<PAGE>
As filed with the Securities and Exchange Commission on October 20, 2000
Registration No. 333-
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
BB&T CORPORATION
(Exact name of registrant as specified in its charter)
---------------
<TABLE>
<CAPTION>
North Carolina 6060 56-0939887
<S> <C> <C>
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or organization) Classification Code Number) Identification Number)
</TABLE>
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:
<TABLE>
<CAPTION>
Douglas A. Mays Wilson S. Ritchie Jack H. McCall
<S> <C> <C>
Womble Carlyle Sandridge & Rice, PLLC Ritchie & Johnson, PLLC Hunton & Williams
3300 One First Union Center 1710 Plaza Tower 2000 Riverview Tower
301 South College Street 800 South Gay Street 900 South Gay Street
Charlotte, North Carolina 28202 Knoxville, Tennessee 37929 Knoxville, Tennessee 37902
</TABLE>
---------------
Approximate date of commencement of proposed sale of the securities to the
public: As soon as practicable after the effective date of this Registration
Statement.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box: [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering: [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: [_]
---------------
CALCULATION OF REGISTRATION FEE
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Proposed Proposed
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
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par
value $5.00 per
share(1)........... 5,798,946 (2) $146,055,601(3) $38,559
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(1) Each share of the registrant's common stock includes one preferred share
purchase right.
(2) Not applicable.
(3) Computed in accordance with Rule 457(f) based on the average of the high
($12.50) and low ($11.0625) sales price of the common stock of BankFirst
Corporation on October 13, 2000 as reported on The Nasdaq National Market
and on the book value per share ($14.48) of the preferred stock of
BankFirst Corporation as of September 30, 2000.
---------------
The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to Section 8(a), may
determine.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>
BankFirst Corporation
625 Market Street
Knoxville, Tennessee 37902
----------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON
THURSDAY, DECEMBER 21, 2000
----------------
BankFirst Corporation will hold a special meeting of its shareholders on
Thursday, December 21, 2000 at 10:00 a.m., local time, at The Knoxville Hilton,
Cherokee Ballroom, Salon C, 501 Church Street, S.W., Knoxville, Tennessee. This
meeting will be held for the following purposes:
. To consider and vote on the proposed merger of BankFirst into BB&T
Corporation. In the merger, each share of BankFirst common stock will be
automatically converted into 0.4554 shares of BB&T common stock and each
share of BankFirst preferred stock (other than shares as to which
dissenters' rights are exercised) will be automatically converted into
1.406 shares of BB&T common stock. Cash will be paid instead of
fractional shares. A copy of the merger agreement is attached as Appendix
A to the accompanying proxy statement/prospectus.
. To transact any other business that may properly come before the meeting
or any adjournment or postponement of the meeting.
Holders of BankFirst common stock and BankFirst preferred stock as of the
close of business on November 1, 2000 are entitled to notice of the meeting and
to vote at the meeting. If your shares are not registered in your own name, you
will need additional documentation from your record holder to vote personally
at the meeting.
Each holder of shares of BankFirst's preferred stock has the right to
dissent to the merger and to demand payment of the fair value of all, but not
less than all, of his or her shares of preferred stock in the event the merger
agreement is approved and the merger is completed. The right of any holder of
BankFirst preferred stock to dissent requires strict compliance with the
provisions of Chapter 23 of the Tennessee Business Corporation Act, the full
text of which is attached to the accompanying proxy statement/prospectus as
Appendix C. Any holder of shares of BankFirst preferred stock who is
considering exercising his or her rights of dissent and appraisal under the
TBCA should consult his or her legal advisor.
The proxy statement/prospectus follows this notice, and a proxy card is
enclosed. To ensure that your vote is counted, please complete, sign, date and
return the proxy card in the enclosed, postage-paid return envelope, whether or
not you plan to attend the meeting in person. You may revoke your proxy at any
time before it is voted at the meeting. If you attend the meeting, you may
revoke your proxy and vote your shares in person. However, your attendance at
the meeting will not of itself revoke a proxy that you have already submitted.
By Order of the Board of Directors
Fred R. Lawson
President and Chief Executive
Officer
Knoxville, Tennessee
November , 2000
PLEASE COMPLETE AND SIGN THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE
ENVELOPE PROVIDED, WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING.
<PAGE>
[BankFirst Logo]
Special Meeting of Shareholders
MERGER PROPOSAL--YOUR VOTE IS VERY IMPORTANT
The Board of Directors of BankFirst Corporation has unanimously approved a
merger combining BankFirst and BB&T Corporation. In the merger, you will
receive 0.4554 shares of BB&T common stock for each share of BankFirst common
stock that you own and 1.406 shares of BB&T common stock for each share of
BankFirst preferred 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 BankFirst's strengths as a community bank covering
eastern Tennessee with BB&T's position as a leading bank throughout the
Carolinas, West Virginia, Virginia, Washington D.C. and parts of Maryland,
Georgia and Kentucky.
At the special meeting, you will consider and vote on the merger agreement.
The merger cannot be completed unless holders of at least a majority of the
shares of BankFirst common stock and the holders of a majority of the shares of
BankFirst preferred stock approve the merger agreement. BankFirst's Board of
Directors believes the merger is in the best interests of BankFirst
shareholders and unanimously recommends that the shareholders vote to approve
the merger agreement. No vote of BB&T shareholders is required to approve the
merger agreement.
BB&T common stock is listed on the New York Stock Exchange under the symbol
"BBT." On November , 2000, the closing price of BB&T common stock was $ ,
making the value of 0.4554 shares of BB&T common stock equal to $ and the
value of 1.406 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 at 10:00 a.m., Eastern time, on Thursday,
December 21, 2000 at The Knoxville Hilton, Cherokee Ballroom, Salon C, located
at 501 Church Street, S.W., Knoxville, Tennessee.
This proxy statement/prospectus provides you with detailed information about
the proposed merger. We encourage you to read this entire document carefully.
In addition, this proxy statement/prospectus incorporates important business
and financial information about BB&T and BankFirst 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 before December 14, 2000 from the appropriate company at
the following addresses:
<TABLE>
<S> <C>
BB&T Corporation BankFirst Corporation
Shareholder Reporting C. David Allen
Post Office Box 1290 625 Market Street
Winston-Salem Knoxville, Tennessee
North Carolina 37902
27102 (865) 595-1100
(336) 733-3021
</TABLE>
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. Your vote is very important. You can revoke
your proxy at any time before it is voted at the meeting. You may do this by
filing written revocation with, or by delivering a later-dated proxy to,
BankFirst's Secretary before the meeting or by attending the meeting and voting
your shares in person. If your shares are registered in street name, you will
need additional documentation from your record holder to vote in person at the
meeting.
On behalf of the Board of Directors of BankFirst, I urge you to vote "FOR"
approval and adoption of the merger agreement.
Fred R. Lawson
President and Chief Executive Officer
Neither the Securities and Exchange Commission nor any state securities regu-
lator 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 November , 2000 and is expected
to be first mailed to shareholders of BankFirst on or about November 22, 2000.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
A WARNING ABOUT FORWARD-LOOKING INFORMATION................................ iv
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 BankFirst Board.................................... 10
THE MERGER................................................................. 11
General.................................................................. 11
Background of and Reasons for the Merger................................. 11
Opinion of BankFirst's Financial Advisor................................. 14
Exchange Ratio........................................................... 19
Exchange of BankFirst Stock Certificates................................. 19
The Merger Agreement..................................................... 20
Interests of Certain Persons in the Merger............................... 25
Rights of Dissenting Shareholders........................................ 29
Regulatory Considerations................................................ 31
Material Federal Income Tax Consequences of the Merger................... 33
Accounting Treatment..................................................... 35
The Option Agreement..................................................... 35
Effect on Employee Benefit Plans and Stock Options....................... 37
Restrictions on Resales by Affiliates.................................... 39
INFORMATION ABOUT BB&T..................................................... 41
General.................................................................. 41
Operating Subsidiaries................................................... 41
Acquisitions............................................................. 42
Capital.................................................................. 43
Deposit Insurance Assessments............................................ 43
INFORMATION ABOUT BANKFIRST................................................ 45
General.................................................................. 45
Operating Subsidiaries................................................... 45
Acquisitions............................................................. 45
Capital.................................................................. 45
Deposit Insurance Assessments............................................ 46
DESCRIPTION OF BB&T CAPITAL STOCK.......................................... 47
General.................................................................. 47
BB&T Common Stock........................................................ 47
BB&T Preferred Stock..................................................... 47
Shareholder Rights Plan.................................................. 47
Other Anti-Takeover Provisions........................................... 50
COMPARISON OF THE RIGHTS OF BB&T SHAREHOLDERS AND BANKFIRST SHAREHOLDERS... 51
Authorized Capital Stock................................................. 51
Special Meetings of Shareholders......................................... 51
Directors................................................................ 52
</TABLE>
ii
<PAGE>
<TABLE>
<S> <C>
Dividends and Other Distributions........................................ 52
Shareholder Nominations and Shareholder Proposals........................ 53
Discharge of Duties; Exculpation and Indemnification..................... 53
Mergers, Share Exchanges and Sales of Assets............................. 54
Anti-takeover Statutes................................................... 55
Amendments to Articles of Incorporation and Bylaws....................... 56
Shareholders' Rights of Dissent and Appraisal............................ 57
Liquidation Rights....................................................... 58
SHAREHOLDER PROPOSALS...................................................... 59
OTHER BUSINESS............................................................. 59
LEGAL MATTERS.............................................................. 59
EXPERTS.................................................................... 59
WHERE YOU CAN FIND MORE INFORMATION........................................ 60
Appendix A--Agreement and Plan of Reorganization and Plan of Merger
Appendix B--Opinion of Southard Financial and Gerrish & McCreary LLC
Consultants
Appendix C--Chapter 23 of Title 48 of the Tennessee Business Corporation
Act
</TABLE>
iii
<PAGE>
A WARNING ABOUT FORWARD-LOOKING INFORMATION
BB&T and BankFirst 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 BankFirst 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 BankFirst 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 BankFirst 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 BankFirst set forth under "Summary" and "The
Merger-- Background of and Reasons for the Merger" and statements preceded by,
followed by or including 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 BankFirst have made statements in this document regarding estimated
earnings per share of BB&T and BankFirst on a stand-alone basis, expected cost
savings from the merger, estimated restructuring charges relating to the
merger, maintenance of BankFirst'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 BankFirst, the amount of general and administrative
expense consolidation, costs relating to converting BankFirst'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:
. expected cost savings from the merger or other previously announced
mergers may not be fully realized or realized within the expected time
frame;
. the loss of deposits, customers or revenues after the merger or other
previously announced mergers may be greater than expected;
. competitive pressures among depository and other financial institutions
may increase significantly;
. costs or difficulties related to the integration of the businesses of
BB&T and its merger partners, including BankFirst, may be greater than
expected;
. changes in the interest rate environment may reduce margins or the
volumes or values of loans made or held;
. general economic or business conditions, either nationally or in the
states or regions in which BB&T and BankFirst do business, may be less
favorable than expected, resulting in, among other things, a
deterioration in credit quality or a reduced demand for credit;
. legislative or regulatory changes, including changes in accounting
standards, may adversely affect the businesses in which BB&T and
BankFirst are engaged;
. adverse changes may occur in the securities markets; and
. competitors of BB&T and BankFirst may develop products that enable those
competitors to compete more successfully than BB&T and BankFirst.
iv
<PAGE>
Management of each of BB&T and BankFirst believes the forward-looking
statements about its company are reasonable; however, shareholders of BankFirst
should not place undue reliance on them. Forward-looking statements are not
guarantees of performance. They involve risks, uncertainties and assumptions.
The future results and shareholder values of BB&T after the 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 BankFirst'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
BankFirst 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 BankFirst undertakes any obligation to release publicly any
revisions to any forward-looking statements to reflect events or circumstances
after the date of this document or to reflect the occurrence of unanticipated
events.
v
<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 0.4554 Shares of BB&T Common Stock for each Share of
BankFirst Common Stock and 1.406 Shares of BB&T Common Stock for each Share of
BankFirst Preferred Stock
If the merger is completed, you will receive 0.4554 shares of BB&T common
stock for each share of BankFirst common stock you own and 1.406 shares of BB&T
common stock for each share of BankFirst preferred stock that you own, plus
cash instead of any fractional share.
On November , 2000, the closing price of BB&T common stock was $ ,
making the value of 0.4554 shares of BB&T common stock equal to $ and the
value of 1.406 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 BB&T's 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 BankFirst common stock or preferred 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 you would
be taxed on cash received upon the exercise of dissenters' rights with respect
to shares of BankFirst preferred stock. 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 After the Merger
BB&T currently pays regular quarterly dividends of $0.23 per share of 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%. BB&T expects that it will continue to
pay quarterly dividends consistent with this payout ratio, but may change that
policy based on business conditions, BB&T's financial condition, earnings and
other factors.
BankFirst Board Unanimously Recommends Shareholder Approval (Page )
The BankFirst Board of Directors believes that the merger is in the best
interests of BankFirst shareholders and unanimously recommends that you vote
"FOR" approval of the merger agreement. The BankFirst Board believes that, as a
result of the merger, you will be able to achieve greater value than you would
if BankFirst remained independent.
Terms of Merger Fair to Shareholders According to BankFirst's Financial Advisor
(Page )
BankFirst's financial advisor, Southard Financial and Gerrish & McCreary LLC
Consultants, has given a written opinion to the BankFirst Board that, as of
August 21, 2000 [and updated as of the date of this proxy statement prospectus]
the terms and conditions of the merger, as stated in the merger agreement, were
fair from a financial point of view to you as BankFirst shareholders. The full
text of this opinion is attached as Appendix B to this proxy
statement/prospectus. We encourage you to read the opinion carefully to
understand the assumptions made, matters considered and limitations of the
review undertaken by Southard and Gerrish in rendering its fairness opinion.
BankFirst has agreed to pay Southard and Gerrish a fee equal to $265,000.
1
<PAGE>
Dissent and Appraisal Rights (Page )
Under Tennessee law, holders of BankFirst common stock do not have the right
to dissent from the merger and to demand a statutory appraisal of the value of
their shares. BankFirst preferred shareholders, however, do have statutory
dissenter's rights under Tennessee law.
If a holder of BankFirst preferred stock does not vote for the merger and
properly exercises rights to dissent from the merger and to demand the "fair
value" of his or her shares of BankFirst preferred stock, he or she will have
the right to obtain a cash payment for the "fair value" of the preferred shares
as determined by statutory appraisal proceedings. To exercise these rights, a
holder of BankFirst preferred stock must comply with the procedural
requirements of the Tennessee Business Corporation Act, the relevant sections
of which we have attached to this proxy statement/prospectus as Appendix C. We
cannot predict what the "fair value" of BankFirst preferred stock resulting
from the statutory appraisal proceedings would be. Failure to take timely
action on any of the steps required under the TBCA may result in a loss of
dissenters' rights.
Meeting to be held December 21, 2000 (Page )
BankFirst will hold the special shareholders' meeting at 10:00 a.m., Eastern
time, on Thursday, December 21, 2000 at The Knoxville Hilton, Cherokee
Ballroom, Salon C, located at 501 Church Street, S.W. in Knoxville, Tennessee.
At the meeting, you will vote on the merger agreement 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 $ billion in assets.
It is the largest bank holding company in the Southeast and, through its
banking subsidiaries, operates branch offices in the Carolinas, Virginia,
Maryland, Washington, D.C., West Virginia, Georgia and Kentucky. BB&T ranks
[first] in deposit market share in West Virginia, [second] in North Carolina
and [third] in South Carolina, and maintains a significant market presence in
Virginia, Maryland, Georgia and Washington, D.C.
BankFirst Corporation
625 Market Street
Knoxville, Tennessee 37902
(865) 595-1100
BankFirst Corp., with $848.8 million in assets, operates 32 banking offices
in east Tennessee through its banking subsidiaries BankFirst and First National
Bank and Trust Company. It also operates BankFirst Trust Company and Curtis
Mortgage Company.
The Merger (Page )
In the merger, BankFirst will merge into BB&T, and BankFirst's banking and
other subsidiaries, through which it operates, will become wholly owned
subsidiaries of BB&T. If the BankFirst shareholders approve the merger
agreement at the special meeting, we currently expect to complete the merger by
January 1, 2001.
We have included the merger agreement as Appendix A to this proxy
statement/prospectus. We encourage you to read the merger agreement in full, as
it is the legal document that governs the merger.
Majority Shareholder Vote Required (Page )
Approval of the merger agreement requires the affirmative vote of the
holders of at least a majority of the outstanding shares of BankFirst common
stock and, voting as a separate class, the affirmative vote of the holders of
at least a majority of the outstanding shares of BankFirst preferred stock. If
you do not 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
BankFirst and their affiliates together owned about % of the BankFirst common
stock and about % of the BankFirst preferred stock entitled to vote at the
meeting, and we expect them to vote their shares in favor of the merger
agreement and the merger. Members of the BankFirst Board, who together own
approximately % of the BankFirst common stock
2
<PAGE>
and % of the BankFirst preferred stock entitled to vote at the meeting, have
agreed in the merger agreement to vote in favor of the merger.
Brokers who hold shares of BankFirst stock as nominees will not have
authority to vote them on the merger unless the beneficial owners of those
shares provide voting instructions. If you hold your shares in street name,
please see the voting form provided by your broker for additional information
regarding the voting of your shares. If your shares are not registered in your
name, you will need additional documentation from your record holder to vote
the shares in person.
The merger does not require the approval of BB&T's shareholders.
Record Date Set at November 1, 2000; One Vote per Share of BankFirst Stock
(Page )
If you owned shares of BankFirst common or preferred stock at the close of
business on November 1, 2000, the record date, you are entitled to vote on the
merger agreement and any other matters that may be properly considered at the
meeting.
On the record date, there were shares of BankFirst common stock and
shares of BankFirst preferred stock outstanding. At the meeting, you will
have one vote for each share of BankFirst common stock and one vote for each
share of BankFirst preferred stock that you owned on the record date.
Monetary Benefits to Management (Page )
When considering the recommendation of the BankFirst Board, you should be
aware that some of BankFirst's directors and officers have interests in the
merger that differ from, or are in addition to, the interests of other
BankFirst shareholders. These interests exist because of rights under benefit
and compensation plans maintained by BankFirst and, in the case of certain
executive officers of BankFirst, under employment agreements with BB&T or
Branch Banking and Trust Company, BB&T's main bank subsidiary, which will
become effective upon the merger:
. BankFirst's president and chief executive officer, Fred R. Lawson, has
been offered
a three-year employment agreement providing for a minimum annual base
salary of $281,782;
. BankFirst's executive vice president, R. Stephen Hagood, has been offered
a five-year employment agreement providing for a minimum annual base
salary of $158,000; and;
. Five other members of BankFirst's management have each been offered a
three-year employment agreement providing for a specified minimum annual
base salary.
All of these employment agreements will provide severance payments and other
benefits if there is a change in control of BB&T.
In addition, James L. Clayton, the chairman of the BankFirst Board, will be
elected to the board of directors of Branch Banking and Trust Company, and the
members of the BankFirst Board who execute a noncompetition agreement with BB&T
will be offered a position on BB&T's local advisory board for the bank's market
area and, for at least two years after the merger, will receive annual fees not
less than those that they now receive as BankFirst Board members.
The material terms and financial provisions of these arrangements are
described under the heading "Interests of Certain Persons in the Merger" on
page . The BankFirst Board was aware of these and other interests and
considered them when it approved and adopted the merger agreement.
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 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.
3
<PAGE>
Other Conditions that Must be Satisfied for the Merger to Occur (Page )
A number of other conditions must be met for us to complete the merger,
including:
. approval of the merger agreement by the BankFirst shareholders;
. receipt of legal opinions concerning the tax consequences of the merger;
. the continuing accuracy of the parties' representations in the merger
agreement; and
. the continuing effectiveness of the registration statement filed with the
SEC covering the shares of BB&T stock to be issued in the merger.
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 March 31, 2001;
. 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.
We can agree to amend the merger agreement in any way, except that after the
shareholders' meeting we cannot decrease the consideration that you will
receive in the merger. Either company can waive any of the requirements of the
other company contained in the merger agreement, except that neither company
can waive any required regulatory approval 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 BB&T's counsel is not available and the
BankFirst Board determines to proceed with the merger, BankFirst will inform
you and ask you to vote again on the merger agreement.
Option Agreement (Page )
As a condition to its offer to acquire BankFirst, and to discourage other
companies from acquiring BankFirst, BB&T required BankFirst to grant BB&T a
stock option that allows BB&T to buy up to 2,199,000 shares of BankFirst's
common stock. The exercise price of the option is $9.50 per share. Generally,
BB&T can exercise the option only if another party attempts to acquire control
of BankFirst. As of the date of this document, we do not believe that has
occurred.
BB&T to Use Purchase Accounting Treatment (Page )
BB&T expects to account for the merger using the purchase method of
accounting. Under the purchase method, BB&T will record, at fair value, the
acquired assets and assumed liabilities of BankFirst. To the extent the total
purchase price exceeds the fair value of assets acquired and liabilities
assumed, BB&T will record goodwill. Any goodwill will be amortized over of the
period of expected benefit. BB&T will include in its consolidated results of
operations the results of BankFirst's operations after the merger is completed.
Share Price Information (Page )
BankFirst common stock is traded on The Nasdaq National Market under the
symbol "BKFR" and BB&T common stock is listed on the New York Stock Exchange
under the symbol "BBT". On August 22, 2000, the last full trading day before
public announcement of the proposed merger, BankFirst common stock closed at
$11.125, and BB&T common stock closed at $26.8125. On November , 2000,
BankFirst common stock closed at $ , and BB&T common stock closed at
$ . BankFirst preferred stock is not publicly traded.
Listing of BB&T Stock
BB&T will list the shares of its common stock to be issued in the merger on
the NYSE.
4
<PAGE>
Comparative Market Prices and Dividends
BB&T common stock is listed on the New York Stock Exchange under the symbol
"BBT," and BankFirst common stock is included in the Nasdaq National Market
under the symbol "BKFR." BankFirst preferred stock is not publicly traded. The
table below shows the high and low closing prices of BB&T common stock and
BankFirst 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 BankFirst's ability to
increase dividends. See page .
<TABLE>
<CAPTION>
BB&T BankFirst
---------------------- ------------------------------
Cash Cash
High Low Dividend High Low Dividend
------ ------ -------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Quarter Ended
March 31, 2000........ $29.19 $22.00 $ 0.20 $ 9.250 $ 7.125 $ 0
June 30, 2000......... 31.75 23.88 0.20 8.625 7.188 0.08
September 30, 2000.... 30.44 24.06 0.23 13.875 8.188 0
December 31, 2000
(through November
).................. 0.23
Quarter Ended
March 31, 1999........ 40.44 34.94 0.175 11.250 8.625 0
June 30, 1999......... 40.25 33.81 0.175 19.750 8.563 0
September 30, 1999.... 36.63 30.50 0.20 9.750 8.250 0
December 31, 1999..... 36.94 27.31 0.20 9.750 8.125 0
For year 1999....... 40.44 27.31 0.75 19.750 8.125 0
Quarter Ended
March 31, 1998........ 33.84 29.03 0.155 -- (1) -- (1) 0
June 30, 1998......... 34.06 32.03 0.155 -- (1) -- (1) 0.01(2)
September 30, 1998.... 36.03 28.00 0.175 13.250 10.625 0
December 31, 1998..... 40.63 27.31 0.175 11.875 8.125 0
For year 1998....... 40.63 27.31 0.66 13.250 8.125 0.01(2)
</TABLE>
The table below shows the closing price of BB&T common stock and BankFirst
common stock on August 22, 2000, the last full trading day before public
announcement of the proposed merger.
<TABLE>
<S> <C>
BB&T historical................................................. $26.8125
BankFirst historical............................................ $ 11.125
BankFirst pro forma equivalent*................................. $ 12.21
</TABLE>
--------
* Calculated by multiplying BB&T's per share closing price by the exchange
ratio of 0.4554.
(1) BankFirst common stock was first publicly traded on the Nasdaq National
Market on August 31, 1998; therefore, information for these periods is
unavailable.
(2) First Franklin Bancshares, Inc., which merged into BankFirst in July 1998,
paid cash dividends during its year-to-date ending in June 1998; therefore,
BankFirst has restated its cash dividends to reflect the effects of this
merger.
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 six
months ended June 30, 2000. The information provided for BB&T has been restated
to include the accounts of Premier Bancshares, Inc., Hardwick Holding Co.,
First Banking Company of Southeast Georgia and One Valley Bancorp, each of
which BB&T acquired during 2000 in a transaction accounted for as a pooling of
interests. 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 six-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 Six
Months Ended June 30, 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..... $ 1,009,922 $ 938,418 $ 1,932,948 $ 1,759,705 $ 1,623,329 $ 1,486,488 $ 1,356,141
Net income.............. 351,722 365,004 705,574 651,744 501,726 467,309 354,714
Basic earnings per
share.................. 0.88 0.92 1.78 1.67 1.29 1.20 0.90
Diluted earnings per
share.................. 0.87 0.91 1.75 1.64 1.27 1.18 0.89
Cash dividends paid per
share.................. 0.40 0.35 0.75 0.66 0.58 0.50 0.43
Book value per share.... 10.69 9.89 10.19 10.17 9.12 8.62 8.34
Total assets............ 55,045,161 51,463,991 53,000,836 48,190,494 43,606,211 38,612,527 35,810,281
Long-term debt.......... 7,318,035 5,973,518 6,073,428 5,499,873 4,183,462 2,611,973 1,701,433
BankFirst--Historical Financial Information
(Dollars in thousands, except for per share amounts)
<CAPTION>
As of/For the Six
Months Ended June 30, 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..... $ 17,201 $ 16,305 $ 33,472 $ 30,988 $ 28,635 $ 25,460 $ 23,037
Net income.............. 4,497 4,271 8,886 6,809 6,628 6,049 5,179
Basic earnings per
share.................. 0.40 0.37 0.77 0.64 0.66 0.63 0.63
Diluted earnings per
share.................. 0.38 0.34 0.73 0.59 0.61 0.59 0.59
Cash dividends paid per
common share........... 0.08 0 0 0.01 0.12 0.09 0.14
Book value per common
share.................. 7.58 7.06 7.31 6.94 5.76 5.24 4.89
Total assets............ 848,807 774,819 812,899 748,301 650,717 595,284 545,718
Long-term debt.......... 46,091 29,223 29,159 11,884 12,121 12,154 8,407
</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 purchase, assuming that 0.4554 shares of BB&T common stock are issued for
each outstanding share of BankFirst common stock and 1.406 shares of BB&T
common stock are issued for each outstanding share of BankFirst preferred
stock. Pro forma equivalent of BankFirst common share amounts are calculated by
multiplying the pro forma combined amounts by 0.4554. 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 six-month information
as being indicative of results expected for the entire year or for any future
interim period.
<TABLE>
<CAPTION>
As of/For
As of/For the the Year
Six Months Ended
Ended December 31,
June 30, 2000 1999
------------- ------------
<S> <C> <C>
Earnings per common share
Basic
BB&T historical................................... $ 0.88 $ 1.78
BankFirst historical.............................. 0.40 0.77
Pro forma combined................................ 0.88 1.78
Pro forma equivalent of one BankFirst common
share............................................ 0.40 0.81
Diluted
BB&T historical................................... 0.87 1.75
BankFirst historical.............................. 0.38 0.73
Pro forma combined................................ 0.87 1.75
Pro forma equivalent of one BankFirst common
share............................................ 0.40 0.80
Cash dividends declared per common share
BB&T historical................................... 0.40 0.75
BankFirst historical.............................. 0.08 0
Pro forma combined................................ 0.40 0.75
Pro forma equivalent of one BankFirst common
share............................................ 0.18 0.34
Shareholders' equity per common share
BB&T historical................................... 10.69 10.19
BankFirst historical.............................. 7.58 7.31
Pro forma combined................................ 10.77 10.28
Pro forma equivalent of one BankFirst common
share............................................ 4.91 4.68
</TABLE>
7
<PAGE>
MEETING OF SHAREHOLDERS
General
We are providing this proxy statement/prospectus to BankFirst shareholders
of record as of November 1, 2000, along with a form of proxy that the BankFirst
Board is soliciting for use at a special meeting of shareholders of BankFirst
to be held on Thursday, December 21, 2000 at 10:00 a.m., Eastern time, at The
Knoxville Hilton, Cherokee Ballroom, Salon C, located at 501 Church Street,
S.W. in Knoxville, Tennessee. At the meeting, the shareholders of BankFirst
will vote upon a proposal to approve the agreement and plan of reorganization,
dated as of August 22, 2000, and the related plan of merger under which
BankFirst would merge into BB&T. In this proxy statement/prospectus, we refer
to the reorganization agreement and related plan of merger as the merger
agreement. Proxies may be voted on other matters that may properly come before
the meeting, if any, at the discretion of the proxy holders. The BankFirst
Board knows of no such other matters except those incidental to the conduct of
the meeting. A copy of the merger agreement is 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 BankFirst in the enclosed postage prepaid envelope.
Record Date, Voting Rights and Vote Required
Only the holders of BankFirst common stock on November 1, 2000, the record
date, are entitled to receive notice of and to vote at the meeting. On the
record date, there were shares of BankFirst common stock
outstanding, held by approximately holders of record, and
shares of BankFirst preferred stock outstanding, held by
approximately holders of record. Each share of BankFirst common stock
is entitled to one vote on each matter submitted at the meeting. Also, under
Tennessee law, each share of BankFirst preferred stock is entitled to one vote
on the proposal to approve the merger agreement.
Approval of the merger agreement requires the affirmative vote of the
holders of at least a majority of the outstanding shares of BankFirst common
stock and the affirmative vote of the holders of at least a majority of the
outstanding shares of BankFirst preferred, voting as separate classes. If you
do not vote your shares, it will have the same effect as a vote "against" the
merger agreement.
The proposal to adopt the merger agreement is a "non-discretionary" item,
meaning that brokerage firms can 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 BankFirst common stock entitled to vote
is represented at the meeting in person or by proxy and if a majority of the
outstanding shares of BankFirst preferred 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 BankFirst
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 requires the affirmative vote of
the holders of a majority of the outstanding shares of BankFirst common stock
and the affirmative vote of the holders of a majority of the outstanding shares
of BankFirst preferred stock, abstentions and broker non-vote shares
8
<PAGE>
will have the same effect as votes against the merger. Accordingly, the
BankFirst 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 BankFirst Stock Certificates" on page .
Holders of BankFirst preferred stock who do not vote for the merger and who
properly exercise rights to dissent to the merger and demand the "fair value"
of their shares of BankFirst preferred stock may have the right to receive a
cash payment equal to the fair value of their preferred shares. See "The
Merger--Rights of Dissenting Shareholders" on page .
As of the record date, the directors and executive officers of BankFirst and
their affiliates beneficially owned a total of shares, or
%, of the issued and outstanding shares of BankFirst common stock
(exclusive of shares that may be acquired on the exercise of stock options) and
a total of shares, or %, of the issued and outstanding shares of
BankFirst preferred stock. In the merger agreement, members of the BankFirst
Board have agreed not to dispose of any of their shares of BankFirst stock and
to vote all of their shares in favor of the merger. A total of shares
of BankFirst common stock, or % of the common shares entitled to vote at
the meeting, and shares of Bank First preferred stock, or % of
the preferred shares entitled to vote at the meeting, are subject to these
agreements. The directors and executive officers of BB&T, their affiliates,
BB&T and its subsidiaries owned [no] shares of BankFirst common stock or
preferred stock, excluding shares that might be deemed to be owned in
connection with the stock option agreement described under the heading "The
Option Agreement" onpage .
Voting and Revocation of Proxies
The shares of BankFirst 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. Proxies marked "FOR" approval of
the merger agreement 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 that are voted "AGAINST" approval of the merger agreement
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 a proxy that
you have already submitted. You may, however, revoke a proxy any time before it
is voted at the meeting by: notifying the Secretary of BankFirst in writing at
BankFirst's principal executive offices; submitting a later-dated proxy to the
Secretary of BankFirst at BankFirst's principal executive offices; or attending
the meeting to vote your shares in person and withdrawing your proxy before it
is voted. If you hold your shares in street name, please see the voting form
provided by your broker for additional information regarding the voting of your
shares. If your shares are not registered in your name, you will need
additional documentation from your record holder to vote the shares in person.
Solicitation of Proxies
BB&T and BankFirst will each pay 50% of the cost of printing this proxy
statement/prospectus, and BankFirst will pay all other costs of soliciting
proxies. Directors, officers and other employees of BankFirst 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. BankFirst will arrange with brokerage firms and other
custodians, nominees and fiduciaries for the forwarding of solicitation
material to the beneficial
9
<PAGE>
owners of stock held of record by these brokerage firms and other custodians,
nominees and fiduciaries, and BankFirst will reimburse these record holders for
their reasonable out-of-pocket expenses.
Recommendation of the BankFirst Board
The BankFirst Board has approved the merger agreement and believes that the
proposed transaction is fair to and in the best interests of BankFirst and its
shareholders. The BankFirst Board unanimously recommends that BankFirst's
shareholders vote "FOR" approval of the merger agreement. See "The Merger--
Background of and Reasons for the Merger" on page .
10
<PAGE>
THE MERGER
The following information describes the material aspects of the merger. This
description does not purport to be complete and is qualified in its entirety by
reference to the appendices to this proxy statement/prospectus, including the
merger agreement, which is 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, BankFirst will be merged into BB&T. Shareholders of BankFirst
will receive common stock of BB&T in exchange for their shares of BankFirst
stock on the basis of 0.4554 shares of BB&T stock for each share of BankFirst
common stock (plus cash instead of any fractional share) and, unless they
exercise dissenters' rights, 1.406 shares of BB&T common stock for each share
of BankFirst preferred stock (plus cash instead of any fractional share).
During the third quarter of 2001, BB&T intends to merge BankFirst's subsidiary
banks into Branch Banking and Trust Company, BB&T's principal subsidiary bank.
Background of and Reasons for the Merger
Background of the Merger
Following the completion of its initial public offering in August 1998 and
two acquisitions, BankFirst's board and management planned for growth to
continue through expansion of retail locations, expansion of products and
services, and possible future mergers or acquisitions. During 1999, management
became concerned that BankFirst was unable to find additional attractive
acquisition opportunities in its planned markets. These opportunities were
largely constrained by general market conditions prevailing in bank stocks,
both throughout the southeast and nationwide, and particularly lower market
prices for small cap financial stocks including BankFirst common stock. These
factors severely curtailed BankFirst's abilities to garner attractive
acquisition candidates using its common stock as an acquisition currency.
In 1999, management began to develop a succession strategy to ensure
effective transitions and stability for BankFirst in the future. One of the
elements of the strategy that developed through late 1999 and early 2000
envisioned the possibility of a potential merger of BankFirst with another
banking institution. To provide an attractive return on investment to
shareholders through a satisfactory exchange ratio, an attractive merger
candidate could also provide community banking strategies comparable to
BankFirst's philosophy. At a planning retreat of the BankFirst Board held in
early 2000, in addition to reviewing options for potential bank and non-bank
acquisitions by BankFirst and possible construction of new branches outside
BankFirst's traditional markets, the BankFirst Board generally discussed the
long-term succession plans of BankFirst's senior management. These discussions
provided further impetus to considerations of possible merger and acquisition
opportunities.
Since BankFirst's August 1998 IPO, various financial institutions have made
overtures to management as to the potential acquisition of BankFirst. This
process continued through the first quarter of 2000, with representatives of
several financial institutions expressing a general interest in acquiring
BankFirst. All but two of these were viewed as not offering effective synergies
to BankFirst, and these discussions did not proceed.
On April 14, 2000, three members of the BankFirst Board were invited to
Winston-Salem to meet with representatives of BB&T to discuss their "community
banking" model and management structure. Terms were not discussed during this
meeting, nor was an offer extended from BB&T to BankFirst.
In executive sessions of the BankFirst Board following regularly scheduled
meetings on April 17, 2000 and May 9, 2000, Mr. Lawson discussed with the board
the meeting with BB&T and the potential compatibility with BankFirst. In both
sessions, Mr. Lawson updated the BankFirst Board as to the status of a contact
with another financial institution. On June 9, 2000, the same three board
members of BankFirst visited the other
11
<PAGE>
financial institution and discussed banking philosophy. Following this on-site
visit, BankFirst's representatives concluded that BB&T would be a more
attractive candidate for a potential merger because of its community/regional
banking model. In an executive session of the BankFirst Board following its
regularly scheduled meeting on June 16, 2000, Mr. Lawson provided the board
with an update as to both the succession plan and both potential suitors.
On June 26, 2000, a representative of BB&T traveled to Knoxville to meet
with Mr. Lawson. They discussed various potential terms of a merger, including
an exchange ratio of 0.4554 for shares of BankFirst common stock. A general
timetable was established at this meeting for due diligence to be conducted.
Drafts of the merger agreement, stock option agreement, employment contracts
and other related documents were prepared and circulated by BB&T's outside
counsel to management on August 8, 2000. Mr. Lawson and another board member
traveled to BB&T on August 16 for due diligence.
During the weeks of August 7th and 14th, negotiations over the terms of the
merger agreement continued between the two companies and their respective
counsel. Due diligence was conducted by representatives of BB&T at BankFirst on
August 18th through August 20th. BB&T further informed BankFirst that a stock
option agreement was required as a condition of BB&T's willingness to enter
into a definitive merger agreement with BankFirst. Execution of employment
agreements was also a prerequisite for the signing of the merger agreement by
two individuals.
On August 18, 2000, Mr. Lawson contacted Jeff Gerrish of Gerrish & McCreary
and Southard Financial to request their assistance in rendering a fairness
opinion with regard to the proposed transaction. On August 21, 2000, Southard
and Gerrish provided their written opinion, addressed to the BankFirst Board,
that the terms and conditions of the merger were fair from a financial point of
view to the BankFirst shareholders. See "Opinion of BankFirst's Financial
Advisor."
On August 22, 2000, a special meeting of the BankFirst Board was convened to
consider a merger with BB&T. Mr. Lawson reviewed with the BankFirst Board the
terms of the proposed merger agreement, stock option agreement and employment
agreements, as well as the regulatory process. Southard and Gerrish orally
updated to management their written opinion, dated August 21, 2000, that the
terms and conditions of the merger were fair from a financial point of view to
the shareholders of BankFirst. Management made its recommendation in favor of
the merger with BB&T. After further questions, comments and discussion by the
BankFirst Board, the board unanimously voted to approve the merger, the merger
agreement and the stock option agreement and to recommend that BankFirst's
shareholders approve the merger agreement.
Following additional discussions of the terms of the definitive documents
between their respective outside counsel, on the morning of August 23, 2000,
BankFirst and BB&T executed and delivered the merger agreement and the stock
option agreement and issued immediately thereafter a joint press release
announcing the transaction.
BankFirst's Reasons for the Merger
In reaching the conclusion that the merger agreement and the merger are in
the best interests of and advisable for BankFirst and its shareholders, and in
approving the merger agreement, the stock option agreement and the transactions
contemplated by those agreements, the BankFirst Board considered and reviewed
with BankFirst's senior management, as well as its financial and legal
advisors, a number of factors. These factors include the following:
. The Board's belief that the terms of the merger, the merger agreement
and the stock option agreement are fair to and are in the best interests
of BankFirst shareholders.
. The fact that the exchange ratio of BB&T stock being offered for
BankFirst common stock represented a substantial premium over recent
market prices of BankFirst common stock.
12
<PAGE>
. Information regarding the business, operations, financial condition,
demographics, technological capabilities, management, earnings and
prospects of each of BankFirst and BB&T.
. The current financial services industry environment, including
.. increased competition;
.. the increasing use of technology-based new product delivery systems,
such as the Internet, and the related expense and potential
advantages of scale;
.. decline in net interest spreads and the market's valuation of banking
organizations;
.. the apparent approaching end of pooling-of-interests accounting
during the first quarter of 2001, which may affect market premiums
for at least some period and may also negatively impact BankFirst's
acquisition program.
. The written opinion dated August 21, 2000, which was orally updated to
management on August 22, 2000, and accompanying analyses of Southard
Financial and Gerrish & McCreary LLC Consultants to the effect that the
terms and conditions of the merger, as stated in the merger agreement,
were fair from a financial point of view to BankFirst's shareholders
(see "Opinion of BankFirst's Financial Advisor").
. That the merger is intended to be generally tax-free for federal income
tax purposes.
. The compatibility of BB&T's business plan and vision with BankFirst's
community banking orientation, BB&T's record as an acquiror of other
banks, and BB&T's commitments relating to the regional banking structure
for the BankFirst system, BankFirst's employees and BankFirst's
communities.
. The fact that BB&T's present quarterly dividends to its shareholders
will be greater than BankFirst's annual dividend to its common
shareholders as first paid in June 2000.
. The fact that certain interests of BankFirst's officers and directors
may be 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 both the outstanding shares of BankFirst common stock and
BankFirst preferred stock entitled to vote thereon.
The foregoing discussion of the information and factors considered by the
BankFirst Board is not meant to be exhaustive, but indicates the material
matters considered by the BankFirst 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 BankFirst is an exceptional
community bank, the acquisition of which will improve BB&T's financial
performance and franchise value and give BB&T its first entry into Tennessee
and expand its presence along the fast-growing corridors of Interstate 75 and
Interstate 81. BB&T's management further believes that the merger will benefit
BankFirst's customers by giving them access to new and expanded products and
services like capital markets, cash management services, leasing and
international banking.
13
<PAGE>
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 2000 and 2001 and BankFirst's 2000 earnings per share on
a stand-alone basis would be in line with the estimates 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%;
. Annual cost savings of approximately $6.2 million, or 20% of BankFirst's
expense base, would be realized as a result of the merger in the first
12 months of operations after conversion;
. BankFirst's core net interest margin (non-fully taxable equivalent)
would be held constant;
. BankFirst's noninterest income would increase at a rate of 15% per year
in years 1-5 and at 12% per year thereafter;
. Bank First's noninterest expense would increase at a rate of 9% in year
1 and at 12% per year thereafter;
. BankFirst's net charge-off rate for loan losses would be increased to
0.35% in year 1and held constant thereafter; and
. BankFirst's loan loss allowance would be raised to 1.30% to match BB&T's
reserve philosophy.
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, cash basis earnings per
share, return on equity, cash basis return on equity and book value in
year 1;
. be dilutive to return on assets and cash basis return on assets in all
years; and
. result in a combined leverage ratio over 7% in year 2.
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 $2.9
million related to completing the merger.
In addition to the analysis described above, BB&T performed an internal rate
of return analysis for this transaction. The purpose of this analysis was to
determine if the projected performance of BankFirst, 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 BankFirst merger indicated that
the projected internal rate of return is 18.92%.
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 iv.
Opinion of BankFirst's Financial Advisor
BankFirst retained Southard Financial and Gerrish & McCreary LLC Consultants
of Memphis, Tennessee to provide an opinion of the fairness to the BankFirst
shareholders, from a financial standpoint, of the merger.
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On August 22, 2000, the BankFirst Board held a meeting to evaluate the
proposed merger. Prior to this meeting, Southard and Gerrish orally updated
management as to their written opinion, dated August 21, 2000, that as of that
date and based upon and subject to the factors and assumptions set forth in
their written opinion, the terms and conditions of the merger were fair, from a
financial point of view, to the BankFirst shareholders. [Southard and Gerrish
subsequently confirmed and updated its August 21, 2000 opinion in writing by
delivering to the BankFirst Board a written opinion dated as of the date of
this proxy statement/prospectus. In connection with this updated written
opinion, Southard and Gerrish confirmed the appropriateness of their reliance
on the analyses used to render their earlier opinion. They also performed
procedures to update certain of their analyses and reviewed the assumptions
used in their analyses and the factors considered in connection with their
earlier opinion.]
The full text of the Southard and Gerrish opinion, which describes, among
other things, the assumptions made, matters considered, and qualifications and
limitations on the review undertaken by Southard and Gerrish is attached as
Appendix B to this proxy statement/prospectus and is incorporated into this
proxy statement/prospectus by reference. BankFirst urges its shareholders to
read Southard and Gerrish's opinion carefully and in its entirety. Southard and
Gerrish's opinion is directed to the BankFirst Board and addresses only the
fairness, from a financial point of view, of the merger to the BankFirst
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 BankFirst 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 their opinion, Southard and Gerrish, among other
things, reviewed and analyzed:
. certain publicly available business and financial information relating
to BankFirst and BB&T that Southard and Gerrish deemed to be relevant,
including, the historical earnings and dividend payments of each bank,
comparisons with peer banks and the competitive environments of the
respective markets;
. BB&T's internal financial analysis of the merger;
. reports of analysts that cover BB&T and its stock;
. current and historical market prices of bank holding companies in
Tennessee and surrounding states;
. recent bank merger transactions in the United States;
. the financial performance and investment characteristics of BankFirst
and BB&T common stock, including, recent minority stock transactions in
BankFirst's stock;
. current and historical trading prices and volumes for BankFirst and BB&T
common stock;
. the merger agreement;
. the pro forma impact of the merger;
. the process used by the BankFirst Board to evaluate the merger; and
. such other financial studies and analyses as Southard and Gerrish deemed
necessary, including, Southard and Gerrish's assessment of general
economic, market and monetary conditions.
Southard and Gerrish also conducted discussions with members of senior
management and representatives of BankFirst 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 resulting from the merger.
In rendering their opinion, Southard and Gerrish assumed and relied on the
accuracy and completeness of all information supplied or otherwise made
available to Southard and Gerrish, or that was discussed with, or reviewed by
or for Southard and Gerrish, or that was publicly available, and Southard and
Gerrish did not
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assume any responsibility for independently verifying this information or
undertake an independent evaluation or appraisal of the assets or liabilities
of BankFirst or BB&T nor has Southard or Gerrish been furnished with such
evaluation or appraisal. Neither Southard nor Gerrish is 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 BankFirst or
BB&T. Neither Southard nor Gerrish reviewed any individual credit files of
BankFirst or BB&T, nor have they been requested to conduct such a review. As a
result, Southard and Gerrish have assumed that the aggregate allowances for
loan losses for both BankFirst and BB&T are adequate to cover such losses and
will be adequate on a pro forma basis for the combined company. In addition,
Southard and Gerrish did not assume any obligation to conduct, nor did Southard
or Gerrish conduct, any physical inspection of the properties or facilities of
either BankFirst or BB&T.
With respect to the financial and operating forecast information furnished
to or discussed with Southard and Gerrish by BankFirst or BB&T, including, the
cost savings, revenue enhancements and related expenses expected to result from
the merger, Southard and Gerrish assumed that the information was reasonably
prepared and reflected the best available estimates and judgments of the senior
management of BankFirst and BB&T as to the future financial and operating
performance of BankFirst, BB&T or the combined entity, as the case may be.
Southard and Gerrish's opinion is necessarily based upon market, economic and
other conditions as in effect on, and on the information made available to
Southard and Gerrish as of, the date of their opinion. For purposes of
rendering their opinion, Southard and Gerrish assumed that, in all respects
material to their 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.
Southard and Gerrish's opinion is not an expression of an opinion as to the
prices at which shares of BankFirst 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. In performing their
analyses, Southard and Gerrish 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 Southard,
Gerrish, BankFirst and BB&T. Any estimates contained in the analyses performed
by Southard and Gerrish 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 Southard and Gerrish opinion was among several factors taken into
consideration by the BankFirst Board in making its determination to approve the
merger agreement and the merger. Therefore, the analyses described below should
not be viewed as determinative of the decision of the BankFirst Board or
management of BankFirst with respect to the fairness of the merger.
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<PAGE>
The following is a summary of the material financial analyses presented by
Southard and Gerrish to the BankFirst Board on August 22, 2000 in connection
with the rendering of their written opinion dated August 21, 2000, which was
orally updated on August 22, 2000. The summary is not a complete description of
the analyses underlying the Southard and Gerrish opinion, 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 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 their opinion, Southard and Gerrish did not attribute any
particular weight to any analysis or factor that they considered, but rather
made qualitative judgments as to the significance and relevance of each
analysis and factor. Accordingly, Southard and Gerrish believe that their
analyses and the summary of their analyses must be considered as a whole and
that selecting portions of their analyses 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 their analyses and
opinion.
Exchange Ratio Analysis
Southard and Gerrish reviewed the terms of the merger and noted that the
exchange ratios of 0.4554 shares of BB&T common stock for each share of
BankFirst common stock and 1.406 shares of BB&T common stock for each share of
BankFirst preferred stock equated to a purchase price of $12.01 per share of
BankFirst stock (common and common equivalents) based on upon the closing price
of BB&T common stock on August 18, 2000 of $26.375.
The purchase price of $12.01 per share of BankFirst stock (common and common
equivalents) represents 158.4% of BankFirst's book value as of June 30, 2000,
15.01 times BankFirst's estimated year 2000 earnings and 16.42% of BankFirst's
assets at June 30, 2000. Based upon their review of publicly traded banks and
bank holding companies in the United States, including Tennessee, Southard and
Gerrish concluded that the pricing for the merger is within the range seen in
recent bank acquisitions. However, Southard and Gerrish noted in their opinion
that, because BankFirst is overcapitalized, its price/book ratio of 158.4% and
price/asset ratio of 16.42% are below the averages of 234.9% and 19.79%,
respectively, for all transactions surveyed in the United States.
The purchase price of $12.01 per share represents a premium of 15.8% over
the August 18, 2000 closing price of $10.375 per share of BankFirst common
stock. However, Southard and Gerrish noted that an article contained in the
August 14, 2000, southern edition of SNL Bank and Thrift Weekly stated that
BB&T's chief financial officer, speaking at the SNL Center for Financial
Education's annual analyst training conference in Charlottesville, Virginia, on
August 7, 2000, reiterated BB&T's desire to operate in eastern Tennessee and
reviewed some of BB&T's criteria for identifying targets. The article further
stated that given those criteria, SNL Financial Datasource yielded only four
likely public targets in eastern Tennessee, including BankFirst. Following the
publication of this article, the trading volume and price of BankFirst stock
materially increased. Consequently, Southard and Gerrish opined that the
pricing of BankFirst stock after August 7, 2000 should be disregarded. Before
August 7, 2000, BankFirst common stock traded in the range of $8.00 to $9.75
per share. Based on a weighted average price of $9.00 per share, the merger
price of $12.01 per share would represent a premium of approximately 33%.
Discounted Cash Flow Analysis of BankFirst Stock
Southard and Gerrish performed a discounted cash flow analysis of BankFirst
common stock in order to compare the value of BankFirst common stock, assuming
BankFirst continued to operate independently, with the merger price of $12.01
per share. Southard and Gerrish calculated the present value of BankFirst
common stock by adding (i) the present value of the estimated future dividend
stream that BankFirst could generate over the ten year period 2001 through
2010; and (ii) the present value of the "terminal value" of BankFirst common
stock at the end of 2010.
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Southard and Gerrish determined BankFirst's projected dividend stream by
assuming an equity/assets ratio of 8.25% and annual growth of earnings and
assets of between 5% and 8%. The terminal value of BankFirst common stock at
the end of 2010 was determined by applying a price/earnings multiple of 15-16
times projected BankFirst's net income for 2010. The dividend stream and
terminal value were discounted to the present using discount rates of 12% to
15%. Using this analysis, the proposed merger price exceeds the implied value
of BankFirst operating independently.
Comparable Transaction Analysis
Southard and Gerrish reviewed publicly available pricing data for minority
interests in over 600 banks and bank holding companies in the United States as
of June 30, 2000. Southard and Gerrish compared BB&T and BankFirst to other
publicly traded banks using the following ratios: price/earnings, price/book
value, current return on average equity and current dividend yield.
Southard and Gerrish compared the pricing of BB&T and BankFirst to the
pricing of publicly traded banks and bank holding companies across the United
States and in Tennessee and surrounding states. Pricing data for minority
interests in banks and bank holding companies (nationwide) is summarized as
follows:
<TABLE>
<CAPTION>
Price/ Price/ Current Current
Publicly Traded Banks(1) Earnings Book Value ROAE Yield
------------------------ -------- ---------- ------- -------
<S> <C> <C> <C> <C>
Banks Under $2.0BB Market
Capitalization (240)........... 11.54x 154.1% 13.29% 3.28%
Banks Under $500MM Market
Capitalization (201)........... 11.43 147.1 12.81 3.20
South Central Banks (54)........ 11.47 149.0 12.79 3.49
Tennessee Banks (5)............. 13.79 161.0 11.39 3.83
North Carolina Banks (14)....... 11.43 143.9 12.66 3.46
TN/AL/AR/GA/KY/MO/MS/NC/VA Banks
(71)........................... 11.98 140.6 11.73 3.59
BB&T--Recent Price ($26.375).... 12.15(2) 255.3(3) 18.83 3.03(4)
Bank First--Recent Price
($10.375)...................... 12.97 136.9 10.31 1.54
</TABLE>
--------
(1) As of June 30, 2000; subject to certain screens performed by Southard and
Gerrish
(2) Based upon estimated 2000 earnings ($2.17 per share for BB&T and $0.80 per
common share for BankFirst)
(3) Based upon June 30, 2000 book value ($10.33 per share for BB&T and $7.58
per common share for BankFirst)
(4) Based upon indicated dividends ($0.80 per share for BB&T and $0.16 per
common share for BankFirst)
Based upon an overall analysis of the data set forth in the table above, the
price/earnings ratios of BB&T (12.15) and BankFirst (12.97) are above average.
BB&T's price/book ratio of 255.3 is significantly above average because of its
low capital and high return on assets. BankFirst's price/book ratio (136.9) is
below average due to its above average capital ratio. BB&T's current dividend
yield (3.03%) is near the average, while BankFirst's (1.54%) is below average.
Pro Forma Analysis
Southard and Gerrish reviewed the Merger Evaluation Model prepared by BB&T
and dated as of August 18, 2000. BB&T's analysis indicated that the merger
would dilute BB&T's earnings in 2000 but would be accretive thereafter. BB&T's
analysis assumed 20% annual cost savings at BankFirst and 12% annual growth in
earnings and assets. The actual results achieved as a result of the merger may
vary from the projected results, and the variations may be material.
BankFirst retained Southard and Gerrish based upon their experience and
expertise in providing valuation services for financial institutions and
closely-held companies. Southard provides valuation services for approximately
120 financial institutions annually. Gerrish is a bank advisory and consulting
firm affiliated with the law firm of Gerrish & McCreary, P.C. These two firms
have represented over 1,000 community banks in a
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variety of matters, including mergers and acquisitions. Pursuant to an oral
agreement between BankFirst and Southard and Gerrish, BankFirst agreed to pay
Southard and Gerrish total professional fees of $265,000 for rendering their
fairness opinion and providing financial advisory services in connection with
the merger. In addition, BankFirst agreed to reimburse Southard and Gerrish for
certain expenses incurred in connection with the provision of their
professional services.
Exchange Ratio
In the merger, each share of BankFirst common stock outstanding when the
merger becomes effective will be converted into the right to receive 0.4554
shares of BB&T common stock and each share of BankFirst preferred stock
outstanding when the merger becomes effective (other than shares held by any
dissenting shareholders) will be converted into the right to receive 1.406
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 after surrender and exchange of your certificates for
shares of BankFirst stock may be more or less than the closing price per share
of BB&T common stock at any other time. We urge you 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 that will be determined by
multiplying the fractional part of the share of BB&T common stock by the
average closing price per share of BB&T common stock on the NYSE at 4:00 p.m.
Eastern time on the date that the merger becomes effective as reported on
NYSEnet.com.
Exchange of BankFirst Stock Certificates
At the effective time of the merger and without any action on the part of
BankFirst or the BankFirst shareholders, shares of BankFirst common stock and
preferred stock will be converted into and will represent the right to receive,
upon surrender of the certificate representing the shares as described below,
whole shares of BB&T common stock and cash for any fractional share interest.
Promptly after the effective time, BB&T will deliver or mail to you a form of
letter of transmittal and instructions for surrender of your BankFirst 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, together with any declared and
unpaid dividends with respect to BankFirst common stock and any accrued and
unpaid dividends with respect to BankFirst preferred stock.
You should not send in your stock certificates until you receive the letter
of transmittal and instructions.
After the effective time, and until surrendered as described above, each
outstanding BankFirst stock certificate will be deemed for all purposes to
represent only the right to receive the merger consideration and any declared
and unpaid dividends (with respect to BankFirst common stock) or accrued and
unpaid dividends (with respect to BankFirst preferred stock). 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 BankFirst stock. With respect to any BankFirst stock
certificate that has been lost or destroyed, BB&T will pay the merger
consideration attributable to the 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 effective time, BankFirst's transfer books will be
closed and no transfer of the shares of BankFirst stock outstanding immediately
before the effective time will be made on BB&T's stock transfer books.
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If BankFirst declares a dividend on the BankFirst common stock in accordance
with the merger agreement which has a record date before the effective time,
and that dividend has not been paid before the effective time, BB&T will pay
the dividend to the former BankFirst shareholders. Also, on the day on which
the effective time of the merger occurs, BankFirst will pay a dividend in
respect of shares of BankFirst preferred stock. The per-share amount of this
preferred dividend will equal the product of $0.0625 times a fraction, the
numerator of which is the number of days since the payment date of the previous
BankFirst preferred stock dividend and the denominator of which is 91. This
payment will constitute the sole right of the holders of BankFirst preferred
stock to a dividend with respect to that stock.
To the extent permitted by law, you will be entitled to vote after the
effective time at any meeting of BB&T shareholders the number of whole shares
of BB&T common stock into which your shares of BankFirst stock are converted,
regardless of whether you have exchanged your BankFirst stock certificates for
BB&T stock certificates. Whenever BB&T declares a dividend or other
distribution on the BB&T common stock which has a record date after the
effective time, the declaration will include dividends or other distributions
on all shares of BB&T common stock issuable under the merger agreement.
However, no dividend or other distribution payable to the holders of record of
BB&T common stock will be delivered to you until you surrender your BankFirst
stock certificate for exchange as described above. Upon surrender of your
BankFirst stock certificate, the certificate representing the BB&T common stock
into which your shares of BankFirst stock have been converted, together with
cash in lieu of any fractional share of BB&T common stock to which you would
otherwise be entitled and any undelivered dividends, will be delivered and paid
to you, without interest.
The Merger Agreement
Effective Date and Time of the Merger
The merger agreement provides that the closing of the merger will take place
on a business day designated by BB&T that is within 30 days after 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 Tennessee. It is
currently anticipated that the filing of the articles of merger will take place
as soon as practicable after the date on which the merger agreement is approved
by the BankFirst shareholders and all other conditions to the respective
obligations of BB&T and BankFirst to complete the merger have been satisfied.
If the merger is approved at the meeting, BB&T and BankFirst currently
anticipate that the filing of the articles of merger and the effective time
will occur by January 1, 2001.
Conditions to the Merger
The obligations of BB&T and BankFirst 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 must have been duly and validly taken, including the
approval of the shareholders of BankFirst of the merger agreement;
. 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 "stop order" or similar
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 consents and 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;
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. neither BB&T nor BankFirst 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 (provided that the parties
must use commercially reasonable efforts to have any order, decree or
injunction vacated, reversed or removed); and
. BankFirst and BB&T must have received an opinion of BB&T's legal
counsel, in form and substance satisfactory to BankFirst and BB&T, to
the effect that the merger will constitute a reorganization under
Section 368 of the Internal Revenue Code of 1986, as amended, and that
the shareholders of BankFirst will not recognize any gain or loss to the
extent that they exchange shares of BankFirst common stock or BankFirst
preferred stock for shares of BB&T common stock.
The obligations of BankFirst 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 BankFirst:
. 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; and
. BankFirst must have received certain closing certificates and legal
opinions from BB&T and its counsel.
In addition, all representations and warranties of BB&T will be evaluated as
of the date of the merger agreement and at the effective time as though made at
the effective time (or on the date designated, in the case of any
representation and warranty that specifically relates to an earlier date),
except as otherwise provided in the merger agreement or consented to in writing
by BankFirst. The representations and warranties of BB&T concerning:
. its capitalization,
. its and its subsidiaries' organization and authority to conduct
business,
. its authorization of, and the binding nature of, the merger agreement
and
. the absence of any conflict between the transactions in the merger
agreement and BB&T's articles of incorporation or bylaws
must be true and correct (except for non-material inaccuracies). Moreover,
there must not be any inaccuracies in the representations and warranties of
BB&T in the merger agreement such that the aggregate effect of the 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 completion of the
transactions inadvisable or unduly burdensome;
. BankFirst 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 certain closing certificates and legal opinions
from BankFirst and its counsel;
. BB&T must have received written agreements from affiliates of BankFirst
to the extent necessary, in the reasonable judgment of BB&T, to promote
compliance with Rule 145 under the Securities Act; and
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<PAGE>
. BB&T must have received employment agreements executed by Fred R. Lawson
and R. Stephen Hagood.
In addition, all representations and warranties of BankFirst will be
evaluated at the date of the merger agreement and at the effective time as
though made on and at the effective time (or on the date designated, in the
case of any representation and warranty that specifically relates to an earlier
date), except as otherwise provided in the merger agreement or consented to in
writing by BB&T. The representations and warranties of BankFirst concerning:
. its capitalization,
. its and its subsidiaries' organization and authority to conduct
business,
. its ownership of its subsidiaries and other equity interests,
. its authorization of, and the binding nature of, the merger agreement,
. the absence of conflict between the transactions in the merger agreement
and BankFirst's articles of incorporation or bylaws,
. its forbearance from taking any actions that would negatively affect the
tax-free elements of the merger or the receipt of necessary regulatory
approvals and
. actions taken to exempt the merger from any applicable anti-takeover
laws
must be true and correct (except for non-material inaccuracies). Moreover,
there must not be any inaccuracies in the representations and warranties of
BankFirst in the merger agreement such that the effect of the inaccuracies
individually or in the aggregate has, or is reasonably likely to have, a
material adverse effect on BankFirst and its subsidiaries taken as a whole.
Conduct of BankFirst's and BB&T's Businesses Before the Effective Time of the
Merger
Except with BB&T's prior consent, not to be unreasonably or arbitrarily
withheld or delayed, before the effective time of the merger, neither BankFirst
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 $0.0625 per share
payable with respect to BankFirst preferred stock payable on record
dates consistent with past practices (except that for the period
beginning on the payment date of the last dividend paid before the
effective time of the merger and ending when the effective time occurs,
the dividend payable will be as described above under the caption "--
Exchange of BankFirst Stock Certificates");
. issue any shares of capital stock, except in accordance with options
outstanding as of the date of the merger agreement, in accordance with
the option granted to BB&T in connection with the merger agreement or on
the conversion of shares of BankFirst preferred stock in accordance with
its terms;
. 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 the grant of rights to
purchase up to 100,000 shares of BankFirst stock under existing stock
option plans in the ordinary course of business consistent with past
practices;
. amend its charter or bylaws;
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. impose or permit the imposition or existence of any lien, charge or
encumbrance on any share of stock held by it in any BankFirst 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 under 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 renewals consistent with past practice);
. solicit inquiries or proposals with respect to, furnish any information
relating to, or participate in any discussions concerning, any other
business combination with BankFirst or any BankFirst subsidiary, or fail
to notify BB&T immediately if any such inquiry or proposal is received,
any information is requested or required or any discussions are sought
(except that this would not apply to furnishing information,
negotiations or discussions with the offeror after an unsolicited offer
if BankFirst is advised by legal counsel that in its opinion the failure
to furnish information or negotiate would likely constitute a breach of
the fiduciary duty of the BankFirst Board to the BankFirst
shareholders);
. enter into (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
BankFirst or a BankFirst subsidiary or guarantee by BankFirst or a
BankFirst 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 as provided for in the merger agreement;
. change its methods of accounting in effect at December 31, 1999, except
as required by changes in accounting principles concurred in by BB&T
(which may not unreasonably withhold its concurrence) 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, 1999,
except as required by changes in law;
. except for certain permitted expenditures, incur any new commitments for
capital expenditures or obligations to make capital expenditures in
excess of $25,000 for any one expenditure or $100,000 in the aggregate;
. incur any new 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;
. take any action that would or could reasonably be expected to (a) cause
the merger 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
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. agree to do any of the foregoing.
BankFirst has also agreed:
. to take 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 BankFirst shareholders, abrogate the
covenants contained in the merger agreement or substantially delay the
completion of the merger;
. to cooperate with BB&T in certain respects concerning (a) accounting and
financial matters necessary to facilitate the merger, including issues
arising in connection with record keeping, loan classification,
valuation adjustments, levels of loan loss reserves and other accounting
practices and (b) BankFirst's lending, investment or asset/liability
management policies;
. to keep BB&T advised of all material developments relevant to its
business before completion of the merger; and
. to provide BB&T access to BankFirst's books and records.
Except with the prior consent of BankFirst, 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 that would or might be expected to:
. cause the merger not to constitute a tax-free reorganization,
. result in any inaccuracy of a representation or warranty that would
allow termination of the merger agreement,
. cause any of the conditions precedent to the transactions contemplated
in 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 BankFirst 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 BankFirst advised of all material developments
relevant to its business before completion of the merger.
Waiver; Amendment; Termination; Expenses
Except with respect to any required regulatory approval or other condition
required by law, BB&T or BankFirst may at any time (whether before or after
approval of the merger agreement and the plan of merger by the BankFirst
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,
the plan of merger or any document delivered pursuant thereto, (b) compliance
with any of the covenants, undertakings or agreements of the other party, or
satisfaction of any of the conditions precedent to its obligations, contained
in the merger agreement or in the plan of merger or (c) the performance by the
other party of any of its obligations set out in the merger agreement or in the
plan of merger. The parties may also mutually amend or supplement the merger
agreement in writing at any time. However, no extension, waiver, amendment or
supplement which would reduce either the exchange ratio or the payment terms
for fractional interests to be provided to holders of BankFirst common stock or
Bank First preferred stock upon completion of the merger will be made after the
BankFirst shareholders approve the merger agreement and the plan of merger.
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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 the
nonfulfillment. In the case of the nonfulfillment of a condition to BankFirst's
obligations, BankFirst will, if it determines it appropriate under the
circumstances, resolicit shareholder approval of the merger agreement and the
plan of merger and provide appropriate information concerning the obligation
that has not been satisfied.
The merger agreement may be terminated, and the merger may be abandoned:
. at any time before the effective time, by the mutual consent in writing
of BB&T and BankFirst;
. at any time before the effective time, by either party (a) in the event
of a material breach by the other party of any covenant or agreement
contained in the merger agreement or (b) in the event of an inaccuracy
of any representation or warranty of the other party contained in the
merger agreement that would provide the nonbreaching party the ability
to refuse to complete the merger under the applicable standard in the
merger agreement (see "--Conditions to the Merger"); and, in either
case, if the breach or inaccuracy has not been cured by the earlier of
30 days after notice of the breach or inaccuracy to the party committing
it or the effective time;
. at any time before the effective time, by either party in writing, if
any of the conditions precedent to the obligations of the other party to
complete the transactions contemplated by the merger agreement cannot be
satisfied or fulfilled before the effective time, and the party giving
the notice is not in material breach of any of its representations,
warranties, covenants or undertakings;
. at any time, by either party in writing, if any of the applications for
prior regulatory approval are denied and the time period for appeals and
requests for reconsideration has run;
. at any time, by either party in writing, if the shareholders of
BankFirst do not approve the merger agreement by the required vote;
. at any time after March 31, 2001 by either party in writing, if the
effective time has not occurred by the close of business on that date
and the party giving the notice is not in material breach of any of its
representations, warranties, covenants or undertakings; or
. at any time, by either party in writing, if an order, decree or
injunction is imposed by a court or agency of competent jurisdiction
which enjoins or prohibits completion of the transactions contemplated
by the merger agreement, provided that the parties have taken
commercially reasonable steps to have the order, decree or injunction
vacated, reversed or removed but the order, decree or injunction is not
successfully vacated, reversed or removed and becomes non-applicable and
final.
If the merger agreement is terminated in accordance with any of the
provisions described above, both the merger agreement and the plan of merger
will become void and have no effect, except that (a) provisions in the merger
agreement relating to confidentiality and 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.
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 BankFirst.
Interests of Certain Persons in the Merger
Certain members of BankFirst's management have interests in the merger that
are in addition to their interests as BankFirst shareholders and optionholders.
The BankFirst Board was aware of these factors and considered them, among other
matters, in approving the merger agreement and the merger.
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Employment Agreements
In connection with the merger, Branch Banking and Trust Company, BB&T's
North Carolina banking subsidiary ("BB&T-NC") expects to enter into a three-
year employment agreement with each of Fred R. Lawson, Jerry L. French, C.
David Allen, David M. Butler, Michael L. Bryson and L. Allen Rathbone, and BB&T
expects to enter into a five-year employment agreement with R. Stephen Hagood.
The employment agreements will provide for the employment of Mr. Lawson as
President and Chief Executive Officer of BankFirst's main banking subsidiary,
for the employment of Mr. Hagood as Senior Vice President of BB&T-NC and
.
Each of the employees will receive a minimum annual base salary during the
term of his employment agreement as follows: Mr. Lawson, $281,782; Mr. French,
$ ; Mr. Allen, $ ; Mr. Butler, $ ; Mr. Bryson, $ ; Mr. Rathbone, $ ;
and Mr. Hagood, $158,000. Salaries will be reviewed annually in accordance with
the compensation policies and procedures of the employer. No later than the
month after the effective time of the merger of the last of BankFirst's banking
subsidiaries into BB&T or its subsidiaries, each employee will be eligible to
receive an annual bonus payment under BB&T's Amended and Restated Short Term
Incentive Plan. In addition, the employees will be granted stock options
annually under BB&T's Amended and Restated 1995 Omnibus Stock Incentive Plan or
a successor plan on the same basis as similarly situated officers of BB&T-NC,
although the number of options granted, if any, as of the first BB&T grant date
will be equitably adjusted by BB&T so as to avoid duplication of options with
any options to acquire BankFirst common stock granted to the employees during
the year ending on that first BB&T grant date.
The employment agreements further provide that the employee will receive, on
the same basis as other similarly situated officers of BB&T-NC, employee
pension and welfare 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. These benefits will begin
on a date determined no later than January 1 after the close of the year in
which the last of BankFirst's bank subsidiaries is merged into BB&T or one of
its subsidiaries. Until that date, BankFirst plans that provide benefits of the
same type or class as a corresponding BB&T plan will continue in effect for the
employees.
Mr. Lawson's agreement provides that, 60 days after completion of conversion
of BankFirst's data processing systems to those of BB&T-NC, he will relinquish
his responsibilities as President and Chief Executive Officer of BankFirst's
main banking subsidiary to become an independent consultant to BB&T-NC. As an
independent consultant, Mr. Lawson would render services as an independent
contractor (and not as an employee) in the nature of customer and community
relations, business development, employee relations and general advice and
assistance relating to BB&T-NC's customers and employees and to the growth and
development in Tennessee of the business of BB&T-NC. These services would be
rendered at times and on a schedule determined by Mr. Lawson, and reasonably
convenient to both BB&T-NC and Mr. Lawson. Mr. Lawson would not be required to
maintain records of hours worked or to work in accordance with any fixed
schedule during the portion of the agreement's term that he is a consultant.
During the consulting period, the employment agreement would generally
continue in full force and effect in accordance with its terms, except that Mr.
Lawson would not be entitled during the consulting period to receive base
salary, bonuses, stock options or employee benefits on the same basis as he
would as an employee of BB&T-NC. Instead, he would receive during the
consulting period, as compensation for the consulting services and in
consideration of covenants not to compete that he has made in the agreement, an
annual amount equal to his annual base salary rate in effect immediately
preceding the start of the consulting period, payable in substantially equal
monthly installments. In addition, in consideration of his consulting services
and his noncompetition covenants, he would be provided:
. health insurance and life insurance benefits comparable to the group
employee benefits which BB&T-NC may from time to time extend to its
officers, at a cost to Mr. Lawson no greater than the cost to the
officers;
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. a retirement benefit payable directly by BB&T-NC economically equivalent
to the benefit he would have received under BB&T-NC's defined benefit
pension plan (and reduced by any duplicative benefits payable under the
defined benefit plan) if he had been an employee of BB&T-NC during the
consulting period, payable in accordance with the same payment options
as are available under the defined benefit plan at the end of the
agreement's term;
. a benefit economically equivalent to the benefit he would have been
entitled to receive under BB&T-NC's Section 401(k) plan if he were a
participant in the plan, based on compensation deferrals by Mr. Lawson
during the Consulting Period and investment performance of investment
options available under the plan as selected from time to time by Mr.
Lawson, payable in accordance with the same payment options as are
available under the plan at the end of the term of the agreement; and
. the disability benefits otherwise provided for in the agreement or
economically equivalent benefits.
Each employment agreement provides that, if the employer terminates the
employee's employment other than because of disability or for cause and if the
employee complies with certain noncompetition provisions, he will be entitled
to receive as "Termination Compensation" an annual payment equal to the highest
amount of cash compensation (including bonuses) received during any of the
preceding three calendar years for the period commencing on the date of the
termination and ending at the end of the original term of the agreement. In
addition, each employee 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. If BB&T-NC terminates Mr. Lawson's
consulting relationship under his employment agreement other than for cause or
because of disability, he will be entitled to continue to receive, for the
remainder of the term of his agreement, the consulting compensation and
benefits described above.
Each employment agreement further provides that, in the event of a "Change
of Control" (as defined below) of BB&T-NC or BB&T, the employee may voluntarily
terminate employment for "Good Reason" (as defined below) until twelve months
after the Change of Control and (a) be entitled to receive in a lump sum
(1) any compensation due but not yet paid through the date of termination and
(2) in lieu of any further salary payments from the date of termination to the
end of the term of the agreement, an amount equal to his Termination
Compensation times 2.99 (or, in the case of Mr. Lawson, if the change of
control occurs during his consulting period, the amount of his cash
compensation rate times 2.99), and (b) continue for the remainder of the term
of the agreement to receive health insurance coverage and other group employee
welfare benefits on the same terms as were in effect either (1) at the date of
termination or (2) if the plans and programs in effect before the Change of
Control were, considered together as a whole, materially more generous to the
officers of BB&T-NC than the plans and programs at the date of termination, at
the date of the Change of Control.
"Good Reason" means any of the following events occurring without the
consent of the employee in question:
. the assignment to him of duties inconsistent with the position and
status of the offices and positions held with BB&T-NC immediately before
the Change of Control;
. a reduction in his base salary as then in effect, or his exclusion from
participation in benefit plans in which he participated immediately
before the Change of Control;
. an involuntary relocation of him more than 30 miles from the location
where he worked immediately before a Change in Control, or BB&T-NC's
breach of any material provision of the employment agreement; or
. any purported termination of his employment by BB&T-NC not effected in
accordance with the employment agreement.
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A "Change of Control" would be deemed to occur if:
. any person or group of persons (as defined in the Securities Exchange
Act of 1934, as amended) together with its affiliates, excluding
employee benefit plans of BB&T-NC or BB&T, is or becomes the beneficial
owner of securities of BB&T-NC or BB&T representing 20% or more of the
combined voting power of BB&T-NC's or BB&T's then outstanding
securities;
. as a result of a tender offer or exchange offer for the purchase of
securities of BB&T-NC or BB&T (other than an offer by BB&T for its own
securities), or as a result of a proxy contest, merger, consolidation or
sale of assets, or as a result of any combination of the foregoing,
individuals who at the beginning of any two-year period constitute the
BB&T Board, plus new directors whose election or nomination for election
by BB&T's shareholders is approved by a vote of at least two-thirds of
the directors still in office who were directors at the beginning of the
two-year period, cease for any reason during the two-year period to
constitute at least two-thirds of the members of the BB&T Board;
. the shareholders of BB&T approve a merger or consolidation of BB&T with
any other corporation or entity, regardless of which entity is the
survivor, other than a merger or consolidation that would result in the
voting securities of BB&T outstanding immediately beforehand continuing
to represent (either by remaining outstanding or by being converted into
voting securities of the surviving entity) at least 40% of the combined
voting power of the voting securities of BB&T or the other surviving
entity outstanding immediately after the merger or consolidation;
. the shareholders of BB&T approve a plan of complete liquidation or
winding-up of BB&T or an agreement for the sale or disposition by BB&T
of all or substantially all of BB&T's assets; or
. any other event occurs that the BB&T Board determines constitutes a
Change of Control.
If any of the payments to be made under any of the employment agreements
would constitute a "parachute payment," as defined in Section 280G of the
Internal Revenue Code, the payments would be reduced by the smallest amount
necessary so that no portion of the payments would be a "parachute payment." A
"parachute payment" generally is a payment which is contingent on a change in
the control of the corporation and the present value of which equals or exceeds
three times the "base amount," which is generally defined as an individual's
annualized includable compensation for the "base period," which is generally
the most recent five taxable years ending before the date of the change in
control. Sections 280G and 4999 of the Code generally provide that if
"parachute payments" are paid to an individual, everything above the base
amount will be subject to a 20% excise tax payable by the individual (in
addition to the payment of regular income taxes on the payments), as well as be
nondeductible by the employer for federal income tax purposes.
The employment agreements will supersede any of the existing employment
agreements and change of control arrangements of the employees with BankFirst
or its subsidiaries.
BB&T-NC Board of Directors; Advisory Board
The merger agreement provides that James L. Clayton, chairman of the
BankFirst Board, will be elected to BB&T-NC's board of directors as of the
effective time of the merger. Members of the BB&T-NC Board who are not
employees of BB&T or any of its affiliates are entitled to receive fees for
service on the board in accordance with BB&T's policies as in effect from time
to time.
At the effective time of the merger, BB&T will offer each member of the
BankFirst Board a seat on BB&T's advisory board for the BB&T Community Bank
region based in Knoxville, Tennessee, conditional upon BB&T's receipt of a
noncompetition agreement from the director. For two years after the effective
time, those members will receive, as compensation for service on the advisory
board, member's fees (annual retainer and attendance fees) at least equal in
amount each year to those that they were receiving as of August 1, 2000 as
directors of BankFirst. These advisory board members will thereafter receive
fees in accordance with
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BB&T's standard schedule of advisory board service fees. For two years after
the effective time, none of these board members may be prohibited from serving
because he or she has reached the maximum age for service, which is currently
age 70.
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 BankFirst for acts or
omissions occurring before the effective time. This insurance will provide at
least the same coverage and amounts as contained in BankFirst's policy on the
date of the merger agreement, unless the annual premium on the policy would
exceed 150% of the annual premium payments on BankFirst'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, employees of BankFirst or a BankFirst subsidiary before the
effective time of the merger from any acts or omissions in those capacities
before the effective time of the merger to the extent indemnification is
provided under the charter or bylaws of BankFirst and is permitted under the
North Carolina Business Corporation Act to the fullest lawful extent.
Rights of Dissenting Shareholders
Any holder of BankFirst preferred stock has the right to dissent from the
merger by complying with the procedures described in this section. In this
section, we refer to a person who exercises this right as a "dissenting
shareholder." The following summary does not purport to be a complete statement
of dissenters' rights of appraisal, and is qualified in its entirety by
reference to Chapter 23 of Title 48 of the TBCA, which is reproduced in full as
Appendix C to this proxy statement/prospectus.
Under the TBCA, any holder of BankFirst preferred stock has the right to
object to the merger and demand payment of the "fair value" of his or her
shares upon compliance with Sections 48-23-202 and 48-23-204 of the TBCA. A
shareholder may not dissent as to less than all of the shares that he or she
holds at the close of business on the record date. A nominee or fiduciary may
not dissent on behalf of a beneficial owner as to less than all of the shares
of the beneficial owner held of record by the nominee or fiduciary. A
beneficial owner asserting dissenters' rights to shares held on his or her
behalf must notify BankFirst in writing of the name and address of the record
holder of the shares, if known to him or her.
Any BankFirst shareholder intending to enforce his or her dissenters' rights
may not vote in favor of the merger agreement (either personally or by proxy)
and must deliver to BankFirst before the time of the vote a written notice of
intent to demand payment for his or her shares (an "objection notice"). The
objection notice must state that the shareholder intends to demand payment for
his or her shares of BankFirst preferred stock if the merger should be
effected. A vote against approval of the merger agreement will not, in and of
itself, constitute an objection notice satisfying the requirements of Section
48-23-202 of the TBCA.
If the merger agreement is approved by BankFirst's shareholders at the
meeting, each BankFirst shareholder who has filed an objection notice will be
notified by BankFirst of the approval no later than ten days after the meeting
(a "dissenter's notice"). The dissenter's notice will:
. state where the payment demand must be sent and where and when
certificates for certificated shares of BankFirst preferred stock must
be deposited,
. inform holders of uncertificated shares (if any) to what extent transfer
of the shares will be restricted after the payment demand is received,
. supply a form for demanding payment that includes the date of the first
announcement to news media or to shareholders of the principal terms of
the proposed corporate action and requires that the person asserting the
dissenters' rights certify whether or not he or she acquired beneficial
ownership of the shares before that date,
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. set a date by which BankFirst must receive the payment demand, which
date may not be fewer than one nor more than two months after the date
the dissenter's notice was delivered, and
. be accompanied by a copy of Chapter 23 of Title 48 of the TBCA.
Within the time prescribed in the dissenter's notice, a BankFirst shareholder
electing to dissent must make a demand for payment (a "payment demand"),
certify whether he or she (or the beneficial shareholder on whose behalf he or
she is asserting dissenters' rights) acquired beneficial ownership of the
shares of BankFirst preferred stock before August 23, 2000 (the date of the
first public announcement of the terms of the merger agreement), and deposit
all certificates in accordance with the terms of the dissenter's notice. Upon
delivering the payment demand and depositing the certificates in accordance
with the dissenter's notice, the dissenting shareholder will retain all other
rights of a BankFirst shareholder until these rights are canceled or modified
by completion of the merger. Failure to comply substantially with these
procedures will cause the dissenting shareholder to lose his or her dissenters'
rights to payment for the shares. Consequently, any BankFirst shareholder who
desires to exercise his or her rights to payment for his or her shares is urged
to consult his or her legal advisor before attempting to exercise these rights.
As soon as the merger is completed, or upon later receipt of a timely
payment demand, BB&T (as the surviving corporation in the merger and successor
in interest to BankFirst) will, under Section 48-23-206 of the TBCA, pay to
each dissenting shareholder who has complied with the requirements of Section
48-23-204 of the TBCA the amount which BB&T estimates to be the fair value of
the shares of BankFirst preferred stock, plus accrued interest. This payment
must be accompanied by:
. certain of BankFirst's financial statements,
. a statement of BB&T's estimate of the fair value of the shares,
. an explanation of how the interest was calculated,
. a statement of the dissenting shareholder's right to demand payment
under Section 48-23-209 of the TBCA, and
. a copy of Sections 48-23-101 through 48-23-302 of the TBCA, if not
previously furnished.
As authorized by Section 48-23-208 of the TBCA, BB&T intends to delay any
payments with respect to any shares ("after-acquired shares") held by a
dissenting shareholder which were not held by the shareholder on August 23,
2000, the date of the first public announcement of the terms of the merger
agreement. To the extent BB&T should elect to withhold payment, after effecting
the merger, it must estimate the fair value of the shares, plus accrued
interest, and pay the amount to each dissenting shareholder who agrees to
accept it in full satisfaction of this demand. BB&T will send with the payment
a statement of its estimate of the fair value of the shares, an explanation of
how the interest was calculated and a statement of the dissenting shareholder's
right to demand additional payment under Section 48-23-209 of the TBCA.
If (a) a dissenting shareholder believes that the amount paid with respect
to his or her shares under Section 48-23-206 or offered under Section 48-23-208
of the TBCA is less than the fair value of his or her shares or that the
interest due is incorrectly calculated, (b) BB&T fails to make payment under
Section 48-23-206 within two months after the date set for demanding payment,
or (c) BankFirst, having failed to effect the merger, does not return the
deposited certificates or release the transfer restrictions imposed on
uncertificated shares within two months after the date set for demanding
payment, the dissenting shareholder may notify BankFirst (or its successor in
the merger) in writing (the notice would be invalid if not delivered within one
month after BB&T made or offered payment for the shareholders' shares) of his
or her own estimate of the fair value of the shares and the amount of interest
due and may demand payment of the difference between his or her estimate of the
fair value and the amount of any payment in respect to the shares already
received by the shareholder, or, in the alternative, if no payment has yet been
made by BankFirst or BB&T, reject that offer under Section 48-23-208 of the
TBCA and demand payment of the fair value of his or her shares and interest
due.
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If BB&T (as the surviving corporation) cannot agree with a dissenting
shareholder on a fair value within two months after BB&T receives the payment
demand, BB&T will institute judicial proceedings in either the Chancery or
Circuit Court of Knox County, Tennessee, naming all dissenting shareholders
(whether or not Tennessee residents) whose demands remain unsettled as parties
to the proceeding and serving these parties with a copy of the petition. The
court will then undertake to establish the fair value of the shares immediately
before the completion of the merger, excluding any appreciation or depreciation
in anticipation of the merger, and will determine the interest owing on the
disputed amount. The fair value of a dissenting shareholder's shares of
BankFirst preferred stock may be more than, less than or the same as the
consideration provided in the merger agreement. The court may, in its
discretion, appoint one or more persons as appraisers to receive evidence and
render a decision on the question of fair value. Each dissenting shareholder
made a party to the proceeding is entitled to judgement for the amount (if any)
by which the court finds the fair value of his or her shares, plus accrued
interest, exceeds the amount paid by BB&T or the fair value, plus accrued
interest, of his or her after-acquired shares for which BB&T elected to
withhold payment under Section 48-23-208 of the TBCA.
The court shall assess costs and expenses of the proceeding (including
reasonable compensation for and expenses of the appraiser but excluding fees
and expenses of counsel and experts) against BB&T, except that the court may
assess costs and expenses as it deems appropriate against any or all of the
dissenting shareholders if it finds that their demand for additional payment
was arbitrary, vexatious or not in good faith. The court may award fees and
expenses of counsel and experts in amounts the court finds equitable: (a)
against BankFirst or BB&T, if the court finds that they did not comply
substantially with the relevant requirements of the TBCA or (b) against
BankFirst or BB&T or any dissenting shareholder, if the court finds that the
party against whom the fees and expenses are assessed acted arbitrarily,
vexatiously, or not in good faith.
The foregoing summary of the applicable provisions of Chapter 23 of Title 48
of the TBCA is not intended to be a complete statement of those provisions, and
is qualified in its entirety by reference to the Chapter, a copy of which is
attached as Appendix C. Any BankFirst preferred shareholder who intends to
dissent from the merger should review the text of Appendix C carefully and
should also consult with an attorney. Any shareholder who fails to strictly
follow the procedures described in the statute will forfeit dissenters' rights.
For a discussion of certain federal income tax consequences in connection
with exercising dissenters' rights, see "The Merger--Material Federal Income
Tax Consequences of the Merger" on page .
Regulatory Considerations
Financial holding companies (such as BB&T) and bank holding companies (such
as BankFirst) and their depository institution subsidiaries are highly
regulated institutions, with numerous federal and state laws and regulations
governing their activities. These institutions are subject to ongoing
supervision, regulation and periodic examination by various federal and state
financial institution regulatory agencies. Financial holding companies that own
one or more commercial banks are considered bank holding companies under state
and federal law for certain transactions, including the merger. Detailed
discussions of this ongoing regulatory oversight and the laws and regulations
under which it is carried out can be found in the Annual Reports on Form 10-K
of BB&T and of BankFirst which are incorporated by reference in this proxy
statement/prospectus. Those discussions are qualified in their entirety by the
actual language of the laws and regulations, which are subject to change based
on possible future legislation and action by regulatory agencies. See "Where
You Can Find More Information" on page .
The merger and the subsidiary bank mergers are subject to regulatory
approvals, as set forth below. To the extent that the following information
describes statutes and regulations, it is qualified in its entirety by
reference to those particular statutes and regulations.
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The Merger
The merger is subject to approval by the Board of Governors of the Federal
Reserve System under the Bank Holding Company Act of 1956. In considering the
approval of a transaction such as the merger, this Act requires the Federal
Reserve to review the financial and managerial resources and future prospects
of the bank holding companies and the banks concerned and the convenience and
needs of the communities to be served. The Federal Reserve also is required to
evaluate whether the merger would result in a monopoly or would be in
furtherance of any combination or conspiracy or attempt to monopolize the
business of banking in any part of the United States or otherwise would
substantially lessen competition or tend to create a monopoly or which in any
manner would be in restraint of trade, unless it finds the anti-competitive
effects of the proposed transaction are clearly outweighed in the public
interest by the probable effect of the transaction in meeting the convenience
and needs of the communities to be served.
Where a transaction, such as the merger, involves the acquisition by a bank
holding company of a bank located in a state other than the home state of the
bank holding company (in this case North Carolina), the Bank Holding Company
Act authorizes the Federal Reserve to approve the transaction without regard to
the laws of any state, provided the bank holding company is adequately
capitalized and adequately managed and certain other limitations are not
exceeded. BB&T is considered well-capitalized and well-managed under the
Federal Reserve's Regulation Y, and the transaction does not exceed the other
limitations.
The merger also is subject to approval by the Tennessee Department of
Financial Institutions under the bank holding company provisions of the
Tennessee Code, which permit a bank holding company, such as BB&T, to directly
or indirectly acquire a Tennessee bank or trust company if the Tennessee
Department approves the transaction. In its review of the merger, the Tennessee
Department is required to considered, among other things, whether the effect of
the merger may be to substantially lessen competition or to tend to create a
monopoly or whether the merger would in any manner be in restraint of trade,
such that the anticompetitive effects of the merger are not clearly outweighed
in the public interest by the probable effect of the merger in meeting the
convenience and needs of the community to be served.
BB&T also is required to provide notice to the Virginia Bureau of Financial
Institutions under the bank holding company act provisions of the Virginia
Code, which permit an out-of-state bank holding company that controls a
Virginia bank, such as BB&T, to acquire a bank outside of Virginia, such as
BankFirst, if the Bureau approves the transaction. The Bureau is required to
approve the transaction if it determines that the transaction would not be
detrimental to the safety and soundness of the Virginia bank.
All of the required applications and notices for the merger were submitted
to the appropriate regulatory agencies, and BB&T received the approval of the
Federal Reserve Bank of Richmond, under delegated authority, on ,
2000, the Tennessee Department of Financial Institutions on ,
2000 and the Virginia Bureau of Financial Institutions on , 2000.
The Subsidiary Bank Mergers
Although not required by the terms of the merger agreement or the plan of
merger and not a condition to the merger, BB&T expects to effect the merger of
BankFirst's banking subsidiaries into BB&T-NC during the third quarter of 2001.
The subsidiary bank mergers are 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 mergers 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 mergers 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 mergers
are clearly outweighed in the
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public interest by the probable effect of the mergers in meeting the
convenience and needs of the communities to be served. In addition, the FDIC
must take into account the record of performance of the existing and proposed
institutions under the Community Reinvestment Act of 1977 in meeting the credit
needs of the community, including low- and moderate-income neighborhoods,
served by the institutions. Applicable regulations also require publication of
notice of the applications for approval of the subsidiary bank mergers and an
opportunity for the public to comment on the applications in writing and to
request a hearing.
The North Carolina Commissioner of Banks also must approve the subsidiary
bank mergers under the bank merger act provisions of the North Carolina General
Statutes. In its review of the subsidiary bank mergers, the N.C. Commissioner
is required to consider whether the interests of the depositors, creditors and
shareholders of each institution are protected, whether the mergers are in the
public interest and whether the mergers are for legitimate purposes.
The Tennessee Department of Financial Institutions also must approve the
subsidiary bank mergers and the merger of BankFirst Trust Company into Branch
Banking and Trust Company under the bank merger provisions of the Tennessee
Code.
Material Federal Income Tax Consequences of the Merger
The following is a summary description of the material anticipated federal
income tax consequences of the merger generally applicable to the shareholders
of BankFirst and to BB&T and BankFirst. This summary is not intended to be a
complete description of all of the federal income tax consequences of the
merger. No information is provided with respect to the tax consequences of the
merger under any other tax laws, including applicable state, local and foreign
tax laws. In addition, the following discussion may not be applicable with
respect to certain specific categories of shareholders, including but not
limited to:
. corporations, trusts, dealers in securities, financial institutions,
insurance companies or tax exempt organizations;
. persons who are not United States citizens or resident aliens or
domestic entities (partnerships or trusts);
. persons who are subject to alternative minimum tax (to the extent that
tax affects the tax consequences of the merger) or are subject to the
"golden parachute" provisions of the Internal Revenue Code (to the
extent that tax affects the tax consequences of the merger);
. persons who acquired BankFirst stock pursuant to employee stock options
or otherwise as compensation if such shares are subject to any
restriction related to employment;
. persons who do not hold their shares as capital assets; or
. persons who hold their shares as part of a "straddle" or "conversion
transaction."
No ruling has been or will be requested from the IRS with respect to the tax
effects of the merger. The federal income tax laws are complex, and a
shareholder's individual circumstances may affect the tax consequences to the
shareholder. Consequently, each BankFirst shareholder is urged to consult his
or her own tax advisor regarding the tax consequences, including the applicable
United States federal, state, local, and foreign tax consequences, of the
merger to him or her.
Tax Consequences of the Merger Generally. In the opinion of Womble Carlyle
Sandridge & Rice, PLLC, counsel to BB&T:
. the merger will constitute a reorganization under Section 368(a) of the
Code;
. each of BB&T and BankFirst 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 BB&T or BankFirst by reason of the
merger;
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. the shareholders of BankFirst will recognize no gain or loss for federal
income tax purposes to the extent BB&T common stock is received in the
merger in exchange for BankFirst common stock or BankFirst preferred
stock;
. a shareholder of BankFirst who receives cash instead of a fractional
share of BB&T common stock will recognize gain or loss as if the
shareholder received the fractional share and it was then redeemed for
cash in an amount equal to the amount paid by BB&T in respect of the
fractional share;
. the tax basis in the BB&T common stock received by a shareholder
(including any fractional share interest deemed received) will be the
same as the tax basis in the BankFirst common stock or BankFirst
preferred stock surrendered in exchange therefor; and
. the holding period for BB&T common stock received (including any
fractional share interest deemed received) in exchange for shares of
BankFirst common stock or BankFirst preferred stock will include the
period during which the shareholder held the shares of BankFirst common
stock or BankFirst preferred stock surrendered in exchange, provided
that the BankFirst common stock or BankFirst preferred stock was held as
a capital asset at the effective time.
The completion of the merger is conditioned upon the receipt by BB&T and
BankFirst of the legal opinion of Womble Carlyle Sandridge & Rice, PLLC,
counsel to BB&T, dated as of the closing date, to the effect of the first and
third bulleted items described above. Neither party intends to waive this
condition. If the tax opinion is not available and the BankFirst Board
determines to proceed with the merger, BankFirst will resolicit its
shareholders.
Cash Received in Lieu of a Fractional Share of BB&T Common Stock. A
shareholder of BankFirst 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
BankFirst 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. BankFirst preferred shareholders who exercise their
dissenters' rights and who receive cash in exchange for their shares of
BankFirst preferred 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 BankFirst common stock or preferred
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 BankFirst stock may 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 the number is correct,
certifies that the holder is not subject to 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 that required information
is furnished to the Internal Revenue Service.
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Accounting Treatment
It is anticipated that the merger will be accounted for under the purchase
method of accounting. Under this accounting method, BB&T will record the
acquired identifiable assets and liabilities assumed at the fair market value
at the time of completion of the merger. Any excess of the cost of BankFirst
and the sum of the fair values of tangible and identifiable intangible assets
less liabilities assumed will be recorded as goodwill. Any goodwill recorded is
expected to be amortized over the period of expected benefit. BB&T's reported
income will include the operations of BankFirst after the acquisition, based on
the cost of the transaction. Financial statements of BB&T issued after
completion of the merger would reflect the impact of BankFirst. Financial
statements of BB&T issued after completion of the merger would not be restated
retroactively to reflect BankFirst's historical financial position or results
of operations. The unaudited pro forma financial information contained in this
proxy statement/prospectus has been prepared using the purchase method of
accounting. See "Summary--Comparative Per Share Data."
The Option Agreement
General
As a condition to BB&T entering into the merger agreement, BankFirst entered
into an agreement with BB&T under which BankFirst granted BB&T an option to
purchase up to 2,199,000 newly issued shares of BankFirst common stock (subject
to adjustment in certain circumstances) at a price of $9.50 per share (subject
to adjustment under certain circumstances). The purchase of any shares of
BankFirst common stock under the option is subject to compliance with
applicable law, including the receipt of necessary approvals under the Bank
Holding Company Act of 1956, and to BB&T's compliance with its covenants in the
merger agreement.
The option agreement is intended to increase the likelihood that the merger
will be completed in accordance with the terms set forth in the merger
agreement. Consequently, certain aspects of the option agreement may have the
effect of discouraging persons who, before the effective time, might be
interested in acquiring all of, or a significant interest in, BankFirst from
considering or proposing such an acquisition, even if they were prepared to
offer to pay consideration to shareholders of BankFirst with a higher current
market price than the BB&T common stock to be received for BankFirst common
stock under the merger agreement.
The option agreement is filed as an exhibit to the registration statement,
of which this proxy statement/ prospectus is a part, and the following
discussion is qualified in its entirety by reference to the option agreement.
See "Where You Can Find More Information" on page .
Exercisability
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 before its termination, as described below, after the
happening of either of the following events (each a "Purchase Event"):
. without BB&T's prior consent, BankFirst 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 (each an "Acquisition Transaction"): (a) a merger,
consolidation or similar transaction involving BankFirst 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
BankFirst and its subsidiaries or (c) the issuance, sale or other
disposition of securities representing 15% or more of the voting power
of BankFirst 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 15% or more of
the outstanding shares of BankFirst common stock.
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The obligation of BankFirst to issue shares of BankFirst 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.
Termination
The option will terminate upon the earliest to occur of the following
events: (a) the effective time; (b) the termination of the merger agreement
before the occurrence of a Purchase Event or a Preliminary Purchase Event (as
defined below) (other than a termination by BB&T based on either a material
breach by BankFirst of a covenant or agreement in the merger agreement or an
inaccuracy in BankFirst's representations or warranties in the merger agreement
of a nature entitling BB&T to terminate (a "Default Termination"); (c) 12
months after a Default Termination; (d) 12 months after termination of the
merger agreement (other than a Default Termination) after the occurrence of a
Purchase Event or a Preliminary Purchase Event; or (e) 12 months after a
termination of the merger agreement based on the failure of the shareholders of
BankFirst to approve the merger agreement.
A "Preliminary Purchase Event" is defined as either of the following:
. the commencement by any third party of a tender or exchange offer such
that it would thereafter own 15% or more of the outstanding shares of
BankFirst common stock or the filing of a registration statement with
respect to an offer of this type, or
. the failure of the shareholders of BankFirst to approve the merger
agreement, the failure of the meeting to have been held, the
cancellation of the meeting before the termination of the merger
agreement or the BankFirst Board having withdrawn or modified in any
manner adverse to BB&T its recommendations with respect to the merger
agreement, 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 under the Securities Act with respect to an
exchange offer such that it would thereafter own 15% or more of the
outstanding shares of BankFirst 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 the knowledge of BB&T and BankFirst, no Purchase Event or Preliminary
Purchase Event has occurred as of the date of this proxy statement/prospectus.
Adjustments
The option agreement provides for certain adjustments in the option in the
event of any change in BankFirst common stock by reason of a stock dividend,
stock split, split-up, recapitalization, combination, exchange of shares or
similar transaction or in the event of the issuance of any additional shares of
BankFirst common stock before termination of the option.
Repurchase Rights
At the request of the holder of the option any time during the 12 months
after the first occurrence of a Repurchase Event (as defined below), BankFirst
must, if the option has not terminated, and subject to any required regulatory
approval, repurchase from the holder (a) the option and (b) all shares of
BankFirst common stock purchased by the holder under the option with respect to
which the holder then has beneficial ownership. The repurchase will be at an
aggregate price equal to the sum of:
. the aggregate purchase price paid by the holder for any shares of
BankFirst common stock acquired under the option with respect to which
the holder then has beneficial ownership, plus
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. the excess, if any, of (a) the Applicable Price (as defined in the
option agreement) for each share of BankFirst common stock over the
purchase price, multiplied by (b) the number of shares of BankFirst
common stock with respect to 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 the holder for
each share of BankFirst common stock with respect to which the option
has been exercised and with respect to which the holder 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.
A "Repurchase Event" occurs if: (a) any third party or "group" (as defined
under the Securities Exchange Act) acquires beneficial ownership of 50% or more
of the then outstanding shares of BankFirst common stock, or (b) any of the
merger or other business combination transactions set forth in the paragraph
below describing substitute options is completed.
Substitute Options
If, before the termination of the option agreement, BankFirst enters into an
agreement:
. to consolidate with or merge into any third party and BankFirst will not
be the continuing or surviving corporation of the consolidation or
merger;
. to permit any third party to merge into BankFirst with BankFirst as the
continuing or surviving corporation, but, in connection therewith, the
then outstanding shares of BankFirst common stock are changed into or
exchanged for stock or other securities of BankFirst or any other person
or cash or any other property, or the outstanding shares of BankFirst
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
BankFirst common stock in 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 the holder's option,
either (x) the continuing or surviving corporation of a merger or consolidation
or the transferee of all or substantially all of BankFirst'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 BankFirst 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 BankFirst common
stock or other securities that have been acquired by or are issuable upon
exercise of the option.
Effect on Employee Benefit Plans and Stock Options
Employee Benefit Plans
As of a date (the "benefit plan date") to be determined by BB&T (but not
later than the first day after the calendar year during which the last of
BankFirst's bank subsidiaries is merged into BB&T or one of its subsidiaries),
BB&T will cause BankFirst's 401(k) plan either to be merged with the 401(k)
plan maintained by BB&T and its subsidiaries, or to be frozen or to be
terminated, as determined by BB&T and subject to receipt
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of applicable regulatory approvals. Each employee of BankFirst at the effective
time of the merger (a) who is a participant in BankFirst's 401(k) plan, (b) who
becomes an employee of BB&T or a BB&T subsidiary (a "BB&T employer")
immediately after the effective time, and (c) who continues in the employment
of a BB&T employer until the benefit plan date, will be eligible to participate
in BB&T's 401(k) plan as of that date. Any other former employee of BankFirst
who is employed by a BB&T employer on or after the benefit plan date will be
eligible to participate in BB&T's 401(k) plan upon complying with eligibility
requirements. All rights to participate in BB&T's 401(k) plan are subject to
BB&T's right to amend or terminate the plan. BB&T will maintain BankFirst's
401(k) plan for the benefit of participating employees until the benefit plan
date. In administering BB&T's 401(k) plan, service with BankFirst and its
subsidiaries will be deemed service with BB&T for participation and vesting
purposes, but not for benefit accrual purposes.
Each employee of BankFirst or a BankFirst subsidiary at the effective time
who becomes an employee of a BB&T employer immediately after the effective time
(a "transferred employee") will be eligible to participate in group
hospitalization, medical, dental, life, disability and other welfare benefit
plans and programs available to employees of the BB&T employer, subject to the
terms of the plans and programs, as of the benefit plan date with respect to
each plan or program, conditional upon the transferred employee's being
employed by the BB&T employer as of the benefit plan date and subject to
complying with eligibility requirements of the respective plans and programs.
BB&T's plans will recognize and give credit under the plans to each transferred
employee for any payments made by the transferred employee of deductible
amounts and for payments made by the transferred employee applicable to out-of-
pocket maximum obligations under the BankFirst plans. 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 that may not be fully comparable to the HMO coverage.
With respect to any benefit plan or program of BankFirst that a BB&T employer
determines, in its sole discretion, provides benefits of the same type or class
as a corresponding plan or program maintained by the BB&T employer, the BB&T
employer will continue the BankFirst plan or program 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
maintained by the BB&T employer (and, with respect to any plan or program,
subject to complying with eligibility requirements and subject to the right of
the BB&T employer to terminate the plan or program). For purposes of
administering these plans and programs, service with BankFirst will be deemed
to be service with the BB&T employer for the purpose of determining eligibility
to participate and vesting (if applicable) in the plans and programs, but not
for the purpose of computing benefits, if any, determined in whole or in part
as to service (except as otherwise described below).
Except to the extent of commitments in the merger agreement or other
contractual commitments specifically made or assumed by BB&T, neither BB&T nor
any BB&T employer will have any obligation arising from the merger to continue
any transferred employees in its employ or in any specific job or to provide to
any transferred employee any specified level of compensation or any incentive
payments, benefits or perquisites. Each transferred employee who is terminated
by a BB&T employer after the Effective Time, excluding any employee who has a
then-existing contract providing for severance, will be entitled to severance
pay in accordance with the general severance policy maintained by BB&T, if and
to the extent that the employee is entitled to severance pay under that policy.
An employee's service with BankFirst or a BankFirst subsidiary will be treated
as service with BB&T for purposes of determining the amount of severance pay,
if any, under BB&T's severance policy.
BB&T has agreed to honor all employment agreements, severance agreements and
deferred compensation agreements that BankFirst and its subsidiaries have with
their current and former employees and directors and which have been disclosed
to BB&T under the merger agreement, except to the extent any agreements are
superseded or terminated at the effective time of the merger or thereafter.
Except for these agreements and except as otherwise described above, the
employee benefit plans of BankFirst will be frozen, terminated or merged into
comparable plans of BB&T, as BB&T may determine in its sole discretion.
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Stock Options
At the effective time, each stock option then outstanding, whether or not
exercisable, granted under BankFirst's Incentive Stock Option Plan 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 BankFirst plan, except that (a)
BB&T and the compensation committee of the BB&T Board will be substituted for
BankFirst and the committee of the BankFirst Board administering its stock
option plan, (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 BankFirst common stock
subject to the stock option by 0.4554 and (d) the per share exercise price for
each stock option will be adjusted by dividing the per share exercise price for
the stock option by 0.4554 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 BankFirst's stock option plan and the stock option
agreements manifesting the options.
Each stock option that is an incentive stock option will be adjusted as
required by Section 424 of the Internal Revenue Code to continue as an
incentive stock option and not to constitute a modification, extension or
renewal within the meaning of Section 424(h) of the 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 BankFirst then 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 plan 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
shares of BankFirst common stock may be outstanding at the
effective time. Any shares of BankFirst common stock issued upon the exercise
of stock options under the stock option plan 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 BankFirst
common stock. Under the merger agreement, BankFirst is permitted to grant
additional options to acquire up to 100,000 shares of BankFirst stock under its
stock option plan in the ordinary course of business consistent with past
practices.
Eligibility to receive stock option grants after the effective time of the
merger will be determined by BB&T in accordance with its plans and procedures
and subject to any contractual obligations.
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
BankFirst for purposes of Rule 145 under the Securities Act. Affiliates include
generally directors, executive officers and beneficial owners of 10% or more of
any class of capital stock of BankFirst. Affiliates may sell their shares of
BB&T common stock acquired in the merger only in transactions that are
registered
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under the Securities Act, permitted by the resale provisions of Rules 145 under
the Securities Act, or as otherwise permitted by the Securities Act. 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.
It is a condition to BB&T's obligation to consummate the merger that each
person who may be deemed to be an affiliate of BankFirst 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 accordance with the
above restrictions.
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INFORMATION ABOUT BB&T
General
BB&T is a financial services 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 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 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-SC, BB&T-VA and Scott and Stringfellow, Inc.
Operating Subsidiaries
BB&T-NC, BB&T's largest subsidiary, is the oldest bank in North Carolina and
currently operates through banking offices throughout North Carolina,
offices in metropolitan Washington, D.C. and Maryland, offices in
Georgia, offices in West Virginia and offices in Kentucky. 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 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 banking offices throughout Virginia.
Scott & Stringfellow, Inc. provides services in retail brokerage,
institutional equity and debt underwriting, investment advice, corporate
finance, equity trading and equity research. In May 1999, it 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.
BB&T also has a number of other operating subsidiaries. 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 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 expanded BB&T's presence in Georgia.
First Liberty Bank, a subsidiary bank of BB&T (as the successor to First
Liberty), was merged into BB&T-NC during the second quarter of 2000.
On January 13, 2000, BB&T acquired Premier Bancshares Inc. 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 expanded BB&T's presence in the metropolitan Atlanta
market. Premier Bank, a subsidiary bank of BB&T (as the successor to Premier),
was merged into BB&T-NC during the third quarter of 2000.
On June 14, 2000, BB&T acquired Hardwick Holding Company in a tax-free
transaction accounted for as a pooling of interests. Through its banking
subsidiaries, Hardwick operated nine banking offices in northwest Georgia. It
is expected that Hardwick Bank & Trust and First National Bank of Northwest
Georgia, subsidiary banks of BB&T (as the successor to Hardwick), will be
merged into BB&T-NC during the second quarter of 2001.
On June 16, 2000, BB&T acquired First Banking Company of Southeast Georgia
in a tax-free transaction accounted for as a pooling of interests. Through its
banking subsidiaries, First Banking Company operated 12 banking offices in
southeast Georgia. The acquisition of First Banking Company expanded BB&T's
presence into southeast Georgia, including specifically the Savannah area. It
is expected that First Bulloch Bank & Trust Company of Statesboro, Metter
Banking Company of Metter, First National Bank of Effingham and Wayne National
Bank of Jesup, subsidiary banks of BB&T (as the successor to First Banking
Company), will be merged into BB&T-NC during the second quarter of 2001.
On July 6, 2000, BB&T acquired One Valley Bancorp in a tax-free transaction
accounted for as a pooling of interests that gave BB&T the top market share, as
measured by deposits, in West Virginia. One Valley, with $6.6 billion in
assets, was the parent company to nine community banks with 125 branches, 77 in
West Virginia and 48 in Virginia. One Valley also operated a trust division,
discount brokerage subsidiary and insurance agencies. It is expected that the
former banking subsidiaries of One Valley (now subsidiary banks of BB&T as the
successor to One Valley) will be merged into BB&T-NC during the fourth quarter
of 2000.
On July 27, 2000, BB&T announced that it had agreed to acquire FCNB Corp of
Frederick, Maryland in a tax-free transaction to be accounted for as a pooling
of interests. In the transaction, valued at $226.5 million based on BB&T's
closing price on July 26, FCNB shareholders would receive 0.725 shares of BB&T
common stock for each share of FCNB common stock. FCNB, with $1.6 billion in
assets, operates 34 banking offices through its banking subsidiary, FCNB Bank,
primarily in Frederick and Montgomery counties of central Maryland. The
acquisition, which is expected to be completed in the first quarter of 2001,
would expand BB&T's presence in economically strong central Maryland and the
fast-growing Washington, D.C., corridor.
On September 6, 2000, BB&T announced that it had agreed to acquire
FirstSpartan Financial Corp. of Spartanburg, South Carolina in a tax-free
transaction to be accounted for as a purchase. In the transaction, valued at
$103.9 million based on BB&T's closing price on September 5, FirstSpartan
shareholders would receive one share of BB&T common stock for each share of
FirstSpartan common stock. Through its banking subsidiary, FirstSpartan
operates 11 banking offices in South Carolina's Spartanburg and Greenville
counties. The acquisition, which is expected to be completed in the first
quarter of 2001, would increase BB&T's South Carolina assets to $5.8 billion.
BB&T ranks third in market share in South Carolina and first in Greenville and
Spartanburg counties.
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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. 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 June 30, 2000,
BB&T's Tier 1 and total capital ratios were 9.2% and 12.69%, 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 under 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 June 30, 2000 was 7.07%. 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 June 30, 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 3.07% of the deposits of BB&T-NC and BB&T-SC and
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a portion of the deposits of BB&T-VA (related to the banks' acquisition of
various savings associations) are subject to assessments imposed by the Savings
Association Insurance Fund of the FDIC.
For the semi-annual period beginning 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 2.06 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 Reports on
Form 10-Q for the quarters ended March 31, 2000 (as amended on Form 10-Q/A
filed on June 5, 2000) and June 30, 2000, and Current Reports on Form 8-K dated
January 12, 2000, February 7, 2000, February 9, 2000, April 11, 2000, April 28,
2000, July 18, 2000, July 27, 2000, August 23, 2000, September 6, 2000, October
12, 2000 and , 2000, all of which are incorporated by reference in this
proxy statement/prospectus. See "Where You Can Find More Information" on page
.
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INFORMATION ABOUT BANKFIRST
General
BankFirst is a bank holding company headquartered in Knoxville, Tennessee
that focuses on meeting the banking needs of East Tennessee businesses and
residents through a relationship-oriented, community bank business strategy.
BankFirst conducts its banking business through its banking subsidiary
BankFirst, which has 26 offices in Knox, Sevier, Blount, Loudon and Jefferson
Counties of Tennessee, and through its banking subsidiary The First National
Bank and Trust Company, a national banking association, with six offices in
McMinn County, Tennessee. BankFirst's operations principally involve commercial
and residential real estate lending, commercial business lending, consumer
lending, mortgage servicing, construction lending and other financial services,
including trust operations, credit card services and brokerage services.
Operating Subsidiaries
BankFirst conducts its banking business through its two wholly owned banking
subsidiaries: BankFirst, which was originally chartered in 1920 and has 26
offices in Knox, Sevier, Blount, Loudon and Jefferson Counties, and The First
National Bank and Trust Company, a national banking association chartered in
1884 and acquired by BankFirst in 1998, with six offices in McMinn County.
BankFirst also wholly owns BankFirst Trust Company, a non-deposit trust
company.
The BankFirst banking subsidiary owns two additional subsidiaries. These are
Curtis Mortgage Company, Inc., a 56-year old company regulated by the Tennessee
Department of Financial Institutions and acquired by BankFirst in 1998, which
originates and purchases mortgage loans for sale and servicing and serves in
all of the banking markets in which BankFirst currently operates, and Eastern
Life Insurance Company, Inc., which was incorporated in 1993 and provides
credit life, accident and health insurance and reinsurance coverage.
The First National Bank and Trust Company wholly owns Friendly Finance
Company, Inc., a non-banking financial company incorporated in 1997.
Acquisitions
BankFirst's most recent merger and acquisition activities occurred in 1998
with two separate business combinations. First, BankFirst's largest subsidiary,
the BankFirst banking subsidiary, purchased Curtis Mortgage Company, Inc. as an
opportunity to increase mortgage originations, which had not been a significant
line of business, and as an opportunity to diversify revenues through loan
servicing. Second, BankFirst acquired First Franklin Bancshares, Inc., a
single-bank holding company based in Athens, Tennessee. First Franklin
Bancshares, Inc. was dissolved and its Athens-based subsidiary, The First
National Bank and Trust Company, became a separate subsidiary of BankFirst,
adding risk diversification and trust expertise to the combined entity.
Capital
BankFirst and its subsidiaries are subject to regulatory capital
requirements administered by federal and state banking agencies. Capital
adequacy guidelines and prompt corrective action regulations involve
quantitative measures of assets, liabilities, and certain off-balance sheet
items calculated under regulatory accounting practices. The prompt corrective
action regulations provide five classifications, including well capitalized,
adequately capitalized, under-capitalized, significantly under-capitalized, and
critically under-capitalized, although these terms are not used to represent
overall financial condition. If under-capitalized, capital distributions, asset
growth and expansion are limited, and plans for capital restoration are
required.
Under guidelines issued by banking regulators, BankFirst and its bank
subsidiaries must maintain a minimum Tier 1 risk-based capital ratio of 4% and
a minimum total risk-based ratio of 8%. Risk-based capital ratios weight the
relative risk factors of all assets and consider the risk associated with off-
balance sheet items.
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BankFirst's Tier 1 risk-based and total risk-based ratios were 13.37% and
14.48%, respectively, as of June 30, 2000. Both of its bank subsidiaries also
individually met the definition of "well capitalized" as of June 30, 2000.
Deposit Insurance Assessments
The deposits of each of BankFirst's two 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 3.07% of the deposits of the BankFirst banking
subsidiary and First National Bank and Trust Company (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 2.06 basis points per $100 of deposits on
an annualized basis to cover those obligations.
You can find additional information about BankFirst in BankFirst's Annual
Report on Form 10-K for the fiscal year ended December 31, 1999, Quarterly
Reports on Form 10-Q for the quarters ended March 31, 2000 and June 30, 2000,
and Current Reports on Form 8-K dated January 11, 2000, March 21, 2000 and
April 17, 2000, all of which are incorporated by reference in this proxy
statement/prospectus. See "Where You Can Find More Information" on page .
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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. There were no shares of
BB&T preferred stock issued and outstanding on that 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 BankFirst 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.
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
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.
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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 , including shares to be issued to BankFirst shareholders
in connection with the merger, 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 after 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 after 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 the 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 the determination will
not be effective until the person has in fact become the beneficial owner of
10% or more of the outstanding shares of BB&T common stock) and (b) after
consultation with the person 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 the 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 after 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
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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). After 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 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)
after 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 that 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 after 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 after 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.
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 after 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 on 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
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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 we refer you to them for the complete
terms of the Rights Agreement and the rights. The above 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, or NCBCA, 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 these provisions, see
"Comparison of Shareholders' Rights--Directors" on page .
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 .
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COMPARISON OF THE RIGHTS OF BB&T SHAREHOLDERS
AND BANKFIRST SHAREHOLDERS
When the merger becomes effective, holders of BankFirst 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 BankFirst
common stock. Since BB&T is organized under the laws of the State of
North Carolina and BankFirst is organized under the laws of the State of
Tennessee, differences in the rights of holders of BB&T common stock and those
of holders of BankFirst common stock arise from differing provisions of the
NCBCA and the Tennessee Business Corporation Act, or TBCA, in addition to
differing provisions of their respective incorporation documents 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 BankFirst 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 TBCA and the governing corporate
instruments of BB&T and BankFirst, to which the shareholders of BankFirst 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 .
BankFirst
BankFirst's authorized capital stock consists of 30,000,000 shares of
BankFirst common stock and 1,000,000 shares of BankFirst preferred stock.
BankFirst's charter authorizes the BankFirst Board to issue shares of BankFirst
preferred stock in one or more series, with no voting powers, and to fix the
designations, preferences and relative, participating, optioned or special
rights, qualifications, limitations or restrictions of BankFirst preferred
stock in each series. As of June 30, 2000, there were 11,047,950 shares of
BankFirst common stock outstanding and 181,050 shares of BankFirst preferred
stock outstanding. No shares of BankFirst capital stock have been reserved for
any purpose, with the exception of 558,992 shares of BankFirst common stock
reserved in connection with conversion of BankFirst preferred stock, 3,125,000
shares of BankFirst common stock reserved in connection with BankFirst's
Incentive Stock Option Plan dated October 11, 1995 (of which shares had been
issued as of the record date) and 2,199,000 shares of BankFirst common stock
reserved in connection with the option granted to BB&T.
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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BankFirst
A special meeting of the BankFirst shareholders may be called at any time by
BankFirst's President, and must be called by BankFirst's President upon written
request of the BankFirst Board, or upon a majority vote of the BankFirst Board,
or upon the written request of the BankFirst shareholders holding at least 25%
of the amount of BankFirst capital stock issued and outstanding.
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 23 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.
BankFirst
BankFirst's charter and bylaws provide for a board of directors having not
less than five and no more than 25 members, each being elected by the BankFirst
shareholders at the annual meeting of the BankFirst shareholders, and each
serving for a period of one year and until his or her successor is elected and
qualified. Currently the BankFirst Board consists of eight directors. According
to the BankFirst bylaws, the BankFirst shareholders may, at any meeting called
for that purpose, remove any of the BankFirst directors and fill the vacancy
thus created until the next annual meeting. Any vacancy on the BankFirst Board
not created by act of the BankFirst shareholders may be filled by the BankFirst
Board until the next annual meeting of the BankFirst shareholders. The
BankFirst charter provides that any or all of the members of the BankFirst
Board may be removed for cause by a vote of a majority of the entire BankFirst
Board, with "cause" being defined to include, but not being limited to, being
absent without reasonable cause from any regular or special meeting for the
purpose of obstructing or hindering BankFirst's business. According to the
BankFirst charter and bylaws, members of the BankFirst Board must comply with
the requirements of 12 United States Code (S) 72, which requires, among other
things, that members of the BankFirst Board also be BankFirst shareholders.
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 the 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 future dividends will depend on business conditions, operating results,
capital, reserve requirements and the consideration of other relevant factors
by the BB&T Board.
BankFirst
The TBCA provides that BankFirst generally may make dividends or other
distributions to its shareholders unless after the distribution either (a)
BankFirst would not be able to pay its debts as they become due in the
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usual course of business, or (b) BankFirst's total assets would be less than
the sum of its total liabilities plus the amount that would be needed to
satisfy the preferential dissolution rights of its preferred stock. In
addition, the Federal Reserve places additional restrictions on the payment of
dividends by bank holding companies, and the Federal Reserve could oppose a
distribution by BankFirst if it determined that the distribution would harm
BankFirst'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 future dividends will depend on business conditions,
operating results, capital, reserve requirements and the consideration of other
relevant factors by the BankFirst Board.
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 that 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.
BankFirst
Neither BankFirst's charter nor its bylaws require any notice procedures for
shareholder proposals or the nomination of candidates for election as
directors. In accordance with SEC Rule 14a-8 under the Securities Exchange Act,
shareholder proposals intended to be included in the proxy statement and
represented at a regularly scheduled annual meting must be received by
BankFirst 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's 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 BankFirst begins to
print and mail its proxy materials.
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
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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 the person to be
clearly in conflict with the best interests of BB&T.
BankFirst
The TBCA requires that a director of a Tennessee 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 in similar circumstances; and
(c) in a manner the director reasonably believes to be in the best interests of
the corporation. BankFirst's charter provides that a director of BankFirst will
be fully protected in relying in good faith upon the books of account or other
records of BankFirst, or a statement prepared by any of BankFirst's officers or
by independent public accountants or by an appraiser selected with reasonable
care by the BankFirst Board as to the value and amount of the assets,
liabilities and/or net profits of BankFirst, or any other facts pertinent to
the existence and amount of surplus or other funds from which dividends might
properly be declared and paid, or with which BankFirst's capital stock might
properly be purchased or redeemed.
BankFirst's charter and bylaws require BankFirst to indemnify any of its
directors, officers, employees or agents, to the fullest extent permitted by
applicable law, against all liabilities arising by reason of his or her being
or having been a BankFirst director, officer, employee or agent. BankFirst's
charter and bylaws further provide that no director will be personally liable
to BankFirst or the BankFirst shareholders for monetary damages arising out of
a breach of fiduciary duty by the director, but will be held liable to the
extent permitted by applicable law (a) for a breach of duty to BankFirst or the
BankFirst shareholders, (b) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, (c) pursuant to a
proceeding by or in the right of BankFirst in which the director was adjudged
liable to BankFirst, or (d) pursuant to a proceeding charging improper personal
benefit to the director, whether or not involving an action in the director's
official capacity, in which the director is adjudged liable on the basis that a
personal benefit was improperly received by the director.
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 BankFirst) 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.
BankFirst
The TBCA generally requires that any merger or share exchange of all or
substantially all the assets of a corporation not in the ordinary course of
business must be approved by an affirmative vote of a majority of the issued
and outstanding shares of each voting group entitled to vote, unless the
corporation's charter or bylaws requires a greater vote. Approval of a merger
by the shareholders of a Tennessee corporation is not required under certain
circumstances, but in the case of the merger with BB&T, none of these
circumstances apply and, therefore, approval by the BankFirst shareholders of
the merger with BB&T must be received. BankFirst is also subject to certain
statutory anti-takeover provisions under Tennessee law. See "--Anti-takeover
Statutes" below.
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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.
BankFirst
Tennessee's Business Combination Act provides that an interested stockholder
(defined as a person beneficially owning, either directly or indirectly, 10% or
more of the voting securities in a Tennessee corporation) cannot engage in a
business combination with that corporation unless the transaction takes place
at least five years after the interested stockholder first became an interested
stockholder, and unless either the transaction (a) is approved by at least two
thirds of the shares of the corporation not beneficially owned by an interested
stockholder or (b) satisfies certain fairness conditions specified in the
Tennessee Business Combination Act relating to the price to be paid to the non-
interested stockholders in such transactions.
These provisions apply to Tennessee corporations unless one of two events
occurs. A business combination with an entity can proceed without the five-year
moratorium if the business combination or the transaction resulting in the
stockholder becoming an interested stockholder is approved by the target
corporation's board of directors before that entity becomes an interested
stockholder. Alternatively, the corporation may enact a charter amendment or
by-law to remove itself entirely from the Tennessee Business Combination Act.
This charter amendment or by-law must be approved by a majority of the
stockholders who have held shares for more than one year before the vote and
may not take effect for at least two years after the vote. BankFirst has not
adopted such a provision in the its charter or by-laws removing BankFirst from
coverage under the Tennessee Business Combination Act. The merger is not
governed by the Tennessee Business Combination Act because the BankFirst Board
approved both the merger agreement and the stock option agreement before they
were executed.
The Tennessee Control Share Acquisition Act takes away the voting rights of
a purchaser's shares any time an acquisition of shares in a Tennessee
corporation brings the purchaser's voting power to 20%, 33 1/3% or more than
50% of all voting power in the corporation, each of which is considered to be a
"control share" under this act. The purchaser's voting rights can be maintained
or re-established only by a majority vote of all the shares entitled to vote
generally as to the election of directors other than those shares owned by the
acquirer and the officers and inside directors of the corporation. After
acquiring a control share, the Control Share Acquisition Act provides a
procedure by which a purchaser may demand a special meeting of stockholders to
conduct such a vote. The purchaser can demand such a meeting before acquiring a
control share, but, can do so only if it holds at least 10% of outstanding
shares and announces a good faith intention to make the control
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share acquisition. The Control Share Acquisition Act applies only to a
corporation that has adopted a provision in its charter or by-laws declaring
that the Control Share Acquisition Act will apply. BankFirst has not adopted
any such provision in its charter or by-laws electing protection under the
Control Share Acquisition Act and therefore is not subject to the Control Share
Acquisition Act.
The Tennessee Investor Protection Act provides that unless a Tennessee
corporation's board of directors has recommended a takeover offer to
stockholders, no offeror beneficially owning 5% or more of any class of equity
securities of the offeree company, any of which was purchased within the
preceding year, may make a tender offer for class of equity security of the
offeree company if after completion the offeror would be a beneficial owner of
more than 10% of any class of outstanding equity securities of the company
unless the offeror, before making such purchase:
. makes a public announcement of his or her intention with respect to
changing or influencing the management or control of the offeree company;
. makes a full, fair and effective disclosure of such intention to the
person from whom he or she intends to acquire such securities; and
. files with the Tennessee Commissioner of Commerce and Insurance and the
offeree company a statement signifying such intentions and containing
such additional information as may be prescribed by the Commissioner.
The offeror must provide that any equity securities of an offeree company
deposited or tendered in connection with a takeover offer may be withdrawn by
an offeree at any time within seven days from the date the offer has become
effective after filing with the Commissioner and the offeree company and public
announcement of the terms or after 60 days from the date the offer has become
effective. If the takeover offer is for less than all the outstanding equity
securities of any class, such an offer also must accept securities ratably if
the number of securities tendered is greater than the number the offeror has
offered to accept and pay for. If the offeror changes the terms of the takeover
offer before its expiration date by increasing the consideration offered to
offerees, the offeror must pay the increased consideration for all equity
securities accepted, whether accepted before or after the change in the terms
of the offer.
Any person making a takeover offer involving a Tennessee corporation shall
file a registration statement with the Commissioner and send a copy of the
registration statement by certified mail to the offeree company. The
registration statement shall contain such information as set forth in the
Investor Protection Act. The Investor Protection Act does not apply to an offer
involving a vote by holders of equity securities of the offeree company,
pursuant to its charter, on a merger, consolidation or sale of corporate assets
in consideration of the issuance of securities of another corporation, or on a
sale of its securities in exchange for cash or securities of another
corporation.
The Investor Protection Act does not apply to the merger because the
BankFirst Board has recommended acceptance of the merger to its stockholders.
The merger therefore does not involve a "takeover offer" within the meaning of
the Investor Protection Act.
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
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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.
BankFirst
The TBCA provides generally that, except in certain limited circumstances
where no shareholder approval is required, a Tennessee corporation's charter
may be amended only upon the approval of a majority of the votes cast within
each shareholder voting group entitled to vote. BankFirst's charter also
permits amendments only as permitted under Tennessee law. The TBCA provides
that a Tennessee corporation's bylaws may be amended or repealed by its board
of directors unless such power has been reserved in the shareholders, either
wholly or in part, by the TBCA or the corporation's charter, or unless the
shareholders, in amending or repealing a particular bylaw, provide expressly
that the board of directors may not amend or repeal that bylaw. According to
the TBCA, a Tennessee corporation's shareholders may amend or repeal any of the
corporation's bylaws. BankFirst's bylaws state that they may be amended,
altered or repealed, or new bylaws adopted by the majority of the BankFirst
Board, unless such bylaw otherwise provides, and the shareholders have the
right to change any such action to amend its bylaws.
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, like 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
the other corporation's shares. BB&T's articles of incorporation do not
authorize any special dissenters' rights.
BankFirst
Tennessee law generally provides dissenters' rights for:
. mergers and share exchanges that would either (a) require stockholder
approval or (b) involve the merger of a subsidiary corporation with its
parent as defined under Tennessee law;
. sales of substantially all the assets of the corporation that would
require stockholder approval (other than sales that are in the usual and
regular course of business and certain liquidations and court-ordered
sales);
. certain amendments to the charter that materially and adversely affect
rights in respect of a dissenter's shares; and
. actions taken pursuant to a stockholder vote to the extent the charter,
by-laws or a resolution of the board of directors provides that
stockholders are entitled to dissenters' rights.
To perfect these appraisal rights, the shareholder of a Tennessee
corporation must (a) file a written objection with the corporation before the
vote, stating that the shareholder intends to demand payment for his or her
shares if the action is taken and (b) not vote in favor of the proposed action.
Dissenters' rights are not available for any shares which are listed on an
exchange registered under Section 6 of the Exchange Act or are "national market
system securities" as defined in rules adopted under the Exchange Act.
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Because BankFirst's common stock is listed on the Nasdaq National Market,
dissenters' rights are not available to the BankFirst common stockholders in
connection with the merger. However, because BankFirst's preferred stock is not
listed on an exchange registered under Section 6 of the Exchange Act and is not
a "national market system security," any holder of BankFirst's preferred stock
has the right to receive payment of the fair value of his or her shares upon
compliance with Tennessee's dissenters' rights laws. These are found in Chapter
23 of the TBCA, and are attached as Appendix C to this proxy
statement/prospectus. For a description of the requirements relating to the
exercise of dissenters' rights, see "The Merger--Rights of Dissenting
Shareholders" on page and Appendix C.
Liquidation Rights
BB&T
If liquidation, dissolution or winding-up of the affairs of BB&T occurs,
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.
BankFirst
In the event that BankFirst's assets are distributed to is shareholders, the
holders of BankFirst preferred stock shall have the same, and no greater, right
to share in the assets than the holders of the BankFirst common stock.
Because BankFirst is a bank holding company, its rights, the rights of its
creditors and of its shareholders, including the holders of the shares of any
BankFirst 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 BankFirst 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 BankFirst for the benefit of
eligible account holders in connection with conversion of the savings
associations from mutual to stock form.
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SHAREHOLDER PROPOSALS
If the merger is not completed, any proposal which a shareholder wishes to
have presented at BankFirst's next annual meeting of shareholders for 2001 and
included in BankFirst's proxy materials must be in writing and must be received
by BankFirst at its main offices at 625 Market Street, Knoxville, Tennessee
37902 no later than November 17, 2000. The determination by BankFirst of
whether it will oppose inclusion of any proposal in its proxy statement and
form of proxy will be made on a case-by-case basis in accordance with its
judgment, BankFirst's bylaws and Rule 14a-8 of the Securities Exchange Act.
Proposals received after November 17, 2000 will not be considered for inclusion
in BankFirst's proxy materials for its 2001 annual meeting of shareholders.
If a shareholder, rather than placing a proposal in BankFirst's proxy
statement as discussed above, commences his or her own proxy solicitation for
the 2001 annual meeting of shareholders or seeks to nominate a candidate for
election or propose business for consideration at such meeting, the shareholder
must notify BankFirst of such proposal by or before January 31, 2001. If notice
is not received by this date, BankFirst may exercise discretionary voting
authority as to that matter under proxies solicited for the BankFirst 2001
annual meeting of shareholders. It is urged that any proposals be sent by
certified mail, return receipt requested.
OTHER BUSINESS
The BankFirst Board is not aware of any business to come before the meeting
other than the 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 as 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, 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 which are incorporated by reference in this proxy
statement/prospectus from BB&T's Current Report on Form 8-K dated ,
2000, which restates the consolidated financial statements for the year ended
December 31, 1999 that are incorporated by reference from BB&T's Current Report
on Form 8-K dated April 28, 2000 to reflect the acquisitions by BB&T of
Hardwick Holding Company on June 13, 2000, First Banking Company of Southeast
Georgia on June 15, 2000 and One Valley Bancorp on July 6, 2000, 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 consolidated financial statements of BankFirst Corporation which are
incorporated by reference herein have been audited by Crowe, Chizek and Company
LLP, independent certified public accountants, as indicated in their report
dated January 21, 2000 with respect thereto, and are incorporated by reference
herein in reliance upon the authority of said firm as experts in accounting and
auditing.
BankFirst expects representatives of Crowe, Chizek and Company LLP to attend
BankFirst's special meeting. These representatives will have an opportunity to
make a statement if they desire to do so, and BankFirst expects that they will
be available to respond to any appropriate questions you may have.
59
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
BB&T and BankFirst 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:
<TABLE>
<S> <C> <C>
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
</TABLE>
Please call the SEC at 1-800-SEC-0330 for further information on the public
reference rooms. These SEC filings are also available to the public from
commercial document retrieval services and at the Internet world wide web site
maintained by the SEC at "http://www.sec.gov." Reports, proxy statements and
other information should also be available for inspection at the offices of the
NYSE and Nasdaq.
BB&T has filed the registration statement to register with the SEC the BB&T
common stock to be issued to BankFirst 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 BankFirst and BB&T to "incorporate by reference" information
into this proxy statement/prospectus. This 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 BankFirst and BB&T have previously filed with the SEC. These
documents contain important information about BankFirst and BB&T and their
businesses.
<TABLE>
<S> <C>
BB&T SEC Filings (File No. 1-10853)
Annual Report on Form 10-K For the fiscal year ended December 31, 1999
Quarterly Reports on Form 10-Q For the fiscal quarter ended March 31, 2000
(as amended of Form 10-Q/A filed on June 5,
2000) and June 30, 2000
Current Reports on Form 8-K Filed January 12, 2000, February 7, 2000,
February 9, 2000, April 11, 2000, April 28,
2000, July 18, 2000, July 27, 2000, August
23, 2000, September 6, 2000, October 12,
2000,
Registration Statements on Form 8-A Filed September 4, 1991 and January 10, 1997
(describing BB&T's common stock and
concerning BB&T's shareholder rights plan)
</TABLE>
60
<PAGE>
<TABLE>
<S> <C>
BankFirst SEC Filings (File No. 1-14417)
Annual Report on Form 10-K For the fiscal year ended December 31, 1999
Quarterly For the fiscal quarters ended March 31, 2000
Reports on Form and June 30, 2000
10-Q
Current Reports Dated January 11, 2000, March 21, 2000 and
on Form 8-K April 21, 2000
Registration Filed August 17, 1998
Statement on
Form 8-A
(describing
BankFirst's
common stock)
</TABLE>
BankFirst 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 BankFirst has supplied
all such information relating to BankFirst before the merger.
If you are a shareholder, we may have sent you some of the documents
incorporated by reference, but you can obtain any of them through the
companies, the SEC or the SEC's Internet web site as described above. Documents
incorporated by reference are available from the companies without charge,
excluding all exhibits except those that the companies have specifically
incorporated by reference in this proxy statement/prospectus. Shareholders may
obtain documents incorporated by reference in this proxy statement/prospectus
by requesting them in writing or by telephone from the appropriate company at
the following addresses:
BB&T Corporation Shareholder Reporting BankFirst Corporation C. David Allen
Post Office Box 1290 Winston-Salem, 625 Market Street Knoxville, Tennessee
North Carolina 27102 (336) 733-3021 37902 (865) 595-1100
If you would like to request documents, please do so by December 14, 2000 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 BankFirst 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
November , 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.
61
<PAGE>
APPENDIX A
AGREEMENT AND PLAN OF REORGANIZATION
BETWEEN
BANKFIRST CORPORATION
and
BB&T CORPORATION
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I DEFINITIONS...................................................... A-1
ARTICLE II THE MERGER...................................................... A-5
2.1Merger................................................................ A-5
2.2Filing; Plan of Merger................................................ A-5
2.3Effective Time........................................................ A-6
2.4Closing............................................................... A-6
2.5Effect of Merger...................................................... A-6
2.6Further Assurances.................................................... A-6
2.7Merger Consideration.................................................. A-6
2.8Conversion of Shares; Payment of Merger Consideration................. A-7
2.9Conversion of Stock Options........................................... A-8
2.10Merger of Subsidiaries............................................... A-9
2.11Anti-Dilution........................................................ A-9
2.12Dissenting Shares.................................................... A-9
ARTICLE III REPRESENTATIONS AND WARRANTIES OF BANKFIRST.................... A-10
3.1Capital Structure..................................................... A-10
3.2Organization, Standing and Authority.................................. A-10
3.3Ownership of Subsidiaries............................................. A-10
3.4Organization, Standing and Authority of the Subsidiaries.............. A-11
3.5Authorized and Effective Agreement.................................... A-11
3.6Securities Filings; Financial Statements; Statements True............. A-11
3.7Minute Books.......................................................... A-12
3.8Adverse Change........................................................ A-12
3.9Absence of Undisclosed Liabilities.................................... A-12
3.10Properties........................................................... A-12
3.11Environmental Matters................................................ A-12
3.12Loans; Allowance for Loan Losses..................................... A-13
3.13Tax Matters.......................................................... A-13
3.14Employees; Compensation; Benefit Plans............................... A-14
3.15Certain Contracts.................................................... A-17
3.16Legal Proceedings; Regulatory Approvals.............................. A-17
3.17Compliance with Laws; Filings........................................ A-18
3.18Brokers and Finders.................................................. A-18
3.19Repurchase Agreements; Derivatives................................... A-18
3.20Deposit Accounts..................................................... A-18
3.21Related Party Transactions........................................... A-19
3.22Certain Information.................................................. A-19
3.23Tax and Regulatory Matters........................................... A-19
3.24State Anti-Takeover Laws............................................. A-19
3.25Labor Relations...................................................... A-19
3.26No Right to Dissent.................................................. A-19
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF BB&T.......................... A-20
4.1Capital Structure of BB&T............................................. A-20
4.2Organization, Standing and Authority of BB&T.......................... A-20
4.3Authorized and Effective Agreement.................................... A-20
4.4Organization, Standing and Authority of BB&T Subsidiaries............. A-21
4.5Securities Documents; Statements True................................. A-21
</TABLE>
i
<PAGE>
<TABLE>
<S> <C>
4.6Certain Information................................................... A-21
4.7Tax and Regulatory Matters............................................ A-21
4.8Share Ownership....................................................... A-21
4.9Legal Proceedings; Regulatory Approvals............................... A-21
4.10Adverse Change....................................................... A-21
ARTICLE V COVENANTS........................................................ A-22
5.1BankFirst Shareholder Meeting......................................... A-22
5.2Registration Statement; Proxy Statement/Prospectus.................... A-22
5.3Plan of Merger; Reservation of Shares................................. A-22
5.4Additional Acts....................................................... A-23
5.5Best Efforts.......................................................... A-23
5.6Certain Accounting Matters............................................ A-23
5.7Access to Information................................................. A-23
5.8Press Releases........................................................ A-24
5.9Forebearances of BankFirst............................................ A-24
5.10Employment Agreements................................................ A-26
5.11Affiliates........................................................... A-26
5.12Section 401(k) Plan; Other Employee Benefits......................... A-26
5.13Directors and Officers Protection.................................... A-27
5.14Forbearances of BB&T................................................. A-28
5.15Reports.............................................................. A-28
5.16Exchange Listing..................................................... A-28
5.17Advisory Boards...................................................... A-28
5.18Board of Directors of Branch Banking and Trust Company............... A-29
ARTICLE VI CONDITIONS PRECEDENT............................................ A-29
6.1Conditions Precedent--BB&T and BankFirst.............................. A-29
6.2Conditions Precedent--BankFirst....................................... A-29
6.3Conditions Precedent--BB&T............................................ A-30
ARTICLE VII TERMINATION, WAIVER AND AMENDMENT.............................. A-31
7.1Termination........................................................... A-31
7.2Effect of Termination................................................. A-31
7.3Survival of Representations, Warranties and Covenants................. A-32
7.4Waiver................................................................ A-32
7.5Amendment or Supplement............................................... A-32
ARTICLE VIII MISCELLANEOUS................................................. A-32
8.1Expenses.............................................................. A-32
8.2Entire Agreement...................................................... A-32
8.3No Assignment......................................................... A-33
8.4Notices............................................................... A-33
8.5Specific Performance.................................................. A-34
8.6Captions.............................................................. A-34
8.7Counterparts.......................................................... A-34
8.8Governing Law......................................................... A-34
8.9Severability.......................................................... A-34
</TABLE>
ANNEXES
Annex A Articles of Merger
Annex B Employment Agreement with Fred R. Lawson (omitted)
Annex C Employment Agreement with R. Stephen Hagood (omitted)
Annex D Employment Agreements with five additional employees (omitted)
ii
<PAGE>
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION ("Agreement"), dated as of August
22, 2000 is among BANKFIRST CORPORATION ("BankFirst"), a Tennessee corporation
having its principal office at Knoxville, Tennessee, and BB&T CORPORATION
("BB&T"), a North Carolina corporation having its principal office at Winston-
Salem, North Carolina;
R E C I T A L S:
The parties desire that BankFirst shall be merged with and into BB&T (said
transaction being hereinafter referred to as the "Merger") pursuant to a plan
of merger (the "Plan of Merger") substantially in the form attached as Annex A
hereto, and the parties desire to provide for certain undertakings, conditions,
representations, warranties and covenants in connection with the transactions
contemplated hereby. As a condition and inducement to BB&T's willingness to
enter into the Agreement, BankFirst is concurrently granting to BB&T an option
to acquire, under certain circumstances, 2,199,000 shares of the common stock,
par value $2.50 per share, of BankFirst.
NOW, THEREFORE, in consideration of the premises and of the mutual
representations, warranties, covenants and agreements herein contained, and
intending to be legally bound hereby, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions
When used herein, the capitalized terms set forth below shall have the
following meanings:
"Affiliate" means, with respect to any Person, any 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 Tennessee, as provided in Section 48-21-107 of the
TBCA.
"Bank Holding Company Act" shall mean the federal Bank Holding Company
Act of 1956, as amended.
"BankFirst Common Stock" shall mean the shares of voting common stock,
par value $2.50 per share, of BankFirst. The BankFirst Common Stock has no
Rights attached, except as provided in Section 3.1.
"BankFirst Disclosure Memorandum" shall mean the written information in
one or more documents, each of which is entitled "BankFirst Disclosure
Memorandum" and dated on or before the date of this Agreement and delivered
not later than the date of execution of this Agreement by BankFirst to
BB&T, and describing 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. Information disclosed with respect to
one Section shall not be deemed to be disclosed for purposes of any other
Section not specifically referenced.
"BankFirst Preferred Stock" shall mean the shares of nonvoting,
noncumulative, convertible 5% Preferred Stock, $5.00 par value of
BankFirst, convertible into 3.0875 shares of BankFirst Common Stock for
each share of BankFirst Preferred Stock.
A-1
<PAGE>
"BankFirst Subsidiaries" shall mean BankFirst, BankFirst Trust Company,
First National Bank and Trust Company of Athens, Curtis Mortgage Company,
Eastern Life Insurance Company, and Friendly Finance Company, Inc., all of
which are incorporated under the laws of the State of Tennessee, and any
and all other Subsidiaries of BankFirst as of the date hereof and any
corporation, bank, savings association, or other organization acquired as a
Subsidiary of BankFirst after the date hereof and held as a Subsidiary by
BankFirst at the Effective Time.
"BB&T Common Stock" shall mean the shares of voting common stock, par
value $5.00 per share, of BB&T, with rights attached issued pursuant to
Rights Agreement dated December 17, 1996 between BB&T and Branch Banking
and Trust Company, as Rights Agent, relating to BB&T's Series B Junior
Participating Preferred Stock, $5.00 par value per share.
"BB&T 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 BankFirst 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 any
employee pension or welfare benefit plan or program maintained by BankFirst
at the Effective Time, the date determined by BB&T with respect to each
such plan or program which shall be not later than January 1 following the
close of the calendar year in which the last of the BankFirst Subsidiaries
which is a bank or other savings institution is merged into BB&T or one of
the BB&T Subsidiaries.
"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 BankFirst Disclosure Memorandum,
referencing the Section number herein pursuant to which such disclosure is
being made.
"Environmental Claim" means any notice from any governmental authority
or third party alleging potential liability (including, without limitation,
potential liability for investigatory costs, cleanup or remediation costs,
governmental response costs, natural resources damages, property damages,
personal injuries or penalties) arising out of, based upon, or resulting
from a violation of the Environmental Laws or the presence or release into
the environment of any Hazardous Substances.
"Environmental Laws" means all applicable federal, state and local laws
and regulations, as amended, relating to pollution or protection of human
health or the environment (including ambient air, surface water, ground
water, land surface, or subsurface strata) and which are administered,
interpreted, or enforced by the United States Environmental Protection
Agency and state and local agencies with jurisdiction over and including
common law in respect of, pollution or protection of the environment,
including without limitation CERCLA, the Resource Conservation and Recovery
Act, as amended, 42 U.S.C. 6901 et seq., and other laws and regulations
relating to emissions, discharges, releases, or threatened releases of any
Hazardous Substances, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or handling of
any Hazardous Substances.
A-2
<PAGE>
"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 Statements" shall mean (a) with respect to BB&T, (i) the
consolidated balance sheets (including related notes and schedules, if any)
of BB&T as of December 31, 1999, 1998, and 1997, and the related
consolidated statements of income and cash flows (including related notes
and schedules, if any) for each of the three years ended December 31, 1999,
1998, and 1997, 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 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, 1999, and (b) with respect to BankFirst, (i) the consolidated
balance sheets (including related notes and schedules, if any) of BankFirst
as of December 31, 1999, 1998 and 1997, and the related consolidated
statements of income and cash flows (including related notes and schedules,
if any) for each of the three years ended December 31, 1999, 1998 and 1997
as filed by BankFirst in Securities Documents and (ii) the consolidated
balance sheets of BankFirst (including related notes and schedules, if any)
and the related consolidated statements of income and cash flows (including
related notes and schedules, if any) included in Securities Documents filed
by BankFirst with respect to periods ended subsequent to December 31, 1999.
"GAAP" shall mean generally accepted accounting principles applicable to
financial institutions and their holding companies, 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 (including
references to such Person being aware of a particular matter), the personal
knowledge after due inquiry of the chief executive officer, chief financial
officer, chief human resources officer, chief operating officer and chief
credit officer of such Person.
"Material Adverse Effect" on BB&T or BankFirst, as applicable, shall
mean an event, change, or occurrence which, individually or together with
any other event, change or occurrence, (i) has a material adverse effect on
the financial condition, results of operations, business or business
prospects of BB&T and the BB&T Subsidiaries taken as a whole, or BankFirst
and the BankFirst Subsidiaries taken as a whole, or (ii) materially impairs
the ability of BB&T or BankFirst to perform its obligations under this
Agreement or to consummate the Merger and the other transactions
contemplated by this Agreement; provided that "Material Adverse Effect"
shall not be deemed to include the impact of (a) actions and omissions of
BB&T or BankFirst taken with the prior written consent of the other in
contemplation of the transactions contemplated hereby and (b) the direct
effects of compliance with this Agreement on the operating performance of
the parties, including expenses incurred by the parties in consummating the
transactions contemplated by this Agreement or relating to any litigation
arising as a result of the Merger.
"NCBCA" shall mean the North Carolina Business Corporation Act, as
amended.
A-3
<PAGE>
"NYSE" shall mean the New York Stock Exchange, Inc.
"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 BankFirst 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 Agreement described under the definition
of "BB&T Common Stock"), and stock appreciation rights, performance units
and similar stock-based rights whether or not they obligate the issuer
thereof to issue stock or other securities or to pay cash.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Securities Documents" shall mean all reports, proxy statements,
registration statements and all similar documents filed, or required to be
filed, pursuant to the Securities Laws, including but not limited to
periodic and other reports filed pursuant to Section 13 of the Exchange
Act.
"Securities Laws" shall mean the Securities Act; the Exchange Act; the
Investment Company Act of 1940, as amended; the Investment Advisers Act of
1940, as amended; the Trust Indenture Act of 1939 as amended; and the rules
and regulations of the Commission promulgated thereunder.
"Stock Option" shall mean, collectively, any option granted under the
Stock Option Plans, outstanding and unexercised on the date hereof to
acquire shares of BankFirst Common Stock, aggregating 1,024,100 shares.
"Stock Option Plans" shall mean BankFirst's Incentive Stock Option Plan
dated October 11, 1995.
"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).
"TBCA" shall mean the Tennessee Business Corporation Act, as amended.
"TILA" shall mean the federal Truth in Lending Act, as amended.
A-4
<PAGE>
1.2 Terms Defined Elsewhere
The capitalized terms set forth below are defined in the following sections:
<TABLE>
<S> <C>
Agreement Introduction
BankFirst 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(c)
Common Exchange Ratio Section 2.7(a)
Constituent Corporations Section 2.1
Effective Time Section 2.3
Employer Entity Section 5.12(a)
Merger Recitals
Merger Consideration Section 2.7(a)
PBGC Section 3.14(b)(iv)
Plan Section 3.14(b)(i)
Plan of Merger Recitals
Preferred Exchange Ratio Section 2.7(a)
Surviving Corporation Section 2.1(a)
Transferred Employee Section 5.12(a)
</TABLE>
ARTICLE II
THE MERGER
2.1 Merger
BB&T and BankFirst are constituent corporations (the "Constituent
Corporations") to the Merger as contemplated by the NCBCA and the TBCA. At the
Effective Time:
(a) BankFirst shall be merged into BB&T in accordance with the
applicable provisions of the NCBCA and the TBCA, with BB&T being the
surviving corporate entity (hereinafter sometimes referred to as the
"Surviving Corporation").
(b) The separate existence of BankFirst 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 the BankFirst Common Stock and of the shares of the BankFirst
Preferred Stock, each voting as a separate class. 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 Tennessee as provided in
Section 55-11-05 of the NCBCA and
A-5
<PAGE>
Section 48-21-107 of the TBCA, respectively. The Plan of Merger is incorporated
herein by reference, and adoption of this Agreement by the Boards of Directors
of the Constituent Corporations and approval by the shareholders of BankFirst
shall constitute adoption and approval of the Plan of Merger.
2.3 Effective Time
The Merger shall be effective at the day and hour specified in the Articles
of Merger as filed as provided in Section 2.2 (herein sometimes referred to as
the "Effective Time").
2.4 Closing
The closing of the transactions contemplated by this Agreement (the
"Closing") shall take place at the offices of Womble Carlyle Sandridge & Rice,
PLLC, Winston-Salem, North Carolina, at 10:00 a.m. 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 BankFirst 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 Constituent Corporations may be prosecuted
as if the Merger had not taken place, or the Surviving Corporation may be
substituted in its place; and any judgment rendered against either of the
Constituent Corporations may be enforced against the Surviving Corporation.
Neither the rights of creditors nor any liens upon the property of either of
the Constituent Corporations shall be impaired by reason of the Merger.
2.6 Further Assurances
If, at any time after the Effective Time, the Surviving Corporation shall
consider or be advised that any further deeds, assignments or assurances in law
or any other actions are necessary, desirable or proper to vest, perfect or
confirm of record or otherwise, in the Surviving Corporation, the title to any
property or rights of the Constituent Corporations acquired or to be acquired
by reason of, or as a result of, the Merger, the Constituent Corporations agree
that such Constituent Corporations and their proper officers and directors
shall and will execute and deliver all such proper deeds, assignments and
assurances in law and do all things necessary, desirable or proper to vest,
perfect or confirm title to such property or rights in the Surviving
Corporation and otherwise to carry out the purpose of this Agreement, and that
the proper officers and directors of the Surviving Corporation are fully
authorized and directed in the name of the Constituent Corporations or
otherwise to take any and all such actions.
2.7 Merger Consideration
(a) As used herein, the term "Merger Consideration" shall mean the
number of shares of BB&T Common Stock (to the nearest ten thousandth of a
share) to be exchanged for each share of BankFirst Common Stock and for
each share of BankFirst Preferred Stock issued and outstanding as of the
Effective Time, and cash (without interest) to be payable in exchange for
any fractional share of BB&T Common Stock which would otherwise be
distributable to a BankFirst shareholder as provided in Section 2.7(b).
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The portion of a share of BB&T Common Stock to be issued for each issued
and outstanding share of BankFirst Common Stock (the "Common Exchange
Ratio") shall be .4554. The number of shares of BB&T Common Stock to be
issued for each issued and outstanding share of BankFirst Preferred Stock
(the "Preferred Exchange Ratio") shall equal 1.4060.
(b) The amount of cash payable with respect to any fractional share of
BB&T Common Stock shall be determined by multiplying the fractional part of
such share by the Closing Value. The "Closing Value" shall mean the average
4:00 p.m. eastern time closing price per share of BB&T Common Stock on the
NYSE on the Closing Date as reported on NYSEnet.com.
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 BankFirst or the holders of record of BankFirst
Common Stock or BankFirst Preferred Stock, each share of BankFirst Common
Stock and each share of BankFirst Preferred Stock issued and outstanding
immediately prior to the Effective Time shall be converted into and shall
represent the right to receive, upon surrender of the certificate
representing such share of BankFirst Common Stock or BankFirst Preferred
Stock (as provided in subsection (d) below), the Merger Consideration.
(b) Each share of BB&T Common Stock issued and outstanding immediately
prior to the Effective Time shall continue to be issued and outstanding.
(c) Until surrendered, each outstanding certificate which prior to the
Effective Time represented one or more shares of BankFirst Common Stock or
BankFirst Preferred Stock shall be deemed upon the Effective Time for all
purposes to represent only the right to receive the Merger Consideration
and any declared and unpaid dividends (with respect to BankFirst Common
Stock) or accrued and unpaid dividends (with respect to BankFirst Preferred
Stock). No interest will be paid or accrued on the Merger Consideration
upon the surrender of the certificate or certificates representing shares
of BankFirst Common Stock or BankFirst Preferred Stock. With respect to any
certificate for BankFirst Common Stock or BankFirst Preferred Stock that
has been lost or destroyed, BB&T shall pay the Merger Consideration
attributable to such certificate upon receipt of a surety bond or other
adequate indemnity as required in accordance with BB&T's standard policy,
and evidence reasonably satisfactory to BB&T of ownership of the shares
represented thereby. After the Effective Time, BankFirst's transfer books
shall be closed and no transfer of the shares of BankFirst Common Stock or
BankFirst Preferred 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 BankFirst 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
BankFirst Common Stock or BankFirst Preferred Stock. Upon proper surrender
of such certificates or other evidence of ownership meeting the
requirements of Section 2.8(c), together with such letter of transmittal
duly executed and completed in accordance with the instructions thereto,
and such other documents as may be reasonably requested, BB&T shall
promptly cause the transfer to the persons entitled thereto of the Merger
Consideration and any declared and unpaid dividends (with respect to
BankFirst Common Stock) or accrued and unpaid dividends (with respect to
BankFirst Preferred Stock).
(e) The Surviving Corporation shall pay any dividends or other
distributions with a record date prior to the Effective Time which have
been declared or made by BankFirst in respect of shares of BankFirst Common
Stock in accordance with the terms of this Agreement and which remain
unpaid at the Effective Time, subject to compliance by BankFirst with
Section 5.9(b). At the time of the Closing and incident thereto, BankFirst
shall pay a per share dividend in respect of shares of BankFirst Preferred
Stock equal to the product of $.0625 times a fraction, the numerator of
which is the number of days following the payment date of the BankFirst
Preferred Stock dividend preceding the Closing Date and the denominator of
which is 91. Such payment shall constitute the sole right of the holders of
the BankFirst Preferred Stock
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to a dividend with respect to such BankFirst Preferred Stock. To the extent
permitted by law, former shareholders of record of BankFirst 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 BankFirst Common Stock or BankFirst Preferred
Stock are converted, regardless of whether such holders have exchanged
their certificates representing BankFirst Common Stock or BankFirst
Preferred Stock for certificates representing BB&T Common Stock in
accordance with the provisions of this Agreement. Whenever a dividend or
other distribution is declared by BB&T on the BB&T Common Stock, the record
date for which is at or after the Effective Time, the declaration shall
include dividends or other distributions on all shares of BB&T Common Stock
issuable pursuant to this Agreement, but no dividend or other distribution
payable to the holders of record of BB&T Common Stock as of any time
subsequent to the Effective Time shall be delivered to the holder of any
certificate representing BankFirst Common Stock or BankFirst Preferred
Stock until such holder surrenders such certificate for exchange as
provided in this Section 2.8. Upon surrender of such certificate, both the
BB&T Common Stock certificate and any undelivered dividends and cash
payments payable hereunder (without interest) shall be delivered and paid
with respect to the shares of BankFirst Common Stock or BankFirst Preferred
Stock represented by such certificate.
2.9 Conversion of Stock Options
(a) At the Effective Time, each Stock Option then outstanding (and which
by its terms 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 BankFirst and the Committee of BankFirst'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 BankFirst Common
Stock subject to such Stock Option immediately prior to the Effective Time
by the Common Exchange Ratio, and (iv) the per share exercise price under
each such Stock Option shall be adjusted by dividing the per share exercise
price under each such Stock Option by the Common Exchange Ratio and
rounding up to the nearest cent. Notwithstanding the foregoing, BB&T may at
its election substitute as of the Effective Time options under the BB&T
Corporation 1995 Omnibus Stock Incentive Plan or any other duly adopted
comparable plan (in either case, the "BB&T Option Plan") for all or a part
of the Stock Options, subject to the following conditions: (A) the
requirements of (iii) and (iv) above shall be met; (B) such substitution
shall not constitute a modification, extension or renewal of any of the
Stock Options; and (C) the substituted options shall continue in effect on
the same terms and conditions as provided in the agreement manifesting each
Stock Option and the Stock Option Plans governing each Stock Option. 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 be approved in accordance with the provisions
of Commission 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 BankFirst 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 duly registered with
the Commission, 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 BankFirst 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
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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. BankFirst 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 stock option grants following the Effective
Time with respect to BB&T Common Stock shall be determined by BB&T in
accordance with its plans and procedures as in effect from time to time,
and subject to any contractual obligations.
2.10 Merger of Subsidiaries
In the event that BB&T shall request, BankFirst shall take such actions, and
shall cause the BankFirst Subsidiaries to take such actions, as may be required
in order to effect, at the Effective Time, the merger of one or more of the
BankFirst Subsidiaries with and into, in each case, one of the BB&T
Subsidiaries.
2.11 Anti-Dilution
In the event BB&T changes the number of shares of BB&T Common Stock issued
and outstanding prior to the Effective Time as a result of a stock split, stock
dividend or other similar recapitalization, and the record date thereof (in the
case of a stock dividend) or the effective date thereof (in the case of a stock
split or similar recapitalization for which a record date is not established)
shall be prior to the Effective Time, the Common Exchange Ratio and the
Preferred Exchange Ratio shall be proportionately adjusted.
2.12 Dissenting Shares.
Any holder of shares of BankFirst Preferred 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 Sections 48-23-101 et seq. of the TBCA (the "Dissenting
Shareholder") shall thereafter have only such rights, if any, as provided to a
dissenting shareholder under Sections 48-23-101 et seq. of the TCBA and shall
have no rights to receive the Merger Consideration under Sections 2.7 and 2.8;
provided, however, that (i) nothing contained herein shall limit such
Dissenting Shareholder's rights to the payment of all accrued and unpaid
dividends as of the Effective Time; and (ii) if a Dissenting Shareholder shall
withdraw (in accordance with the TCBA) the demand for such appraisal, shall
fail to perfect such demand as required under Section 48-23-202 of the TBCA 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).
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BANKFIRST
Except as Disclosed, BankFirst represents and warrants to BB&T as follows
(the representations and warranties herein of BankFirst are made subject to the
applicable standard set forth in Section 6.3(a), and no such representation or
warranty shall be deemed to be inaccurate unless the inaccuracy would permit
BB&T to refuse to consummate the Merger under such applicable standard):
3.1 Capital Structure
The authorized capital stock of BankFirst consists of 30,000,000 shares of
BankFirst Common Stock and 1,000,000 shares of BankFirst Preferred Stock.
BankFirst has 11,050,669 shares of BankFirst Common Stock issued and
outstanding and 181,050 shares of BankFirst Preferred Stock issued and
outstanding. No other classes of capital stock of BankFirst, common or
preferred, are authorized, issued or outstanding. All outstanding shares of
BankFirst 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 BankFirst Common Stock reserved in connection
with the Stock Option Plans, (ii) 2,199,000 shares of BankFirst Common Stock
reserved in connection with the BB&T Option Agreement, and (iii) 558,992 shares
of BankFirst Common Stock reserved in connection with conversion of the
BankFirst Preferred Stock. BankFirst has granted options to acquire 1,024,100
shares of BankFirst Common Stock under the Stock Option Plans, 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 BankFirst shareholder to own, to vote or to dispose of, the capital
stock of BankFirst. Holders of BankFirst Common Stock do not have preemptive
rights.
3.2 Organization, Standing and Authority
BankFirst is a corporation duly organized, validly existing and in good
standing under the laws of the State of Tennessee, with full corporate power
and authority to carry on its business as now conducted and to own, lease and
operate its properties and assets. BankFirst is not required to be qualified to
do business in any other state of the United States or foreign jurisdiction.
BankFirst is registered as a bank holding company under the Bank Holding
Company Act.
3.3 Ownership of Subsidiaries
Section 3.3 of the BankFirst Disclosure Memorandum lists all of the
BankFirst Subsidiaries and, with respect to each, its jurisdiction of
organization, jurisdictions in which it is qualified or otherwise licensed to
conduct business, the number of shares or ownership interests owned by
BankFirst (directly or indirectly), the percentage ownership interest so owned
by BankFirst and its business activities. The outstanding shares of capital
stock or other equity interests of the BankFirst Subsidiaries are validly
issued and outstanding, fully paid and nonassessable, and all such shares are
directly or indirectly owned by BankFirst 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 BankFirst Subsidiaries, and there are no agreements,
understandings or commitments relating to the right of BankFirst to own, to
vote or to dispose of said interests. None of the shares of capital stock or
other equity interests of the BankFirst Subsidiaries have been issued in
violation of the preemptive rights of any person. Section 3.3 of the BankFirst
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 than the BankFirst Subsidiaries and stock
or other securities held in a fiduciary capacity) owned directly or indirectly
by BankFirst.
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3.4 Organization, Standing and Authority of the Subsidiaries
Each BankFirst Subsidiary which is a depository institution is a federally
chartered or Tennessee chartered bank with its deposits insured by the FDIC.
Each of the BankFirst Subsidiaries is validly existing and in good standing
under the laws of its jurisdiction of organization. Each of the BankFirst
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. No BankFirst Subsidiary is required
to be qualified to do business in any other state of the United States or
foreign jurisdiction, or is engaged in any type of activities that have not
been Disclosed.
3.5 Authorized and Effective Agreement
(a) BankFirst 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 BankFirst 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, the Articles of Merger and the BB&T Option
Agreement, 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 BankFirst shareholders pursuant to and to the extent
required by applicable law. This Agreement, the Plan of Merger and the BB&T
Option Agreement constitute legal, valid and binding obligations of
BankFirst, and each is enforceable against BankFirst 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 hereby or thereby, nor compliance by BankFirst
with any of the provisions hereof or thereof, shall (i) conflict with or
result in a breach of any provision of the Charter or bylaws of BankFirst
or any BankFirst 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 BankFirst or any BankFirst 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 BankFirst or any BankFirst
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 BankFirst of the Merger and the other transactions
contemplated in this Agreement.
3.6 Securities Filings; Financial Statements; Statements True
(a) BankFirst has timely filed all Securities Documents required by the
Securities Laws to be filed since December 31, 1996. BankFirst has
Disclosed or made available to BB&T a true and complete copy of each
Securities Document filed by BankFirst with the Commission after December
31, 1996 and prior to the date hereof, which are all of the Securities
Documents that BankFirst 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 BankFirst fairly present or will fairly
present, as the case may be, the consolidated financial position of
BankFirst and the BankFirst 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 BankFirst or any BankFirst Subsidiary to BB&T
contains or will contain any untrue statement of a material fact or will
omit to state a material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.
3.7 Minute Books
The minute books of BankFirst and each of the BankFirst 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 June 30, 2000, BankFirst and the BankFirst Subsidiaries have not
incurred any liability, whether accrued, absolute or contingent, except as
disclosed in the most recent BankFirst 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 business prospects of
BankFirst or any of the BankFirst Subsidiaries.
3.9 Absence of Undisclosed Liabilities
All liabilities (including contingent liabilities) of BankFirst and the
BankFirst Subsidiaries are disclosed in the most recent Financial Statements of
BankFirst or are normally recurring business obligations incurred in the
ordinary course of its business since the date of BankFirst's most recent
Financial Statements.
3.10 Properties
(a) BankFirst and the BankFirst 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 BankFirst as of December 31,
1999 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 BankFirst or any BankFirst
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) BankFirst and the BankFirst Subsidiaries are and at all times have
been in compliance with all Environmental Laws. Neither BankFirst nor any
BankFirst Subsidiary has received any communication alleging that BankFirst
or the BankFirst 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 BankFirst nor any
BankFirst 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, arbitral 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) BankFirst or any BankFirst Subsidiary, (ii) any
person or entity whose liability for any Environmental Claim BankFirst or
any BankFirst 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 BankFirst or any BankFirst Subsidiary, or any real or
personal property which BankFirst or any BankFirst 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 BankFirst or any BankFirst
Subsidiary holds a security interest securing a loan recorded on the books
of BankFirst or any BankFirst Subsidiary. Neither BankFirst nor any
BankFirst 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) BankFirst and the BankFirst Subsidiaries are in compliance with all
recommendations contained in any environmental audits, analyses and surveys
received by BankFirst relating to all real and personal property owned or
leased by BankFirst or any BankFirst Subsidiary and all real and personal
property of which BankFirst or any BankFirst 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, circumstances,
conditions, events or incidents 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 BankFirst or any BankFirst Subsidiary or
against any person or entity whose liability for any Environmental Claim
BankFirst or any BankFirst 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 BankFirst and the BankFirst
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 BankFirst'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 BankFirst are, in the
reasonable judgment of BankFirst's management, adequate as of their
respective dates under the requirements of GAAP and applicable regulatory
requirements and guidelines.
3.13 Tax Matters
(a) BankFirst and the BankFirst 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 (in
accordance with GAAP) an adequate reserve or accrual for the payment of,
all taxes required to be paid in respect of the periods covered by such
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returns and, as of the Effective Time, will have paid, or where payment is
not required to have been made, will have set up (in accordance with GAAP)
an adequate reserve or accrual for the payment of, all taxes for any
subsequent periods ending on or prior to the Effective Time. Neither
BankFirst nor any BankFirst Subsidiary has any liability for any such taxes
in excess of the amounts so paid or reserves or accruals so established.
BankFirst and the BankFirst Subsidiaries have paid, or where payment is not
required to have been made have set up (in accordance with GAAP) 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 BankFirst and the BankFirst Subsidiaries are complete and
accurate. Neither BankFirst nor any BankFirst Subsidiary is delinquent in
the payment of any tax, assessment or other governmental charge. No
deficiencies for any tax, assessment or other governmental charge have been
proposed, asserted or assessed (tentatively or otherwise) against BankFirst
or any BankFirst Subsidiary which have not been settled and paid. There are
currently no agreements in effect with respect to BankFirst or any
BankFirst 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 BankFirst nor any of the BankFirst 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 BankFirst or a BankFirst
subsidiary) or has any liability for taxes of any person (other than
BankFirst and the BankFirst 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 BankFirst and the BankFirst 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 BankFirst nor any of the BankFirst 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. BankFirst 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 BankFirst and
of each BankFirst Subsidiary and each other person (in each case other than
as an employee) to whom BankFirst or any BankFirst 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) BankFirst has Disclosed an accurate and complete list of all
Plans, as defined below, contributed to, maintained or sponsored by
BankFirst or any BankFirst Subsidiary, to which BankFirst or any
BankFirst 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 BankFirst or
any BankFirst Subsidiary is a member. For
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purposes of this Agreement, the term "Plan" shall mean a plan,
arrangement, agreement or program described in the foregoing provisions
of this Section 3.14(b)(i) and which is: (A) a profit-sharing, deferred
compensation, bonus, stock option, stock purchase, pension, retainer,
consulting, retirement, severance, welfare or incentive plan, agreement
or arrangement, whether or not funded and whether or not terminated,
(B) an employment agreement, (C) a material 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 BankFirst nor any BankFirst 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 BankFirst or any BankFirst
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
BankFirst or any BankFirst Subsidiary is the subject of any lien
arising under Section 302(f) of ERISA or Section 412(n) of the Code,
neither BankFirst nor any BankFirst 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 BankFirst or any
BankFirst 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 form
of such Plan and its 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.
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(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 BankFirst or any BankFirst Subsidiary is a member
or was a member during such five-year period.
(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 on
an ongoing basis in accordance with reasonable actuarial methods,
factors and assumptions applicable to a defined benefit plan. 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 BankFirst nor, to the Knowledge of
BankFirst, any BankFirst 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 BankFirst or any BankFirst 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) BankFirst and each BankFirst Subsidiary has been and is
presently in compliance with all of the requirements of Section 4980B
of the Code.
(xi) Neither BankFirst nor any BankFirst Subsidiary has a liability
as of December 31, 1999 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 BankFirst as of December
31, 1999 or otherwise Disclosed.
(xii) Neither the consideration nor implementation of the
transactions contemplated under this Agreement will increase (A)
BankFirst's or any BankFirst 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, BankFirst 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.
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(xiv) Each of the Plans as applied to BankFirst and any BankFirst
Subsidiary may be amended or terminated at any time by action of
BankFirst's Board of Directors, or such BankFirst'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 BankFirst or a BankFirst Subsidiary thereunder).
3.15 Certain Contracts
(a) Neither BankFirst nor any BankFirst Subsidiary is a party to, is
bound or affected by, or receives benefits under (i) any agreement,
arrangement or commitment, written or oral, the default of which would have
a Material Adverse Effect, whether or not made in the ordinary course of
business (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 business activities, 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 BankFirst or any BankFirst
Subsidiary or the guarantee by BankFirst or any BankFirst Subsidiary of any
such obligation, which cannot be terminated within less than 60 days after
the Closing Date by BankFirst or any BankFirst Subsidiary (without payment
of any 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 BankFirst or
any BankFirst Subsidiary (without payment of any penalty or cost), or that
provides benefits which are contingent, or the application of which is
altered, upon the occurrence of a transaction involving BankFirst 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 BankFirst nor any BankFirst Subsidiary is in default under
any agreement, commitment, arrangement, lease, insurance policy, or other
instrument, whether entered into in the ordinary course of business or
otherwise and whether written or oral, and there has not occurred any event
that, with the lapse of time or giving of notice or both, would constitute
such a default.
3.16 Legal Proceedings; Regulatory Approvals
There are no actions, suits, claims, governmental investigations or
proceedings instituted, pending or, to the Knowledge of BankFirst, threatened
against BankFirst or any BankFirst Subsidiary or against any asset, interest,
Plan or right of BankFirst or any BankFirst Subsidiary, or, to the Knowledge of
BankFirst, 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 BankFirst, threatened against any present or
former director or officer of BankFirst or any BankFirst Subsidiary that would
reasonably be expected to give rise to a claim against BankFirst or any
BankFirst Subsidiary for indemnification. There are no actual or, to the
Knowledge of BankFirst, threatened actions, suits or proceedings which present
a claim to restrain or prohibit the transactions contemplated herein or in the
BB&T Option Agreement. To the Knowledge of BankFirst, no fact or condition
relating to BankFirst or any BankFirst Subsidiary exists (including, without
limitation, noncompliance with the CRA) that would prevent BankFirst or BB&T
from obtaining all of the federal and state regulatory approvals contemplated
herein.
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3.17 Compliance with Laws; Filings
Each of BankFirst and each BankFirst 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 BankFirst nor any BankFirst Subsidiary
has received written notification that has not lapsed, been withdrawn or
abandoned from any agency or department of federal, state or local government,
or otherwise has Knowledge that such a written notification is pending, (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 BankFirst nor any BankFirst 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
communication requesting that it enter into any of the foregoing. Since
December 31, 1996, BankFirst and each of the BankFirst Subsidiaries 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 BankFirst nor any BankFirst 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 Gerrish & McCreary, P.C., the
nature and extent of which has been Disclosed.
3.19 Repurchase Agreements; Derivatives
(a) With respect to all agreements currently outstanding pursuant to
which BankFirst or any BankFirst Subsidiary has purchased securities
subject to an agreement to resell, BankFirst or the BankFirst 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 BankFirst or any
BankFirst Subsidiary has sold securities subject to an agreement to
repurchase, neither BankFirst nor the BankFirst Subsidiary has pledged
collateral in excess of the amount of the debt secured thereby. Neither
BankFirst nor any BankFirst Subsidiary has pledged collateral in excess of
the amount required under any interest rate swap or other similar agreement
currently outstanding.
(b) Neither BankFirst nor any BankFirst 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 BankFirst Subsidiaries that are depository
institutions are insured by the FDIC to the maximum extent permitted by federal
law, and the BankFirst 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.
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3.21 Related Party Transactions
BankFirst has Disclosed all existing transactions, investments and loans,
including loan guarantees existing as of the date hereof, to which BankFirst or
any BankFirst Subsidiary is a party with any director, executive officer or 5%
shareholder of BankFirst or any person, corporation, or enterprise controlling,
controlled by or under common control with any of the foregoing. All such
transactions, investments and loans are on terms no less favorable to BankFirst
than could be obtained from unrelated parties.
3.22 Certain Information
When the Proxy Statement/Prospectus is mailed, and at the time of the
meeting of shareholders of BankFirst to vote on the Agreement and the Plan of
Merger, the Proxy Statement/Prospectus and all amendments or supplements
thereto, with respect to all information set forth therein provided by
BankFirst, (i) shall comply with the applicable provisions of the Securities
Laws, and (ii) shall not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements contained therein, in light of the circumstances in which
they were made, not misleading.
3.23 Tax and Regulatory Matters
Neither BankFirst nor any BankFirst Subsidiary has taken or agreed to take
any action which would or could reasonably be expected to (i) cause the Merger
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 Anti-Takeover Laws
BankFirst and each BankFirst 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. Neither the Charter nor the Bylaws of BankFirst, nor any
other document of BankFirst or to which BankFirst is a party, contains a
provision that requires more than a majority of the shares of BankFirst Common
Stock entitled to vote, more than a majority of the shares of BankFirst
Preferred Stock entitled to vote, or the vote or approval of any other class of
capital stock or voting security, to approve the Merger or any other
transactions contemplated in this Agreement.
3.25 Labor Relations
Neither BankFirst nor any BankFirst 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 BankFirst or any BankFirst Subsidiary party to any
collective bargaining agreement. There is no strike or other labor dispute
involving BankFirst or any BankFirst Subsidiary, pending or threatened, or to
the Knowledge of BankFirst, is there any activity involving any employees of
BankFirst or any BankFirst Subsidiary seeking to certify a collective
bargaining unit or engaging in any other organization activity.
3.26 No Right to Dissent
Except with respect to holders of shares of BankFirst Preferred Stock under
Sections 48-23-101 et. seq. of the TBCA, nothing in the Charter or the Bylaws
of BankFirst or any BankFirst Subsidiary provides or would provide to any
person, including without limitation the holders of BankFirst Common Stock,
upon execution of this Agreement or the Plan of Merger and consummation of the
transactions contemplated hereby and thereby, rights of dissent and appraisal
of any kind.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BB&T
BB&T represents and warrants to BankFirst as follows (the representations
and warranties herein of BB&T are made subject to the applicable standard set
forth in Section 6.2(a), and no such representation or warranty shall be deemed
to be inaccurate unless the inaccuracy would permit BankFirst to refuse to
consummate the Merger under such applicable standard):
4.1 Capital Structure of BB&T
The authorized capital stock of BB&T consists of (i) 5,000,000 shares of
preferred stock, par value $5.00 per share, of which 2,000,000 shares have been
designated as Series B Junior Participating Preferred Stock and the remainder
are undesignated, and none of which shares are issued and outstanding, and (ii)
500,000,000 shares of BB&T Common Stock of which 356,760,711 shares were issued
and outstanding as of June 30, 2000. 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 financial 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.
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4.4 Organization, Standing and Authority of BB&T Subsidiaries
Each of the BB&T Subsidiaries is duly organized, validly existing and in
good standing under applicable laws. BB&T owns, directly or indirectly, all of
the issued and outstanding shares of capital stock of each of the BB&T
Subsidiaries. Each of the BB&T Subsidiaries (i) has full power and authority to
carry on its business as now conducted and (ii) is duly qualified to do
business in the states of the United States and foreign jurisdictions where its
ownership or leasing of property or the conduct of its business requires such
qualification.
4.5 Securities Documents; Statements True
BB&T has timely filed all Securities Documents required by the Securities
Laws to be filed since December 31, 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. No statement, certificate, instrument or other writing
furnished or to be furnished hereunder by BB&T or any other BB&T Subsidiary to
BankFirst contains or will contain any untrue statement of material fact or
will omit to state a material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.
4.6 Certain Information
When the Proxy Statement/Prospectus is mailed, and at all times subsequent
to such mailing up to and including the time of the meeting of shareholders of
BankFirst to vote on the Merger, the Proxy Statement/Prospectus and all
amendments or supplements thereto, with respect to all information set forth
therein relating to BB&T, (i) shall comply with the applicable provisions of
the Securities Laws, and (ii) shall not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements contained therein, in light of the
circumstances in which they were made, not misleading.
4.7 Tax and Regulatory Matters
Neither BB&T nor any BB&T Subsidiary has taken or agreed to take any action
which would or could reasonably be expected to (i) cause the Merger not to
constitute a reorganization under Section 368 of the Code, or (ii) materially
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 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 BankFirst Common Stock.
4.9 Legal Proceedings; Regulatory Approvals
There are no actual or, to the Knowledge of BB&T, threatened actions, suits
or proceedings instituted against BB&T or any BB&T Subsidiary, which present a
claim to restrain or prohibit the 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 BankFirst from obtaining all of the federal and state
regulatory approvals contemplated herein.
4.10 Adverse Change.
Since June 30, 2000, there has not 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.
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ARTICLE V
COVENANTS
5.1 BankFirst Shareholder Meeting
BankFirst 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 date of effectiveness of the Registration Statement,
and by approving and authorizing the execution of this Agreement, the Board of
Directors of BankFirst agrees that it shall, at the time the Proxy
Statement/Prospectus is mailed to the shareholders of BankFirst, recommend that
BankFirst's shareholders vote for such approval; provided, that the Board of
Directors of BankFirst may withdraw, modify or refuse to make such
recommendation only if the Board of Directors shall determine in good faith
that such recommendation should not be made in light of its fiduciary duty to
BankFirst's shareholders after consideration of written advice of legal counsel
that, in the opinion of such counsel, such recommendation or the failure to
withdraw or modify such recommendation could reasonably be expected to
constitute a breach of the fiduciary duty of the Board of Directors to the
shareholders of BankFirst. Notwithstanding any other provisions hereof, by his
signature to this Agreement each member of the Board of Directors of BankFirst
hereby agrees that he will vote all issued and outstanding shares of voting
capital stock of BankFirst over which he has voting rights in favor of the Plan
of Merger, and will otherwise support approval of the Plan of Merger by
shareholders of BankFirst, and that he will not, prior to the record date for
any vote on the Plan of Merger, convey or otherwise dispose of the right to
vote any such shares.
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. BankFirst will furnish to
BB&T the information required to be included in the Registration Statement with
respect to its business and affairs before it is filed with the Commission and
again before any amendments are filed, and shall have the right to review and
consult with BB&T on the form of, and any characterizations of such information
included in, the Registration Statement prior to the filing with the
Commission. Such Registration Statement, at the time it becomes effective and
on the Effective Time, shall in all material respects conform to the
requirements of the Securities Act and the applicable rules and regulations of
the Commission. The Registration Statement shall include the form of Proxy
Statement/Prospectus. BB&T and BankFirst shall use all reasonable efforts to
cause the Proxy Statement/Prospectus to be approved by the Commission for
mailing to the BankFirst 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. BankFirst shall cause the Proxy Statement/Prospectus
to be mailed to shareholders in accordance with all applicable notice
requirements under the Securities Laws, the TBCA 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.
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5.4 Additional Acts
(a) BankFirst 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 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 and BankFirst
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. BankFirst 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 BankFirst 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 BankFirst 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
BankFirst 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) BankFirst's lending, investment or asset/liability
management policies; provided, that any action taken pursuant to this Section
5.6 shall not be deemed to constitute or result in the breach of any
representation or warranty of BankFirst contained in this Agreement; provided,
however, that BankFirst shall not be required to alter, amend, modify or change
any such policies or practices until the earlier of (i) such time as BB&T
acknowledges to BankFirst or its legal counsel 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 (ii) immediately prior to the Effective Time.
5.7 Access to Information
BankFirst 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,
BankFirst 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 BankFirst and the
BankFirst Subsidiaries and, during such period, shall make available all
information concerning their businesses as may be reasonably
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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 BankFirst 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 Forebearances of BankFirst
Except with the prior written consent of BB&T, between the date hereof and
the Effective Time, BankFirst shall not, and shall cause each of the BankFirst
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 $.0625 per share payable with respect to BankFirst Preferred
Stock, payable on record dates consistent with past practices; provided
that for the period commencing with the payment date of the last dividend
paid preceding the Closing Date and ending with the Closing Date, the
dividend payable shall be as provided in Section 2.8(e);
(c) issue any shares of its capital stock (including treasury shares),
except pursuant to the Stock Option Plans with respect to the options
outstanding on the date hereof, pursuant to the BB&T Option Agreement, or
pursuant to any conversion of shares of BankFirst Preferred Stock in
accordance with the terms and conditions of such Preferred Stock;
(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
existence on the date hereof, in the ordinary course of business consistent
with past practices; provided, however, that in no event shall Rights to
purchase more than 100,000 shares of the capital stock of BankFirst
(subject to adjustment as may be necessary for organic changes, if any) be
granted between the date hereof and the Effective Time;
(e) amend its Charter or Bylaws;
(f) impose or permit imposition, of any lien, charge or encumbrance on
any share of stock held by it in any BankFirst 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 assets or acquire
any assets other than in the ordinary course of its business consistent
with past practices;
(h) fail to comply in any material respect with any laws, regulations,
ordinances or governmental actions applicable to it and to the conduct of
its business;
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(i) increase the rate of compensation of any of its directors, officers
or employees (excluding increases in compensation resulting from the
exercise of compensatory stock options outstanding as of the date of this
Agreement), or pay or agree to pay any bonus to, or provide any new
employee benefit or incentive to, any of its directors, officers or
employees, except for increases or payments 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, BankFirst or
any BankFirst Subsidiary or any business combination with BankFirst or any
BankFirst Subsidiary other than as contemplated by this Agreement; or
authorize any officer, director, agent or affiliate of BankFirst or any
BankFirst 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 subsection (k)
shall not apply to furnishing information, negotiations or discussions with
the offeror following an unsolicited offer if, as a result of such offer,
BankFirst is advised in writing by legal counsel that in its opinion the
failure to so furnish information or negotiate would likely constitute a
breach of the fiduciary duty of BankFirst's Board of Directors to the
BankFirst shareholders;
(l) enter into (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 BankFirst or a BankFirst Subsidiary or guarantee
by BankFirst or a BankFirst 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
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, BankFirst 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, 1999,
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, 1999, except as required by changes in law
or regulation;
(o) with the exception of the capital expenditures which are reasonably
necessary to be incurred in connection with the three branch offices under
construction on the date hereof, incur any commitments for capital
expenditures or obligation to make capital expenditures in excess of
$25,000, for any one expenditure, or $100,000, in the aggregate;
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(p) incur any 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 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
BB&T (or its specified BB&T Subsidiary) agrees to enter into employment
agreements with Fred R. Lawson, substantially in the form of Annex B hereto,
with R. Stephen Hagood substantially in the form of Annex C hereto, and with
Jerry L. French, C. David Allen, David M. Butler, Michael L. Bryson and L.Allen
Rathbone substantially in the form of Annex D hereto.
5.11 Affiliates
BankFirst shall use its best efforts to cause all persons who are Affiliates
of BankFirst 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 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 with respect to the
401(k) plan of BankFirst, BB&T shall cause such plan to be merged with the
401(k) plan maintained by BB&T and the BB&T Subsidiaries, or to be frozen
or to be terminated, in each case as determined by BB&T and subject to the
receipt of all applicable regulatory or governmental approvals. Each
employee of BankFirst at the Effective Time (i) who is a participant in the
401(k) plan of BankFirst, (ii) who becomes an employee immediately
following the Effective Time of BB&T or of any subsidiary of BB&T
("Employer Entity"), and (iii) who continues in the employment of an
Employer Entity until the Benefit Plan Determination Date, shall be
eligible to participate in BB&T's 401(k) plan as of the Benefit Plan
Determination Date. Any other former employee of BankFirst who is employed
by an Employer Entity on or after the Benefit Plan Determination Date shall
be eligible to be a participant in the BB&T 401(k) plan upon complying with
eligibility requirements. All rights to participate in BB&T's 401(k) plan
are subject to BB&T's right to amend or terminate the plan. Until the
Benefit Plan Determination Date, BB&T shall continue in effect for the
benefit of participating employees the Section 401(k) plan of BankFirst.
For purposes of administering BB&T's 401(k) plan, service with BankFirst
and the BankFirst Subsidiaries shall be deemed to be service with BB&T for
participation and vesting purposes, but not for purposes of benefit
accrual. Each employee of BankFirst or a BankFirst Subsidiary at the
Effective Time who becomes an employee immediately following the Effective
Time of an Employer Entity is referred to herein as a "Transferred
Employee".
(b) Each Transferred Employee shall be eligible to participate in group
hospitalization, medical, dental, life, disability and other welfare
benefit plans and programs available to employees of the Employer Entity,
subject to the terms of such plans and programs, as of the Benefit Plan
Determination Date with respect to each such plan or program, conditional
upon the Transferred Employee's being employed by an Employer Entity as of
such Benefit Plan Determination Date and subject to complying
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with eligibility requirements of the respective plans and programs. BB&T's
plans shall recognize and give credit under such BB&T plans to each
Transferred Employee for any payments made by such Transferred Employee of
deductible amounts and for payments made by such Transferred Employee
applicable to out-of-pocket maximum obligations under the BankFirst Plans.
With respect to health care coverages, 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 BankFirst 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 BankFirst 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(b), service with BankFirst
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 (c) below).
(c) 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 arising from
the Merger to continue any Transferred Employees in its employ or in any
specific job or to provide to any Transferred Employee any specified level
of compensation or any incentive payments, benefits or perquisites. Each
Transferred Employee who is terminated by an Employer Entity subsequent to
the Effective Time, excluding any employee who has a then existing contract
providing for severance, shall be entitled to severance pay in accordance
with the general severance policy maintained by BB&T, if and to the extent
that such employee is entitled to severance pay under such policy. Such
employee's service with BankFirst or a BankFirst Subsidiary shall be
treated as service with BB&T for purposes of determining the amount of
severance pay, if any, under BB&T's severance policy.
(d) BB&T agrees to honor all employment agreements, severance agreements
and deferred compensation agreements that BankFirst and the BankFirst
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 BankFirst shall, in the sole discretion of
BB&T, be frozen, terminated or merged into comparable plans of BB&T,
effective as BB&T shall determine in its sole discretion.
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 BankFirst for acts or
omissions occurring prior to the Effective Time. Such insurance shall provide
at least the same coverage and amounts as contained in BankFirst's policy on
the date hereof; provided, that in no event shall the annual premium on such
policy exceed 150% of the annual premium payments on BankFirst'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 BankFirst or any BankFirst Subsidiary
prior to the Effective Time from any acts or omissions in such capacities prior
to the Effective Time, to the extent that such indemnification is provided
pursuant to the Charter or Bylaws of BankFirst on the date hereof and is
permitted under the NCBCA to the fullest lawful extent.
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5.14 Forbearances of BB&T
Except with the prior written consent of BankFirst, which consent shall not
be arbitrarily or unreasonably withheld, between the date hereof and the
Effective Time neither BB&T nor any BB&T Subsidiary shall take any action which
would or might be expected to (i) cause the business combination contemplated
hereby not to constitute a reorganization under Section 368 of the Code; (ii)
result in any inaccuracy of a representation or warranty herein which would
allow for termination of this Agreement; (iii) cause any of the conditions
precedent to the transactions contemplated by this Agreement to fail to be
satisfied; (iv) exercise the BB&T Option Agreement other than in accordance
with its terms, or dispose of the shares of BankFirst 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 BankFirst and BB&T shall file (and shall cause the BankFirst
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 BankFirst, 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 BankFirst 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
As of the Effective Time, BB&T shall offer to the members of the Board of
Directors of BankFirst a seat on the BB&T Advisory Board for the BB&T Community
Bank region based in Knoxville, Tennessee. For two years following the
Effective Time, the Advisory Board members appointed pursuant to this Section
5.17 and who continue to serve shall receive, as compensation for service on
the Advisory Board, Advisory Board member's fees (annual retainer and
attendance fees) equal in amount each year (prorated for any partial year) to
the annual retainer and schedule of attendance fees for directors of BankFirst
in effect on August 1, 2000. Following such two-year period, Advisory Board
Members, if they continue to serve in such capacity, shall receive fees in
accordance with BB&T's standard schedule of fees for service thereon as in
effect from time to time. For two years after the Effective Time, no such
Advisory Board member shall be prohibited from serving thereon because he or
she shall have attained the maximum age for service thereon (currently age 70).
Membership of any person on any Advisory Board shall be conditional upon
execution of an agreement providing that such person will not engage in
activities competitive with BB&T for two years following the Effective Time or,
if longer, the period that he or she is a member of the Advisory Board.
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5.18 Board of Directors of Branch Banking and Trust Company
As of the Effective Time, Branch Banking and Trust Company, a North Carolina
banking corporation, shall elect James L. Clayton to its Board of Directors, to
serve until its next annual meeting (subject to the right of removal for cause)
and thereafter so long as he is elected and qualifies. Any member of such Board
of Directors who is not an employee of BB&T or any of its Affiliates shall be
entitled to receive fees for service on the Board in accordance with BB&T's
policies as in effect from time to time.
ARTICLE VI
CONDITIONS PRECEDENT
6.1 Conditions Precedent--BB&T and BankFirst
The respective obligations of BB&T and BankFirst 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 BankFirst 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 "stop order" or
like 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 consents and
approvals required in connection with the transactions contemplated by this
Agreement and the Plan of Merger, all notice periods and waiting periods
with respect to such approvals shall have passed and all such approvals
shall be in effect;
(d) None of BB&T, any of the BB&T Subsidiaries, BankFirst or any of the
BankFirst 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 (provided,
however, that the parties shall use their commercially reasonable efforts
to have any such court or agency order, decree or injunction vacated,
reversed or removed); and
(e) BankFirst and BB&T shall have received an opinion of BB&T's legal
counsel, in form and substance satisfactory to BankFirst and BB&T, to the
effect that the Merger will constitute a reorganization under Section 368
of the Code and that the shareholders of BankFirst will not recognize any
gain or loss to the extent that such shareholders exchange shares of
BankFirst Common Stock or BankFirst Preferred Stock for shares of BB&T
Common Stock.
6.2 Conditions Precedent--BankFirst
The obligations of BankFirst 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 BankFirst
pursuant to Section 7.4:
(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 BankFirst. The representations
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and warranties of BB&T set forth in Sections 4.1, 4.2 (except as relates to
qualification), 4.3(a), 4.3(b)(i) and 4.4 (except as relates to
qualification) shall be true and correct (except for inaccuracies which are
de minimus). There shall not exist inaccuracies in the representations and
warranties of BB&T set forth in this Agreement (including the
representations and warranties set forth in Sections 4.1, 4.2, 4.3(a),
4.3(b)(i) and 4.4) such that the aggregate effect of such inaccuracies has,
or is reasonably likely to have, a Material Adverse Effect on BB&T.
(b) BB&T shall have performed in all material respects all obligations
and complied in all material respects with all covenants required by this
Agreement.
(c) BB&T shall have delivered to BankFirst 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 and that there are no actions, suits, claims,
governmental investigations or procedures instituted, pending or, to the
best of such officer's knowledge, threatened that reasonably may be
expected to have a Material Adverse Effect on BB&T or that present a claim
to restrain or prohibit the transactions contemplated herein or in the Plan
of Merger.
(d) BankFirst shall have received opinions of counsel to BB&T in the
form reasonably acceptable to BankFirst's legal counsel.
(e) The shares of BB&T Common Stock issuable pursuant to the Merger
shall have been approved for listing on the NYSE, subject to official
notice of issuance.
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 BankFirst 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 BankFirst set
forth in Sections 3.1, 3.2 (except the last sentence thereof), 3.3, 3.4
(except the last sentence thereof), 3.5(a), 3.5(b)(i), 3.23 and 3.24 shall
be true and correct (except for inaccuracies which are de minimis). There
shall not exist inaccuracies in the representations and warranties of
BankFirst 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
BankFirst and the BankFirst 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.
(c) BankFirst shall have performed in all material respects all
obligations and complied in all material respects with all covenants
required by this Agreement.
(d) BankFirst 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 BankFirst, have been satisfied and that there are
no actions, suits, claims, governmental investigations or procedures
instituted, pending or, to the best of such officer's knowledge, threatened
that reasonably may be expected to have a Material Adverse Effect on
BankFirst or that present a claim to restrain or prohibit the transactions
contemplated herein or in the Plan of Merger.
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<PAGE>
(e) BB&T shall have received opinions of counsel to BankFirst in the
form reasonably acceptable to BB&T's legal counsel.
(f) BB&T shall have received the written agreements from Affiliates as
specified in Section 5.11 to the extent necessary, in the reasonable
judgment of BB&T, to promote compliance with Rule 145 promulgated by the
Commission.
(g) BB&T shall have received Employment Agreements substantially in the
form of Annex B executed by Fred R. Lawson and of Annex C executed by R.
Stephen Hagood.
ARTICLE VII
TERMINATION, WAIVER AND AMENDMENT
7.1 Termination
This Agreement may be terminated:
(a) At any time prior to the Effective Time, by the mutual consent in
writing of the parties hereto.
(b) At any time prior to the Effective Time, by either party (i) in the
event of a material breach by the other party of any covenant or agreement
contained in this Agreement, or (ii) in the event of an inaccuracy of any
representation or warranty of the other party contained in this Agreement,
which inaccuracy would provide the nonbreaching party the ability to refuse
to consummate the Merger under the applicable standard set forth in Section
6.2(a) in the case of BankFirst 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 BankFirst do not approve the Agreement and the Plan of Merger.
(f) At any time following March 31, 2001 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, by either party hereto in writing, if an order, decree
or injunction is imposed by a court or agency of competent jurisdiction
which enjoins or prohibits consummation of the transactions contemplated by
this Agreement, after commercially reasonable steps have been taken by the
parties hereto to have such order, decree or injunction vacated, reversed
or removed but such order, decree or injunction is not successfully
vacated, reversed or removed and becomes non-appealable and final.
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
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<PAGE>
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 BB&T Option Agreement shall be governed by its own
terms.
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 and 5.17); provided that no such representations,
warranties or covenants shall be deemed to be terminated or extinguished so as
to deprive BB&T or BankFirst (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 BankFirst, the aforesaid
representations, warranties and covenants being material inducements to
consummation by BB&T and BankFirst of the transactions contemplated herein.
7.4 Waiver
Except with respect to any required regulatory approval or other condition
required 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 BankFirst 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 BankFirst shareholders of this Agreement and the
Plan of Merger, shall reduce either the Common Exchange Ratio, the Preferred
Exchange Ratio or the payment terms for fractional interests.
7.5 Amendment or Supplement
This Agreement or the Plan of Merger may be amended or supplemented at any
time in writing by mutual agreement of BB&T and BankFirst, 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 BankFirst.
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
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<PAGE>
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 BankFirst to enforce rights in Sections 5.13 and
5.17.
8.3 No Assignment
Except for a substitution of parties pursuant to Section 5.4(a), none of the
parties hereto may assign any of its rights or obligations under this Agreement
to any other person, except upon the prior written consent of each other party.
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 BankFirst:
BankFirst Corporation
625 Market Street
Knoxville, Tennessee 37902
Attn: Fred R. Lawson
Telephone: 865-595-1100
Fax: 865-595-1199
With a required copy to:
Wilson S. Ritchie
Suite 1710, Plaza Tower
800 S. Gay Street
Knoxville, Tennessee
Telephone: 865-524-5353
Fax: 865-974-9615
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
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<PAGE>
Any party may by notice change the address to which notice or other
communications to it are to be delivered.
8.5 Specific Performance
BankFirst acknowledges that the BankFirst Common Stock and the BankFirst
business and assets are unique, and that if BankFirst 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 BankFirst shall, without cause, refuse to consummate the
transactions contemplated by this Agreement.
8.6 Captions
The captions and section and descriptive headings 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 and the same 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.
8.9 Severability
If any term or other provision of this Agreement is held invalid, illegal or
incapable of being enforced by any rule of law or public policy by a court of
competent jurisdiction, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic
substance of the transactions contemplated hereby is not affected in any manner
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner, to the
end that the transactions contemplated hereby are fulfilled to the extent
possible.
[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
/s/ John A. Allison, IV
By: _________________________________
Name: John A. Allison, IV__________
Title: Chairman and Chief
Executive Officer__________________
BANKFIRST CORPORATION
/s/ Fred R. Lawson
By:__________________________________
Name: Fred R. Lawson _____________
Title: President & CEO_____________
The undersigned each hereby agrees to comply with the provisions of Section
5.1 of the foregoing Agreement as specifically applicable to him.
<TABLE>
<S> <C> <C>
/s/ James L. Clayton
______________________________________
James L. Clayton
/s/ C. Warren Neel
______________________________________
C. Warren Neel
/s/ Fred R. Lawson
______________________________________
Fred R. Lawson
/s/ C. Scott Mayfield, Jr.
______________________________________
C. Scott Mayfield, Jr.
/s/ Charles E. Ogle, Jr.
______________________________________
Charles E. Ogle, Jr.
/s/ W. D. Sullins, Jr.
______________________________________
W. D. Sullins, Jr.
/s/ L. A. Walker, Jr.
______________________________________
L. A. Walker, Jr.
/s/ Geoffrey A. Wolpert
______________________________________
Geoffrey A. Wolpert
</TABLE>
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<PAGE>
ARTICLES OF MERGER
OF
BANKFIRST CORPORATION
WITH AND INTO
BB&T CORPORATION
The undersigned corporations, pursuant to Section 48-21-107 of the Tennessee
Business Corporation Act ("TBCA") and Section 55-11-05 of the North Carolina
Business Corporation Act ("NCBCA"), hereby execute the following Articles of
Merger.
ONE
The merger of BankFirst Corporation, a Tennessee corporation ("BankFirst"),
with and into BB&T Corporation, a North Carolina corporation ("BB&T"), shall be
in accordance with the Plan of Merger attached hereto as Exhibit I-NC (the
"Plan of Merger").
TWO
The Plan of Merger was submitted to the shareholders of BankFirst by its
Board of Directors in accordance with the provisions of Section 48-21-104 of
the TBCA and 55-11-03 of the NCBCA and was duly approved in the manner
prescribed by law by the shareholders of BankFirst on the day of
, 200 . 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
, 2001.
[Remainder of Page Intentionally Left Blank]
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<PAGE>
The undersigned, each of BB&T and BankFirst, declares the facts herein
stated are true as of , 2001.
BB&T CORPORATION
By: _________________________________
Name: ____________________________
Title: ___________________________
BANKFIRST CORPORATION
By: _________________________________
Name: ____________________________
Title: ___________________________
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<PAGE>
ANNEX A
PLAN OF MERGER
OF
BANKFIRST CORPORATION
WITH AND INTO
BB&T CORPORATION
Section 1. Corporations Proposing to Merge and Surviving
Corporation. BankFirst Corporation, a Tennessee corporation ("BankFirst"),
shall be merged (the "Merger") with and 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 August 22, 2000 (the "Agreement"), by and among BankFirst 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 Office of the Secretary of State of
North Carolina and with the Secretary of the State of Tennessee. BB&T shall
continue as the surviving corporation (the "Surviving Corporation") in the
Merger and the separate corporate existence of BankFirst shall cease.
Section 2. Effects of the Merger. The Merger shall have the effects set
forth in Section 48-21-108 of the Business Corporation Act of the State of
Tennessee (the "TBCA") and in 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 remain in effect as 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; Payment of Merger Consideration
(a) At the Effective Time, by virtue of the Merger and without any
action on the part of BankFirst or the holders of record of the voting
common stock, par value $2.50 per share, of BankFirst ("BankFirst Common
Stock"), or of the nonvoting preferred stock, par value $5.00 per share, of
BankFirst ("BankFirst Preferred Stock") each share of BankFirst 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 BankFirst Common Stock or
BankFirst Preferred Stock (as provided in Section 4(d)), the Merger
Consideration.
(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 BankFirst Common Stock or
BankFirst Preferred Stock shall be deemed upon the Effective Time for all
purposes to represent only the right to receive the Merger Consideration
and any declared and unpaid dividends (with respect to BankFirst Common
Stock) or accrued and unpaid dividends (with respect to BankFirst Preferred
Stock). No interest will be paid or accrued on the Merger Consideration
upon the surrender of the certificate or certificates representing shares
of BankFirst Common Stock or BankFirst Preferred Stock. With respect to any
certificate for BankFirst Common Stock or Bank First Preferred Stock that
has been lost or destroyed, BB&T shall pay the Merger Consideration
attributable to such certificate upon receipt of a surety bond or other
adequate indemnity as required in accordance with BB&T's standard policy,
and evidence reasonably satisfactory to BB&T of ownership of the shares
represented thereby. After the Effective Time, BankFirst's transfer books
shall be closed and no transfer of the shares of BankFirst Common Stock or
BankFirst Preferred Stock outstanding immediately prior to the Effective
Time shall be made on the stock transfer books of the Surviving
Corporation.
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<PAGE>
(d) Promptly after the Effective Time, BB&T shall cause to be delivered
or mailed to each BankFirst 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
BankFirst Common Stock or BankFirst Preferred Stock. Upon 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 (with respect to BankFirst Common Stock)
or accrued and unpaid dividends (with respect to BankFirst Preferred
Stock).
(e) The Surviving Corporation shall pay any dividends or other
distributions with a record date prior to the Effective Time which have
been declared or made by BankFirst in respect of shares of BankFirst Common
Stock in accordance with the terms of the Agreement and which remain unpaid
at the Effective Time, subject to compliance by BankFirst with Section
5.9(b) of the Agreement. At the time of the Closing and incident thereto,
BankFirst shall pay a per share dividend in respect of shares of BankFirst
Preferred Stock equal to the product of $.0625 times a fraction, the
numerator of which is the number of days following the payment date of the
BankFirst Preferred Stock dividend preceding the Closing Date and the
denominator of which is 91. Such payment shall constitute the sole right of
the holders of the BankFirst Preferred Stock to a dividend with respect to
such BankFirst Preferred Stock. To the extent permitted by law, former
shareholders of record of BankFirst 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 BankFirst
Common Stock or BankFirst Preferred Stock are converted, regardless of
whether such holders have exchanged their certificates representing
BankFirst Common Stock or BankFirst Preferred 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 Effective Time
shall be delivered to the holder of any certificate representing BankFirst
Common Stock or BankFirst Preferred 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
BankFirst Common Stock or BankFirst Preferred Stock represented by such
certificate.
Section 5. Merger Consideration
As used herein, the term "Merger Consideration" shall mean the number of
shares of BB&T Common Stock (to the nearest one-hundredth of a share) to be
exchanged for each share of BankFirst Common Stock or BankFirst Preferred Stock
issued and outstanding as of the Effective Time and cash (without interest) to
be payable in exchange for any fractional share of BB&T Common Stock which
would otherwise be distributable to a BankFirst shareholder as provided in
Section 4(d), determined as follows:
(a) The number of shares of BB&T Common Stock to be issued for each
issued and outstanding share of BankFirst Common Stock shall be in the
ratio of .4554 shares of BB&T Common Stock for each share of BankFirst
Common Stock (the "Common Exchange Ratio"); and the number of shares of
BB&T Common Stock to be issued for each issued and outstanding share of
BankFirst Preferred Stock shall be in the ratio of 1.4060 shares of BB&T
Common Stock for each share of BankFirst Preferred Stock (the "Preferred
Exchange Ratio").
(b) The amount of cash payable with respect to any fractional share of
BB&T Common Stock shall be determined by multiplying the fractional part of
such share by the Closing Value. The "Closing Value" shall mean the 4:00
p.m. eastern time closing price per share of BB&T Common Stock on the NYSE
on the Closing Date as reported on NYSEnet.com.
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<PAGE>
Section 6. Conversion of Stock Options
(a) At the Effective Time, each option granted under BankFirst's
Incentive Stock Option Plan dated October 11, 1995 (the "Stock Option
Plan") to acquire shares of BankFirst 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 Plan, except
that from and after the Effective Time (i) BB&T and its Compensation
Committee shall be substituted for BankFirst and the Compensation Committee
of BankFirst's Board of Directors administering the Stock Option Plan, (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 BankFirst Common Stock subject to such Stock Option immediately
prior to the Effective Time by the Common Exchange Ratio, and (iv) the per
share exercise price under each such Stock Option shall be adjusted by
dividing the per share exercise price under each such Stock Option by the
Common Exchange Ratio and rounding up to the nearest cent. Notwithstanding
the foregoing, BB&T may at its election substitute as of the Effective Time
options under the BB&T Corporation 1995 Omnibus Stock Incentive Plan or any
other duly adopted comparable plan (in either case, the "BB&T Option Plan")
for all or a part of the Stock Options, subject to the following
conditions: (A) the requirements of (iii) and (iv) above shall be met; (B)
such substitution shall not constitute a modification, extension or renewal
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 Plan
granting each Stock Option. 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 Rule 16b-3 shall 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 BankFirst shall take all
necessary steps to effectuate the foregoing provisions of this Section 6.
BB&T has reserved and shall continue to reserve adequate shares, duly
registered with the Securities and Exchange Commission, 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 BankFirst 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 Plan 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 BankFirst 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 BankFirst Common Stock upon consummation of the Merger.
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<PAGE>
APPENDIX B
August 21, 2000
[To be updated to the date of the proxy statement/prospectus]
Board of Directors
BankFirst Corporation
Knoxville, Tennessee
RE: Fairness Opinion Relative to the Proposed Agreement and Plan of Merger by
and among BB&T Corporation and BankFirst Corporation
Directors:
On behalf of BankFirst Corporation ("BankFirst"), the Board of Directors
retained Southard Financial ("Southard") and Gerrish & McCreary LLC Consultants
("Gerrish"), to render an opinion of the fairness to the shareholders of
BankFirst, from a financial viewpoint, of the proposed acquisition of BankFirst
by BB&T Corporation ("BB&T"). The primary assets of BankFirst are its 100%
ownership of BankFirst in Knoxville, Tennessee and The First National Bank and
Trust Company in Athens, Tennessee. Southard and Gerrish and their respective
principals have no past, present, or future contemplated financial, equity, or
other interest in either BankFirst or BB&T. The principals of Gerrish are also
principals of Gerrish & McCreary, P.C., a law firm that provided advisory
services to BankFirst. Fees for those services are independent of the fees for
this fairness opinion. This opinion is issued based primarily upon financial
data as of June 30, 2000.
Approach to Assignment
Southard Financial is a financial valuation consulting firm specializing in
the valuation of closely-held companies and financial institutions. Since its
founding in 1987, Southard Financial has provided approximately 2,000 valuation
opinions for clients in 43 states. Further, Southard Financial provides
valuation services for approximately 120 financial institutions annually.
Southard Financial is independent of the parties to the merger. Gerrish &
McCreary LLC Consultants is a bank advisory and consulting firm.
Southard and Gerrish's approach to this assignment was to consider the
following factors:
. A review of the financial performance and position of BankFirst and the
value of its common stock;
. A review of the financial performance and position of BB&T and the value
of its common stock;
. A review of recent bank merger transactions in the United States and in
Tennessee and surrounding states;
. A review of the current and historical market prices of bank holding
companies in Tennessee and surrounding states;
. A review of the investment characteristics of the common stock of
BankFirst;
. A review of the investment characteristics of the common stock of BB&T;
. A review of the process undertaken by the Board of Directors for the sale
of BankFirst;
. A review of the proposed terms of the merger; and,
. An evaluation of other factors as was considered necessary to render this
opinion.
B-1
<PAGE>
DUE DILIGENCE REVIEW PROCESS
In connection with this opinion, Southard and Gerrish made such reviews,
analyses, and inquiries, as were deemed necessary and appropriate under the
circumstances. In performing this assignment, Southard and Gerrish conducted a
review of the documents specifically outlined in Exhibit 1.
Review of BankFirst Corporation
Southard and Gerrish reviewed the information listed in Exhibit 1 pertaining
to BankFirst. Due to the extensive availability of public information on
BankFirst, Southard and Gerrish did not conduct on-site due diligence. Details
pertaining to BankFirst are contained in Southard and Gerrish's files.
Review of BB&T Corporation
Southard and Gerrish reviewed the information listed in Exhibit 1 pertaining
to BB&T. Due to the extensive availability of public information on BB&T,
Southard and Gerrish did not conduct on-site due diligence. It is assumed that
all material information regarding BB&T is contained in its filings with the
Securities and Exchange Commission, and is reflected in its market pricing and
in the recommendations of the 23 securities analysts who follow BB&T stock.
Details pertaining to BB&T are contained in Southard and Gerrish's files.
Merger Documentation
Southard and Gerrish reviewed the preliminary terms of an Agreement and Plan
of Merger (draft dated August 14, 2000), by and among BB&T Corporation and
BankFirst Corporation (the "Agreement"). The merger terms are outlined in
Exhibit 2 (Terms of the Proposed Agreement and Plan of Merger).
Although discussions with management and supporting documentation give
Southard and Gerrish comfort that its due diligence efforts were appropriate,
Southard and Gerrish have not conducted a physical examination of all
BankFirst's properties or facilities and have not obtained or been provided
with any independent formal evaluation of such properties and facilities.
Southard and Gerrish have reviewed the financial information and other internal
data provided, as well as other publicly available information, and while
unable to verify the accuracy and completeness of such data and information,
Southard and Gerrish have judged the reasonableness thereof and made certain
judgments thereto. The opinion is necessarily based upon market, economic and
other considerations as they exist on, and can be evaluated as of the date of
this letter.
B-2
<PAGE>
MAJOR CONSIDERATIONS
Numerous factors were considered in the overall review of the proposed
merger. The review process included considerations regarding BankFirst and the
proposed merger. The major considerations are as follows:
BankFirst Corporation
. Historical earnings;
. Historical dividend payments;
. Outlook for future performance, earnings, and dividends;
. Economic conditions and outlook in BankFirst's market;
. The competitive environment in BankFirst's market;
. Comparisons with peer banks;
. Recent minority stock transactions in BankFirst's common stock;
. Recent offers for the purchase of BankFirst common stock; and,
. Other such factors as were deemed appropriate in rendering this opinion.
BB&T Corporation
. Historical earnings;
. Historical dividend payments;
. Outlook for future performance, earnings, and dividends;
. Recent minority stock transactions in BankFirst's common stock; and,
. Other such factors as were deemed appropriate in rendering this opinion.
Market Factors
. Historical and current bank merger pricing.
The Proposed Merger
. The proposed terms of the Agreement as described herein;
. The specific pricing of the merger;
. Adequacy of the consideration paid to the shareholders of BankFirst; and,
. Other such factors as deemed appropriate.
B-3
<PAGE>
OVERVIEW OF FAIRNESS ANALYSIS
In connection with rendering this opinion, Southard and Gerrish performed a
variety of financial analyses, which are summarized below. Southard and Gerrish
believe that the analyses must be considered as a whole and that considering
only selected factors could create an incomplete view of the analyses and the
process underlying the opinion. The preparation of a fairness opinion is a
complex process involving subjective judgments and is not susceptible to
partial analyses.
Any estimates contained in the analyses prepared by Southard and Gerrish are
not necessarily indicative of future results or values, which may vary
significantly from such estimates. Estimates of value of companies do not
purport to be appraisals or necessarily reflect the prices at which companies
or their securities may actually be sold. None of the analyses performed by
Southard and Gerrish was assigned a greater significance than any other. The
following is a summary of the various analyses undertaken in conjunction with
this fairness opinion. This summary is not intended to represent all analyses
performed by Southard and Gerrish, but is presented here for the convenience of
BankFirst and its Board of Directors.
Fairness of the Merger Price
Analysis of Market Transactions
Based upon the merger terms, BankFirst shareholders will receive 0.4554
shares of BB&T common stock for each share of BankFirst common stock and 1.406
shares of BB&T common stock for each share of BankFirst preferred stock. Based
upon the most recent closing price of BB&T common stock ($26.375 per share),
these exchange ratios equate to a purchase price of $12.01 per share of
BankFirst stock (common and common equivalents). The transactions price
represents 158.4% of BankFirst book value at June 30, 2000, 15.01 times
BankFirst estimated 2000 earnings, and 16.42% of BankFirst assets at June 30,
2000. Based upon the review conducted by Southard and Gerrish, the pricing for
BankFirst in the merger is within the range of multiples seen in recent bank
acquisitions (see Exhibit 4). Further, it should be noted that the price/book
value ratio is below the average of market transactions due in large part to
the over-capitalization of BankFirst. After adjusting the capital of BankFirst
from 10.36% to 7.55% (BB&T's capital ratio at December 31, 1999 and June 30,
2000), the effective price/book value ratio becomes 187.3% and the effective
price/assets ratio becomes 16.94%.
Analysis of Liquidity
The common stocks of both BB&T and BankFirst are traded on market exchanges.
BB&T common stock is traded on the New York Stock Exchange under the ticker
symbol BBT. Average daily transaction volume was about 500,000 shares during
the month ended August 18, 2000, when it closed at $26.375 per share. BankFirst
common stock is traded on the NASDAQ national market under the ticker symbol
BKFR. Average daily transaction volume was about 17,500 shares during the month
ended August 18, 2000, when it closed at $10.375 per share.
B-4
<PAGE>
Thus, the merger price of $12.01 per share represents a premium of 15.8%
over the most recent closing price of BankFirst stock. However, on August 7,
2000, BB&T's chief financial officer publicly reiterated BB&T's desire to be in
eastern Tennessee and he reviewed some of BB&T's criteria for identifying
targets. According to SNL Securities, those criteria identified only four
likely public targets, including BankFirst. Since that revelation, the volume
and pricing levels of BankFirst stock have increased significantly.
Therefore, it is the opinion of Southard and Gerrish that for purposes of
this analysis, the pricing of BankFirst stock subsequent to August 7, 2000
should not be considered. Prior to August 7, 2000, BankFirst stock traded in
the range of about $8.00 to $9.75 per share, with a weighted average closing
price of about $9.00 per share. Based on a market price of $9.00 per share, the
transaction price would represent a premium of about 33%.
Analysis of Alternatives
BankFirst received indications of interest from several potential acquirors,
but the BB&T offer was the only written offer received. Southard and Gerrish
believe that BankFirst followed a reasonable approach to selling BankFirst in a
manner that would result in the best offer for shareholders. This fact is a key
consideration in this fairness opinion.
Analysis of Pro Forma Results
Southard and Gerrish reviewed the Merger Evaluation Model prepared by BB&T's
Corporate Finance Department as of August 18, 2000. That analysis indicated
that the transaction would be dilutive to BB&T shareholders in 2000, but that
it would be accretive after that. The model assumes 20% annual cost savings at
BankFirst, as well as 12% growth in earnings and assets.
Further, Southard and Gerrish prepared a pro-forma discounted cash flow
analysis to determine a range of present values of BankFirst assuming BankFirst
continued to operate as a stand-alone entity. This range was determined by
adding (i) the present value of the estimated future dividend stream that
BankFirst could generate over the ten year period from 2001 through 2010 and
(ii) the present value of the "terminal value" of BankFirst common stock at the
end of 2010. To determine a projected dividend stream, Southard Financial
assumed an equity to assets ratio of 8.25%. Southard Financial used an estimate
of ongoing earnings for 2001 and assumed annual growth in earnings and assets
of between 5% and 8%. The "terminal value" of BankFirst common stock at the end
of the ten-year period was determined by applying a price/earnings multiple of
15-16 times projected net income for BankFirst in 2010. The dividend stream and
terminal value were discounted to the present using discount rates of 12% to
15%, which Southard Financial viewed as the appropriate discount rate range for
a company with BankFirst's risk characteristics. Using this analysis, the
implied value of BankFirst was consistently below the proposed price in the
merger.
B-5
<PAGE>
Summary of Analyses
The summary set forth does not purport to be a complete description of the
analyses performed by Southard and Gerrish. The analyses performed by Southard
and Gerrish are not necessarily indicative of actual values, which may differ
significantly from those suggested by such analyses. Southard and Gerrish did
not appraise any individual assets or liabilities of BankFirst or BB&T.
Throughout the due diligence process, all information provided by BankFirst,
BB&T, and third party sources was relied upon by Southard and Gerrish without
independent verification.
FAIRNESS OPINION
Based upon the analyses of the foregoing and such matters as were considered
relevant, it is the opinion of Southard and Gerrish that the terms and
conditions of the merger, as stated in the Agreement and Plan of Merger, are
fair to the shareholders of BankFirst from a financial point of view.
Southard and Gerrish consent to a description and inclusion of the fairness
opinion in the proxy statement to be used in connection with the meeting of
BankFirst stockholders to be held for the purpose of voting on the proposed
transaction and to references to Southard and Gerrish in the proxy statement
and other such documents, provided that any such description is reasonably
acceptable to Southard and Gerrish. The fairness opinion is solely for the use
and benefit of the Board of Directors of BankFirst and shall not be disclosed
publicly or made available to third parties without the prior approval of
Southard and Gerrish, except as otherwise required by law.
In accordance with recognized professional ethics, Southard and Gerrish's
professional fees for this service are not contingent upon the opinion
expressed herein.
Thank you for the opportunity to be of service in this matter.
Sincerely yours,
/s/ SOUTHARD FINANCIAL
/s/ GERRISH & MCCREARY, L.L.C.
CONSULTANTS
Attachments:
<TABLE>
<C> <S>
Exhibit 1: Document Review List
Exhibit 2: Preliminary Terms of the Agreement and Plan of Merger
Comparison of the Merger Pricing to Public Market Transactions
Exhibit 3: (Control)
Comparison of BB&T and BankFirst Pricing to Public Market
Exhibit 4: Transactions (Minority)
Exhibit 5: Qualifications of Southard Financial (omitted)
Exhibit 6: Qualifications of Gerrish & McCreary LLC Consultants (omitted)
</TABLE>
B-6
<PAGE>
EXHIBIT 1
DOCUMENT REVIEW LIST
1. Securities and Exchange Commission Form 10-K of BankFirst Corporation for
the year ended December 31, 1999.
2. Securities and Exchange Commission Form 10-Q of BankFirst Corporation for
the quarter ended June 30, 2000.
3. Bank Holding Company Performance Report of BankFirst Corporation for the
period ended March 31, 2000.
4. History of transaction prices and volumes for the common stock of BankFirst
Corporation from FinancialWeb.com, Inc. and Commodity Systems, Inc.
5. Securities and Exchange Commission Form 10-K of BB&T Corporation for the
year ended December 31, 1999.
6. Securities and Exchange Commission Form 10-Q of BB&T Corporation for the
quarter ended June 30, 2000.
7. BB&T Corporation 1999 Annual Report and Second Quarter Report 2000.
8. BB&T Corporation Investor Fact Book dated May 2000.
9. Merger Evaluation Model for the acquisition of BankFirst Corporation dated
August 18, 2000, prepared by the Corporate Finance Department of BB&T
Corporation.
10. Analyst reports of BB&T Corporation by U.S. Bancorp Piper Jaffray, Inc.; A-
Lehman Brothers, Inc.; CIBC World Markets, Inc.; UBS Warburg, LLC; Sandler
O'Neill & Partners, L.P.; Legg Mason Wood Walker, Inc.; The Robinson-
Humphrey Company, LLC; A.G. Edwards & Sons, Inc.; and Salomon Smith Barney.
11. History of transaction prices and volumes for the common stock of BB&T
Corporation from FinancialWeb.com, Inc. and Commodity Systems, Inc.
12. Confidential Evaluation Material of BankFirst Corporation dated November
15, 1999, prepared by Gerrish & McCreary, P.C.
13. Draft of Agreement and Plan of Merger by and among BB&T Corporation and
BankFirst Corporation dated August 14, 2000.
14. Additional pertinent information deemed necessary to render this opinion.
B-7
<PAGE>
EXHIBIT 2
PRELIMINARY TERMS OF THE
AGREEMENT AND PLAN OF MERGER
The discussion below is based upon a review of the preliminary terms of the
Agreement and Plan of Merger (draft dated August 14, 2000), by and among BB&T
Corporation BankFirst Corporation (the "Agreement").
The proposed terms call for each share of BankFirst common stock to be
exchanged for 0.4554 shares of BB&T common stock, and for each share of
BankFirst preferred stock to be exchanged for 1.406 shares of BB&T common
stock. BankFirst preferred stock is convertible into 3.0875 shares of BankFirst
common stock, which generated the 1.406 ratio (0.4554 common share exchange
ratio times 3.0875 common shares for each preferred share).
Based upon the closing price of BB&T common stock on August 18, 2000
($26.375), the purchase price is equivalent to $12.01 per share of BankFirst
common stock (0.4554 common share exchange ratio times $26.375 per share, or
alternatively, 1.406 preferred share exchange ratio times $26.375 per share
divided by 3.0875 conversion ratio).
Options to purchase BankFirst stock will be converted into options to
purchase BB&T stock based upon the exchange ratios noted above.
The Agreement may be terminated as follows:
. By the mutual consent in writing of BankFirst and BB&T.
. By BankFirst or BB&T if the other party breaches any representation,
warranty, or covenant contained in the Agreement.
. By BankFirst or BB&T if the BankFirst stockholders do not provide
approval of the merger.
. By BankFirst or BB&T if the merger does not receive the necessary
regulatory approvals.
. By BankFirst or BB&T if the Merger effective date is not on or before
March 31, 2001.
B-8
<PAGE>
EXHIBIT 3
COMPARISON OF THE MERGER PRICING
TO PUBLIC MARKET TRANSACTIONS
Southard and Gerrish compared the pricing terms of the Agreement to the
pricing of recent acquisitions of banks and bank holding companies across the
United States and in Tennessee and surrounding states. Pricing data for recent
acquisitions of banks and bank holding companies (nationwide) is summarized as
follows:
<TABLE>
<CAPTION>
Average
Transactions Announced in # of Average Average Average Ret on
2000(1) Banks Price/Earnings Price/Book Price/Assets Equity
------------------------- ----- -------------- ---------- ------------ -------
<S> <C> <C> <C> <C> <C>
All Transactions 27 20.5x 2.349% 19.79% 12.99%
Assets $0-$100 Million... 8 20.6 2.186 17.78 11.29
Assets $100-$300
Million................. 12 22.3 2.421 20.86 12.96
Assets $300-$500
Million................. 3 17.2 2.268 21.45 13.54
Assets $500 Million to $1
Billion................. 4 17.3 2.524 19.32 16.20
Equity/Assets 6%-8%...... 10 20.8 2.259 15.47 12.70
Equity/Assets 8%-10%..... 11 22.3 2.560 23.48 12.80
Equity/Assets 10%-12%.... 3 16.3 2.151 23.14 13.99
ROA 0.00%-0.75%.......... 5 27.4 1.794 13.82 7.31
ROA 0.75%-1.00%.......... 5 21.7 2.548 18.93 12.14
ROA 1.00%-1.50%.......... 11 20.3 2.721 22.99 14.30
Tennessee and Contiguous
States.................. 2 16.3 1.331 12.25 na
BankFirst(2) ............ 15.0 1.584 16.42 10.31
BankFirst(3)............. 15.0 1.873 16.94 14.19
</TABLE>
--------
(1) Through July 31, 2000; only includes transactions for commercial banks with
assets under $1 billion for which sufficient data was available
(2) Based upon a transaction price of $12.01 per common equivalent share,
BankFirst estimated 2000 earnings of $0.80 per common equivalent share,
BankFirst book value at June 30, 2000 of $7.58 per common equivalent share,
and BankFirst assets at June 30, 2000 of $73.13 per common equivalent
share.
(3) Adjusting BankFirst to BB&T capital level (7.55% equity/assets).
Based upon the assumptions noted in the table above, the acquisition of
BankFirst by BB&T will take place at 15.01 times BankFirst's estimated 2000
earnings, 158.4% of BankFirst's June 30, 2000 book value, and 16.42% of
BankFirst June 30, 2000 assets. The price/earnings, price/assets, and
price/book value ratios are all below the average, but within the range of
recent market multiples. However, the price/book value ratio is below the
average of market transactions due in large part to the over-capitalization of
BankFirst. After adjusting the capital of BankFirst from 10.36% to 7.55%
(BB&T's capital ratio at December 31, 1999 and June 30, 2000), the effective
price/book value ratio becomes 187.3% and the effective price/assets ratio
becomes 16.94%.
B-9
<PAGE>
EXHIBIT 4
COMPARISON OF BB&T AND BANKFIRST PRICING
TO PUBLIC MARKET TRANSACTIONS
Southard and Gerrish compared the pricing of BB&T and BankFirst to the
pricing of publicly traded banks and bank holding companies across the United
States and in Tennessee and surrounding states. Pricing data for minority
interests in banks and bank holding companies (nationwide) is summarized as
follows:
<TABLE>
<CAPTION>
Price/ Price/ Current Current
Publicly Traded Banks(1) Earnings Book Val ROAE Yield
------------------------ -------- -------- ------- -------
<S> <C> <C> <C> <C>
Banks Under $2.0BB Mkt Cap (240)..... 11.54x 154.1% 13.29% 3.28%
Banks Under $500MM Mkt Cap (201)..... 11.43 147.1 12.81 3.20
South Central Banks (54)............. 11.47 149.0 12.79 3.49
Tennessee Banks (5).................. 13.79 161.0 11.39 3.83
North Carolina Banks (14)............ 11.43 143.9 12.66 3.46
TN/AL/AR/GA/KY/MO/MS/NC/VA Banks
(71)................................ 11.98 140.6 11.73 3.59
BB&T--Recent Price ($26.375)......... 12.15x2 255.3(3) 18.83 3.03(4)
BankFirst--Recent Price ($10.375).... 12.97 136.9 10.31 1.54
</TABLE>
--------
(1) As of June 30, 2000; subject to certain screens performed by Southard
(2) Based upon estimated 2000 earnings ($2.17 per share for BB&T and $0.80 per
share for BankFirst)
(3) Based upon June 30, 2000 book value ($10.33 per share for BB&T and $7.58
per share for BankFirst)
(4) Based upon indicated dividends ($0.80 per share for BB&T and $0.16 per
share for BankFirst)
Based upon the analysis presented in the table above, the price/earnings
ratios of BB&T and BankFirst are within the range of public banks, and above
the averages. BB&T's price/book value ratio is well above average due to its
low capital and high ROAE, while BankFirst's price/book value ratio is slightly
below average due to its above average capital ratio. BB&T's dividend yield is
near the average of publicly traded banks, while BankFirst pays below average
dividends.
B-10
<PAGE>
APPENDIX C
Chapter 23 of the Tennessee Business Corporation Act
Part 1
Right to Dissent and Obtain Payment for Shares.
48-23-101. Definitions.
48-23-102. Right to dissent.
48-23-103. Dissent by nominees and beneficial owners.
Part 2
Procedure for Exercise of Dissenters' Rights.
48-23-201. Notice of dissenters' rights.
48-23-202. Notice of intent to demand payment.
48-23-203. Dissenters' notice.
48-23-204. Duty to demand payment.
48-23-205. Share restrictions.
48-23-206. Payment.
48-23-207. Failure to take action.
48-23-208. After-acquired shares.
48-23-209. Procedure if shareholder dissatisfied with payment or offer.
Part 3
Judicial Appraisal of Shares.
48-23-301. Court action.
48-23-302. Court costs and counsel fees.
PART 1
RIGHT TO DISSENT AND OBTAIN PAYMENT FOR SHARES
48-23-101. Definitions.
As used in this chapter, unless the context otherwise requires:
(1) "Beneficial shareholder" means the person who is a beneficial owner
of shares held by a nominee as the record shareholder;
(2) "Corporation" means the issuer of the shares held by a dissenter
before the corporate action, or the surviving or acquiring corporation by
merger or share exchange of that issuer;
(3) "Dissenter" means a shareholder who is entitled to dissent from
corporate action under (S) 48-23-102 and who exercises that right when and
in the manner required by part 2 of this chapter;
(4) "Fair value", with respect to a dissenter's shares, means the value
of the shares immediately before the effectuation of the corporate action
to which the dissenter objects, excluding any appreciation or depreciation
in anticipation of the corporate action;
(5) "Interest" means interest from the effective date of the corporate
action that gave rise to the shareholder's right to dissent until the date
of payment, at the average auction rate paid on United States treasury
bills with a maturity of six (6) months (or the closest maturity thereto)
as of the auction date for such treasury bills closest to such effective
date;
(6) "Record shareholder" means the person in whose name shares are
registered in the records of a corporation or the beneficial owner of
shares to the extent of the rights granted by a nominee certificate on file
with a corporation; and
(7) "Shareholder" means the record shareholder or the beneficial
shareholder.
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<PAGE>
48-23-102. Right to dissent.
(a) A shareholder is entitled to dissent from, and obtain payment of the
fair value of the shareholder's shares in the event of, any of the following
corporate actions:
(1) Consummation of a plan of merger to which the corporation is a
party:
(A) If shareholder approval is required for the merger by (S) 48-21-
104 or the charter and the shareholder is entitled to vote on the
merger; or
(B) If the corporation is a subsidiary that is merged with its
parent under (S) 48-21-105;
(2) Consummation of a plan of share exchange to which the corporation is
a party as the corporation whose shares will be acquired, if the
shareholder is entitled to vote on the plan;
(3) Consummation of a sale or exchange of all, or substantially all, of
the property of the corporation other than in the usual and regular course
of business, if the shareholder is entitled to vote on the sale or
exchange, including a sale in dissolution, but not including a sale
pursuant to court order or a sale for cash pursuant to a plan by which all
or substantially all of the net proceeds of the sale will be distributed to
the shareholders within one (1) year after the date of sale;
(4) An amendment of the charter that materially and adversely affects
rights in respect of a dissenter's shares because it:
(A) Alters or abolishes a preferential right of the shares;
(B) Creates, alters, or abolishes a right in respect of redemption,
including a provision respecting a sinking fund for the redemption or
repurchase, of the shares;
(C) Alters or abolishes a preemptive right of the holder of the
shares to acquire shares or other securities;
(D) Excludes or limits the right of the shares to vote on any
matter, or to cumulate votes, other than a limitation by dilution
through issuance of shares or other securities with similar voting
rights; or
(E) Reduces the number of shares owned by the shareholder to a
fraction of a share, if the fractional share is to be acquired for cash
under (S) 48-16-104; or
(5) Any corporate action taken pursuant to a shareholder vote to the
extent the charter, bylaws, or a resolution of the board of directors
provides that voting or nonvoting shareholders are entitled to dissent and
obtain payment for their shares.
(b) A shareholder entitled to dissent and obtain payment for the
shareholder's shares under this chapter may not challenge the corporate action
creating the shareholder's entitlement unless the action is unlawful or
fraudulent with respect to the shareholder or the corporation.
(c) Notwithstanding the provisions of subsection (a), no shareholder may
dissent as to any shares of a security which, as of the date of the
effectuation of the transaction which would otherwise give rise to dissenters'
rights, is listed on an exchange registered under (S) 6 of the Securities
Exchange Act of 1934, as amended, or is a "national market system security," as
defined in rules promulgated pursuant to the Securities Exchange Act of 1934,
as amended.
48-23-103. Dissent by nominees and beneficial owners.
(a) A record shareholder may assert dissenters' rights as to fewer than all
the shares registered in the record shareholder's name only if the record
shareholder dissents with respect to all shares beneficially owned by any one
(1) person and notifies the corporation in writing of the name and address of
each person on whose behalf the record shareholder asserts dissenters' rights.
The rights of a partial dissenter under this subsection are determined as if
the shares as to which the partial dissenter dissents and the partial
dissenter's other shares were registered in the names of different
shareholders.
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<PAGE>
(b) A beneficial shareholder may assert dissenters' rights as to shares of
any one (1) or more classes held on the beneficial shareholder's behalf only
if the beneficial shareholder:
(1) Submits to the corporation the record shareholder's written consent
to the dissent not later than the time the beneficial shareholder asserts
dissenters' rights; and
(2) Does so with respect to all shares of the same class of which the
person is the beneficial shareholder or over which the person has power to
direct the vote.
PART 2
PROCEDURE FOR EXERCISE OF DISSENTERS' RIGHTS
48-23-201. Notice of dissenters' rights.
(a) If proposed corporate action creating dissenters' rights under (S) 48-
23-102 is submitted to a vote at a shareholders' meeting, the meeting notice
must state that shareholders are or may be entitled to assert dissenters'
rights under this chapter and be accompanied by a copy of this chapter.
(b) If corporate action creating dissenters' rights under (S) 48-23-102 is
taken without a vote of shareholders, the corporation shall notify in writing
all shareholders entitled to assert dissenters' rights that the action was
taken and send them the dissenters' notice described in (S) 48-23-203.
(c) A corporation's failure to give notice pursuant to this section will
not invalidate the corporate action.
48-23-202. Notice of intent to demand payment.
(a) If proposed corporate action creating dissenters' rights under (S) 48-
23-102 is submitted to a vote at a shareholders' meeting, a shareholder who
wishes to assert dissenters' rights must:
(1) Deliver to the corporation, before the vote is taken, written notice
of the shareholder's intent to demand payment for the shareholder's shares
if the proposed action is effectuated; and
(2) Not vote the shareholder's shares in favor of the proposed action.
No such written notice of intent to demand payment is required of any
shareholder to whom the corporation failed to provide the notice required
by (S) 48-23-201.
(b) A shareholder who does not satisfy the requirements of subsection (a)
is not entitled to payment for the shareholder's shares under this chapter.
48-23-203. Dissenters' notice.
(a) If proposed corporate action creating dissenters' rights under (S) 48-
23-102 is authorized at a shareholders' meeting, the corporation shall deliver
a written dissenters' notice to all shareholders who satisfied the
requirements of (S) 48-23-202.
(b) The dissenters' notice must be sent no later than ten (10) days after
the corporate action was authorized by the shareholders or effectuated,
whichever is the first to occur, and must:
(1) State where the payment demand must be sent and where and when
certificates for certificated shares must be deposited;
(2) Inform holders of uncertificated shares to what extent transfer of
the shares will be restricted after the payment demand is received;
(3) Supply a form for demanding payment that includes the date of the
first announcement to news media or to shareholders of the principal terms
of the proposed corporate action and requires that the person asserting
dissenters' rights certify whether or not the person asserting dissenters'
rights acquired beneficial ownership of the shares before that date;
C-3
<PAGE>
(4) Set a date by which the corporation must receive the payment demand,
which date may not be fewer than one (1) nor more than two (2) months after
the date the subsection (a) notice is delivered; and
(5) Be accompanied by a copy of this chapter if the corporation has not
previously sent a copy of this chapter to the shareholder pursuant to (S)
48-23-201.
48-23-204. Duty to demand payment.
(a) A shareholder sent a dissenters' notice described in (S) 48-23-203 must
demand payment, certify whether the shareholder acquired beneficial ownership
of the shares before the date required to be set forth in the dissenters'
notice pursuant to (S) 48-23-203(b)(3), and deposit the shareholder's
certificates in accordance with the terms of the notice.
(b) The shareholder who demands payment and deposits the shareholder's share
certificates under subsection (a) retains all other rights of a shareholder
until these rights are canceled or modified by the effectuation of the proposed
corporate action.
(c) A shareholder who does not demand payment or deposit the shareholder's
share certificates where required, each by the date set in the dissenters'
notice, is not entitled to payment for the shareholder's shares under this
chapter.
(d) A demand for payment filed by a shareholder may not be withdrawn unless
the corporation with which it was filed, or the surviving corporation, consents
thereto.
48-23-205. Share restrictions.
(a) The corporation may restrict the transfer of uncertificated shares from
the date the demand for their payment is received until the proposed corporate
action is effectuated or the restrictions released under (S) 48-23-207.
(b) The person for whom dissenters' rights are asserted as to uncertificated
shares retains all other rights of a shareholder until these rights are
canceled or modified by the effectuation of the proposed corporate action.
48-23-206. Payment.
(a) Except as provided in (S) 48-23-208, as soon as the proposed corporate
action is effectuated, or upon receipt of a payment demand, whichever is later,
the corporation shall pay each dissenter who complied with (S) 48-23-204 the
amount the corporation estimates to be the fair value of each dissenter's
shares, plus accrued interest.
(b) The payment must be accompanied by:
(1) The corporation's balance sheet as of the end of a fiscal year
ending not more than sixteen (16) months before the date of payment, an
income statement for that year, a statement of changes in shareholders'
equity for that year, and the latest available interim financial
statements, if any;
(2) A statement of the corporation's estimate of the fair value of the
shares;
(3) An explanation of how the interest was calculated;
(4) A statement of the dissenter's right to demand payment under (S) 48-
23-209; and
(5) A copy of this chapter if the corporation has not previously sent a
copy of this chapter to the shareholder pursuant to (S) 48-23-201 or (S)
48-23-203.
48-23-207. Failure to take action.
(a) If the corporation does not effectuate the proposed action that gave
rise to the dissenters' rights within two (2) months after the date set for
demanding payment and depositing share certificates, the corporation shall
return the deposited certificates and release the transfer restrictions imposed
on uncertificated shares.
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(b) If, after returning deposited certificates and releasing transfer
restrictions, the corporation effectuates the proposed action, it must send a
new dissenters' notice under (S) 48-23-203 and repeat the payment demand
procedure.
48-23-208. After-acquired shares.
(a) A corporation may elect to withhold payment required by (S) 48-23-206
from a dissenter unless the dissenter was the beneficial owner of the shares
before the date set forth in the dissenters' notice as the date of the first
announcement to news media or to shareholders of the principal terms of the
proposed corporate action.
(b) To the extent the corporation elects to withhold payment under
subsection (a), after effectuating the proposed corporate action, it shall
estimate the fair value of the shares, plus accrued interest, and shall pay
this amount to each dissenter who agrees to accept it in full satisfaction of
the dissenter's demand. The corporation shall send with its offer a statement
of its estimate of the fair value of the shares, an explanation of how the
interest was calculated, and a statement of the dissenter's right to demand
payment under (S) 48-23-209.
48-23-209. Procedure if shareholder dissatisfied with payment or offer.
(a) A dissenter may notify the corporation in writing of the dissenter's own
estimate of the fair value of the dissenter's shares and amount of interest
due, and demand payment of the dissenter's estimate (less any payment under (S)
48-23-206), or reject the corporation's offer under (S) 48-23-208 and demand
payment of the fair value of the dissenter's shares and interest due, if:
(1) The dissenter believes that the amount paid under (S) 48-23-206 or
offered under (S) 48-23-208 is less than the fair value of the dissenter's
shares or that the interest due is incorrectly calculated;
(2) The corporation fails to make payment under (S) 48-23-206 within two
(2) months after the date set for demanding payment; or
(3) The corporation, having failed to effectuate the proposed action,
does not return the deposited certificates or release the transfer
restrictions imposed on uncertificated shares within two (2) months after
the date set for demanding payment.
(b) A dissenter waives the dissenter's right to demand payment under this
section unless the dissenter notifies the corporation of the dissenter's demand
in writing under subsection (a) within one (1) month after the corporation made
or offered payment for the dissenter's shares.
PART 3
JUDICIAL APPRAISAL OF SHARES
48-23-301. Court action.
(a) If a demand for payment under (S) 48-23-209 remains unsettled, the
corporation shall commence a proceeding within two (2) months after receiving
the payment demand and petition the court to determine the fair value of the
shares and accrued interest. If the corporation does not commence the
proceeding within the two-month period, it shall pay each dissenter whose
demand remains unsettled the amount demanded.
(b) The corporation shall commence the proceeding in a court of record
having equity jurisdiction in the county where the corporation's principal
office (or, if none in this state, its registered office) is located. If the
corporation is a foreign corporation without a registered office in this state,
it shall commence the proceeding in the county in this state where the
registered office of the domestic corporation merged with or whose shares were
acquired by the foreign corporation was located.
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(c) The corporation shall make all dissenters (whether or not residents of
this state) whose demands remain unsettled, parties to the proceeding as in an
action against their shares and all parties must be served with a copy of the
petition. Nonresidents may be served by registered or certified mail or by
publication as provided by law.
(d) The jurisdiction of the court in which the proceeding is commenced under
subsection (b) is plenary and exclusive. The court may appoint one (1) or more
persons as appraisers to receive evidence and recommend decision on the
question of fair value. The appraisers have the powers described in the order
appointing them, or in any amendment to it. The dissenters are entitled to the
same discovery rights as parties in other civil proceedings.
(e) Each dissenter made a party to the proceeding is entitled to judgment:
(1) For the amount, if any, by which the court finds the fair value of
the dissenter's shares, plus accrued interest, exceeds the amount paid by
the corporation; or
(2) For the fair value, plus accrued interest, of the dissenter's after-
acquired shares for which the corporation elected to withhold payment under
(S) 48-23-208.
48-23-302. Court costs and counsel fees.
(a) The court in an appraisal proceeding commenced under (S) 48-23-301 shall
determine all costs of the proceeding, including the reasonable compensation
and expenses of appraisers appointed by the court. The court shall assess the
costs against the corporation, except that the court may assess costs against
all or some of the dissenters, in amounts the court finds equitable, to the
extent the court finds the dissenters acted arbitrarily, vexatiously, or not in
good faith in demanding payment under (S) 48-23-209.
(b) The court may also assess the fees and expenses of counsel and experts
for the respective parties, in amounts the court finds equitable against:
(1) The corporation and in favor of any or all dissenters if the court
finds the corporation did not substantially comply with the requirements of
part 2 of this chapter; or
(2) Either the corporation or a dissenter, in favor of any other party,
if the court finds that the party against whom the fees and expenses are
assessed acted arbitrarily, vexatiously, or not in good faith with respect
to the rights provided by this chapter.
(c) If the court finds that the services of counsel for any dissenter were
of substantial benefit to other dissenters similarly situated, and that the
fees for those services should not be assessed against the corporation, the
court may award to these counsel reasonable fees to be paid out of the amounts
awarded to the dissenters who were benefited.
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<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)).
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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 August 22, 2000,
between BB&T Corporation and BankFirst Corporation (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
Consent of Womble Carlyle Sandridge & Rice, PLLC (included in Exhibit
23(a) 5)*
Consent of Womble Carlyle Sandridge & Rice, PLLC (included in Exhibit
23(b) 8)*
23(c) Consent of Arthur Andersen LLP
23(d) Consent of Crowe, Chizek and Company LLP
23(e) Consent of Southard Financial and Gerrish & McCreary LLC Consultants*
24 Power of Attorney
99(a) Form of BankFirst Corporation Proxy Card
99(b) Option Agreement dated as of August 22, 2000 between BB&T Corporation
and BankFirst Corporation
</TABLE>
--------
* To be filed by amendment
(b) Financial statement schedules: Not applicable.
(c) Reports, opinion or appraisals: The opinion of Southard Financial and
Gerrish & McCreary LLC Consultants is included as Appendix B to the Proxy
Statement/Prospectus.
Item 22. Undertakings
A. The undersigned registrant hereby undertakes:
1. To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement; and
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<PAGE>
(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.
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.
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<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 October 19, 2000.
BB&T CORPORATION
/s/ Jerone C. Herring
By: _________________________________
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 October 19, 2000.
<TABLE>
<S> <C>
/s/ John A. Allison* /s/ Scott E. Reed*
______________________________________________________________________________________
Name:John A. Allison, IV Name:Scott E. Reed
Title: Chairman of the Board Title: Senior Executive Vice President
and Chief Executive Officer and Chief Financial Officer
(principal executive officer) (principal financial officer)
/s/ Sherry A. Kellett* /s/ Paul B. Barringer*
______________________________________________________________________________________
Name:Sherry A. Kellett Name:Paul B. Barringer
Title: Executive Vice President Title: Director
and Controller
(principal accounting officer)
/s/ Nelle Ratrie Chilton* /s/ Alfred E. Cleveland*
______________________________________________________________________________________
Name:Nelle Ratrie Chilton Name:Alfred E. Cleveland
Title: Director Title: Director
/s/ W. R. Cuthbertson, Jr.* /s/ Ronald E. Deal*
______________________________________________________________________________________
Name:W. R. Cuthbertson, Jr. Name:Ronald E. Deal
Title: Director Title: Director
/s/ A. J. Dooley, Sr.*
______________________________________________________________________________________
Name:A. J. Dooley, Sr. Name:Tom D. Efird
Title: Director Title: Director
/s/ Paul S. Goldsmith* /s/ L. Vincent Hackley*
______________________________________________________________________________________
Name:Paul S. Goldsmith Name:L. Vincent Hackley
Title: Director Title: Director
</TABLE>
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<PAGE>
<TABLE>
<S> <C>
/s/ Jane P. Helm* /s/ Richard Janeway, M.D.*
______________________________________________________________________________________
Name:Jane P. Helm Name:Richard Janeway, M.D.
Title: Director Title: Director
/s/ J. Ernest Lathem, M.D.* /s/ James H. Maynard*
______________________________________________________________________________________
Name:J. Ernest Lathem, M.D. Name:James H. Maynard
Title: Director Title: Director
/s/ Joseph A. McAleer, Jr.* /s/ Albert O. McCauley*
______________________________________________________________________________________
Name:Joseph A. McAleer, Jr. Name:Albert O. McCauley
Title: Director Title: Director
/s/ J. Holmes Morrison* /s/ Richard L. Player, Jr.*
______________________________________________________________________________________
Name:J. Holmes Morrison Name:Richard L. Player, Jr.
Title: Director Title: Director
/s/ C. Edward Pleasants* /s/ Nido R. Qubein*
______________________________________________________________________________________
Name:C. Edward Pleasants Name:Nido R. Qubein
Title: Director Title: Director
/s/ E. Rhone Sasser* /s/ Jack E. Shaw*
______________________________________________________________________________________
Name:E. Rhone Sasser Name:Jack E. Shaw
Title: Director Title: Director
/s/ Harold B. Wells*
___________________________________________
Name:Harold B. Wells
Title: Director
/s/ Jerone C. Herring
*By: ______________________________________
Jerone C. Herring
Attorney-in-Fact
</TABLE>
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