received;
(3) Set a date by which the corporation must receive the payment demand,
which date may not be fewer than 30 nor more than 60 days after the date
the notice required in subsection (a) of this Code section is delivered;
and
(4) Be accompanied by a copy of this article.
(S) 14-2-1323. Duty to Demand Payment.
(a) A record shareholder sent a dissenters' notice described in Code Section
14-2-1322 must demand payment and deposit his certificates in accordance with
the terms of the notice.
(b) A record shareholder who demands payment and deposits his shares under
subsection (a) of this Code section retains all other rights of a shareholder
until these rights are cancelled or modified by the taking of the proposed
corporate action.
(c) A record shareholder who does not demand payment or deposit his share
certificates where required, each by the date set in the dissenters' notice,
is not entitled to payment for his shares under this article.
(S) 14-2-1324. Share Restrictions.
(a) The corporation may restrict the transfer of uncertificated shares from
the date the demand for their payment is received until the proposed corporate
action is taken or the restrictions released under Code Section 14-2-1326.
(b) The person for whom dissenters' rights are asserted as to uncertificated
shares retains all other rights of a shareholder until these rights are
cancelled or modified by the taking of the proposed corporate action.
(S) 14-2-1325. Offer of Payment.
(a) Except as provided in Code Section 14-2-1327, within ten days of the
later of the date the proposed corporate action is taken or receipt of a
payment demand, the corporation shall by notice to each dissenter who
B-3
<PAGE>
complied with Code Section 14-2-1323 offer to pay to such dissenter the amount
the corporation estimates to be the fair value of his or her shares, plus
accrued interest.
(b) The offer of payment must be accompanied by:
(1) The corporation's balance sheet as of the end of a fiscal year ending
not more than 16 months before the date of payment, an income statement for
that year, a statement of changes in shareholders' equity for that year,
and the latest available interim financial statements, if any;
(2) A statement of the corporation's estimate of the fair value of the
shares;
(3) An explanation of how the interest was calculated;
(4) A statement of the dissenter's right to demand payment under Code
Section 14-2-1327; and
(5) A copy of this article.
(c) If the shareholder accepts the corporation's offer by written notice to
the corporation within 30 days after the corporation's offer or is deemed to
have accepted such offer by failure to respond within said 30 days, payment
for his or her shares shall be made within 60 days after the making of the
offer or the taking of the proposed corporate action, whichever is later.
(S) 14-2-1326. Failure to Take Action.
(a) If the corporation does not take the proposed action within 60 days
after the date set for demanding payment and depositing share certificates,
the corporation shall return the deposited certificates and release the
transfer restrictions imposed on uncertified shares.
(b) If, after returning deposited certificates and releasing transfer
restrictions, the corporation takes the proposed action, it must send a new
dissenters' notice under Code Section 14-2-1322 and repeat the payment demand
procedure.
(S) 14-2-1327. Procedure if Shareholder Dissatisfied With Payment or Offer.
(a) A dissenter may notify the corporation in writing of his own estimate of
the fair value of his shares and amount of interest due, and demand payment of
his estimate of the fair value of his shares and interest due, if:
(1) The dissenter believes that the amount offered under Code Section 14-
2-1325 is less than the fair value of his shares or that the interest due
is incorrectly calculated; or
(2) The corporation, having failed to take the proposed action, does not
return the deposited certificates or release the transfer restrictions
imposed on uncertificated shares within 60 days after the date set for
demanding payment.
(b) A dissenter waives his or her right to demand payment under this Code
section and is deemed to have accepted the corporation's offer unless he or
she notifies the corporation of his or her demand in writing under subsection
(a) of this Code section within 30 days after the corporation offered payment
for his or her shares, as provided in Code Section 14-2-1325.
(c) If the corporation does not offer payment within the time set forth in
subsection (a) of Code Section 14-2-1325:
(1) The shareholder may demand the information required under subsection
(b) of Code Section 14-2-1325, and the corporation shall provide the
information to the shareholder within ten days after receipt of a written
demand for the information; and
(2) The shareholder may at any time, subject to the limitations period of
Code Section 14-2-1332, notify the corporation of his own estimate of the
fair value of his shares and the amount of interest due and demand payment
of his estimate of the fair value of his shares and interest due.
B-4
<PAGE>
Part 3. Judicial Appraisal of Shares.
(S) 14-2-1330. Court Action.
(a) If a demand for payment under Code Section 14-2-1327 remains unsettled,
the corporation shall commence a proceeding within 60 days after receiving the
payment demand and petition the court to determine the fair value of the
shares and accrued interest. If the corporation does not commence the
proceeding within the 60-day period, it shall pay each dissenter whose demand
remains unsettled the amount demanded.
(b) The corporation shall commence the proceeding, which shall be a nonjury
equitable valuation proceeding, in the superior court of the county where a
corporation's registered office is located. If the surviving corporation is a
foreign corporation without a registered office in this state, it shall
commence the proceeding in the county in this state where the registered
office of the domestic corporation merged with or whose shares were acquired
by the foreign corporation was located.
(c) The corporation shall make all dissenters, whether or not residents of
this state, whose demands remain unsettled parties to the proceeding, which
shall have the effect of an action quasi in rem against their shares. The
corporation shall serve a copy of the petition in the proceeding upon each
dissenting shareholder who is a resident of this state in the manner provided
by law for the service of a summons and complaint, and upon each nonresident
dissenting shareholder either by registered or certified mail or by
publication, or in any other manner permitted by law.
(d) The jurisdiction of the court in which the proceeding is commenced under
subsection (b) of this Code section is plenary and exclusive. The court may
appoint one or more persons as appraisers to receive evidence and recommend
decision on the question of fair value. The appraisers have the powers
described in the order appointing them or in any amendment to it. Except as
otherwise provide din this chapter, Chapter 11 of Title 9, known as the
"Georgia Civil Practice Act," applies to any proceeding with respect to
dissenters' rights under this chapter.
(e) Each dissenter made a party to the proceeding is entitled to judgment
for the amount which the court finds to be the fair value of his shares, plus
interest to the date of judgment.
(S) 14-2-1331. Court Costs and Counsel Fees.
(a) The court in an appraisal proceeding commenced under Code Section 14-2-
1330 shall determine all costs of the proceeding, including the reasonable
compensation and expenses of appraisers appointed by the court, but not
including fees and expenses of attorneys and experts for the respective
parties. The court shall assess the costs against the corporation, except that
the court may assess the costs against all or some of the dissenters, in
amounts the court finds equitable, to the extent the court finds the
dissenters acted arbitrarily, vexatiously, or not in good faith in demanding
payment under Code Section 14-2-1327.
(b) The court may also asses the fees and expenses of attorneys and experts
for the respective parties, in amounts the court finds equitable:
(1) Against the corporation and in favor of any or all dissenters if the
court finds the corporation did not substantially comply with the
requirements of Code Sections 14-2-1320 through 14-2-1327; or
(2) Against either the corporation or a dissenter, in favor of any other
party, if the court finds that the party against whom the fees and expenses
are assessed acted arbitrarily, vexatiously, or not in good faith with
respect to the rights provided by this article.
(c) If the court finds that the services of attorneys for any dissenter were
of substantial benefit to other dissenters similarly situated, and that the
fees for those services should not be assessed against the corporation, the
court may award to these attorneys reasonable fees to be paid out of the
amounts awarded the dissenters who were benefited.
B-5
<PAGE>
(S) 14-2-1332. Limitation of Actions.
No action by any dissenter to enforce dissenters' rights shall be brought
more than three years after the corporate action was taken, regardless of
whether notice of the corporate action and of the right to dissent was given by
the corporation in compliance with the provisions of Code Section 14-2-1320 and
Code Section 14-2-1322.
B-6
<PAGE>
July 28, 1999
Board of Directors
Premier Bancshares, Inc.
2180 Atlanta Plaza
950 East Places Ferry Road
Atlanta, GA 31061
Ladies and Gentlemen:
You have requested our opinion as to the fairness from a financial point of
view to the holders of common stock, $1.00 par value per share ("Company
Common Stock") of Premier Bancshares, Inc. ("Premier" or the "Company") of the
Exchange Ratio (as defined below) pursuant to the terms of the Agreement and
Plan of Reorganization, dated as of July 28, 1999 (the "Agreement"), by and
between BB&T Corporation ("BB&T") and the Company pursuant to which the
Company will be merged (the "Merger") with and into BB&T.
Pursuant to the Agreement, each share of Company Common Stock of the will be
converted, subject to certain exceptions, into the right to receive .5155
shares (the "Exchange Ratio") of common stock, $5.00 par value per share
("BB&T Common Stock"), of BB&T.
In arriving at our opinion, we have reviewed the July 27, 1999 draft of the
Agreement and have assumed that the final Agreement as executed and delivered
did not differ from that draft in any respect that is material to this
opinion. We also have reviewed financial and other information that was
publicly available or furnished to us by the Company and BB&T including
I/B/E/S International, Inc. earnings estimates and information provided during
discussions with their respective managements. Included in the information
provided during discussions with the respective managements were certain
financial projections of the Company provided by the Company's management and
certain cost savings and operating synergies provided by the Company's
management. In addition, we have compared certain financial and securities
data of the Company and BB&T with various other companies whose securities are
traded in public markets, reviewed the historical stock prices and trading
volumes of Company Common Stock and BB&T Common Stock, reviewed prices and
premiums paid in certain other business combinations and conducted such other
financial studies, analyses and investigations as we deemed appropriate for
purposes of this opinion.
In rendering our opinion, we have relied upon and assumed the accuracy and
completeness of all of the financial and other information that was available
to us from public sources, that was provided to us by the Company or its
representatives, or that was otherwise reviewed by us and have assumed that
the Company is not aware of any information prepared by it or its other
representatives that might be material to our opinion that has not been made
available to us. In particular, we have relied upon the estimates of the
management of Premier of the cost savings and operating synergies achievable
as a result of the Merger and upon our discussion of such cost savings and
operating synergies with management of the Company. With respect to the
financial projections (including cost savings and operating synergies)
reviewed by us, we have assumed that they have been reasonably prepared on a
basis reflecting the best currently available estimates and judgments of the
management of the Company as to the future operating and financial performance
of Premier and the combined company. We are not experts in the evaluation of
loan and lease portfolios for purposes of assessing the adequacy of the
allowances for losses with respect thereto and have assumed, with your
consent, that such allowances for each of the Company and BB&T are in the
aggregate adequate to cover all such losses. In addition, we have not reviewed
individual credit files nor have we made an independent evaluation or
appraisal of the assets and liabilities (including any hedge or derivative
positions) of the Company or BB&T or any of their subsidiaries and we have not
been furnished with any such evaluation or appraisal. We have not assumed any
responsibility for making any independent evaluation of any assets or
liabilities or for making any independent verification of any of the
information reviewed by us. We have assumed that the Merger will qualify as a
pooling of interests transaction under generally accepted accounting
principles. We have also assumed that the transaction will qualify as a tax-
free reorganization for United States federal income tax purposes and that all
material
C-1
<PAGE>
governmental, regulatory or other consents and approvals necessary for the
consummation of the Merger will be obtained without any adverse effect on the
Company, BB&T or on the anticipated benefits of the Merger. We have relied as
to certain legal matters on advice of counsel to the Company.
Our opinion is necessarily based on economic, market, financial and other
conditions as they exist on, and on the information made available to us as
of, the date of this letter. It should be understood that, although subsequent
developments may affect this opinion, we do not have any obligation to update,
revise or reaffirm this opinion. We are expressing no opinion herein as to the
prices at which the Company Common Stock or the BB&T Common Stock will
actually trade at any time. Our opinion does not address the relative merits
of the Merger and the other business strategies being considered by the
Company's Board of Directors, nor does it address the Board's decision to
proceed with the Merger. Our opinion does not constitute a recommendation to
any stockholder as to how such stockholder should vote on the proposed
transaction.
Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ"), as part of its
investment banking services, is regularly engaged in the valuation of
businesses and securities in connection with mergers, acquisitions,
underwritings, sales and distributions of listed and unlisted securities,
private placements and valuations for corporate and other purposes. In the
ordinary course of our business, we and our affiliates actively trade the
securities of the Company and BB&T for our own account and for accounts of our
customers, and, accordingly, may at any time hold a long or short position in
such securities. DLJ has performed investment banking and other services for
the Company and BB&T in the past and has been compensated for such services.
Based upon the foregoing and such other factors as we deem relevant, we are
of the opinion that the Exchange Ratio is fair from a financial point of view
to the holders (other than BB&T) of Company Common Stock.
Very truly yours,
Donaldson, Lufkin & Jenrette
Securities Corporation
/s/ Tod D. Perkins
By: _________________________________
Tod D. Perkins
Managing Director
C-2
<PAGE>
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. Indemnification of Directors and Officers
Sections 55-8-50 through 55-8-58 of the North Carolina Business Corporation
Act contain specific provisions relating to indemnification of directors and
officers of North Carolina corporations. In general, such sections provide
that: (i) a corporation must indemnify a director or officer who is wholly
successful in his defense of a proceeding to which he is a party because of
his status as such, unless limited by the articles of incorporation, and (ii)
a corporation may indemnify a director or officer if he is not wholly
successful in such defense if it is determined as provided by statute that the
director or officer meets a certain standard of conduct, except that when a
director or officer is liable to the corporation or is adjudged liable on the
basis that personal benefit was improperly received by him, the corporation
may not indemnify him. A director or officer of a corporation who is a party
to a proceeding may also apply to a court for indemnification, and the court
may order indemnification under certain circumstances set forth in statute. A
corporation may, in its articles of incorporation or bylaws or by contract or
resolution of the board of directors, provide indemnification in addition to
that provided by statute, subject to certain conditions.
The registrant's bylaws provide for the indemnification of any director or
officer of the registrant against liabilities and litigation expenses arising
out of his status as such, excluding: (i) any liabilities or litigation
expenses relating to activities that were at the time taken known or believed
by such person to be clearly in conflict with the best interest of the
registrant and (ii) that portion of any liabilities or litigation expenses
with respect to which such person is entitled to receive payment under any
insurance policy.
The registrant's articles of incorporation provide for the elimination of
the personal liability of each director of the registrant to the fullest
extent permitted by law.
The registrant maintains directors' and officers' liability insurance that,
in general, insures: (i) the registrant's directors and officers against loss
by reason of any of their wrongful acts and (ii) the registrant against loss
arising from claims against the directors and officers by reason of their
wrongful acts, all subject to the terms and conditions contained in the
policy.
Certain rules of the Federal Deposit Insurance Corporation limit the ability
of certain depository institutions, their subsidiaries and their affiliated
depository institution holding companies to indemnify affiliated parties,
including institution directors. In general, subject to the ability to
purchase directors and officers liability insurance and to advance
professional expenses under certain circumstances, the rules prohibit such
institutions from indemnifying a director for certain costs incurred with
regard to an administrative or enforcement action commenced by any federal
banking agency that results in a final order or settlement pursuant to which
the director is assessed a civil money penalty, removed from office,
prohibited from participating in the affairs of an insured depository
institution or required to cease and desist from or take an affirmative action
described in Section 8(b) of the Federal Deposit Insurance Act (12 U.S.C. (S)
1818(b)).
II-1
<PAGE>
ITEM 21. Exhibits and Financial Statement Schedules
(a) The following documents are filed as exhibits to this registration
statement on Form S-4:
<TABLE>
<CAPTION>
Exhibit
No. Description
------- -----------
<C> <S>
2 Agreement and Plan of Reorganization dated as of July 28, 1999 between
BB&T Corporation and Premier Bancshares, Inc. (included as Appendix A
to the Proxy Statement/Prospectus)
5 Opinion of Womble Carlyle Sandridge & Rice, PLLC
8 Opinion of Womble Carlyle Sandridge & Rice, PLLC
23(a) Consent of Womble Carlyle Sandridge & Rice, PLLC (included in Exhibit
5)
23(b) Consent of Womble Carlyle Sandridge & Rice, PLLC (included in Exhibit
8)
23(c) Consent of Arthur Andersen LLP
23(d) Consent of Ernst & Young LLP
23(e) Consent of Mauldin & Jenkins, LLC
23(f) Consent of Porter Keadle Moore, LLP
23(g) Consent of Porter Keadle Moore, LLP
23(h) Consent of Mauldin & Jenkins, LLC
23(i) Consent of Mauldin & Jenkins, LLC
23(j) Consent of Bricker & Melton, P.A.
23(k) Consent of Donaldson, Lufkin & Jenrette Securities Corporation
24 Power of Attorney
99 Form of Premier Bancshares, Inc. Proxy Card
</TABLE>
- --------
(b) Financial statement schedules: Not applicable.
ITEM 22. Undertakings
A. The undersigned registrant hereby undertakes:
1. To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement.
2. That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
II-2
<PAGE>
3. To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination
of the offering.
B. The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
C. The undersigned registrant hereby undertakes as follows: that prior to
any public reoffering of the securities registered hereunder through use of a
prospectus which is a part of this registration statement, by any person or
party who is deemed to be an underwriter within the meaning of Rule 145(c),
the issuer undertakes that such reoffering prospectus will contain the
information called for by the applicable registration form with respect to
reofferings by persons who may be deemed underwriters, in addition to the
information called for by the other Items of the applicable form.
D. The registrant undertakes that every prospectus (i) that is filed
pursuant to Paragraph (C) immediately preceding, or (ii) that purports to meet
the requirements of section 10(a)(3) of the Securities Act of 1933 and is used
in connection with an offering of securities subject to Rule 415, will be
filed as a part of an amendment to the registration statement and will not be
used until such amendment is effective, and that, for purposes of determining
any liability under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
E. Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the registrant
will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Securities Act of 1933 and will be governed by the final
adjudication of such issue.
F. The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Items 4, 10(b), 11 or 13 of this Form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through
the date of responding to the request.
G. The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant has duly caused this Registration Statement on Form S-4 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Winston-Salem, State of North Carolina, on November 10, 1999.
BB&T Corporation
/s/ Jerone C. Herring
By: _________________________________
Jerone C. Herring
Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on November 10, 1999.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/s/ John A. Allison IV* Chairman of the Board and Chief Executive
______________________________________ Officer (principal executive officer)
John A. Allison IV
/s/ Scott E. Reed* Senior Executive Vice President and Chief
______________________________________ Financial Officer (principal financial
Scott E. Reed officer)
/s/ Sherry A. Kellett* Executive Vice President and Controller
______________________________________ (principal accounting officer)
Sherry A. Kellett
/s/ Paul B. Barringer* Director
______________________________________
Paul B. Barringer
/s/ Alfred E. Cleveland* Director
______________________________________
Alfred E. Cleveland
/s/ W. R. Cuthbertson, Jr.* Director
______________________________________
W. R. Cuthbertson, Jr.
/s/ Ronald E. Deal* Director
______________________________________
Ronald E. Deal
/s/ A. J. Dooley, Sr.* Director
______________________________________
A. J. Dooley, Sr.
/s/ Tom D. Efird* Director
______________________________________
Tom D. Efird
/s/ Paul S. Goldsmith* Director
______________________________________
Paul S. Goldsmith
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/s/ L. Vincent Hackley* Director
______________________________________
L. Vincent Hackley
/s/ Jane P. Helm* Director
______________________________________
Jane P. Helm
/s/ Richard Janeway, M.D.* Director
______________________________________
Richard Janeway, M.D.
/s/ J. Ernest Lathem, M.D.* Director
______________________________________
J. Ernest Lathem, M.D.
/s/ James H. Maynard* Director
______________________________________
James H. Maynard
/s/ Joseph A. McAleer, Jr.* Director
______________________________________
Joseph A. McAleer, Jr.
/s/ Albert O. McCauley* Director
______________________________________
Albert O. McCauley
/s/ Richard L. Player, Jr.* Director
______________________________________
Richard L. Player, Jr.
/s/ C. Edward Pleasants, Jr.* Director
______________________________________
C. Edward Pleasants, Jr.
/s/ Nido R. Qubein* Director
______________________________________
Nido R. Qubein
/s/ E. Rhone Sasser* Director
______________________________________
E. Rhone Sasser
/s/ Jack E. Shaw* Director
______________________________________
Jack E. Shaw
/s/ Harold B. Wells* Director
______________________________________
Harold B. Wells
/s/ Jerone C. Herring
*By: _________________________________
Jerone C. Herring
Attorney-in-Fact
</TABLE>
II-5
<PAGE>
Garza Baldwin, III
Direct Dial: 202-857-4487
Direct Fax: 202-261-0087
E-mail: [email protected]
November 10, 1999
BB&T Corporation
200 West Second Street
Winston-Salem, North Carolina 27101
Re: Registration Statement on Form S-4 (the "Registration Statement") with
respect to shares to be issued pursuant to the Agreement and Plan of
Reorganization by and between BB&T Corporation ("BB&T") and Premier
Bancshares, Inc. dated as of July 28, 1999 (the "Merger Agreement")
Ladies and Gentlemen:
We have acted as counsel to BB&T in connection with the registration of
17,628,703 shares of its common stock, par value $5.00 per share (the
"Shares"), issuable pursuant to the Merger Agreement, as set forth in the
Registration Statement that is being filed on the date hereof by BB&T with the
Securities and Exchange Commission (the "Commission") pursuant to the Securities
Act of 1933, as amended (the "Securities Act"). This opinion is provided
pursuant to the requirements of Item 21(a) of Form S-4 and Item 601(b)(5) of
Regulation S-K.
In connection with the foregoing, we have examined such records, documents,
and proceedings as we have deemed relevant as a basis for the opinion expressed
herein, and we have relied upon an officer's certificate as to certain factual
matters.
Based on the foregoing, we are of the opinion that, when issued upon the
terms and conditions set forth in the Merger Agreement, the Shares will be
validly issued, fully paid and nonassessable.
We hereby consent to be named in the Registration Statement under the
heading "LEGAL MATTERS" as attorneys who passed upon the validity of the Shares
and to the filing of a copy of this opinion as Exhibit 5 to the Registration
Statement. In giving this consent, we do not admit that we are within the
category of persons whose consent is required by Section 7 of the Securities Act
or other rules and regulations of the Commission thereunder.
Very truly yours,
WOMBLE CARLYLE SANDRIDGE & RICE,
A Professional Limited Liability Company
By: /s/ Garza Baldwin, III
-------------------------------------
Garza Baldwin, III
GB/WAD
<PAGE>
Neil G. O'Rourke
Direct Dial: 336-721-3752
Direct Fax: 336-726-6997
E-mail: [email protected]
November 10, 1999
BB&T Corporation
200 West Second Street
Winston-Salem, North Carolina 27101
Re: Registration Statement on Form S-4 (the "Registration Statement") with
respect to shares to be issued pursuant to the Agreement and Plan of
Reorganization, dated as of July 28, 1999 (the "Reorganization
Agreement"), by and between Premier Bancshares, Inc., a Georgia
corporation ("Premier"), and BB&T Corporation, a North Carolina
corporation ("BB&T")
___________________________________________________________________________
Ladies and Gentlemen:
We have acted as counsel to BB&T in connection with the registration of
17,628,703 shares of its Common Stock, par value $5.00 per share (the "BB&T
Common Stock"), issuable pursuant to the Reorganization Agreement, as set forth
in the Registration Statement that is being filed on the date hereof by BB&T
with the Securities and Exchange Commission (the "Commission") pursuant to the
Securities Act of 1933, as amended (the "Securities Act"). This opinion is
provided pursuant to the requirements of Item 21(a) of Form S-4 and Item
601(b)(8) of Regulation S-K. All capitalized terms not otherwise defined herein
shall have the meanings given to them in the Reorganization Agreement.
In the Merger, Premier will merge into BB&T pursuant to North Carolina and
Georgia law, and each outstanding share of Premier Common Stock and Premier
Preferred Stock is to be converted into a number of shares of BB&T Common Stock
determined under a formula in the Reorganization Agreement. Also, cash will be
paid in lieu of issuance of fractional shares. Premier's shareholders holding
Premier Preferred Stock are entitled by state law to dissent from the Merger.
In giving this opinion we have reviewed, and with your permission we have
relied upon, the representations and warranties contained in and the facts
described in the Reorganization Agreement, the Registration Statement, and
certificates dated November 8, 1999 in which officers of Premier and officers of
BB&T make certain representations on behalf of Premier and BB&T, respectively,
regarding the Merger (the "Tax Certificates"). We also have reviewed such other
documents as we have considered necessary and appropriate for the purposes of
this opinion.
<PAGE>
BB&T Corporation
November 10, 1999
Page 2
In giving this opinion we have with your permission assumed that the
statements in the Tax Certificates are true, correct and complete as of the date
of this opinion, and any representation or statement made "to the best of
knowledge" or similarly qualified is correct without such qualification. As to
all matters in which a person or entity has represented that such person or
entity either is not a party to, or does not have, or is not aware of, any plan
or intention, understanding or agreement, we have assumed that there is in fact
no such plan, intention, understanding or agreement. We also assume that (a) the
Merger will be consummated in accordance with the Reorganization Agreement, (b)
Premier's only outstanding stock (as that term is used in Section 368 of the
Internal Revenue Code of 1986, as amended (the "Code")) is the Premier Common
Stock and the Premier Preferred Stock, and (c) the Rights attached to the shares
of BB&T Common Stock issued in the Merger will not be exchanged by BB&T for any
part of the value of the Premier Common Stock and Premier Preferred Stock, and
such Rights will have no ascertainable fair market value at the Effective Time.
Based on the foregoing, and subject to the limitations herein, we are of
the opinion that under existing law, upon consummation of the Merger in
accordance with the Reorganization Agreement, for federal income tax purposes:
(1) The Merger will constitute a "reorganization" within the meaning
of section 368 of the Code.
(2) No gain or loss will be recognized by Premier or BB&T by reason
of the Merger.
(3) No gain or loss will be recognized by the shareholders of Premier
upon the receipt of BB&T Common Stock (including any fractional
share interest to which they may be entitled) solely in exchange
for their shares of Premier Common Stock and Premier Preferred
Stock.
(4) A shareholder of Premier who receives cash in lieu of a
fractional share of BB&T Common Stock will recognize gain or loss
as if the fractional share has been received and then redeemed
for cash equal to the amount paid by BB&T in respect of such
fractional share, subject to the provisions and limitations of
section 302 of the Code.
(5) A shareholder of Premier who owns Premier Preferred Stock and who
receives a cash payment pursuant to the exercise of dissenter's
rights will recognize gain or loss in an amount equal to the
difference between the amount received and his or her basis in
the Premier Preferred Stock surrendered.
(6) The tax basis in the BB&T Common Stock received by a Premier
shareholder (including any fractional share interest deemed
received) will be the same as
<PAGE>
BB&T Corporation
November 10, 1999
Page 3
the tax basis in the Premier Common Stock and Premier Preferred
Stock surrendered in exchange therefor.
(7) The holding period for BB&T Common Stock received (including any
fractional share interest deemed received) in exchange for shares
of Premier Common Stock and Premier Preferred Stock will
include the period during which the shareholder held the shares
of Premier Common Stock and Premier Preferred Stock
surrendered in the exchange, provided that the Premier Common
Stock and Premier Preferred Stock were held as capital assets
at the Effective Time.
We express no opinion as to the laws of any jurisdiction other than the
United States of America. Further, our opinion is limited to the specific
conclusions set forth above, and no other opinions are expressed or implied. The
opinions stated with respect to shares of Premier Common Stock and Premier
Preferred Stock do not apply to any stock rights, warrants or options to acquire
Premier Common Stock. or Premier Preferred Stock. The opinions stated as to
Premier shareholders are general in nature and do not necessarily apply to any
particular Premier shareholder, and, for example, may not apply to shareholders
who are corporations, trusts, dealers in securities, financial institutions,
insurance companies or tax exempt organizations; or to persons who are not
United States citizens or resident aliens or domestic entities (partnerships or
trusts), are subject to the alternative minimum tax (to the extent that tax
affects the tax consequences), or are subject to the "golden parachute"
provisions of the Code (to the extent that tax affects the tax consequences); or
to shareholders who acquired Premier Common Stock or Premier Preferred Stock
pursuant to employee stock options or otherwise as compensation if such shares
are subject to any restriction related to employment, who do not hold their
shares as capital assets, or who hold their shares as part of a "straddle" or
"conversion transaction."
This opinion represents our best legal judgment, but it has no binding
effect or official status of any kind. Changes to the Code or in regulations or
rulings thereunder, or changes by the courts in the interpretation of the
authorities relied upon, may be applied retroactively and may affect the
opinions expressed herein. This opinion is rendered based upon applicable laws,
rules and regulations as in effect on the date hereof, and we assume no duty or
responsibility to inform you of any changes hereafter in our opinion due to any
change hereafter in such laws, rules and regulations. Any material defect in any
assumption or representation on which we have relied would adversely affect our
opinion.
We furnish this opinion to you solely to support the discussion set forth
under the headings "SUMMARY--No Federal Income Tax on Shares Received in
Merger," "THE MERGER--The Merger Agreement--Conditions to the Merger," and "THE
MERGER--Material Federal Income Tax Consequences of the Merger" in the
Registration Statement, and we do not consent to its use for any other purpose.
We hereby consent to be named in the Registration Statement under the foregoing
headings and to the filing of a copy of this opinion as Exhibit 8 to the
Registration Statement. In giving
<PAGE>
BB&T Corporation
November 10, 1999
Page 4
this consent, we do not admit that we are within the category of persons whose
consent is required by Section 7 of the Securities Act or the rules and
regulations of the Commission thereunder.
Very truly yours,
WOMBLE CARLYLE SANDRIDGE & RICE
A Professional Limited Liability Company
By: /s/ Neil G. O'Rourke
-------------------------------
Neil G. O'Rourke
<PAGE>
EXHIBIT 23(c)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this registration statement of our report dated September 3,
1999, included in BB&T Corporation's Form 8-K dated September 3, 1999, and to
all references to our firm included in this registration statement. Our report
dated January 29, 1999, included in BB&T Corporation's financial statements
previously filed on Form 10-K and incorporated by reference in this registration
statement is no longer appropriate since restated financial statements have been
presented giving effect to one or more business combinations accounted for as
poolings of interests.
/s/ ARTHUR ANDERSEN LLP
Charlotte, North Carolina
November 9, 1999
<PAGE>
EXHIBIT 23(d)
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-4 No. 333-00000) and related Prospectus of BB&T
Corporation for the registration of 17,628,703 shares of its common stock and to
the incorporation by reference of our report dated February 5, 1999, with
respect to the consolidated financial statements of Premier Bancshares, Inc. and
Subsidiaries included in its Annual Report (Form 10-K) for the year ended
December 31, 1998, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Atlanta, Georgia
November 8, 1999
<PAGE>
EXHIBIT 23(e)
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the November 10, 1999
Registration Statement on Form S-4 of our report, dated January 31, 1997, except
for Note 2 as to which the date is June 23, 1997, December 12, 1997, June 9,
1998, July 1, 1998 and July 2, 1998, relating to the consolidated statements of
income, stockholders' equity and cash flows of Premier Bancshares, Inc. and
subsidiaries for the year ended December 31, 1996, contained in the annual
report on Form 10-K for the year ended December 31, 1998, and to the reference
to our Firm under the caption "Experts" in the Prospectus.
/s/ Mauldin & Jenkins, LLC
Atlanta, Georgia
November 9, 1999
<PAGE>
EXHIBIT 23(f)
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have issued our report dated February 4, 1997, accompanying the consolidated
financial statements of Citizens Gwinnett Bankshares, Inc. for the year ended
December 31, 1996, included in the Form 10-K for Premier Bancshares, Inc. for
the year ended December 31, 1998. We hereby consent to the incorporation by
reference of said report in the Registration Statement and Prospectus of BB&T
Corporation on Form S-4.
PORTER KEADLE MOORE, LLP
/s/ Porter Keadle Moore, LLP
Atlanta, Georgia
November 9, 1999
<PAGE>
EXHIBIT 23(g)
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have issued our report dated January 23, 1997, accompanying the consolidated
financial statements of Central and Southern Holding Company for the year ended
December 31, 1996, included in the Form 10-K for Premier Bancshares, Inc. for
the year ended December 31, 1998. We hereby consent to the incorporation by
reference of said report in the Registration Statement and Prospectus of BB&T
Corporation on Form S-4.
PORTER KEADLE MOORE, LLP
/s/ Porter Keadle Moore, LLP
Atlanta, Georgia
November 9, 1999
<PAGE>
EXHIBIT 23(h)
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the November 10, 1999
Registration Statement on Form S-4 of our report, dated January 14, 1998, except
for Note 14 as to which the date is February 5, 1998, relating to the
consolidated financial statements of Button Gwinnett Financial Corporation and
subsidiary for the two years ended December 31, 1997, contained in the annual
report on Form 10-K for the year ended December 31, 1998, and to the reference
to our Firm under the caption "Experts" in the Prospectus.
/s/ Mauldin & Jenkins, LLC
Atlanta, Georgia
November 9, 1999
<PAGE>
EXHIBIT 23(i)
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the November 10, 1999
Registration Statement on Form S-4 of our report, dated January 29, 1998,
relating to the consolidated financial statements of The Bank Holding Company
and subsidiaries for the two years ended December 31, 1997, contained in the
annual report on Form 10-K for the year ended December 31, 1998, and to the
reference to our Firm under the caption "Experts" in the Prospectus.
/s/ Mauldin & Jenkins, LLC
Atlanta, Georgia
November 9, 1999
<PAGE>
EXHIBIT 23(j)
[LETTERHEAD OF B&M APPEARS HERE]
Consent of Independent Certified Public Accountant
We consent to the incorporation in the Registration Statement on Form S-4 of our
report dated January 16, 1998, which appears in the annual report on Form 10-K
of Premier Bancshares, Inc. and Subsidiaries for the year ended December 31,
1998, quarterly reports on Form 10-Q for the fiscal quarters ended March 31,
1999, and June 30, 1999, current reports on Form 8-K dated April 9, 1999,
April 27, 1999, May 27, 1999, and August 3, 1999, and Registration Statements on
Form 8-A/A dated May 27, 1999, (for Common Stock); dated May 27, 1999, (for
Preferred Securities of Premier Capital Trust I), Registration Statement on Form
S-4 dated July 16, 1999. Registration Statement on Form S-8 dated July 27, 1999,
Post-Effective Amendment No. 1 to Form S-4 Registration Statement dated
September 22, 1999, and Registration Statement on Form S-4 dated September 27,
1999, Post-Effective Amendment No. 2 on Form S-8 to Registration Statement on
Form S-4 dated November 3, 1999, and Registration Statement on Form S-4 dated
November 10, 1999, for the merger of Premier Bancshares, Inc. with and into BB&T
Corporation.
/s/ Bricker & Melton, P.A.
Duluth, Georgia
November 9, 1999
<PAGE>
EXHIBIT 23(k)
CONSENT OF DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
November 10, 1999
Premier Bancshares
950 East Paces Ferry Road
Suite 2180
Atlanta, Georgia 30326
We hereby consent to the inclusion of our opinion letter dated July 28,
1999 to the Board of Directors of Premier Bancshares, Inc. (the "Company") as
Appendix C to the proxy statement/prospectus relating to the proposed merger of
the Company with and into BB&T Corporation and contained in the Registration
Statement on Form S-4, filed with the Securities and Exchange Commission as of
the date hereof, and to the references to our firm and such opinion in such
proxy statement/ prospectus. In giving consent, we do not admit that we come
within the category of persons whose consent is required under Section 7 of the
Securities Act of 1933, as amended (the "Act"), or the rules and regulations of
the Securities and Exchange Commission thereunder (the "Regulations"), nor do we
admit that we are experts with respect to any part of such Registration
Statement within the meaning of the "experts" as used in the Act or the
Regulations.
Donaldson, Lufkin & Jenrette Securities Corporation
By: /s/ Tod D. Perkins
Name: Tod D. Perkins
Title: Managing Director
New York City, New York
November 10, 1999
<PAGE>
PROXY
PREMIER BANCSHARES, INC.
950 E. Paces Ferry Road
Atlanta, Georgia 30326
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF PREMIER
BANCSHARES, INC. The undersigned hereby appoints Darrell D. Pittard and Robert
C. Oliver or either of them, as the lawful attorneys and proxies of the
undersigned, each with full power and substitution, and hereby authorizes each
of them to represent and to vote, as designated on the reverse side hereof, all
of the shares of Common Stock or Preferred Stock of Premier Bancshares, Inc.
held of record by the undersigned on November 5, 1999 at the Special Meeting of
Shareholders to be held on January 7, 2000 and any adjournments thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREBY
BY THE UNDERSIGNED SHAREHOLDER. IF THIS PROXY IS PROPERLY EXECUTED BUT NO
DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR APPROVAL OF THE AGREEMENT AND
---
PLAN OF REORGANIZATION AND RELATED PLAN OF MERGER REFERENCED IN ITEM 1 AND IN
THEIR DISCRETION ON OTHER MATTERS.
(See Reverse Side)
<PAGE>
1. TO APPROVE the Agreement and Plan of Reorganization dated as of July 28,
1999, and a related Plan of Merger and the merger provided therein,
pursuant to which Premier Bancshares, Inc. will merge with and into BB&T
Corporation, and each outstanding share of Common Stock and Preferred Stock
of Premier Bancshares, Inc. will be converted into the right to receive
shares of Common Stock of BB&T, as described in the accompanying proxy
statement/prospectus. The Agreement and Plan of Reorganization and the
Plan of Merger are attached to the proxy statement/prospectus as Appendix
A.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
2. In their discretion, the proxies are authorized to vote upon any other
business which properly comes before the meeting and any adjournments
thereof.
Please sign exactly as your name appears. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by the President or other authorized officer. If a
partnership, please sign in partnership name by an authorized person. This
Proxy votes all shares held in all capacities.
PLEASE MARK, SIGN, DATE AND MAIL THE CARD IN
THE ENCLOSED ENVELOPE.
DATED: __________________________, 1999
Signature______________________________________
DATED: __________________________, 1999
Signature______________________________________
