<PAGE>
As Filed with the Securities and Exchange Commission on March 24, 2000
Registration No. 333-
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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)
North Carolina 6060 56-0939887
(State or other
jurisdiction of
incorporation or
organization)
(Primary Standard Industrial Classification Code Number)
(I.R.S. Employer
Identification Number)
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. Mitchell S. Eitel, Esq.
Womble Carlyle Sandridge & Rice, PLLC Sullivan & Cromwell
200 West Second Street, 17th Floor 125 Broad Street
Winston-Salem, North Carolina 27101 New York, New York 10004
----------------
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
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<TABLE>
<CAPTION>
Proposed Proposed
maximum maximum Amount of
Title of each class of Amount to be offering price aggregate registration
securities to be registered registered per unit offering price fee
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<S> <C> <C> <C> <C>
Common Stock, par value
$5.00 per share(1).... 44,664,592 (2) $ (3) $307,776
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</TABLE>
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(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
($34.4375) and low ($32.375) sales price of the common stock of One Valley
Bancorp, Inc. on March 21, 2000 as reported on The New York Stock
Exchange, Inc.
----------------
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.
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<PAGE>
[One Valley logo]
Special Meeting of Shareholders
MERGER PROPOSAL--YOUR VOTE IS VERY IMPORTANT
The Board of Directors of One Valley Bancorp, Inc. has unanimously approved
a merger combining One Valley and BB&T Corporation. In the merger, you will
receive 1.28 shares of BB&T common stock for each share of One Valley common
stock that you own.
You generally will not recognize gain or loss for federal income tax
purposes on your receipt of the BB&T common stock.
The merger will join One Valley's strengths as a supercommunity bank
covering West Virginia and central Virginia with BB&T's position as a leading
bank throughout the Carolinas, Virginia, Washington D.C. and parts of
Maryland, Georgia, West Virginia and Kentucky.
At the special meeting, you will consider and vote on the merger agreement
and the related plan of merger. The merger cannot be completed unless holders
of at least a majority of the shares of One Valley common stock approve the
merger agreement and plan of merger. One Valley's Board of Directors believes
the merger is in the best interests of One Valley shareholders and unanimously
recommends that the shareholders vote to approve the merger agreement and plan
of merger. No vote of BB&T shareholders is required to approve the merger
agreement and plan of merger.
BB&T common stock is listed on the New York Stock Exchange under the symbol
"BBT." On , 2000, the closing price of BB&T common stock was $ , making
the value of 1.28 shares of BB&T common stock equal to $ . This price and
value will, however, fluctuate between now and the merger.
The special meeting will be held on June , 2000 at the Charleston Town
Center Marriott on 200 Lee Street East in Charleston, West Virginia.
This document constitutes One Valley's proxy statement in connection with
its solicitation of proxies for use at the special meeting and BB&T's
prospectus in connection with the offer and sale of its shares of common stock
as a result of the merger and 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 One Valley 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 , 2000 [insert date that is 5 business
days before the meeting] from the appropriate company at the following
addresses:
BB&T Corporation One Valley
Shareholder Bancorp, Inc.
Reporting Brien Chase
Post Office Box One Valley Square
1290 Charleston, West
Winston-Salem, Virginia 25326
North Carolina (304) 348-7000
27102
(336) 733-3021
Whether or not you plan to attend the meeting, please take the time to vote
by completing and mailing the enclosed proxy card to us. If you fail to return
your proxy card and fail to vote in person, the effect will be the same as a
vote against the merger agreement and plan of merger. Your vote is very
important. You can revoke your proxy at any time before its exercise by filing
written revocation with, or by delivering a later-dated proxy to, One Valley's
Secretary before the meeting or by attending the meeting, withdrawing your
proxy and voting in person.
On behalf of the Board of Directors of One Valley, I urge you to vote "FOR"
approval and adoption of the merger agreement and plan of merger.
J. Holmes Morrison
Chairman of the Board, President and Chief Executive Officer
Neither the Securities and Exchange Commission nor any state securities
regulator has 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.
The shares of BB&T stock to be issued in the merger are not savings or
deposit accounts or other obligations of any bank or savings association and
are not insured by the Federal Deposit Insurance Corporation or any other
governmental agency.
This proxy statement/prospectus is dated , 2000 and is expected to be
first mailed to shareholders of One Valley on or about , 2000.
<PAGE>
ONE VALLEY BANCORP, INC.
One Valley Square
Charleston, West Virginia 25326
----------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE , 2000
----------------
TO THE SHAREHOLDERS OF ONE VALLEY BANCORP, INC.:
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders (the
"Meeting") of One Valley Bancorp, Inc., a West Virginia corporation ("One
Valley"), will be held at the Charleston Town Center Marriott, 200 Lee Street
East in Charleston, West Virginia, on June , 2000 at : .m. Eastern Time,
for the following purpose:
. To consider and vote upon a proposal to approve the Agreement and Plan of
Reorganization, dated as of February 6, 2000 (the "Merger Agreement"),
between One Valley and BB&T Corporation, a North Carolina corporation
("BB&T"), and a related plan of merger, pursuant to which One Valley will
merge with and into BB&T (the "Merger"). In the Merger, each share of
common stock of One Valley outstanding when the Merger becomes effective
(other than shares of One Valley shareholders who have properly exercised
their dissenters' rights as described below) will be converted into the
right to receive 1.28 shares of common stock of BB&T, plus cash in lieu of
any fractional share of BB&T common stock. A copy of the Merger Agreement
and plan of merger set forth therein is attached to the accompanying proxy
statement/prospectus as Appendix A.
Each holder of shares of the common stock of One Valley has the right to
dissent to the merger and to demand payment of the fair value of all or any
portion of such shares of common stock in the event the Merger Agreement is
approved and the Merger is consummated. The right of any holder of One Valley
common stock to dissent requires compliance with the provisions of Sections
31-1-122 and 31-1-123 of the West Virginia Corporation Act (the "WVCA"), the
full texts of which are attached to the accompanying proxy
statement/prospectus as Appendix B.
Shareholders of One Valley of record at the close of business on , 2000
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
J. Holmes Morrison
Chairman of the Board, President and
Chief Executive Officer
Charleston, West Virginia
, 2000
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 plan of merger. Please do not send in
any certificates for your shares at this time.
<PAGE>
TABLE OF CONTENTS
<TABLE>
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Page
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A WARNING ABOUT FORWARD-LOOKING INFORMATION.............................. iii
SUMMARY.................................................................. 1
MEETING OF SHAREHOLDERS.................................................. 8
General................................................................ 8
Record Date, Voting Rights and Vote Required........................... 8
Voting and Revocation of Proxies....................................... 9
Solicitation of Proxies................................................ 9
Recommendation of the One Valley Board................................. 9
THE MERGER............................................................... 10
General................................................................ 10
Background of and Reasons for the Merger............................... 10
Opinion of Financial Advisor to One Valley............................. 15
Exchange Ratio......................................................... 23
Exchange of One Valley Stock Certificates.............................. 23
The Merger Agreement................................................... 24
Interests of Certain Persons in the Merger............................. 30
Rights of Dissenting Shareholders...................................... 35
Regulatory Considerations.............................................. 37
Material Federal Income Tax Consequences of the Merger................. 38
Accounting Treatment................................................... 40
The Option Agreement................................................... 41
Effect on Employees, Employee Benefit Plans and Stock Options.......... 43
Restrictions on Resales by Affiliates.................................. 46
INFORMATION ABOUT BB&T................................................... 47
General................................................................ 47
Operating Subsidiaries................................................. 47
Acquisitions........................................................... 48
Capital................................................................ 49
Deposit Insurance Assessments.......................................... 49
INFORMATION ABOUT ONE VALLEY............................................. 50
DESCRIPTION OF BB&T CAPITAL STOCK........................................ 51
General................................................................ 51
BB&T Common Stock...................................................... 51
BB&T Preferred Stock................................................... 52
Shareholder Rights Plan................................................ 52
Other Anti-Takeover Provisions......................................... 54
COMPARISON OF THE RIGHTS OF BB&T SHAREHOLDERS AND ONE VALLEY
SHAREHOLDERS............................................................ 55
Authorized Capital Stock............................................... 55
Special Meetings of Shareholders....................................... 55
Directors.............................................................. 56
Dividends and Other Distributions...................................... 56
Shareholder Nominations and Shareholder Proposals...................... 57
Discharge of Duties; Exculpation and Indemnification................... 58
Mergers, Share Exchanges and Sales of Assets........................... 58
Anti-takeover Statutes................................................. 59
</TABLE>
i
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Page
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<S> <C>
Amendments to Articles of Incorporation and Bylaws....................... 59
Shareholders' Rights of Dissent and Appraisal............................ 60
Liquidation Rights....................................................... 60
SHAREHOLDER PROPOSALS...................................................... 60
OTHER BUSINESS............................................................. 61
LEGAL MATTERS.............................................................. 61
EXPERTS.................................................................... 61
WHERE YOU CAN FIND MORE INFORMATION........................................ 61
</TABLE>
Appendix A--Agreement and Plan of Reorganization and Plan of Merger
Appendix B--Sections 31-1-122 and 31-1-123 of the West Virginia Corporation Act
Appendix C--Opinion of Merrill Lynch, Pierce, Fenner & Smith Incorporated
ii
<PAGE>
A WARNING ABOUT FORWARD-LOOKING INFORMATION
BB&T and One Valley 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 One Valley and on information
currently available to them or, in the case of information that appears under
the heading "The Merger--Background of and Reasons for the Merger" on page ,
information that was available to management of BB&T and One Valley 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 One Valley
in its 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 One Valley set forth under "Summary"
and "The Merger--Background of and 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 .
BB&T and One Valley have made statements in this document regarding
estimated earnings per share of BB&T and One Valley on a stand-alone basis,
expected cost savings from the merger, estimated restructuring charges
relating to the merger, estimated yield enhancement from restructuring One
Valley's bond portfolio, maintenance of One Valley'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 One Valley, the amount of general and
administrative expense consolidation, costs relating to converting One
Valley'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 prove to be incorrect, 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 One Valley, may be greater than
expected;
5. changes in the interest rate environment may reduce margins or the
volumes or values of loans made or held;
6. general economic or business conditions, either nationally or in the
states or regions in which BB&T and One Valley 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 One
Valley are engaged;
8. adverse changes may occur in the securities markets; and
9. competitors of BB&T and One Valley may develop products that enable
those competitors to compete more successfully than BB&T and One Valley.
Management of each of BB&T and One Valley believes the forward-looking
statements about its company are reasonable; however, shareholders of One
Valley should not place undue reliance on them. Forward-looking
iii
<PAGE>
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 One
Valley's ability to control or predict.
All subsequent written and oral forward-looking statements concerning the
merger or other matters addressed in this document and attributable to BB&T or
One Valley or any person acting on their behalf are expressly qualified in
their entirety by the cautionary statements contained or referred to in this
section. Neither BB&T nor One Valley undertakes any obligation to release
publicly any revisions to such forward-looking statements to reflect events or
circumstances after the date of this document or to reflect the occurrence of
unanticipated events.
iv
<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 .
Exchange Ratio to be 1.28 Shares of BB&T Common Stock for each Share of One
Valley Common Stock
If the merger is completed, you will receive 1.28 shares of BB&T common
stock for each share of One Valley common stock you own, plus cash instead of
any fractional share.
On , 2000, the closing price of BB&T common stock was $ , making the
value of 1.28 shares of BB&T common stock equal to $ . 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.
No Federal Income Tax on Shares Received in Merger (Page )
Neither company is required to complete the merger unless it receives a
legal opinion from its counsel to the effect that, based on certain facts,
representations and assumptions, the merger will be treated as a
"reorganization" for federal income tax purposes. Therefore, we expect that,
for federal income tax purposes, you generally will not recognize any gain or
loss on the conversion of shares of One Valley common stock into shares of
BB&T common stock. You will be taxed, however, on any cash that you receive
instead of any fractional share of BB&T common stock and, if 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 regular quarterly dividends of $.20 per share on its
common stock and, over the past five years, has had a dividend payout ratio in
the range of approximately 36.5% to 39.5% of recurring earnings and a compound
annualized dividend growth rate of 14.9%. Consistent with this history, BB&T
management intends to recommend to the BB&T Board that BB&T's regular
quarterly dividend be increased from $.20 to $.23 per share for the third
quarter of 2000, subject to business conditions, BB&T's financial condition,
earnings and other factors.
One Valley Board Unanimously Recommends Shareholder Approval (Page )
The One Valley Board of Directors believes that the merger is in the best
interests of One Valley shareholders and unanimously recommends that you vote
"FOR" approval of the merger agreement and the related plan of merger. The One
Valley Board believes that, as a result of the merger, you will be able to
achieve greater value than you would if One Valley remained independent.
Exchange Ratio Fair to Shareholders According to One Valley's Financial
Advisor (Page )
Among other factors considered in deciding to approve the merger, the One
Valley Board has received the opinion of its financial advisor, Merrill Lynch,
Pierce, Fenner & Smith Incorporated that, as of February 5, 2000 (the date of
the One Valley's board vote on the merger) [and updated through the date of
this proxy statement/prospectus], the exchange ratio was fair to the holders
of One Valley common stock from a financial point of view. We have attached
this opinion to this proxy statement/ prospectus as Appendix C. You should
read this opinion completely to understand the assumptions made, matters
considered and limitations of the review undertaken by Merrill Lynch in
providing its opinion. One Valley has agreed to pay to Merrill Lynch a fee
based on the value of the consideration paid in the merger, which fee is
expected to be approximately $6.0 million, of which approximately $4.45
million is payable upon the closing of the merger.
Dissent and Appraisal Rights (Page )
Under West Virginia law, if you do not vote for the merger and you properly
exercise rights to dissent from the merger and to demand the "fair value" of
1
<PAGE>
your shares of One Valley common stock, you will have the right to obtain a
cash payment for the "fair value" of your shares as determined by statutory
appraisal proceedings. To exercise these rights, you must comply with the
procedural requirements of the West Virginia Corporation Act, the relevant
sections of which we have attached to this proxy statement/prospectus as
Appendix B. We cannot predict what the "fair value" of One Valley common stock
resulting from the statutory appraisal proceedings would be. Failure to take
timely and properly any of the steps required under the WVCA may result in a
loss of dissenters' rights. See "Rights of Dissenting Shareholders" on page .
Meeting to be held June , 2000 (Page )
One Valley will hold the special shareholders' meeting at : .m. on ,
June , 2000 at the Charleston Town Center Marriott on 200 Lee Street East in
Charleston, West Virginia. At the meeting, you will vote on the merger
agreement and plan of merger and conduct any other business that properly
arises.
The Companies (Page )
BB&T Corporation
200 West Second Street
Winston-Salem, North Carolina 27101
(336) 733-2000
BB&T is a multi-bank holding company with more than $45.5 billion in assets.
It is the sixth largest bank holding company in the Southeast and, through its
banking and thrift subsidiaries, operates 687 branch offices in the Carolinas,
Virginia, Maryland, Washington, D.C., West Virginia, Georgia 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, Maryland,
Georgia and Washington, D.C.
One Valley Bancorp, Inc.
One Valley Square
Charleston, West Virginia 25326
(304) 348-7000
One Valley, with $6.6 billion in assets, is the parent company for nine
community banks and 123 branches, including 76 in West Virginia and 47 in
central Virginia, that serve 81 cities and towns. One Valley also operates a
trust division, a discount brokerage corporation and an insurance agency. One
Valley ranks first in deposit market share in West Virginia.
The Merger (Page )
In the merger, One Valley will merge into BB&T, and One Valley's banking
subsidiaries, through which it operates, will become wholly owned subsidiaries
of BB&T. If the One Valley shareholders approve the merger agreement and plan
of merger at the special meeting, we currently expect to complete the merger
in the third quarter of 2000.
We have attached the merger agreement and 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 Shareholder Vote Required (Page )
Approval of the merger agreement and plan of merger requires the affirmative
vote of the holders of at least a majority of the outstanding shares of One
Valley common stock. If you fail to vote, it will have the effect of a vote
against the merger agreement and the merger. At the record date, the directors
and executive officers of One Valley and their affiliates together owned about
% of the shares entitled to vote 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 One Valley common 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 , 2000; One Vote per Share of One Valley Common Stock
(Page )
If you owned shares of One Valley common stock at the close of business on
, 2000, the record date, you are entitled to vote on the merger agreement
and plan of merger and any other matters that may be properly considered at
the meeting.
On the record date, there were shares of One Valley common stock
outstanding. You will have one vote at the meeting for each share of One
Valley common stock that you owned on the record date.
2
<PAGE>
Monetary Benefits to Management (Page )
When considering the recommendation of the One Valley Board, you should be
aware that some of One Valley's directors and officers have interests in the
merger that differ from, or are in addition to, the interests of other One
Valley shareholders. These interests exist because of rights under benefit and
compensation plans maintained by One Valley and, in the case of certain
executive officers of One Valley, under employment agreements with Branch
Banking and Trust Company, BB&T's main bank subsidiary.
Each of One Valley's Chairman of the Board, President and Chief Executive
Officer, J. Holmes Morrison, Chief Operating Officer, Phyllis H. Arnold,
Executive Vice President, Frederick H. Belden, and Chief Financial Officer,
Laurance G. Jones, has agreed to an employment agreement with Branch Banking
and Trust Company:
. Mr. Morrison's agreement is for five years and provides for an annual
base salary of at least $510,000 and an annual bonus of at least
$300,000 for the period that he is in charge of BB&T's West Virginia
operations and for an annual base salary of at least $300,000 and an
annual bonus of at least $100,000 for the balance of the agreement;
. Ms. Arnold's agreement is for five years and provides for an annual base
salary of at least $290,000 and an annual cash bonus of at least
$135,000;
. Mr. Belden's agreement is for three years and provides for an annual
base salary of at least $220,000 and an annual bonus of at least
$95,000; and
. Mr. Jones' agreement is for three years and provides for an annual base
salary of at least $230,000 and an annual bonus of at least $95,000.
As more fully described in this proxy statement/prospectus, the employment
agreements for Messrs. Morrison, Belden and Jones and Ms. Arnold also provide,
subject to satisfaction of certain conditions, that they will be paid
additional amounts upon completion of specified events relating to the merger,
the subsequent conversion of the systems of One Valley and its banking
subsidiaries to those of BB&T, integration of business functions and the
creation of a strategic plan for BB&T's West Virginia operations.
In addition, up to sixteen other One Valley officers will be offered three-
year employment agreements with Branch Banking and Trust Company at their
current base salaries.
All of these employment agreements may provide severance benefits if
employment is terminated following the merger. The material terms and
financial provisions of these employment agreements are described under the
heading "Interests of Certain Persons in the Merger" on page .
In addition, following the completion of the merger, Mr. Morrison and
will be named to the BB&T Board of Directors and Mr. Morrison will be named to
BB&T's Executive Committee.
The One Valley Board was aware of these and other interests and considered
them when it approved and adopted the merger agreement and plan of merger.
Conditions that Must be Satisfied for the Merger to Occur (Page )
A number of conditions must be met for us to complete the merger, including:
. approval of the merger agreement and plan of merger by the One Valley
shareholders;
. receipt of legal opinions 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 covering the shares of BB&T stock to be issued in the merger;
and
. receipt by BB&T of letters from its accountants confirming the ability
to account for the merger as a pooling of interests.
Regulatory Approvals We Must Obtain for the Merger to Occur (Page )
We cannot complete the merger unless the Board of Governors of the Federal
Reserve System
3
<PAGE>
approves it, and we have filed an application with the Federal Reserve Board
seeking its approval. In addition, the merger is subject to the approval of,
or notice to, certain state regulatory authorities, and we have made the
necessary filings with those authorities.
Although we do not know of any reason why we would not obtain these
regulatory approvals in a timely manner, we cannot be certain when we will
obtain them or that we will obtain them at all.
Termination and Amendment of the Merger Agreement (Page )
We can jointly agree at any time to terminate the merger agreement without
completing the merger. Either company can also unilaterally terminate the
merger agreement if:
. the merger is not completed by October 1, 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.
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 or One Valley
if:
. the One Valley Board authorizes One Valley management to accept a
superior offer. The types of offers that constitute superior offers are
described under the heading "Conduct of One Valley's and BB&T's
Businesses Prior to the Effective Time of the Merger" on page ; or
. the One Valley Board withdraws, modifies, conditions or refuses to make
its recommendation to the One Valley shareholders that they vote to
approve the merger agreement and plan of merger in certain prescribed
circumstances relating to a superior offer or to the fairness opinion of
One Valley's financial advisor.
We can agree to amend the merger agreement in any way, except that after the
shareholders' meeting we cannot alter the exchange ratio of 1.28 shares of
BB&T common stock for each share of One Valley common stock. 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 or the satisfaction of any condition imposed by law. Neither company
intends to waive the condition that it receives a tax opinion. If a tax
opinion from its counsel is not available and One Valley determines to waive
this condition, One Valley will inform you and ask you to vote again on the
merger agreement and plan of merger.
Option Agreement (Page )
As a condition to its offer to acquire One Valley, and to discourage other
companies from acquiring One Valley, BB&T required One Valley to grant BB&T a
stock option that allows BB&T to buy up to 6,700,000 shares of One Valley's
common stock. The exercise price of the option is $29.75 per share. Generally,
BB&T can exercise the option only if another party attempts to acquire control
of One Valley. As of the date of this document, we do not believe that has
occurred.
BB&T to Use Pooling-of-Interests Accounting Treatment (Page )
BB&T will account for the merger as a pooling of interests. This will avoid
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 One Valley had always been combined with BB&T.
Share Price Information (Page )
One Valley common stock and BB&T common stock are both listed on the New
York Stock Exchange. On February 4, 2000, the last full trading day before
public announcement of the proposed merger, One Valley common stock closed at
$27.06, and BB&T common stock closed at $27.50. On , 2000, One Valley
common stock closed at $ , and BB&T common stock closed at $ .
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.
4
<PAGE>
Comparative Market Prices and Dividends
BB&T common stock and One Valley common stock are listed on the New York
Stock Exchange under the symbols "BBT" and "OV," respectively. The table below
shows the high and low closing prices of BB&T common stock and One Valley
common stock and cash dividends paid per share for the last two fiscal years
plus the interim period. For BB&T, amounts reflect a 2-for-1 stock split on
August 3, 1998. The merger agreement restricts One Valley's ability to
increase dividends. See page .
<TABLE>
<CAPTION>
BB&T One Valley
------------------------- -------------------------
High Low Cash Dividend High Low Cash Dividend
----- ----- ------------- ----- ----- -------------
<S> <C> <C> <C> <C> <C> <C>
Quarter Ended
March 31, 2000........... $ $ $ .20 $ $ $
June 30, 2000 (through
, 2000)..............
Quarter Ended
March 31, 1999........... 40.44 34.94 .175 35.13 29.88 .24
June 30, 1999............ 40.25 33.81 .175 40.00 34.00 .24
September 30, 1999....... 36.63 30.50 .20 39.38 33.50 .26
December 31, 1999........ 36.94 27.31 .20 36.75 29.63 .26
For year 1999.......... 40.44 27.31 .75 40.00 29.63 1.00
Quarter Ended
March 31, 1998........... 33.84 29.03 .155 38.81 33.75 .21
June 30, 1998............ 34.06 32.03 .155 40.13 33.25 .21
September 30, 1998....... 36.03 28.00 .175 36.31 29.50 .24
December 31, 1998........ 40.63 27.31 .175 34.00 28.75 .24
For year 1998.......... 40.63 27.31 .66 40.13 28.75 .90
</TABLE>
The table below shows the closing price of BB&T common stock and One Valley
common stock on February 4, 2000, the last full trading day before public
announcement of the proposed merger.
<TABLE>
<S> <C>
BB&T historical..................................................... $27.50
One Valley historical............................................... $27.06
One Valley pro forma equivalent*.................................... $35.20
</TABLE>
- --------
* calculated by multiplying BB&T's per share closing price by the exchange
ratio of 1.28
5
<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 1995 through 1999 and unaudited financial statements for the
three months ended March 31, 2000. [The information provided for BB&T has been
restated to include the accounts of Premier Bancshares, Inc., which was
acquired by BB&T on January 13, 2000 in a transaction accounted for as a
pooling of interests.] [to be updated] 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 . You should not rely on the three-month information as
being indicative of results expected for the entire year or for any future
interim period.
BB&T--Historical Financial Information
(Dollars in thousands, except for per share amounts)
<TABLE>
<CAPTION>
As of/For the
Three Months Ended
March 31, As of/For the Years Ended December 31,
------------------ -----------------------------------------------------------
2000 1999 1999 1998 1997 1996 1995
----- ------------ ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Net interest income..... $ $ 390,697 $ 1,651,552 $ 1,497,486 $ 1,383,797 $ 1,256,556 $ 1,141,455
Net income.............. 154,007 614,360 566,947 429,022 399,119 290,707
Basic earnings per
share.................. 0.45 1.78 1.66 1.27 1.18 0.86
Diluted earnings per
share.................. 0.44 1.75 1.63 1.25 1.16 0.83
Cash dividends paid per
share.................. 0.175 0.75 0.66 0.58 0.50 0.43
Book value per share.... 9.80 9.76 9.67 8.68 8.02 7.70
Total assets............ 42,826,247 45,478,877 41,243,750 37,489,552 32,932,032 30,621,861
Long-term debt.......... 5,666,542 5,520,484 5,450,081 2,839,210 2,564,578 1,667,689
One Valley--Historical Financial Information
(Dollars in thousands, except for per share amounts)
<CAPTION>
As of/For the
Three Months Ended
March 31, As of/For the Years Ended December 31,
------------------ -----------------------------------------------------------
2000 1999 1999 1998 1997 1996 1995
----- ------------ ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Net interest income..... $ $ 57,855 $ 235,223 $ 220,724 $ 199,830 $ 192,679 $ 179,763
Net income.............. 19,943 80,824 73,045 63,800 58,618 55,580
Basic earnings per
share.................. .58 2.39 2.19 2.00 1.80 1.69
Diluted earnings per
share.................. .57 2.37 2.15 1.95 1.76 1.67
Cash dividends paid per
share.................. .24 1.00 0.90 0.80 0.74 0.66
Book value per share.... 16.72 17.14 15.75 14.82 15.32
Total assets............ 6,583,061 5,963,580 5,161,486 4,801,113 4,355,586
Long-term debt.......... 541,824 35,480 48,875 32,892 22,661
</TABLE>
6
<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 .
The pro forma combined information gives effect to the merger accounted for
as a pooling of interests, assuming that 1.28 shares of BB&T common stock is
issued for each outstanding share of One Valley common stock. Pro forma
equivalent of One Valley common share amounts are calculated by multiplying
the pro forma combined amounts by 1.28. 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 three-month information as being
indicative of results expected for the entire year or for any future interim
period. [to be updated]
<TABLE>
<CAPTION>
As of/For the
As of/For the Year Ended
Three Months December 31,
Ended March 31, ------------------
2000 1999 1998 1997
--------------- ----- ------ -----
<S> <C> <C> <C> <C>
Earnings per common share
Basic
BB&T historical......................... $ $1.78 $ 1.66 $1.27
One Valley historical................... 2.39 2.19 2.00
Pro forma combined...................... 1.79 1.67 1.30
Pro forma equivalent of one One Valley
common share........................... 2.29 2.14 1.67
Diluted
BB&T historical......................... 1.75 1.63 1.25
One Valley historical................... 2.37 2.15 1.95
Pro forma combined...................... 1.76 1.64 1.28
Pro forma equivalent of one One Valley
common share........................... 2.26 2.10 1.63
Cash dividends declared per common share
BB&T historical........................... .20 .75 .66 .58
One Valley historical..................... 1.00 .90 .80
Pro forma combined........................ .20 .75 .66 .58
Pro forma equivalent of one One Valley
common share............................. .256 .96 .84 .74
Shareholders' equity per common share
BB&T historical........................... 9.76 9.67 8.68
One Valley historical..................... 16.72 17.14 15.75
Pro forma combined........................ 10.12 10.09 9.07
Pro forma equivalent of one One Valley
common share............................. 12.96 12.92 11.61
</TABLE>
7
<PAGE>
MEETING OF SHAREHOLDERS
General
We are providing this proxy statement/prospectus to One Valley shareholders
of record as of , 2000, along with a form of proxy that the One Valley
Board is soliciting for use at a special meeting of shareholders of One Valley
to be held on , June , 2000 at : .m., Eastern Time, at the Charleston
Town Center Marriott on 200 Lee Street East in Charleston, West Virginia. At
the meeting, the shareholders of One Valley will vote upon a proposal to
approve the merger agreement, dated as of February 6, 2000, and the related
plan of merger pursuant to which One Valley would merge 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 One Valley Board knows of no such
other matters except those incidental to the conduct of the meeting. The
merger agreement and plan of merger are attached as Appendix A.
Whether or not you expect to attend the meeting, your vote is important. We
request that you complete, date and sign the accompanying proxy and return it
promptly to One Valley in the enclosed postage prepaid envelope.
Record Date, Voting Rights and Vote Required
Only the holders of One Valley common stock on the record date are entitled
to receive notice of and to vote at the meeting. On the record date, there
were shares of One Valley common stock outstanding, held by approximately
holders of record. Each such share of One Valley common stock is entitled
to one vote on each matter submitted at the meeting.
Approval of the merger agreement and plan of merger requires the affirmative
vote of the holders of at least a majority of the outstanding shares of One
Valley common stock. If you do not vote your shares, it will have the same
effect as a vote "against" the merger agreement and plan of merger.
The proposal to adopt the merger agreement and 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 non-vote 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 One Valley common stock entitled to vote
is represented at the meeting in person or by proxy. Shares with respect to
which proxies have been marked as abstentions and broker non-vote shares will
be treated as shares present for purposes of determining whether a quorum is
present. The One Valley 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 plan of merger requires the
affirmative vote of the holders of at least a majority of the outstanding
shares of One Valley common stock, abstentions and broker non-vote shares will
have the same effect as votes against the merger. Accordingly, the One Valley
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 One Valley Stock Certificates" on page .
8
<PAGE>
If 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 One
Valley common stock, you may have the right to obtain a cash payment equal to
the "fair value" of your shares. See "THE MERGER-Rights of Dissenting
Shareholders" on page .
As of the record date, the directors and executive officers of One Valley
and their affiliates beneficially owned a total of shares, or %, of the
issued and outstanding shares of One Valley common stock (exclusive of shares
that may be acquired pursuant to the exercise of stock options), and the
directors and executive officers of BB&T, their affiliates, BB&T and its
subsidiaries owned no shares of One Valley common stock, excluding the shares
subject to the stock option agreement described under the heading "The Option
Agreement" on page .
Voting and Revocation of Proxies
The shares of One Valley common 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 respective shareholders unless the proxies
are revoked as described below. If no instructions are given, executed proxies
will be voted "FOR" approval of the merger agreement and plan of merger.
Proxies marked "FOR" approval of the merger agreement and 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 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: notifying the
Secretary of One Valley in writing or in person at One Valley's principal
executive offices; submitting a later-dated proxy to the Secretary of One
Valley at One Valley's principal executive offices; or attending the meeting
and withdrawing the proxy before it is voted.
Solicitation of Proxies
BB&T and One Valley will each pay 50% of the cost of printing this proxy
statement/prospectus, and One Valley will pay all other costs of soliciting
proxies. Directors, officers and other employees of One Valley 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. One Valley 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 brokerage
firms and other custodians, nominees and fiduciaries, and One Valley will
reimburse these record holders for their reasonable out-of-pocket expenses. In
addition, One Valley intends to use the services of Georgeson Shareholder
Communications, Inc., a professional proxy solicitation firm, to help with
soliciting proxies for the meeting, at an estimated cost of $8,000 plus out-
of-pocket expenses.
Recommendation of the One Valley Board
The One Valley Board has approved the merger agreement and plan of merger
and believes that the proposed transaction is fair to and in the best
interests of One Valley and its shareholders. The One Valley Board unanimously
recommends that One Valley's shareholders vote "FOR" approval of the merger
agreement and plan of merger. See "The Merger--Background of and Reasons for
the Merger" on page .
9
<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 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, One Valley will be merged into BB&T. Shareholders of One
Valley (other than those who have properly exercised their dissenters' rights)
will receive shares of the common stock of BB&T in exchange for their shares
of One Valley common stock on the basis of 1.28 shares of BB&T stock for each
share of One Valley stock (plus cash instead of any fractional share). During
the [first] quarter of 200[1], BB&T intends to merge One Valley's subsidiary
banks into one or more subsidiaries of BB&T. [to be updated]
Background of and Reasons for the Merger
Background of the Merger; One Valley's Reasons for the Merger and
Recommendation of Directors.
Following its comprehensive biannual review of One Valley's business plan in
1997, the One Valley Board approved a three-year strategic plan intended to
enhance shareholder value. Among the principal components of this strategic
plan were acquisitions in markets that had demographics superior to One
Valley's core markets in West Virginia and an increased emphasis on the
generation of fee income. This plan included financial objectives to produce
annual earnings per share growth of 10% to 15% and a return on equity of 14%
to 15%.
Planned strategies to achieve those financial objectives included the sale
of more financial services to households in West Virginia that already had
banking relationships with One Valley and a pace of acquisition activity in
Virginia that would have resulted in a core deposit growth rate of 10% to 15%
annually.
In 1998, the growth in earnings per share on an as-reported basis was only
3.9%, but had improved to 10.2% on an annualized basis for the first nine
months of 1999. Return on equity was 13.08% for the year of 1998 and improved
to 14.99% the first three quarters of 1999. However, earnings per share growth
and return on equity performance in 1999 were enhanced by the $59 million
repurchase of 1.6 million shares of One Valley's stock during the first nine
months of 1999. Three acquisitions were consummated in attractive growth areas
of Virginia during 1998, but further acquisition efforts in the first nine
months of 1999 were unsuccessful. Efforts to increase fee income were modestly
successful with the ratio of fee income to assets rising to 1.11% in the first
nine months of 1999 from the 1.08% level in 1997. However, efforts to increase
financial services per household were relatively unsuccessful, only increasing
from 2.56 services in September of 1998 to 2.59 in September of 1999.
By the second half of 1999, management of One Valley became concerned that
it would not be able to continue to execute its business plan so as to produce
the targeted earnings growth. One Valley was unable to find additional
attractive acquisition opportunities in Virginia, and competition was limiting
the growth of fee income. One Valley also explored and rejected other
acquisition opportunities. In addition, two other factors were depressing
earnings growth prospects. First, increased competition and the flattening of
the yield curve (which shows the difference between short-term and long-term
interest rates) were depressing the net interest margin (the difference
between what One Valley earned on interest-earning assets and paid on the
deposits and other liabilities funding those assets). Second, the advent of
Internet banking and other technological innovations would require One Valley
to increase substantially its expenditures for technology.
Accordingly, at a meeting of the Mergers & Acquisitions Committee of the One
Valley Board held on October 20, 1999, the Committee considered whether the
Company should amend its business plan to consider the possibility of a
strategic merger with a larger institution. After discussing at length issues
relating to
10
<PAGE>
the achievement of earnings goals and the other objectives of the business
plan, issues relating to the need for additional management depth if One
Valley continued to expand, and developments in the merger environment, the
Committee instructed management to explore on a preliminary basis, over the
following two months, the potential viability of both a strategic merger with
a larger partner and continuation of independence. The Committee further
concluded that any viable strategic partner should offer high long-term market
returns for shareholders, demonstrated technological expertise and management
depth, as well as a cultural fit for One Valley's customers, employees and
communities.
On January 6, 2000, One Valley held a joint meeting of its Mergers &
Acquisitions and Executive Committees to consider again basic strategic
alternatives. At this meeting, Richard Speer of the consulting firm of Speer &
Associates Inc. made a detailed presentation. Speer & Associates had been
retained by One Valley in 1997 to assist it in the development and
implementation of its strategic plan. The Speer presentation focused on the
demographics of One Valley's markets, the status of its current business plan,
the rapid changes in technology and the expanding role of e-commerce in
delivering financial services, and the increased competition for financial
services. Mr. Speer concluded that these external factors, as well as
shrinking net interest margins and difficulties in expanding fee income, were
adversely impacting banking institutions, such as One Valley, that were
primarily dependent upon net interest income. He also noted that substantial
technology expenditures would be necessary for One Valley to compete
effectively. For these reasons, he recommended that a strategic merger should
be considered as a viable option.
Management of One Valley stated that they had reached the same conclusions
for similar reasons. Mr. Morrison noted that capital investments for enhanced
technology would be substantial, and he reiterated concerns about management
breadth and depth. The Committee discussed these issues at length and asked
numerous questions of Mr. Speer and management.
Mr. Speer then provided a detailed overview of potential strategic partners.
He expressed the view that a desirable strategic partner would have
demonstrated a strong financial and market performance over time, strong
demographic growth potential, strong technology and e-commerce capabilities
and a good cultural fit. Mr. Speer concluded that BB&T and one other
institution stood out as desirable strategic partners based on those criteria.
Mr. Speer also noted that both BB&T and the other institution had very
successful records of merger integration.
Management concurred with Mr. Speer's conclusion and recommended initiation
of discussions with BB&T and the other institution. The Committees authorized
management to initiate discussions and to engage Merrill Lynch and Sandler
O'Neill as financial advisors.
During the next three weeks, management held discussions with BB&T and the
other institution. On January 18, representatives of One Valley met with
representatives of BB&T to discuss non-price matters relating to a possible
merger. These matters included regional operations, management structure,
timing, contractual terms, employee arrangements, job loss and charitable and
community development activities.
On January 24, 2000, the other institution informed Mr. Morrison that,
although it regarded One Valley as a highly desirable merger partner, it had
higher priorities on which to focus at that time.
On January 26, 2000, the Mergers & Acquisitions and Executive Committees
again met in joint session to review the situation. Reports were provided on
the discussions and meetings with BB&T and the discussions with the other
institution. Following these reports, Merrill Lynch provided a detailed report
on the current merger and acquisition environment, One Valley's market
position, the perspective of BB&T and other larger institutions as acquirors,
the financial and market position and performance of BB&T and the profile of a
combined company. Sandler O'Neill offered commentary on the same subjects and
on BB&T's pricing approach in other transactions. The Committee asked numerous
questions of the financial advisors.
Following further discussions, the Committees adopted a resolution
authorizing Merrill Lynch and Sandler O'Neill to enter into pricing
discussions with BB&T concerning terms of a possible exchange ratio.
11
<PAGE>
Following this meeting, Merrill Lynch and Sandler O'Neill began discussions
with BB&T regarding a possible exchange ratio for a merger. After some initial
progress had been made by January 31 in negotiating an exchange ratio,
preliminary due diligence began and BB&T's outside counsel delivered to One
Valley and its counsel a draft merger agreement, stock option agreement,
employment contracts and other related documents. During the course of the
week, negotiations over the exchange ratio continued and more extensive due
diligence was commenced. The two companies and their respective counsel also
negotiated the terms of the merger documents. During the negotiations, BB&T
informed One Valley that the stock option agreement was required as a
condition to BB&T's willingness to enter into a definitive merger agreement
with One Valley.
On February 4, 2000, the Mergers & Acquisitions and Executive Committees
again met in joint session. Senior executives of BB&T made a detailed
presentation to the Committees regarding the business strategies, performance,
vision, values and management approach of BB&T, including its approach to
mergers and merger integration, and its commitment to technology. The BB&T
executives also reviewed the future prospects of BB&T and noted that it was
the intention of BB&T's management to recommend to the BB&T Board that it
increase BB&T's dividend rate during the third quarter. The BB&T executives
then responded to numerous questions from the Committees.
Following the BB&T presentation, Merrill Lynch made a presentation on the
financial aspects of a possible merger. Sandler O'Neill provided additional
commentary. The financial advisors reported that, after intense negotiations,
BB&T had indicated a willingness on February 3 to offer an exchange ratio of
1.28 BB&T shares for each One Valley share but were not prepared to increase
the offer.
Based on closing prices of the stocks of BB&T and One Valley on February 3,
the 1.28 exchange ratio produced a market premium of 37%.
There followed intensive discussion by the Committees regarding financial
issues, as well as the results of One Valley's due diligence on BB&T, possible
market reaction to a merger announcement and communications. Merrill Lynch
advised that it was prepared to deliver to the Board of Directors an opinion
that the exchange ratio of 1.28 was fair to the One Valley shareholders from a
financial point of view. This was followed by a discussion of the merger
documents and the status of the negotiations.
Following further extensive discussion, the Committees jointly and
unanimously recommended a merger with BB&T to the One Valley Board of
Directors.
On February 5, 2000, a special meeting of the One Valley Board of Directors
was convened at 9:00 A.M. to consider a merger with BB&T.
Management reviewed in detail with the Board the One Valley business plan
and the actions that the Mergers & Acquisitions Committee and the Executive
Committee had taken and conclusions they had reached at the meetings beginning
with the October 20, 1999 meeting of the Mergers & Acquisitions Committee.
Mr. Speer then provided an updated version of the reports he had made to the
Mergers and Acquisitions and Executive Committees on January 6. He also
reported in detail on the utilization of technology by BB&T. Mr. Speer then
responded to numerous questions and comments from members of the Board.
Mr. Morrison then reported on his discussions with BB&T and the other
institution. He discussed, and responded to, questions regarding the structure
for post-merger operations in West Virginia and Virginia, employee matters,
the values, culture and performance of BB&T, job loss, including BB&T's pledge
to establish or relocate a line of business to Charleston and BB&T's pledge to
enhance charitable contributions in One Valley's market area.
Merrill Lynch then made a detailed presentation regarding the financial
aspects of the merger, including the 1.28 exchange ratio and BB&T's proposed
dividend increase. Merrill Lynch reiterated that it was prepared to provide an
opinion that the exchange ratio was fair to One Valley shareholders from a
financial point of view. Sandler O'Neill then provided additional commentary
on the financial aspects of the merger, including BB&T's
12
<PAGE>
general reputation and merger "track record." Throughout the presentations,
Merrill Lynch and Sandler O'Neill responded to numerous questions and comments
from the Board.
One Valley's counsel then reviewed the terms of the merger agreement, stock
option agreement and employment agreements, as well as the regulatory process
and shareholders' meeting to consider the merger.
Management then made its own recommendation in favor of the merger with BB&T
and reiterated that the Mergers and Acquisitions and Executive Committees had
also unanimously recommended the merger. After further questions, comments and
discussion by the Board, the Board then unanimously voted to approve the
merger, the merger agreement and the stock option agreement and to recommend
that One Valley's shareholders approve the merger agreement.
On February 6, 2000, One Valley and BB&T entered into the merger agreement
and the stock option agreement and BB&T's principal bank subsidiary executed
employment agreements, to be effective upon completion of the merger, with
certain executive officers of One Valley.
Reasons for the Merger
In reaching the conclusion that the merger agreement and the merger are in
the best interests of and advisable for One Valley and its shareholders, and
in approving the merger agreement, the stock option agreement and the
transactions contemplated by those agreements, the One Valley Board considered
and reviewed with One Valley's senior management, as well as its financial and
legal advisors, a number of factors including the following:
. Information regarding the business, operations, financial condition,
demographics, technological capabilities, management, earnings and
prospects of each of One Valley and BB&T, including the difficulty of
achieving the earnings goals set forth in One Valley's business plan.
. The current financial services industry environment, including
. the rapid consolidation within the industry,
. the increasing use of technology-based new product delivery systems,
such as the Internet, and the related expense and potential
advantages of scale,
. increased competition,
. decline in net interest spreads and the market's valuation of
banking organizations,
. the apparent approaching end of pooling-of-interests accounting at
January 1, 2001 which may affect market premiums for at least some
period and may also negatively impact One Valley's acquisition
program.
. Their belief that the terms of the merger, the merger agreement and the
stock option agreement are fair to and in the best interests of One
Valley shareholders and that the merger is consistent with One Valley's
long-term strategy.
. The fact that the exchange ratio of BB&T stock being offered for One
Valley stock represented a substantial premium over recent market prices
of One Valley stock.
. The analyses provided by Merrill Lynch and Sandler O'Neill, and Speer &
Associates.
. The oral opinion of Merrill Lynch provided on February 5, 2000
(subsequently confirmed in writing) that, as of such date, the exchange
ratio between shares of BB&T and One Valley, as set out in the merger
agreement, was fair from a financial point of view to One Valley
shareholders (see "Opinion of Financial Advisor to One Valley").
13
<PAGE>
. That the merger is intended to be generally tax-free for federal income
tax purposes and a pooling of interests for accounting purposes.
. BB&T's record as an acquiror of other banks and its commitments relating
to the management structure for One Valley's franchise, One Valley's
employees and One Valley's communities.
. The intention of BB&T's management, subject to business conditions, to
recommend to the BB&T Board a $0.03 increase in BB&T's quarterly
dividend from $0.20 to $0.23 per share for the third quarter of 2000.
. The interests of One Valley's officers and directors that are different
from, or in addition to, the interests of shareholders generally (see
"Interests of Certain Persons in the Merger").
. The fact that approval of the merger agreement requires the consent of a
majority of the outstanding shares of common stock entitled to vote
thereon.
The foregoing discussion of the information and factors considered by the
One Valley Board is not meant to be exhaustive, but indicates the material
matters considered by the One Valley Board. In reaching its determination to
approve the merger agreement, the stock option agreement and the transactions
contemplated thereby, the Board did not assign any relative or specific weight
to the foregoing factors, and individual directors may have considered various
factors differently.
Your Board of Directors Unanimously Recommends That You Vote "FOR" the
Merger Agreement and Plan of 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
asset size range. BB&T's management believes that One Valley is an exceptional
supercommunity bank, the acquisition of which will improve BB&T's financial
performance and franchise value, give BB&T the leading market share in West
Virginia and strengthen BB&T's position in Virginia. BB&T's management further
believes that the merger will benefit One Valley's customers by giving them
access to new and expanded products and services like capital markets, cash
management services, leasing and international banking.
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:
. Each of BB&T's and One Valley's 2000 earnings per share on a stand-alone
basis would be in line with the estimate published by First Call
Corporation;
. BB&T's earnings per share on a stand-alone basis for 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
12%;
. One Valley's earnings on a stand-alone basis for periods after 2000
would increase at an assumed rate, determined solely for the purpose of
assessing the impact of the merger as described above, of approximately
11%, before applying the effect of the assumptions described below;
. Annual cost savings of approximately $30.5 million, or 17.5% of One
Valley's expense base, would be realized as a result of the merger, 10%
of which would be realized in 2000 and 90% of which would be realized in
2001;
. One Valley's core net interest margin (non-fully taxable equivalent)
would be maintained annually at 4.03%, excluding the enhancements
derived from restructuring One Valley's bond portfolio as described
below;
14
<PAGE>
. One Valley's bond portfolio would be restructured with an expected
improved yield of approximately 90 basis points;
. One Valley's noninterest income would increase at a rate of 15% per year
in years 1-3 and at 12% per year thereafter; and
. One Valley's net charge-off rate for loan losses would be increased to
0.25% in 2001and held constant thereafter.
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, book value per share and leverage capital
ratio. This analysis indicated that the merger would:
. be accretive to estimated earnings per share and book value per share in
all years and to return on assets in the first year;
. be dilutive to return on equity in all years; and
. result in a combined leverage ratio over 7%.
BB&T excluded from its calculations of earnings per share, return on equity
and return on assets the effect of estimated one-time after-tax charges of $48
million related to consummating the merger and $29 million related to
restructuring One Valley's bond portfolio.
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 One Valley, 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 One Valley merger indicated
that the projected internal rate of return is 18.97%.
None of the above information has been updated since the date of the merger
agreement. There can be no certainty that the results described 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 One Valley
One Valley retained Merrill Lynch to act as its financial advisor in
connection with the merger. On February 5, 2000, the One Valley Board held a
meeting to evaluate the proposed merger. At this meeting, Merrill Lynch
rendered its opinion that, as of that date and based upon and subject to the
factors and assumptions set forth in its written opinion, the exchange ratio
was fair, from a financial point of view, to the One Valley shareholders.
[Merrill Lynch subsequently confirmed and updated its February 5, 2000 opinion
in writing by delivering to the One Valley Board a written opinion dated as of
the date of this proxy statement/prospectus. In connection with its written
opinion, Merrill Lynch confirmed the appropriateness of its reliance on the
analyses used to render its earlier opinion. It also performed procedures to
update certain of its analyses and reviewed the assumptions used in its
analyses and the factors considered in connection with its earlier opinion.]
[to be updated]
The full text of the Merrill Lynch opinion, which describes, among other
things, the assumptions made, matters considered, and qualifications and
limitations on the review undertaken by Merrill Lynch is attached as Appendix
C to this proxy statement/prospectus and is incorporated into this proxy
statement/prospectus by reference. One Valley shareholders are urged to read
Merrill Lynch's opinion carefully and in its entirety. Merrill Lynch's opinion
is directed to the One Valley Board and addresses only the fairness, from a
financial point of
15
<PAGE>
view, of the exchange ratio to the One Valley shareholders. The opinion does
not address any other aspect of the merger or any related transaction, nor
does it constitute a recommendation to any shareholder as to how to vote at
the One Valley special meeting. The summary of the fairness opinion set forth
in this proxy statement/prospectus is qualified in its entirety by reference
to the full text of the opinion.
In arriving at its opinion, Merrill Lynch, among other things:
. reviewed certain publicly available business and financial information
relating to One Valley and BB&T that Merrill Lynch deemed to be
relevant;
. reviewed certain information, including financial forecasts, relating to
the respective businesses, earnings, assets, liabilities and prospects
of One Valley and BB&T furnished to Merrill Lynch by the senior
management of One Valley and BB&T, as well as the amount and timing of
the cost savings, revenue enhancements and related expenses expected to
result from the merger furnished to Merrill Lynch by senior management
of BB&T;
. conducted discussions with members of senior management and
representatives of One Valley and BB&T concerning the matters described
in the bullet points set forth above, as well as their respective
businesses and prospects before and after giving effect to the merger
and the expected synergies;
. reviewed the market prices and valuation multiples for One Valley common
stock and BB&T common stock and compared them with those of certain
publicly traded companies that Merrill Lynch deemed to be relevant;
. reviewed the respective publicly reported financial conditions and
results of operations of One Valley and BB&T and compared them with
those of certain publicly traded companies that Merrill Lynch deemed to
be relevant;
. compared the proposed financial terms of the merger with the financial
terms of certain other transactions that Merrill Lynch deemed to be
relevant;
. participated in certain discussions and negotiations with
representatives of One Valley, its financial and legal advisors and BB&T
with respect to the merger;
. reviewed the pro forma impact of the merger;
. reviewed the merger agreement; and
. reviewed such other financial studies and analyses and took into account
such other matters as Merrill Lynch deemed necessary, including Merrill
Lynch's assessment of general economic, market and monetary conditions.
In rendering its opinion, Merrill Lynch assumed and relied on the accuracy
and completeness of all information supplied or otherwise made available to
Merrill Lynch, or that was discussed with, or reviewed by or for Merrill
Lynch, or that was publicly available, and Merrill Lynch did not assume any
responsibility for independently verifying this information or undertake an
independent evaluation or appraisal of the assets or liabilities of One Valley
or BB&T nor has Merrill Lynch been furnished with such evaluation or
appraisal.
Merrill Lynch is not an expert in the evaluation of allowances for loan
losses, and neither made an independent evaluation of the adequacy of the
allowances for loan losses of One Valley or BB&T, nor reviewed any individual
credit files of One Valley or BB&T or been requested to conduct such a review.
As a result, Merrill Lynch has assumed that the aggregate allowances for loan
losses for both One Valley and BB&T are adequate to cover such losses and will
be adequate on a pro forma basis for the combined company. In addition,
Merrill Lynch did not assume any obligation to conduct, nor did Merrill Lynch
conduct, any physical inspection of the properties or facilities of One Valley
or BB&T. With respect to the financial and operating forecast
16
<PAGE>
information furnished to or discussed with Merrill Lynch by One Valley or
BB&T, including the cost savings, revenue enhancements and related expenses
expected to result from the merger, Merrill Lynch assumed that the information
was reasonably prepared and reflect the best currently available estimates and
judgments of the senior management of each of One Valley and BB&T as to the
future financial and operating performance of One Valley, BB&T or the combined
entity, as the case may be. Merrill Lynch's opinion is necessarily based upon
market, economic and other conditions as in effect on, and on the information
made available to Merrill Lynch as of, the date of its opinion.
For purposes of rendering its opinion, Merrill Lynch assumed that, in all
respects material to its analyses:
. the merger will be completed substantially in accordance with the terms
set forth in the merger agreement;
. the representations and warranties of each party in the merger agreement
and in all related documents and instruments referred to in the merger
agreement are true and correct;
. each party to the merger agreement and all related documents will
perform all of the covenants and agreements required to be performed by
such party under such documents;
. all conditions to the completion of the merger will be satisfied without
any waivers; and
. in the course of obtaining the necessary regulatory, contractual, or
other consents or approvals for the merger, no restrictions, including
any divestiture requirements, termination or other payments or
amendments or modifications, will be imposed that will have a material
adverse effect on the future results of operations or financial
condition of the combined entity or the contemplated benefits of the
merger, including the cost savings, revenue enhancements and related
expenses expected to result from the merger.
Merrill Lynch further assumed that the merger will be accounted for as a
pooling of interests under generally accepted accounting principles, and that
the merger will qualify as a tax-free reorganization for U.S. federal income
tax purposes. Merrill Lynch's opinion is not an expression of an opinion as to
the prices at which shares of One Valley common stock or shares of BB&T common
stock will trade following the announcement of the merger or the actual value
of the shares of common stock of the combined company when issued pursuant to
the merger, or the prices at which the shares of common stock of the combined
company will trade following the completion of the merger.
Analyses of Merrill Lynch
In performing its analyses, Merrill Lynch made numerous assumptions with
respect to industry performance, general business, economic, market and
financial conditions and other matters, many of which are beyond the control
of Merrill Lynch, One Valley and BB&T. Any estimates contained in the analyses
performed by Merrill Lynch are not necessarily indicative of actual values or
future results, which may be significantly more or less favorable than
suggested by these analyses. Additionally, estimates of the value of
businesses or securities do not purport to be appraisals or to reflect the
prices at which such businesses or securities might actually be sold.
Accordingly, these analyses and estimates are inherently subject to
substantial uncertainty. In addition, the Merrill Lynch opinion was among
several factors taken into consideration by the One Valley Board in making its
determination to approve the merger agreement and the merger. Consequently,
the analyses described below should not be viewed as determinative of the
decision of the One Valley Board or management of One Valley with respect to
the fairness of the exchange ratio.
The following is a summary of the material financial analyses presented by
Merrill Lynch to the One Valley Board on February 5, 2000 in connection with
the rendering of its opinion on that date. The summary is not a complete
description of the analyses underlying the Merrill Lynch opinion or the
presentation made by Merrill Lynch to the One Valley Board, but summarizes the
material analyses performed and presented in connection with such opinion. The
preparation of a fairness opinion is a complex analytic process involving
various
17
<PAGE>
determinations as to the most appropriate and relevant methods of financial
analysis and the application of those methods to the particular circumstances.
Therefore, a fairness opinion is not readily susceptible to partial analysis
or summary description. In arriving at its opinion, Merrill Lynch did not
attribute any particular weight to any analysis or factor that it considered,
but rather made qualitative judgments as to the significance and relevance of
each analysis and factor. The financial analyses summarized below include
information presented in tabular format. Accordingly, Merrill Lynch believes
that its analyses and the summary of its analyses must be considered as a
whole and that selecting portions of its analyses and factors or focusing on
the information presented below in tabular format, without considering all
analyses and factors or the full narrative description of the financial
analyses, including the methodologies and assumptions underlying the analyses,
could create a misleading or incomplete view of the process underlying its
analyses and opinion. The tables alone do not constitute a complete
description of the financial analyses.
Calculation of Implied Value of Exchange Ratio. Merrill Lynch reviewed the
terms of the merger. It noted that the exchange ratio of 1.28 shares of BB&T
common stock for each share of One Valley common stock had an implied value of
$36.48 per share of One Valley common stock based upon the closing price of
BB&T common stock on February 3, 2000 of $28.50.
Implied Pricing Multiples. Based on an exchange ratio of 1.28 and the
closing price of BB&T common stock on February 3, 2000 of $28.50, Merrill
Lynch also analyzed the implied per share transaction value of $36.48 as an
absolute multiple of One Valley's fully diluted book value per share, fully
diluted tangible book value per share, last twelve months fully diluted
earnings per share, latest quarter annualized fully diluted earnings per
share, and estimated earnings per share for the year 2000.
The analyses performed indicated that the per share transaction value as a
multiple of One Valley's fully diluted book value per share would be 2.19x and
further indicated that the per share transaction value as a multiple of One
Valley's fully diluted tangible book value per share would be 2.41x, in each
case based on financial data for the period ending December 31, 1999, with
fully diluted shares including options accounted for under the treasury stock
method. Merrill Lynch's analyses also indicated that the per share transaction
value as a multiple of the last twelve months fully diluted earnings per share
would be 15.39x, and that the transaction value as a multiple of the latest
quarter annualized fully diluted earnings per share would be 15.46x. The
analyses also indicated that the transaction value as a multiple of One
Valley's estimated earnings per share in 2000 would be 14.36x, based on
consensus First Call earnings estimates as of February 3, 2000. First Call is
a recognized data service that monitors and publishes compilations of earnings
estimates by selected research analysts regarding companies of interest to
institutional investors.
Merrill Lynch also analyzed the per share transaction value as a premium to
the closing price of One Valley common stock at different intervals prior to
the announcement of the merger. The analyses performed indicated the per share
transaction value as a premium to: (1) the closing price of One Valley common
stock on February 3, 2000 was 37.0%, and (2) the average closing price of One
Valley common stock year-to-date was 30.9%.
Implied Relative Pricing Multiples. Merrill Lynch analyzed certain implied
relative pricing multiples with regard to the BB&T/One Valley transaction. The
relative multiples were determined by dividing the absolute transaction
multiple by the relevant trading multiple of BB&T. Merrill Lynch determined
that the relative pricing multiple of estimated earnings per share and book
value would be 1.11x and 0.74x, respectively. This analysis was based on
BB&T's current price-to-estimated 2000 earnings per share of 12.90x and price-
to-book value of 2.95x. Merrill Lynch further analyzed implied relative
pricing multiples for all bank merger transactions in excess of $1.0 billion
in 1999, all BB&T merger transactions in 1999, and all BB&T merger
transactions from 1997 to present. Using this analysis, Merrill Lynch
determined that the relative pricing multiple of estimated earnings per share
and book value in these transactions was 0.88x and 0.72x, respectively, for
all bank merger transactions in excess of $1.0 billion in 1999, 1.07x and
0.72x, respectively, for all BB&T merger transactions in 1999, and 1.12x and
0.77x, respectively, for all BB&T merger transactions from 1997 to present.
18
<PAGE>
Historical Trading Valuation Analysis. Based on an exchange ratio of 1.28
and the closing price of BB&T common stock on February 3, 2000 of $28.50,
Merrill Lynch reviewed the historical trading valuation of BB&T common stock
for different periods during the one-year period prior to February 3, 2000 to
determine the implied per share offer value of the transaction to One Valley
shareholders and the implied premium to the average price of One Valley common
stock for such periods. The following table indicates the implied per share
offer value of the transaction to One Valley shareholders and the implied
premium to the average price of One Valley common stock for the periods
listed.
<TABLE>
<CAPTION>
Implied Premium
BB&T Implied Value to One Valley
Average Price to One Valley Average Price
------------- ------------- ---------------
<S> <C> <C> <C>
February 3, 2000.................... $28.50 $36.48 37%
Year-to-date average................ 27.02 34.59 24
Three-month average................. 30.30 38.78 23
One-year average.................... 34.47 44.12 26
Three-month high.................... 36.63 46.89 27
One-year high....................... 40.00 51.20 27
</TABLE>
Discounted Dividend Analysis--One Valley. Merrill Lynch performed a
discounted dividend analysis to estimate a range of present values per share
of One Valley common stock assuming One Valley continued to operate as a
stand-alone entity. This range was determined by adding (1) the present value
of the estimated future dividend stream that One Valley could generate, and
(2) the present value of the "terminal value" of One Valley common stock at
December 31, 2004.
In calculating a terminal value of One Valley common stock at December 31,
2004, Merrill Lynch applied a multiple of 10.0x to 12.0x to year 2005
forecasted cash earnings. The dividend stream and terminal value were then
discounted back to December 31, 1999 using discount rates ranging from 13.0%
to 15.0%, which rates Merrill Lynch viewed as the appropriate range of
discount rates for a company of One Valley's risk characteristics.
In performing this analysis, Merrill Lynch used First Call earnings
estimates for 2000 of $2.54 per share. For periods after 2000, earnings per
share were assumed to increase at annual long-term earnings growth rates of 6%
and 8%. Merrill Lynch also assumed an annual asset growth rate of 8%, and
further assumed that earnings in excess of those necessary to maintain One
Valley's current tangible common equity ratio at 7.00% could be paid out to
One Valley shareholders as dividends. Based on the above assumptions, the
stand-alone present value of the One Valley common stock ranged from $24.13 to
$29.67 per share based on an estimated annual long-term earnings growth rate
of 6.0%, and $25.58 to $31.53 per share based on an estimated annual long-term
earnings growth rate of 8.0%.
Discounted Dividend Analysis--BB&T. Merrill Lynch also performed a
discounted dividend analysis to estimate a range of present values per share
of BB&T common stock assuming BB&T continued to operate as a stand-alone
entity. As with the analysis performed with regard to One Valley, this range
was determined by adding (1) the present value of the estimated future
dividend stream that BB&T could generate, and (2) the present value of the
"terminal value" of BB&T common stock at December 31, 2004.
In calculating a terminal value of BB&T common stock at December 31, 2004,
Merrill Lynch applied a terminal year multiple of 10.0x to 12.0x to year 2005
forecasted cash earnings. The dividend stream and terminal value were then
discounted back to December 31, 1999 using discount rates ranging from 13.0%
to 15.0%, which rates Merrill Lynch viewed as the appropriate range of
discount rates for a company with BB&T's risk characteristics.
In performing this analysis, Merrill Lynch used First Call earnings
estimates for 2000 and 2001 of $2.21 and $2.48 per share, respectively. For
periods after 2001, earnings per share were assumed to increase at First
Call's estimated annual long-term earnings growth rate of 12%. Merrill Lynch
also assumed an annual asset growth rate of 8%, and further assumed that
earnings in excess of those necessary to maintain BB&T's current tangible
common equity ratio at 6.24% could be paid out to BB&T shareholders as
dividends. Based on the above assumptions, the stand-alone present value of
the BB&T common stock ranged from $25.66 to $31.86 per share.
19
<PAGE>
Pro Forma Discounted Dividend Analysis. Merrill Lynch also performed a pro
forma discounted dividend analysis to estimate a range of present values per
share of BB&T common stock and One Valley common stock based on the pro forma
combined company. This range was determined by using the same valuation
methodology applied in the preceding six paragraphs in terms of calculating
the terminal value of the combined company and the discount rate applicable to
that value. Merrill Lynch also made the same assumptions as set forth in the
preceding six paragraphs, except that: (1) earnings estimates for pro forma
BB&T are based on First Call's Combined Consensus Equity Analysts' Estimates
increased at 12% after 2001; (2) synergies are assumed to equal $17.9 million
pre-tax in 2000 (excluding $1.4 million of capital leverage), and $35.8
million pre-tax in 2001 (excluding $2.7 million of capital leverage) with
synergies increasing at 11% annually thereafter; and (3) earnings in excess of
those necessary to maintain pro forma BB&T's tangible common equity ratio at
6.24% could be paid out to shareholders as dividends.
Based on the above assumptions, the present value of pro forma BB&T common
stock ranged from $26.18 to $32.30 per share. Merrill Lynch then applied the
exchange ratio to the pro forma discounted dividend values arrived at per
share of pro forma BB&T common stock to determine a range of present values
per share of One Valley common stock, and determined that the present value of
the One Valley common stock under this analysis ranged from $33.51 to $41.34
per share.
The analyses set forth in each of the preceding eight paragraphs does not
necessarily indicate actual values or actual future results and does not
purport to reflect the prices at which any securities may trade at the present
or at any time in the future. The discount rates applied to One Valley and
BB&T referred to in such paragraphs were based on several factors, including
Merrill Lynch's knowledge of each of One Valley and BB&T and the industry in
which they operate, the business risk of each company and the overall interest
rate environment as of February 5, 2000. The asset growth rates applied for
One Valley and BB&T took into consideration several factors, including the
historical asset growth of each of One Valley and BB&T as well as projected
long-term growth rates. Dividend discount analysis is 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.
Peer Group Stock Trading Multiple Analysis--One Valley. Merrill Lynch
compared selected operating and stock market results of One Valley to publicly
available corresponding data for the following companies that Merrill Lynch
determined were comparable to One Valley:
.CCB Financial Corporation .First Virginia Banks, Inc.
.Citizens Banks Corporation .Keystone Financial, Inc.
.Centura Banks, Inc. .Old National Bancorp.
.First Citizens Bancshares, Inc. .Trustmark Corporation
.First Commonwealth Financial Corporation .United Bankshares, Inc.
.First Merit Corporation .Whitney Holding Corporation
.Fulton Financial Corporation
Merrill Lynch then determined the imputed per share value of One Valley
common stock based on the multiples arrived at by Merrill Lynch in its
comparability analysis.
20
<PAGE>
The following table compares selected financial data of One Valley with
corresponding mean data for the companies selected by Merrill Lynch, which
data is based on financial data at or for the quarter ended December 31, 1999,
earnings estimates from First Call as of February 3, 2000, and market prices
as of February 3, 2000. The calculations of price-to-2000 and price-to-2001
First Call estimated earnings per share are based on estimated earnings per
share calculated in accordance with generally accepted accounting principles.
The calculations of price-to-2000 and price-to-2001 First Call estimated cash
earnings per share are based on estimated earnings per share plus amortization
of intangible assets per share.
<TABLE>
<CAPTION>
First
Call
Price / Price/ Price/ Projected 2000
2000 2001 Price/ Price/ Price/ Stated Five-Year Price
Estimated Estimated 2000 2001 Stated Tangible EPS Earnings
GAAP GAAP Estimated Estimated Book Book Growth Growth
EPS EPS Cash EPS Cash EPS Value Value Rate Ratio
--------- --------- --------- --------- ------ -------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Merrill Lynch Selected
Company Average........ 10.93x 10.04x 10.30x 9.50x 1.85x 2.03x 9.0% 125%
One Valley.............. 10.48 9.89 9.71 9.20 1.59 1.75 8.0 131
Imputed Average Value
Per Share Based on
Selected Company Data
....................... $27.77 $27.02 $28.23 $27.48 $30.87 $30.89
</TABLE>
Peer Group Stock Trading Multiple Analysis--BB&T. Merrill Lynch also
compared selected operating and stock market results of BB&T to publicly
available corresponding data for the companies that Merrill Lynch determined
were comparable to BB&T:
.AmSouth Bancorporation .First Virginia Banks, Inc.
.CCB Financial Corporation .Regions Financial Corporation
.Centura Banks, Inc. .SouthTrust Banks, Inc.
.First Tennessee National Corporation .Union Planters Corporation
Merrill Lynch then determined the imputed per share value of BB&T common
stock based on the multiples arrived at by Merrill Lynch in its comparability
analysis.
The following table compares selected financial data of BB&T with
corresponding mean data for the companies selected by Merrill Lynch, which
data is based on financial data at or for the quarter ended December 31, 1999,
earnings estimates from First Call as of February 3, 2000, and market prices
as of February 3, 2000. The calculations of price-to-2000 and price-to-2001
First Call estimated earnings per share are based on estimated earnings per
share calculated in accordance with generally accepted accounting principles.
<TABLE>
<CAPTION>
First
Call
Price/ Price/ Price/ Projected 2000
2000 2001 Price/ Price/ Price/ Stated Five-Year Price
Estimated Estimated 2000 2001 Stated Tangible EPS Earnings
GAAP GAAP Estimated Estimated Book Book Growth Growth
EPS EPS Cash EPS Cash EPS Value Value Rate Ratio
--------- --------- --------- --------- ------ -------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Merrill Lynch Selected
Company Average........ 10.92x 9.81x 10.26x 9.35x 1.94x 2.29x 11.0% 106%
BB&T.................... 12.90 11.49 12.20 10.94 2.95 3.64 12.0 96%
Imputed Average Value
Per Share Based on
Selected Company Data.. $24.13 $24.34 $23.97 $24.37 $18.74 $17.93
</TABLE>
No company or transaction used in the comparable company analyses described
above is identical to One Valley, BB&T, the pro forma combined company, or the
merger, as the case may be. Accordingly, an analysis
21
<PAGE>
of the results of the foregoing necessarily involves complex considerations
and judgments concerning financial and operating characteristics and other
factors that could affect the merger, public trading, or other values of the
companies to which they are being compared. Mathematical analysis (such as
determining the average or median) is not in itself a meaningful method of
using comparable transaction data or comparable company data.
Returns Analysis--BB&T. Merrill Lynch compared selected returns information
with regard to BB&T to the corresponding data for the S&P Regional Bank Index
and the S&P 500. The following table compares selected returns data of BB&T
with corresponding data for the S&P Regional Banks Index and the S&P 500. This
data has been adjusted for stock splits and the reinvestment of dividends in
the stock:
<TABLE>
<CAPTION>
Two-Year Three-Year Five-Year
One-Year Annualized Annualized Annualized
Return Return Return Return
-------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
BB&T................................. (20.74)% (0.85)% 16.64% 24.43%
S&P Regional Bank Index.............. (14.04) (6.71) 5.34 18.08
S&P 500.............................. 12.01 19.02 21.90 24.34
</TABLE>
Merrill Lynch's analysis further revealed that BB&T's seven-year annualized
return was 17.6% and its ten-year annualized return was 17.2%.
Break-Even Returns Analysis. Merrill Lynch also performed a break-even
returns analysis to estimate a range of the compound annual growth rate in
earnings required from 2000 to 2005 that would be necessary to achieve a
future stock price in five years the present value of which would be equal to
the per share offer value of $36.48 contemplated in the merger. In performing
this analysis, Merrill Lynch applied terminal year multiples of 11.0x and
12.0x to forward GAAP earnings. Merrill Lynch then discounted these terminal
values back to December 31, 1999 using a discount rate of 14%. This analysis
also assumed that dividends received would be reinvested in One Valley common
stock, and further assumed that One Valley's current multiple to current
earnings per share was 10.5x.
Based on this analysis, Merrill Lynch determined that One Valley would need
to generate between 14% and 16% compound annual growth rate in earnings for a
five-year period to provide shareholders with the value consistent with the
$36.48 per share contemplated in the merger.
Pro Forma Financial Impact. Based on an exchange ratio of 1.28, Merrill
Lynch also analyzed the pro forma per share financial impact of the merger on
(1) BB&T's and One Valley's earnings per share for 2000 and 2001, (2) BB&T's
book value per share and tangible book value per share, and (3) One Valley's
dividend payments.
Merrill Lynch's analysis of the impact of the merger on BB&T's and One
Valley's estimated earnings per share for both 2000 and 2001 was based on
consensus First Call earnings estimates and estimated pre-tax synergies of
$38.5 million in 2001 (which included $2.7 million of capital leverage), as
well as management's estimated earnings per share of $2.50 in 2000 for One
Valley.
The analyses performed indicated that, on a per share basis, the merger
would not affect BB&T's estimated earnings per share in 2000 and would be
accretive to One Valley's estimated earnings per share in 2000 based on First
Call and management estimates. The analysis further revealed that, on a per
share basis, the merger would be accretive to BB&T's and One Valley's
estimated earnings per share in 2001 based on First Call and management
estimates for One Valley.
The analyses performed also indicated that the merger would be accretive to
BB&T's book value per share and further indicated that the merger would be
accretive to BB&T's tangible book value per share, in each case as of the
completion of the merger. The book value per share and tangible book value per
share analyses included the impact of an estimated pre-tax restructuring
charge equal to $57.8 million. Merrill Lynch's analysis further indicated that
the amount of dividends payable to One Valley shareholders would increase by
5.1% as a result of the merger.
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The actual operating and financial results achieved by the pro forma
combined company may vary from projected results and variations may be
material as a result of business and operational risks, the timing, amount and
costs associated with achieving cost savings and revenue enhancements, as well
as other factors.
One Valley retained Merrill Lynch based upon its experience and expertise.
Merrill Lynch is an internationally recognized investment banking and advisory
firm. As part of its investment banking business, Merrill Lynch is regularly
engaged in the valuation of businesses and securities in connection with
mergers and acquisitions, negotiated underwritings, competitive biddings,
secondary distributions of listed and unlisted securities, private placements
and valuations for estate, corporate and other purposes.
In addition, in the ordinary course of its business, Merrill Lynch and its
affiliates may actively trade the debt and equity securities of One Valley and
BB&T for their own account and/or the accounts of their respective customers,
and, accordingly, may at any time hold long or short positions in these
securities. In the past two years, Merrill Lynch has provided to One Valley
financial advisory, investment banking and other services unrelated to the
proposed merger and has received fees for the rendering of these services.
Merrill Lynch may provide these types of services to the combined company in
the future and receive fees for those services.
Pursuant to a letter agreement between One Valley and Merrill Lynch, dated
as of January 20, 2000, One Valley agreed to pay Merrill Lynch for financial
advisory services rendered through the closing of the merger (1) a fee of
$50,000 payable upon the execution of the letter agreement, (2) a transaction
fee of $1,500,000 contingent upon and payable upon the execution of either an
agreement in principle, a letter of intent or a definitive agreement by One
Valley to effect a business combination, and (3) a fee equal to 0.50% of the
aggregate purchase price paid in such business combination, payable in cash if
and when such business combination is completed. Any fees paid to Merrill
Lynch under items (1) and (2) will be credited against any fees payable under
item (3). One Valley also agreed, among other things, to reimburse Merrill
Lynch for certain expenses incurred in connection with the services provided
by Merrill Lynch and to indemnify Merrill Lynch and its affiliates from and
against certain liabilities and expenses, which may include certain
liabilities under federal securities laws, in connection with its engagement.
Exchange Ratio
In the merger, each share of One Valley common stock outstanding when the
merger becomes effective (other than shares held by shareholders who have
properly exercised their dissenters' rights) will be converted into the right
to receive 1.28 shares of BB&T common stock.
You should be aware that the actual market value of a share of BB&T common
stock when the merger becomes effective and at the time certificates for those
shares are delivered following surrender and exchange of your certificates for
shares of One Valley common stock may be more or less than the closing price
per share of BB&T common stock at any other time. 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 .
No fractional shares of BB&T common stock will be issued in the merger. If
you 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 closing price per
share of BB&T common stock on the NYSE at 4:00 p.m. eastern time on the date
that the merger becomes effective as reported on NYSEnet.com or, if not
reported on NYSEnet.com, another authoritative source.
Exchange of One Valley Stock Certificates
When the merger becomes effective, by virtue of the merger and without any
action on the part of One Valley or the One Valley shareholders, shares of One
Valley common stock (other than shares held by shareholders who have properly
exercised their dissenters' rights) will be converted into and will represent
the
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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 merger becomes effective, BB&T
will deliver or mail to you a form of letter of transmittal and instructions
for surrender of your One Valley 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.
You should not send in your stock certificates until you receive the letter
of transmittal and instructions.
Until surrendered as described above, each outstanding One Valley stock
certificate (other than certificates of shareholders who have properly
exercised their dissenters' rights) will be deemed at the time the merger
becomes effective to represent for all purposes only the right to receive the
merger consideration and any declared and unpaid dividends thereon. No
interest will be paid or accrued on any cash payable for fractional shares as
part of the merger consideration upon the surrender of the certificate or
certificates representing shares of One Valley common stock. With respect to
any One Valley 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. After the time that the merger becomes
effective, One Valley's transfer books will be closed and no transfer of the
shares of One Valley common stock outstanding immediately prior to the
effective time will be made on BB&T's stock transfer books.
BB&T will pay any dividends or other distributions with a record date before
the time that the merger becomes effective that have been declared or made by
One Valley in respect of shares of One Valley common stock in accordance with
the terms of the merger agreement and that remain unpaid when the merger
becomes effective, unless the effective time occurs prior to the record date
for BB&T's dividend payable in the third quarter of 2000, in which case the
former One Valley shareholders would receive BB&T's dividend rather than One
Valley's dividend.
To the extent permitted by law, you will be entitled to vote after the
merger at any meeting of BB&T shareholders the number of whole shares of BB&T
common stock into which your shares of One Valley common stock are converted,
regardless of whether you have exchanged your One Valley 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. After the thirtieth day after the effective time, no
dividend or other distribution that becomes payable to the holders of record
of BB&T common stock will be delivered to you until you surrender your One
Valley stock certificate for exchange as described above. Upon surrender of
your One Valley 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 One Valley common stock represented by your certificate.
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 West
Virginia. 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 plan of merger is approved by the One Valley shareholders
and all other conditions to the respective obligations of BB&T and One Valley
to complete the
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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 third quarter of 2000.
Conditions to the Merger
The obligations of BB&T and One Valley 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 plan of merger must have been duly and validly
taken, including the approval of the shareholders of One Valley of the
merger agreement and 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, to
BB&T's knowledge, 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 exempt from registration
under applicable state securities laws;
. the parties must have received all regulatory approvals required in
connection with the transactions contemplated by 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; and
. neither BB&T nor One Valley 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.
The obligations of One Valley 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 One Valley:
. 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;
. One Valley must have received closing certificates from BB&T to the
effect that certain conditions to the merger have been satisfied; and
. One Valley must have received an opinion of its legal counsel, Sullivan
& Cromwell, subject to customary assumptions and representations,
substantially to the effect that the Merger will constitute a
reorganization within the meaning of Section 368 of the Internal Revenue
Code of 1986, as amended.
In addition, all representations and warranties made by BB&T in the merger
agreement will be evaluated as of the date of the merger agreement and at the
time the merger becomes effective as though made at that 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 One Valley. 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 so materially
adversely affect the business or economic benefits to BB&T of the
transactions in the merger agreement as to render the consummation of
such transactions
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inadvisable or unduly burdensome; provided that any condition or
requirement does not relate principally to any regulatory violation or
other failure on the part of BB&T or a divestiture requirement that is
consistent with regulatory precedent;
. One Valley 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 closing certificates from One Valley to the
effect that certain conditions to the merger have been satisfied;
. 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 as in effect on the date of the merger agreement;
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
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, and that the shareholders of One Valley will not
recognize any gain or loss to the extent that they exchange shares of
One Valley common stock for shares of BB&T common stock.
In addition, all representations and warranties made by One Valley in the
merger agreement will be evaluated at the date of the merger agreement and at
the time the merger becomes effective as though made on and at that 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 One Valley regarding ownership of its subsidiaries, the
shareholder vote required to approve the merger, actions taken to exempt the
merger from any applicable anti-takeover laws, and the inapplicability to the
merger of certain provisions of One Valley's articles of incorporation and One
Valley's rights plan must be true and correct (except for inaccuracies that
are immaterial in amount). In addition, there must not be any inaccuracies in
any of the representations and warranties of One Valley 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
One Valley and its subsidiaries taken as a whole.
Conduct of One Valley's and BB&T's Businesses Prior to the Effective Time of
the Merger
Except with the prior consent of BB&T, not to be unreasonably or arbitrarily
withheld or delayed, before the effective time of the merger, neither One
Valley nor any of its subsidiaries may:
. 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 dividend or distribution on its capital stock, other
than regularly scheduled quarterly dividends of $0.26 per share (subject
to increase at the time and in an amount consistent with past practices)
payable with respect to One Valley common stock on record dates
consistent with past practice (except that, unless otherwise agreed, 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);
. issue any shares of capital stock, except pursuant to One Valley's
Amended and Restated 1993 Incentive Stock Option Plan, 1983 Incentive
Stock Option Plan, Mountaineer Bankshares Incentive Stock Option Plan,
CSB Financial Corporation 1993 Incentive Stock Option Plan, CSB
Financial Corporation 1993 Stock Option Plan for Outside Directors, or
FFVA Financial Corporation Qualified and Non-Qualified Stock Option
Plans for Directors, Senior Officer and Officers, in each case with
respect to options outstanding as of the date of the merger agreement,
or pursuant to the option granted to BB&T in connection with the merger
agreement;
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. issue, grant or authorize any rights to acquire capital stock or effect
any recapitalization, reclassification, stock dividend, stock split or
similar change in capitalization, other than rights to acquire up to
175,000 shares of One Valley's capital stock granted under the stock
option plans referenced in the previous paragraph in the ordinary course
of business consistent with past practices;
. 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 One Valley
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;
. merge with any other entity or permit any other entity to merge into it,
acquire control over any other entity or dispose of any material amount
of assets or acquire any material amount of assets, in each case other
than in the ordinary course of its business consistent with past
practices;
. 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 compensatory stock
options), or pay or agree to pay any bonus or provide any new employee
benefit or incentive, except for increases or payments made in the
ordinary course of business consistent with past practice pursuant to
existing plans or arrangements;
. 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 negotiations or discussions
concerning, any acquisition or purchase of all or substantially all the
assets of or a substantial equity interest in, or any recapitalization,
liquidation or dissolution involving or a business combination or other
similar transaction with, One Valley or any One Valley subsidiary; or
authorize any officer, director, agent or affiliate of One Valley or any
One Valley subsidiary to do any of the foregoing; 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 none of the
foregoing would apply to furnishing information to or to participating
in negotiations or discussions with any party that has made, or that the
One Valley Board determines in good faith is reasonably likely to make,
a superior offer (as described below), if the One Valley Board
determines in good faith, after consultation with outside legal counsel,
that it should take such actions in light of its fiduciary duty to One
Valley's shareholders;
. enter into, other than as contemplated by the merger agreement, (a) any
material agreement or commitment other than in the ordinary course, (b)
any agreement, indenture or other instrument other than in the ordinary
course relating to the borrowing of money by One Valley or a One Valley
subsidiary or guarantee by One Valley or a One Valley 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, and except that, after approval of the merger agreement
and the merger by the One Valley shareholders and after receipt of the
requisite regulatory approvals for the transactions contemplated by the
merger agreement, One Valley will cooperate in good faith with BB&T to
adopt policies, practices and procedures consistent with those utilized
by BB&T, effective at or before the effective time;
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. change its methods of accounting in effect at December 31, 1998 in any
material respect, 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 commitments for capital expenditures or obligations to make
capital expenditures in excess of $250,000 for any one expenditure or
$1,000,000 in the aggregate; provided, that commitments or obligations
in place prior to the date of the merger agreement will not be counted
towards these thresholds;
. incur any material indebtedness other than deposits from customers,
advances from the Federal Home Loan Bank or Federal Reserve Bank and
reverse repurchase arrangements, in each case in the ordinary course of
business;
. take any action that would or could reasonably be expected to (a) cause
the merger not to be accounted for as a pooling of interests or not to
constitute a tax-free reorganization as determined 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 of
business; or
. agree to do any of the foregoing.
A superior offer is a proposal or offer to acquire or purchase all or a
substantial portion of the assets of or a substantial equity interest in, or
to effect any recapitalization, liquidation or dissolution involving or a
business combination or other similar transaction with, One Valley or any One
Valley subsidiary (including, without limitation, a tender offer or exchange
offer to purchase One Valley common stock):
. that did not arise from or involve a breach or violation by One Valley
of the merger agreement;
. that the One Valley Board determines in its good faith judgment based,
among other things, on advice of Merrill Lynch & Co., Inc. (or another
investment banking firm of national standing), to be more favorable to
the One Valley shareholders than the merger with BB&T; and
. the financing for the implementation of which, to the extent required,
is then committed or in the good faith reasonable judgment of the One
Valley Board, based, among other things on advice of Merrill Lynch (or
another investment banking firm of national standing), is capable of
being obtained by the party making the proposal or offer.
One Valley has also agreed:
. to take such actions as may be reasonably necessary to modify the
structure of the merger as long as the modification does not reduce the
consideration to be received by One Valley shareholders, abrogate the
covenants contained in the merger agreement or substantially delay the
completion of the merger;
. to cooperate with BB&T concerning accounting and financial matters
necessary to facilitate the merger and One Valley's lending, investment
and asset/liability management policies;
. to keep BB&T advised of all material developments relevant to its
business prior to completion of the merger; and
. to provide BB&T access to One Valley's books and records.
Except with the prior consent of One Valley, not to be arbitrarily or
unreasonably withheld or delayed, before the effective time, neither BB&T nor
any subsidiary of BB&T may take any action (or in the case of the first bullet
point below, fail to take any action) that would or might be expected 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,
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. cause any of the conditions precedent to the transactions contemplated
by the merger agreement to fail to be satisfied;
. exercise the option agreement executed concurrently with the merger
agreement other than in accordance with its terms or dispose of shares
of One Valley common stock acquired under that agreement other than in
accordance with its terms; 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.
BB&T has also agreed to keep One Valley advised of all material developments
relevant to its business prior to completion of the merger.
Possible Alternative Merger Structure
As permitted by the merger agreement, BB&T and One Valley may change the
structure of the merger in a manner that would not reduce the exchange ratio
or the payment terms for fractional shares of BB&T common stock that would
otherwise be issuable in the merger.
Waiver; Amendment; Termination; Expenses
Except with respect to any required regulatory approval or other condition
imposed by law, BB&T or One Valley may at any time (whether before or after
approval of the merger agreement and plan of merger by the One Valley
shareholders) extend the time 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,
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 plan of merger or (c) the performance by the other
party of any of its obligations set out in the merger agreement or 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 reduce either the exchange ratio or the payment terms for
fractional interests to be provided to holders of One Valley common stock upon
completion of the merger will be made after the One Valley shareholders
approve the merger agreement and 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 One
Valley's obligations, One Valley will, if it determines it appropriate under
the circumstances, resolicit shareholder approval of the merger agreement and
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 One Valley;
. at any time before the effective time, by either party in writing (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;
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. 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;
. at any time, by either party in writing, if the shareholders of One
Valley disapprove the merger agreement and plan of merger at a meeting
called and held for the purpose of voting on them;
. at any time following October 1, 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 before the effective time, by BB&T or One Valley in writing,
if the One Valley Board withdraws, modifies, conditions or refuses to
make its recommendation to the One Valley shareholders that they vote to
approve the merger agreement and plan of merger under circumstances
permitted by the merger agreement; or
. at any time before the effective time, by BB&T or One Valley in writing,
if the One Valley Board authorizes One Valley management to enter into
an agreement, plan or transaction to consummate a Superior Offer.
If the merger agreement is terminated pursuant to any of the provisions
described above, both the merger agreement and plan of merger will become void
and have no effect, except that (a) provisions in the merger agreement
relating to confidentiality and payment of expenses 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. The option
agreement granted to BB&T in connection with the merger agreement will be
governed by its own terms, and no termination of the merger agreement is to be
interpreted as a consent by BB&T to any action or matter that would have the
effect of diminishing or adversely affecting BB&T's rights under that option
agreement.
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 One Valley.
Interests of Certain Persons in the Merger
Certain members of One Valley's management have interests in the merger that
are in addition to their interests as One Valley shareholders. The One Valley
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, four senior executives of One Valley and
Branch Banking and Trust Company, BB&T's North Carolina banking subsidiary
(BB&T-NC), agreed to employment agreements. Each of J. Holmes Morrison and
Phyllis H. Arnold entered into a five-year agreement, and each of Frederick H.
Belden and Laurance G. Jones entered into a three-year agreement. BB&T-NC also
expects to enter into a three-year employment agreement with up to sixteen
additional One Valley executives.
The employment agreements for the senior executives, will become effective
only when the merger is completed and provide that:
. Mr. Morrison will become, for two years or, at his election, a shorter
time to be not less than one year, Chairman and Chief Executive Officer
of West Virginia operations and an Executive Vice President of BB&T-NC
and will receive an annual base salary at least equal to $510,000 and an
annual bonus under BB&T's short-term incentive plan at least equal to
$300,000 and, for the balance of the term, will become Chairman of the
West Virginia Board of Advisors and will receive a base salary at least
equal to $300,000 and an annual bonus at least equal to $100,000;
. Ms. Arnold will become President and Chief Operating Officer of West
Virginia operations, President of BB&T's regional community bank in
Charleston, West Virginia and an Executive Vice President of BB&T-NC and
will receive an annual base salary at least equal to $290,000 and an
annual bonus under BB&T's short-term incentive plan at least equal to
$135,000;
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. Mr. Belden will become an Executive Vice President of BB&T-NC and will
receive an annual base salary at least equal to $220,000 and an annual
bonus under BB&T's incentive short-term plan at least equal to $95,000;
and
. Mr. Jones will become an Executive Vice President of BB&T-NC and will
receive an annual base salary at least equal to $230,000 and an annual
bonus under BB&T's incentive short-term plan at least equal to $95,000.
In addition, BB&T has agreed to pay the four senior executives the following
conditional amounts upon the successful completion of the designated tasks
. if the merger is consummated, Mr. Morrison will receive $425,000, Ms.
Arnold will receive $200,000, Mr. Belden will receive $135,000 and Mr.
Jones will receive $176,000, payable within five days;
. if the conversion of the M&I Data Services systems of One Valley to the
computer systems of BB&T-NC is substantially completed, Mr. Morrison
will receive $575,000, Ms. Arnold will receive $300,000, Mr. Belden will
receive $200,000 and Mr. Jones will receive $261,000, payable not later
than the end of the calendar quarter in which the conversion is
substantially completed;
. upon the earlier to occur, if at all, of (x) the date that the
integration of One Valley's West Virginia support, administrative and
back office functions, including any that are relocated by BB&T from
another area, with the corresponding BB&T functions is substantially
completed, and (y) 90 days after One Valley's West Virginia banks are
merged into a BB&T entity, Mr. Morrison will receive $575,000, Ms.
Arnold will receive $300,000, Mr. Belden will receive $200,000 and Mr.
Jones will receive $261,000, payable not later than the end of the
calendar quarter in which the integration is completed, in the case of
(x), or the end of the calendar quarter in which the 90th day falls, in
the case of (y); and
. upon the earlier to occur, if at all, of (x) the date that the
development of a plan to create and enhance BB&T's brand identity within
One Valley's market area is substantially completed and the
implementation of the plan begun, including but not limited to the
implementation of programs for BB&T advisory boards in West Virginia to
increase BB&T's name recognition and to market BB&T's services, and (y)
180 days after One Valley's Virginia banks are merged into a BB&T
entity, Mr. Morrison will receive $225,000, Ms. Arnold will receive
$90,000, Mr. Belden will receive $50,000 and Mr. Jones will receive
$76,000, payable no later than the end of the calendar quarter in which
such tasks are completed, in the case of (x), or the end of the calendar
quarter in which the 180th day falls, in the case of (y).
If, prior to completion of any one or more of the above tasks, one of the
four senior executives dies, or the employment of a senior executive is
terminated by BB&T-NC because of his or her disability or for just cause (as
that term is defined in the employment agreements), or by a senior executive
other than for good reason (as that term is defined in the employment
agreements), the terminated senior executive will not be entitled to receive
the conditional payment corresponding to any uncompleted task. If the
employment of a senior executive with BB&T-NC terminates for any other reason,
the senior executive will continue to be entitled to receive the conditional
payments upon completion of any uncompleted task. The conditional payments
will be deemed compensation for income tax purposes but will not be deemed
compensation or otherwise taken into account for purposes of determining
benefits or contributions under any retirement or other plan, program or
arrangement of BB&T-NC. Good reason includes, among other things, involuntary
relocation of the senior executive more than 30 miles from Charleston, West
Virginia, or termination of the employment of a senior executive (other than
for just cause) within 30 days of a change in control of BB&T.
Each of the executives' employment agreements provides for him or her to be
[to be updated], to maintain his or her employment title immediately
preceding the merger until a date selected by BB&T to be not later than the
time that the last of One Valley's banking subsidiaries is merged into BB&T or
a BB&T
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subsidiary, to receive a base salary at least equal to his or her base salary
as of April 1, 2000, subject to an annual review, and to participate in BB&T's
short-term incentive plan on the same basis as similarly situated officers of
BB&T, subject to an equitable adjustment by BB&T to avoid duplication with any
bonus earned under One Valley's cash bonus program in any year.
All of the employment agreements provide for the granting of stock options
annually in accordance with BB&T's 1995 Omnibus Stock Incentive Plan or a
successor plan. Options granted to each of the four senior executives during
the term of their respective employment agreements will have a value equal to
42% of base salary and will vest and become immediately exercisable upon his
or her death or disability consistent with the terms of that BB&T plan.
Options granted to the executives will be granted on the same basis as
similarly situated officers of BB&T and will be equitably adjusted by BB&T to
avoid duplication with options to acquire One Valley shares granted prior to
the merger and during the one-year period ending on the first BB&T grant date.
The employment agreements further provide that the senior executive or
executive will receive, on the same basis as other similarly situated officers
of BB&T-NC, 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, such benefits to commence as of a date determined
by BB&T to be not later than January 1 following the effective time of the
merger of the last of One Valley's bank subsidiaries is merged into BB&T or
one of its subsidiaries. Mr. Morrison will also receive perquisites on the
same basis as similarly situated officers of BB&T-NC. Until the date that
BB&T's benefits commence, One Valley plans that provide benefits of the same
type or class as a corresponding BB&T plan will continue in effect for the
senior executives and executives. In addition, the employment agreements for
each of the four senior executives provide that he or she will be entitled to
receive a supplemental retirement benefit that is at least equal to the
benefit provided under the One Valley Supplemental Executive Retirement Plan
(SERP) as in effect immediately prior to the effective time of the merger,
without regard to any termination of the One Valley SERP prior to or after
that time, and to elect to defer compensation in accordance with the terms of
the BB&T deferred compensation plan. In addition, from and after the effective
time of the merger, the four senior executives will be entitled to participate
in the BB&T Corporation Non-Qualified Defined Benefit Plan (BB&T SERP) taking
into account their service and compensation after the effective time of the
merger.
The employment agreements further provide that, if a senior executive or
executive terminates his or her employment for good reason or if BB&T-NC
terminates his or her employment other than for just cause or, solely in the
case of Mr. Morrison, because of his disability, and if he or she complies
with certain noncompetition provisions:
. in the case of Mr. Morrison, he will be entitled to receive annual
termination compensation equal, if the termination occurs prior to the
time that his duties change as described above, to $810,000 until the
second anniversary following the effective time of the merger and
$400,000 thereafter until the end of the original five-year term; and,
if the termination occurs after the time that his duties change as
described above, to $400,000 until the end of the original five-year
term, plus in either case any payment due under the SERP, payable at
such times as salary would be payable in accordance with the agreement;
. in the case of Ms. Arnold, she will be entitled to receive annual
termination compensation equal to the highest amount of cash
compensation (including bonuses and other cash-based benefits, whether
or not deferred, but excluding any conditional payments) received during
any of the three calendar years immediately preceding the termination
for the period commencing on the date of the termination and ending at
the end of the original five-year term of the agreement, plus any
payment due under the SERP, payable at such times as salary would be
payable in accordance with the agreement;
. in the case of each of Messrs. Belden and Jones, he will be entitled to
receive annual termination compensation equal to the highest amount of
cash compensation (including bonuses and other cash-based benefits,
whether or not deferred, but excluding any conditional payments)
received during any of the three calendar years immediately preceding
the termination for the period commencing on the date of the termination
and ending at the end of the original three-year term of the agreement,
plus any
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payment due under the SERP, payable at such times as salary would be
payable in accordance with the agreement;
. in the case of each of the other sixteen executives, he or she will be
entitled to receive termination compensation equal to the greater of (x)
an annual amount equal to the highest amount of cash compensation
(including bonuses and other cash-based benefits, whether or not
deferred) received during any of the three calendar years immediately
preceding the termination for the period commencing on the date of the
termination and ending at the end of the original three-year term of the
agreement, payable at such times as salary would be payable in
accordance with the agreement, or (y) a lump sum equal to two times the
highest amount of cash compensation (including bonuses and other cash-
based benefits, whether or not deferred) received during any of the
three calendar years immediately preceding the termination, payable
within 30 days following the termination.
. in the case of some of the sixteen executives to be specified by One
Valley with the consent of BB&T, he or she will also be entitled to
receive a retirement benefit equal to (i) the benefit which would have
been paid to him or her under the current One Valley Bancorp Retirement
Plan based on the total number of years of service he or she would have
accumulated at age fifty-five if employment had not terminated (not to
exceed the difference between 87 and his or her age) reduced by (ii) the
aggregate present value of actual benefits paid or payable under the One
Valley retirement plan and BB&T's pension plan, payable at the same time
or times as the executive's retirement benefit under the One Valley plan
if he or she is entitled to a retirement benefit thereunder at the time
retirement benefits commence or, if not, under BB&T's pension plan.
Each of the four senior executives and each executive will continue to
receive health insurance coverage and other group employee benefits from, and
to participate in retirement plans of, 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. In
addition, BB&T will use its best efforts to accelerate vesting of any
nonvested benefits under any employee stock-based or other benefit plan or
arrangement to the extent permitted by the plan or arrangement. Also, in the
case of Mr. Morrison, if the termination compensation becomes due as a result
of a termination because of disability, it shall be equitably offset by BB&T
by the amount paid to him under any disability insurance plan.
The employment agreements for the senior executives also provide that:
. if his or her employment is terminated because of disability or other
than for just cause or for good reason (or, in the case of Ms. Arnold,
by her), and he or she has attained age fifty-five (or, in the case of
Ms. Arnold and Mr. Jones, age fifty) with ten years of service with
BB&T-NC (or any of its affiliates), or any predecessor or successor of
BB&T-NC (including One Valley), the senior executive will be eligible to
receive retiree medical benefits from BB&T-NC at the conclusion of any
other benefit coverage provided for in the agreement; and
. if it is determined that any payment, award, benefit or distribution (or
any acceleration of any payment, award, benefit or distribution) to a
senior executive (determined without regard to any additional payments
described in this sentence) would be subject to the excise tax imposed
by Section 4999 of the Internal Revenue Code, or any interest or
penalties are incurred by a senior executive with respect to the excise
tax, then BB&T-NC will pay to the senior executive (or to the Internal
Revenue Service on behalf of the senior executive) an additional payment
in an amount sufficient to pay the excise tax (and any interest or
penalties) plus an additional amount to satisfy any tax (interest or
penalties) due on the amount so paid; provided, that, if the payment
triggering the excise tax would not trigger the excise tax if reduced by
10% or less, then the payment will be reduced by the minimum amount
necessary to avoid triggering the excise tax. By contrast, with respect
to the sixteen executives, any payment that would trigger the excise tax
would be reduced by the minimum amount necessary to avoid doing so,
without regard to the 10% limit.
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Where BB&T-NC is referred to in this section as employer, the reference also
includes any other BB&T affiliate that employs the senior executive or
executive. The employment agreements will supersede the existing employment
agreements and change of control arrangements of the employees with One Valley
or its subsidiaries.
BB&T Board of Directors and Executive Committee; BB&T-NC Board of Directors;
Advisory Boards
Following the closing of the merger: Mr. Morrison and will be named
to the BB&T Board of Directors, each to serve for so long as he is elected and
qualifies, subject to the right of removal for cause; Mr. Morrison will be
named to BB&T's Executive Committee; and Ms. Arnold will be named to BB&T-NC's
Board of Directors to serve for until its next annual meeting and thereafter
for so long as she is elected and qualifies, subject to the right of removal
for cause.
Following the closing of the merger, each member of the One Valley Board
will be offered a position on BB&T's Advisory Board for West Virginia and, for
at least two years after the merger, will receive annual fees not less than
those that he or she was receiving as a member of the One Valley Board as of
January 1, 2000. These advisory board members will thereafter receive fees in
accordance with BB&T's standard schedule of advisory board service fees. For
two years following the merger, none of these advisory board members will be
prohibited from serving because he or she has reached the maximum age for
advisory board service (currently age 70).
Each member of the respective boards of directors of the One Valley banking
subsidiaries will be offered a position on BB&T's advisory board for that
bank's market area effective as of a date determined by BB&T to be, with
respect to each One Valley banking subsidiary, not later than January 1
following the end of the calendar year in which it is merged into BB&T or a
BB&T subsidiary. In addition, following the closing of the merger, R. Marshall
Evans, Jr. will be offered a position on BB&T's Advisory Board for the State
of Georgia. These advisory board members will receive fees in accordance with
BB&T's standard schedule of advisory board service fees.
Notwithstanding the foregoing, only persons who have executed a
noncompetition and nonsolicitation agreement reasonably acceptable to BB&T
will be eligible to serve on an advisory board, and no fees will be paid to
any member of any advisory board 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 One Valley for acts or
omissions occurring before the effective time. This insurance will provide at
least the same coverage and amounts as contained in One Valley's policy on the
date of the merger agreement, unless the annual premium on the policy would
exceed 175% of the annual premium payments on One Valley'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 all individuals who are or have been
officers, directors or employees of One Valley or a One Valley subsidiary
prior to the effective time of the merger from any acts or omissions in such
capacities prior to the effective time, to the fullest extent lawful. If BB&T
or any of its successors or assigns consolidates with or merges into any other
entity and is not the continuing or surviving entity, or transfers all or
substantially all of its assets to any entity, then and in each case, BB&T
will make proper provision so that the successors or assigns of BB&T shall
assume the obligations described in this paragraph.
Other Information regarding Directors, Executive Officers and Significant
Shareholders
Information concerning One Valley's directors and officers, executive
compensation and ownership of common stock by management and principal
shareholders is contained in One Valley's Annual Report on
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Form 10-K for the fiscal year ended December 31, 1999 [to be filed prior to
the effective date of this proxy statement/prospectus] and is incorporated
herein by reference. See "Where you can Find More Information" on page .
Rights of Dissenting Shareholders
The following is a summary of the steps you must take to perfect your
dissenters' rights under West Virginia law. This summary may not contain all
information that is important to you, and we refer you to Sections 31-1-122
and 31-1-123 of the West Virginia Business Corporation Act, which are 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 WVCA, if the merger is consummated, any
shareholder of record of One Valley who objects to the merger and who complies
with Sections 31-1-122 and 31-1-123 of the WVCA will be entitled to demand and
receive payment in cash of an amount equal to the fair value of all or any
portion of his or her shares of One Valley common stock. 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
shares of One Valley common stock will be determined as of the day prior to
the date on which the shareholder vote was taken with regard to the merger
agreement and plan of merger, excluding any appreciation or depreciation in
anticipation of the merger.
Any One Valley shareholder desiring to receive payment of the fair value of
his or her One Valley common stock must:
. deliver to the Secretary of One Valley, prior to the shareholder vote on
the merger agreement and plan of merger, a written objection to the
merger agreement and plan of merger;
. not vote his or her shares in favor of the merger agreement and plan of
merger;
. within ten days after the date on which the vote is taken, make written
demand on One Valley for payment of the fair value of his or her shares;
and
. within twenty days after demanding payment, submit his or her One Valley
stock certificates for notation that a demand has been made.
Any shareholder making a demand within the above-referenced ten-day period
will thereafter be entitled only to payment for the fair value of the shares
and will not be entitled to vote or to exercise any other rights as a
shareholder, and any shareholder failing to make a timely demand will be bound
by the terms of the merger.
Failure of a shareholder to submit his or her One Valley certificates within
the above-referenced 20-day period will, at the option of One Valley (or BB&T,
as successor to One Valley), terminate his or her rights under Section 31-1-
123 of the WVCA unless a court of general civil jurisdiction, for good and
sufficient cause shown, otherwise directs.
All written communications from shareholders with respect to the exercise of
dissenters' rights should be mailed before the effective time of the merger to
One Valley Bancorp, Inc., One Valley Square, Summers and Lee Streets, Post
Office Box 1793, Charleston, West Virginia 25326, 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. Under the WVCA, if you wish to dissent from the merger, it is not
sufficient merely to vote against, to abstain from voting or to fail to vote
on the proposal to approve the merger agreement and plan of merger. You must
also comply with the conditions relating to the separate written notice of
objection to the merger, the separate written demand for payment of the fair
value of shares of One Valley common stock and the deposit of the stock
certificates.
Within ten days after the merger, BB&T (as successor to One Valley) will
give written notice to each dissenting shareholder who has made a demand for
payment, including an offer to pay a specified price deemed
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by BB&T (as successor to One Valley) to be the fair value of such shares. The
notice and offer will be accompanied by a balance sheet of One Valley, as of
the latest available date and not more than 12 months prior to making such
offer, and a profit and loss statement for the 12-month period ended on the
date of the balance sheet.
If, within 30 days after the merger, the dissenting shareholder and BB&T (as
successor to One Valley) agree on the fair value of his or her One Valley
shares, payment will be made by BB&T within 90 days after the merger. Upon
payment of the agreed value, the dissenting shareholder will cease to have any
interest in the shares. If, within the 30-day period after the merger, the
dissenting shareholder and BB&T do not agree upon the fair value of such
shares, then, within 30 days after receipt of written demand from the
dissenting shareholder (which written demand must be given within 60 days
after the merger), or otherwise within the 60-day period at its own election,
BB&T will file a complaint in a court of general civil jurisdiction requesting
that the fair value of such shares be found and determined. The complaint will
be filed in any court of general civil jurisdiction in Kanawha County, West
Virginia. If BB&T fails to institute the proceedings, any dissenting
shareholder may do so in the name of BB&T. All dissenting shareholders,
wherever residing, may be made parties to the proceedings as an action against
their shares quasi in rem. A copy of the complaint will be served on each
dissenting shareholder who is a resident of West Virginia in the same manner
as in other civil actions. Dissenting shareholders who are nonresidents of
West Virginia will be served a copy of the complaint by registered or
certified mail, return receipt requested. In addition, service upon such
nonresident shareholders shall be made by publication, as provided in Rule
4(e)(2) of the West Virginia Rules of Civil Procedure. All shareholders who
are parties to the proceeding will be entitled to judgment against BB&T for
the amount of the fair value of their shares.
In any such proceeding, the court may, if it so elects, appoint one or more
persons as appraisers to receive evidence and recommend a decision as to fair
value. The appraisers will have the power and authority as specified in the
order of their appointment or any subsequent appointment. The judgment will be
payable only upon and concurrently with the surrender to BB&T of the
certificates representing such shares. Upon payment of the judgment, the
dissenting shareholder will cease to have any interest in such shares. The
judgment will include an allowance for interest at a rate as the court may
find to be fair and equitable in all the circumstances, from the date on which
the vote was taken on the merger to the date of payment.
The costs and expenses of any such proceeding will be determined by the
court and will be assessed against BB&T (as successor to One Valley), but all
or any part of such costs and expenses may be apportioned and assessed as the
court may deem equitable against any or all of the dissenting shareholders who
are parties to the proceeding to whom BB&T has made an offer to pay for the
shares if the court finds that the action of such shareholders in failing to
accept the offer was arbitrary or vexatious or not in good faith. Expenses
will include reasonable compensation for the reasonable expenses of the
appraisers, but will exclude the fees and expenses of counsel for and experts
employed by any party; provided, that, if the fair value of the shares as
determined materially exceeds the amount which BB&T offered to pay, or if no
offer was made, the court in its discretion may award to any shareholder who
is a party to the proceeding such sum as the court may determine to be
reasonable compensation for any expert or experts employed by the shareholder
in the proceeding. Any party to the proceeding may appeal any judgment or
ruling of the court as in other civil cases.
One Valley shareholders should note that cash paid to dissenting
shareholders in satisfaction of the fair value of their shares will be
recognized as gain or loss for federal income tax purposes. See "--Federal
Income Tax Consequences of the Merger" on page .
Any One Valley shareholder who has properly exercised the right to dissent
as described above will have only the rights of a dissenting shareholder under
the WVCA and will have no right to receive BB&T shares or cash instead of
fractional shares in the merger. Any One Valley shareholder who withdraws a
demand for payment as described above in accordance with the WVCA or who
becomes ineligible for such payment will have the right to receive the BB&T
shares, cash instead of fractional shares and accrued and unpaid dividends to
the extent permitted by the merger agreement.
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Failure by a One Valley shareholder to follow the steps required by the WVCA
for perfecting dissenters' rights may result in the loss of such rights. In
view of the complexity of these provisions and the requirement that they be
strictly complied with, if you are considering dissenting from the approval
and adoption of the merger agreement and exercising your dissenters' rights
under the WVCA, you should consult your legal advisors.
Regulatory Considerations
One Valley and BB&T have agreed to use their reasonable best efforts to
obtain all regulatory approvals required to consummate the transactions
contemplated by the merger agreement, which include approval from the Board of
Governors of the Federal Reserve System and various state and other regulatory
authorities, and have completed the filing of these applications and
notifications prior to the date of this document. The merger cannot proceed in
the absence of these regulatory approvals. There can be no assurance as to
when these regulatory approvals will be obtained, that they will be obtained
at all or, if obtained, that there will not be any litigation challenging
them. There can likewise be no assurance that the United States Department of
Justice or any state attorney general will not attempt to challenge the merger
on antitrust grounds, or, if a challenge is made, there can be no assurance as
to its result.
One Valley and BB&T are not aware of any other material governmental
approvals or actions that are required prior to the parties' consummation of
the merger other than those described below. It is presently contemplated that
if any additional governmental approvals or actions are required, they will be
sought. There can be no assurance, however, that any such additional approvals
or actions will be obtained.
Federal Reserve Board. The merger is subject to approval by the Federal
Reserve Board under the Bank Holding Company Act of 1956. BB&T has filed the
required application with the Federal Reserve Board for approval of the
merger. Assuming Federal Reserve Board approval, the merger may not be
consummated until 30 days after such approval, during which time the
Department of Justice may challenge the Merger on antitrust grounds. With the
approval of the Federal Reserve Board and the Department of Justice, the
waiting period may be reduced to no less than 15 days. If the United States
Department of Justice were to commence an antitrust action, it would stay the
effectiveness of Federal Reserve Board approval of the merger unless a court
specifically orders otherwise. Failure of the Department of Justice to object
to the merger may not prevent private persons or state attorneys general from
filing antitrust actions.
The Federal Reserve Board is prohibited from approving any transaction under
the applicable statutes that would result in a monopoly, or that 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, or that
may have the effect in any section of the United States of substantially
reducing competition, or tending to create a monopoly, or resulting in a
restraint of trade, unless the Federal Reserve Board finds that the anti-
competitive effects of the 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.
In addition, in reviewing a transaction under the Bank Holding Company Act,
the Federal Reserve Board will consider the financial and managerial resources
of the companies and their subsidiary banks. It will also consider the
convenience and needs of the communities to be served, including the record of
each of One Valley and BB&T under the Community Reinvestment Act of 1977 in
meeting the needs of the communities they serve, including low- and moderate-
income neighborhoods. As part of its consideration of these factors, we expect
that the Federal Reserve Board will consider the regulatory status of One
Valley and BB&T and the overall capital and safety and soundness standards
established by and under the Federal Deposit Insurance Corporation Improvement
Act of 1991.
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The Federal Reserve Board will furnish notice and a copy of the application
for approval of the merger to the Office of the Comptroller of the Currency,
the Federal Deposit Insurance Corporation and the appropriate state regulatory
authorities. These agencies have 30 days to submit their views and
recommendations to the Federal Reserve Board, and the Federal Reserve Board
must hold a public hearing if it receives a written recommendation of
disapproval of the application. Furthermore, the Federal Reserve Board
regulations require publication of notice of, and the opportunity for public
comment on, the application submitted by BB&T for approval of the merger and,
under certain circumstances, authorize the Federal Reserve Board to hold a
public hearing or meeting.
BB&T's right to exercise its option under the option agreement also requires
the prior approval of the Federal Reserve Board, to the extent that the
exercise of its option under the option agreement would cause BB&T to own more
than 5% of the outstanding shares of One Valley. BB&T has filed the required
application and notification with the Federal Reserve Board for approval of
the exercise of its option under the option agreement. In considering whether
to approve BB&T's right to exercise its option, the Federal Reserve Board
would generally apply the same statutory criteria it would apply to its
consideration of approval of the merger.
State Regulatory Authorities. Applications or notifications have been filed
in states where One Valley or BB&T control banking subsidiaries with various
state regulators under applicable state law. In addition, the merger may be
reviewed by the attorneys general in the states where BB&T and One Valley own
banking subsidiaries. Such authorities may be empowered under the applicable
state laws and regulations to investigate and/or disapprove the merger under
the circumstances and based upon the review set forth in applicable state laws
and regulations.
The Subsidiary Bank Mergers
Although not required by the terms of the merger agreement or plan of merger
and not a condition to the merger, BB&T expects to effect the mergers of One
Valley's banking subsidiaries into BB&T-NC or BB&T-VA during the [first]
quarter of 200[1]. 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 subsidiary bank mergers are also subject to applicable state laws and
regulations and the approval of state regulatory authorities.
Material Federal Income Tax Consequences of the Merger
The following section describes the material U.S. federal income tax
consequences of the merger to holders of One Valley common stock who hold One
Valley common stock as a capital asset within the meaning of Section 1221 of
the Internal Revenue Code of 1986, as amended (the "Code"), and is the opinion
of Sullivan
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and Cromwell, counsel to One Valley, and Womble Carlyle Sandridge & Rice,
PLLC, counsel to BB&T. This section does not apply to special classes of
taxpayers, such as:
. financial institutions,
. insurance companies,
. tax-exempt organizations,
. dealers in securities or currencies,
. traders in securities that elect to use a mark to market method of
accounting,
. persons that hold One Valley common stock as part of a straddle or
conversion transaction,
. persons who are not citizens or residents of the United States, and
. shareholders who acquired their shares of One Valley common stock
through the exercise of an employee stock option or otherwise as
compensation.
The following represents general information only and is based upon the
Code, its legislative history, existing and proposed regulations thereunder
and published rulings and decisions, all as currently in effect as of the date
hereof, and all of which are subject to change, possibly with retroactive
effect. Tax considerations under state, local and foreign laws are not
addressed in this proxy statement/prospectus. All shareholders should consult
with their own tax advisors as to the tax consequences of the merger in their
particular circumstances, including the applicability and effect of the
alternative minimum tax and any state, local or foreign and other tax laws and
of changes in those laws.
Tax Consequences of the Merger Generally. It is a condition to the merger
that One Valley receive an opinion of its counsel, Sullivan & Cromwell, that
the merger will be treated for federal income tax purposes as a reorganization
within the meaning of Section 368(a) of the Code. It is also a condition to
the merger that BB&T receive an opinion of its counsel, Womble Carlyle
Sandridge & Rice, PLLC, that the merger will be treated for federal income tax
purposes as a reorganization within the meaning of Section 368(a) of the Code
and that no gain or loss will be recognized by shareholders of One Valley who
receive shares of BB&T common stock in exchange for shares of One Valley
common stock, except with respect to cash received instead of fractional
shares.
In rendering these opinions, Sullivan & Cromwell and Womble Carlyle
Sandridge & Rice, PLLC will require and rely upon representations contained in
letters to be received from One Valley and BB&T and may require and rely upon
similar letters from large One Valley shareholders. Neither of these tax
opinions will be binding on the Internal Revenue Service. Neither BB&T nor One
Valley intends to request any ruling from the Internal Revenue Service as to
the U.S. federal income tax consequences of the merger.
Based on the above assumptions and qualifications and certain
representations of BB&T and One Valley, for U.S. federal income tax purposes:
. the merger will be treated for federal income tax purposes as a
reorganization within the meaning of Section 368(a) of the Code,
. each of BB&T and One Valley will be a party to that reorganization
within the meaning of Section 368(b) of the Code,
. no gain or loss will be recognized by shareholders of One Valley who
receive shares of BB&T common stock in exchange for shares of One Valley
common stock, except with respect to cash received in lieu of fractional
share interests,
. the holding period of BB&T common stock received in exchange for shares
of One Valley common stock will include the holding period of the One
Valley common stock for which it is exchanged,
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assuming the shares of One Valley common stock are capital assets in the
hands of the holder thereof at the closing of the merger, and
. the basis of the BB&T common stock received in the merger will be the
same as the basis of the One Valley common stock for which it is
exchanged, less any basis attributable to fractional shares for which
cash is received.
Cash Received in Lieu of a Fractional Share of BB&T Common Stock. A
shareholder of One Valley who receives cash in lieu of a fractional share of
BB&T common stock will be treated as having received the fractional share
pursuant to the merger and then as having exchanged the fractional share for
cash in a redemption by BB&T subject to Section 302 of the Code. As a result, a
One Valley shareholder will generally recognize gain or loss equal to the
difference between the amount of cash received and the portion of the basis of
the shares of BB&T common stock allocable to his or her fractional interest.
This gain or loss will generally be capital gain or loss, and will be long-term
capital gain or loss if, as of the date of the exchange, the holding period for
such shares is greater than one year. Long-term capital gain of a non-corporate
holder is generally subject to tax at a maximum federal tax rate of 20%.
Dissenters' Rights. One Valley shareholders who exercise their dissenters'
rights and who receive cash in exchange for their shares of One Valley common
stock will be treated as having received that payment in redemption of their
shares. In general, the holder will recognize capital gain or loss measured by
the difference between the amount of cash received and the holder's adjusted
tax basis for the shares. If, however, the holder owns, either actually or
constructively, any One Valley common stock that is exchanged in the merger for
BB&T common stock, the payment for dissenting shares to the holder could, in
certain limited circumstances, be treated as dividend income. In general, under
the constructive ownership rules of the Code, a holder may be considered to own
stock that is owned, and in some cases constructively owned, by certain related
individuals or entities, as well as stock that the holder (or related
individuals or entities) has the right to acquire by exercising an option or
converting a convertible security. Each holder who contemplates exercising
dissenters' rights should consult his or her own tax advisor as to the
possibility that any payment to such holder will be treated as dividend income.
Backup Withholding and Information Reporting. Payments of cash to a holder
surrendering shares of One Valley common stock will be subject to information
reporting and backup withholding (whether or not the holder also receives BB&T
common stock) at a rate of 31% of the cash payable to the holder, unless the
holder furnishes its taxpayer identification number in the manner prescribed in
applicable Treasury Regulations, certifies that such number is correct,
certifies as to no loss of exemption from backup withholding and meets certain
other conditions. Any amounts withheld from payments to a holder under the
backup withholding rules will be allowed as a refund or credit against the
holder's U.S. federal income tax liability, provided the required information
is furnished to the Internal Revenue Service.
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 One Valley 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 One Valley shares for shares of BB&T
common stock. Accordingly, the book value of the assets, liabilities and
shareholders' equity of One Valley, 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 One Valley 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 per share pro forma financial
information contained in this proxy statement/prospectus has been prepared
using the pooling-of-interests method of accounting. Completion of the merger
is subject to BB&T's condition that it receives reasonably satisfactory letters
from its accountants to the effect that the merger will qualify for pooling-of-
interests accounting treatment. If holders of One Valley's common stock were to
exercise their dissenters' rights and receive a cash payment for their shares,
it may effect the ability of the merger to qualify for pooling-of-interests
accounting.
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The Option Agreement
General
As an inducement to BB&T entering into the merger agreement, One Valley
agreed to grant BB&T an option to purchase shares of One Valley stock. The
following description of the option agreement is qualified in its entirety by
reference to the text of the option agreement, which is filed as an exhibit to
the registration statement of which this proxy statement/prospectus is a part.
See "Where You Can Find More Information" on page .
Under the option agreement, One Valley granted an option to BB&T to purchase
from One Valley up to 6,700,000 shares of One Valley common stock. Although
this number is subject to adjustment in certain cases, it will never exceed
19.9% of the number of One Valley shares outstanding immediately before the
exercise of the option. The exercise price of the option is $29.75 per share,
but is subject to adjustment, upon the occurrence of stock dividends,
recapitalizations and other charges in capitalization of One Valley. The terms
of the option agreement provide that BB&T's total profit from the option, if
any, is not to exceed $47.5 million.
Arrangements such as the option agreement are customarily entered into in
connection with corporate mergers and acquisitions in an effort to increase
the likelihood that the transactions will be consummated in accordance with
their terms and, if a transaction is not completed, to compensate the company
granted the option for the efforts undertaken and the expenses and losses
incurred by it. The option agreement may have the effect of discouraging
offers by third parties to acquire all of or a significant interest in One
Valley prior to the merger, even if such persons were prepared to offer to pay
consideration to One Valley shareholders that has a higher current market
price than the shares of BB&T common stock to be received for One Valley
common stock pursuant to the merger agreement, in part because the exercise of
the stock option may prevent another acquiror from accounting for an
acquisition of One Valley using the pooling-of-interests accounting method for
a period of two years.
Transfers by BB&T of its interests under the option agreement to a third
party are permitted in limited circumstances. References to BB&T in this
summary of the option agreement generally include any third party holder of
the option.
Exercise
If BB&T is not in material breach of the option agreement or its covenants
and agreements contained in the merger agreement and if no injunction or other
court order against delivery of the shares covered by the option is in effect,
BB&T may generally exercise the option, in whole or in part, at any time and
from time to time prior to its termination, as described below, following the
happening of either of the following purchase events:
. One Valley authorizes, recommends, publicly proposes (or publicly
announces an intention to authorize, recommend or propose) or enters
into an agreement with any third party to effect any of the following
acquisition transactions: (a) a merger, consolidation or similar
transaction involving One Valley or any of its significant subsidiaries,
(b) the sale, lease, exchange or other disposition of 15% or more of the
consolidated assets or deposits of One Valley and its subsidiaries or
(c) the issuance, sale or other disposition of securities representing
20% or more of the voting power of One Valley or any of its significant
subsidiaries; or
. any third party or group of third parties acquires or has the right to
acquire beneficial ownership of securities representing 20% or more of
the outstanding shares of One Valley common stock.
To our knowledge, no purchase event has occurred as of the date of this
proxy statement/prospectus.
The obligation of One Valley to issue shares of One Valley common stock upon
exercise of the option will be deferred (but will not terminate) (a) until the
receipt of all required governmental or regulatory approvals or consents, or
until the expiration or termination of any waiting period required by law, or
(b) so long as any injunction or other order, decree or ruling issued by any
federal or state court of competent jurisdiction is in effect that prohibits
the sale or delivery of the shares.
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Termination
The option will terminate upon the earliest to occur of the following
events:
. the completion of the merger;
. the termination of the merger agreement prior to the occurrence of a
purchase event (described above) or a preliminary purchase event
(described below) (other than a termination of the merger agreement by
BB&T as described in the next bullet point);
. 12 months after a termination of the merger agreement by BB&T based on
either a material breach by One Valley of a covenant or agreement in the
merger agreement or an inaccuracy in One Valley's representations or
warranties in the merger agreement of a nature entitling BB&T to
terminate the merger agreement;
. 12 months after termination of the merger agreement (other than a
termination of the merger agreement by BB&T as described in the previous
bullet point) following the occurrence of a purchase event (described
above) or a preliminary purchase event (described below); and
. 12 months after termination of the merger agreement based on the
disapproval by the shareholders of One Valley of the merger agreement
and plan of merger at the special meeting.
A preliminary purchase event is defined in the option agreement as either of
the following:
. the commencement by any third party of a tender offer or the filing of a
registration statement for an exchange offer that would result in the
third party owning 15% or more of the outstanding shares of One Valley
common stock; or
. the failure of the shareholders of One Valley to approve the merger
agreement at the special meeting, the failure of the meeting to have
been held, the cancellation of the meeting prior to the termination of
the merger agreement or the withdrawal or modification by the One Valley
Board of its recommendation with respect to the merger agreement in any
manner adverse to BB&T, in any case after a third party: (a) proposes to
engage in an acquisition transaction, (b) commences a tender offer or
files a registration statement with respect to an exchange offer such
that would result in the third party owning 15% or more of the
outstanding shares of One Valley common stock or (c) files an
application or notice under federal or state statutes relating to the
regulation of financial institutions or their holding companies to
engage in an Acquisition Transaction.
To our knowledge, no preliminary purchase event has occurred as of the date
of this proxy statement/prospectus.
Adjustments
The option agreement provides that the number of shares subject to the
option and the purchase price will be adjusted appropriately in the event of
any change in One Valley common stock by reason of a stock dividend, stock
split, split-up, recapitalization, combination, exchange of shares or similar
transaction. In the event of the issuance of any additional shares of One
Valley common stock before termination of the option, the number of shares
subject to the option will be adjusted to equal 19.9% of the number of One
Valley shares issued and outstanding.
Repurchase Rights
If: (a) any third party acquires actual ownership or control of, or any
"group" (as such term is defined under the Securities Exchange Act) is formed
that has acquired actual ownership or control of, 50% or more of the then
outstanding shares of One Valley common stock, or (b) any of the merger or
other business combination transactions set forth in the paragraph below
describing substitute options is completed, then at the request of BB&T any
time during the next 12 months, One Valley must, if the option has not
terminated, and subject to
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any required regulatory approval, repurchase from BB&T (a) the option and (b)
all shares of One Valley common stock purchased by BB&T pursuant to the option
of which BB&T has beneficial ownership at an aggregate purchase price equal to
the sum of:
. the aggregate purchase price paid by BB&T for any shares of One Valley
common stock acquired pursuant to the option of which BB&T then has
beneficial ownership, plus
. the excess, if any, of (a) the applicable price (as that term is defined
in the option agreement) for each share of One Valley common stock over
the purchase price, multiplied by (b) the number of shares of One Valley
common stock for which the option has not been exercised, plus
. the product of (a) the excess, if any, of the applicable price over the
purchase price paid (or payable in the case of the exercise of the
option for which the closing date has not occurred) by BB&T for each
share of One Valley common stock for which the option has been exercised
and of which BB&T then has beneficial ownership (or the right to
beneficial ownership if the option is exercised but the closing date has
not occurred) multiplied by (b) the number of such shares.
Substitute Options
If, before the termination of the option agreement, One Valley enters into
an agreement:
. to consolidate with or merge into any third party and One Valley will
not be the continuing or surviving corporation of the consolidation or
merger;
. to permit any third party to merge into One Valley with One Valley as
the continuing or surviving corporation, but, in connection therewith,
then outstanding shares of One Valley common stock are changed into or
exchanged for stock or other securities of One Valley or any other
person or cash or any other property, or the outstanding shares of One
Valley common stock after the merger represent less than 50% of the
outstanding shares and share equivalents of the merged company;
. to permit any third party to acquire all of the outstanding shares of
One Valley common stock pursuant to a statutory share exchange; or
. to sell or otherwise transfer all or substantially all of its assets or
deposits to any third party,
then the agreement must provide that the option will be converted or exchanged
for an option to purchase shares of common stock of, at BB&T's option, either
(x) the continuing or surviving corporation of a merger or consolidation or
the transferee of all or substantially all of One Valley's assets or (y) any
person controlling the continuing or surviving corporation or transferee. The
number of shares subject to the substitute option and the exercise price per
share will be determined in accordance with a formula in the option agreement.
To the extent possible, the substitute option will contain terms and
conditions that are the same as those in the option agreement.
Registration Rights
The option agreement grants to BB&T and any permitted transferee of the
option certain rights to require One Valley to prepare and file a registration
statement under the Securities Act if registration is necessary in order to
permit the sale or other disposition of any or all shares of One Valley common
stock or other securities that have been acquired by or are issuable upon
exercise of the option.
Effect on Employees, Employee Benefit Plans and Stock Options
Employees
As of a date determined by BB&T, BB&T will, its sole discretion, cause One
Valley's 401(k) plan to be either merged with BB&T's 401(k) plan, frozen or
terminated, in each case subject to all applicable regulatory or governmental
approvals. As of that date, each employee of One Valley or a One Valley
subsidiary when the
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merger becomes effective who becomes an employee immediately following the
effective time (a "transferred employee") of BB&T or a BB&T subsidiary (a
"BB&T employer"), was a participant in One Valley's 401(k) plan and is an
employee of a BB&T employer as of that date will be eligible to participate in
BB&T's 401(k) plan (subject to BB&T's right to amend or terminate such plan).
Until that date, BB&T will continue One Valley's 401(k) plan in effect for the
benefit of participating employees. For purposes of administering BB&T's
401(k) plan, service by a transferred employee with One Valley and the One
Valley subsidiaries will be deemed to be service with BB&T for purposes of
determining eligibility to participate and vesting, but not for purposes of
accruing benefits.
As of a date determined by BB&T, BB&T will, in its sole discretion, cause
One Valley's defined benefit pension plan to be either merged with BB&T's
defined benefit pension plan, frozen or terminated, in each case subject to
all applicable regulatory or governmental approvals. Each transferred employee
who was a participant in One Valley's Defined Benefit Pension plan and is an
employee of a BB&T employer as of that date will be eligible to participate in
BB&T's defined benefit pension plan (subject to BB&T's right to amend or
terminate such plan). The accrued benefit for each transferred employee under
the One Valley plan as of that date will become the accrued benefit under the
BB&T pension plan for service prior to that date (and will be added to the
benefit accrued under the BB&T pension plan for service and compensation
beginning on that date). For purposes of administering BB&T's pension plan,
service by a transferred employee with One Valley and the One Valley
subsidiaries will be deemed to be service with BB&T for purposes of
determining eligibility to participate and vesting, but not for purposes of
accruing benefits.
As of a date determined by BB&T for each group hospitalization, medical,
dental, life, disability and other welfare benefit plan and program available
to employees of the BB&T employer, each transferred employee who is an
employee of a BB&T employer as of that date, together with his or her
dependents and beneficiaries, will be eligible to participate in such plan or
program, subject to its eligibility requirements and other terms and, with
respect to health care coverage, the availability of HMO options. Until those
respective dates, the BB&T employer will continue in effect for the benefit of
the transferred employees (so long as they remain eligible to participate and
until they become eligible to participate in the corresponding plan or program
of the BB&T employer) those welfare benefit plans and programs of One Valley
that it determines, in its sole discretion, provide benefits of the same type
or class as a corresponding plan or program maintained by the BB&T employer.
For purposes of administering each BB&T plan or program, service with One
Valley will be deemed to be service with BB&T or its subsidiaries for purposes
of determining eligibility to participate and vesting (if applicable), but not
for purposes of computing benefits, if any, determined in whole or in part
with reference to service (except as otherwise provided in the following
paragraph), and each transferred employee will receive credit for any co-
payment and deductibles paid prior to the date determined by BB&T (to the same
extent credit was given under the analogous One Valley plan prior to that
date) in satisfying any applicable deductibles, co-payments or out-of-pocket
expenses.
Except to the extent of commitments made in the merger agreement or other
contractual commitments specifically made or assumed under the merger
agreement by BB&T, neither BB&T nor any BB&T employer has any obligation to
continue to employ any transferred employee of One Valley or any One Valley
subsidiary in any specific job, at any specific level of compensation,
incentive payments, benefits or perquisites, or at all. If a transferred
employee is terminated by a BB&T employer (other than a transfer of employment
to another BB&T employer) and the transferred employee would have been
eligible for severance pay under One Valley's special severance policy, he or
she will be entitled to severance pay in accordance with that policy. If the
transferred employee was a party at the time the merger became effective to a
Change in Control Severance Agreement with One Valley which was not terminated
by an agreement executed by the transferred employee in connection with the
merger, he or she will be entitled to severance pay in accordance with the
Change in Control Severance Agreement and any additional benefit payable under
One Valley's special severance policy.
BB&T has agreed to honor all employment agreements, severance agreements and
deferred compensation agreements that One Valley and its subsidiaries have
with their current and former employees and directors and
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which have been disclosed to BB&T pursuant to the merger agreement, except to
the extent any such agreements are superseded or terminated at or after the
time the merger becomes effective. During the one-year period commencing at
the effective time of the merger, the transferred employees and former One
Valley employees who retired under the One Valley plans will continue to be
provided with benefits under benefit plans (other than stock options or other
stock-based incentive plans) which in the aggregate are substantially
comparable either to those provided immediately prior to the effective time
under the One Valley plans to such transferred employees and former employees
or those provided to similarly situated employees of BB&T; provided, however,
that transferred employees covered by collective bargaining agreements, if
any, will not be provided with such benefits.
Stock Options
When the merger becomes effective, each stock option then outstanding,
whether or not exercisable, granted under One Valley's Amended and Restated
1993 Incentive Stock Option Plan, 1983 Incentive Stock Option Plan,
Mountaineer Bankshares Incentive Stock Option Plan, CSB Financial Corporation
1993 Incentive Stock Option Plan, CSB Financial Corporation 1993 Stock Option
Plan for Outside Directors, or FFVA Financial Corporation Qualified and Non-
Qualified Stock Option Plans for Directors, Senior Officer and Officers 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 One Valley option plans, except
that (a) BB&T and the compensation committee of the BB&T Board will be
substituted for One Valley and the compensation committee of the One Valley
Board 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 One Valley common stock subject to the stock option by 1.28 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 1.28 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 provided in the One Valley option plans and the option
agreement governing the option. Each stock option that is an incentive stock
option will be adjusted as required by Section 424 of the 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 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, and to
the extent One Valley has a registration statement in effect or an obligation
to file a registration statement, 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
[1,020,988.77] shares of One Valley common stock may be outstanding when the
merger becomes effective. Any shares of One Valley 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 One Valley common stock.
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Restrictions on Resales by Affiliates
The shares of BB&T common stock to be issued in the merger will be
registered under the Securities Act and will be freely transferable, except
for shares issued to any shareholder who may be deemed to be an affiliate of
One Valley for purposes of Rule 145 under the Securities Act. Shares issued to
affiliates are not covered by this proxy statement/prospectus. Affiliates
include generally directors, executive officers and beneficial owners of 10%
or more of any class of capital stock of One Valley. Affiliates may not sell
their shares of BB&T common stock acquired in the merger except:
. in transactions that are registered under the Securities Act, permitted
by the resale provisions of Rules 145 under the Securities Act, or as
otherwise permitted by the Securities Act, and
. following the publication of financial results of at least 30 days of
post-merger combined operations of BB&T and One Valley, as required by
the SEC's Accounting Series Release Nos. 130 and 135.
The restrictions on resales by an affiliate extend also to related parties
of the affiliate, including parties related by marriage who live in the same
home as the affiliate.
One Valley has agreed in the merger agreement to use its best efforts to
cause each person who may be deemed to be an affiliate of One Valley to
execute and deliver to BB&T a written agreement stating, among other things,
that the affiliate will not offer to sell, transfer or otherwise dispose of
any of the BB&T common stock issued to that affiliate in the merger except:
. in compliance with Rule 145 under the Securities Act, in a transaction
that, counsel to BB&T believes is otherwise exempt from the registration
requirements of the Securities Act, or in an offering registered under
the Securities Act, and
. in compliance with the requirements of the SEC's Accounting Series
Release Nos. 130 and 135.
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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, Washington D.C., 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,
Washington D.C., West Virginia, Georgia 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"), excluding bank subsidiaries of recently acquired bank holding
companies that are expected to be merged into BB&T-NC or BB&T-VA during 2000.
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. [to be updated]
Operating Subsidiaries
BB&T-NC, BB&T's largest subsidiary, is the oldest bank in North Carolina and
currently operates through 339 banking offices throughout North Carolina and
57 offices in metropolitan Washington, D.C. and Maryland [to be updated].
BB&T-NC provides a wide range of banking and trust services in its local
market for retail and commercial customers, including small and mid-size
businesses, public agencies and local governments 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., 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.
Other subsidiaries of BB&T-NC include Raleigh, North Carolina-based BB&T
Insurance Services, Inc., which offers life, property and casualty and title
insurance on an agency basis, and 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 88 banking offices. BB&T-SC provides a
wide range of banking and trust services in its local market for retail and
commercial customers, including small and mid-size businesses, public
agencies, local governments and individuals.
BB&T-VA offers a full range of commercial and retail banking services
through 104 banking offices throughout Virginia.
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.
Regional Acceptance Corporation specializes in indirect financing for
consumer purchases of mid-model and late-model used automobiles. BB&T Factors
Corporation buys and manages account receivables primarily in the furniture,
textile 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.
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Acquisitions
BB&T's profitability and market share have been enhanced through internal
growth and acquisitions of both financial and nonfinancial institutions during
recent years. BB&T's most recent acquisitions include the following:
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. It is expected that First Citizens Bank and First Citizens Bank
of Georgia, subsidiary banks of BB&T (as the successor to First Citizens),
will be merged into BB&T-NC during the third quarter of 2000.
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 central
Maryland. It is expected that Carroll County Bank and Trust Company and Bank
of Maryland, subsidiary banks of BB&T (as the successor to Mason-Dixon), were
merged into BB&T-NC in March 2000.
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. It is expected that Matewan National Bank and Matewan FSB,
subsidiary banks of BB&T (as the successor to Matewan), will be merged into
BB&T-NC or BB&T-VA during the second quarter of 2000. [to be updated]
On November 17, 1999, BB&T announced that it had agreed to acquire Hardwick
Holding Company in a transaction to be accounted for as a pooling of
interests. In the transaction, valued at $138.7 million based on BB&T's
closing price on November 15, Hardwick shareholders would receive, depending
on the average reported closing price of BB&T common stock over a five-day
period ending shortly before the merger becomes effective, not less than
0.9010 or more than 0.9320 of a share of BB&T common stock for each share of
Hardwick common stock. Through its banking subsidiaries, Hardwick operates
nine banking offices in northwest Georgia. The acquisition of Hardwick,
expected to close in the second quarter of 2000, would expand BB&T's presence
into northwest Georgia.
On November 19, 1999, BB&T acquired First Liberty Financial Corp. in a tax-
free transaction accounted for as a pooling of interests. First Liberty
operated 38 banking offices and 13 consumer finance offices in Georgia and
Tennessee and its acquisition by BB&T expands BB&T's presence in Georgia. It
is expected that First Liberty Bank, a subsidiary bank of BB&T (as the
successor to First Liberty), will be merged into BB&T-NC during the second
quarter of 2000. [to be updated]
On December 15, 1999, BB&T announced that it had agreed to acquire First
Banking Company of Southeast Georgia in a transaction to be accounted for as a
pooling of interests. [to be updated] In the transaction, valued at $124.2
million based on BB&T's closing price on December 14, First Banking Company
shareholders would receive 0.74 of a share of BB&T common stock for each share
of First Banking Company common stock. Through its banking subsidiaries, First
Banking Company operates 12 banking offices in southeast Georgia. The
acquisition of First Banking Company, expected to close in the second quarter
of 2000, would expand BB&T's presence into southeast Georgia, including
specifically the Savannah area.
On January 13, 2000, BB&T acquired Premier Bancshares Inc. ("Premier") in a
tax-free transaction accounted for as a pooling of interests. Through its
banking subsidiaries, Premier operated 32 banking offices in Atlanta and
northwest Georgia and, though Premier Lending, 10 mortgage banking offices.
The acquisition of Premier expands BB&T's presence in the metropolitan Atlanta
market. It is expected that Premier Bank, a subsidiary bank of BB&T (as the
successor to Premier), will be merged into BB&T-NC during the third quarter of
2000.
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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, 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 March
31, 2000, BB&T's Tier 1 and total capital ratios were % and %, 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 having the
highest regulatory rating. Bank holding companies that do not meet the
specified criteria 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 March 31, 2000 was %. 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 March
31, 2000.
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
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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 December 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
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 both BIF-insured
deposits and SAIF-insured deposits an additional 2.120 basis points per $100
of deposits on an annualized basis to cover those obligations.
You can find additional information about BB&T in BB&T's Annual Report on
Form 10-K for the fiscal year ended December 31, 1999, Quarterly Report on
Form 10-Q for the quarter ended March 31, 2000, and Current Reports on Form 8-
K dated January 12, 2000, February 7, 2000 and April , 2000 [to be updated],
all of which are incorporated by reference in this proxy statement/prospectus.
See "Where You Can Find More Information" on page .
INFORMATION ABOUT ONE VALLEY
One Valley is a $6.6 billion registered bank holding company headquartered
in Charleston, West Virginia. On December 31, 1999, One Valley owned a total
of nine affiliate banks in West Virginia and Virginia.
Through these affiliate banks, One Valley has 123 offices in West Virginia
and Virginia and over $4.0 billion in trust assets under administration. One
Valley has a market capitalization of over $1.1 billion and is the largest
bank holding company headquartered in West Virginia.
One Valley's West Virginia affiliate banks are located in the most
economically vibrant areas in West Virginia and have concentrated on growth in
urban areas along major highways. Accordingly, these affiliate banks generally
serve the stronger economic areas of West Virginia. In 1996, One Valley began
an interstate expansion strategy into Virginia. One Valley focused on the area
through Central Virginia as a priority expansion market, with Charlottesville,
Lynchburg and Lexington being the cornerstones of this expansion strategy.
Operations of the Affiliate Banks and Other Subsidiaries
The affiliate banks offer all services that full-service commercial banks
traditionally offer, including commercial and individual demand and time
deposit accounts, commercial and individual loans, credit card (MasterCard and
Visa) and drive-in banking services. Additionally, One Valley is active in
correspondent banking services. It also offers trust services in West Virginia
and Virginia. No material portion of any of the affiliate banks' deposits has
been obtained from a single or small group of customers, and the loss of any
one customer's deposits would not have a material adverse effect on the
business of any of the affiliate banks.
The affiliate banks also offer services to customers at various locations
within their service areas through approximately 280 automated teller machines
or ATMs. The ATMs allow customers to make deposits and withdrawals twenty-four
hours a day at convenient locations. Customers may also borrow against their
revolving lines of credit or transfer funds between deposit accounts at ATM
locations. Affiliate bank customers may conduct transactions at any One Valley
ATM and, by means of the MAC system, a regional ATM system, through the CIRRUS
ATM network, can conduct ATM transactions worldwide.
One Valley Securities Corporation, a subsidiary of One Valley Bank, National
Association, provides discount brokerage services and also sells, as agent,
mutual funds and annuities. One Valley Insurance Corporation, a subsidiary of
One Valley Bank Inc., is a general insurance agency and sells life and other
insurance products. On January 7, 2000, One Valley Bank, National Association
completed its acquisition of
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Carson Insurance Agency, Inc., an independent insurance agency offering a full
line of insurance products, including individual and commercial property and
casualty coverages, employee benefit programs, bonds and life insurance
products. Valley Security Insurance Company, Inc., a subsidiary of One Valley
Bank-Shenandoah, sells title insurance, as agent.
Although the market areas of several of the affiliate banks encompass a
portion of the coal fields located in southern West Virginia, an area of the
State which has been economically depressed, the coal-related loans in the
loan portfolios of the affiliate banks constitute less than 5% of One Valley's
total loans outstanding.
Employees
As of March 1, 2000, One Valley, its affiliate banks and other subsidiaries
had approximately 2,300 full-time equivalent employees.
Capital Requirements
At March 31, 2000, One Valley had a Tier I capital ratio of . %, a total
capital ratio of . % and a leverage ratio of . %, which qualify it as "well-
capitalized" under the Federal Deposit Insurance Corporation Improvement Act
of 1991.
You can find additional information about One Valley in One Valley's Annual
Report on Form 10-K for the fiscal year ended December 31, 1999 [to be filed
prior to the effective date of this proxy statement/ prospectus], Quarterly
Report on Form 10-Q for the quarter ended March 31, 2000, and Current Reports
on Form 8-K dated February 7, 2000 and February 14, 2000 [to be updated], all
of which are incorporated by reference in this proxy statement/prospectus. See
"Where You Can Find More Information" on page .
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 , 2000, there were shares of
BB&T common stock issued and outstanding. If BB&T's acquisitions of Harwick
Holding Company and First Banking Company of Southeast Georgia had been
completed on that date, there would have been a maximum of 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 . Based on
the number of shares of One Valley common stock outstanding at the record
date, it is estimated that approximately 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.
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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 shares
of BB&T preferred stock, or merely the existing authorization of the BB&T
Board to issue shares of BB&T preferred stock, may tend to discourage or
impede a merger or other change in control of BB&T. See "--Shareholder Rights
Plan" on page .
Shareholder Rights Plan
BB&T has adopted a shareholder rights plan that grants BB&T's shareholders
the right to purchase securities or other property of BB&T upon the occurrence
of certain triggering events involving a potentially hostile takeover of BB&T.
Like other shareholder rights plans, BB&T's plan is intended to give the BB&T
Board the opportunity to assess the fairness and appropriateness of a proposed
transaction in order to determine whether it is in the best interests of BB&T
and its shareholders and to encourage potential hostile acquirors to negotiate
with the BB&T Board. BB&T's plan, also like other shareholder rights plans,
could also have the unintended effect of discouraging a business combination
that shareholders believe to be in their best interests.
The terms of the rights are set forth in the Rights Agreement, dated as of
December 17, 1996, between BB&T and BB&T-NC, as Rights Agent and are
summarized below:
On December 17, 1996, the BB&T Board declared a dividend of one right for
each outstanding share of BB&T common stock, payable to shareholders of record
at the close of business on January 17, 1997. One right has also been
distributed, and will also be distributed in the future, for each share of
BB&T common stock issued between January 17, 1997 and the occurrence of a
"distribution date," as described in the next paragraph. Each right entitles
the holder to purchase from BB&T 1/100th of a share of BB&T Junior Preferred
Stock (which is substantially equivalent to one share of BB&T common stock) at
a price of $145.00, subject to anti-dilution adjustments, or, under certain
circumstances, other securities or property.
Initially, the rights are attached to all BB&T common stock certificates and
are not exercisable until a distribution date occurs. A "distribution date"
will occur, and the rights will separate from shares of BB&T common stock and
become exercisable, 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 (or the offeror's receipt of regulatory or shareholder approval
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 next 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
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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.
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.
It is expected that as long as the rights are exercisable only for 1/100th
of a share of BB&T Junior Preferred Stock at an exercise price of $145.00,
BB&T's shareholders would not find it economic to exercise the rights.
However, under the circumstances described below, the rights may be exercised
for an amount of BB&T common stock or other property (including BB&T Junior
Preferred Stock) having a value equal to two times the exercise price. The
Rights Agreement provides that 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 then outstanding shares of BB&T
common stock, a holder of a right will thereafter have the right to receive at
the time specified in the Rights Agreement, in lieu of 1/100th of a share of
BB&T Junior Preferred Stock, (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 described in the preceding paragraph would
entitle its holder to purchase $290.00 worth of BB&T common stock (or cash,
securities or other property, as noted above) for $145.00. Assuming that the
BB&T common stock was determined as provided in the Rights Agreement to have a
value of $29.00 at such time the holder of each valid right would be entitled
to purchase 10 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 five shares of BB&T common stock (or cash, securities or other
property, as noted above).
In addition, 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, a 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.
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The purchase price payable, and the number of shares 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.
The rights 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.
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 public
announcement that an acquiring person has become such or, if earlier, 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.
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 .
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 .
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 .
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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 .
COMPARISON OF THE RIGHTS OF BB&T SHAREHOLDERS
AND ONE VALLEY SHAREHOLDERS
When the merger becomes effective, holders of One Valley common 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
One Valley common stock. Since BB&T is organized under the laws of the State
of North Carolina and One Valley is organized under the laws of the State of
West Virginia, differences in the rights of holders of BB&T common stock and
those of holders of One Valley common stock arise from differing provisions of
the NCBCA and the WVCA 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 One Valley common stock. The identification of
specific provisions or differences is not meant to indicate that other equally
or more significant differences do not exist. This summary is qualified in its
entirety by reference to the NCBCA and the WVCA and the governing corporate
instruments of BB&T and One Valley, to which the shareholders of One Valley
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 ,
2000, there were 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 .
One Valley
One Valley's authorized capital stock consists of 70,000,000 shares of One
Valley common stock, par value $10.00 per share, and 1,000,000 shares of One
Valley preferred stock, par value $10.00 per share. As of , 2000, there
were shares of One Valley common stock outstanding and no shares of One
Valley preferred stock outstanding.
Special Meetings of Shareholders
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.
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One Valley
Special meetings of the shareholders of One Valley may be called at any time
by One Valley's Chairman of the Board, President, Secretary or by the Board of
Directors and shall be called by One Valley's President at the request of the
holders of not less than one-tenth of all outstanding shares of One Valley
entitled to vote.
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
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.
One Valley
One Valley's articles of incorporation and bylaws provide for a board of
directors of not less than six nor more than 33 as fixed from time to time by
resolution of the One Valley Board. Currently, the One Valley Board consists
of 26 directors. The One Valley Board is divided into three classes, with
directors serving staggered three-year terms. Under One Valley's articles of
incorporation and bylaws, One Valley directors may be removed, with or without
cause, only by the affirmative vote of the holders of 80% of the combined
voting power of then-outstanding shares of stock entitled to vote generally in
the election of directors, voting together as a single class. Holders of One
Valley common stock 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.
One Valley
Under the WVCA, the board of directors of a West Virginia corporation may
declare, and the corporation may pay, dividends except when the corporation is
insolvent or when the payment of dividends would render the corporation
insolvent. One Valley is not subject to any other express regulatory
restrictions on payments of dividends and other distributions. A major portion
of One Valley's revenues comes from dividends its affiliate banks pay to it.
Federal law restricts the amount of dividends affiliate banks may pay, and in
certain instances, a national bank must obtain approval of the Comptroller of
the Currency before paying dividends. Federal law also prohibits national
banks from paying dividends greater than the bank's undivided profits after
deducting statutory bad debt in excess of the bank's allowance for loan
losses. Similar restrictions on dividends apply to the state chartered
affiliate banks of One Valley. Other regulatory policies and requirements
impact the affiliate banks' ability to pay dividends, including the
requirements that the institution maintain adequate capital above regulatory
minimums. Banking regulatory authorities may restrict payments if the payment
of dividends would be an unsafe or unsound banking practice.
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<PAGE>
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.
One Valley
One Valley's articles of incorporation and bylaws provide that nominations
for election to One Valley's board of directors, other than those made by or
on behalf of One Valley's existing management, shall be made by a shareholder
in writing, delivered or mailed to One Valley's president not less than 14
days nor more than 50 days prior to the meeting called for the election of
directors. If One Valley gives less than 21 days' notice of the meeting, then
shareholder nominations must be mailed or delivered to One Valley's President
by the seventh day following the day One Valley mailed the notice of meeting.
The notice of nomination shall include, to the extent known, the name and
address of the proposed nominees, the principal occupation of the nominees,
the total shares to be voted for each nominee, the name and address of the
notifying shareholder and the number of shares owned by the notifying
shareholder. The chairman of the meeting may disregard the votes cast for each
nominee if nominations were not made in accordance with these requirements.
In addition, a shareholder intending to make a proposal for consideration at
a regularly scheduled annual meeting of One Valley's shareholders that is not
intended to be included in the proxy statement for that meeting must notify
One Valley's secretary in writing at least 40 days prior to the meeting,
provided that if less than 50 days' notice or prior public disclosure of the
date of the meeting is given or made to shareholders, One Valley must receive
notice from the shareholder no later than the close of business on the eighth
day following the day on which One Valley mailed or made public disclosure
regarding a notice of such meeting. The shareholder's notice to the secretary
must contain: (a) a brief description of the business the shareholder intends
to bring before the annual meeting and the reasons for conducting that
business at the annual meeting; (b) the name and address, as they appear on
One Valley's books, of the shareholder proposing that business; (c) the class
and number of shares of One Valley which that shareholder beneficially owns;
and (d) any material interest that the shareholder has in that business.
One Valley, like BB&T, is also subject to the SEC's rules regarding
shareholder proposals intended to be included in the proxy statement and
presented at a regularly scheduled annual meeting.
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Discharge of Duties; 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 is not subject to any different
duties or to 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, to the fullest extent permitted by applicable law, against
liabilities arising out of his or her 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.
One Valley
West Virginia law requires that a director of a West Virginia corporation
discharge his or her duties as a director in good faith, with the care an
ordinarily prudent person in a like position would exercise under similar
circumstances and in a manner the director reasonably believes to be in the
best interests of the corporation. Indemnification is the practice by which a
corporation pays the expenses of directors and officers who are named as
defendants or otherwise involved in litigation relating to their activities on
behalf of the corporation. One Valley's indemnification provision in its
articles of incorporation indemnifies One Valley's directors and officers "to
the fullest extent authorized by law." Also, the indemnification provision
clearly specifies the payments One Valley must make, the binding contractual
nature of One Valley's commitment to do so, and the procedure that an
indemnified party may use to obtain prompt payment.
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 the shareholders of the surviving corporation is
not required in certain instances, however, including (as in the case of the
merger with One Valley) 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.
One Valley
Under the WVCA, any merger, share exchange or sale of all or substantially
all of 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 unless a
corporation's articles of incorporation provide otherwise. One Valley's
articles of incorporation contain a fair price provision which requires the
approval of the holders of 80% of One Valley's shares entitled to vote as a
condition to specified transactions with an interested shareholder, except in
cases in which either (a) price criteria and procedural requirements are
satisfied, or (b) the transaction is recommended to the shareholders by a
majority of the disinterested directors. If the minimum price criteria and
procedural requirements are met or the requisite approval of the One Valley
Board are given, the normal requirements of West Virginia law would apply. The
fair price provision does not apply to the merger with BB&T. Therefore, only
the affirmative vote of the majority of the issued and outstanding shares of
One Valley's common stock is necessary to approve the merger with BB&T.
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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.
One Valley
West Virginia has not adopted any anti-takeover statutes such as the North
Carolina Control Share Acquisition Act applicable to BB&T.
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 impose a greater requirement, 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 board of directors or its shareholders, except
that, unless the articles of incorporation or a bylaw adopted by the
shareholders provides otherwise, the board of directors may not amend a bylaw
approved by the shareholders. BB&T's articles of incorporation authorize the
BB&T Board to amend BB&T's bylaws.
One Valley
The WVCA provides that a West Virginia 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. In certain circumstances, One
Valley's articles of incorporation and bylaws impose greater requirements. For
instance, One Valley's articles of incorporation and bylaws provide that the
affirmative vote of the holders of at least 80% of the outstanding shares
entitled to vote are required to amend or repeal articles of incorporation
provisions dealing with the classification of the board of directors, director
nominations, appointment to newly created directorships, vacancies of
directors, removal of directors, and business combinations by unsolicited and
unapproved third parties. One Valley's articles of incorporation also require
a two-thirds' affirmative vote of the members of the One Valley Board to amend
the bylaws to change the principal office, change the number of directors,
change the number of directors on the executive committee, or make a
substantial change in the duties of the chairman of the board of the directors
or the President.
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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.
One Valley
The WVCA provides that holders of One Valley common stock have dissenters'
rights in connection with the merger so long as any shareholder of record of
One Valley who objects to the merger complies with Sections 31-1-122 and 31-1-
123 of the WVCA, the full texts of which are attached as Appendix B. Those
provisions are summarized under the heading "Rights of Dissenting
Shareholders" on page .
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.
One Valley
In the event of liquidation, dissolution or winding up of the affairs of One
Valley, the rights of shareholders of One Valley's common stock are similar to
those outlined above for BB&T's shareholders. Additionally, One Valley's right
to participate in the assets of any affiliate bank upon an affiliate bank's
liquidation or recapitalization is similar to the right outlined above for
BB&T.
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 One Valley's proxy materials must be received at
the main office of One Valley, One Valley Square, Charleston, West Virginia
25326, no later than , 2000. 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 One Valley'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 One Valley's proxy materials) must also give notice of such proposals
to One Valley no later than , 2000. It is urged that any proposals be sent
by certified mail, return receipt requested.
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OTHER BUSINESS
The One Valley 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 54,000 shares of BB&T common stock.
EXPERTS
The consolidated financial statements of BB&T Corporation and its
subsidiaries incorporated in this proxy statement/prospectus by reference to
BB&T's Annual Report on Form 10-K for the year ended December 31, 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.
The above referenced consolidated financial statements have not been restated
to reflect the acquisition by BB&T of Premier Bancshares, Inc., on January 13,
2000, which was accounted for as a pooling of interests. Before this proxy
statement/prospectus becomes effective, the consolidated financial statements
of BB&T Corporation and its subsidiaries for the year ended December 31, 1999
will be restated to reflect the acquisition of Premier Bancshares, Inc. under
the pooling-of-interests method of accounting.
Ernst & Young LLP, independent auditors, have audited One Valley's
consolidated financial statements incorporated herein by reference from its
Annual Report on Form 10-K for the year ended December 31, 1999, as set forth
in their report, which is incorporated by reference in this proxy statement/
prospectus [to be filed prior to the effective date of this proxy
statement/prospectus]. One Valley's financial statements are incorporated by
reference in reliance on Ernst & Young LLP's report, given on its authority as
an expert in accounting and auditing.
One Valley's Annual Report on Form 10-K for the year ended December 31, 1999
also incorporates by reference the audit report of Cherry, Bekaert & Holland,
L.L.P. dated January 30, 1998 relating to the consolidated financial statements
of FFVA Financing Corporation for the year ended December 31, 1997. One Valley
acquired FFVA Financing Corporation in 1998 and FFVA Financing Corporation's
financial statements are incorporated by reference in reliance on Cherry,
Bekaert & Holland, L.L.P.'s report, given on its authority as an expert in
accounting and auditing.
One Valley expects representatives of Ernst & Young LLP to attend One
Valley's special meeting. These representatives will have an opportunity to
make a statement if they desire to do so, and One Valley expects that they will
be available to respond to any appropriate questions you may have.
WHERE YOU CAN FIND MORE INFORMATION
BB&T and One Valley 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 following SEC locations:
Public Reference Room New York Regional Office Chicago Regional Office
450 Fifth Street, N.W. 7 World Trade Center Citicorp Center
Room 1024 Suite 1300 500 West Madison Street
Washington, D.C. 20549 New York, New York 10048 Suite 1400
Chicago, Illinois 60661-
2511
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BB&T has filed the registration statement to register with the SEC the BB&T
common stock to be issued to One Valley 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.
The SEC allows One Valley 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 One Valley and BB&T have previously filed with the SEC. These
documents contain important information about One Valley and BB&T and their
businesses. [to be updated]
<TABLE>
<CAPTION>
BB&T SEC Filings (File No. 1-10853)
- ------------------------------------
<S> <C>
Annual Report on Form 10-K................. For the fiscal year ended December 31, 1999
Quarterly Report on Form 10-Q.............. For the fiscal quarter ended March 31,
2000*
Current Reports on Form 8-K................ Filed January 12, 2000, February 7, 2000,
February 9, 2000 and April , 2000
Registration Statements on Form 8-A
(describing BB&T's common stock and
concerning BB&T's shareholder
rights plan) ............................. Filed September 4, 1991 and January 10,
<CAPTION> 1997
One Valley SEC Filings (File No. 0-10042)
- -----------------------------------------
<S> <C>
Annual Report on Form 10-K ................ For the fiscal year ended December 31,
1999*
Quarterly Report on Form 10-Q.............. For the fiscal quarter ended March 31,
2000*
Current Reports on Form 8-K ............... Filed February 7, 2000 and February 14,
2000
Registration Statements on Form 8-A/A
(concerning One Valley's shareholder
rights plan and describing One Valley's
common stock) ............................ Filed on October 19, 1995, as amended on
April 30, 1997 and May 22, 1997
</TABLE>
- --------
* to be filed prior to the effective date of this proxy statement/prospectus
One Valley 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 One Valley has supplied
all such information relating to One Valley 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.
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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:
BB&T Corporation One Valley Bancorp, Inc.
Shareholder Reporting Brien Chase
Post Office Box 1290 One Valley Square
Winston-Salem, North Carolina 27102 Charleston, West Virginia 25326
(336) 733-3021 (304) 348-7000
If you would like to request documents please do so by , 2000 [insert date
that is 5 business days before the meeting] 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 One Valley have not
authorized anyone to provide you with information that is different from what
is contained in this proxy statement/prospectus or in any of the materials
that have been incorporated by reference into this document. If you are in a
jurisdiction where offers to exchange or sell, or solicitations of offers to
exchange or purchase, the securities offered by this document or the
solicitation of proxies is unlawful, or if you are a person to whom it is
unlawful to direct these types of activities, then the offer presented in this
document does not extend to you. This proxy statement/prospectus is dated ,
2000. 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.
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APPENDIX A
AGREEMENT AND PLAN OF REORGANIZATION
BETWEEN
ONE VALLEY BANCORP, INC.
and
BB&T CORPORATION
<PAGE>
TABLE OF CONTENTS
<TABLE>
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<C> <S> <C>
ARTICLE I DEFINITIONS................................................... A-1
ARTICLE II THE MERGER................................................... A-6
2.1 Merger......................................................... A-6
2.2 Filing; Plan of Merger......................................... A-6
2.3 Effective Time................................................. A-6
2.4 Closing........................................................ A-6
2.5 Effect of Merger............................................... A-6
2.6 Further Assurances............................................. A-7
2.7 Merger Consideration........................................... A-7
2.8 Conversion of Shares; Payment of Merger Consideration.......... A-7
2.9 Conversion of Stock Options.................................... A-8
2.10 No Right to Dissent............................................ A-9
2.11 Merger of Subsidiaries......................................... A-9
2.12 Anti-Dilution.................................................. A-9
ARTICLE III REPRESENTATIONS AND WARRANTIES OF ONE VALLEY................ A-10
3.1 Capital Structure.............................................. A-10
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-11
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-17
3.16 Legal Proceedings; Regulatory Approvals........................ A-17
3.17 Compliance with Laws; Filings.................................. A-17
3.18 Brokers and Finders............................................ A-18
3.19 Repurchase Agreements; Derivatives............................. A-18
3.20 Deposit Accounts............................................... A-18
3.21 Related Party Transactions..................................... A-18
3.22 Certain Information............................................ A-19
3.23 Accounting: Tax and Regulatory Matters......................... A-19
State Takeover Laws; No Supermajority Vote Required; Rights
3.24 Plan........................................................... A-19
3.25 Labor Relations................................................ A-19
3.26 Fairness Opinion............................................... A-19
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF BB&T....................... A-19
4.1 Capital Structure of BB&T...................................... A-20
4.2 Organization, Standing and Authority of BB&T................... A-20
4.3 Authorized and Effective Agreement............................. A-20
4.4 Organization, Standing and Authority of BB&T Subsidiaries...... A-20
4.5 Securities Documents; Statements True.......................... A-21
4.6 Certain Information............................................ A-21
4.7 Tax and Regulatory Matters..................................... A-21
4.8 Share Ownership................................................ A-21
4.9 Legal Proceedings; Regulatory Approvals........................ A-21
4.10 Adverse Change................................................. A-22
4.11 Absence of Undisclosed Liabilities............................. A-22
</TABLE>
A-i
<PAGE>
<TABLE>
<CAPTION>
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<C> <S> <C>
ARTICLE V COVENANTS....................................................... A-22
5.1 One Valley Shareholder Meeting................................... A-22
5.2 Registration Statement; Proxy Statement/Prospectus............... A-22
5.3 Plan of Merger; Reservation of Shares............................ A-23
5.4 Additional Acts.................................................. A-23
5.5 Best Efforts..................................................... A-23
5.6 Certain Accounting Matters....................................... A-23
5.7 Access to Information............................................ A-24
5.8 Press Releases................................................... A-24
5.9 Forbearances of One Valley....................................... A-24
5.10 Employment Agreements............................................ A-26
5.11 Affiliates....................................................... A-26
5.12 Section 401(k) Plan; Other Employee Benefits..................... A-26
5.13 Directors and Officers Protection................................ A-28
5.14 Forbearances of BB&T............................................. A-28
5.15 Reports.......................................................... A-29
5.16 Exchange Listing................................................. A-29
5.17 Advisory Boards.................................................. A-29
5.18 Reserved......................................................... A-30
5.19 Board of Directors of BB&T....................................... A-30
5.20 Treatment as Reorganization for Tax Purposes..................... A-30
ARTICLE VI CONDITIONS PRECEDENT........................................... A-30
6.1 Conditions Precedent--BB&T and One Valley........................ A-30
6.2 Conditions Precedent--One Valley................................. A-30
6.3 Conditions Precedent--BB&T....................................... A-31
ARTICLE VII TERMINATION, DEFAULT, WAIVER AND AMENDMENT.................... A-32
7.1 Termination...................................................... A-32
7.2 Effect of Termination............................................ A-32
7.3 Survival of Representations, Warranties and Covenants............ A-33
7.4 Waiver........................................................... A-33
7.5 Amendment or Supplement.......................................... A-33
ARTICLE VIII MISCELLANEOUS................................................ A-33
8.1 Expenses......................................................... A-33
8.2 Entire Agreement................................................. A-33
8.3 No Assignment.................................................... A-34
8.4 Notices.......................................................... A-34
8.5 Specific Performance............................................. A-34
8.6 Captions......................................................... A-35
8.7 Counterparts..................................................... A-35
8.8 Governing Law.................................................... A-35
</TABLE>
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<PAGE>
ANNEXES
<TABLE>
<C> <S>
Annex A Articles of Merger
Annex B-1, B-3 Employment Agreements with J. Holmes Morrison, Frederick H.
and B-4 Belden and Laurance G. Jones (omitted)
Annex B-2 Reserved
Annex C-1 and Forms of Employment Agreement with various officers (omitted)
C-2
</TABLE>
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<PAGE>
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION ("Agreement"), dated as of
February 6, 2000 is between ONE VALLEY BANCORP, INC., a West Virginia
corporation having its principal office at One Valley Square, Charleston, West
Virginia ("One Valley"), and BB&T CORPORATION, a North Carolina corporation
having its principal office at Winston-Salem, North Carolina ("BB&T");
RECITALS:
The parties desire that One Valley shall be merged 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.
The parties intend that the Merger be treated as a "reorganization" as
defined in Section 368 of the Code. As a condition and inducement to BB&T's
willingness to enter into the Agreement, One Valley is concurrently granting
to BB&T an option to acquire, under certain circumstances, 6,700,000 shares of
the common stock, par value $10.00 per share, of One Valley.
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:
"Advisory Board Establishment Date" shall mean, with respect to each One
Valley Subsidiary that is a bank or savings institution, the date determined
by BB&T to be, with respect to each such One Valley Subsidiary, not later than
January 1 following the close of the calendar year in which it is merged into
BB&T or a BB&T Subsidiary.
"Affiliate" means, with respect to any Person, any other 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 and any Affiliate of such executive officer or director.
"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 West Virginia, as provided in Sections 31-1-36 and 31-1-118 of the WVCA.
"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.
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"BB&T Option Agreement" shall mean the Stock Option Agreement dated as of
even date herewith, as amended from time to time, under which BB&T has an
option to purchase shares of One Valley Common Stock, which shall be executed
immediately following execution of this Agreement.
"BB&T Subsidiaries" shall mean Branch Banking and Trust Company, Branch
Banking and Trust Company of South Carolina and Branch Banking and Trust
Company of Virginia.
"Benefit Plan Determination Date" shall mean, with respect to each employee
pension or welfare benefit plan or program maintained by One Valley at the
Effective Time, the date determined by BB&T, with respect to each such plan or
program.
"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.
"Disclosed" shall mean disclosed in the One Valley Disclosure Memorandum in
a manner that references the Section number herein pursuant to which such
disclosure is being made or so that the Section or Section under which such
disclosure is being made is reasonably apparent.
"Environmental Claim" means any notice from any governmental authority or
third party alleging potential liability (including, without limitation,
potential liability for investigative 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 Advisor" shall mean Merrill Lynch & Co., Inc. or another
investment banking firm of national standing.
"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
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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 One
Valley, (i) the consolidated statements of financial condition (including
related notes and schedules, if any) of One Valley as of December 31, 1998,
1997 and 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, 1997 and 1996 as filed by One
Valley in Securities Documents, and (ii) the consolidated statements of
financial condition of One Valley (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 One Valley with respect to periods ended
subsequent to December 31, 1998.
"GAAP" shall mean generally accepted accounting principles applicable to
banks and their holding companies and Subsidiaries, as in effect at the
relevant date.
"Hazardous Substances" means any substance or material (i) identified in
CERCLA; (ii) determined to be toxic, a pollutant or a contaminant under any
applicable federal, state or local statutes, law, ordinance, rule or
regulation, including but not limited to petroleum products; (iii) asbestos;
(iv) radon; (v) poly-chlorinated biphiphenyls and (vi) such other materials,
substances or waste which are otherwise dangerous, hazardous, harmful to human
health or the environment.
"IRS" shall mean the Internal Revenue Service.
"Knowledge" shall mean, as used with respect to a Person, the personal
knowledge, after due inquiry, of the chief executive officer, chief financial
officer, chief operating officer, chief credit officer and general counsel of
such Person.
"Material Adverse Effect" on BB&T or One Valley shall mean an event, change,
or occurrence which, individually or together with one or more other events,
changes or occurrences, (i) has, or is reasonably likely to have, a material
adverse effect on the financial condition, results of operations, business or
stockholders' equity of BB&T and the BB&T Subsidiaries taken as a whole, or
One Valley and the One Valley Subsidiaries taken as a whole, or (ii)
materially impairs the ability of BB&T or One Valley 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 any effect of (a) actions and omissions
of BB&T or One Valley taken with the prior written consent of the other in
contemplation of the transactions contemplated hereby, (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 arising as a
result of the Merger, or (c) any change in general economic conditions,
including changes in interest rates, affecting banks and their holding
companies generally, except to the extent that such change affects One Valley
or BB&T, as the case may be, in a manner materially different from the manner
in which it affects other banking organizations or (d) subject to compliance
with Section 6.3(e), changes in laws or accounting requirements affecting
banks and their holding companies generally.
"NCBCA" shall mean the North Carolina Business Corporation Act, as amended.
"NYSE" shall mean the New York Stock Exchange, Inc.
"One Valley Common Stock" shall mean the shares of voting common stock, par
value $10.00 per share, of One Valley with rights attached issued pursuant to
Rights Agreement dated October 18, 1995 between One Valley and One Valley
Bank, National Association, as Rights Agent.
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"One Valley Disclosure Memorandum" shall mean the written information in one
or more documents, each of which (a) is entitled "One Valley Disclosure
Memorandum," (b) is dated and delivered to BB&T on or before the date of this
Agreement and (c) describes in reasonable detail the matters contained
therein. Each disclosure made therein shall be in existence on the date of
this Agreement and shall specifically reference each Section of this Agreement
under which such disclosure is made or be presented in a manner so that the
Section or Sections under which such disclosure is made shall be reasonably
apparent. The inclusion of a given item in the Disclosure Memorandum shall not
be deemed a conclusion or admission that such item (or any other item) is
material or has a Material Adverse Effect.
"One Valley Preferred Stock" shall mean the shares of nonvoting Preferred
Stock, $10.00 par value, of One Valley.
"One Valley Subsidiaries" shall mean One Valley Bank, National Association,
One Valley Bank of Huntington, Inc., One Valley Bank of Mercer County, Inc.,
One Valley Bank-East, N.A., One Valley Bank, Inc., One Valley Bank-South,
Inc., One Valley Bank-North, Inc., One Valley Bank-Central Virginia, N.A., One
Valley Bank-Shenandoah, One Valley Square, Inc., Valley Security Insurance
Company, Inc., One Valley Insurance Corporation, Carson Insurance Agency, Inc.
and any and all other Subsidiaries of One Valley as of the date hereof and any
corporation, bank, savings association, or other organization acquired as a
Subsidiary of One Valley after the date hereof and held as a Subsidiary by One
Valley at the Effective Time.
"Person" shall mean any individual, corporation, partnership, limited
liability company, joint venture, trust, association, unincorporated
organization, agency, other entity or group of entities, or governmental body.
"Proxy Statement/Prospectus" shall mean the proxy statement and prospectus,
together with any supplements thereto, to be sent to shareholders of One
Valley to solicit their votes in connection with a proposal to approve this
Agreement and the Plan of Merger.
"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 Agreements described under the definitions of "BB&T
Common Stock" and "One Valley 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 an option to acquire shares of One Valley Common
Stock granted under any of the Stock Option Plans that is outstanding and
unexercised on the date hereof.
"Stock Option Plans" shall mean One Valley's Amended and Restated 1993
Incentive Stock Option Plan, 1983 Incentive Stock Option Plan, Mountaineer
Bankshares Incentive Stock Option Plan, CSB Financial Corporation 1993
Incentive Stock Option Plan, CSB Financial Corporation 1993 Stock Option Plan
for Outside
A-4
<PAGE>
Directors, and FFVA Financial Corporation Qualified and Non-Qualified Stock
Option Plans for Directors, Senior Officer and Officers.
"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 (in
determining whether one entity owns or controls 50% or more of the outstanding
equity securities of another, equity securities owned or controlled in a
fiduciary capacity shall be deemed owned and controlled by the beneficial
owner).
"Superior Offer" shall mean a proposal or offer to acquire or purchase all
or a substantial portion of the assets of or a substantial equity interest in,
or to effect any recapitalization, liquidation or dissolution involving or a
business combination or other similar transaction with, One Valley or any One
Valley Subsidiary (including, without limitation, a tender offer or exchange
offer to purchase One Valley Common Stock) other than as contemplated by this
Agreement: (i) that did not arise from or involve a breach or violation by One
Valley of Section 5.9(k) or any other provision of this Agreement; (ii) that
the One Valley Board of Directors determines in its good faith judgment,
based, among other things, on advice of the Financial Advisor, to be more
favorable to the One Valley shareholders than the Merger; and (iii) the
financing for the implementation of which, to the extent required, is then
committed or in the good faith reasonable judgment of the One Valley Board of
Directors, based, among other things, on advice of the Financial Advisor, is
capable of being obtained by the party making the proposal or offer.
"TILA" shall mean the Truth in Lending Act, as amended.
"WVCA" shall mean the West Virginia Corporation 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)
Constituent Corporations Section 2.1
Dissenting Shareholder Section 2.10
Dissenting Shares Section 2.10
Effective Time Section 2.3
Employer Entity Section 5.12(a)
Exchange Ratio Section 2.7(a)
Maximum Amount Section 5.13
Merger Recitals
Merger Consideration Section 2.7(a)
One Valley Introduction
PBGC Section 3.14(b)(iv)
Plan Section 3.14(b)(i)
Plan of Merger Recitals
Surviving Corporation Section 2.1(a)
Transferred Employee Section 5.12(a)
</TABLE>
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<PAGE>
ARTICLE II
THE MERGER
2.1 Merger
BB&T and One Valley are constituent corporations (the "Constituent
Corporations") to the Merger as contemplated by the NCBCA and the WVCA. At the
Effective Time:
(a) One Valley shall be merged into BB&T in accordance with the
applicable provisions of the NCBCA and the WVCA, with BB&T being the
surviving corporate entity (hereinafter sometimes referred to as the
"Surviving Corporation").
(b) The separate existence of One Valley shall cease and the Merger
shall in all respects have the effects 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 One Valley Common Stock entitled to vote. 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 West Virginia, as
provided in Section 55-11-05 of the NCBCA and Section 31-1-36 of the WVCA,
respectively.
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. 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 One Valley
shall cease, and the Surviving Corporation shall thereupon and thereafter, to
the extent consistent with its Articles of Incorporation, 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
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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 (including, without limitation,
any confirmatory deeds required by Section 31-1-37(b) of the WVCA),
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 number of
shares of BB&T Common Stock (to the nearest ten thousandth of a share) to be
exchanged for each share of One Valley Common 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 that would otherwise be
distributable to a One Valley shareholder as provided in Section 2.7(b). The
number of shares of BB&T Common Stock to be issued for each issued and
outstanding share of One Valley Common Stock (the "Exchange Ratio") shall be
1.28.
(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 price per share of BB&T Common Stock on the NYSE at 4:00
p.m. eastern time on the Closing Date as reported on NYSEnet.com (or, if not
reported thereon, another authoritative source) (the "Closing Value").
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 One Valley or the holders of record of One Valley Common Stock,
each share of One Valley Common 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 One
Valley Common 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 One Valley Common 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
thereon. No interest will be paid or accrued on the Merger Consideration upon
the surrender of the certificate or certificates representing shares of One
Valley Common Stock. With respect to any certificate for One Valley Common
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. After the Effective Time, One Valley's transfer books
shall be closed and no transfer of the shares of One Valley Common Stock
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<PAGE>
outstanding immediately prior to the Effective Time shall be made on the stock
transfer books of the Surviving Corporation.
(d) Promptly after the Effective Time, BB&T shall cause to be delivered or
mailed to each One Valley 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 One Valley
Common 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 thereon.
(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 One Valley in respect of shares of One Valley Common Stock in
accordance with the terms of this Agreement and which remain unpaid at the
Effective Time, subject to compliance by One Valley with Section 5.9(b). To
the extent permitted by law, former shareholders of record of One Valley 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 One Valley Common Stock are converted, regardless of
whether such holders have exchanged their certificates representing One Valley
Common 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 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
thirtieth day after the Effective Time shall be delivered to the holder of any
certificate representing One Valley Common 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 One Valley Common
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 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, except that from and after the Effective
Time: (i) BB&T and its Compensation Committee shall be substituted for One
Valley and the Compensation Committee of One Valley's Board of Directors
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 One Valley Common Stock subject to such
Stock Option immediately prior to the Effective Time by the 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 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 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 under which they
were granted. 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
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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 One Valley 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, and to the extent One Valley shall have a registration
statement in effect or an obligation to file a registration statement, 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 best 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. One
Valley 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.
(c) Eligibility to receive grants of options to purchase BB&T Common Stock
following the Effective Time shall be determined by BB&T in accordance with
its plans and procedures as in effect from time to time, subject to any
contractual obligations.
2.10 Dissenting Shares
Any holder of shares of One Valley Common Stock who shall have properly
exercised rights to dissent with respect to the Merger and to demand payment
of the "fair value" of the shareholder's shares (the "Dissenting Shares") in
accordance with the WVCA (the "Dissenting Shareholder") shall thereafter have
only such rights, if any, as are provided a dissenting shareholder under the
WVCA 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 WVCA) 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 certificates 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).
2.11 Merger of Subsidiaries
In the event that BB&T shall request, One Valley shall take such actions,
and shall cause the One Valley Subsidiaries to take such actions, as may
reasonably be required in order to effect, at the Effective Time, the merger
of one or more of the One Valley Subsidiaries into, in each case, one of the
BB&T Subsidiaries.
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
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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 Exchange
Ratio shall be proportionately adjusted.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF ONE VALLEY
Except as Disclosed, One Valley represents and warrants to BB&T as follows
(the representations and warranties herein of One Valley are made as of the
date hereof and, as contemplated by Section 6.3(a), will also be evaluated as
of the Closing Date 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 not to consummate the
Merger under such applicable standard):
3.1 Capital Structure
The authorized capital stock of One Valley consists of 70,000,000 shares of
One Valley Common Stock and 1,000,000 shares of One Valley Preferred Stock. As
of the date of this Agreement, One Valley has 33,698,223 shares of One Valley
Common Stock issued and outstanding and no shares of One Valley Preferred
Stock issued and outstanding. No other classes of capital stock of One Valley,
common or preferred, are authorized, issued or outstanding. All outstanding
shares of One Valley capital 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 One Valley Common Stock
reserved in connection with the Stock Option Plans, and (ii) 6,700,000 shares
of One Valley Common Stock reserved in connection with the BB&T Option
Agreement. As of the date of this Agreement, One Valley has granted options to
acquire 1,020,988.77 shares of One Valley 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 One
Valley shareholder to own, to vote or to dispose of, the capital stock of One
Valley, except as set forth in the rights described in the definition of One
Valley Common Stock. Holders of One Valley Common Stock do not have preemptive
rights.
3.2 Organization, Standing and Authority
One Valley is a corporation duly organized, validly existing and in good
standing under the laws of the State of West Virginia, with full corporate
power and authority to carry on its business as now conducted and to own,
lease and operate its properties and assets. One Valley 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 One Valley Disclosure Memorandum lists all of the One
Valley Subsidiaries and One Valley's ownership percentage in, and the business
activities of, each such One Valley Subsidiary. The outstanding shares of
capital stock or other equity interests of the One Valley Subsidiaries are
validly issued and outstanding, fully paid and nonassessable (subject to 12
USC (S)55 and similar state statutes), and all such shares are directly or
indirectly owned by One Valley free and clear of all liens, claims and
encumbrances or preemptive rights of any person. No Rights are authorized,
issued or outstanding with respect to the capital stock or other equity
interests of the One Valley Subsidiaries, and there are no agreements,
understandings or commitments relating to the right of One Valley to own, to
vote or to dispose of said interests. None of the shares of capital stock or
other equity interests of the One Valley Subsidiaries has been issued in
violation of the preemptive rights of any person. Section 3.3 of the One
Valley Disclosure Memorandum also lists all shares of capital stock or other
securities or ownership interests of any corporation, partnership, joint
venture, or other organization (other
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than the One Valley Subsidiaries and stock or other securities held in a
fiduciary capacity) owned directly or indirectly by One Valley.
3.4 Organization, Standing and Authority of the Subsidiaries
Each One Valley Subsidiary that is a depository institution is a federally
chartered or West Virginia or Virginia chartered bank with its deposits
insured by the FDIC. Each of the One Valley Subsidiaries is validly existing
and in good standing under the laws of its jurisdiction of organization. Each
of the One Valley Subsidiaries has full power and authority to carry on its
business as now conducted, and is duly qualified to do business and in good
standing in each jurisdiction Disclosed with respect to it. Each One Valley
Subsidiary is qualified to do business in each other state of the United
States or foreign jurisdiction where required to conduct its business and is
not engaged in any type of activities that have not been Disclosed.
3.5 Authorized and Effective Agreement
(a) One Valley has all requisite corporate power and authority to enter into
and (subject to receipt of all necessary governmental approvals and the
receipt of approval of the One Valley shareholders of this Agreement and the
Plan of Merger) to perform all of its obligations under this Agreement, the
Articles of Merger and the BB&T Option Agreement. The execution and delivery
of this Agreement and the Articles of Merger, 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 One Valley shareholders
pursuant to and to the extent required by applicable law. This Agreement and
the Plan of Merger constitute legal, valid and binding obligations of One
Valley, and each is enforceable against One Valley in accordance with its
terms, 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, the Articles of
Merger or the BB&T Option Agreement, nor consummation of the transactions
contemplated by this Agreement or the Articles of Merger, nor compliance by
One Valley 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 One Valley or any One Valley 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 One Valley or any One Valley
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 approvals, violate any order, writ,
injunction, decree, statute, rule or regulation applicable to One Valley or
any One Valley 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 One Valley of the Merger and the other transactions
contemplated in this Agreement.
3.6 Securities Documents; Financial Statements; Statements True
(a) One Valley has timely filed all Securities Documents required by the
Securities Laws to be filed since December 31, 1996. One Valley has Disclosed
or made available to BB&T a true and complete copy of each Securities Document
filed by One Valley with the Commission after December 31, 1996 and prior to
the date hereof, which are all of the Securities Documents that One Valley was
required to file during such period. 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.
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(b) The Financial Statements of One Valley fairly present or will fairly
present, as the case may be, the consolidated financial position of One Valley
and the One Valley 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.
(c) No statement, certificate, instrument or other writing furnished or to
be furnished hereunder by One Valley or any One Valley Subsidiary to BB&T
contains or will contain any untrue or misleading statement of a material
fact.
3.7 Minute Books
The minute books of One Valley and each of the One Valley 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 September 30, 1999, One Valley and the One Valley Subsidiaries have
not incurred any liability, whether accrued, absolute or contingent, except as
disclosed in the most recent One Valley Financial Statements, or entered into
any transactions with Affiliates, in each case other than in the ordinary
course of business consistent with past practices, nor has there been any
adverse change or any event involving a prospective adverse change in the
business, financial condition, results of operations or stockholders' equity
of One Valley or any of the One Valley Subsidiaries.
3.9 Absence of Undisclosed Liabilities
All liabilities (including contingent liabilities) of One Valley and the One
Valley Subsidiaries are disclosed in the most recent Financial Statements of
One Valley or are normally recurring business obligations incurred in the
ordinary course of its business since the date of One Valley's most recent
Financial Statements.
3.10 Properties
(a) One Valley and the One Valley 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 on the consolidated balance sheet included
in the Financial Statements of One Valley as of December 31, 1998 or acquired
after such date, except for (i) liens for current taxes not yet due and
payable, (ii) pledges to secure deposits and other liens incurred in the
ordinary course of banking business, (iii) such imperfections of title,
easements and encumbrances, if any, as are not material in character, amount
or extent, or (iv) dispositions and encumbrances for adequate consideration in
the ordinary course of business.
(b) All leases and licenses pursuant to which One Valley or any One Valley
Subsidiary, as lessee or licensee, leases or licenses rights to real or
personal property are valid and enforceable in accordance with their
respective terms.
3.11 Environmental Matters
(a) One Valley and the One Valley Subsidiaries are and at all times have
been in compliance with all Environmental Laws. Neither One Valley nor any One
Valley Subsidiary has received any communication alleging that One Valley or
the One Valley Subsidiary is not in such compliance, and there are no present
circumstances that would prevent or interfere with the continuation of such
compliance.
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(b) There are no pending Environmental Claims, neither One Valley nor any
One Valley Subsidiary has received notice of any pending Environmental Claims,
and there are no conditions or facts existing which might reasonably be
expected to result in legal, administrative, arbitration or other proceedings
asserting Environmental Claims or other claims, causes of action or
governmental investigations of any nature seeking to impose, or that could
result in the imposition of, any liability arising under any Environmental
Laws upon (i) One Valley or any One Valley Subsidiary, (ii) any person or
entity whose liability for any Environmental Claim One Valley or any One
Valley 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
One Valley or any One Valley Subsidiary, or any real or personal property
which One Valley or any One Valley 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 One Valley or any One Valley Subsidiary holds a
security interest securing a loan recorded on the books of One Valley or any
One Valley Subsidiary. Neither One Valley nor any One Valley 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 under any Environmental Laws.
(c) One Valley and the One Valley Subsidiaries are in compliance with all
recommendations contained in any environmental audits, analyses and surveys
received by One Valley relating to all real and personal property owned or
leased by One Valley or any One Valley Subsidiary and all real and personal
property of which One Valley or any One Valley Subsidiary has or is judged to
have managed or supervised or participated in the management of.
(d) There are no past or present actions, activities, events or incidents
or, to the Knowledge of One Valley, circumstances or conditions that could
reasonably form the basis of any Environmental Claim, or other claim or action
or governmental investigation that could result in the imposition of any
liability arising under any Environmental Laws, against One Valley or any One
Valley Subsidiary or against any person or entity whose liability for any
Environmental Claim One Valley or any One Valley 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 One Valley and the One Valley
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
One Valley'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) The allowances for loan losses reflected on the consolidated balance
sheets included in the Financial Statements of One Valley are, in the
reasonable judgment of One Valley management, adequate as of their respective
dates under the requirements of GAAP and applicable regulatory requirements
and guidelines.
3.13 Tax Matters
(a) One Valley and the One Valley 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 adequate 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
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to have been made, will have set up an adequate reserve or accrual for the
payment of, all taxes for any subsequent periods ending on or prior to the
Effective Time. Neither One Valley nor any One Valley Subsidiary has or will
have any liability for any such taxes in excess of the amounts so paid or
reserves or accruals so established. One Valley and the One Valley
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.
(b) All federal, state and local (and, if applicable, foreign) tax returns
filed by One Valley and the One Valley Subsidiaries are complete and accurate.
Neither One Valley nor any One Valley 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 One Valley or any One Valley Subsidiary
which have not been settled and paid. There are currently no agreements in
effect with respect to One Valley or any One Valley 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 One Valley nor any of the One Valley 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 One Valley or a One Valley subsidiary) or has any
liability for taxes of any person (other than One Valley and the One Valley
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 One Valley and the One Valley 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 One Valley nor any of the One Valley 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. One Valley 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 director, shareholder, independent
contractor, consultant and agent of One Valley and of each One Valley
Subsidiary and each other person (in each case other than as an employee) to
whom One Valley or any One Valley Subsidiary pays or provides, or has an
obligation, agreement (written or unwritten), policy or practice of paying or
providing, retirement, health, welfare or other benefits of any kind or
description whatsoever.
(b) Employee Benefit Plans.
(i) One Valley has Disclosed an accurate and complete list of all Plans,
as defined below, contributed to, maintained or sponsored by One Valley or
any One Valley Subsidiary, to which One Valley or any One Valley 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 One Valley or any One Valley 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,
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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.
(ii) Neither One Valley nor any One Valley 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 One Valley or any One Valley
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 threatened, and
there are no facts which could give rise to or be expected 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 has always fully met 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 One Valley or
any One Valley Subsidiary is the subject of any lien arising under Section
302(f) of ERISA or Section 412(n) of the Code, neither One Valley nor any
One Valley 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 could be expected to give rise to such lien or such posting of
security. No event has occurred and no condition exists that would subject
One Valley or any One Valley 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, and
nothing has occurred since the date of such determination letter that could
adversely affect 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 One Valley or any One Valley Subsidiary is a member or was a member
during such five-year period.
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(vii) As of December 31, 1999, 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 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 One Valley nor, to the Knowledge of One Valley,
any One Valley 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 One
Valley or any One Valley 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) One Valley and each One Valley Subsidiary has been and is presently
in compliance with all of the requirements of Section 4980B of the Code.
(xi) Neither One Valley nor any One Valley 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 One Valley as of December 31, 1998
or otherwise Disclosed.
(xii) Neither the consideration nor implementation of the transactions
contemplated under this Agreement will increase (A) One Valley's or any One
Valley 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).
(xiii) With respect to each Plan, One Valley 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 One Valley and any One Valley
Subsidiary may be amended or terminated at any time by action of One
Valley's Board of Directors, or such One Valley'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 One Valley
or a One Valley Subsidiary thereunder).
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3.15 Certain Contracts
(a) Neither One Valley nor any One Valley Subsidiary is a party to, is bound
or affected by, or receives benefits under (i) any agreement, arrangement or
commitment, written or oral, that would be required to be disclosed pursuant
to Item 601(b)(4) (without regard to clause (ii) thereof) or Item 601(b)(10)
(disregarding the exception therein for contracts entered into in the ordinary
course of business) of Regulation S-K (other than loans or loan commitments
made or certificates or deposits received in the ordinary course of the
banking business), or any agreement restricting its ability to engage in any
line of business, including, without limitation, agreements or memoranda of
understanding with regulatory authorities, (ii) any agreement, indenture or
other instrument, written or oral, relating to the borrowing of money by One
Valley or any One Valley Subsidiary or the guarantee by One Valley or any One
Valley Subsidiary of any such obligation, which cannot be terminated within
less than 60 days after the Closing Date by One Valley or any One Valley
Subsidiary (without payment of any material penalty or cost, except with
respect to Federal Home Loan Bank or Federal Reserve Bank advances), (iii) any
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 60 days after the
Closing Date by One Valley or any One Valley Subsidiary (without payment of
any material penalty or cost), or that provides benefits which are contingent,
or the application of which is altered, upon the occurrence of a transaction
involving One Valley of the nature contemplated by this Agreement or the BB&T
Option Agreement, or (iv) any agreement or plan, written or oral, including
any Stock Option Plans, 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 BB&T Option
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 or the
BB&T Option Agreement. Each matter Disclosed pursuant to this Section 3.15(a)
is in full force and effect as of the date hereof.
(b) Neither One Valley nor any One Valley Subsidiary is in default under any
agreement, commitment, arrangement, lease, insurance policy, or other
instrument Disclosed or that should be Disclosed in Section 3.15(a) of the One
Valley Disclosure Memorandum, whether entered into in the ordinary course of
business or otherwise and whether written or oral, and there has not occurred
any event that, with the lapse of time or giving of notice or both, would
constitute such a default.
3.16 Legal Proceedings; Regulatory Approvals
There are no actions, suits, claims, governmental investigations or
proceedings instituted, pending or, to the Knowledge of One Valley, threatened
against One Valley, any One Valley Subsidiary or any asset, interest, Plan or
right of One Valley or any One Valley Subsidiary, or, to the Knowledge of One
Valley, against any officer, director or employee of any of them in their
capacity as such. There are no actions, suits or proceedings instituted,
pending or, to the Knowledge of One Valley, threatened against any present or
former director or officer of One Valley or any One Valley Subsidiary that
could reasonably be expected to give rise to a claim against One Valley or any
One Valley Subsidiary for indemnification. There are no actual or, to the
Knowledge of One Valley, threatened actions, suits or proceedings which
present, or could reasonably be expected to present, a claim to restrain or
prohibit the transactions contemplated herein or in the BB&T Option Agreement.
To the Knowledge of One Valley, no fact or condition relating to One Valley or
any One Valley Subsidiary exists (including, without limitation, noncompliance
with the CRA) that would prevent One Valley or BB&T from obtaining all of the
federal and state regulatory approvals contemplated herein.
3.17 Compliance with Laws; Filings
Each of One Valley and each One Valley 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 One Valley nor any One Valley
Subsidiary has received written or, to One Valley's
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Knowledge, oral 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. Neither One Valley nor any One Valley Subsidiary is subject to any
regulatory or supervisory cease and desist order, agreement, directive,
memorandum of understanding or commitment, and none of them has received any
written or, to One Valley's Knowledge, oral communication requesting that it
enter into any of the foregoing. Since December 31, 1996, each of One Valley
and each One Valley 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
Commission, 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 One Valley nor any One Valley 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 or
in the BB&T Option Agreement, except for an obligation to the Financial
Advisor for investment banking services, the nature and extent of which has
been Disclosed, and except for fees to accountants and lawyers.
3.19 Repurchase Agreements; Derivatives
(a) With respect to all agreements currently outstanding pursuant to which
One Valley or any One Valley Subsidiary has purchased securities subject to an
agreement to resell, One Valley or the One Valley 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. With respect to all agreements
currently outstanding pursuant to which One Valley or any One Valley
Subsidiary has sold securities subject to an agreement to repurchase, neither
One Valley nor the One Valley Subsidiary has pledged collateral in excess of
the amount of the debt secured thereby. Neither One Valley nor any One Valley
Subsidiary has pledged collateral in excess of the amount required under any
interest rate swap or other similar agreement currently outstanding.
(b) Neither One Valley nor any One Valley 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 included on its
balance sheets in the Financial Statements, which is a financial derivative
contract (including various combinations thereof), except for options and
forwards entered into in the ordinary course of its mortgage lending business
consistent with past practice and current policy.
3.20 Deposit Accounts
The deposit accounts of the One Valley Subsidiaries that are depository
institutions are insured by the FDIC to the maximum extent permitted by
federal law, and the One Valley Subsidiaries have paid all premiums and
assessments and filed all reports required to have been paid or filed under
all rules and regulations applicable to the FDIC.
3.21 Related Party Transactions
All existing transactions, investments and loans, including loan guarantees
existing as of the date hereof to which One Valley or any One Valley
Subsidiary is a party with any director, executive officer or 5% shareholder
of One Valley or any person, corporation, or enterprise controlling,
controlled by or under common control with any of the foregoing are on terms
no less favorable to One Valley than could be obtained from unrelated parties;
and no such transaction, investment or loan, if lost, discontinued or
defaulted, would or could be reasonably expected to have a Material Adverse
Effect on the business of One Valley.
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3.22 Certain Information
When the Proxy Statement/Prospectus is mailed, and at the time of the
meeting of shareholders of One Valley to vote on this Agreement and the Plan
of Merger, information supplied by One Valley for inclusion in the Proxy
Statement/Prospectus and all amendments or supplements thereto 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 Accounting; Tax and Regulatory Matters
Neither One Valley nor any One Valley Subsidiary has taken or agreed to take
any action that would or could reasonably be expected to (i) cause the Merger
not to be accounted for as a pooling of interests or not to constitute a
reorganization under Section 368 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 Supermajority Vote Required; Rights Plan
One Valley and each One Valley Subsidiary have taken all necessary action 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 law shall be activated or applied as a result of
such transactions. The provisions of Article VI.1 of One Valley's Articles of
Incorporation are not applicable to the Merger or the other transactions
contemplated in this Agreement, and neither the Articles of Incorporation nor
the Bylaws of One Valley contain a provision that requires more than a
majority of the shares of One Valley Common Stock entitled to vote to approve
the Merger or any of the other transactions contemplated in this Agreement.
The rights attached to shares of One Valley Common Stock described in the
definition of One Valley Common Stock are not and will not become exercisable
by holders thereof as a result of execution of this Agreement or consummation
of the transactions contemplated herein.
3.25 Labor Relations
Neither One Valley nor any One Valley 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
seeking to compel it to bargain with any labor organization as to wages or
conditions of employment, nor is One Valley or any One Valley Subsidiary party
to any collective bargaining agreement. There is no strike or other labor
dispute involving One Valley or any One Valley Subsidiary, pending or
threatened, or to the Knowledge of One Valley, is there any activity involving
any employees of One Valley or any One Valley Subsidiary seeking to certify a
collective bargaining unit or engaging in any other organization activity.
3.26 Fairness Opinion
One Valley has received from the Financial Advisor an opinion that, as of
the date hereof, the Merger Consideration is fair to the shareholders of One
Valley from a financial point of view.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF BB&T
BB&T represents and warrants to One Valley as follows (the representations
and warranties herein of BB&T are made as of the date hereof and, as
contemplated by Section 6.2(a), will also be evaluated as of the Closing Date
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 One Valley not to consummate the Merger under such
applicable standard):
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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
331,170,260 shares were issued and outstanding as of December 31, 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.
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 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 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.
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4.5 Securities Documents; Financial Statements; Statements True
(a) BB&T has timely filed all Securities Documents required by the
Securities Laws to be filed since December 31, 1996. 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.
(b) The Financial Statements of BB&T fairly present or will fairly present,
as the case may be, the consolidated financial position of BB&T and its
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.
(c) No statement, certificate, instrument or other writing furnished or to
be furnished hereunder by BB&T or any other BB&T Subsidiary to One Valley
contains or will contain any untrue or misleading statement of material fact.
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
One Valley 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 Accounting; Tax and Regulatory Matters
Neither BB&T nor any BB&T Subsidiary has taken or agreed to take any action
that would or could reasonably be expected to (i) cause the Merger not to be
accounted for as a pooling of interests or not to constitute a reorganization
under Section 368 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); provided, that nothing contained herein
shall limit the ability of BB&T to exercise its rights under the BB&T Option
Agreement.
4.8 Share Ownership
As of the date of this Agreement, BB&T does not own (except in a fiduciary
capacity) any shares of One Valley Common Stock.
4.9 Legal Proceedings; Regulatory Approvals
There are no actions, suits, claims, governmental investigations or
proceedings instituted, pending or, to the Knowledge of BB&T, threatened
against BB&T or any BB&T Subsidiary or any asset, interest, Plan or right of
BB&T or any BB&T Subsidiary, or, to the Knowledge of BB&T, against any
officer, director or employee of any of them in their capacity as such. There
are no actions, suits or proceedings instituted, pending or, to the Knowledge
of BB&T, threatened against any present or former director or officer of BB&T
or any BB&T Subsidiary that could reasonably be expected to give rise to a
claim against BB&T or any BB&T Subsidiary for indemnification. There are no
actual or, to the Knowledge of BB&T, threatened actions, suits or proceedings
instituted, which present, or could reasonably be expected to present, a claim
to restrain or prohibit the
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transactions contemplated herein. To the Knowledge of BB&T, no fact or
condition relating to BB&T or any BB&T Subsidiary exists (including, without
limitation, noncompliance with the CRA) that would prevent BB&T or One Valley
from obtaining all of the federal and state regulatory approvals contemplated
herein.
4.10 Adverse Change
Since September 30, 1999, BB&T and the BB&T Subsidiaries have not incurred
any liability, whether accrued, absolute or contingent, except as disclosed in
the most recent BB&T Financial Statements, or entered into any transactions
with Affiliates, in each case other than in the ordinary course of business
consistent with past practices, nor has there been any adverse change or any
event involving a prospective adverse change in the financial condition,
results of operations or stockholders' equity of BB&T or any of the BB&T
Subsidiaries.
4.11 Absence of Undisclosed Liabilities
All liabilities (including contingent liabilities) of BB&T and the BB&T
Subsidiaries are disclosed in the most recent Financial Statements of BB&T or
are normally recurring business obligations incurred in the ordinary course of
its business since the date of BB&T's most recent Financial Statements.
ARTICLE V
COVENANTS
5.1 One Valley Shareholder Meeting
One Valley shall submit this Agreement and the Plan of Merger to its
shareholders for approval at a meeting to be held as soon as reasonably
practicable following the effectiveness of the Registration Statement. By
approving this Agreement and authorizing its execution, the Board of Directors
of One Valley agrees that it shall, at the time the Proxy Statement/Prospectus
is mailed to the shareholders of One Valley, recommend that One Valley's
shareholders vote for such approval; provided, that the Board of Directors of
One Valley may withdraw, modify, condition or refuse to make such
recommendation only if the Board of Directors shall determine in good faith,
after consultation with outside legal counsel, that such recommendation should
not be made in light of its fiduciary duty to One Valley's shareholders
following (i) a Superior Offer, or (ii) the withdrawal, or material
modification that results in a revocation, of the opinion referenced in
Section 3.26 by the Financial Advisor or (iii) the delivery to the One Valley
Board of Directors of written advice from the Financial Advisor that the
Merger Consideration is either not fair or is inadequate to the shareholders
of One Valley 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. One Valley 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. BB&T shall prepare such Registration Statement such that,
at the time it becomes effective and at the Effective Time, it shall in all
material respects conform to the requirements of the Securities Act and the
applicable rules and regulations of the Commission (provided that no covenant
is made by BB&T as to information provided by One Valley for inclusion in the
Registration Statement). The Registration Statement shall include the form of
Proxy Statement/Prospectus. BB&T and One Valley shall use all reasonable
efforts to cause the Proxy Statement/Prospectus to be cleared by the
Commission for mailing to the One Valley 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. One Valley shall cause the Proxy
Statement/Prospectus to be mailed to shareholders in accordance
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with all applicable notice requirements under the Securities Laws, the WVCA
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 acknowledges that it (i) has
adopted the Plan of Merger and (ii) will 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) One Valley 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 (or the tax treatment thereof) or abrogate the covenants and
other agreements contained in this Agreement, including, without limitation,
the covenant not to take any action that would substantially delay or impair
the prospects of completing the Merger pursuant to this Agreement and the Plan
of Merger.
(b) As promptly as practicable after the date hereof, BB&T shall submit,
and, to the extent required, One Valley shall submit, notice or applications
for prior approval of the transactions contemplated herein to the Federal
Reserve Board and any other federal, state or local government 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. One Valley 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.
5.5 Best Efforts
Each of BB&T and One Valley shall use, and shall cause each of their
respective Subsidiaries to use, its best 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 One Valley 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
One Valley 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 limitation,
issues arising in connection with record keeping, loan classification,
valuation adjustments, levels of loan loss reserves and other accounting
practices, and (ii) One Valley's lending, investment or asset/liability
management policies; provided, that any action by One Valley or a One Valley
Subsidiary taken pursuant to this Section 5.6 shall not be deemed to
constitute or result in the breach of any representation, warranty, covenant
or closing condition of One Valley contained in this Agreement. One Valley
shall not be
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required to modify or change any such policies or practices, however, until
the earlier of (A) such time as BB&T acknowledges that all conditions to its
obligation to consummate the Merger have been waived or satisfied (other than
the delivery of certificates, opinions and other instruments and documents to
be delivered at 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) or (B) immediately prior to the Effective Time.
5.7 Access to Information
One Valley 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,
One Valley 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 One Valley and the
One Valley Subsidiaries and, during such period, shall make available all
information concerning their businesses as may be reasonably requested. 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. 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 One Valley 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 One Valley
Except with the prior written consent of BB&T (which consent shall not be
unreasonably or arbitrarily withheld or delayed), between the date hereof and
the Effective Time, One Valley shall not, and shall cause each of the One
Valley 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 $0.26 (subject to increase at the time and in an amount
consistent with past practices) per share of One Valley Common Stock
payable on record dates and in amounts consistent with past practices;
provided that any dividend declared or payable on the shares of One Valley
Common Stock for the quarterly period during which the Effective Time
occurs shall, unless otherwise agreed upon in writing by BB&T and One
Valley, be declared with a record date prior to the 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;
(c) issue any shares of its capital stock (including treasury shares),
except pursuant to the Stock Option Plans with respect to options
outstanding on the date hereof or pursuant to the BB&T Option Agreement;
(d) issue, grant or authorize any Rights or effect any recapitalization,
reclassification, stock dividend, stock split or like change in
capitalization other than pursuant to the Stock Option Plans or Plans in
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existence on the date hereof, in the ordinary course of business consistent
with past practices; provided, that in no event shall Rights to purchase
more than 175,000 shares of the capital stock of One Valley (subject to
adjustment for organic changes) be granted between the date hereof and the
Effective Time.
(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 One Valley 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;
(g) merge with any other entity or permit any other entity to merge into
it, or consolidate with any other entity; acquire control over any other
entity; or liquidate, sell or otherwise dispose of any material amount of
assets or acquire any material amount of 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), 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 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, or any
recapitalization, liquidation or dissolution involving or a business
combination or other similar transaction with, One Valley or any One Valley
Subsidiary other than as contemplated by this Agreement; or authorize any
officer, director, agent or affiliate of One Valley or any One Valley
Subsidiary to do any of the above; or fail to notify BB&T immediately if
any such inquiries or proposals are received, any such information is
requested or required, or any such negotiations or discussions are sought
to be initiated; provided, that this Section 5.9(k) shall not apply to
furnishing information to or participating in negotiations or discussions
with any Person that has made, or that the One Valley Board of Directors
determines in good faith is reasonably likely to make, a Superior Offer, if
the One Valley Board of Directors determines in good faith, after
consultation with outside legal counsel, that it should take such actions
in light of its fiduciary duty to One Valley's shareholders;
(l) enter into, other than as contemplated in this Agreement, (i) any
material agreement, arrangement or commitment not made in the ordinary
course of business, (ii) any agreement, indenture or other instrument not
made in the ordinary course of business relating to the borrowing of money
by One Valley or a One Valley Subsidiary or guarantee by One Valley or a
One Valley 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, and except that after approval of the
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Agreement and the Plan of Merger by its shareholders and after receipt of
the requisite regulatory approvals for the transactions contemplated by
this Agreement and the Plan of Merger, One Valley shall cooperate in good
faith with BB&T to adopt policies, practices and procedures consistent with
those utilized by BB&T, effective on or before the Closing Date;
(n) change its methods of accounting in effect at December 31, 1998 in
any material respect, 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 commitments for capital expenditures or obligations to
make capital expenditures in excess of $250,000 for any one expenditure, or
$1,000,000 in the aggregate; provided that commitments or obligations in
place prior to the date hereof shall not be counted towards these
thresholds.
(p) incur any material indebtedness other than deposits from customers,
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 would or could reasonably be expected to (i)
cause the Merger not to be accounted for as a pooling of interests or not
to constitute a reorganization under Section 368 of the Code as determined
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
In addition to the Employment Agreements substantially in the form of
Annexes B-1, B-3 and B-4 hereto between BB&T's specified BB&T Subsidiary and
J. Holmes Morrison, Frederick H. Belden and Laurance G. Jones, respectively,
which have been entered into concurrently herewith to become effective at the
Effective Time, BB&T (or its specified BB&T Subsidiary) agrees to enter into
employment agreements substantially in the form of Annex C-1 or C-2 hereto
with up to 16 individuals who are officers of One Valley or a One Valley
Subsidiary, which individuals and the form of agreement applicable to each are
to be specified by One Valley with the consent of BB&T.
5.11 Affiliates
One Valley shall use its best efforts to cause all persons who are
Affiliates of One Valley to deliver to BB&T promptly following execution of
this Agreement a written agreement 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 as
consistent with qualifying the transactions contemplated hereby for pooling-
of-interests accounting treatment, and in any event shall use its 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) Effective on the Benefit Plan Determination Date for the 401(k) plan of
One Valley, BB&T shall, in its sole discretion, cause the 401(k) plan of One
Valley to be (i) merged with the 401(k) plan maintained by BB&T and its
subsidiaries, (ii) frozen or (iii) terminated, in each case subject to the
receipt of all applicable regulatory or governmental approvals. Each employee
of One Valley at the Effective Time who (A) becomes an employee immediately
following the Effective Time of BB&T or any subsidiary of BB&T (a "Transferred
Employee")
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and is a participant in the 401(k) plan of One Valley, and (B) continues in
the employment of BB&T or any subsidiary of BB&T (an "Employer Entity") until
the Benefit Plan Determination Date for the 401(k) plan of One Valley, shall
be eligible to participate in BB&T's 401(k) plan as of such Benefit Plan
Determination Date. All rights to participate in BB&T's 401(k) plan are
subject to BB&T's rights to amend or to terminate the plan. Until such Benefit
Plan Determination Date, BB&T shall continue in effect for the benefit of
participating employees the Section 401(k) plan of One Valley. For purposes of
administering BB&T's 401(k) plan, service with One Valley and the One Valley
Subsidiaries shall be deemed to be service with BB&T for participation and
vesting purposes, but not for purposes of benefit accrual.
(b) Effective on the Benefit Plan Determination Date for the One Valley
Defined Benefit Pension Plan, BB&T shall, in its sole discretion, cause the
One Valley Defined Benefit Pension Plan to be (i) merged with the defined
benefit pension plan maintained by BB&T and its subsidiaries, (ii) frozen or
(iii) terminated, in each case subject to the receipt of all applicable
regulatory or governmental approvals. Each Transferred Employee who (A) is a
participant in One Valley Defined Benefit Pension Plan at the Effective Time,
and (B) continues in the employment of an Employer Entity until its Benefit
Plan Determination Date, shall be eligible to participate in BB&T's pension
plan as of such Benefit Plan Determination Date. All rights to participate in
BB&T's pension plan are subject to BB&T's right to amend or terminate the
plan. As of the close of business immediately preceding the Benefit Plan
Determination Date for the One Valley Defined Benefit Pension Plan, BB&T shall
determine the accrued benefit thereunder for each participant continuing in
the service of an Employer Entity. Such accrued benefit shall be determined by
taking into account service and compensation following the Effective Time, and
the accrued benefit as so determined shall be the accrued benefit under the
BB&T pension plan for service prior to the Benefit Plan Determination Date
(and shall be added to the benefit accrued under the BB&T pension plan for
service and compensation beginning with the Benefit Plan Determination Date).
For purposes of administering BB&T's pension plan, service with One Valley and
the One Valley Subsidiaries shall be deemed to be service with BB&T for
participation and vesting purposes, but not for purposes of benefit accrual.
(c) As of the Benefit Plan Determination Date for each group
hospitalization, medical, dental, life, disability and other welfare benefit
plan or program available to employees of the Employer Entity, each
Transferred Employee, together with his or her dependents and beneficiaries,
shall generally be eligible to participate in such plan or program, subject to
(i) its eligibility requirements and other terms and (ii) the Transferred
Employee being employed by an Employer Entity as of its Benefit Plan
Determination Date. With respect to health care coverage, participation in
BB&T's plans may be subject to availability of HMO options. In any case in
which HMO coverage is not available, substitute coverage will be provided
which may not be fully comparable to the HMO coverage. With respect to any
welfare benefit plan or program of One Valley which the Employer Entity
determines, in its sole discretion, provides benefits of the same type or
class as a corresponding plan or program maintained by the Employer Entity,
the Employer Entity shall continue such One Valley plan or program in effect
for the benefit of the Transferred Employees so long as they remain eligible
to participate and until they shall become eligible to become participants in
the corresponding plan or program maintained by the Employer Entity (and, with
respect to any such plan or program, subject to complying with eligibility
requirements and subject to the right of the Employer Entity to terminate such
plan or program). For purposes of administering the welfare plans and programs
subject to this Section 5.12(c), (A) service with One Valley 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 (except as otherwise
provided in Section 5.12(d)), and (B) each Transferred Employee shall receive
credit for any co-payment and deductibles paid prior to the Benefit Plan
Determination Date (to the same extent such credit was given under the
analogous Plan prior to such Benefit Plan Determination Date) in satisfying
any applicable deductibles, co-payments or out-of-pocket expenses.
(d) Except to the extent of commitments herein or other contractual
commitments, if any, specifically made or assumed hereunder by BB&T, neither
BB&T nor any Employer Entity shall have any obligation to continue to employ
any Transferred Employee in any specific job, at any specified level of
compensation, incentive
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payments, benefits or perquisites, or at all. If a Transferred Employee is
terminated by an Employer Entity (other than a transfer of employment to
another Employer Entity), and such Transferred Employee was a party at the
Effective Time to a Change in Control Severance Agreement with One Valley (a
"Severance Agreement") which was not terminated by an agreement executed by
the Transferred Employee as of the Effective Time, such Transferred Employee
shall be entitled to severance pay in accordance with the Severance Agreement
and any additional benefit payable under the One Valley Special Severance
Policy referenced below. A Transferred Employee shall be entitled to severance
pay under the One Valley Special Severance Policy (as amended and restated
4/27/99) if and to the extent he or she is eligible for severance pay under
such Policy, except that, the Transferred Employee shall be eligible for
severance pay under the Policy if he or she is terminated within eighteen
months following the Effective Time.
(e) BB&T agrees to honor all employment agreements, severance agreements and
deferred compensation agreements that One Valley and the One Valley
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 or terminated at the Closing or
following the Closing Date. Except for the agreements described in the
preceding sentence and except as otherwise provided in this Section 5.12, the
employee benefit plans of One Valley shall, in the sole discretion of BB&T, be
frozen, terminated or merged into comparable plans of BB&T as of the Effective
Time or at such time thereafter as BB&T shall determine in its sole
discretion; provided that BB&T agrees that, during the period commencing at
the Effective Time and ending on the first anniversary thereof, the
Transferred Employees and former One Valley employees who retired under the
Plans of One Valley will continue to be provided with benefits under benefit
plans (other than stock options or other stock-based incentive plans) which in
the aggregate are substantially comparable to (i) those provided immediately
prior to the Effective Time under the Plans of One Valley to such Transferred
Employees and former employees or (ii) those provided to similarly situated
employees of BB&T; provided, however, that Transferred Employees covered by
collective bargaining agreements, if any, need not be provided with such
benefits.
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 One Valley for acts
or omissions occurring prior to the Effective Time. Such insurance shall
provide at least the same coverage and amounts as contained in One Valley's
policy on the date hereof; provided, that in no event shall the annual premium
on such policy exceed 175% of the annual premium payments on One Valley'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 all individuals who are or have
been officers, directors or employees of One Valley or any One Valley
Subsidiary prior to the Effective Time from any acts or omissions in such
capacities prior to the Effective Time to the fullest extent lawful. If BB&T
or any of its successors or assigns shall consolidate with or merge into any
other entity and shall not be the continuing or surviving entity of such
consolidation or merger or shall transfer all or substantially all of its
assets to any entity, then and in each case, proper provision shall be made so
that the successors and assigns of BB&T shall assume the obligations set forth
in this Section 5.13.
5.14 Forbearances of BB&T
Except with the prior written consent of One Valley, which consent shall not
be arbitrarily or unreasonably withheld or delayed, between the date hereof
and the Effective Time, neither BB&T nor any BB&T Subsidiary shall take any
action (or, in the case of clause (i), fail to take any action) that would or
might be expected 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 of the Code; (ii) result in any inaccuracy of
a representation or
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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; (iv) exercise the BB&T Option Agreement
other than in accordance with its terms, or dispose of the shares of One
Valley Common Stock issuable upon exercise of the option rights conferred
thereby other than as permitted by the terms thereof; or (v) 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 One Valley and BB&T shall file (and shall cause the One Valley
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 One Valley, 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 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 One Valley 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 Advisory Boards
(a) As of the Effective Time, BB&T shall offer to each of the members of the
One Valley Board of Directors a seat on the BB&T Advisory Board for West
Virginia. Except as provided in Section 5.17(d), the Advisory Board members
appointed pursuant to this Section 5.17(a) and who continue to serve shall
receive, as compensation for service on the Advisory Board, Advisory Board
member fees (annual retainer and attendance
(b) As of the Advisory Board Establishment Date for each One Valley
Subsidiary that is a bank or savings institution, BB&T shall offer to the
members of the Board of Directors of such One Valley Subsidiary a seat on the
BB&T Advisory Board for such One Valley Subsidiary's market area. During the
period commencing at the Effective Time and ending on the Advisory Board
Establishment Date for each such One Valley Subsidiary, the directors of such
One Valley Subsidiary shall continue to serve as such so long as they continue
to meet the requirements for serving. In addition, as of the Effective Time,
BB&T shall offer to R. Marshall Evans, Jr. a seat on the BB&T Advisory Board
for Georgia. Except as provided in Section 5.17(d), the Advisory Board members
appointed pursuant to this Section 5.17(b) and who continue to serve shall
receive, as compensation for service on the Advisory Board, Advisory Board
member fees (annual retainer and attendance fees) in accordance with BB&T's
standard schedule of fees for service thereon as in effect from time to time.
(c) Notwithstanding anything herein to the contrary, membership of any
person on any Advisory Board shall be conditional upon his or her execution of
a noncompetition and nonsolicitation agreement reasonably acceptable to BB&T.
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(d) Notwithstanding the provisions of Section 5.17, no fees will be paid to
any member of any Advisory Board who is also an employee of BB&T or an
Affiliate of BB&T.
5.18 Reserved
5.19 Board of Directors of BB&T
As soon as practicable following the Effective Time, the BB&T Board of
Directors shall (i) increase the number of directors comprising the Board of
Directors to 23 pursuant to Article III, Section 2 of BB&T's Bylaws and (ii)
elect J. Holmes Morrison and another individual to be selected on or before
the Effective Time by mutual agreement of the Chief Executive Officer of One
Valley and the Chief Executive Officer of BB&T to fill the two vacancies
created by such increase, as permitted by Article III, Section 6 of BB&T's
Bylaws. Each of Mr. Morrison and the selected individual shall serve for so
long as he or she is elected and qualifies, subject to the right of removal
for cause. In addition, as soon as practicable following the Effective Time,
BB&T's Chief Executive Officer shall appoint, and the BB&T Board of Directors
shall elect, J. Holmes Morrison to BB&T's Executive Committee.
5.20 Treatment as Reorganization for Tax Purposes
Each of One Valley and BB&T shall treat the Merger as a reorganization
within the meaning of Section 368 of the Code for all federal income tax
purposes.
ARTICLE VI
CONDITIONS PRECEDENT
6.1 Conditions Precedent--BB&T and One Valley
The respective obligations of BB&T and One Valley 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 of the
shareholders of One Valley 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 all regulatory 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; and
(d) None of BB&T, any of the BB&T Subsidiaries, One Valley or any of the
One Valley 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.
6.2 Conditions Precedent--One Valley
The obligations of One Valley 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 One
Valley pursuant to Section 7.4:
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(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 One Valley. There shall not exist inaccuracies in the
representations and warranties of BB&T set forth in this Agreement 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 One Valley 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), to the extent applicable to
BB&T, have been satisfied;
(d) 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
(e) One Valley shall have received an opinion of Sullivan & Cromwell,
subject to customary assumptions and representations, substantially to the
effect that the Merger will constitute a reorganization within the meaning
of Section 368 of the Code.
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 One Valley 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 One Valley set
forth in Sections 3.3 (solely with respect to the ownership by One Valley
of the One Valley Subsidiaries) and 3.24 shall be true and correct (except
for inaccuracies that are immaterial in amount). There shall not exist
inaccuracies in the representations and warranties of One Valley 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 One Valley and the One Valley
Subsidiaries taken as a whole;
(b) No regulatory approval shall have imposed any condition or
requirement which, in the reasonable opinion of the Board of Directors of
BB&T, would so materially adversely affect the business or economic
benefits to BB&T of the transactions contemplated by this Agreement as to
render consummation of such transactions inadvisable or unduly burdensome;
provided that any such condition or requirement shall not relate
principally to any regulatory violation or other failure on the part of
BB&T or a divestiture requirement that is consistent with regulatory
precedent;
(c) One Valley shall have performed in all material respects all
obligations and complied in all material respects with all covenants
required by this Agreement;
(d) One Valley 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), 6.3(a) and 6.3(c), to
the extent applicable to One Valley, have been satisfied;
(e) 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 as in effect on the date
hereof; and
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(f) BB&T shall have received an opinion of BB&T's legal counsel, in form
and substance satisfactory to BB&T, substantially to the effect that the
Merger will constitute one or more reorganizations under Section 368 of the
Code and that the shareholders of One Valley will not recognize any gain or
loss to the extent that such shareholders exchange shares of One Valley
Common Stock for shares of BB&T Common Stock.
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 in writing
(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) in the case of One Valley and Section
6.3(a) 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 are denied, and
the time period for appeals and requests for reconsideration has run.
(e) At any time, by either party hereto in writing, if the shareholders
of One Valley disapprove the Agreement and the Plan of Merger at a meeting
called and held for the purpose of voting thereon.
(f) At any time following October 1, 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 or One Valley in
writing, if the Board of Directors of One Valley shall have withdrawn,
modified, conditioned or refused to make its recommendation to the
shareholders of One Valley that they vote to approve the Plan of Merger
under conditions permitted by Section 5.1.
(h) At any time prior to the Effective Time, by BB&T or One Valley in
writing, if One Valley's Board of Directors shall have authorized One
Valley management to enter into an agreement, plan or transaction to
consummate a Superior Offer.
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 and expenses set forth in Sections 5.7 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. The Option Agreement shall be governed by its own terms, and no
termination of this Agreement or the Plan of Merger pursuant to Section 7.1
shall be interpreted as a consent by BB&T to any action or matter that would
have the effect of diminishing or adversely affecting BB&T's rights under the
Option Agreement.
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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 5.13, 5.17 and 5.19); provided that no such
representations, warranties or covenants shall be deemed to be terminated or
extinguished so as to deprive BB&T or One Valley (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 One
Valley, the aforesaid representations, warranties and covenants being material
inducements to consummation by BB&T and One Valley of the transactions
contemplated herein.
7.4 Waiver
Except with respect to any required regulatory approval or other condition
imposed by law, 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 One Valley
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 One Valley shareholders of this
Agreement and the Plan of Merger, shall reduce either the 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 One Valley, subject to the
proviso to Section 7.4.
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 One Valley.
8.2 Entire Agreement
This Agreement, including the documents and other writings referenced herein
or 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. The terms and
conditions of this Agreement and the BB&T Option Agreement shall inure to the
benefit of and be binding upon the parties hereto and thereto and their
respective successors. Nothing in this Agreement or the BB&T Option Agreement,
expressed or implied, is intended to confer upon any party, other than the
parties hereto and thereto, and their respective successors, any rights,
remedies, obligations or liabilities, except for the rights of directors and
officers of One Valley to enforce rights in Sections 5.13, 5.17, 5.18 and 5.19
and the rights of Transferred Employees to enforce rights in the last two
sentences of Section 5.12(d).
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<PAGE>
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.
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 One Valley:
Merrell S. McIlwain
One Valley Square
Charleston, West Virginia 25301
Telephone: 304-348-1172
Fax: 304-348-7397
With a required copy to:
Mitchell S. Eitel
Sullivan & Cromwell
125 Broad Street
New York, New York 10004-2498
Telephone: 212-558-4000
Fax: 212-558-3588
If to BB&T:
Scott E. Reed
150 South 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
One Valley acknowledges that the One Valley Common Stock and the One Valley
business and assets are unique and that, if One Valley 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 One Valley shall, without
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<PAGE>
cause, refuse to consummate the transactions contemplated by this Agreement.
This Section 8.5 shall not be deemed a waiver by One Valley to seek any
legally available remedy in the event of a breach by BB&T.
8.6 Captions
The captions contained in this Agreement are for reference only and are not
part of this Agreement.
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]
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<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
By: /s/ John A. Allison, IV
___________________________________
Name: John A. Allison, IV
Title: Chairman and Chief
Executive Officer
ONE VALLEY BANCORP, INC.
By: /s/ J. Holmes Morrison
___________________________________
Name: J. Holmes Morrison
Title: Chairman and Chief
Executive Officer
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<PAGE>
ANNEX A
ARTICLES OF MERGER
OF
ONE VALLEY BANCORP, INC.
INTO
BB&T CORPORATION
The undersigned corporations, pursuant to Section 31-1-36 of the West
Virginia Corporation Code (the "WVCA") and Section 55-11-05 of the North
Carolina Business Corporation Act (the "NCBCA"), hereby execute the following
Articles of Merger.
ONE
The merger of One Valley Bancorp, Inc., a West Virginia corporation ("One
Valley"), into BB&T Corporation, a North Carolina corporation ("BB&T"), shall
be in accordance with the Plan of Merger attached hereto as Exhibit I (the
"Plan of Merger").
TWO
A. The Plan of Merger was submitted to the shareholders of One Valley by its
Board of Directors in accordance with the provisions of Sections 31-1-34 and
31-1-38 of the WVCA and Section 55-11-03 of the NCBCA and was duly approved in
the manner prescribed by law by the shareholders of One Valley on the day of
, 2000. The number of outstanding shares of common stock, $10.00 par value,
of One Valley (the only class entitled to vote on the Plan of Merger) entitled
to be cast with respect to the Plan of Merger and number of votes cast for,
cast against and abstaining were:
<TABLE>
<CAPTION>
Outstanding
Shares For Against Abstain
- ----------- --- ------- -------
<S> <C> <C> <C>
</TABLE>
B. The shareholders of BB&T were not required to approve the Plan of Merger.
THREE
These Articles of Merger shall become effective at 11:59 p.m. on , 2000.
[Remainder of Page Intentionally Left Blank]
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<PAGE>
The undersigned, each of BB&T and One Valley, declares that the facts herein
stated are true as of , 2000.
BB&T Corporation
By: _________________________________
Attest:
_____________________________________
Secretary
One Valley Bancorp, Inc.
By: _________________________________
Attest:
_____________________________________
Secretary
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<PAGE>
THE UNDERSIGNED, Chairman and Chief Executive Officer of BB&T Corporation,
who executed on behalf of said corporation the foregoing Articles of Merger,
of which this certificate is made a part, hereby verifies, in the name and on
behalf of said corporation, the foregoing Articles of Merger to be the
corporate act of said corporation.
BB&T Corporation
By: _________________________________
John A. Allison IV
Chairman and Chief Executive
Officer
THE UNDERSIGNED, Chairman and Chief Executive Officer of One Valley Bancorp,
Inc., who executed on behalf of said corporation the foregoing Articles of
Merger, of which this certificate is made a part, hereby verifies, in the name
and on behalf of said corporation, the foregoing Articles of Merger to be the
corporate act of said corporation.
One Valley Bancorp, Inc.
By: _________________________________
J. Holmes Morrison
Chairman and Chief Executive
Officer
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<PAGE>
EXHIBIT I
PLAN OF MERGER
OF
ONE VALLEY BANCORP, INC.
INTO
BB&T CORPORATION
Section 1. Corporations Proposing to Merge and Surviving Corporation. One
Valley Bancorp, Inc., a West Virginia corporation ("One Valley"), shall be
merged (the "Merger") into BB&T Corporation, a North Carolina corporation
("BB&T"), pursuant to the terms and conditions of this Plan of Merger (the
"Plan of Merger") and of the Agreement and Plan of Reorganization, dated as of
February 6, 2000 (the "Agreement"), by and between One Valley and BB&T. The
effective time for the Merger (the "Effective Time") shall be set forth in the
Articles of Merger to be filed with the Secretary of State of West Virginia
and the Secretary of State of North Carolina. BB&T shall continue as the
surviving corporation (the "Surviving Corporation") in the Merger and the
separate corporate existence of One Valley shall cease.
Section 2. Effects of the Merger. The Merger shall have the effects set
forth in Section 31-1-37 of the West Virginia Corporation Code (the "WVCA")
and Section 55-11-06 of the North Carolina Business Corporation Act (the
"NCBCA").
Section 3. Articles of Incorporation and Bylaws. The Articles of
Incorporation and the Bylaws of BB&T as in effect immediately prior to the
Effective Time shall become the Articles of Incorporation and Bylaws of the
Surviving Corporation following the Effective Time until changed in accordance
with their terms and the NCBCA.
Section 4. Conversion of Shares.
(a) At the Effective Time, by virtue of the Merger and without any action on
the part of One Valley or the holders of record of the voting common stock,
par value $10.00 per share, of One Valley with rights attached issued pursuant
to Rights Agreement dated October 18, 1995 between One Valley and One Valley
Bank, National Association, as Rights Agent ("One Valley Common Stock"), each
share of One Valley Common 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 One
Valley Common Stock (as provided in Section 4(d)), the Merger Consideration
(as defined in Section 5).
(b) Each share of the voting common stock of BB&T, par value $5.00 per
share, 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 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 One Valley Common 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
thereon. No interest will be paid or accrued on the Merger Consideration upon
the surrender of the certificate or certificates representing shares of One
Valley Common Stock. With respect to any certificate for One Valley Common
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. After the Effective
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<PAGE>
Time, One Valley's transfer books shall be closed and no transfer of the
shares of One Valley Common Stock outstanding immediately prior to the
Effective Time shall be made on the stock transfer books of the Surviving
Corporation.
(d) Promptly after the Effective Time, BB&T shall cause to be delivered or
mailed to each One Valley 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 One Valley
Common Stock. Upon proper surrender of such certificates or other evidence of
ownership meeting the requirements of Section 4(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 thereon.
(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 One Valley in respect of shares of One Valley Common Stock in
accordance with the terms of the Agreement and which remain unpaid at the
Effective Time, subject to compliance by One Valley with Section 5.9(b) of the
Agreement. To the extent permitted by law, former shareholders of record of
One Valley 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 One Valley Common Stock are converted,
regardless of whether such holders have exchanged their certificates
representing One Valley Common Stock for certificates representing BB&T Common
Stock in accordance with the provisions of the 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 Stock
issuable pursuant to the 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 thirtieth day after the Effective Time shall be delivered to
the holder of any certificate representing One Valley Common Stock until such
holder surrenders such certificate for exchange as provided in this Section 4.
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 One Valley
Common Stock represented by such certificate.
Section 5. Merger Consideration.
(a) As used herein, the term "Merger Consideration" shall mean the number of
shares of BB&T Common Stock (to the nearest ten thousandth of a share) to be
exchanged for each share of One Valley Common 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 that would otherwise be
distributable to a One Valley shareholder as provided in Section 5(b). The
number of shares of BB&T Common Stock to be issued for each issued and
outstanding share of One Valley Common Stock (the "Exchange Ratio") shall be
1.28.
(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 price per share of BB&T Common Stock on the NYSE at 4:00
p.m. eastern time on the Closing Date as reported on NYSEnet.com (or, if not
reported thereon, another authoritative source).
Section 6. Conversion of Stock Options.
(a) At the Effective Time, each option granted under One Valley's Amended
and Restated 1993 Incentive Stock Option Plan and 1983 Incentive Stock Option
Plan (collectively, the "Stock Option Plans") or otherwise to acquire shares
of One Valley Common Stock then outstanding (and which, by its terms does not
lapse on or before the Effective Time), whether or not then exercisable (a
"Stock Option"), 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, except that from and after the Effective
Time (i) BB&T and its Compensation Committee shall be substituted for One
Valley and its compensation committee administering the
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<PAGE>
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 One Valley Common Stock subject to such Stock Option
immediately prior to the Effective Time by the 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
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 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 under which they
were granted. 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 One Valley will take all necessary steps to effectuate the foregoing
provisions of this Section 6. 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, and to the extent One Valley shall have a
registration statement in effect or an obligation to file a registration
statement, 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 Securities Exchange Act of 1934, as amended (the
"Exchange Act"), BB&T shall administer the Stock Option Plans assumed pursuant
to this Section 6 (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.
(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.
Section 7. Amendment. At any time before the Effective Time, this Plan of
Merger may be amended, provided that no such amendment executed after approval
by the One Valley shareholders of the Agreement and this Plan of Merger shall
modify either the amount or the form of the consideration to be provided to
holders of One Valley Common Stock upon consummation of the Merger.
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<PAGE>
APPENDIX B
(S)31-1-122. Right of shareholders to dissent.
Any shareholder of a corporation shall have the right to dissent from any of
the following corporate actions:
(a) Any plan of merger or consolidation to which the corporation is a
party; or
(b) Any sale or exchange of all or substantially all of the property and
assets of the corporation not made in the usual and regular course of its
business, including a sale in dissolution, but not including a sale
pursuant to an order of a court having jurisdiction in the premises or a
sale for cash on terms requiring that all or substantially all of the net
proceeds of sale be distributed to the shareholders in accordance with
their respective interests within one year after the date of sale.
A shareholder may dissent as to less than all of the shares registered in
his name. In that event, his rights shall be determined as if the shares as to
which he has dissented and his other shares were registered in the names of
different shareholders.
(S)31-1-123. Rights of dissenting shareholders; procedure for purchasing of
dissenting shareholders' shares; civil action for determining value of shares;
procedure for transferring of such shares to corporation and payment therefor.
(a) Any shareholder electing to exercise his right to dissent, pursuant to
section one hundred twenty-two of this article, shall file with the
corporation, prior to or at the meeting of shareholders at which such proposed
corporate action is submitted to a vote, a written objection to such proposed
corporate action. If such proposed corporate action be approved by the
required vote and such shareholder shall not have voted in favor thereof, such
shareholder may, within ten days after the date on which the vote was taken or
if a corporation is to be merged without a vote of its shareholders into
another corporation, any of its shareholders may, within fifteen days after
the plan of such merger shall have been mailed to such shareholders, make
written demand on the corporation, or, in the case of a merger or
consolidation, on the surviving or new corporation, domestic or foreign, for
payment of the fair value of such shareholder's shares, and, if such proposed
corporate action is effected, such corporation shall pay to such shareholder,
upon surrender of the certificate or certificates representing such shares,
the fair value thereof as of the day prior to the date on which the vote was
taken approving the proposed corporate action, excluding any appreciation or
depreciation in anticipation of such corporate action. Any shareholder failing
to make demand within the ten-day period shall be bound by the terms of the
proposed corporate action. Any shareholder making such demand shall thereafter
be entitled only to payment as in this section provided and shall not be
entitled to vote or to exercise any other rights of a shareholder.
(b) No such demand may be withdrawn unless the corporation shall consent
thereto. If, however, such demand shall be withdrawn upon consent, or if the
proposed corporate action shall be abandoned or rescinded or the shareholders
shall revoke the authority to effect such action, or if, in the case of a
merger, on the date of the filing of the articles of merger the surviving
corporation, is the owner of all the outstanding shares of the other
corporations, domestic and foreign, that are parties to the merger, or if no
demand or petition for the determination of fair value by a court of general
civil jurisdiction have been made or filed within the time provided in
subsection (e) of this section, or if a court of general civil jurisdiction
shall determine that such shareholder is not entitled to the relief provided
by this section, then the right of such shareholder to be paid the fair value
of his shares shall cease and his status as a shareholder shall be restored,
without prejudice to any corporate proceedings which may have been taken
during the interim.
(c) Within ten days after such corporate action is effected, the
corporation, or, in the case of a merger or consolidation, the surviving or
new corporation, domestic or foreign, shall give written notice thereof to
each dissenting shareholder who has made demand as herein provided, and shall
make a written offer to each
B-1
<PAGE>
shareholder to pay for such shares at a specified price deemed by such
corporation to be fair value thereof. Such notice and offer shall be
accompanied by a balance sheet of the corporation the shares of which the
dissenting shareholder holds, as of the latest available date and not more
than twelve months prior to the making of such offer, and a profit and loss
statement of such corporation for the twelve months' period ended on the date
of such balance sheet.
(d) If within thirty days after the date on which such corporate action is
effected the fair value of such shares is agreed upon between any such
dissenting shareholder and the corporation, payment therefor shall be made
within ninety days after the date on which such corporate action was effected,
upon surrender of the certificate or certificates representing such shares.
Upon payment of the agreed value the dissenting shareholder shall cease to
have any interest in such shares.
(e) If within such period of thirty days, a dissenting shareholder and the
corporation do not so agree, then the corporation shall within thirty days
after receipt of written demand from any dissenting shareholder, which written
demand must be given within sixty days after the date on which such corporate
action was effected, file a complaint in a court of general civil jurisdiction
requesting that the fair value of such shares be found and determined, or the
corporation may file such complaint at any time within such sixty-day period
at its own election. Such complaint shall be filed in any court of general
civil jurisdiction in the county in which the principal office of the
corporation is situated, or, if there be no such office in this state, in the
county in which any dissenting shareholder resides or is found or in which the
property of such corporation, or any part of it, may be. If the corporation
shall fail to institute such proceedings, any dissenting shareholder may do so
in the name of the corporation. All dissenting shareholders wherever residing,
may be made parties to the proceedings as an action against their shares quasi
in rem. A copy of the complaint shall be served on each dissenting shareholder
who is a resident of this state in the same manner as in other civil actions.
Dissenting shareholders who are nonresidents of this state shall be served a
copy of the complaint by registered or certified mail, return receipt
requested. In addition, service upon such nonresident shareholders shall be
made by publication, as provided in Rule 4(e)(2) of the West Virginia Rules of
Civil Procedure. All shareholders who are parties to the proceeding shall be
entitled to judgment against the corporation for the amount of the fair value
of their shares. The court may, if it so elects, appoint one or more persons
as appraisers to receive evidence and recommend a decision on the question of
fair value. The appraisers shall have such power and authority as shall be
specified in the order of their appointment or any subsequent appointment. The
judgment shall be payable only upon and concurrently with the surrender to the
corporation of the certificate or certificates representing such shares. Upon
payment of the judgment, the dissenting shareholder shall cease to have any
interest in such shares. The judgment shall include an allowance for interest
at such rate as the court may find to be fair and equitable in all the
circumstances, from the date on which the vote was taken on the proposed
corporate action to the date of payment. The costs and expenses of any such
proceeding shall be determined by the court and shall be assessed against the
corporation, but all or any part of such costs and expenses may be apportioned
and assessed as the court may deem equitable against any or all of the
dissenting shareholders who are parties to the proceeding to whom the
corporation shall have made an offer to pay for the shares if the court shall
find that the action of such shareholders in failing to accept such offer was
arbitrary or vexatious or not in good faith. Such expenses shall include
reasonable compensation for and reasonable expenses of the appraisers, but
shall exclude the fees and expenses of counsel for and experts employed by any
party; but if the fair value of the shares as determined materially exceeds
the amount which the corporation offered to pay therefor, or if no offer was
made, the court in its discretion may award to any shareholder who is a party
to the proceeding such sum as the court may determine to be reasonable
compensation to any expert or experts employed by the shareholder in the
proceeding. Any party to the proceeding may appeal any judgment or ruling of
the court as in other civil cases.
(f) Within twenty days after demanding payment for his shares, each
shareholder demanding payment shall submit the certificate or certificates
representing his shares to the corporation for notation thereon that such
demand has been made. His failure to do so shall, at the option of the
corporation, terminate his rights under this section unless a court of general
civil jurisdiction, for good and sufficient cause shown, shall otherwise
direct. If shares represented by a certificate on which notation has been so
made shall be transferred, each new certificate
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<PAGE>
issued therefor shall bear similar notation, together with the name of the
original dissenting holder of such shares, and a transferee of such shares
shall acquire by such transfer no rights in the corporation other than those
which the original dissenting shareholder had after making demand for payment
of the fair value thereof.
(g) Shares acquired by a corporation pursuant to payment of the agreed value
therefor or to payment of the judgment entered therefor, as in this section
provided, may be held and disposed of by such corporation as in the case of
other treasury shares, except that, in the case of a merger or consolidation,
they may be held and disposed of as the plan of merger or consolidation may
otherwise provide.
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<PAGE>
APPENDIX C
February 5, 2000
Board of Directors
One Valley Bancorp, Inc.
One Valley Square
Charleston, WV 25326
Members of the Board:
We understand that One Valley Bancorp, Inc. ("One Valley") and BB&T
Corporation ("BB&T") propose to enter into an Agreement and Plan of Merger,
dated as of February 6, 2000 (the "Agreement"), pursuant to which One Valley
is to be merged with and into BB&T, with BB&T being the surviving corporation
in the transaction (the "Merger"). Pursuant to the Merger, and as set forth
more fully in the Agreement, upon the merger of One Valley and BB&T, each
outstanding share of One Valley common stock, par value $10.00 per share (the
"One Valley Shares"), other than certain excluded shares, will be converted
into the right to receive 1.28 shares (the "Exchange Ratio") of the common
stock, par value $5.00 per share, of BB&T (the "BB&T Shares").
You have asked us whether, in our opinion, the Exchange Ratio is fair from a
financial point of view to the shareholders of One Valley.
In arriving at the opinion set forth below, we have, among other things:
(1) Reviewed certain publicly available business and financial
information relating to One Valley and BB&T that we deemed to be relevant;
(2) Reviewed certain information, including financial forecasts,
relating to the respective businesses, earnings, assets, liabilities and
prospects of One Valley and BB&T furnished to us by senior management of
One Valley and BB&T, as well as the amount and timing of the cost savings,
revenue enhancements and related expenses expected to result from the
Merger (the "Expected Synergies") furnished to us by senior management of
BB&T;
(3) Conducted discussions with members of senior management and
representatives of One Valley and BB&T concerning the matters described in
clauses (1) and (2) above, as well as their respective businesses and
prospects before and after giving effect to the Merger and the Expected
Synergies;
(4) Reviewed the market prices and valuation multiples for the One
Valley Shares and the BB&T Shares and compared them with those of certain
publicly traded companies that we deemed to be relevant;
(5) Reviewed the respective publicly reported financial condition and
results of operations of One Valley and BB&T and compared them with those
of certain publicly traded companies that we deemed to be relevant;
(6) Compared the proposed financial terms of the Merger with the
financial terms of certain other transactions that we deemed to be
relevant;
(7) Participated in certain discussions and negotiations among
representatives of One Valley and BB&T and their financial and legal
advisors with respect to the Merger;
(8) Reviewed the potential pro forma impact of the Merger;
(9) Reviewed the Agreement and the related stock option agreement; and
(10) Reviewed such other financial studies and analyses and took into
account such other matters as we deemed necessary, including our assessment
of general economic, market and monetary conditions.
C-1
<PAGE>
In preparing our opinion, we have assumed and relied on the accuracy and
completeness of all information supplied or otherwise made available to us,
discussed with or reviewed by or for us, or publicly available, and we have
not assumed any responsibility for independently verifying such information or
undertaken an independent evaluation or appraisal of the assets or liabilities
of One Valley or BB&T or been furnished with any such evaluation or appraisal.
We are not experts in the evaluation of allowances for loan losses, and we
have neither made an independent evaluation of the adequacy of the allowances
for loan losses of One Valley or BB&T, nor have we reviewed any individual
credit files of One Valley or BB&T or been requested to conduct such a review,
and, as a result, we have assumed that the respective allowances for loan
losses for One Valley and BB&T are adequate to cover such losses and will be
adequate on a pro forma basis for the combined entity. In addition, we have
not assumed any obligation to conduct, nor have we conducted, any physical
inspection of the properties or facilities of One Valley or BB&T. With respect
to the financial and operating information, including without limitation,
financial forecasts, valuations of contingencies and projections regarding
under-performing or non-performing assets, net charge offs, adequacy of
reserves, future economic conditions, and the Expected Synergies furnished to
or discussed with us by One Valley and BB&T, we have assumed that they have
been reasonably prepared and reflect the best currently available estimates
and judgments of the senior management of One Valley and BB&T as to the future
financial and operating performance of One Valley, BB&T or the combined
entity, as the case may be, and the Expected Synergies. We have further
assumed that the Merger will be accounted for as a pooling-of-interests under
generally accepted accounting principles and that it will qualify as a tax-
free reorganization for U.S. federal income tax purposes.
Our opinion is necessarily based upon market, economic and other conditions
as in effect on, and on the information made available to us as of, the date
hereof. For the purposes of rendering this opinion, we have assumed that the
Merger will be consummated substantially in accordance with the terms set
forth in the Agreement, including in all respects material to our analysis,
that the representations and warranties of each party in the Agreement and in
all related documents and instruments (collectively, the "Documents") that are
referred to therein are true and correct, that each party to the Documents
will perform all of the covenants and agreements required to be performed by
such party under such Documents, that all conditions to the consummation of
the Merger will be satisfied without waiver thereof, and that the Merger is in
fact consummated pursuant to the terms of the Agreement. We have also assumed
that, in the course of obtaining the necessary regulatory or other consents or
approvals (contractual or otherwise) for the Merger, no restrictions,
including any divestiture requirements or amendments or modifications, will be
imposed that will have a material adverse effect on the future results of
operations or financial condition of One Valley, BB&T, or the combined entity
or on the contemplated benefits of the Merger, including the Expected
Synergies.
We have been retained by the Board of Directors of One Valley to act as
financial advisor to One Valley in connection with the Merger and will receive
a fee from One Valley for our services, a significant portion of which is
contingent upon the consummation of the Merger. In addition, One Valley has
agreed to indemnify us for certain liabilities arising out of our engagement.
We have in the past two years provided financial advisory, investment banking
and other services to One Valley and BB&T and have received fees for the
rendering of such services and may continue to provide such services in the
future. In addition, in the ordinary course of our business, we may actively
trade the One Valley Shares and other securities of One Valley and its
affiliates and the BB&T Shares and other securities of BB&T and its affiliates
for our own account and for the accounts of our customers, and, accordingly,
may at any time hold long or short positions in such securities.
This opinion is for the sole and exclusive use and benefit of the Board of
Directors of One Valley. It is further understood that this opinion will not
be reproduced, summarized, described or referred to or given to any person
without Merrill Lynch's prior written consent. Our opinion does not address
the merits of the underlying decision by One Valley to engage in the Merger
and does not constitute a recommendation to any shareholder of One Valley as
to how such shareholder should vote on the proposed Merger or any other matter
related thereto.
We have not considered, nor are we expressing any opinion herein with
respect to, the prices at which One Valley Shares or BB&T Shares will trade
following the announcement of the Merger or the price at which BB&T Shares
will trade following the consummation of the Merger.
C-2
<PAGE>
On the basis of and subject to the foregoing, we are of the opinion that, as
of the date hereof, the Exchange Ratio is fair, from a financial point of
view, to the shareholders of One Valley.
Very truly yours,
/s/ Merrill Lynch, Pierce, Fenner &
Smith
Incorporated
C-3
<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 February 6, 2000,
between BB&T Corporation and One Valley Bancorp, Inc. (including
Annex A) (included as Appendix A to the Proxy Statement/Prospectus)
4(a) Articles of Amendment to Amended and Restated Articles of
Incorporation of the Registrant related to Junior Participating
Preferred Stock (Incorporated herein by reference to Exhibit 3(a)
to the Registrant's Annual Report on Form 10-K filed March 17,
1997)
4(b) Rights Agreement dated as of December 17, 1996 between the
Registrant and Branch Banking and Trust Company, Rights Agent
(Incorporated herein by reference to Exhibit 1 to the Registrant's
Form 8-A filed January 10, 1997)
4(c) Subordinated Indenture (including Form of Subordinated Debt
Security) between the Registrant and State Street Bank and Trust
Company, Trustee, dated as of May 24, 1996 (Incorporated herein by
reference to Exhibit 4(d) to Registration No. 333-02899)
4(d) Senior Indenture (including Form of Senior Debt Security) between
the Registrant and State Street Bank and Trust company, Trustee,
dated as of May 24, 1996 (Incorporated herein by reference to
Exhibit 4(c) to Registration No. 333-02899)
5 Form of Opinion of Womble Carlyle Sandridge & Rice, PLLC
8 Form of 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 Cherry, Bekaert & Holland, L.L.P.*
24 Power of Attorney
99(a) Form of One Valley Bancorp, Inc. Proxy Card
99(b) Option Agreement dated as of February 6, 2000 between BB&T
Corporation and One Valley Bancorp, Inc.
99(c) Consent of J. Holmes Morrison*
99(d) Consent of *
99(e) Consent of Merrill Lynch, Pierce, Fenner & Smith Incorporated
</TABLE>
- --------
*to be filed by amendment
(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-2
<PAGE>
(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.
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.
II-3
<PAGE>
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-4
<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 March 24, 2000.
BB&T CORPORATION
By: /s/ Jerone C. Herring
_______________________________
Name: Jerone C. Herring
Title: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 March 24, 2000.
/s/ John A. Allison IV* /s/ Scott E. Reed*
_____________________________________ _____________________________________
Name: John A. Allison IV Name: Scott E. Reed
Title:
Chairman of the Board and Title:Senior Executive Vice
Chief Executive Officer President and Chief Financial
(principal executive officer) Officer (principal financial
officer)
/s/ Sherry A. Kellett* /s/ Paul B. Barringer*
_____________________________________ _____________________________________
Name: Sherry A. Kellett Name: Paul B. Barringer
Title:
Executive Vice President and Title:Director
Controller (principal
accounting officer)
/s/ Alfred E. Cleveland* /s/ W. R. Cuthbertson, Jr.*
_____________________________________ _____________________________________
Name: Alfred E. Cleveland Name: W. R. Cuthbertson, Jr.
Title:
Director Title:Director
/s/ Ronald E. Deal* /s/ A. J. Dooley, Sr.*
_____________________________________ _____________________________________
Name: Ronald E. Deal Name: A. J. Dooley, Sr.
Title:
Director Title:Director
/s/ Tom D. Efird /s/ Paul S. Goldsmith*
_____________________________________ _____________________________________
Name: Tom D. Efird Name: Paul S. Goldsmith
Title:
Director Title:Director
/s/ L. Vincent Hackley* /s/ Jane P. Helm*
_____________________________________ _____________________________________
Name: L. Vincent Hackley Name: Jane P. Helm
Title:
Director Title:Director
/s/ Richard Janeway, M.D.* /s/ James H. Maynard*
_____________________________________ _____________________________________
Name: Name: James H. Maynard
Richard Janeway, M.D.
Title: Title:Director
Director
/s/ J. Ernest Lathem, M.D.*
_____________________________________ _____________________________________
Name: Name: Joseph A. McAleer, Jr.
J. Ernest Lathem, M.D.
Title: Title: Director
Director
II-5
<PAGE>
/s/ Richard L. Player, Jr.* /s/ Albert O. McCauley*
_____________________________________ _____________________________________
Name: Name: Albert O. McCauley
Richard L. Player, Jr.
Title: Title:Director
Director
/s/ Nido R. Qubein* /s/ C. Edward Pleasants, Jr.*
_____________________________________ _____________________________________
Name: Name: C. Edward Pleasants, Jr.
Nido R. Qubein
Title: Title:Director
Director
/s/ Jack E. Shaw* /s/ E. Rhone Sasser*
_____________________________________ _____________________________________
Name: Name: E. Rhone Sasser
Jack E. Shaw
Title: Title:Director
Director
/s/ Jerone C. Herring /s/ Harold B. Wells*
*By__________________________________ _____________________________________
Jerone C. Herring Name: Harold B. Wells
Attorney-in-Fact Title:Director
II-6
<PAGE>
Exhibit 5
Garza Baldwin, III
Direct Dial: 202-857-4487
Direct Fax: 202-261-0087
E-mail: [email protected]
_________________, 2000
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 One Valley
Bancorp, Inc. dated as of February 6, 2000 (the "Merger Agreement")
Ladies and Gentlemen:
We have acted as counsel to BB&T in connection with the registration of
44,664,592 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:
-------------------------------
Garza Baldwin, III
GB/WAD
<PAGE>
EXHIBIT 8
Neil G. O'Rourke
Direct Dial: 336-721-3752
Direct Fax: 336-726-6997
E-mail: [email protected]
____________ __, 2000
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 February 6, 2000 (the "Reorganization
Agreement"), by and One Valley Bancorp, Inc., a West Virginia
corporation ("One Valley"), 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
_____________ 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, One Valley will merge into BB&T pursuant to North Carolina
and West Virginia law, and each outstanding share of One Valley Common Stock
(the only class outstanding) 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 the issuance of fractional shares. One Valley
shareholders 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 ____________ __, 2000 in which officers of One Valley and
officers of BB&T make certain representations on behalf of One Valley 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
_________, 2000
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) One Valley'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 One Valley
Common, 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 One
Valley Common 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(a) of the Code.
(2) Each of BB&T and One Valley will be a party to that reorganization
within the meaning of section 368(b) of the Code.
(3) No gain or loss will be recognized by the shareholders of One Valley
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 One Valley Common Stock.
(4) A shareholder of One Valley 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 One Valley who receives a cash payment pursuant to
the exercise of dissenter's rights should recognize gain or loss in an
amount equal to the difference between the amount received and his or
her basis in the One Valley Common Stock surrendered.
(6) The tax basis in the BB&T Common Stock received by a One Valley
shareholder (including any fractional share interest deemed received)
will be
<PAGE>
BB&T Corporation
_________, 2000
Page 3
the same as the tax basis in the One Valley Common 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
One Valley Common Stock will include the period during which the
shareholder held the shares of One Valley Common Stock surrendered in
the exchange, provided that the One Valley Common Stock was held as a
capital asset 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 One Valley Common Stock do not
apply to any stock rights, warrants or options to acquire One Valley Common
Stock. The opinions stated as to One Valley shareholders are general in nature
and do not necessarily apply to any particular One Valley 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 One
Valley Common Stock pursuant to employee stock options or otherwise as, 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 or 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
<PAGE>
BB&T Corporation
_________, 2000
Page 4
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 the rules and
regulations of the Commission thereunder.
Very truly yours,
WOMBLE CARLYLE SANDRIDGE & RICE
A Professional Limited Liability Company
By:
-------------------------------
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 January 24,
2000, included in BB&T Corporation's Form 10-K dated March 13, 2000, and to
all references to our firm included in this registration statement.
/s/ ARTHUR ANDERSEN LLP
Charlotte, North Carolina
March 24, 2000
<PAGE>
Exhibit 99(a)
PROXY
ONE VALLEY BANCORP, INC.
One Valley Square
Charleston, West Virginia 25326
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF ONE VALLEY
BANCORP, INC. The undersigned hereby appoints Charles D. Dunbar, Elizabeth Lord
and Louis S. Southworth II, or any 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 of One Valley Bancorp, Inc. held of record by
the undersigned on ______________, 2000 at the Special Meeting of Shareholders
to be held on June __, 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 THE NOTICE OF
SPECIAL MEETING AND IN THE DISCRETION OF THE PROXYHOLDER ON OTHER MATTERS.
(See Reverse Side)
<PAGE>
1. TO APPROVE the Agreement and Plan of Reorganization dated as of February 6,
2000, and a related Plan of Merger and the merger provided therein,
pursuant to which One Valley Bancorp, Inc. will merge with and into BB&T
Corporation, and each outstanding share of Common Stock of One Valley
Bancorp, 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: __________________________, 2000
Signature______________________________________
DATED: __________________________, 2000
Signature______________________________________
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Exhibit 99(b)
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT (this "Agreement") is made and entered into as
of February 6, 2000 by and between ONE VALLEY BANCORP, INC., a West Virginia
corporation ("One Valley" or "Issuer"), and BB&T CORPORATION, a North Carolina
corporation ("Grantee").
R E C I T A L S:
- - - - - - - -
WHEREAS, Grantee and Issuer have entered into that certain Agreement and
Plan of Reorganization, dated this date (the "Merger Agreement"), providing for,
among other things, the merger of Issuer with and into Grantee; and
WHEREAS, as a condition and inducement to Grantee's execution of the Merger
Agreement, Grantee has required that Issuer agree, and Issuer has agreed, to
grant to Grantee the Option (as defined below);
NOW, THEREFORE, in consideration of the respective representations,
warranties, covenants and agreements set forth herein and in the Merger
Agreement, and intending to be legally bound hereby, Issuer and Grantee agree as
follows:
1. Defined Terms. Capitalized terms which are used but not defined herein
shall have the meanings ascribed to such terms in the Merger Agreement.
2. Grant of Option. Subject to the terms and conditions set forth herein,
Issuer hereby grants to Grantee an irrevocable option (the "Option") to purchase
up to 6,700,000 shares (as adjusted as set forth herein, the "Option Shares,"
which term shall refer to the Option Shares before and after any transfer of
such Option Shares), of the common stock of Issuer, par value $10.00 per share
("Issuer Common Stock"), at a purchase price per Option Share (subject to
adjustment as set forth herein, the "Purchase Price") equal to $29.75.
3. Exercise of Option.
(a) Provided that (i) Grantee or Holder (as hereinafter defined), as
applicable, shall not be in material breach of its agreements or covenants
contained in this Agreement or the Merger Agreement, and (ii) no preliminary or
permanent injunction or other order against the delivery of shares covered by
the Option issued by any court of competent jurisdiction in the United States
shall be in effect, Holder may exercise the Option, in whole or in part, at any
time and from time to time following the occurrence of a Purchase Event (as
hereinafter defined); provided, that the Option shall terminate and be of no
further force and effect upon the earliest to occur of (A) the Effective Time,
(B) subject to clause (E) below, termination of the Merger Agreement in
accordance with the terms thereof prior to the occurrence of a Purchase Event or
a Preliminary Purchase Event (as hereinafter defined) (other than a termination
of the Merger
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Agreement by Grantee pursuant to Section 7.1(b) thereof (a "Default
Termination")), (C) 12 months after a Default Termination, (D) 12 months after
any termination of the Merger Agreement (other than a Default Termination)
following the occurrence of a Purchase Event or a Preliminary Purchase Event,
and (E) subject to clause (D) above, 12 months after termination of the Merger
Agreement pursuant to Section 7.1(e) thereof; provided further, that any
purchase of shares upon exercise of the Option shall be subject to compliance
with applicable law, including, without limitation, the Bank Holding Company Act
of 1956, as amended (the "BHC Act"). Subject to compliance with Section 13(h)
hereof, the term "Holder" shall mean the holder or holders of the Option from
time to time, including initially Grantee. The rights set forth in Section 8
hereof shall terminate when the right to exercise the Option terminates (other
than as a result of a complete exercise of the Option) as set forth herein.
(b) As used herein, a "Purchase Event" means any of the following events
subsequent to the date of this Agreement:
(i) Issuer shall have authorized, recommended, publicly proposed or
publicly announced an intention to authorize, recommend or propose, or entered
into an agreement with any person (other than Grantee or any Subsidiary of
Grantee) to effect an Acquisition Transaction (as defined below). As used
herein, the term "Acquisition Transaction" shall mean (A) a merger,
consolidation or similar transaction involving Issuer or any of its Subsidiaries
(other than transactions solely between Issuer's Subsidiaries or between
Issuer's Subsidiaries and Issuer), (B) the disposition, by sale, lease, exchange
or otherwise, of assets of Issuer or any of its Subsidiaries representing in
either case 15% or more of the consolidated assets of Issuer and its
Subsidiaries (other than a sale of loan receivables in a financing transaction
in the normal course of business consistent with past practices), or (C) the
issuance, sale or other disposition (including by way of merger, consolidation,
share exchange or any similar transaction) of securities representing 20% or
more of the voting power of Issuer or any of its Subsidiaries; or
(ii) any person (other than Grantee or any Subsidiary of Grantee) shall
have acquired beneficial ownership (as such term is defined in Rule 13d-3
promulgated under the Exchange Act) of or the right to acquire beneficial
ownership of, or any "group" (as such term is defined under the Exchange Act),
other than a group of which Grantee or any of the Subsidiaries of Grantee is a
member, shall have been formed which beneficially owns or has the right to
acquire beneficial ownership of, 20% or more of the then-outstanding shares of
Issuer Common Stock.
(c) As used herein, a "Preliminary Purchase Event" means any of the
following events:
(i) any person (other than Grantee or any Subsidiary of Grantee) shall
have commenced (as such term is defined in Rule 14d-2 under the Exchange Act),
or shall have filed a registration statement under the Securities Act with
respect to, a tender offer or exchange offer to purchase any shares of Issuer
Common Stock such that, upon consummation of such offer, such person would own
or control 15% or more of the then-outstanding shares of Issuer Common Stock
(such an offer being referred to herein as a "Tender Offer" or an "Exchange
Offer," respectively); or
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(ii) the holders of Issuer Common Stock shall have disapproved the
Merger Agreement at the meeting of such shareholders held for the purpose of
voting on the Merger Agreement, such meeting shall not have been held or shall
have been canceled prior to termination of the Merger Agreement, or Issuer's
Board of Directors shall have withdrawn or modified in a manner adverse to
Grantee the recommendation of Issuer's Board of Directors with respect to the
Merger Agreement, in each case after any person (other than Grantee or any
Subsidiary of Grantee) shall have (A) made, or disclosed an intention to make, a
proposal to engage in an Acquisition Transaction, (B) commenced a Tender Offer
or filed a registration statement under the Securities Act with respect to an
Exchange Offer, or (C) filed an application (or given a notice), whether in
draft or final form, under any federal or state statute or regulation (including
an application or notice filed under the BHC Act, the Bank Merger Act, the Home
Owners' Loan Act or the Change in Bank Control Act of 1978) seeking the consent
to an Acquisition Transaction from any federal or state governmental or
regulatory authority or agency.
As used in this Agreement, "person" shall have the meaning specified in Sections
3(a)(9) and 13(d)(3) of the Exchange Act.
(d) Notwithstanding the foregoing, the obligation of One Valley to
issue Option Shares upon exercise of the Option shall be deferred (but shall not
terminate): (i) until the receipt of all required governmental or regulatory
approvals or consents necessary for One Valley to issue the Option Shares or
Holder to exercise the Option, or until the expiration or termination of any
waiting period required by law, or (ii) so long as any injunction or other
order, decree or ruling issued by any federal or state court of competent
jurisdiction is in effect which prohibits the sale or delivery of the Option
Shares.
(e) In the event Holder wishes to exercise the Option, it shall send to
Issuer a written notice (the date of which being herein referred to as the
"Notice Date") specifying (i) the total number of Option Shares it intends to
purchase pursuant to such exercise and (ii) a place and date not earlier than
three business days nor later than 15 business days from the Notice Date for the
closing (the "Closing") of such purchase (the "Closing Date"). If prior consent
of any governmental or regulatory agency or authority is required in connection
with such purchase, Issuer shall cooperate with Holder in the filing of the
required notice or application for such consent and the obtaining of such
consent at Holder's expense, and the Closing shall occur not earlier than three
business days nor later than 15 business days following receipt of such consents
(and expiration of any mandatory waiting periods).
4. Payment and Delivery of Certificates.
(a) On each Closing Date, Holder shall (i) pay to Issuer, in
immediately available funds by wire transfer to a bank account designated by
Issuer, an amount equal to the Purchase Price multiplied by the number of Option
Shares to be purchased on such Closing Date, and (ii) present and surrender this
Agreement to the Issuer at the address of the Issuer referenced in Section 13(f)
hereof.
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(b) At each Closing, simultaneously with the delivery of immediately
available funds and surrender of this Agreement as provided in Section 4(a)
hereof, (i) Issuer shall deliver to Holder (A) a certificate or certificates
representing the Option Shares to be purchased at such Closing, which Option
Shares shall be free and clear of all liens, claims, charges and encumbrances of
any kind whatsoever and subject to no preemptive rights, and (B) if the Option
is exercised in part only, an executed new agreement with the same terms as this
Agreement evidencing the right to purchase the balance of the shares of Issuer
Common Stock purchasable hereunder, and (ii) Holder shall deliver to Issuer a
letter evidencing Holder's agreement not to offer, sell or otherwise dispose of
such Option Shares in violation of applicable federal and state law or of the
provisions of this Agreement.
(c) In addition to any other legend that is required by applicable law,
certificates for the Option Shares delivered at each Closing shall be endorsed
with a restrictive legend which shall read substantially as follows:
THE TRANSFER OF THE STOCK REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO
RESTRICTIONS ARISING UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND PURSUANT
TO THE TERMS OF A STOCK OPTION AGREEMENT DATED AS OF FEBRUARY 6, 2000. A COPY
OF SUCH AGREEMENT WILL BE PROVIDED TO THE HOLDER HEREOF WITHOUT CHARGE UPON
RECEIPT BY THE ISSUER OF A WRITTEN REQUEST THEREFOR.
It is understood and agreed that the above legend shall be removed by delivery
of substitute certificate(s) without such legend if Holder shall have delivered
to Issuer a copy of a letter from the staff of the Commission, or an opinion of
counsel in form and substance reasonably satisfactory to Issuer and its counsel,
to the effect that such legend is not required for purposes of the Securities
Act.
5. Representations and Warranties of Issuer. Issuer hereby represents and
warrants to Grantee as follows:
(a) Issuer has all requisite corporate power and authority to enter
into this Agreement and, subject to its obtaining any approvals or consents
referred to herein, to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Issuer. This Agreement (i) has been duly
executed and delivered by Issuer, (ii) constitutes the legal, valid and binding
obligation of Issuer, and (iii) is enforceable against Issuer in accordance with
its terms, subject to (A) 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 (B) general principles of equity (whether
applied in a court of law or in equity).
(b) Issuer has taken all necessary corporate and other action to
authorize and reserve and to permit it to issue and, at all times from the date
hereof until the obligation to
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deliver Issuer Common Stock upon the exercise of the Option terminates, will
have reserved for issuance, upon exercise of the Option, the number of shares of
Issuer Common Stock necessary for Holder to exercise the Option, and Issuer will
take all necessary corporate action to authorize and reserve for issuance all
additional shares of Issuer Common Stock or other securities which may be issued
pursuant to Section 7 hereof upon exercise of the Option. The shares of Issuer
Common Stock to be issued upon due exercise of the Option, including all
additional shares of Issuer Common Stock or other securities which may be
issuable pursuant to Section 7 hereof, upon issuance pursuant hereto, shall be
duly and validly issued, fully paid, and nonassessable, and shall be delivered
free and clear of all liens, claims, charges, and encumbrances of any kind or
nature whatsoever, including any preemptive rights of any shareholder of Issuer.
6. Representations and Warranties of Grantee. Grantee hereby represents
and warrants to Issuer that:
(a) Grantee has all requisite corporate power and authority to enter
into this Agreement and, subject to its obtaining any approvals or consents
referred to herein, to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Grantee. This Agreement has been duly executed
and delivered by Grantee.
(b) Grantee represents that it is acquiring the Option for Grantee's
own account and not with a view to, or for sale in connection with, any
distribution of the Option or the Option Shares. Grantee represents that it is
aware that neither the Option nor the Option Shares is the subject of a
registration statement filed with and declared effective by the Commission
pursuant to Section 5 of the Securities Act, but instead each is being offered
in reliance upon the exemption from the registration requirement provided by
Section 4(2) thereof and the representations and warranties made by Grantee in
connection therewith. Grantee represents that neither the Option nor the Option
Shares will be transferred or otherwise disposed of except in a transaction
registered or exempt from registration under the Securities Laws, and that with
respect to any transfer or other disposition proposed to be made in reliance
upon an exemption from registration, such transfer or other disposition shall
not be made unless One Valley first receives an opinion of counsel in form and
substance reasonably acceptable to it regarding the availability of such
exemption.
7. Adjustment upon Changes in Capitalization, etc.
(a) In the event of any change in Issuer Common Stock by reason of a
stock dividend, stock split, split-up, recapitalization, combination, exchange
of shares or similar transaction, the type and number of shares or securities
subject to the Option and the Purchase Price therefor shall be adjusted
appropriately, and proper provision shall be made in the agreements governing
such transaction so that Holder shall receive, upon exercise of the Option, the
number and class of shares or other securities or property that Holder would
have received in respect of Issuer Common Stock if the Option had been exercised
immediately prior to such event, or the record date therefor, as applicable. If
any additional shares of Issuer Common Stock are issued after the date of this
Agreement (other than pursuant to an event described in the
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first sentence of this Section 7(a)), the number of shares of Issuer Common
Stock subject to the Option shall be adjusted so that, after such issuance, it,
when added to the number of shares of Issuer Common Stock previously issued
pursuant hereto, equals 19.9% of the number of shares of Issuer Common Stock
then issued and outstanding, without giving effect to any shares subject to or
issued pursuant to the Option.
(b) In the event that Issuer shall enter into an agreement (prior to
termination of the Option pursuant to Section 3(a) hereof): (i) to consolidate
with or merge into any person, other than Grantee or one of its Subsidiaries,
and Issuer shall not be the continuing or surviving corporation of such
consolidation or merger; (ii) to permit any person, other than Grantee or one of
its Subsidiaries, to merge into Issuer, and Issuer shall be the continuing or
surviving corporation, but, in connection with such merger, the then outstanding
shares of Issuer Common Stock shall be changed into or exchanged for stock or
other securities of Issuer or any other person or cash or any other property or
the outstanding shares of Issuer Common Stock immediately prior to such merger
shall after such merger represent less than 50% of the outstanding shares and
share equivalents of the merged company; (iii) to permit any person, other than
Grantee or one of its Subsidiaries, to acquire all of the outstanding shares of
Issuer Common Stock pursuant to a statutory share exchange; or (iv) to sell or
otherwise transfer all or substantially all of its assets to any person, other
than Grantee or one of its Subsidiaries, then, and in each such case, the
agreement governing such transaction shall make proper provisions so that the
Option shall, upon the consummation of any such transaction and upon the terms
and conditions set forth herein, be converted into, or exchanged for, an option
(the "Substitute Option"), at the election of Grantee, deemed granted by either
(x) the Acquiring Corporation (as defined below), (y) any person that controls
the Acquiring Corporation, or (z) in the case of a merger described in clause
(ii), the Issuer (in each case, such person being referred to as the "Substitute
Option Issuer").
(c) The Substitute Option shall have the same terms as the Option, provided
that, if the terms of the Substitute Option cannot, for legal reasons, be
identical to those of the Option, such terms shall be as similar as possible and
in no event less advantageous to Grantee. The Substitute Option Issuer shall
also enter into an agreement with the then-holder or holders of the Substitute
Option in substantially the same form as this Agreement, which agreement shall
be applicable to the Substitute Option.
(d) The Substitute Option shall be exercisable for such number of shares of
the Substitute Common Stock (as hereinafter defined) as is equal to the Assigned
Value (as hereinafter defined) multiplied by the number of shares of the Issuer
Common Stock for which the Option was theretofore exercisable, divided by the
Average Price (as hereinafter defined). The exercise price of the Substitute
Option per share of the Substitute Common Stock (the "Substitute Purchase
Price") shall then be equal to the Purchase Price multiplied by a fraction in
which the numerator is the number of shares of the Issuer Common Stock for which
the Option was theretofore exercisable and the denominator is the number of
shares for which the Substitute Option is exercisable.
(e) The following terms have the meanings indicated:
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(i) "Acquiring Corporation" shall mean the continuing or surviving
corporation of a consolidation or merger with Issuer (if other than Issuer),
Issuer in a merger in which Issuer is the continuing or surviving person, the
corporation that shall acquire all of the outstanding shares of Issuer Common
Stock pursuant to a statutory share exchange, or the transferee of all or
substantially all of the Issuer's assets (or the assets of its Subsidiaries).
(ii) "Substitute Common Stock" shall mean the common stock issued by the
Substitute Option Issuer upon exercise of the Substitute Option.
(iii) "Assigned Value" shall mean the highest of (x) the price per share
of the Issuer Common Stock at which a Tender Offer or Exchange Offer therefor
has been made by any person (other than Grantee), (y) the price per share of the
Issuer Common Stock to be paid by any person (other than the Grantee) pursuant
to an agreement with Issuer, and (z) the highest closing sales price per share
of Issuer Common Stock quoted on the New York Stock Exchange within the six-
month period immediately preceding the agreement; provided, that in the event of
a sale of less than all of Issuer's assets, the Assigned Value shall be the sum
of the price paid in such sale for such assets and the current market value of
the remaining assets of Issuer as determined by a nationally recognized
investment banking firm selected by Grantee (or by a majority in interest of the
Grantees if there shall be more than one Grantee (a "Grantee Majority")),
divided by the number of shares of the Issuer Common Stock outstanding at the
time of such sale. In the event that an exchange offer is made for the Issuer
Common Stock or an agreement is entered into for a merger or consolidation
involving consideration other than cash, the value of the securities or other
property issuable or deliverable in exchange for the Issuer Common Stock shall
be determined by a nationally recognized investment banking firm mutually
selected by Grantee and Issuer (or if applicable, Acquiring Corporation). (If
there shall be more than one Grantee, any such selection shall be made by a
Grantee Majority.)
(iv) "Average Price" shall mean the average closing price of a share of
the Substitute Common Stock for the one-year period immediately preceding
effectiveness of the consolidation, merger, share exchange or sale in question,
but in no event higher than the closing price of the shares of the Substitute
Common Stock on the day preceding the effectiveness of such consolidation,
merger, share exchange or sale; provided, that if Issuer is the issuer of the
Substitute Option, the Average Price shall be computed with respect to a share
of common stock issued by Issuer, the person merging into Issuer or by any
company which controls or is controlled by such merger person, as Grantee may
elect.
(f) In no event pursuant to any of the foregoing sections shall the
Substitute Option be exercisable for more than 19.9% of the aggregate of the
shares of the Substitute Common Stock outstanding prior to exercise of the
Substitute Option. In the event that the Substitute Option would be exercisable
for more than 19.9% of the aggregate of the shares of Substitute Common Stock
but for this clause (f), the Substitute Option Issuer shall make a cash payment
to Grantee equal to the excess of (i) the value of the Substitute Option without
giving effect to the limitation in this clause (f) over (ii) the value of the
Substitute Option after giving effect to the limitation in this clause (f).
This difference in value shall be determined by a nationally recognized
investment banking firm selected by Grantee (or a Grantee Majority).
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(g) Issuer shall not enter into any transaction described in
subsection (b) of this Section 7 unless the Acquiring Corporation and any person
that controls the Acquiring Corporation assume in writing all the obligations of
Issuer hereunder and take all other actions that may be necessary so that the
provisions of this Section 7 are given full force and effect (including, without
limitation, any action that may be necessary so that the shares of Substitute
Common Stock are in no way distinguishable from or have lesser economic value
than other shares of common stock issued by the Substitute Option Issuer).
(h) The provisions of Sections 8, 9, 10 and 11 hereof shall apply,
with appropriate adjustments, to any securities for which the Option becomes
exercisable pursuant to this Section 7 and, as applicable, references in such
sections to "Issuer," "Option," "Purchase Price" and "Issuer Common Stock" shall
be deemed to be references to "Substitute Option Issuer," "Substitute Option,"
"Substitute Purchase Price" and "Substitute Common Stock," respectively.
8. Repurchase at the Option of Holder.
(a) Subject to the last sentence of Section 3(a) hereof, at the
request of Holder at any time commencing upon the first occurrence of a
Repurchase Event (as defined in Section 8(d)) and ending 12 months immediately
thereafter, Issuer shall repurchase from Holder the Option and all shares of
Issuer Common Stock purchased by Holder pursuant hereto with respect to which
Holder then has beneficial ownership. The date on which Holder exercises its
rights under this Section 8 is referred to as the "Request Date." Such
repurchase shall be at an aggregate price (the "Section 8 Repurchase
Consideration") equal to the sum of:
(i) the aggregate Purchase Price paid by Holder for any shares of
Issuer Common Stock acquired by Holder pursuant to the Option with respect to
which Holder then has beneficial ownership;
(ii) the excess, if any, of (x) the Applicable Price (as defined
below) for each share of Issuer Common Stock over (y) the Purchase Price
(subject to adjustment pursuant to Section 7), multiplied by the number of
shares of Issuer Common Stock with respect to which the Option has not been
exercised; and
(iii) the excess, if any, of the Applicable Price over the Purchase
Price (subject to adjustment pursuant to Section 7) paid (or, in the case of
Option Shares with respect to which the Option has been exercised but the
Closing Date has not occurred, payable) by Holder for each share of Issuer
Common Stock with respect to which the Option has been exercised and with
respect to which Holder then has beneficial ownership, multiplied by the number
of such shares.
(b) If Holder exercises its rights under this Section 8, Issuer
shall, within ten business days after the Request Date, pay the Section 8
Repurchase Consideration to Holder in immediately available funds, and
contemporaneously with such payment Holder shall surrender to Issuer the Option
and the certificates evidencing the shares of Issuer Common Stock purchased
thereunder with respect to which Holder then has beneficial ownership, and
Holder
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shall warrant that it has sole record and beneficial ownership of such shares
and that the same are then free and clear of all liens, claims, charges and
encumbrances of any kind whatsoever. Notwithstanding the foregoing, to the
extent that prior notification to or the consent or approval of any governmental
or regulatory agency or authority is required in connection with the payment of
all or any portion of the Section 8 Repurchase Consideration, Holder shall have
the ongoing option to revoke its request for repurchase pursuant to Section 8,
in whole or in part, or to require that Issuer deliver from time to time that
portion of the Section 8 Repurchase Consideration that it is not then so
prohibited from paying and promptly file the required notice or application for
approval and expeditiously process the same (and each party shall cooperate with
the other in the filing of any such notice or application and the obtaining of
any such approval), in which case the ten business day period of time that would
otherwise run pursuant to the preceding sentence for the payment of the portion
of the Section 8 Repurchase Consideration shall run instead from the date on
which, as the case may be, any required notification period has expired or been
terminated or such approval has been obtained and, in either event, any
requisite waiting period shall have passed. If any governmental or regulatory
agency or authority disapproves of any part of Issuer's proposed repurchase
pursuant to this Section 8, Issuer shall promptly give notice of such fact to
Holder. If any governmental or regulatory agency or authority prohibits the
repurchase in part but not in whole, then Holder shall have the right (i) to
revoke the repurchase request or (ii) to the extent permitted by such agency or
authority, determine whether the repurchase should apply to the Option and/or
Option Shares and to what extent to each, and Holder shall thereupon have the
right to exercise the Option as to the number of Option Shares for which the
Option was exercisable at the Request Date less the sum of the number of shares
covered by the Option in respect of which payment has been made pursuant to
Section 8(a)(ii) and the number of shares covered by the portion of the Option
(if any) that has been repurchased. Holder shall notify Issuer of its
determination under the preceding sentence within five business days of receipt
of notice of disapproval of the repurchase.
Notwithstanding anything herein to the contrary, all of Holder's rights
under this Section 8 shall terminate on the date of termination of this Option
pursuant to Section 3(a) hereof.
(c) For purposes of this Agreement, the "Applicable Price" means the
highest of (i) the highest price per share of Issuer Common Stock paid for any
such share by the person or groups described in Section 8(d)(i) hereof, (ii) the
price per share of Issuer Common Stock received by holders of Issuer Common
Stock in connection with any merger or other business combination transaction
described in Sections 7(b)(i), 7(b)(ii), 7(b)(iii) or 7(b)(iv) hereof, or (iii)
the highest closing sales price per share of Issuer Common Stock quoted on the
New York Stock Exchange (or if Issuer Common Stock is not quoted on the New York
Stock Exchange, the highest bid price per share as quoted on the principal
trading market or securities exchange on which such shares are traded as
reported by a recognized source chosen by Holder) during the 60 business days
preceding the Request Date; provided, however, that in the event of a sale of
less than all of Issuer's assets, the Applicable Price shall be the sum of the
price paid in such sale for such assets and the current market value of the
remaining assets of Issuer as determined by an independent nationally recognized
investment banking firm selected by Holder and reasonably acceptable to Issuer
(which determination shall be conclusive for all purposes of this Agreement),
divided by the number of shares of the Issuer Common Stock outstanding at the
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time of such sale. If the consideration to be offered, paid or received
pursuant to either of the foregoing clauses (i) or (ii) shall be other than in
cash, the value of such consideration shall be determined in good faith by an
independent nationally recognized investment banking firm selected by Holder and
reasonably acceptable to Issuer, which determination shall be conclusive for all
purposes of this Agreement.
(d) As used herein, "Repurchase Event" shall occur if (i) any person
(other than Grantee or any Subsidiary of Grantee) shall have acquired actual
ownership or control, or any "group" (as such term is defined under the Exchange
Act) shall have been formed which shall have acquired actual ownership or
control, of 50% or more of the then-outstanding shares of Issuer Common Stock,
or (ii) any of the transactions described in Section 7(b)(i), 7(b)(ii),
7(b)(iii) or 7(b)(iv) shall be consummated.
9. Registration Rights.
(a) For a period of 24 months following termination of the Merger
Agreement, Issuer shall, subject to the conditions of subsection (c) below, if
requested by any Holder, including Grantee and any permitted transferee of the
Option Shares ("Selling Holder"), as expeditiously as possible prepare and file
a registration statement under the Securities Laws if necessary in order to
permit the sale or other disposition of any or all shares of Issuer Common Stock
or other securities that have been acquired by or are issuable to Selling Holder
upon exercise of the Option in accordance with the intended method of sale or
other disposition stated by the Selling Holder in such request, including,
without limitation, a "shelf" registration statement under Rule 415 under the
Securities Act or any successor provision, and Issuer shall use its best efforts
to qualify such shares or other securities for sale under any applicable state
securities laws.
(b) If Issuer at any time after the exercise of the Option proposes to
register any shares of Issuer Common Stock under the Securities Laws in
connection with an underwritten public offering of such Issuer Common Stock,
Issuer will promptly give written notice to Holder of its intention to do so
and, upon the written request of Holder given within 30 days after receipt of
any such notice (which request shall specify the number of shares of Issuer
Common Stock intended to be included in such underwritten public offering by
Selling Holder), Issuer will cause all such shares, the holders of which shall
have requested participation in such registration, to be so registered and
included in such underwritten public offering; provided, that Issuer may elect
to cause any such shares not to be so registered (i) if the underwriters in good
faith object for a valid business reason, or (ii) in the case of a registration
solely to implement a dividend reinvestment or similar plan, an employee benefit
plan or a registration filed on Form S-4 or any successor form, or a
registration filed on a form which does not permit registration of resales;
provided, further, that such election pursuant to clause (i) may be made only
one time. If some but not all the shares of Issuer Common Stock, with respect
to which Issuer shall have received requests for registration pursuant to this
subsection (b), shall be excluded from such registration, Issuer shall make
appropriate allocation of shares to be registered among Selling Holders and any
other person (other than Issuer or any person exercising demand registration
rights in connection with such registration) who or which is permitted to
register their shares of Issuer Common Stock in connection with such
registration pro rata in the proportion that the
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<PAGE>
number of shares requested to be registered by each Selling Holder bears to the
total number of shares requested to be registered by all persons then desiring
to have Issuer Common Stock registered for sale.
(c) Issuer shall use all reasonable efforts to cause each registration
statement referred to in subsection (a) above to become effective and to obtain
all consents or waivers of other parties which are required therefor and to keep
such registration statement effective, provided, that Issuer may delay any
registration of Option Shares required pursuant to subsection (a) above for a
period not exceeding 90 days in the event that Issuer shall in good faith
determine that any such registration would adversely affect an offering or
contemplated offering of other securities by Issuer, and Issuer shall not be
required to register Option Shares under the Securities Laws pursuant to
subsection (a) above:
(i) prior to the occurrence of a Purchase Event;
(ii) on more than two occasions;
(iii) more than once during any calendar year;
(iv) within 90 days after the effective date of a registration referred
to in subsection (b) above pursuant to which the Selling Holders concerned were
afforded the opportunity to register such shares under the Securities Laws and
such shares were registered as requested; and
(v) unless a request therefor is made to Issuer by Selling Holders
holding at least 25% or more of the aggregate number of Option Shares then
outstanding.
In addition to the foregoing, Issuer shall not be required to
maintain the effectiveness of any registration statement after the expiration of
nine months from the effective date of such registration statement. Issuer shall
use all reasonable efforts to make any filings, and take all steps, under all
applicable state securities laws to the extent necessary to permit the sale or
other disposition of the Option Shares so registered in accordance with the
intended method of distribution for such shares, provided, that Issuer shall not
be required to consent to general jurisdiction or qualify to do business in any
state where it is not otherwise required to so consent to such jurisdiction or
to so qualify to do business.
(d) Except where applicable state law prohibits such payments, Issuer
will pay all expenses (including without limitation registration fees,
qualification fees, blue sky fees and expenses (including the fees and expenses
of counsel), accounting expenses, legal expenses, including reasonable fees and
expenses of one counsel to the Selling Holders whose Option Shares are being
registered, printing expenses, reasonable expenses of underwriters, excluding
discounts and commissions but including liability insurance if Issuer so desires
or the underwriters so require, and the reasonable fees and expenses of any
necessary special experts) in connection with each registration pursuant to
subsection (a) or (b) above (including the related offerings and sales by
Selling Holders) and all other qualifications, notifications or exemptions
pursuant to subsection (a) or (b) above. Underwriting discounts and commissions
relating to
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Option Shares and any other expenses incurred by such Selling Holders in
connection with any such registration shall be borne by such Selling Holders.
(e) In connection with any registration under subsection (a) or (b)
above Issuer hereby indemnifies the Selling Holders, and each underwriter
thereof, including each person, if any, who controls such holder or underwriter
within the meaning of Section 15 of the Securities Act, against all expenses,
losses, claims, damages and liabilities caused by any untrue statement of a
material fact contained in any registration statement or prospectus or
notification or offering circular (including any amendments or supplements
thereto) or any preliminary prospectus, or caused by any omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such expenses, losses,
claims, damages or liabilities of such indemnified party are caused by any
untrue statement or alleged untrue statement or omission or alleged omission
that was included by Issuer in any such registration statement or prospectus or
notification or offering circular (including any amendments or supplements
thereto) in reliance upon and in conformity with, information furnished in
writing to Issuer by such indemnified party expressly for use therein, and
Issuer and each officer, director and controlling person of Issuer shall be
indemnified by such Selling Holder, or by such underwriter, as the case may be,
for all such expenses, losses, claims, damages and liabilities caused by any
untrue or alleged untrue statement or omission or alleged omission that was
included by Issuer in any such registration statement or prospectus or
notification or offering circular (including any amendments or supplements
thereto) in reliance upon, and in conformity with, information furnished in
writing to Issuer by such holder or such underwriter, as the case may be,
expressly for such use.
Promptly upon receipt by a party indemnified under this subsection
(e) of notice of the commencement of any action against such indemnified party
in respect of which indemnity or reimbursement may be sought against any
indemnifying party under this subsection (e), such indemnified party shall
notify the indemnifying party in writing of the commencement of such action, but
the failure so to notify the indemnifying party shall not relieve it of any
liability which it may otherwise have to any indemnified party under this
subsection (e). In case notice of commencement of any such action shall be given
to the indemnifying party as above provided, the indemnifying party shall be
entitled to participate in and, to the extent it may wish, jointly with any
other indemnifying party similarly notified, to assume the defense of such
action at its own expense, with counsel chosen by it and satisfactory to such
indemnified party. The indemnified party shall have the right to employ separate
counsel in any such action and participate in the defense thereof, but the fees
and expenses of such counsel (other than reasonable costs of investigation)
shall be paid by the indemnified party unless (i) the indemnifying party agrees
to pay them, (ii) the indemnifying party fails to assume the defense of such
action with counsel satisfactory to the indemnified party, or (iii) the
indemnified party has been advised by counsel that one or more legal defenses
may be available to the indemnifying party that may be contrary to the interest
of the indemnified party, in which case the indemnifying party shall be entitled
to assume the defense of such action notwithstanding its obligation to bear fees
and expenses of such counsel. No indemnifying party shall be liable for any
settlement entered into without its consent, which consent may not be
unreasonably withheld.
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If the indemnification provided, for in this subsection (e) is
unavailable to a party otherwise entitled to be indemnified in respect of any
expenses, losses, claims, damages or liabilities referred to herein, then the
indemnifying party, in lieu of indemnifying such party otherwise entitled to be
indemnified, shall contribute to the amount paid or payable by such party to be
indemnified as a result of such expenses, losses, claims, damages or liabilities
in such proportion as is appropriate to reflect the relative benefits received
by Issuer, all Selling Holders and the underwriters from the offering of the
securities and also the relative fault of Issuer, all Selling Holders and the
underwriters in connection with the statements or omissions which resulted in
such expenses, losses, claims, damages or liabilities, as well as any other
relevant equitable considerations. The amount paid or payable by a party as a
result of the expenses, losses, claims, damages and liabilities referred to
above shall be deemed to include any legal or other fees or expenses reasonably
incurred by such party in connection with investigating or defending any action
or claim; provided, that in no case shall any Selling Holder be responsible, in
the aggregate, for any amount in excess of the net offering proceeds
attributable to its Option Shares included in the offering. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. Any obligation by any holder to
indemnify shall be several and not joint with other holders.
In connection with any registration pursuant to subsection (a) or
(b) above, Issuer and each Selling Holder (other than Grantee) shall enter into
an agreement containing the indemnification provisions of this subsection (e).
(f) Issuer shall comply with all reporting requirements and will do all
such other things as may be necessary to permit the expeditious sale at any time
of any Option Shares by the Selling Holders in accordance with and to the extent
permitted by any rule or regulation promulgated by the Commission from time to
time, including, without limitation, Rules 144 and 144A. Issuer shall at its
expense provide the Selling Holders with any information necessary in connection
with the completion and filing of any reports or forms required to be filed by
them under the Securities Laws, or required pursuant to any state securities
laws or the rules of any stock exchange.
(g) Issuer will pay all stamp taxes in connection with the issuance and
the sale of the Option Shares and in connection with the exercise of the Option,
and will save Holder harmless, without limitation as to time, against any and
all liabilities, with respect to all such taxes.
10. Quotation; Listing. If Issuer Common Stock or any other securities to
be acquired upon exercise of the Option are then authorized for quotation or
trading or listing on the New York Stock Exchange or any other securities
exchange or any automated quotations system maintained by a self-regulatory
organization, Issuer will promptly file an application, if required, to
authorize for quotation or trading or listing the shares of Issuer Common Stock
or other securities to be acquired upon exercise of the Option on the New York
Stock Exchange or any other securities exchange or any automated quotations
system maintained by a self-regulatory organization and will use its best
efforts to obtain approval, if required, of such quotation or listing as soon as
practicable.
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11. Division of Option. This Agreement (and the Option granted hereby) is
exchangeable, without expense, at the option of Holder, upon presentation and
surrender of this Agreement at the principal office of Issuer for other
Agreements providing for Options of different denominations entitling the holder
thereof to purchase in the aggregate the same number of shares of Issuer Common
Stock purchasable hereunder. The terms "Agreement" and "Option" as used herein
include any other Agreements and related Options for which this Agreement (and
the Option granted hereby) may be exchanged. Upon receipt by Issuer of evidence
reasonably satisfactory to it of the loss, theft, destruction or mutilation of
this Agreement, and (in the case of loss, theft or destruction) of reasonably
satisfactory indemnification, and upon surrender and cancellation of this
Agreement, if mutilated, Issuer will execute and deliver a new Agreement of like
tenor and date. Any such new Agreement executed and delivered shall constitute
an additional contractual obligation on the part of Issuer, whether or not the
Agreement so lost, stolen, destroyed or mutilated shall at any time be
enforceable by anyone.
12. Total Profit.
(a) Notwithstanding any other provision of this Agreement, in no
event shall the Grantee's Total Profit (as hereinafter defined) exceed $47.5
million and, if it otherwise would exceed such amount, the Grantee, at its sole
election, shall either (i) reduce the number of shares of Issuer Common Stock
subject to this Option, (ii) deliver to Issuer for cancellation Option Shares
previously purchased by Grantee, (iii) pay cash to Issuer, or (d) any
combination thereof so that Grantee's actually realized Total Profit shall not
exceed $47.5 million after taking into account the foregoing actions.
(b) Notwithstanding any other provision of this Agreement, this
Option may not be exercised for a number of shares as would, as of the date of
exercise, result in a Notional Total Profit (as defined below) of more than
$47.5 million; provided that nothing in this sentence shall restrict any
exercise of the Option permitted hereby on any subsequent date.
(c) As used herein, the term "Total Profit" shall mean the aggregate
amount (before taxes) of the following: (i) the amount received by Grantee
pursuant to Issuer's repurchase of the Option (or any portion thereof) pursuant
to Section 8, (ii) (x) the amount received by Grantee pursuant to Issuer's
repurchase of Option Shares pursuant to Section 8, less (y) the Grantee's
purchase price for such Option Shares, (iii) (x) the net cash amounts received
by Grantee pursuant to the sale of Option Shares (or any other securities into
which such Option Shares are converted or exchanged) to any unaffiliated party,
less (y) the Grantee's purchase price of such Option Shares, (iv) any amounts
received by Grantee on the transfer of the Option (or any portion thereof) to
any unaffiliated party, and (v) any amount equivalent to the foregoing with
respect to the Substitute Option.
(d) As used herein, the term "Notional Total Profit" with respect to
any number of shares as to which Grantee may propose to exercise this Option
shall be the Total Profit determined as of the date of such proposed exercise
assuming that this Option were exercised on such date for such number of shares
and assuming that such shares, together with
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<PAGE>
all other Option Shares held by Grantee and its affiliates as of such date, were
sold for cash at the closing market price for the Issuer Common Stock as of the
close of business on the preceding trading day (less customary brokerage
commissions).
13. Miscellaneous.
(a) Expenses. Except as otherwise provided, herein, each of the
parties hereto shall bear and pay all costs and expenses incurred by it or on
its behalf in connection with the transactions contemplated hereunder, including
fees and expenses of its own financial consultants, investment bankers,
accountants and counsel.
(b) Waiver and Amendment. Any provision of this Agreement may be
waived at any time by the party that is entitled to the benefits of such
provision. This Agreement may not be modified, amended, altered or supplemented
except upon the execution and delivery of a written agreement executed by the
parties hereto.
(c) Entire Agreement; No Third-Party Beneficiary; Severability. This
Agreement, together with the Merger Agreement and the other documents and
instruments referred to herein and therein, between Grantee and Issuer (a)
constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, between the parties with respect to the
subject matter hereof and (b) is not intended to confer upon any person other
than the parties hereto (other than any transferees of the Option Shares or any
permitted transferee of this Agreement pursuant to Section 13(h) hereof) any
rights or remedies hereunder. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction or a federal or
state governmental or regulatory agency or authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated. If for any reason such court or
regulatory agency determines that the Option does not permit Holder to acquire,
or does not require Issuer to repurchase, the full number of shares of Issuer
Common Stock as provided, in Sections 3 and 8 hereof (as adjusted pursuant to
Section 7 hereof), it is the express intention of Issuer to allow Holder to
acquire or to require Issuer to repurchase such lesser number of shares as may
be permissible without any amendment or modification hereof.
(d) Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of North Carolina without
regard to any applicable conflicts of law rules, except to the extent that the
federal laws of the United States shall govern.
(e) Descriptive Headings. The descriptive headings contained herein
are for convenience of reference only and shall not affect in any way the
meaning or interpretation of this Agreement.
(f) Notices. All notices and other communications hereunder shall be
in writing and shall be deemed given if delivered personally, telecopied (with
confirmation) or mailed by registered or certified mail (return receipt
requested) to the parties at the addresses set
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forth in the Merger Agreement (or at such other address for a party as shall be
specified by like notice).
(g) Counterparts. This Agreement and any amendments hereto may be
executed in two counterparts, each of which shall be considered one and the same
agreement and shall become effective when both counterparts have been signed, it
being understood that both parties need not sign the same counterpart.
(h) Assignment; Transfer. Neither this Agreement nor any of the
rights, interests or obligations hereunder or under the Option shall be assigned
or transferred by any of the parties hereto (whether by operation of law or
otherwise) without the prior written consent of the other party, except that (i)
Grantee may assign this Agreement to a wholly owned subsidiary of Grantee and
(ii) subject to the express provisions hereof, Grantee may assign in whole or in
part its rights and obligations hereunder within 12 months following a Purchase
Event; provided, that until the date 15 days following the date on which the
Federal Reserve Board has approved an application by Grantee to acquire the
shares of Issuer Common Stock subject to the Option, Grantee may not assign its
rights under the Option except in (A) a widely dispersed public distribution,
(B) a private placement in which no one party acquires the right to purchase in
excess of 2% of the voting shares of Issuer, (C) an assignment to a single party
(e.g., a broker or investment banker) for the purpose of conducting a widely
dispersed public distribution on Grantee's behalf or (iv) any other manner
approved by the Federal Reserve Board. In the case of any permitted assignment
or transfer of the Option, Issuer shall do all things necessary to facilitate
the same, and the Holder to whom the Option is assigned or transferred shall
make the representations contained in Section 6 hereof (with Holder substituted
for Grantee) and shall agree in writing to the terms and conditions hereof.
Subject to the preceding sentence, this Agreement shall be binding upon, inure
to the benefit of and be enforceable by the parties and their respective
successors and assigns.
(i) Further Assurances. In the event of any exercise of the Option by
Holder, Issuer and Holder shall execute and deliver all other documents and
instruments and take all other action that may be reasonably necessary in order
to consummate the transactions provided, for by such exercise.
(j) Specific Performance. The parties hereto agree that this Agreement
may be enforced by either party through specific performance, injunctive relief
and other equitable relief. Both parties further agree to waive any requirement
for the securing or posting of any bond in connection with the obtaining of any
such equitable relief and that this provision is without prejudice to any other
rights that the parties hereto may have for any failure to perform this
Agreement.
[remainder of page intentionally left blank]
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IN WITNESS WHEREOF, Issuer and Grantee have caused this Stock Option
Agreement to be signed by their respective officers thereunto duly authorized,
all as of the day and year first written above.
<TABLE>
<S> <C>
ONE VALLEY BANCORP, INC. BB&T CORPORATION
By: /s/ J. Holmes Morrison By: /s/ John A. Allison, IV
---------------------- ------------------------
Name: J. Holmes Morrison Name: John A. Allison, IV
------------------- -------------------
Title: Chairman and Chief Executive Officer Title: Chairman and Chief Executive Officer
------------------------------------- ------------------------------------
</TABLE>
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Exhibit (99)(c)
CONSENT OF J. HOLMES MORRISON
The undersigned hereby consents, pursuant to Rule 438 of the Securities
Act of 1933, as amended, to the reference to him in the Proxy Statement/
Prospectus of One Valley Bancorp, Inc. and BB&T Corporation, which is part of
this Registration Statement on Form S-4 of BB&T Corporation, with respect to
his being elected or appointed as a director of BB&T Corporation under the
circumstances described therein.
/s/ _______________________________
J. Holmes Morrison
_________________, 2000
<PAGE>
EXHIBIT 23(e)
CONSENT OF MERRILL LYNCH
We hereby consent to the inclusion of our opinion letter to the Board of
Directors of One Valley Bancorp, Inc. ("One Valley"), to be dated the date of
the Proxy Statement/Prospectus which forms a part of the Registration
Statement on Form S-4 relating to the proposed merger of One Valley with BB&T
Corporation, as Appendix C to the Proxy Statement/Prospectus, and to the
references to such opinion in such Proxy Statement/Prospectus under the
captions "SUMMARY--Exchange Ratio Fair to Shareholders According to One
Valley's Financial Advisor," and "THE MERGER--Background of and Reasons for
the Merger," and "-- Opinion of Financial Advisor to One Valley." In giving
such 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, or the rules and regulations of the Securities and Exchange
Commission thereunder, nor do we thereby admit that we are experts with
respect to any part of such Registration Statement within the meaning of the
term "experts" as used in the Securities Act of 1933, as amended, or the rules
and regulations of the Securities and Exchange Commission thereunder.
MERRILL LYNCH, PIERCE, FENNER &
SMITH INCORPORATED
By: _________________________________
March 24, 2000
