Summary
This Form 8-K filing by BB&T Corporation (the "Company") on December 19, 2012, primarily concerns the amendment and restatement of the employment agreement for its Chairman and Chief Executive Officer, Kelly S. King. The updated agreement, effective December 19, 2012, largely retains the terms of the previous agreement from November 13, 2008, but introduces several key modifications. Of particular note for investors, the amended agreement removes the automatic expiration of Mr. King's employment term upon reaching age 65, and clarifies the conditions under which severance pay is triggered, specifically requiring termination by the Company without just cause or resignation by Mr. King for good reason. It also adjusts the basis for calculating severance benefits to an "Average Compensation Amount" over the three years preceding termination, instead of the "Highest Compensation Amount," and modifies the duration and applicability of non-solicitation and non-competition covenants in the event of a change of control. These changes appear to align the CEO's compensation and severance structure with evolving corporate governance practices and the Company's current operational context, including its exit from the TARP Capital Purchase Program.
Key Highlights
- 1BB&T Corporation amended and restated the employment agreement for its Chairman and CEO, Kelly S. King, effective December 19, 2012.
- 2The revised agreement removes the mandatory retirement age clause (age 65) from Mr. King's employment term.
- 3Severance pay is now contingent upon specific events: termination by the Company without just cause or resignation by Mr. King for good reason.
- 4Severance calculation is based on the average annual cash compensation over the three years prior to termination, rather than the highest single year's compensation.
- 5The definition of 'change of control' has been updated to reference the Company's 2012 Incentive Plan.
- 6In case of a change of control, Mr. King is entitled to severance benefits if a qualifying termination occurs within two years (previously one year) following the change of control.
- 7The agreement reflects updates to account for changes since 2008, including the Company's exit from the TARP Capital Purchase Program.