EXHIBIT 2.1
AGREEMENT AND PLAN OF REORGANIZATION
BETWEEN
PREMIER BANCSHARES, INC.
and
BB&T CORPORATION
TABLE OF CONTENTS
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Page
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ARTICLE I
DEFINITIONS.............................................................. 1
1.1 Definitions........................................................ 1
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1.2 Terms Defined Elsewhere............................................ 6
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ARTICLE II
THE MERGER............................................................... 7
2.1 Merger............................................................. 7
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2.2 Filing; Plan of Merger............................................. 7
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2.3 Effective Time..................................................... 7
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2.4 Closing............................................................ 7
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2.5 Effect of Merger................................................... 8
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2.6 Further Assurances................................................. 8
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2.7 Merger Consideration............................................... 8
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2.8 Conversion of Shares; Payment of Merger Consideration.............. 9
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2.9 Conversion of Stock Options........................................ 10
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2.10 Assumption of Trust Preferred Obligations.......................... 12
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2.11 Merger of Subsidiaries............................................. 12
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2.12 Anti-Dilution...................................................... 12
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2.13 Dissenting Shares.................................................. 12
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PREMIER................................ 13
3.1 Capital Structure.................................................. 13
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3.2 Organization, Standing and Authority............................... 14
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3.3 Ownership of Subsidiaries.......................................... 14
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3.4 Organization, Standing and Authority of the Subsidiaries........... 14
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3.5 Authorized and Effective Agreement................................. 14
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3.6 Securities Filings; Financial Statements; Statements True.......... 15
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3.7 Minute Books....................................................... 16
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3.8 Adverse Change..................................................... 16
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3.9 Absence of Undisclosed Liabilities................................. 16
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3.10 Properties......................................................... 17
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3.11 Environmental Matters.............................................. 17
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3.12 Loans; Allowance for Loan Losses................................... 18
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3.13 Tax Matters........................................................ 18
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3.14 Employees; Compensation; Benefit Plans............................. 19
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3.15 Certain Contracts.................................................. 23
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3.16 Legal Proceedings; Regulatory Approvals............................ 23
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3.17 Compliance with Laws; Filings...................................... 24
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3.18 Brokers and Finders................................................ 24
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3.19 Repurchase Agreements; Derivatives................................. 24
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3.20 Deposit Accounts................................................... 25
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3.21 Related Party Transactions......................................... 25
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3.22 Certain Information................................................ 25
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3.23 Tax and Regulatory Matters......................................... 25
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3.24 State Takeover Laws; No Rights Plan................................ 26
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3.25 Labor Relations.................................................... 26
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3.26 No Right to Dissent................................................ 26
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3.27 Fairness Opinion................................................... 26
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BB&T................................... 26
4.1 Capital Structure of BB&T.......................................... 27
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4.2 Organization, Standing and Authority of BB&T....................... 27
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4.3 Authorized and Effective Agreement................................. 27
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4.4 Organization, Standing and Authority of BB&T Subsidiaries.......... 28
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4.5 Securities Documents; Statements True.............................. 28
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4.6 Certain Information................................................ 28
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4.7 Tax and Regulatory Matters......................................... 28
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4.8 Adverse Change..................................................... 29
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4.9 Rights Agreement................................................... 29
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ARTICLE V
COVENANTS................................................................ 29
5.1 Premier Shareholder Meeting........................................ 29
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5.2 Registration Statement; Proxy Statement/Prospectus................. 30
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5.3 Plan of Merger; Reservation of Shares.............................. 30
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5.4 Additional Acts.................................................... 30
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5.5 Efforts to Consummate.............................................. 31
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5.6 Certain Accounting Matters, Lending Policies....................... 31
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5.7 Access to Information.............................................. 32
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5.8 Press Releases..................................................... 32
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5.9 Forbearances of Premier............................................ 32
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5.10 Employment Agreements.............................................. 35
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5.11 Affiliates......................................................... 35
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5.12 Section 401(k) Plan; Other Employee Benefits....................... 36
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5.13 Directors and Officers Protection.................................. 37
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5.14 Forbearances of BB&T............................................... 37
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5.15 Reports............................................................ 38
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5.16 Exchange Listing................................................... 38
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5.17 Board of Directors................................................. 38
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5.18 Completion of Bank Mergers......................................... 39
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ARTICLE VI
CONDITIONS PRECEDENT..................................................... 39
6.1 Conditions Precedent - BB&T and Premier............................ 39
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6.2 Conditions Precedent - Premier..................................... 40
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6.3 Conditions Precedent - BB&T........................................ 41
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ARTICLE VII
TERMINATION, DEFAULT, WAIVER AND AMENDMENT............................... 42
7.1 Termination........................................................ 42
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7.2 Effect of Termination.............................................. 43
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7.3 Survival of Representations, Warranties and Covenants.............. 43
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7.4 Waiver............................................................. 44
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7.5 Amendment or Supplement............................................ 44
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7.6 Termination Fee.................................................... 44
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ARTICLE VIII
MISCELLANEOUS............................................................ 45
8.1 Expenses........................................................... 45
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8.2 Entire Agreement................................................... 45
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8.3 No Assignment...................................................... 45
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8.4 Notices............................................................ 46
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8.6 Captions........................................................... 47
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8.7 Counterparts....................................................... 47
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8.8 Governing Law...................................................... 47
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ANNEXES
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Annex A Articles of Merger
Annexes B-1 and B-2 Employment Agreements with Officers
Annex C Matters to be Covered in Opinion of BB&T's
Counsel
Annex D Matters to be Covered in Opinion of Premier's
Counsel
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION ("Agreement"), dated as of
_____________, 1999, is by and between PREMIER BANCSHARES, INC. ("Premier"), a
Georgia corporation having its principal office at ________________, Georgia,
and BB&T CORPORATION ("BB&T"), a North Carolina corporation having its principal
office at Winston-Salem, North Carolina;
R E C I T A L S:
- - - - - - - -
The parties believe it is in their respective best interests that Premier
be merged with and into BB&T (said transaction being hereinafter referred to as
the "Merger") pursuant to a plan of merger (the "Plan of Merger") substantially
in the form attached as Annex A hereto, and the parties desire to provide for
certain undertakings, conditions, representations, warranties and covenants in
connection with the transactions contemplated hereby.
NOW, THEREFORE, in consideration of the premises and of the mutual
representations, warranties, covenants and agreements herein contained, and
intending to be legally bound hereby, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions
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When used herein, the capitalized terms set forth below shall have the
following meanings:
"Affiliate" means, with respect to any Person, any Person, who directly or
indirectly, through one or more intermediaries, controls or is controlled by, or
is under common control with such Person and, without limiting the generality of
the foregoing, includes any executive officer or director of such Person.
"Articles of Merger" shall mean the Articles of Merger required to be filed
with the office of the Secretary of State of North Carolina, as provided in
Section 55-11-05 of the NCBCA, and with the office of the Secretary of State of
Georgia, as provided in Section 14-2-1105 of the GBCC.
"Bank Holding Company Act" shall mean the Federal Bank Holding Company Act
of 1956, as amended.
"BB&T Common Stock" shall mean the shares of voting common stock, par value
$5.00 per share, of BB&T, with rights attached issued pursuant to Rights
Agreement dated December 17, 1996 between BB&T and Branch Banking and Trust
Company, as Rights Agent, relating to BB&T's Series B Junior Participating
Preferred Stock, $5.00 par value per share.
"BB&T Subsidiaries" shall mean all bank Subsidiaries of BB&T at the
Effective Time.
"Business Day" shall mean all days other than Saturdays, Sundays and
Federal Reserve holidays.
"CERCLA" shall mean the Comprehensive Environmental Response Compensation
and Liability Act, as amended (42 U.S.C. 9601 et seq.).
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Commission" shall mean the Securities and Exchange Commission.
"CRA" shall mean the Community Reinvestment Act of 1977, as amended.
"Disclosed" shall mean disclosed in the Premier Disclosure Memorandum,
referencing the Section number herein pursuant to which such disclosure is being
made.
"Environmental Claim" means any notice from any governmental authority or
third party alleging potential liability (including, without limitation,
potential liability for investigatory costs, cleanup or remediation costs,
governmental response costs, natural resources damages, property damages,
personal injuries or penalties) arising out of, based upon, or resulting from a
violation of the Environmental Laws or the presence or release into the
environment of any Hazardous Substances.
"Environmental Laws" means all applicable federal, state and local laws and
regulations, as amended, relating to pollution or protection of human health or
the environment (including ambient air, surface water, ground water, land
surface, or subsurface strata) and which are administered, interpreted, or
enforced by the United States Environmental Protection Agency and state and
local agencies with jurisdiction over and including common law in respect of,
pollution or protection of the environment, including without limitation CERCLA,
the Resource Conservation and Recovery Act, as amended, 42 U.S.C. 6901 et seq.,
and other laws and regulations relating to emissions, discharges, releases, or
threatened releases of any Hazardous Substances, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport, or handling of any Hazardous Substances.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
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"FDIC" shall mean the Federal Deposit Insurance Corporation.
"Federal Reserve Board" shall mean the Board of Governors of the Federal
Reserve System.
"Financial Advisors" shall mean Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities
Corporation and Xxxxx, Xxxxx Capital Partners, Inc.
"Financial Statements" shall mean (a) with respect to BB&T, (i) the
consolidated balance sheet (including related notes and schedules, if any) of
BB&T as of December 31, 1998, 1997, and 1996, and the related consolidated
statements of income, shareholders' equity and cash flows (including related
notes and schedules, if any) for each of the three years ended December 31,
1998, 1997, and 1996, as filed by BB&T in Securities Documents and (ii) the
consolidated balance sheets of BB&T (including related notes and schedules, if
any) and the related consolidated statements of income, shareholders' equity and
cash flows (including related notes and schedules, if any) included in
Securities Documents filed by BB&T with respect to periods ended subsequent to
December 31, 1998, and (b) with respect to Premier, (i) the consolidated
statements of financial condition (including related notes and schedules, if
any) of Premier as of December 31, 1998, December 31, 1997 and December 31,
1996, and the related consolidated statements of income and retained earnings,
and cash flows (including related notes and schedules, if any) for each of the
three years ended December 31, 1998, December 31, 1997 and December 31, 1996 as
filed by Premier in Securities Documents, (ii) the consolidated statements of
financial condition of Premier (including related notes and schedules, if any)
and the related consolidated statements of income and retained earnings, and
cash flows (including related notes and schedules, if any) included in
Securities Documents filed by Premier with respect to periods ended subsequent
to December 31, 1998 and (iii) the Press Release of Premier dated June 21, 1999.
"GAAP" shall mean generally accepted accounting principles applicable to
financial institutions and their holding companies, as in effect at the relevant
date.
"GBCC" shall mean the Georgia Business Corporation Code, as amended.
"Hazardous Substances" means any substance or material (i) identified as
such in CERCLA; (ii) determined to be toxic, a pollutant or a contaminant under
CERCLA or any other applicable federal, state or local statute, law, ordinance,
rule or regulation, including but not limited to petroleum products; (iii)
asbestos; and (iv) poly-chlorinated biphiphenyls.
"IRS" shall mean the Internal Revenue Service.
"Knowledge" shall mean, as used with respect to a Person (including
references to such Person being aware of a particular matter), the personal
knowledge after due inquiry of the chairman, president, chief financial officer,
chief accounting officer, chief operating officer, chief credit officer, general
counsel, any assistant or deputy general counsel, or any senior, executive or
other vice president of such Person.
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"Material Adverse Effect" on BB&T or Premier shall mean an event, fact,
change, or occurrence which, individually or together with any other event,
fact, change or occurrence, (i) has a material adverse effect on the financial
condition, results of operations, business or business prospects of BB&T and the
BB&T Subsidiaries taken as a whole, or Premier and the Premier Subsidiaries
taken as a whole, or (ii) materially impairs the ability of BB&T or Premier to
perform its obligations under this Agreement or to consummate the Merger and the
other transactions contemplated by this Agreement; provided that "Material
Adverse Effect" shall not be deemed to include the impact of (a) actions and
omissions of BB&T or Premier taken with the prior written consent of the other
in contemplation of the transactions contemplated hereby and (b) the direct
effects of compliance with this Agreement on the operating performance of the
parties, including expenses incurred by the parties in consummating the
transactions contemplated by this Agreement or relating to any litigation or
proceedings arising as a result of the Merger.
"NCBCA" shall mean the North Carolina Business Corporation Act, as amended.
"NYSE" shall mean the New York Stock Exchange, Inc.
"Pending Acquisitions" shall mean, collectively, the proposed acquisitions
by Premier of North Xxxxxx Bancshares, Inc., Roswell, Georgia, Farmers &
Merchants Bank, Summerville, Georgia and Bank Atlanta, Decatur, Georgia.
"Person" shall mean any individual, corporation, partnership, limited
liability company, joint venture, trust, association, unincorporated
organization, agency, other entity or groups of entities, or governmental body.
"Premier Common Stock" shall mean the shares of voting common stock, par
value $1.00 per share, of Premier.
"Premier Disclosure Memorandum" shall mean the written information in one
or more documents, each of which is entitled "Premier Disclosure Memorandum" and
dated and delivered by Premier to BB&T prior to the date of execution of this
Agreement, and describing in reasonable detail the matters contained therein.
Each disclosure made therein shall specifically reference each Section of this
Agreement under which such disclosure is made and relevant. Information
disclosed with respect to one Section shall not be deemed to be disclosed for
purposes of any other Section not specifically referenced.
"Premier Preferred Stock" shall mean the shares of nonvoting Series A
Redeemable Preferred Stock, $60.00 par value, of Premier.
"Premier Subsidiaries" shall mean Premier Bank, Premier Lending
Corporation, PMB Holdings, Inc. and any and all other Subsidiaries of Premier as
of the date hereof and any
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corporation, bank, savings association, or other organization acquired as a
Subsidiary of Premier after the date hereof and held as a Subsidiary by Premier
at the Effective Time.
"Proxy Statement/Prospectus" shall mean the proxy statement and prospectus,
together with any supplements or amendments thereto, to be sent to shareholders
of Premier to solicit their votes in connection with a proposal to approve this
Agreement and the Plan of Merger.
"Registration Statement" shall mean the registration statement of BB&T as
declared effective by the Commission under the Securities Act, including any
post-effective amendments or supplements thereto as filed with the Commission
under the Securities Act, with respect to the BB&T Common Stock to be issued in
connection with the transactions contemplated by this Agreement.
"Rights" shall mean warrants, options, rights, convertible securities and
other arrangements or commitments which obligate an entity to issue or dispose
of any of its capital stock or other ownership interests (other than rights
pursuant to the Rights Agreement described under the definition of "BB&T Common
Stock"), and stock appreciation rights, performance units and similar stock-
based rights whether or not they obligate the issuer thereof to issue stock or
other securities or to pay cash.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Securities Documents" shall mean all reports, proxy statements,
registration statements and all similar documents filed, or required to be
filed, pursuant to the Securities Laws, including but not limited to periodic
and other reports filed pursuant to Section 13 of the Exchange Act.
"Securities Laws" shall mean the Securities Act; the Exchange Act; the
Investment Company Act of 1940, as amended; the Investment Advisers Act of 1940,
as amended; the Trust Indenture Act of 1939 as amended; and the rules and
regulations of the Commission promulgated thereunder.
"Stock Option" shall mean, collectively, any option granted under the Stock
Option Plans, or otherwise pursuant to any award or agreement, outstanding and
unexercised on the date hereof to acquire shares of Premier Common Stock,
aggregating 1,975,935 shares.
"Stock Option Plans" shall mean the following plans maintained by Premier:
1997 Stock Option Plan, 1995 Stock Option Plan, 1993 Employee Stock Option Plan,
Frederica Bank and Trust Directors Stock Option Plan, Amended and Restated
Directors' Deferred Stock Unit Plan and Directors' Stock Option Plan and any
stock option or other similar plans maintained by or for any of the institutions
(or their Subsidiaries) party to the Pending Acquisitions and Disclosed.
"Subsidiaries" shall mean all those corporations, associations, or other
business entities of which the entity in question either owns or controls 50% or
more of the
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outstanding equity securities either directly or through an unbroken chain of
entities as to each of which 50% or more of the outstanding equity securities is
owned directly or indirectly by its parent, but excluding equity securities
owned or controlled in a fiduciary capacity or acquired through foreclosure or
enforcement of any lien.
"TILA" shall mean the Truth in Lending Act, as amended.
1.2 Terms Defined Elsewhere
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The capitalized terms set forth below are defined in the following
sections:
Agreement Introduction
BB&T Introduction
BB&T Option Plan Section 2.9(a)
Closing Section 2.4
Closing Date Section 2.4
Closing Value Section 2.7(b)
Common Exchange Ratio Section 2.7(a)
Constituent Corporations Section 2.1
Effective Time Section 2.3
Employer Entity Section 5.12(b)
Indenture Section 2.10
Merger Recitals
Merger Consideration Section 2.7(a)
PBGC Section 3.14(b)(iv)
Plan Section 3.14(b)(i)
Plan of Merger Recitals
Preferred Exchange Ratio Section 2.7(a)
Premier Introduction
Premier Acquisition Proposal Section 7.1(g)
Premier Capital Trust Section 2.10
Surviving Corporation Section 2.1(a)
Termination Fee Section 7.6(a)
Transferred Employee Section 5.12(b)
Trust Preferred Section 2.10
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ARTICLE II
THE MERGER
2.1 Merger
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BB&T and Premier are constituent corporations (the "Constituent
Corporations") to the Merger as contemplated by the NCBCA and the GBCC. At the
Effective Time:
(a) Premier shall be merged with and into BB&T in accordance with the terms
of this Agreement and the applicable provisions of the NCBCA and the GBCC, with
BB&T being the surviving corporate entity (hereinafter sometimes referred to as
the "Surviving Corporation").
(b) The separate existence of Premier shall cease and the Merger shall in
all respects have the effect provided in Section 2.5.
(c) The Articles of Incorporation of BB&T at the Effective Time shall
become the Articles of Incorporation of the Surviving Corporation.
(d) The Bylaws of BB&T at the Effective Time shall become the Bylaws of the
Surviving Corporation.
2.2 Filing; Plan of Merger
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The Merger shall not become effective unless this Agreement and the Plan of
Merger are duly approved by shareholders holding at least a majority of the
shares of Premier Common Stock and Premier Preferred Stock, voting together as a
single voting group. Upon fulfillment or waiver of the conditions specified in
Article VI and provided that this Agreement has not been terminated pursuant to
Article VII, the Constituent Corporations will cause the Articles of Merger to
be executed and filed with the Secretary of State of North Carolina and the
Secretary of State of Georgia, as provided in Section 55-11-05 of the NCBCA and
Section 14-2-1105 of the GBCC, respectively. The Plan of Merger is attached
hereto and incorporated herein by reference, and adoption of this Agreement by
the Boards of Directors of the Constituent Corporations and approval by the
shareholders of Premier shall constitute adoption and approval of the Plan of
Merger.
2.3 Effective Time
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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
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The closing of the transactions contemplated by this Agreement (the
"Closing") shall take place at the offices of Xxxxxx Xxxxxxx Xxxxxxxxx & Xxxx,
PLLC, Winston-Salem, North Carolina,
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at 10:00 a.m., or such other place as BB&T and Premier may agree, on the date
designated by BB&T which is within thirty days following the satisfaction of the
conditions to Closing set forth in Article VI (other than the delivery of
certificates, opinions and other instruments and documents to be delivered at
the Closing), or such later date as the parties may otherwise agree (the
"Closing Date").
2.5 Effect of Merger
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From and after the Effective Time, the separate existence of Premier shall
cease, and the Surviving Corporation shall thereupon and thereafter, possess all
of the rights, privileges, immunities and franchises, of a public as well as a
private nature, of each of the Constituent Corporations; and all property, real,
personal and mixed, and all debts due on whatever account, and all other choses
in action, and each and every other interest of or belonging to or due to each
of the Constituent Corporations shall be taken and deemed to be transferred to
and vested in the Surviving Corporation without further act or deed; and the
title to any real estate or any interest therein vested in either of the
Constituent Corporations shall not revert or be in any way impaired by reason of
the Merger. The Surviving Corporation shall thenceforth be responsible for all
the liabilities, obligations and penalties of each of the Constituent
Corporations; and any claim, existing action or proceeding, civil or criminal,
pending by or against either of the Constituent Corporations may be prosecuted
as if the Merger had not taken place, or the Surviving Corporation may be
substituted in its place; and any judgment rendered against either of the
Constituent Corporations may be enforced against the Surviving Corporation.
Neither the rights of creditors nor any liens upon the property of either of the
Constituent Corporations shall be impaired by reason of the Merger.
2.6 Further Assurances
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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
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(a) As used herein, the term "Merger Consideration" shall mean the portion
of a share of BB&T Common Stock to be exchanged for each share of Premier Common
Stock and the number of shares of BB&T Common Stock to be exchanged for each
share of Premier Preferred Stock issued and outstanding as of the Effective Time
and cash (without interest) to be payable in exchange for
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any fractional share of BB&T Common Stock which would otherwise be distributable
to a Premier shareholder as provided in Section 2.7(b). The portion of a share
of BB&T Common Stock to be issued for each issued and outstanding share of
Premier Common Stock (the "Common Exchange Ratio") shall be .5155. The number of
shares of BB&T Common Stock (computed to the nearest ten thousandth of a share)
to be issued for each issued and outstanding share of Premier Preferred Stock
(the "Preferred Exchange Ratio") shall equal the quotient of $60.00 divided by
the Closing Value (as defined in Section 2.7(b)).
(b) The amount of cash payable with respect to any fractional share of BB&T
Common Stock shall be determined by multiplying the fractional part of such
share by the Closing Value. The "Closing Value" shall mean the average closing
price per share of BB&T Common Stock on the NYSE Composite Transaction List (as
reported by The Wall Street Journal - Eastern Edition) for the five trading days
(determined by excluding days on which the NYSE is closed) ending on the
calendar day preceding the Effective Time.
2.8 Conversion of Shares; Payment of Merger Consideration
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(a) At the Effective Time, by virtue of the Merger and without any action
on the part of Premier or the holders of record of Premier Common Stock or
Premier Preferred Stock, each share of Premier Common Stock and each share of
Premier Preferred Stock issued and outstanding immediately prior to the
Effective Time shall be converted into and shall represent the right to receive,
upon surrender of the certificate representing such share of Premier Common
Stock or Premier Preferred Stock (as provided in subsection (d) below), the
Merger Consideration.
(b) Each share of BB&T Common Stock issued and outstanding immediately
prior to the Effective Time shall continue to be issued and outstanding.
(c) Until surrendered, each outstanding certificate which prior to the
Effective Time represented one or more shares of Premier Common Stock or Premier
Preferred Stock shall be deemed upon the Effective Time for all purposes to
represent only the right to receive the Merger Consideration and any declared
and unpaid dividends (in the case of Premier Common Stock) or accrued and unpaid
dividends (in the case of Premier Preferred Stock). No interest will be paid or
accrued on any cash payable for fractional shares as part of the Merger
Consideration (or on any dividend or other distribution) upon the surrender of
the certificate or certificates representing shares of Premier Common Stock or
Premier Preferred Stock. With respect to any certificate for Premier Common
Stock or Premier Preferred Stock that has been lost or destroyed, BB&T shall pay
the Merger Consideration attributable to such certificate upon receipt of a
surety bond or other adequate indemnity as required in accordance with BB&T's
standard policy, and evidence reasonably satisfactory to BB&T of ownership of
the shares represented thereby. Upon and after the Effective Time, Premier's
transfer books shall be closed and no transfer of the shares of Premier Common
Stock or Premier Preferred Stock outstanding immediately prior to the Effective
Time shall be made.
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(d) Promptly after the Effective Time, BB&T shall cause to be delivered or
mailed to each Premier shareholder a form of letter of transmittal and
instructions for use in effecting the surrender of the certificates which,
immediately prior to the Effective Time, represented any shares of Premier
Common Stock or Premier Preferred Stock. Upon proper surrender of such
certificates or other evidence of ownership meeting the requirements of Section
2.8(c), together with such letter of transmittal duly executed and completed in
accordance with the instructions thereto, and such other documents as may be
reasonably requested, BB&T shall promptly cause the transfer to the persons
entitled thereto of the Merger Consideration and any declared and unpaid
dividends (in the case of Premier Common Stock) or accrued and unpaid dividends
(in the case of Premier Preferred Stock).
(e) The Surviving Corporation shall pay any dividends or other
distributions with a record date prior to the Effective Time which have been
declared or made by Premier in respect of shares of Premier Common Stock in
accordance with the terms of this Agreement and which remain unpaid at the
Effective Time, subject to compliance by Premier with Section 5.9(b). At the
time of the Closing and incident thereto, Premier shall pay a per share dividend
in respect of shares of Premier Preferred Stock for the calendar year in which
the Closing Date occurs equal to the product of $4.80 times a fraction, the
numerator of which is the number of days in the calendar year through the
Closing Date and the denominator of which is the number of days in such calendar
year. Such payment shall constitute the sole right of the holders of the
Premier Preferred Stock to a dividend with respect to such Premier Preferred
Stock for such calendar year. To the extent permitted by law, former
shareholders of record of Premier shall be entitled to vote after the Effective
Time at any meeting of BB&T shareholders the number of whole shares of BB&T
Common Stock into which their respective shares of Premier Common Stock or
Premier Preferred Stock are converted, regardless of whether such holders have
exchanged their certificates representing Premier Common Stock or Premier
Preferred Stock for certificates representing BB&T Common Stock in accordance
with the provisions of this Agreement. Whenever a dividend or other
distribution is declared by BB&T on the BB&T Common Stock, the record date for
which is at or after the Effective Time, the declaration shall include dividends
or other distributions on all shares of BB&T Common Stock issuable pursuant to
this Agreement, but no dividend or other distribution payable to the holders of
record of BB&T Common Stock as of any time subsequent to the Effective Time
shall be delivered to the holder of any certificate representing Premier Common
Stock or Premier Preferred Stock until such holder surrenders such certificate
for exchange as provided in this Section 2.8. Upon surrender of such
certificate, both the BB&T Common Stock certificate and any undelivered
dividends and cash payments payable hereunder (without interest) shall be
delivered and paid with respect to the shares of Premier Common Stock or Premier
Preferred Stock represented by such certificate.
2.9 Conversion of Stock Options
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(a) At the Effective Time, each Stock Option then outstanding (and which,
by its terms existing as of the date hereof, does not lapse on or before the
Effective Time), whether or not then exercisable, shall be converted into and
become rights with respect to BB&T Common Stock, and BB&T shall assume each
Stock Option in accordance with the terms of the Stock Option Plans or
10
in accordance with the terms of the award or agreement governing such Stock
Option, except that from and after the Effective Time (i) BB&T and its
Compensation Committee shall be substituted for Premier and Premier's
Compensation Committee administering the Stock Option Plans, (ii) each Stock
Option assumed by BB&T may be exercised solely for shares of BB&T Common Stock,
(iii) the number of shares of BB&T Common Stock subject to each such Stock
Option shall be the number of whole shares of BB&T (omitting any fractional
share) determined by multiplying the number of shares of Premier Common Stock
subject to such Stock Option immediately prior to the Effective Time by the
Common Exchange Ratio, and (iv) the per share exercise price under each such
Stock Option shall be adjusted by dividing the per share exercise price under
each such Stock Option by the Common Exchange Ratio and rounding up to the
nearest cent. Notwithstanding the foregoing, BB&T may at its election substitute
as of the Effective Time options under the BB&T Corporation 1995 Omnibus Stock
Incentive Plan or any other duly adopted comparable plan (in either case, the
"BB&T Option Plan") for all or a part of the Stock Options, subject to the
following conditions: (A) the requirements of (iii) and (iv) above shall be met;
(B) such substitution shall not constitute a modification, extension or renewal
(within the meaning of Section 424(h) of the Code) of any of the Stock Options
which are incentive stock options; and (C) the substituted options shall
continue in effect on the same terms and conditions as provided in the Stock
Options and the Stock Option Plans. Each grant of a converted or substitute
option to any individual who subsequent to the Merger will be a director or
officer of BB&T as construed under Commission Rule 16b-3 shall, as a condition
to such conversion or substitution, be approved in accordance with the
provisions of Rule 16b-3. Each Stock Option which is an incentive stock option
shall be adjusted as required by Section 424 of the Code, and the Regulations
promulgated thereunder, so as to continue as an incentive stock option under
Section 424(a) of the Code, and so as not to constitute a modification,
extension, or renewal of the option within the meaning of Section 424(h) of the
Code. BB&T and Premier agree to take all necessary steps to effectuate the
foregoing provisions of this Section 2.9. BB&T has reserved and shall continue
to reserve adequate shares of BB&T Common Stock for delivery upon exercise of
any converted or substitute options. As soon as practicable after the Effective
Time, if it has not already done so, BB&T shall file a registration statement on
Form S-3 or Form S-8, as the case may be (or any successor or other appropriate
forms), with respect to the shares of BB&T Common Stock subject to converted or
substitute options and shall use its reasonable efforts to maintain the
effectiveness of such registration statement (and maintain the current status of
the prospectus or prospectuses contained therein) for so long as such converted
or substitute options remain outstanding. With respect to those individuals, if
any, who subsequent to the Merger may be subject to the reporting requirements
under Section 16(a) of the Exchange Act, BB&T shall administer the Stock Option
Plans assumed pursuant to this Section 2.9 (or the BB&T Option Plan, if
applicable) in a manner that complies with Rule 16b-3 promulgated under the
Exchange Act to the extent necessary to preserve for such individuals the
benefits of Rule 16b-3 to the extent such benefits were available to them prior
to the Effective Time. Premier hereby represents that the Stock Option Plans in
their current forms comply with Rule 16b-3 to the extent, if any, required as of
the date hereof.
11
(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.
2.10 Assumption of Trust Preferred Obligations
-----------------------------------------
BB&T acknowledges that Premier's affiliate, Premier Capital Trust I
("Premier Capital Trust") holds 9.00% Trust Preferred Securities (the "Trust
Preferred") issued by Premier pursuant to an Indenture (the "Indenture")
between Premier and State Street Bank and Trust Company, as trustee, dated as of
November 13, 1997. BB&T shall upon the Effective Time expressly assume all of
Premier's obligations under the Indenture (including, without limitation, being
substituted for Premier) and execute any and all documents, instruments and
agreements, including any supplemental indentures, required by Article XII of
the Indenture or the Trust Preferred and thereafter shall perform all of
Premier's obligations with respect to the Trust Preferred Securities.
2.11 Merger of Subsidiaries
----------------------
In the event that BB&T shall request, Premier shall take such actions, and
shall cause the Premier Subsidiaries to take such actions, as may be required in
order to effect, as soon as practicable after the Effective Time, the merger of
one or more of the Premier Subsidiaries with and into, in each case, one of the
BB&T Subsidiaries. Such mergers shall be subject to the condition that the
Merger has been completed and shall automatically be terminated in the event
this Agreement is terminated.
2.12 Anti-Dilution
-------------
In the event BB&T changes the number of shares of BB&T Common Stock issued
and outstanding prior to the Effective Time as a result of a stock split, stock
dividend or other similar recapitalization, and the record date thereof (in the
case of a stock dividend) or the effective date thereof (in the case of a stock
split or similar recapitalization for which a record date is not established)
shall be prior to the Effective Time, the Common Exchange Ratio and the
Preferred Exchange Ratio shall be proportionately adjusted.
2.13 Dissenting Shares
-----------------
Any holder of shares of Premier Preferred Stock who shall have exercised
rights to dissent with respect to the Merger in accordance with the GBCC and who
has properly exercised such shareholder's rights to demand payment of the "fair
value" of the shareholder's shares (the "Dissenting Shares") as provided in the
GBCC (the "Dissenting Shareholder") shall thereafter have only such rights, if
any, as are provided a Dissenting Shareholder in accordance with the GBCC and
shall have no rights to receive the Merger Consideration under Sections 2.7 and
2.8 (provided, that nothing contained herein shall limit such Dissenting
Shareholder's rights to the payment of all accrued and unpaid dividends);
provided, however, that if a Dissenting Shareholder shall withdraw
12
(in accordance with the GBCC) the demand for such appraisal or shall become
ineligible for such appraisal, then such Dissenting Shareholder's Dissenting
Shares automatically shall cease to be Dissenting Shares and shall be converted
into and represent only the right to receive from the Surviving Corporation,
upon surrender of the certificate representing the Dissenting Shares, the Merger
Consideration provided for in Section 2.7 and accrued and unpaid dividends as
provided in Section 2.8(c) and Section 2.8(e).
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PREMIER
Except as Disclosed, Premier represents and warrants to BB&T as follows
(the representations and warranties herein of Premier are made subject to the
applicable standard set forth in Section 6.3(a), and no such representation or
warranty shall be deemed to be inaccurate unless the inaccuracy would permit
BB&T to refuse to consummate the Merger under such applicable standard):
3.1 Capital Structure
-----------------
The authorized capital stock of Premier consists of 60,000,000 shares of
Premier Common Stock and 2,000,000 shares of Premier Preferred Stock. Premier
has 26,106,015 shares of Premier Common Stock issued and outstanding and 40,770
shares of Premier Preferred Stock issued and outstanding. No other classes of
capital stock of Premier, common or preferred, are authorized, issued or
outstanding; provided, however, that Premier Capital Trust has issued and
outstanding 9.00% Cumulative Trust Preferred Securities with an aggregate
liquidation amount of $28.75 million. All outstanding shares of Premier Common
Stock have been duly authorized and are validly issued, fully paid and
nonassessable. No shares of capital stock have been reserved for any purpose,
except for (i) shares of Premier Common Stock reserved in connection with the
Stock Option Plans, and (ii) 5,921,666/*/ shares of Premier Common Stock to be
issued in consummating the Pending Acquisitions (including Premier options to be
issued incident to such transactions). Premier has granted options to acquire
1,975,935 shares of Premier Common Stock under the Stock Option Plans or
outstanding agreements and awards, which options remain outstanding as of the
date hereof. Except as set forth in this Section 3.1, there are no Rights
authorized, issued or outstanding with respect to, nor are there any agreements,
understandings or commitments relating to the right of any Premier shareholder
to own, to vote or to dispose of, the capital stock of Premier. Holders of
Premier Common Stock do not have preemptive rights.
-------------------
/*/ Premier has reserved an additional 252,945 shares which a re subject to
issuance pursuant to Section 3.1(d) of the Agreement and Plan of Reorganization
between Premier, PMB Acquisition Corp. II and Bank Atlanta dated May 20, 1999,
if the conditions set forth in such Section are met.
13
3.2 Organization, Standing and Authority
------------------------------------
Premier is a corporation duly organized, validly existing and in good
standing under the laws of the State of Georgia, with full corporate power and
authority to carry on its business as now conducted and to own, lease and
operate its properties and assets. Premier is not required to be qualified to
do business in any other state of the United States or foreign jurisdiction.
3.3 Ownership of Subsidiaries
-------------------------
Section 3.3 of the Premier Disclosure Memorandum lists all of the Premier
Subsidiaries and, with respect to each, its jurisdiction of organization,
jurisdictions in which it is qualified or otherwise licensed to conduct
business, the number of shares or ownership interests owned by Premier (directly
or indirectly), the percentage ownership interest so owned by Premier and its
business activities. The outstanding shares of capital stock of the Premier
Subsidiaries are validly issued and outstanding, fully paid and nonassessable
(except pursuant to state and federal laws applicable to depository
institutions, including 12 U.S.C. 55), and all such shares are directly or
indirectly owned by Premier free and clear of all liens, claims and encumbrances
or preemptive rights of any person other than Premier or a Premier Subsidiary.
No Rights are authorized, issued or outstanding with respect to the capital
stock of the Premier Subsidiaries, and there are no agreements, understandings
or commitments obligating Premier to issue, to vote or to dispose of capital
stock or other equity interests of the Premier Subsidiaries. None of the shares
of capital stock of the Premier Subsidiaries have been issued in violation of
the preemptive rights of any person. Neither Premier nor any Premier Subsidiary
owns 5% or more of the voting capital stock or other voting securities or voting
ownership interests of any corporation, partnership, joint venture, or other
organization (other than the Premier Subsidiaries).
3.4 Organization, Standing and Authority of the Subsidiaries
--------------------------------------------------------
Each Premier Subsidiary which is a depository institution is a Georgia
chartered bank with its deposits insured by the FDIC. Each of the Premier
Subsidiaries is validly existing and in good standing under the laws of its
jurisdiction of organization. Each of the Premier Subsidiaries has full power
and authority to carry on its business as now conducted. Each Premier
Subsidiary is in good standing in the States of the United States and foreign
jurisdictions where the character of its assets or the nature or conduct of its
business requires it to be qualified or licensed to transact business as a
foreign corporation. No Premier Subsidiary is engaged in any type of nonbanking
or nonmortgage activities that have not been Disclosed.
3.5 Authorized and Effective Agreement
----------------------------------
(a) Premier has all requisite corporate power and authority to enter into
and (subject to receipt of all necessary governmental and regulatory approvals
and the receipt of approval of the Premier shareholders of this Agreement and
the Plan of Merger) to perform all of its obligations under this Agreement. The
execution and delivery of this Agreement and the Articles of Merger
14
(including the Plan of Merger incorporated by reference therein), and
consummation of the transactions contemplated hereby and thereby, have been duly
and validly authorized by all necessary corporate action, except, in the case of
this Agreement and the Plan of Merger, the approval of the Premier shareholders
to the extent required by applicable law and the rules and regulations of the
NYSE. This Agreement and the Plan of Merger constitute legal, valid and binding
obligations of Premier, and each is enforceable against Premier in accordance
with its terms and conditions, in each such case subject to (i) bankruptcy,
fraudulent transfer, insolvency, moratorium, reorganization, conservatorship,
receivership, or other similar laws from time to time in effect relating to or
affecting the enforcement of the rights of creditors of FDIC-insured
institutions or the enforcement of creditors' rights generally; and (ii) general
principles of equity (whether applied in a court of law or in equity).
(b) Neither the execution and delivery of this Agreement or the Articles of
Merger, nor consummation of the transactions contemplated hereby or thereby, nor
compliance by Premier with any of the provisions hereof or thereof, shall (i)
conflict with or result in a breach of any provision of the Articles of
Incorporation or bylaws of Premier or any Premier Subsidiary, (ii) constitute or
result in a breach of any term, condition or provision of, or constitute a
default under, or give rise to any right of termination, cancellation or
acceleration with respect to, or result in the creation of any lien, charge or
encumbrance upon any property or asset of Premier or any Premier Subsidiary
pursuant to, any note, bond, mortgage, indenture, license, permit, contract,
agreement or other instrument or obligation, or (iii) subject to receipt of all
required governmental or regulatory approvals, violate any order, writ,
injunction, decree, statute, rule or regulation applicable to Premier or any
Premier Subsidiary.
(c) Other than in connection or compliance with the provisions of the
federal securities laws, applicable state corporate and securities laws and the
rules of the NYSE, and other than consents and approvals required from
governmental or regulatory authorities (as provided in Section 5.4(b)), and
other than notices to or filings with the Internal Revenue Service or the PBGC
with respect to any employee benefit plans, or under the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, no notice to, filing with, or consent or
approval of, any public body or authority is necessary for the consummation by
Premier of the Merger and the other transactions contemplated by this Agreement.
3.6 Securities Filings; Financial Statements; Statements True
---------------------------------------------------------
(a) Premier has timely filed all Securities Documents required by the
Securities Laws to be filed since December 31, 1995. Premier has Disclosed or
made available to BB&T a true and complete copy of each Securities Document
filed by Premier with the Commission after December 31, 1995 and prior to the
date hereof, which are all of the Securities Documents that Premier was required
to file during such period. At the time they were filed (or, if amended or
superseded by a filing prior to the date of this Agreement, on the date of such
filing), such Securities Documents complied with the Securities Laws as then in
effect and did not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary
15
to make the statements therein, in light of the circumstances under which they
were made, not misleading.
(b) The Financial Statements of Premier fairly present or will fairly
present, as the case may be, the consolidated financial position of Premier and
the Premier Subsidiaries as of the dates indicated and the consolidated
statements of income and retained earnings, changes in shareholders' equity and
statements of cash flows for the periods then ended (subject, in the case of
unaudited interim statements, to the absence of notes and to normal year-end
audit adjustments that are not material in amount or effect) in conformity with
GAAP applied on a consistent basis, except as may be indicated in the notes
applicable thereto.
(c) No statement, certificate, instrument or other writing furnished or to
be furnished hereunder by Premier or any Premier Subsidiary to BB&T contains or
will contain any untrue statement of a material fact or will omit to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
3.7 Minute Books
------------
The minute books of Premier and each of the Premier Subsidiaries contain or
will contain at Closing accurate records of all meetings and other corporate
actions of their respective shareholders and Boards of Directors (including
committees of the Board of Directors), and the signatures contained therein are
the true signatures of the persons whose signatures they purport to be.
3.8 Adverse Change
--------------
Since December 31, 1998, Premier and the Premier Subsidiaries have not
incurred any liability, whether accrued, absolute or contingent, except as
disclosed in the most recent Premier Financial Statements, or entered into any
transactions with Affiliates (or any Affiliate of an Affiliate that is natural
person), other than between or among Premier and Premier Subsidiaries, in each
case other than in the ordinary course of business consistent with past
practices, nor has there been any adverse change or any fact or event involving
a prospective adverse change in the business, financial condition, results of
operations or business prospects of Premier or any of the Premier Subsidiaries.
3.9 Absence of Undisclosed Liabilities
----------------------------------
All liabilities (including contingent liabilities) of Premier and the
Premier Subsidiaries are disclosed in the most recent Financial Statements of
Premier or are normally recurring business obligations incurred in the ordinary
course of its business since the date of Premier's most recent Financial
Statements.
16
3.10 Properties
----------
(a) Premier and the Premier Subsidiaries have good and marketable title,
free and clear of all liens, encumbrances, charges, defaults or equitable
interests, to all of the properties and assets, real and personal, tangible and
intangible, reflected in the Financial Statements of Premier as of December 31,
1998 or acquired after such date, except for (i) liens, encumbrances, charges
and equitable interests identified in the Premier Financial Statements, (ii)
liens for current taxes not yet due and payable, (iii) pledges to secure
deposits, repurchase agreements and federal funds purchased and other liens
incurred in the ordinary course of Premier's banking and mortgage banking
businesses, (iv) such imperfections of title, easements and encumbrances, if
any, as are not material in character, amount or extent and (v) dispositions and
encumbrances for reasonably adequate consideration in the ordinary course of
business.
(b) All leases and licenses pursuant to which Premier or any Premier
Subsidiary, as lessee or licensee, leases or licenses rights to real or personal
property are valid and enforceable in accordance with their respective terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, receivership, conservatorship, moratorium, or other laws
affecting the enforcement of creditors' rights generally and except for general
principles of equity (whether applied in a court or law or in equity).
3.11 Environmental Matters
---------------------
(a) Premier and the Premier Subsidiaries are and at all times have been in
compliance with all Environmental Laws. Neither Premier nor any Premier
Subsidiary has received any communication alleging that Premier or the Premier
Subsidiary is not in such compliance, and, to the Knowledge of Premier, there
are no present circumstances that would prevent or interfere with the
continuation of such compliance.
(b) There are no Environmental Claims, neither Premier nor any Premier
Subsidiary has received notice of any pending Environmental Claims, and, to the
Knowledge of Premier, there are no conditions or facts existing which are
reasonably likely to result in legal, administrative, arbitral or other
proceedings asserting Environmental Claims or governmental investigations of any
nature seeking to impose, or that could result in the imposition of, liability
arising under any Environmental Laws upon (i) Premier or any Premier Subsidiary,
(ii) any person or entity whose liability for any Environmental Claim Premier or
any Premier Subsidiary has or may have retained or assumed, either contractually
or by operation of law, (iii) any real or personal property owned or leased by
Premier or any Premier Subsidiary, or any real or personal property which
Premier or any Premier Subsidiary has or is judged to have managed or supervised
or participated in the management of, or (iv) any real or personal property in
which Premier or any Premier Subsidiary holds a security interest securing a
loan recorded on the books of Premier or any Premier Subsidiary. Neither
Premier nor any Premier Subsidiary is subject to any agreement, order, judgment,
decree or memorandum by or with any court, governmental authority, regulatory
agency or third party imposing any liability on Premier or a Premier Subsidiary
under any Environmental Laws.
17
(c) Premier and the Premier Subsidiaries are in compliance with all
recommendations contained in any environmental audits, analyses and surveys
received by Premier relating to all real and personal property owned or leased
by Premier or any Premier Subsidiary and all real and personal property of which
Premier or any Premier Subsidiary has or is judged to have managed or supervised
or participated in the management of.
(d) To the Knowledge of Premier, there are no past or present actions,
activities, circumstances, conditions, events or incidents that could reasonably
form the basis of any Environmental Claim or governmental investigation that
could result in the imposition of any liability arising under any Environmental
Laws, against Premier or any Premier Subsidiary or against any person or entity
whose liability for any Environmental Claim Premier or any Premier Subsidiary
has or may have retained or assumed, either contractually or by operation of
law.
3.12 Loans; Allowance for Loan Losses
--------------------------------
(a) All of the loans on the books of Premier and the Premier Subsidiaries
are valid and properly documented and were made in the ordinary course of
business, and the security therefor, if any, is valid and properly perfected.
Neither the terms of such loans, nor any of the loan documentation, nor the
manner in which such loans have been administered and serviced, nor Premier's
procedures and practices of approving or rejecting loan applications, violates
any federal, state or local law, rule, regulation or ordinance applicable
thereto, including, without limitation, the TILA, Regulations O and Z of the
Federal Reserve Board, the CRA, the Equal Credit Opportunity Act, as amended,
and state laws, rules and regulations relating to consumer protection,
installment sales and usury.
(b) In the good faith opinion of the management of Premier, the allowances
for loan losses reflected on the consolidated balance sheets included in the
Financial Statements of Premier are adequate as of their respective dates under
the requirements of GAAP and applicable regulatory requirements and guidelines.
3.13 Tax Matters
-----------
(a) Premier and the Premier Subsidiaries and each of their predecessors
have timely filed (or requests for extensions have been timely filed and any
such extensions either are pending or have been granted and have not expired)
all federal, state and local (and, if applicable, foreign) tax returns required
by applicable law to be filed by them (including, without limitation, estimated
tax returns, income tax returns, information returns, and withholding and
employment tax returns) and have paid, or where payment is not required to have
been made, have set up an appropriate reserve or accrual for the payment of, all
taxes required to be paid in respect of the periods covered by such returns and,
as of the Effective Time, will have paid, or where payment is not required to
have been made, will have set up an appropriate reserve or accrual for the
payment of, all taxes for any subsequent periods ending on or prior to the
Effective Time. Neither Premier nor any Premier Subsidiary has or will have any
liability for any such taxes in excess of the amounts so paid or reserves or
accruals so
18
established. Premier and the Premier Subsidiaries have paid, or where payment is
not required to have been made have set up an adequate reserve or accrual for
payment of, all taxes required to be paid or accrued for the preceding or
current fiscal year for which a return is not yet due.
(b) All federal, state and local (and, if applicable, foreign) tax returns
filed by Premier and the Premier Subsidiaries are complete and accurate.
Neither Premier nor any Premier Subsidiary is delinquent in the payment of any
tax, assessment or governmental charge. No deficiencies for any tax, assessment
or governmental charge have been proposed, asserted or assessed (tentatively or
otherwise) against Premier or any Premier Subsidiary which have not been settled
and paid. There are currently no agreements in effect with respect to Premier
or any Premier Subsidiary to extend the period of limitations for the assessment
or collection of any tax. No audit examination or deficiency or refund
litigation with respect to such returns is pending.
(c) Deferred taxes have been provided for in accordance with GAAP
consistently applied.
(d) Neither Premier nor any of the Premier Subsidiaries is a party to any
tax allocation or sharing agreement or has been a member of an affiliated group
filing a consolidated federal income tax return (other than a group the common
parent of which was Premier or a Premier subsidiary) or has any liability for
taxes of any person (other than Premier and the Premier Subsidiaries) under
Treasury Regulation Section 1.1502-6 (or any similar provision of state, local
or foreign law) as a transferee or successor or by contract or otherwise.
(e) Each of Premier and the Premier Subsidiaries is in compliance with, and
its records contain all information and documents (including properly completed
IRS Forms W-9) necessary to comply with, all applicable information reporting
and tax withholding requirements under federal, state, and local tax laws, and
such records identify with specificity all accounts subject to backup
withholding under Section 3406 of the Code.
(f) Neither Premier nor any of the Premier Subsidiaries has made any
payments, is obligated to make any payments, or is a party to any contract that
could obligate it to make any payments that would be disallowed as a deduction
under Section 280G or 162(m) of the Code.
3.14 Employees; Compensation; Benefit Plans
--------------------------------------
(a) Compensation. Premier has Disclosed a complete and correct list of the
------------
name, age, position, rate of compensation and any incentive compensation
arrangements, bonuses or commissions or fringe or other benefits, whether
payable in cash or in kind, of each person to whom Premier or any Premier
Subsidiary pays or provides, or has an obligation, agreement (written or
unwritten), policy or practice of paying or providing, retirement, health or
welfare benefits of any kind or description whatsoever for reasons other than
service as an employee of Premier or a Premier Subsidiary (including, without
limitation, directors, shareholders, independent contractors, consultants and
agents).
19
(b) Employee Benefit Plans.
----------------------
(i) Premier has Disclosed an accurate and complete list of all Plans,
as defined below, contributed to, maintained or sponsored by Premier or any
Premier Subsidiary, to which Premier or any Premier Subsidiary is obligated
to contribute or has any liability or potential liability, whether direct
or indirect, including all Plans contributed to, maintained or sponsored by
each member of the controlled group of corporations, within the meaning of
Sections 414(b), 414(c), 414(m) and 414(o) of the Code, of which Premier or
any Premier Subsidiary is a member. For purposes of this Agreement, the
term "Plan" shall mean a plan, arrangement, agreement or program described
in the foregoing provisions of this Section 3.14(b)(i) and which is: (A) a
profit-sharing, deferred compensation, bonus, stock option, stock purchase,
pension, retainer, consulting, retirement, severance, welfare or incentive
plan, agreement or arrangement, whether or not funded and whether or not
terminated, (B) an employment agreement, (C) a personnel policy or fringe
benefit plan, policy, program or arrangement providing for benefits or
perquisites to current or former employees, officers, directors or agents,
whether or not funded, and whether or not terminated, including, without
limitation, benefits relating to automobiles, clubs, vacation, child care,
parenting, sabbatical, sick leave, severance, medical, dental,
hospitalization, life insurance and other types of insurance, or (D) any
other employee benefit plan as defined in Section 3(3) of ERISA, whether or
not funded and whether or not terminated.
(ii) Neither Premier nor any Premier Subsidiary contributes to, has an
obligation to contribute to or otherwise has any liability or potential
liability with respect to (A) any multiemployer plan as defined in Section
3(37) of ERISA, (B) any plan of the type described in Sections 4063 and
4064 of ERISA or in Section 413 of the Code (and regulations promulgated
thereunder), or (C) any plan which provides health, life insurance,
accident or other "welfare-type" benefits to current or future retirees or
former employees or directors, their spouses or dependents, other than in
accordance with Section 4980B of the Code or applicable state continuation
coverage law.
(iii) None of the Plans obligates Premier or any Premier Subsidiary
to pay separation, severance, termination or similar-type benefits solely
as a result of any transaction contemplated by this Agreement or solely as
a result of a "change in control," as such term is used in Section 280G of
the Code (and regulations promulgated thereunder).
(iv) Each Plan, and all related trusts, insurance contracts and funds,
has been maintained, funded and administered in compliance in all respects
with its own terms and in compliance in all respects with all applicable
laws and regulations, including but not limited to ERISA and the Code. No
actions, suits, claims, complaints, charges, proceedings, hearings,
examinations, investigations, audits or demands with respect to the Plans
(other than routine claims for benefits) are pending or, to Premier's
Knowledge, threatened, and there are no facts which are reasonably likely
to give rise to any actions, suits, claims, complaints, charges,
proceedings, hearings, examinations, investigations, audits or demands.
20
No Plan that is subject to the funding requirements of Section 412 of the
Code or Section 302 of ERISA has incurred any "accumulated funding
deficiency" as such term is defined in such Sections of ERISA and the Code,
whether or not waived, and each Plan currently meets the funding standards
required under Title I of ERISA and Section 412 of the Code. No liability
to the Pension Benefit Guaranty Corporation ("PBGC") (except for routine
payment of premiums) has been or is expected to be incurred with respect to
any Plan that is subject to Title IV of ERISA, no reportable event (as such
term is defined in Section 4043 of ERISA) for which the PBGC has not waived
notice has occurred with respect to any such Plan, and the PBGC has not
commenced or threatened the termination of any Plan. None of the assets of
Premier or any Premier Subsidiary is the subject of any lien arising under
Section 302(f) of ERISA or Section 412(n) of the Code, neither Premier nor
any Premier Subsidiary has been required to post any security pursuant to
Section 307 of ERISA or Section 401(a)(29) of the Code, and there are no
facts which are reasonably likely to give rise to such lien or such posting
of security. No event has occurred and no condition exists that would
subject Premier or any Premier Subsidiary to any tax under Sections 4971,
4972, 4976, 4977 or 4979 of the Code or to a fine or penalty under Section
502(c) of ERISA.
(v) Each Plan that is intended to be qualified under Section 401(a) of
the Code, and each trust (if any) forming a part thereof, has received a
favorable determination letter from the IRS as to the qualification under
the Code of such Plan and the tax exempt status of such related trust or is
still within the remedial amendment period following its adoption, and
nothing has occurred since the date of such determination letter that is
reasonably likely to affect adversely the qualification of such Plan or the
tax exempt status of such related trust.
(vi) No underfunded "defined benefit plan" (as such term is defined in
Section 3(35) of ERISA) has been, during the five years preceding the
Closing Date, transferred out of the controlled group of corporations
(within the meaning of Sections 414(b), (c), (m) and (o) of the Code) of
which Premier or any Premier Subsidiary is a member or was a member during
such five-year period.
(vii) As of December 31, 1998, the fair market value of the assets of
each Plan that is a tax qualified defined benefit plan equaled or exceeded,
and as of the Closing Date will equal or exceed, the present value of all
vested and nonvested liabilities thereunder determined in accordance with
reasonable actuarial methods, factors and assumptions applicable to a
defined benefit plan on an ongoing basis. With respect to each Plan that
is subject to the funding requirements of Section 412 of the Code and
Section 302 of ERISA, all required contributions for all periods ending
prior to or as of the Closing Date (including periods from the first day of
the then-current plan year to the Closing Date and including all quarterly
contributions required in accordance with Section 412(m) of the Code) shall
have been made. With respect to each other 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.
21
(viii) No prohibited transaction (which shall mean any transaction
prohibited by Section 406 of ERISA and not exempt under Section 408 of
ERISA or Section 4975 of the Code, whether by statutory, class or
individual exemption) has occurred with respect to any Plan which would
result in the imposition, directly or indirectly, of any excise tax,
penalty or other liability under Section 4975 of the Code or Section 409 or
502(i) of ERISA. Neither Premier nor, to the Knowledge of Premier, any
Premier Subsidiary, any trustee, administrator or other fiduciary of any
Plan, or any agent of any of the foregoing has engaged in any transaction
or acted or failed to act in a manner that could subject Premier or any
Premier Subsidiary to any liability for breach of fiduciary duty under
ERISA or any other applicable law.
(ix) With respect to each Plan, all reports and information required
to be filed with any government agency or distributed to Plan participants
and their beneficiaries have been duly and timely filed or distributed.
(x) Premier and each Premier Subsidiary has been and is presently in
compliance with all of the requirements of Section 4980B of the Code.
(xi) Neither Premier nor any Premier Subsidiary has a liability as of
December 31, 1998 under any Plan that, to the extent disclosure is required
under GAAP, is not reflected on the consolidated balance sheet included in
the Financial Statements of Premier as of December 31, 1998 or otherwise
Disclosed.
(xii) Neither the consideration nor implementation of the
transactions contemplated under this Agreement will increase (A) Premier's
or any Premier Subsidiary's obligation to make contributions or any other
payments to fund benefits accrued under the Plans as of the date of this
Agreement or (B) the benefits accrued or payable with respect to any
participant under the Plans (except to the extent benefits may be deemed
increased by accelerated vesting, accelerated allocation of previously
unallocated Plan assets or by the conversion of all stock options in
accordance with Section 2.9 hereof).
(xiii) With respect to each Plan, Premier has Disclosed or made
available to BB&T, true, complete and correct copies of (A) all documents
pursuant to which the Plans are maintained, funded and administered,
including summary plan descriptions, (B) the three most recent annual
reports (Form 5500 series) filed with the IRS (with attachments), (C) the
three most recent actuarial reports, if any, (D) the three most recent
financial statements, (E) all governmental filings for the last three
years, including, without limitation, excise tax returns and reportable
events filings, and (F) all governmental rulings, determinations, and
opinions (and pending requests for governmental rulings, determinations,
and opinions) during the past three years.
(xiv) Each of the Plans as applied to Premier and any Premier
Subsidiary may be amended or terminated at any time by action of Premier's
Board of Directors, or such
22
Premier's Subsidiary's Board of Directors, as the case may be, or a
committee of such Board of Directors or duly authorized officer, in each
case subject to the terms of the Plan and compliance with applicable laws
and regulations (and limited, in the case of multiemployer plans, to
termination of the participation of Premier or a Premier Subsidiary
thereunder).
3.15 Certain Contracts
-----------------
With respect to each contract of Premier and the Premier Subsidiaries, and
except as disclosed in the most recent of the Premier Financial Statements: (i)
the contract is in full force and effect; (ii) neither Premier nor any Premier
Subsidiary is in default thereunder; (iii) neither Premier nor any Premier
Subsidiary has repudiated or waived any provision of any such contract; and (iv)
to the Knowledge of Premier, no other party to any such contract is in default
in any respect or has repudiated any provision thereunder. Premier has
Disclosed each agreement, arrangement or commitment, written or oral, relating
to the employment of a consultant, independent contractor or agent, or the
employment, election or retention in office of any present or former director or
officer, which cannot be terminated within less than 30 days after the Closing
Date by Premier or any Premier Subsidiary (without payment of any penalty or
cost), or that provides benefits which are contingent, or the application of
which is altered, upon the occurrence of a transaction involving Premier of the
nature contemplated by this Agreement, and each agreement or plan, written or
oral, including any stock option plan, stock appreciation rights plan,
restricted stock plan or stock purchase plan, any of the benefits of which will
be increased, or the vesting of the benefits of which will be accelerated, by
the occurrence of any of the transactions contemplated by this Agreement or the
value of any of the benefits of which will be calculated on the basis of any of
the transactions contemplated by this Agreement.
3.16 Legal Proceedings; Regulatory Approvals
---------------------------------------
Premier has not received notice of any actions, suits, claims, governmental
investigations or proceedings that have been instituted or are pending or
threatened against Premier or any Premier Subsidiary or against any asset,
interest, plan or right of Premier or any Premier Subsidiary, or, to the
Knowledge of Premier, against any officer, director or employee of any of them
in their capacity as such. Premier has not received notice of any actions,
suits or proceedings that have been instituted or are pending or threatened
against any present or former director or officer of Premier or any Premier
Subsidiary that are reasonably likely to give rise to a claim against Premier or
any Premier Subsidiary for indemnification. There are no actual or, to the
Knowledge of Premier, threatened actions, suits or proceedings which present a
claim to restrain or prohibit the transactions contemplated herein. To the
Knowledge of Premier, no fact or condition relating to Premier or any Premier
Subsidiary exists (including, without limitation, noncompliance with the CRA)
that would prevent Premier or BB&T from obtaining all of the federal and state
regulatory approvals contemplated herein.
23
3.17 Compliance with Laws; Filings
-----------------------------
Each of Premier and each Premier Subsidiary is in compliance with all
statutes and regulations (including, but not limited to, the CRA, the TILA and
regulations promulgated thereunder, and other consumer banking laws), and has
obtained and maintained all permits, licenses and registrations applicable to
the conduct of its business, and neither Premier nor any Premier Subsidiary has
received notification that has not lapsed, been withdrawn or abandoned by any
agency or department of federal, state or local government (i) asserting a
violation or possible violation of any such statute or regulation, (ii)
threatening to revoke any permit, license, registration, or other government
authorization, or (iii) restricting or in any way limiting its operations as
presently conducted. Neither Premier nor any Premier Subsidiary is subject to
any cease and desist order, agreement, directive, memorandum of understanding or
commitment from any applicable regulatory authority, and none of them has
received any communication from any applicable regulatory authority requesting
that it enter into any of the foregoing. Since December 31, 1995, each of
Premier and each Premier Subsidiary has filed all reports, registrations,
notices and statements, and any amendments thereto, that it was required to file
with federal and state regulatory authorities, including, without limitation,
the FDIC, Federal Reserve Board and applicable state regulators. Each such
report, registration, notice and statement, and each amendment thereto, complied
with applicable legal requirements.
3.18 Brokers and Finders
-------------------
Neither Premier nor any Premier Subsidiary, nor any of their respective
officers, directors or employees, has employed any broker, finder or financial
advisor or incurred any liability for any fees or commissions in connection with
the transactions contemplated herein, in the Plan of Merger, except for
obligations to the Financial Advisors, the nature and extent of which have been
Disclosed, for investment banking services, and except for fees to accountants
and lawyers.
3.19 Repurchase Agreements; Derivatives
----------------------------------
(a) With respect to all agreements currently outstanding pursuant to which
Premier or any Premier Subsidiary has purchased securities subject to an
agreement to resell, Premier or the Premier Subsidiary has a valid, perfected
first lien or security interest in the securities or other collateral securing
such agreement, and the value of such collateral equals or exceeds the amount of
the debt secured thereby. All agreements currently outstanding pursuant to
which Premier or any Premier Subsidiary has sold securities subject to an
agreement to repurchase reflect arms' length transactions, and, with respect to
such agreements, Premier and the Premier Subsidiaries have pledged only the
amount of collateral required by the terms thereof. Neither Premier nor any
Premier Subsidiary has pledged collateral in excess of the amount required under
any interest rate swap or other similar agreement currently outstanding.
24
(b) Neither Premier nor any Premier Subsidiary is a party to or has agreed
to enter into an exchange-traded or over-the-counter swap, forward, future,
option, cap, floor, or collar financial contract, or any other interest rate or
foreign currency protection contract not identified in the Financial Statements,
which is a financial derivative contract (including various combinations
thereof), except for options, forwards and commitments entered into in the
ordinary course of its mortgage and other lending businesses consistent with
past practice and current policy.
3.20 Deposit Accounts
----------------
The deposit accounts of the Premier Subsidiaries that are depository
institutions are insured by the FDIC to the maximum extent permitted by federal
law, and the Premier Subsidiaries have paid all deposit insurance premiums and
assessments.
3.21 Related Party Transactions
--------------------------
Neither Premier nor any Premier Subsidiary is a party to any existing
transaction or outstanding investment, loan or loan guarantee with or for the
benefit of any Affiliate (or any Affiliate of an Affiliate that is a natural
person) or 5% or greater shareholder of Premier that was made or entered into
(i) other than in the ordinary course of business or (ii) on terms less
favorable to Premier than it could have obtained from unrelated parties.
3.22 Certain Information
-------------------
When the Proxy Statement/Prospectus is mailed to shareholders of Premier,
and at the time of the meeting of shareholders of Premier to vote on the Plan of
Merger, the Proxy Statement/Prospectus, as amended or supplemented, with
respect to all information set forth therein provided by Premier, (i) shall
comply with the applicable provisions of the Securities Laws, and (ii) shall not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements contained
therein, in light of the circumstances in which they were made, not misleading.
3.23 Tax and Regulatory Matters
--------------------------
Neither Premier nor any Premier Subsidiary has taken or agreed to take any
action, nor has Knowledge of any fact or circumstance, which is reasonably
likely to (i) cause the Merger not to be accounted for as a pooling-of-interests
or not to constitute a reorganization under Section 368(a) of the Code or (ii)
impede or delay receipt of any consents of regulatory authorities referred to in
Section 5.4(b) or result in failure of the condition in Section 6.3(b).
25
3.24 State Takeover Laws; No Rights Plan
-----------------------------------
Premier and each Premier Subsidiary have taken, or as soon as practicable
after the date hereof will take, all necessary action, if any, to exempt the
transactions contemplated by this Agreement from any applicable moratorium, fair
price, business combination, control share or other anti-takeover laws, and no
such laws shall be activated or applied as a result of such transactions.
Premier has no shareholder rights plan.
3.25 Labor Relations
---------------
Neither Premier nor any Premier Subsidiary is the subject of any claim or
allegation that it has committed an unfair labor practice (within the meaning of
the National Labor Relations Act or comparable state law) or seeking to compel
it to bargain with any labor organization as to wages or conditions of
employment, nor is Premier or any Premier Subsidiary party to any collective
bargaining agreement. There is no strike or other labor dispute involving
Premier or any Premier Subsidiary, pending or threatened, or to the Knowledge of
Premier, is there any activity involving any employees of Premier or any Premier
Subsidiary seeking to certify a collective bargaining unit or engaging in any
other organization activity.
3.26 No Right to Dissent
-------------------
Nothing in the Articles of Incorporation or the Bylaws of Premier or any
Premier Subsidiary provides or would provide to any person (other than the
holders of Premier Preferred Stock), including without limitation the holders of
Premier Common Stock, upon execution of this Agreement or the Plan of Merger and
consummation of the transactions contemplated hereby and thereby, rights of
dissent and appraisal of any kind.
3.27 Fairness Opinion
----------------
Premier has received from at least one of the Financial Advisors an opinion
that, as of the date hereof, the Merger Consideration is fair to the
shareholders of Premier from a financial point of view.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF BB&T
BB&T represents and warrants to Premier as follows (the representations and
warranties herein of BB&T are made subject to the applicable standard set forth
in Section 6.2(a), and no such representation or warranty shall be deemed to be
inaccurate unless the inaccuracy would permit Premier to refuse to consummate
the Merger under such applicable standard):
26
4.1 Capital Structure of BB&T
-------------------------
The authorized capital stock of BB&T consists of (i) 5,000,000 shares of
preferred stock, par value $5.00 per share, of which 2,000,000 shares have been
designated as Series B Junior Participating Preferred Stock and the remainder
are undesignated, and none of which shares are issued and outstanding, and (ii)
500,000,000 shares of BB&T Common Stock of which 306,051,309 shares were issued
and outstanding on June 30, 1999. All outstanding shares of BB&T Common Stock
have been duly authorized and are validly issued, fully paid and nonassessable.
The shares of BB&T Common Stock reserved as provided in Section 5.3 are free of
any Rights and have not been reserved for any other purpose, and such shares are
available for issuance as provided pursuant to the Plan of Merger. Holders of
BB&T Common Stock do not have preemptive rights. All shares of BB&T Common
Stock to be issued in the Merger will be, upon issuance, duly authorized,
validly issued, fully paid and nonassessable
4.2 Organization, Standing and Authority of BB&T
--------------------------------------------
BB&T is a corporation duly organized, validly existing and in good standing
under the laws of the State of North Carolina, with full corporate power and
authority to carry on its business as now conducted and to own, lease and
operate its assets, and is duly qualified to do business in the states of the
United States where its ownership or leasing of property or the conduct of its
business requires such qualification. BB&T is registered as a bank holding
company under the Bank Holding Company Act.
4.3 Authorized and Effective Agreement
----------------------------------
(a) BB&T has all requisite corporate power and authority to enter into and
(subject to receipt of all necessary government and regulatory approvals)
perform all of its obligations under this Agreement. The execution and delivery
of this Agreement and consummation of the transactions contemplated hereby have
been 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)
27
violate any order, writ, injunction, decree, statute, rule or regulation
applicable to BB&T or any BB&T Subsidiary.
(c) Other than consents or approvals required from, or notices to,
regulatory authorities as provided in Section 5.4(b), no notice to, filing with,
or consent of, any public body or authority is necessary for the consummation by
BB&T of the Merger and the other transactions contemplated in this Agreement.
4.4 Organization, Standing and Authority of BB&T Subsidiaries
---------------------------------------------------------
Each of the BB&T Subsidiaries is duly organized, validly existing and in
good standing under applicable laws. BB&T owns, directly or indirectly, all of
the issued and outstanding shares of capital stock of each of the BB&T
Subsidiaries. Each of the BB&T Subsidiaries (i) has full power and authority to
carry on its business as now conducted and (ii) is duly qualified to do business
in the states of the United States and foreign jurisdictions where its ownership
or leasing of property or the conduct of its business requires such
qualification.
4.5 Securities Documents; Statements True
-------------------------------------
BB&T has timely filed all Securities Documents required by the Securities
Laws to be filed since December 31, 1995. As of their respective dates of
filing, such Securities Documents complied with the Securities Laws as then in
effect, and did not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. No statement, certificate, instrument or other writing
furnished or to be furnished hereunder by BB&T or any other BB&T Subsidiary to
Premier contains or will contain any untrue statement of material fact or will
omit to state a material fact necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading.
4.6 Certain Information
-------------------
When the Proxy Statement/Prospectus is mailed, and at all times subsequent
to such mailing up to and including the time of the meeting of shareholders of
Premier to vote on the Merger, the Proxy Statement/Prospectus and all amendments
or supplements thereto, with respect to all information set forth therein
relating to BB&T, (i) shall comply with the applicable provisions of the
Securities Laws, and (ii) shall not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements contained therein, in light of the circumstances in which
they were made, not misleading.
4.7 Tax and Regulatory Matters
--------------------------
Neither BB&T nor any BB&T Subsidiary has taken or agreed to take any
action, and has no Knowledge of any fact or circumstance, which is reasonably
likely to (i) cause the Merger not to be
28
accounted for as a pooling-of-interests or not to constitute a reorganization
under Section 368(a) of the Code or (ii) impede or delay receipt of any consents
of regulatory authorities referred to in Section 5.4(b) or result in failure of
the condition in Section 6.3(b).
4.8 Adverse Change
--------------
Since December 31, 1998, except as disclosed in the most recent BB&T
Financial Statements, there has not been any adverse change or any fact or event
involving a prospective adverse change in the business, financial condition,
results of operations or business prospects of BB&T and any of the BB&T
Subsidiaries taken as a whole.
4.9 Rights Agreement
----------------
Execution of this Agreement and consummation of the Merger and the other
transactions contemplated by this Agreement will not result in the grant of any
rights to any person under the Rights Agreement described in the definition of
BB&T Common Stock.
ARTICLE V
COVENANTS
5.1 Premier Shareholder Meeting
---------------------------
Premier shall submit this Agreement and the Plan of Merger to its
shareholders for approval at a meeting to be held as soon as practicable
following the effectiveness of the Registration Statement, and by approving
execution of this Agreement, the Board of Directors of Premier agrees that it
shall, at the time the Proxy Statement/Prospectus is mailed to the shareholders
of Premier, recommend that Premier's shareholders vote for such approval;
provided, that the Board of Directors of Premier may withdraw, modify or refuse
to make such recommendation only if the Board of Directors shall determine in
good faith (after determining that any bona fide proposal from a third party
other than BB&T for a business combination with Premier has the required
financing committed and that all legal and regulatory requirements are likely to
be met) that such recommendation should not be made in light of its fiduciary
duty to Premier's shareholders following consideration of (i) written advice of
legal counsel to the effect that making such recommendation or failing to
withdraw or modify such recommendation is likely to constitute a breach of the
fiduciary duty of such Board to the shareholders of Premier and (ii) either (A)
the withdrawal, or material modification that results in a revocation, of the
opinion referenced in Section 3.27 by the Financial Advisor that gave such
opinion or (B) the delivery to the Premier Board of Directors of written advice
from either Financial Advisor that the Merger Consideration is either not fair
or is inadequate to the shareholders of Premier from a financial point of view.
29
5.2 Registration Statement; Proxy Statement/Prospectus
--------------------------------------------------
As promptly as practicable after the date hereof, BB&T shall prepare and
file the Registration Statement with the Commission. Premier will furnish to
BB&T the information required to be included in the Registration Statement with
respect to its business and affairs before it is filed with the Commission and
again before any amendments are filed, and shall have the right to review and
consult with BB&T on the form of, and any characterizations of such information
included in, the Registration Statement prior to the filing with the Commission.
Such Registration Statement, at the time it becomes effective and on the
Effective Time, shall in all material respects conform to the requirements of
the Securities Act and the applicable rules and regulations of the Commission.
The Registration Statement shall include the form of Proxy Statement/Prospectus.
BB&T and Premier shall use all reasonable efforts to cause the Proxy
Statement/Prospectus to be approved by the Commission for mailing to the Premier
shareholders, and such Proxy Statement/Prospectus shall, on the date of mailing,
conform in all material respects to the requirements of the Securities Laws and
the applicable rules and regulations of the Commission thereunder. Premier
shall cause the Proxy Statement/Prospectus to be mailed to shareholders in
accordance with all applicable notice requirements under the Securities Laws,
the GBCC and the rules and regulations of the NYSE.
5.3 Plan of Merger; Reservation of Shares
-------------------------------------
At the Effective Time, the Merger shall be effected in accordance with the
Plan of Merger. In connection therewith, BB&T has adopted the Plan of Merger and
agrees to pay or cause to be paid when due the Merger Consideration. BB&T has
reserved for issuance such number of shares of BB&T Common Stock as shall be
necessary to pay the Merger Consideration and agrees not to take any action that
would cause the aggregate number of authorized shares of BB&T Common Stock
available for issuance hereunder not to be sufficient to effect the Merger. If
at any time the aggregate number of shares of BB&T Common Stock reserved for
issuance hereunder is not sufficient to effect the Merger, BB&T shall take all
appropriate action as may be required to increase the number of shares of BB&T
Common Stock reserved for such purpose.
5.4 Additional Acts
---------------
(a) Premier agrees to take such actions requested by BB&T as may be
reasonably necessary to modify the structure of, or to substitute parties to (so
long as such substitute is BB&T or a BB&T Subsidiary) the transactions
contemplated hereby, provided that such modifications do not change the Merger
Consideration, prevent the fulfillment of conditions precedent to the Closing or
abrogate the covenants and other agreements contained in this Agreement,
including, without limitation, the covenants set forth in Section 4.7.
(b) As promptly as practicable after the date hereof, BB&T and, to the
extent required, Premier shall submit notice or applications for prior approval
of the transactions contemplated herein to the Federal Reserve Board, the
Georgia Department of Banking and Finance and any other federal, state or local
government or regulatory agency, department or body to which notice is
30
required or from which approval is required for consummation of the Merger and
the other transactions contemplated hereby. Premier shall cooperate with BB&T in
making all such filings. Premier and BB&T each represents and warrants to the
other that all information included (or submitted for inclusion) concerning it,
its respective Subsidiaries, and any of its respective directors, officers and
shareholders, shall be true, correct and complete in all material respects as of
the date presented. Upon request, the parties shall deliver to each other copies
of all filings, correspondence and orders to and from all regulatory authorities
and the Commission in connection with the Merger.
(c) BB&T agrees that its Board of Directors or authorized Board committee
shall approve prior to the Effective Time each grant of a converted option (as
described in Section 2.9(a)) to any individual who, subsequent to consummation
of the Merger, will be a director or officer of BB&T under Rule 16b-3 of the
Exchange Act.
5.5 Efforts to Consummate
---------------------
Each of BB&T and Premier (subject to the provisions of Section 5.1) shall
use, and shall cause each of their respective Subsidiaries to use, all
reasonable efforts in good faith to (i) furnish such information as may be
required in connection with and otherwise cooperate in the preparation and
filing of the documents referred to in Sections 5.2 and 5.4 or elsewhere herein,
and (ii) take or cause to be taken all action necessary or desirable on its part
to fulfill the conditions in Article VI, including, without limitation,
executing and delivering, or causing to be executed and delivered, such
representations, certificates and other instruments or documents as may be
reasonably requested by BB&T's legal counsel for such counsel to issue the
opinion contemplated by Section 6.1(e), and to consummate the transactions
herein contemplated at the earliest possible date. Neither BB&T nor Premier
shall take, or cause, or to the best of its ability permit to be taken, any
action that would substantially delay or impair the prospects of completing the
Merger pursuant to this Agreement and the Plan of Merger.
5.6 Certain Accounting Matters, Lending Policies
--------------------------------------------
Premier shall cooperate with BB&T concerning (i) accounting and financial
matters necessary or appropriate to facilitate the Merger (taking into account
BB&T's policies, practices and procedures), including, without limitation,
issues arising in connection with record keeping, loan classification, valuation
adjustments, levels of loan loss reserves and other accounting practices, and
(ii) Premier's lending, investment or asset liability management policies;
provided, that (A) any action taken pursuant to this Section 5.6 shall not be
deemed to constitute or result in the breach of any representation, warranty or
agreement of Premier contained in this Agreement and (B) no action shall be
required to be taken by Premier pursuant to this Section 5.6 unless and until
BB&T agrees in writing that it believes that all conditions to its obligation to
consummate the Merger set forth in Sections 6.1 and 6.3 (other than the delivery
of certificates, opinions and other instruments and documents to be delivered at
the Closing or otherwise to be dated at the Effective Time, the delivery of
which shall continue to be a condition to BB&T's obligation to consummate the
Merger) have been satisfied or waived.
31
5.7 Access to Information
---------------------
Premier and BB&T will each keep the other advised of all material
developments relevant to its business and the businesses of its Subsidiaries,
and to consummation of the Merger, and each shall provide to the other, upon
request, reasonable details of any such development. Upon reasonable notice,
Premier shall afford to representatives of BB&T access, during normal business
hours during the period prior to the Effective Time, to all of the properties,
books, contracts, commitments and records of Premier and the Premier
Subsidiaries and, during such period, shall make available all information
concerning their businesses as may be reasonably requested. BB&T shall make
available to representatives of Premier access to information consistent with
access provided by BB&T in the past to other corporations similarly situated and
shall make available representatives of BB&T to answer any questions that
Premier or its representatives may have. No investigation pursuant to this
Section 5.7 shall affect or be deemed to modify any representation or warranty
made by, or the conditions to the obligations hereunder of, either party hereto.
Each party hereto shall, and shall cause each of its directors, officers,
attorneys and advisors to, maintain the confidentiality of all information
obtained hereunder which is not otherwise publicly disclosed by the other party,
said undertakings with respect to confidentiality to survive any termination of
this Agreement pursuant to Section 7.1. The parties acknowledge and reaffirm
their obligations under the Confidentiality Agreement dated August 12, 1998. In
the event of the termination of this Agreement, each party shall return to the
other party upon request all confidential information previously furnished in
connection with the transactions contemplated by this Agreement.
5.8 Press Releases
--------------
BB&T and Premier shall agree with each other as to the form and substance
of any press release related to this Agreement and the Plan of Merger or the
transactions contemplated hereby and thereby, and consult with each other as to
the form and substance of other public disclosures related thereto; provided,
that nothing contained herein shall prohibit either party, following
notification to the other party, from making any disclosure which in the opinion
of its counsel is required by law.
5.9 Forbearances of Premier
-----------------------
Except with the prior written consent of BB&T, between the date hereof and
the Effective Time, Premier shall not, and shall cause each of the Premier
Subsidiaries not to:
(a) carry on its business other than in the usual, regular and
ordinary course in substantially the same manner as heretofore conducted,
or establish or acquire any new Subsidiary or engage in any new type of
activity or expand any existing activities;
(b) declare, set aside, make or pay any dividend or other distribution
in respect of its capital stock, other than regularly scheduled quarterly
dividends of $.09 per share
32
payable with respect to Premier Common Stock and the annual dividend of
$4.80 per share payable with respect to Premier Preferred Stock for the
calendar year 1999 (if the Closing occurs after December 31, 1999), in each
case payable on record dates and in amounts consistent with past practices;
provided that (i) any dividend declared or payable on the shares of Premier
Common Stock for the quarterly period during which the Effective Time
occurs shall, unless otherwise agreed upon in writing by BB&T and Premier,
be declared with a record date prior to the Effective Time only if the
normal record date for payment of the corresponding quarterly dividend to
holders of BB&T Common Stock is before the Effective Time and (ii) with
respect to the Premier Preferred Stock for the year 1999 (if the Effective
Time occurs on or prior to December 31, 1999) or for the year 2000 (if the
Effective Time occurs after December 31, 1999), any dividend payable shall
be as provided in Section 2.8(e);
(c) issue any shares of its capital stock (including treasury shares),
except pursuant to outstanding Stock Options and the Pending Acquisitions;
(d) issue, grant or authorize any Rights or effect any
recapitalization, reclassification, stock dividend, stock split or like
change in capitalization;
(e) amend its Articles of Incorporation or Bylaws;
(f) impose or permit imposition, of any lien, charge or encumbrance on
any share of stock held by it in any Premier Subsidiary, or permit any such
lien, charge or encumbrance to exist; or waive or release any material
right or cancel or compromise any debt or claim, in each case other than in
the ordinary course of business or in connection with deposits, repurchase
agreements, bankers acceptances or other indebtedness permitted under
Section 5.9(p), "treasury tax and loan" accounts established in the
ordinary course of business, or the satisfaction of legal requirements in
the exercise of trust powers.
(g) except for the Pending Acquisitions, merge with any other entity
or permit any other entity to merge into it (except for a merger of Premier
Subsidiaries), or consolidate with any other entity; acquire control over
any other entity (except as a result of foreclosure or in a fiduciary
capacity); or liquidate, sell or otherwise dispose of any assets or acquire
any assets other than in the ordinary course of its business consistent
with past practices;
(h) fail to comply in any material respect with any laws, regulations,
ordinances or governmental actions applicable to it and to the conduct of
its business;
(i) increase the rate of compensation of any of its directors,
officers or employees (excluding increases in compensation resulting from
the exercise of compensatory stock options outstanding as of the date of
this Agreement), or pay or agree to pay any bonus to, or provide any new
employee benefit or incentive to, any of its directors, officers or
employees, except for increases or payments required by law or by existing
contracts or
33
made in the ordinary course of business consistent with past practice
pursuant to plans or arrangements in effect on the date hereof;
(j) enter into or substantially modify (except as may be required by
applicable law or regulation) any pension, retirement, stock option, stock
purchase, stock appreciation right, savings, profit sharing, deferred
compensation, consulting, bonus, group insurance or other employee benefit,
incentive or welfare contract, plan or arrangement, or any trust agreement
related thereto, in respect of any of its directors, officers or other
employees; provided, however, that this subparagraph shall not prevent
renewal of any of the foregoing consistent with past practice;
(k) solicit or encourage inquiries or proposals with respect to,
furnish any information relating to, or participate in any negotiations or
discussions concerning, any acquisition or purchase of all or a substantial
portion of the assets of, or a substantial equity interest in, Premier or
any Premier Subsidiary or any business combination with Premier or any
Premier Subsidiary other than as contemplated by this Agreement; or
authorize any officer, director, agent or affiliate of Premier or any
Premier Subsidiary to do any of the above; or fail to notify BB&T
immediately if any such inquiry or proposal is received, any such
information is requested or required, or any such negotiations or
discussions are sought to be initiated; provided, that this subsection (k)
shall not apply to or restrict the furnishing of information, negotiations
or discussions following an unsolicited offer if, as a result of such
offer, Premier is advised in writing by legal counsel that in its opinion
the failure to so furnish information or negotiate is likely to constitute
a breach of the fiduciary duty of Premier's Board of Directors to the
Premier shareholders;
(l) enter into (i) any material agreement, arrangement or commitment
not made in the ordinary course of business or contemplated by this
Agreement, (ii) any agreement, indenture or other instrument not made in
the ordinary course of business relating to the borrowing of money by
Premier or a Premier Subsidiary or guarantee by Premier or a Premier
Subsidiary of any obligation, (iii) any agreement, arrangement or
commitment relating to the employment or severance of a consultant or the
employment, severance, election or retention in office of any present or
former director, officer or employee (this clause shall not apply to the
election of directors by shareholders or the reappointment of officers in
the normal course), or (iv) any contract, agreement or understanding with a
labor union;
(m) change its lending, investment or asset liability management
policies in any material respect, except as may be required by applicable
law, regulation, or directives;
(n) change its methods of accounting in effect at December 31, 1998,
except as required by changes in GAAP concurred in by BB&T, which
concurrence shall not be unreasonably withheld, or change any of its
methods of reporting income and deductions for federal income tax
purposes from those employed in the preparation of its federal income tax
34
returns for the year ended December 31, 1998, except as required by changes
in law or regulation;
(o) incur any new commitments for capital expenditures or obligation
to make capital expenditures in excess of $100,000, for any one
expenditure, or $500,000, in the aggregate;
(p) incur any indebtedness other than deposits, advances from the
Federal Home Loan Bank or Federal Reserve Bank and reverse repurchase
arrangements in the ordinary course of business;
(q) take any action which is reasonably likely to (i) cause the Merger
not to be accounted for as a pooling-of-interests or not to constitute a
reorganization under Section 368(a) of the Code as determined in good faith
by BB&T, (ii) result in any inaccuracy of a representation or warranty
herein which would allow for a termination of this Agreement, or (iii)
cause any of the conditions precedent to the transactions contemplated by
this Agreement to fail to be satisfied;
(r) dispose of any material assets other than in the ordinary course
of business; or
(s) agree to do any of the foregoing.
5.10 Employment Agreements
---------------------
Concurrently with the execution hereof, BB&T has requested that Xxxxxxx X.
Xxxxxxx and Xxxxxx Xxxxxx enter into Employment Agreements substantially in the
forms attached hereto as Annexes B-1 and B-2, respectively, such Employment
Agreements to be conditional on consummation of, and become effective as of the
Effective Time of, the Merger.
5.11 Affiliates
----------
Premier shall use its reasonable best efforts to cause all persons who are
Affiliates of Premier to deliver to BB&T promptly following the date hereof a
written agreement, in a form reasonably acceptable to BB&T, providing that such
person will not dispose of BB&T Common Stock received in the Merger except in
compliance with the Securities Act and the rules and regulations promulgated
thereunder and except as consistent with qualifying the transactions
contemplated hereby for pooling-of-interests accounting treatment, and in any
event shall use its reasonable best efforts to cause such affiliates to deliver
to BB&T such written agreement prior to the Closing Date.
35
5.12 Section 401(k) Plan; Other Employee Benefits
--------------------------------------------
(a) As soon as practicable following the Effective Time and consistent
with past practice, and not in limitation of its obligations under Section 5.10
and subsection (d) hereof, and except as otherwise provided in the Employment
Agreements attached as Annexes B-1 and B-2, BB&T shall provide to the officers
and employees of Premier and Premier's banking Subsidiaries benefits under
employee benefit and welfare plans, on terms and conditions which when taken as
a whole are substantially similar to those currently provided by the BB&T and
its subsidiaries to their similarly situated officers and employees.
(b) Each "Transferred Employee" (defined as an employee of Premier or a
Premier Subsidiary at the Effective Time who becomes an employee immediately
following the Effective Time of BB&T or a BB&T Subsidiary ("Employer Entity"))
who was a participant in a 401(k) plan of Premier or a Premier Subsidiary
immediately prior to the Effective Time shall be eligible at the Effective Time
to participate in BB&T's 401(k) plan (subject to BB&T's right to amend or
terminate such plan), as amended or succeeded. For purposes of administering
BB&T's 401(k) plan, service by a Transferred Employee with Premier and the
Premier Subsidiaries shall be deemed to be service with the Employer Entity for
participation and vesting purposes, but not for purposes of benefit accrual.
(c) Each Transferred Employee shall be eligible to participate in the
group hospitalization, medical, dental, life, disability and other welfare
benefit plans and programs available to employees of the Employer Entity,
subject to the terms of such plans and programs. In applying such plans and
programs, service with Premier and the Premier Subsidiaries shall be deemed to
be service with the Employer Entity for the purpose of determining eligibility
to participate and vesting (if applicable) in such welfare plans and programs,
but not for the purpose of computing benefits, if any, determined in whole or in
part with reference to service.
(d) Each Transferred Employee who is terminated by an Employer Entity
subsequent to the Effective Time, excluding any employee who has in effect at
the time of termination an employment or special termination agreement (but,
with respect to such an agreement in effect prior to the Effective Time, only if
it is Disclosed), shall be entitled to severance pay in accordance with BB&T's
general severance policy as set forth in BB&T's letter to Premier dated July 20,
1999, if and to the extent that such employee is entitled to severance pay under
such policy. Such employee's service with Premier or a Premier Subsidiary shall
be treated as service with BB&T for purposes of determining the amount of
severance pay, if any, under BB&T's severance policy.
(e) BB&T agrees to honor all employment agreements, severance agreements
and deferred compensation and individualized benefit agreements that Premier and
the Premier Subsidiaries have with their current and former employees and
directors and which have been Disclosed to BB&T pursuant to this Agreement,
except to the extent any such agreements shall be superseded (by the Employment
Agreements described in Section 5.10) or terminated (in accordance with their
terms) at the Closing or following the Closing Date. Except for the agreements
described
36
in the preceding sentence, 401(k) plans maintained by Premier and any Premier
Subsidiary, the Stock Option Plans and other employee benefit plans of Premier
and the Premier Subsidiaries shall be either terminated or merged into
comparable BB&T plans as of or following the Effective Time, as determined by
BB&T.
(f) Notwithstanding and without limiting the generality of Section 5.12(e),
as soon as practicable following the date hereof, Premier shall take any and all
action necessary to terminate the Premier Bancshares, Inc. Stock Purchase Plan,
and no purchases of shares of Premier Common Stock shall be made under the Stock
Purchase Plan after the Effective Time.
5.13 Directors and Officers Protection
---------------------------------
BB&T or a BB&T Subsidiary shall provide and keep in force for a period of
three years after the Effective Time directors' and officers' liability
insurance providing coverage to directors and officers of Premier for acts or
omissions occurring prior to the Effective Time. Such insurance shall provide
at least the same coverage and amounts as contained in Premier's policy on the
date hereof; provided, that in no event shall the annual premium on such policy
exceed 150% of the annual premium payments on Premier's policy in effect as of
the date hereof (the "Maximum Amount"). If the amount of the premiums necessary
to maintain or procure such insurance coverage exceeds the Maximum Amount, BB&T
shall use its reasonable efforts to maintain the most advantageous policies of
directors' and officers' liability insurance obtainable for a premium equal to
the Maximum Amount. Notwithstanding the foregoing, BB&T further agrees to
indemnify, defend and hold harmless the present and former directors, officers
and employees of Premier and the Premier Subsidiaries (each, an "Indemnified
Party") against all liabilities (which, for purposes of this Section 5.13, shall
mean and include any direct or indirect, primary or secondary, liability,
indebtedness, obligation, penalty, cost, expense, including without limitation
all costs of investigation and defense, claim, action, investigation or
proceeding, of any type, whether accrued, absolute or contingent, liquidated or
unliquidated, matured or unmatured, and in each case including reasonable
attorneys' fees and charges, arising out of actions or omissions arising out of
the Indemnified Party's service or services as directors, officers or employees
of Premier and the Premier Subsidiaries or, at the request of Premier or a
Premier Subsidiary, of another corporation, partnership, joint venture, trust or
other enterprise occurring at or prior to the Effective Time (including the
transactions contemplated by this Agreement) to the fullest extent permitted
under Part 5 of Article 8 of the NCBCA (including Section 55-8-57), including
provisions relating to advances of expenses incurred in the defense of any
claims, demands, actions, causes of action, complaints, governmental or other
examination, investigation, prosecution or hearing, or any other proceedings,
investigations or inquiries, whether or not BB&T or any BB&T Subsidiary is
insured against any such matter.
5.14 Forbearances of BB&T
--------------------
Except with the prior written consent of Premier, neither BB&T nor any BB&T
Subsidiary shall take any action which is reasonably likely to (i) cause the
business combination contemplated
37
hereby not to be accounted for as a pooling-of-interests or not to constitute a
reorganization under Section 368(a) of the Code; (ii) result in any inaccuracy
of a representation or warranty herein which would allow for termination of this
Agreement; (iii) cause any of the conditions precedent to the transactions
contemplated by this Agreement to fail to be satisfied; or (iv) fail to comply
in any material respect with any laws, regulations, ordinances or governmental
actions applicable to it and to the conduct of its business.
5.15 Reports
-------
Each of Premier and BB&T shall file (and shall cause the Premier
Subsidiaries and the BB&T Subsidiaries, respectively, to file), between the date
of this Agreement and the Effective Time, all reports required to be filed by it
with the Commission and any other regulatory authorities having jurisdiction
over such party, and shall deliver to BB&T or Premier, as the case may be,
copies of all such reports promptly after the same are filed. If financial
statements are contained in any such reports filed with the Commission, such
financial statements will fairly present the consolidated financial position of
the entity filing such statements as of the dates indicated and the consolidated
results of operations, changes in shareholders' equity, and cash flows for the
periods then ended in accordance with applicable Commission rules and
regulations or GAAP (subject in the case of interim financial statements to the
absence of notes and to normal recurring year-end adjustments that are not
material). As of their respective dates, such reports filed with the Commission
will comply in all material respects with the Securities Laws and will not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. Any financial statements contained in any other reports to a
regulatory authority other than the Commission shall be prepared in accordance
with requirements applicable to such reports.
5.16 Exchange Listing
----------------
BB&T shall use its reasonable best efforts to list, prior to the
Effective Time, on the NYSE, subject to official notice of issuance, the shares
of BB&T Common Stock to be issued to the holders of Premier Common Stock
pursuant to the Merger, and BB&T shall give all notices and make all filings
with the NYSE required in connection with the transactions contemplated herein.
5.17 Board of Directors
------------------
BB&T believes that it is important and in its best interest to preserve,
facilitate and enhance its operations in the State of Georgia and the operations
of Branch Banking and Trust Company, a North Carolina banking corporation which
will become by merger BB&T's sole Georgia bank, and to have Xxxxxxx X. Xxxxxxx
as an officer and director thereof. Accordingly, as of the Effective Time,
Branch Banking and Trust Company shall name Xx. Xxxxxxx as Vice-Chairman of its
Advisory Board for the State of Georgia and shall elect him to its Board of
Directors, to serve until its next annual meeting (subject to the right of
removal for cause) and thereafter so long as he is elected and qualifies.
38
5.18 Completion of Bank Mergers
--------------------------
Prior to the Effective Time, Premier shall complete the Pending
Acquisitions in accordance with the terms of the documents governing each such
Pending Acquisition on the date hereof. BB&T shall cooperate with Premier in
good faith to help resolve any issues that may arise following the date hereof
related to the closing of any of the Pending Acquisitions.
ARTICLE VI
CONDITIONS PRECEDENT
6.1 Conditions Precedent - BB&T and Premier
---------------------------------------
The respective obligations of BB&T and Premier to effect the transactions
contemplated by this Agreement shall be subject to satisfaction or waiver of the
following conditions at or prior to the Effective Time:
(a) All corporate action necessary to authorize the execution, delivery and
performance of this Agreement and the Plan of Merger, and consummation of the
transactions contemplated hereby and thereby, shall have been duly and validly
taken, including, without limitation, the approval by the shareholders of
Premier of the Agreement and the Plan of Merger;
(b) The Registration Statement (including any post-effective amendments
thereto) shall be effective under the Securities Act, no proceedings shall be
pending or, to the Knowledge of BB&T, threatened by the Commission to suspend
the effectiveness of such Registration Statement and the BB&T Common Stock to be
issued as contemplated in the Plan of Merger shall have either been registered
or be subject to exemption from registration under applicable state securities
laws;
(c) The parties shall have received from all applicable regulatory
authorities the approvals required in connection with the transactions
contemplated by this Agreement and the Plan of Merger, all notice periods and
waiting periods with respect to such approvals shall have passed and all such
approvals shall be in effect;
(d) None of BB&T, any of the BB&T Subsidiaries, Premier or any of the
Premier Subsidiaries shall be subject to any order, decree or injunction of a
court or agency of competent jurisdiction which enjoins or prohibits
consummation of the transactions contemplated by this Agreement; and
(e) Premier and BB&T shall have received an opinion of BB&T's legal
counsel, in form and substance satisfactory to Premier and BB&T, substantially
to the effect that (i) the Merger will constitute one or more reorganizations
under Section 368(a) of the Code, (ii) the shareholders of Premier will not
recognize any gain or loss to the extent that such shareholders exchange shares
of Premier Common Stock or Premier Preferred Stock for shares of BB&T Common
Stock and (iii) neither BB&T nor Premier will recognize any gain or loss solely
as the result of the Merger.
39
(f) BB&T shall have received letters, dated as of the date of filing of the
Registration Statement with the Commission and as of the Effective Time,
addressed to BB&T, in form and substance reasonably satisfactory to BB&T, from
Xxxxxx Xxxxxxxx, LLP to the effect that the Merger will qualify for pooling-of-
interests accounting treatment.
6.2 Conditions Precedent - Premier
------------------------------
The obligations of Premier to effect the transactions contemplated by this
Agreement shall be subject to the satisfaction of the following additional
conditions at or prior to the Effective Time, unless waived by Premier pursuant
to Section 7.4:
(a) All representations and warranties of BB&T shall be evaluated as of the
date of this Agreement and as of the Effective Time as though made on and as of
the Effective Time (or on the date designated in the case of any representation
and warranty which specifically relates to an earlier date), except as otherwise
contemplated by this Agreement or consented to in writing by Premier. The
representations and warranties of BB&T set forth in Sections 4.1, 4.2 (except as
relates to qualification), 4.3(a), 4.3(b)(i) and 4.4 (except as relates to
qualification) shall be true and correct (except for inaccuracies which are de
minimis in amount). In each and every case, there shall not exist inaccuracies
in the representations and warranties of BB&T set forth in this Agreement
(including the representations and warranties set forth in Sections 4.1, 4.2,
4.3(a), 4.3(b)(i) and 4.4) such that the aggregate effect of such inaccuracies
has, or is reasonably likely to have, a Material Adverse Effect on BB&T;
(b) BB&T shall have performed in all material respects all obligations and
complied in all material respects with all covenants required by this Agreement;
(c) BB&T shall have delivered to Premier a certificate, dated the Closing
Date and signed by its Chairman or President or an Executive Vice President, to
the effect that the conditions set forth in Sections 6.1(a), 6.1(b), 6.1(c),
6.1(d), 6.2(a) and 6.2(b) hereof, to the extent applicable to BB&T, have been
satisfied and that there are no actions, suits, claims, governmental
investigations or procedures instituted, pending or, to the best of such
officer's Knowledge, threatened that are reasonably likely to have a Material
Adverse Effect on BB&T or that present a claim to restrain or prohibit the
transactions contemplated herein or in the Plan of Merger;
(d) Premier shall have received opinions of counsel to BB&T as to the
matters described in Annex C hereto;
(e) The shares of BB&T Common Stock issuable pursuant to the Merger shall
have been approved for listing on the NYSE, subject to official notice of
issuance; and
40
(f) The Financial Advisor who gave the opinion referred to in Section 3.27
shall not have withdrawn or modified its opinion that the Merger is fair, from a
financial point of view, to Premier's shareholders.
6.3 Conditions Precedent - BB&T
---------------------------
The obligations of BB&T to effect the transactions contemplated by this
Agreement shall be subject to satisfaction of the following additional
conditions at or prior to the Effective Time, unless waived by BB&T pursuant to
Section 7.4:
(a) All representations and warranties of Premier shall be evaluated as of
the date of this Agreement and as of the Effective Time as though made on and as
of the Effective Time (or on the date designated in the case of any
representation and warranty which specifically relates to an earlier date),
except as otherwise contemplated by this Agreement or consented to in writing by
BB&T. The representations and warranties of Premier set forth in Sections 3.1,
3.2 (except the last sentence thereof), 3.3, 3.4 (except the last sentence
thereof), 3.5(a), 3.5(b)(i) and 3.24 shall be true and correct (except for
inaccuracies which are de minimis in amount). In each and every case, there
shall not exist inaccuracies in the representations and warranties of Premier
set forth in this Agreement (including the representations and warranties set
forth in the Sections designated in the preceding sentence) such that the effect
of such inaccuracies individually or in the aggregate has, or is reasonably
likely to have, a Material Adverse Effect on Premier and the Premier
Subsidiaries taken as a whole;
(b) No regulatory approval shall have imposed in connection with the
transactions contemplated hereby any condition or requirement which, in the
reasonable opinion of the Board of Directors of BB&T, would have, or is
reasonably likely to have, a Material Adverse Effect on the business or economic
benefits to BB&T of the transactions contemplated by this Agreement;
(c) Premier shall have performed in all material respects all obligations
and complied in all material respects with all covenants required by this
Agreement;
(d) Premier shall have delivered to BB&T a certificate, dated the Closing
Date and signed by its Chairman or President, to the effect that the conditions
set forth in Sections 6.1(a), 6.1(c), 6.1(d), 6.3(a) and 6.3(c) hereof, to the
extent applicable to Premier, have been satisfied and that there are no actions,
suits, claims, governmental investigations or procedures instituted, pending or,
to the best of such officer's Knowledge, threatened that are reasonably likely
to have a Material Adverse Effect on Premier or that present a claim to restrain
or prohibit the transactions contemplated herein or in the Plan of Merger;
(e) BB&T shall have received opinions of counsel to Premier as to the
matters described in Annex D hereto; and
41
(f) BB&T shall have received the written agreements from Affiliates as
specified in Section 5.11 hereof to the extent necessary, in the reasonable
judgment of BB&T, to ensure that the Merger will be accounted for as a pooling-
of-interests under GAAP and to promote compliance with Rule 145 promulgated by
the Commission.
(g) Xxxxxxx X. Xxxxxxx shall have (i) continued in the employment of
Premier until the Effective Time, and (ii) as of the Effective Time shall have
entered into one or more mutually satisfactory agreements or arrangements
providing for his employment by Branch Banking and Trust Company (or another
Subsidiary of BB&T) and setting forth covenants not to compete with BB&T and its
Subsidiaries.
ARTICLE VII
TERMINATION, DEFAULT, WAIVER AND AMENDMENT
7.1 Termination
-----------
This Agreement may be terminated:
(a) At any time prior to the Effective Time, by the mutual consent in
writing of the parties hereto.
(b) At any time prior to the Effective Time, by either party (i) in the
event of a material breach by the other party of any covenant or agreement
contained in this Agreement, or (ii) in the event of an inaccuracy of any
representation or warranty of the other party contained in this Agreement, which
inaccuracy would provide the nonbreaching party the ability to refuse to
consummate the Merger under the applicable standard set forth in Section 6.2(a)
hereof in the case of Premier and Section 6.3(a) hereof in the case of BB&T;
and, in the case of (i) or (ii), if such breach or inaccuracy has not been cured
by the earlier of thirty days following written notice of such breach to the
party committing such breach or the Effective Time.
(c) At any time prior to the Effective Time, by either party hereto in
writing, if any of the conditions precedent to the obligations of the other
party to consummate the transactions contemplated hereby cannot be satisfied or
fulfilled prior to the Closing Date, and the party giving the notice is not in
material breach of any of its representations, warranties, covenants or
undertakings herein.
(d) At any time, by either party hereto in writing, if any of the
applications for prior approval referred to in Section 5.4 hereof are denied,
and the time period for appeals and requests for reconsideration has run;
provided, that the applicant has used all reasonable effort to promptly
prosecute such appeals and requests.
(e) At any time, by either party hereto in writing, if the shareholders of
Premier do not approve the Agreement and the Plan of Merger.
42
(f) At any time following March 31, 2000 by either party hereto in writing,
if the Effective Time has not occurred by the close of business on such date,
and the party giving the notice is not in material breach of any of its
representations, warranties, covenants or undertakings herein.
(g) At any time prior to the Effective Time, by BB&T in writing, if the
Board of Directors of Premier shall have withdrawn its recommendation or refused
to recommend to the shareholders of Premier that they vote to approve the Plan
of Merger as required by Section 5.1 or shall have recommended to the
shareholders of Premier approval of an agreement, plan or transaction arising
out of or implementing any proposal or offer to acquire or purchase all or a
substantial portion of the assets of, or a substantial equity interest in,
Premier or any Premier Subsidiary (including, without limitation, a tender offer
or exchange offer to purchase Premier Common Stock) or any business combination
with Premier or any Premier Subsidiary other than with BB&T or a BB&T Subsidiary
(any such proposal or offer, "Premier Acquisition Proposal").
(h) At any time prior to the Effective Time, by Premier in writing, if the
Board of Directors of Premier shall have determined in good faith to enter into
an agreement, plan or transaction arising out of or implementing a Premier
Acquisition Proposal that did not arise from a breach of Section 5.1 or Section
5.9(k).
7.2 Effect of Termination
---------------------
In the event this Agreement and the Plan of Merger is terminated pursuant
to Section 7.1, both this Agreement and the Plan of Merger shall become void and
have no effect, except that (i) the provisions hereof relating to
confidentiality, the Termination Fee and expenses set forth in Sections 5.7, 7.6
and 8.1, respectively, shall survive any such termination and (ii) a termination
pursuant to Section 7.1(b) shall not relieve the breaching party from liability
for a breach of the covenant, agreement, representation or warranty giving rise
to such termination.
7.3 Survival of Representations, Warranties and Covenants
-----------------------------------------------------
All representations, warranties and covenants in this Agreement or the Plan
of Merger or in any instrument delivered pursuant hereto or thereto shall expire
on, and be terminated and extinguished at, the Effective Time, other than
covenants that by their terms are to be performed after the Effective Time
(including Sections 5.7, 5.13 and 5.17), provided that no such representations,
warranties or covenants shall be deemed to be terminated or extinguished so as
to deprive BB&T or Premier (or any director, officer or controlling person
thereof) of any defense at law or in equity which otherwise would be available
against the claims of any person, including, without limitation, any shareholder
or former shareholder of either BB&T or Premier, the aforesaid representations,
warranties and covenants being material inducements to consummation by BB&T and
Premier of the transactions contemplated herein.
43
7.4 Waiver
------
Except with respect to any required regulatory approval, each party hereto,
by written instrument signed by an executive officer of such party, may at any
time (whether before or after approval of the Agreement and the Plan of Merger
by the Premier shareholders) extend the time for the performance of any of the
obligations or other acts of the other party hereto and may waive (i) any
inaccuracies of the other party in the representations or warranties contained
in this Agreement, the Plan of Merger or any document delivered pursuant hereto
or thereto, (ii) compliance with any of the covenants, undertakings or
agreements of the other party, or satisfaction of any of the conditions
precedent to its obligations, contained herein or in the Plan of Merger, or
(iii) the performance by the other party of any of its obligations set out
herein or therein; provided that no such extension or waiver, or amendment or
supplement pursuant to this Section 7.4, executed after approval by the Premier
shareholders of this Agreement and the Plan of Merger, shall reduce either the
Common Exchange Ratio, the Preferred Exchange Ratio or the payment terms for
fractional interests.
7.5 Amendment or Supplement
-----------------------
This Agreement or the Plan of Merger may be amended or supplemented at any
time in writing by mutual agreement of BB&T and Premier, subject to the proviso
to Section 7.4.
7.6 Termination Fee
---------------
(a) In the event that this Agreement is terminated:
(i) by either BB&T or Premier pursuant to Section 7.1(e) and (A) at
the time of the meeting of the Premier shareholders referred to in Section 5.1
(or at any adjournment thereof) a Premier Acquisition Proposal exists or (B)
prior to such shareholders' meeting, Premier's Board of Directors shall have
withdrawn its recommendation or refused to recommend to the shareholders of
Premier that they vote to approve the Plan of Merger;
(ii) by BB&T pursuant to Section 7.1(g); or
(iii) by BB&T pursuant to Section 7.1(b) or Section 7.1(c) (solely
with respect to a breach by Premier of Section 5.9(k));
(iv) by Premier pursuant to Section 7.1(c) (solely with respect to the
failure of the condition set forth in Section 6.2(f) to be satisfied);
(v) by Premier pursuant to Section 7.1(h)
then Premier shall promptly, but in no event later than two business days after
the date of such termination, pay to BB&T as compensation for the Merger not
becoming effective a termination fee
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equal to $10 million (the "Termination Fee") by wire transfer of immediately
available funds. The Termination Fee shall be payable without regard to any
expenses to be paid pursuant to Section 8.1.
(b) Premier acknowledges that the agreements contained in Section 7.6(a)
are an integral part of the transactions contemplated by this Agreement and
that, without these agreements, BB&T would not enter into this Agreement;
accordingly, if Premier fails promptly to pay any amount due pursuant to Section
7.6(a), and, in order to obtain such payment, BB&T commences a suit which
results in a judgment against Premier for all or a substantial portion of the
payment set forth in Section 7.6(a), Premier shall pay to BB&T its costs and
expenses (including reasonable attorneys' fees) in connection with such suit,
together with interest on the Premier Termination Fee from the date for payment
until the date of such payment at the prime rate of Branch Banking and Trust
Company in effect on the date such payment was required to be made plus two
percentage points.
ARTICLE VIII
MISCELLANEOUS
8.1 Expenses
--------
Each party hereto shall bear and pay all costs and expenses incurred by it
in connection with the transactions contemplated by this Agreement, including,
without limitation, fees and expenses of its own financial consultants,
accountants and counsel; provided, however, that the filing fees and printing
costs incurred in connection with the Registration Statement and the Proxy
Statement/Prospectus shall be borne 50% by BB&T and 50% by Premier.
8.2 Entire Agreement
----------------
This Agreement, including the Annexes attached hereto and the Premier
Disclosure Memorandum delivered pursuant hereto, contains the entire agreement
between the parties with respect to the transactions contemplated hereunder and
thereunder and supersedes all arrangements or understandings with respect
thereto, written or oral, entered into on or before the date hereof, except for
the Confidentiality Agreement between the parties hereto dated August 12, 1998,
which remains in full force and effect. The terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the parties hereto
and their respective successors. Nothing in this Agreement, expressed or
implied, is intended to confer upon any party, other than the parties hereto,
and their respective successors, any rights, remedies, obligations or
liabilities, except for the rights of directors and officers of Premier to
enforce rights in Sections 5.13 and 5.17.
8.3 No Assignment
-------------
Except for a substitution of parties pursuant to Section 5.4(a), none of
the parties hereto may assign any of its rights or obligations under this
Agreement to any other person, except upon the prior written consent of each
other party.
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8.4 Notices
-------
All notices or other communications which are required or permitted
hereunder shall be in writing and sufficient if delivered personally or sent by
nationally recognized overnight express courier or by facsimile transmission,
addressed or directed as follows:
If to Premier:
Premier Bancshares, Inc.
000 X. Xxxxx Xxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
Telephone: 000-000-0000
Fax: 000-000-0000
With a required copy to:
Xxxxx X. XxxXxxxxx, III
Xxxxxx & Bird LLP
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Telephone: 000-000-0000
Fax: 000-000-0000
If to BB&T:
Xxxxx X. Xxxx
150 Premier Stratford Road
4th Floor
Xxxxxxx-Xxxxx, Xxxxx Xxxxxxxx 00000
Telephone: 000-000-0000
Fax: 000-000-0000
With a required copy to:
Xxxxxxx X. Xxxxx, XX
Xxxxxx Xxxxxxx Xxxxxxxxx & Xxxx, PLLC
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx-Xxxxx, Xxxxx Xxxxxxxx 00000
Telephone: 000-000-0000
Fax: 000-000-0000
Any party may by notice change the address to which notice or other
communications to it are to be delivered.
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8.5 Specific Performance
--------------------
Premier acknowledges that the Premier Common Stock and the Premier business
and assets are unique, and that if Premier fails to consummate the transactions
contemplated by this Agreement such failure will cause irreparable harm to BB&T
for which there will be no adequate remedy at law. BB&T shall be entitled, in
addition to its other remedies at law, to specific performance of this Agreement
if Premier shall, without cause, refuse to consummate the transactions
contemplated by this Agreement.
8.6 Captions
--------
The captions contained in this Agreement are for reference only and are not
part of this Agreement.
8.7 Counterparts
------------
This Agreement may be executed in any number of counterparts, and each such
counterpart shall be deemed to be an original instrument, but all such
counterparts together shall constitute but one agreement.
8.8 Governing Law
-------------
This Agreement shall be governed by and construed in accordance with the
laws of the State of North Carolina, without regard to the principles of
conflicts of laws, except to the extent federal law may be applicable.
[remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto, intending to be legally bound
hereby, have caused this Agreement to be executed in counterparts by their duly
authorized officers, all as of the day and year first above written.
BB&T CORPORATION
By: /s/ Xxxx X. Xxxxxxx XX
-----------------------
Name: Xxxx X. Xxxxxxx XX
------------------
Title: Chairman and Chief Executive Officer
------------------------------------
PREMIER BANCSHARES, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------
Name: Xxxxxxx X. Xxxxxxx
------------------
Title: Chairman and Chief Executive Officer
------------------------------------
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