<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Materials Pursuant to (section mark)240.14a-11(c) or
(section mark)240.14a-12
WACHOVIA CORPORATION
(Name of Registrant as Specified In Its Charter)
ALICE WASHINGTON GROGAN
(Name of Person(s) Filing Proxy Statement)
PAYMENT OF FILING FEE (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange
Act Rule 0-11:1
(4) Proposed maximum aggregate value of transaction:
1Set forth the amount on which the filing fee is calculated and state how it
was determined.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
(Wachovia logo appears here)
301 NORTH MAIN STREET
P.O. BOX 3099
WINSTON-SALEM, NORTH CAROLINA 27150
191 PEACHTREE STREET, N.E.
P.O. BOX 4148
ATLANTA, GEORGIA 30303
March 18, 1994
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To the Shareholders of
Wachovia Corporation
You are cordially invited to attend the Annual Meeting of Shareholders of
Wachovia Corporation to be held at the offices of the Company at 301 North Main
Street, Winston-Salem, North Carolina, on Friday, April 22, 1994 at 10:30 A.M.,
EDT, for the following purposes:
1. To elect five Directors of Wachovia Corporation for a three-year term to
expire at the 1997 Annual Meeting of Shareholders, and one Director for a
two-year term to expire at the 1996 Annual Meeting of Shareholders.
2. To approve the Wachovia Corporation Stock Plan.
3. To approve certain amendments to the Wachovia Corporation Senior Management
Incentive Plan to preserve the Company's tax deduction for certain plan awards.
4. To ratify the appointment of the independent auditors for 1994.
5. To transact such other business as properly may come before the meeting.
Shareholders of record at the close of business on March 7, 1994 are entitled to
notice of and to vote at said meeting and any adjournment thereof.
L. M. Baker, Jr.
Chief Executive Officer
PLEASE MARK, DATE,
SIGN AND RETURN YOUR
PROXY PROMPTLY.
<PAGE>
(Wachovia logo appears here)
301 NORTH MAIN STREET
P.O. BOX 3099
WINSTON-SALEM, NORTH CAROLINA 27150
191 PEACHTREE STREET, N.E.
P.O. BOX 4148
ATLANTA, GEORGIA 30303 March 18, 1994
PROXY STATEMENT
This Proxy Statement and accompanying Form of Proxy are being mailed to
shareholders on or about March 18, 1994, in connection with the solicitation of
Proxies by the Board of Directors of Wachovia Corporation (Wachovia or the
Company) for use at the Annual Meeting of Shareholders to be held on April 22,
1994 and at any adjournment thereof. The entire cost of such solicitation will
be borne by Wachovia. In addition to solicitation by mail, arrangements will be
made with brokerage houses and other custodians, nominees and fiduciaries to
send proxy materials to their principals, and Wachovia will reimburse them for
their expenses in so doing. Wachovia has retained W.F. Doring & Co. to assist in
such solicitation. The fee to be paid to such firm is not expected to exceed
$7,500, plus reasonable out-of-pocket costs and expenses. Personal solicitation
may be conducted by Directors, officers and employees of Wachovia and its
subsidiaries.
The shares represented by the accompanying Proxy will be voted if the Form of
Proxy is properly signed and received by Wachovia prior to or at the time of the
meeting. Where a choice is specified on any Proxy as to the vote on any matter
to come before the meeting, the Proxy will be voted in accordance with such
specification. If no choice is specified, the Proxy will be voted in favor of
Proposals 1, 2, 3 and 4. Any Proxy may be revoked at any time prior to the
voting of the Proxy by notifying the Secretary of Wachovia in writing or by
signing and delivering a Proxy with a later date. A Proxy is suspended if the
person giving the Proxy attends the meeting and elects to vote in person.
Throughout this Proxy Statement, reference will be made to the following
subsidiaries or former subsidiaries of Wachovia: Wachovia Corporation of North
Carolina (WCNC), Wachovia Bank of North Carolina, N.A. (WBNC), Wachovia
Corporation of Georgia (WCGA), Wachovia Bank of Georgia, N.A. (WBGA), and South
Carolina National Corporation (SCNC). WCNC and WCGA were bank holding companies
organized under the laws of North Carolina and Georgia, respectively, and were
merged into Wachovia effective March 31, 1993. WBNC, formerly a subsidiary of
WCNC, and WBGA, formerly a subsidiary of WCGA, are national banking associations
organized under the laws of the United States. SCNC is a bank and savings and
loan holding company organized under the laws of the State of South Carolina,
the principal subsidiary of which is The South Carolina National Bank (SCNB).
SCNB is a national banking association organized under the laws of the United
States.
Shareholders of record at the close of business on March 7, 1994 will be
entitled to vote at the Annual Meeting of Shareholders. Holders of Wachovia's
common stock, $5.00 par value per share (the Common Stock), are entitled at all
meetings of shareholders of Wachovia to one vote for each share held. At the
close of business on March 7, 1994, there were 171,582,507 shares of Common
Stock outstanding. All such shares are entitled to be voted at the meeting.
Under the bylaws of Wachovia, a majority of votes entitled to be cast on a
particular matter, represented in person or by proxy, constitutes a quorum for
purposes of all matters to be considered at the Annual Meeting. The bylaws of
Wachovia further provide that once a share is represented for any purpose at a
meeting, it is deemed present for quorum purposes for the remainder of the
meeting and any adjournment thereof, unless a new record date is or must be set
for the adjournment. Shares which are withheld as to voting with respect to one
or more of the nominees for Director and abstentions will be counted in
determining the existence of a quorum, but shares held by a broker, as nominee,
that are not
2
<PAGE>
voted on any matter will not be counted for such purposes.
Under the laws of North Carolina, the persons receiving a plurality of the
votes cast by the shares entitled to vote will be elected as Directors. The
proposal to approve the Wachovia Corporation Stock Plan will be adopted if it
receives the affirmative vote of the holders of a majority of the shares
present, or represented, and entitled to vote at the Annual Meeting. The
proposal to approve certain amendments to the Wachovia Corporation Senior
Management Incentive Plan will be adopted if it receives the affirmative vote of
a majority of the voting shares. The proposal to ratify the appointment of the
independent auditors for 1994 will be approved if the votes cast in favor of
such proposal exceed the votes cast against such proposal. Abstentions, shares
which are withheld as to voting with respect to nominees for Director and shares
held of record by a broker, as nominee, that are not voted with respect to any
of the foregoing proposals will not be counted as a vote in favor of or against
such proposal and, therefore, will have no effect on the proposal to elect the
six Directors named herein, the proposal to approve certain amendments to the
Wachovia Corporation Senior Management Incentive Plan and the proposal to ratify
the appointment of independent auditors for 1994. However, abstentions will be
counted as shares present and entitled to vote on the proposal to approve the
Wachovia Corporation Stock Plan and, therefore, will be treated as a vote
against such proposal.
To Wachovia's knowledge, no shareholder beneficially owned more than 5% of the
outstanding shares of Wachovia Common Stock as of December 31, 1993. Wachovia's
three principal banking subsidiaries held, as of December 31, 1993, in various
fiduciary capacities, an aggregate of 11,203,607 shares, or 6.5375%, of the
Common Stock, as follows: WBNC (7,759,118 shares, or 4.5275%), WBGA (2,261,362
shares, or 1.3195%), and SCNB (1,183,127 shares, or 0.6904%).
BOARD OF DIRECTORS
The Board of Directors of Wachovia held four meetings during 1993. Each
incumbent Director attended at least 75% of the aggregate of the total number of
meetings of the Board of Directors and the total number of meetings held by all
committees of the Board on which such Director served during 1993.
Wachovia has an Audit Committee presently consisting of the following
nonmanagement Directors: Thomas K. Hearn, Jr., Chairman, Rufus C. Barkley, Jr.,
Vice Chairman, Donald R. Hughes, W. Duke Kimbrell and Herman J. Russell. During
1993, four meetings of the Audit Committee were held. The Audit Committee is
responsible for assuring that there exist viable internal and independent
auditing processes for Wachovia and its subsidiaries and affiliated companies.
The committee recommends to the Board of Directors the appointment of the
independent auditors. The committee maintains open lines of communication with
internal auditors, independent auditors, and regulatory examiners for the
purpose of satisfying the committee that audit scopes and programs are
comprehensive and adequate to meet needs, that management takes appropriate and
timely action on recommendations made by internal auditors, independent
auditors, and regulatory examiners, and that Wachovia personnel cooperate fully
with internal auditors, independent auditors, and regulatory examiners. In
fulfilling its responsibilities, the committee reviews and considers written and
oral reports of examinations by the regulatory authorities, management letters
or other comments of independent auditors, reports of the internal auditors, and
other audit-related information it considers appropriate. The Chairman of the
Audit Committee regularly reports to the Board of Directors on the committee's
findings, any recommendations made by the committee, and action taken by
management on such recommendations.
Wachovia has a Compensation, Nominating and Organization Committee (the CNO
Committee) presently consisting of the following nonmanagement Directors:
Sherwood H. Smith, Jr., Chairman, J. Mack Robinson, Vice Chairman, Hayne Hipp,
James W. Johnston and Charles McKenzie Taylor. The CNO Committee has the
authority for establishing and administering salary, incentive, benefit and
stock plans, including setting the compensation of senior officers, considering
and recommending nominees for the Board of Directors of the Company and
reviewing and recommending assignment and succession of top executive
management. Four
3
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BOARD OF DIRECTORS - CONTINUED
meetings of the CNO Committee were held during 1993.
The CNO Committee will consider recommendations for director nominees made by
shareholders of the Company. Such nominations shall be made in writing to the
Chief Executive Officer of Wachovia, in accordance with the requirements of the
Company's bylaws, and shall state the name, age, address, principal occupation,
background and qualifications of the person recommended, specify the class of
Directors to which such person is nominated, state the number of shares that
will be voted for the person recommended, and indicate the name and residence
address of, and number of shares held by, the shareholder making the
recommendation.
In addition, the Board of Directors of Wachovia has an Executive Committee, a
Credit Committee, a Finance Committee, a Regulatory Compliance Committee and a
Trust Committee.
The bylaws of Wachovia provide that the number of Directors shall not be less
than nine nor more than twenty-five and that the Board shall be divided into
three classes as equal in number as possible. There are presently nineteen
Directors divided into three classes. Messrs. James G. Lindley, James H. Millis,
Sr. and J. Mack Robinson are retiring as of the date of the Annual Meeting
pursuant to the provisions of the Company's bylaws, at which time the number of
Directors will be set at sixteen. Five directors are to be elected at the 1994
Annual Meeting of Shareholders to serve for a term of three years. If elected,
the nominees will serve until the 1997 Annual Meeting. In order to maintain as
nearly equal as possible the number of Directors in each class, one Director
whose current term would expire in 1995 is to be elected for a term of two
years, until the 1996 Annual Meeting. All nominees and the remaining members of
the Board of Directors are expected to continue to serve until their respective
terms expire and until their successors are elected and qualified, except as the
age and retirement provisions of Wachovia's bylaws otherwise require.
It is not anticipated that any of the nominees will be unable or unwilling to
serve, but if that should occur, it is the intention of the proxyholders named
in the Proxy either to vote for such other person or persons for the office of
Director as may be nominated by the Board of Directors or to reduce the number
of Directors to be elected at the meeting by the number of such persons unable
or unwilling to serve (subject to the requirement of Wachovia's articles of
incorporation that the number of Directors in each of the three classes be as
equal in number as possible). Proxies cannot be voted for a greater number of
nominees than the number named in the Proxy Statement.
Set forth on the following pages for each nominee for election as Director of
Wachovia, and for each Director whose term will continue after the Annual
Meeting, is a brief statement including the age, year of first election as a
Director of Wachovia, principal occupation and business experience during the
past five years, and certain other directorships, all as of December 31, 1993,
unless otherwise indicated.
NOMINEES FOR ELECTION AS DIRECTORS
TERM EXPIRING 1997 ANNUAL MEETING
RUFUS C. BARKLEY, JR., 63, is Chairman of The Cameron and Barkley Company, an
industrial, electrical and electronics supplier. He served as Chief Executive
Officer of that company until January 31, 1992. Mr. Barkley also is a Director
of The Liberty Corporation. He was a Director of SCNC from 1971 to 1991 and was
named a Director of Wachovia by its Board of Directors in connection with the
acquisition of SCNC in 1991.
<TABLE>
<S> <C> <C> <C>
Committees: Audit Regulatory Compliance
</TABLE>
4
<PAGE>
NOMINEES FOR ELECTION AS DIRECTORS - CONTINUED
TERM EXPIRING 1997 ANNUAL MEETING
JOHN L. CLENDENIN, 59, is Chairman and Chief Executive Officer of BellSouth
Corporation, a telecommunications holding company. He also serves as a Director
of Capital Holding Corporation, Coca-Cola Enterprises, Inc., Equifax Inc.,
National Service Industries, Inc., The Kroger Company and Springs Industries,
Inc. Mr. Clendenin was a Director of WCGA and WBGA from 1981 to 1988. He was
designated a Director of Wachovia upon its organization in 1985 and was elected
for his present term at the 1991 Annual Meeting of Shareholders.
<TABLE>
<S> <C> <C> <C>
Committees: Executive Credit Finance
</TABLE>
ROBERT M. HOLDER, JR., 63, is Chairman of the Board and Chief Executive Officer
of Holder Corporation, a general contractor and development firm. He also serves
as a Director of National Service Industries, Inc. Mr. Holder was a Director of
WCGA and WBGA from 1973 to 1990. He first was elected as a Director of Wachovia
at the 1988 Annual Meeting of Shareholders and was elected for his present term
at the 1991 Annual Meeting of Shareholders.
<TABLE>
<S> <C> <C> <C>
Committees: Credit Finance
</TABLE>
W. DUKE KIMBRELL, 69, is Chairman of the Board and Chief Executive Officer of
Parkdale Mills, Inc., a yarn manufacturer. He also served as President of that
company until January of 1992. Mr. Kimbrell was a Director of WCNC and WBNC from
1983 to 1990. He first was elected as a Director of Wachovia at the 1988 Annual
Meeting of Shareholders and was elected for his present term at the 1991 Annual
Meeting of Shareholders.
<TABLE>
<S> <C> <C> <C>
Committees: Audit Regulatory Compliance
</TABLE>
JOHN G. MEDLIN, JR., 60, is Chairman of the Board of Wachovia. He also served as
Chief Executive Officer of Wachovia until his retirement on December 31, 1993,
and as President until February 1, 1993. Mr. Medlin serves as a Director of
BellSouth Corporation, Media General, Inc., National Service Industries, Inc.,
RJR Nabisco Holdings Corp., RJR Nabisco, Inc. and USAir Group, Inc. He also
serves as a Director of WBNC, WBGA, SCNC and SCNB, and was a Director of WCNC
and WCGA until those companies were merged into Wachovia on March 31, 1993. Mr.
Medlin was designated a Director of Wachovia upon its organization in 1985 and
was elected for his present term at the 1991 Annual Meeting of Shareholders.
<TABLE>
<S> <C> <C> <C>
Committee: Executive
</TABLE>
TERM EXPIRING 1996 ANNUAL MEETING
LESLIE M. BAKER, JR., 51, became President and Chief Executive Officer of
Wachovia on January 1, 1994. He was President and Chief Operating Officer of
Wachovia from February 1, 1993 to December 31, 1993, and prior thereto served as
Executive Vice President. Mr. Baker was President of WBNC from January 1, 1990
until May 1, 1993. He has served as a Director of WBNC since 1990 and as a
Director of WBGA, SCNC and SCNB since 1993. He also served as President and a
Director of WCNC from 1990 until its merger into Wachovia in 1993. Prior to
1990, Mr. Baker served as Executive Vice President of WBNC and WCNC. He was
elected a Director of Wachovia, effective February 1, 1993, by its Board of
Directors to fill the vacancy resulting from an increase in the number of
Directors and to serve for the term expiring in April of 1995.
<TABLE>
<S> <C> <C> <C>
Committee: Executive
</TABLE>
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DIRECTORS CONTINUING IN OFFICE
TERM EXPIRING 1995 ANNUAL MEETING
CRANDALL C. BOWLES, 46, is Executive Vice President and a Director of Springs
Industries, Inc., a home furnishings, finished fabrics and industrial textiles
company, positions she has held since April of 1992. She previously served as
President of The Springs Company, a management services company. Mrs. Bowles
also serves as a Director of Duke Power Co. She was a Director of SCNC and SCNB
from 1988 to 1991 and was named a Director of Wachovia by its Board of Directors
in connection with the acquisition of SCNC in 1991. She was elected for her
present term at the 1992 Annual Meeting of Shareholders.
<TABLE>
<S> <C> <C> <C>
Committees: Credit Finance
</TABLE>
HAYNE HIPP, 53, is President and Chief Executive Officer of The Liberty
Corporation, an insurance and broadcasting holding company. He also serves as a
Director of The Liberty Corporation and SCANA Corporation. Mr. Hipp was a
Director of SCNC and SCNB from 1984 to 1991 and was named a Director of Wachovia
by its Board of Directors in connection with the acquisition of SCNC in 1991. He
was elected for his present term at the 1992 Annual Meeting of Shareholders.
<TABLE>
<S> <C> <C> <C>
Committees: Compensation, Nominating and Organization Trust
</TABLE>
DONALD R. HUGHES, 64, is Vice Chairman of the Board of Burlington Industries,
Inc., which manufactures textiles and home furnishings. He served as Vice
Chairman of the Board and Chief Financial Officer of the parent company,
Burlington Industries Equity Inc., until it was merged into Burlington
Industries, Inc. earlier this year. Mr. Hughes was a Director of WCNC and WBNC
from 1979 to 1990. He was designated a Director of Wachovia upon its
organization in 1985 and was elected for his present term at the 1992 Annual
Meeting of Shareholders.
<TABLE>
<S> <C> <C> <C>
Committees: Audit Executive Regulatory Compliance
</TABLE>
JAMES W. JOHNSTON, 47, is Chairman, Chief Executive Officer and a Director of
R.J. Reynolds Tobacco Co., a manufacturer of tobacco products, and a Director of
RJR Nabisco, Inc., a holding company, positions he has held since 1989. He was
named a Director of RJR Nabisco Holdings Corp. in 1992 and Chairman of R.J.
Reynolds Tobacco International, Inc. in 1993. Mr. Johnston was a Division
Executive, Northeast Division, of Citibank, N.A. from 1984 to 1989. He also
serves as a Director of Sealy Corporation. Mr. Johnston was elected a Director
of Wachovia by its Board of Directors to fill a vacancy in 1990 and was elected
for his present term at the 1992 Annual Meeting of Shareholders.
<TABLE>
<S> <C> <C> <C>
Committees: Compensation, Nominating and Organization Trust
</TABLE>
SHERWOOD H. SMITH, JR., 59, is Chairman of the Board of Carolina Power and Light
Company, a public utility. He also served as President of that company until
September of 1992. Mr. Smith serves as a Director of Springs Industries, Inc.
and a Trustee of Northwestern Mutual Life Insurance Company. Mr. Smith was a
Director of WCNC and WBNC from 1980 to 1990. He was designated a Director of
Wachovia upon its organization in 1985 and was elected for his present term at
the 1992 Annual Meeting of Shareholders.
<TABLE>
<S> <C> <C> <C>
Committees: Executive Compensation, Nominating and Organization Trust
</TABLE>
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DIRECTORS CONTINUING IN OFFICE - CONTINUED
TERM EXPIRING 1995 ANNUAL MEETING
CHARLES MCKENZIE TAYLOR, 64, is Chairman of the Board of Taylor & Mathis, Inc.,
and General Partner of Taylor & Mathis Enterprises, commercial real estate
development, management and brokerage companies. He also serves as a Director of
Atlanta Gas Light Company. Mr. Taylor was a Director of WCGA and WBGA from 1979
to 1990. He was designated a Director of Wachovia upon its organization in 1985
and was elected for his present term at the 1992 Annual Meeting of Shareholders.
<TABLE>
<S> <C> <C> <C>
Committees: Compensation, Nominating and Organization Trust
</TABLE>
TERM EXPIRING 1996 ANNUAL MEETING
LAWRENCE M. GRESSETTE, JR., 61, is the Chairman, Chief Executive Officer and a
Director of SCANA Corporation, positions he has held since 1990, in addition to
the position of President of SCANA Corporation which he has held since 1985.
SCANA Corporation is a holding company whose principal subsidiary is South
Carolina Electric & Gas Company, a public utility. He was Vice Chairman of South
Carolina Electric & Gas Company from 1987 to 1990. Mr. Gressette was a Director
of SCNC and SCNB from 1979 to 1991. He was named a Director of Wachovia by its
Board of Directors in connection with the acquisition of SCNC in 1991 and was
elected for his present term at the 1993 Annual Meeting of Shareholders.
<TABLE>
<S> <C> <C> <C>
Committees: Credit Finance
</TABLE>
THOMAS K. HEARN, JR., 56, is President of Wake Forest University. He also serves
as a Director of Health Equity Properties Incorporated. Dr. Hearn was a Director
of WCNC and WBNC from 1988 to 1990. He first was elected as a Director of
Wachovia at the 1990 Annual Meeting of Shareholders and was elected for his
present term at the 1993 Annual Meeting of Shareholders.
<TABLE>
<S> <C> <C> <C>
Committees: Audit Regulatory Compliance
</TABLE>
F. KENNETH IVERSON, 68, is Chairman and Chief Executive Officer of Nucor
Corporation, a manufacturer of steel and steel products. He also is a Director
of Wal-Mart Stores, Inc. Mr. Iverson was a Director of WCNC and WBNC from 1987
to 1990. He first was elected as a Director of Wachovia at the 1990 Annual
Meeting of Shareholders and was elected for his present term at the 1993 Annual
Meeting of Shareholders.
<TABLE>
<S> <C> <C> <C>
Committees: Credit Finance
</TABLE>
HERMAN J. RUSSELL, 63, is Chairman and Chief Executive Officer of H. J. Russell
& Company, a management services company. He also serves as a Director of
Citizens Bancshares Corporation and Georgia Power Company. Mr. Russell served as
a Director of WCGA and WBGA from 1983 to 1992. He was elected a Director of
Wachovia by its Board of Directors to fill a vacancy in 1992 and was elected for
his present term at the 1993 Annual Meeting of Shareholders.
<TABLE>
<S> <C> <C> <C>
Committees: Audit Regulatory Compliance
</TABLE>
7
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STOCK OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth beneficial ownership of Common Stock by each
Director, each of the five most highly compensated executive officers of the
Company as set forth in the Summary Compensation Table (the named executives)
and all Directors and executive officers as a group, as of December 31, 1993.
<TABLE>
<CAPTION>
PERCENT
NAME NUMBER OF SHARES OF CLASS
<S> <C> <C>
Leslie M. Baker, Jr. 79,809(2)(3)(4)(5) 0.0466
Rufus C. Barkley, Jr. 113,100(1)(4)(5) 0.0660
Crandall C. Bowles 16,321(1)(5) 0.0095
John L. Clendenin 6,012 0.0035
Anthony L. Furr 54,832(3)(4)(5) 0.0320
Lawrence M. Gressette, Jr. 5,544(4)(5) 0.0032
Thomas K. Hearn, Jr. 4,349 0.0025
W. Hayne Hipp 2,600(5) 0.0015
Robert M. Holder, Jr. 18,311 0.0107
Donald R. Hughes 5,783 0.0034
F. Kenneth Iverson 15,600 0.0091
James W. Johnston 4,800 0.0028
W. Duke Kimbrell 23,670 0.0138
James G. Lindley 61,981(2) 0.0362
Robert S. McCoy, Jr. 30,206(2)(3)(5) 0.0176
John G. Medlin, Jr. 265,390(2)(4) 0.1549
James H. Millis, Sr. 73,810(1)(4) 0.0431
G. Joseph Prendergast 49,542(3)(5) 0.0289
J. Mack Robinson 5,585,748 3.2594
Herman J. Russell 14,758(5) 0.0086
Sherwood H. Smith, Jr. 9,173 0.0054
Charles McKenzie Taylor 56,199(4) 0.0328
All Directors and Executive Officers
as a Group (30 persons) 6,947,012(2)(3)(4)(5) 4.0537
</TABLE>
(1) Beneficial owners have sole voting and investment power with respect to
their shares except for 106,816 shares with respect to which Mr. Barkley
shares investment and voting power, 13,500 shares with respect to which Mrs.
Bowles shares investment and voting power and 9,386 shares with respect to
which Mr. Millis shares voting power.
(2) Included are 961 shares held in Mr. Baker's account, 26,684 shares held in
Mr. Lindley's account and 7,138 shares held in Mr. McCoy's account by the
Trustee under Wachovia's Retirement Savings and Profit-Sharing Plan, 10,220
shares held in Mr. Medlin's account by the Trustee under WCNC's Deferred
Profit-Sharing Incentive Plan, contributions to which were terminated in
1975, and 279 shares held in Mr. Lindley's account and 1,118 shares held in
Mr. McCoy's account under SCNC's Amended and Restated Savings, Thrift and
Deferred Cash Plan (contributions to this plan were terminated in 1992 and
participant contributions, matching contributions, and the earnings thereon
were transferred to Wachovia's Retirement Savings and Profit Sharing plans
as of December 31, 1992). As of December 31, 1993, the Trustees under such
plans held 57,103 shares for the accounts of other executive officers of
Wachovia participating in such plans, and those shares are included in the
total set forth above.
(3) Included are shares subject to stock options granted to Messrs. Baker
(23,532 shares), Furr (33,800 shares), McCoy (4,250 shares) and Prendergast
(17,840 shares) under Wachovia's stock option plans and exercisable at
December 31, 1993 or within 60 days thereafter. Other executive officers of
Wachovia had the right to acquire 143,852 shares under such plans at
December 31, 1993 or within 60 days thereafter, and those shares are
included in the total set forth above.
(4) Included in the shares reported are the following shares of Common Stock: 96
shares owned by members of Mr. Baker's family; 2,024 shares owned by a
member of Mr. Barkley's family; 480 shares owned by a
8
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STOCK OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS - CONTINUED
member of Mr. Furr's family; 108 shares owned by a member of Mr. Gressette's
family; 480 shares owned by a member of Mr. Medlin's family; 10,160 shares
owned by a member of Mr. Millis' family; 2,098 shares owned by a member of
Mr. Taylor's family; and 23,161 shares owned by family members of four other
executive officers of Wachovia. Messrs. Baker, Barkley, Furr, Gressette,
Medlin, Millis and Taylor and such executive officers disclaim beneficial
ownership of such shares.
(5) Not included in the shares reported are 3,600 shares of Common Stock
reserved for each of Mrs. Bowles and Messrs. Barkley, Gressette, Hipp and
Russell under the Senior Management and Director Stock Plan, the ownership
of which will vest three years after the date of grant or upon death,
disability or retirement from the Board of Directors; or 29,000 shares
reserved for Mr. Baker, 22,000 shares reserved for Mr. Furr, 8,000 shares
reserved for Mr. McCoy, 18,000 shares reserved for Mr. Prendergast, and
55,900 shares reserved for other executive officers of Wachovia under such
plan, the ownership of which will vest five years after the date of grant or
upon such officer's retirement from the Company (or will vest in part upon
such officer's termination of employment due to death or disability).
PROPOSAL TO ADOPT WACHOVIA CORPORATION STOCK PLAN
Background
The Board of Directors approved the adoption of the Wachovia Corporation Stock
Plan (the plan) on January 28, 1994, subject to the adoption of the final form
of the plan and related agreements by the CNO Committee (the Committee) and the
approval of the plan by the shareholders at the 1994 Annual Meeting of
Shareholders. The Committee approved the plan effective March 10, 1994. Awards
may be granted under the plan on and after the effective date (April 22, 1994,
provided the shareholders approve the plan) but no later than April 21, 2004.
The discussion which follows is qualified in its entirety by reference to the
plan, a copy of which is attached to the Proxy Statement as Exhibit A.
A maximum of 6,000,000 shares of Common Stock may be issued pursuant to awards
granted under the plan, and the Board of Directors has reserved such number of
shares for this purpose. The number of shares reserved for issuance under the
plan shall be adjusted in the event of an adjustment in the capital stock
structure of the Company or a related corporation affecting the Common Stock
(due to a merger, stock split, stock dividend or similar event), and the
Committee is authorized to adjust awards and the terms of the plan in the event
of a change in the capital stock in order to prevent dilution or enlargement of
awards. On March 7, 1994, the closing sales price of the Common Stock as
reported on the New York Stock Exchange was $31.00 per share.
If the plan is approved by the shareholders, as of the plan's effective date,
no further options or awards will be granted under the Company's Senior
Management and Director Stock Plan, although options and awards previously
granted will continue in effect until they are exercised, vest, expire or are
forfeited. See Board Compensation Committee Report on Executive
Compensation -- Senior Management and Director Stock Plan, below.
Purpose and Eligibility
The purpose of the plan is to encourage and enable selected key employees of
the Company and related corporations and nonemployee Directors of the Company to
acquire or increase their holdings of Common Stock and other proprietary
interests in the Company in order to promote a closer identification of their
interests with those of the Company and its shareholders, thereby further
stimulating their efforts to enhance the efficiency, soundness, profitability,
growth and shareholder value of the Company.
The purpose will be carried out by the granting of benefits (collectively
referred to herein as awards) to selected key employees and nonemployee
Directors. Key employees selected to participate in the plan may be eligible for
the grant of incentive stock options and nonqualified stock options
(collectively, options); stock appreciation rights; and restricted stock awards
and restricted units (collectively, restricted awards). Nonemployee Directors
shall be eligible for initial director awards and annual director awards of
restricted stock (collectively, director awards). The material terms of each
award are discussed below. See Awards.
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PROPOSAL TO ADOPT WACHOVIA CORPORATION STOCK PLAN - CONTINUED
A key employee is defined in the plan to mean an employee of the Company or a
related corporation who makes significant and important contributions to the
Company or a related corporation, as determined by the Committee which is
authorized to administer the plan. Executive officers of the Company, including
employee Directors, will be eligible for benefits under the plan if so selected
by the Committee. Approximately 1,500 persons qualify as key employees at this
time. A nonemployee Director is defined in the plan as a Director of the Company
who is not now an employee of the Company or a related corporation and who has
not previously served as a senior officer of the Company or a related
corporation. As of the effective date of the plan, 14 Directors are nonemployee
Directors eligible to participate in the plan.
Administration; Amendment and Termination
The plan shall be administered by the Committee. Members of the Committee are
intended to qualify as disinterested persons, as that term is defined in Rule
16b-3 under the Securities Exchange Act of 1934, as amended (the Exchange Act).
Under the terms of the plan, the Committee has full and final authority to take
any action with respect to the plan, including, without limitation, the
authority to (i) determine all matters relating to awards, including selection
of individuals to be granted awards, the types of awards, the number of shares
of Common Stock, if any, subject to an award, and the terms, conditions,
restrictions and limitations of an award; (ii) prescribe the form or forms of
agreements related to awards granted under the plan; (iii) establish, amend and
rescind rules and regulations for the administration of the plan; and (iv)
construe and interpret the plan and agreements related to awards, establish and
interpret rules and regulations for administering the plan and make all other
determinations deemed necessary or advisable for administering the plan. The
plan is intended to comply with Rule 16b-3 under the Exchange Act and, as
discussed below, Section 162(m) of the Internal Revenue Code of 1986, as amended
(the Code), and the regulations thereunder.
The plan may be amended or terminated at any time by the Board of Directors,
subject to the following: (i) no amendment or termination may adversely affect
the rights of an award recipient without the recipient's consent; and (ii)
shareholder approval is required of any amendment that would increase the number
of shares issuable under the plan (except to the extent of adjustments, as
discussed above), materially change the requirements for eligibility to receive
an award or be required by Rule 16b-3 under the Exchange Act. Notwithstanding
the foregoing, the provisions of the plan relating to the number of shares of
Common Stock subject to a director award and the timing of such awards may not
be amended more than once every six months, other than to comport with changes
in the Code, the Employee Retirement Income Security Act (ERISA), or the rules
thereunder.
Awards
The plan authorizes the granting of incentive stock options, nonqualified
stock options, stock appreciation rights, restricted stock awards and restricted
units to selected key employees, and the granting of initial director awards and
annual director awards to nonemployee Directors. A summary of the material terms
of each type of award is provided below.
Options
The plan authorizes the grant of both incentive stock options and nonqualified
stock options, both of which are exercisable for shares of Common Stock. The
option price at which an option may be exercised shall be not less than the fair
market value per share of Common Stock on the date of the option grant, as
determined in good faith by the Committee. The fair market value shall mean the
closing price per share of the Common Stock on the New York Stock Exchange as
reported in The Wall Street Journal on the last trading day prior to the date
the option was granted; or if there was no such sale on such day, the fair
market value as determined in accordance with Section 20.2031-2 of the Federal
Estate Tax Regulations, or in any other manner consistent with the Code.
The period during which an option may be exercised shall be determined by the
Committee at the time of option grant and may not extend more than 10 years from
the date of grant. Any option or portion thereof that is not exercised before
expiration of the applicable option period shall terminate. Pursuant to the
terms of the plan, an employee must be continuously employed by the Company or a
related corporation since the time of grant in order to exercise an option. If
an employee retires in accordance with the
10
<PAGE>
PROPOSAL TO ADOPT WACHOVIA CORPORATION STOCK PLAN - CONTINUED
retirement policies of the Company or dies, options are exercisable to the
extent of exercisability on the date of retirement or death, unless the
Committee, in its discretion, accelerates the date of exercisability of options
not otherwise exercisable. If the employment of an optionee is terminated for
any other reason, options are exercisable only to the extent exercisable at the
date of termination, unless the Committee, in its discretion, accelerates the
date that an option not otherwise exercisable may be exercised, or unless the
terminations due to a change of control. See Change of Control, below.
Stock Appreciation Rights
Under the terms of the plan, stock appreciation rights may be granted to an
optionee of an option (a related option) with respect to all or a portion of the
shares of Common Stock subject to the related option (a tandem SAR) or may be
granted separately (a freestanding SAR). (Tandem SARs and freestanding SARs are
collectively referred to herein as SARs.) The base price of a freestanding SAR
may not be less than the fair market value of the Common Stock on the date of
grant of the SAR. The price of a tandem SAR shall be determined by the option
price of the related option, which shall be not less than the fair market value
of the Common Stock on the date of grant. The consideration to be received by
the holder of a SAR (a SAR holder) may be paid in cash, shares of Common Stock
(valued at fair market value on the date of the SAR exercise), or a combination
of cash and shares of Common Stock, as elected by the SAR holder, subject to the
discretion of the Committee and the terms of the plan. The Committee may
establish a maximum value payable for a SAR. The consideration paid by the
Company upon exercise of a SAR may be paid currently or on a deferred basis. No
fractional shares are issuable upon the exercise of a SAR.
SARs are exercisable according to the terms stated in the agreement to which
the SAR relates. Upon the exercise of a tandem SAR, the related option is deemed
to be surrendered to the extent of the number of shares of Common Stock for
which the tandem SAR is exercised. No SAR may be exercised more than 10 years
after it was granted, or such shorter period as may apply to related options in
the case of tandem SARs. SAR holders are subject to the same restrictions on
exercise regarding con-
tinuous employment, retirement, death or other termination as optionees. See
Awards -- Options, above, and Change of Control, below.
The Committee has sole and absolute discretion to approve or disapprove an
election by a SAR holder to receive cash in full or partial settlement of a SAR.
In addition, if the SAR holder is subject to Section 16 of the Exchange Act,
then, to the extent necessary to comply with Rule 16b-3, (i) no election may be
made as of an exercise date which occurs within six months of the exercise of
the SAR; or (ii) (A) the election by the holder to receive cash in full or
partial settlement of the SAR, as well as the exercise by the SAR holder for
cash (unless the date of exercise is automatic or fixed in advance and is
outside the control of the SAR Holder), must be made during the period beginning
on the third business day following the date of release for publication of the
Company's quarterly or annual summary statements of revenues and earnings and
ending on the twelfth business day following such date, and (B) the SAR must be
held for six months from the date of acquisition to the date of cash settlement.
Restricted Awards
Subject to the limitations of the plan, the Committee may in its sole and
absolute discretion grant restricted awards to such eligible key employees in
such numbers, upon such terms and at such times as the Committee shall
determine. A restricted award may consist of a restricted stock award or a
restricted unit, or both. Restricted stock awards and restricted units shall be
payable in cash or whole shares of Common Stock (including restricted stock), or
partly in cash and partly in whole shares of Common Stock, in accordance with
the terms of the plan and the sole and absolute discretion of the Committee.
Restricted stock awards and restricted units payable in shares of Common Stock
shall be granted only from shares reserved and then available for the granting
of awards under the plan.
The Committee may condition the grant or vesting, or both, of a restricted
stock award or restricted unit, or both, upon the continued service of the
recipient for a certain period of time, attainment of such performance
objectives as the Committee may determine, or upon a combination of continued
service and performance objectives. The Committee shall determine the nature,
length and starting date
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<PAGE>
PROPOSAL TO ADOPT WACHOVIA CORPORATION STOCK PLAN - CONTINUED
of the period during which the restricted award may be earned (the restriction
period) for each restricted award, which shall be as stated in the agreement to
which the award relates. In the case of restricted awards based upon performance
criteria, or a combination of performance criteria and continued service, the
Committee shall determine the performance objectives to be used in valuing
restricted awards and determining the extent to which such awards have been
earned. Performance objectives may vary from participant to participant and
between groups of participants and shall be based upon such Company, business
unit and/or individual performance factors and criteria as the Committee in its
sole discretion may deem appropriate, including, but not limited to, earnings
per share, return on equity, return on assets or total return to shareholders.
Restriction periods may overlap and participants may participate simultaneously
with respect to restricted awards that are subject to different restriction
periods, performance factors and performance criteria.
The measure of whether and to what degree conditions to a restricted award
have been attained, and the resulting awards to be paid, will be determined by
the Committee. The earned portion of a restricted award may be paid currently or
on a deferred basis with such interest as may be determined by the Committee, in
its sole and absolute discretion. Payment may be made either in a lump sum
payment or in annual installments commencing as soon as practicable after the
end of the relevant restriction period, as determined by the Committee, in its
sole and absolute discretion.
Restricted awards shall be deemed earned upon the completion of the restricted
period, the retirement, death or disability of the recipient, or the
acceleration by the Committee in its sole discretion of the date that a
restricted award is deemed earned; provided, however, that restricted awards
subject to performance criteria, or a combination of performance criteria and
continued service, shall be deemed earned only to the extent determined by the
Committee. Restricted awards which have not been earned prior to a recipient's
termination shall be forfeited, except in the case of a change of control. See
Change of Control, below.
Director Awards
Each nonemployee Director who is newly elected
or appointed to the Board of Directors on or after the effective date of the
plan shall receive a director award for 1,000 shares of restricted stock (the
initial director award). An initial director award shall be restricted for a
period of three years and shall be deemed earned and shall vest on the third
anniversary of the date of grant provided the Director is still in service.
Commencing with the 1994 annual meeting of the shareholders and for each
annual meeting thereafter, each nonemployee Director who has been a Director for
at least one year shall receive an annual director award of 250 shares of
restricted stock. An annual director award shall be deemed earned and shall vest
one year after the date of grant provided the Director is still in service. In
addition, a director award not otherwise forfeited will vest upon the death,
disability or retirement of the Director in accordance with the policies of the
Company or upon a change of control. See Change of Control, below. Director
awards not otherwise earned shall be forfeited upon the termination of the
Director for service on the Board of Directors.
Nontransferability; Dividend and Voting Rights;
Withholding
The terms of the plan provide that options, SARs and restricted units are not
transferable other than by will, the laws of intestate succession or pursuant to
a qualified domestic relations order (as defined by the Code, or Title I of
ERISA or the rules thereunder), except to the extent that such transfer may be
permitted by the Code, Rule 16b-3 or any successor thereto. A recipient of a
restricted award or director award may not sell, transfer, assign, pledge or
otherwise encumber shares subject to the award until all conditions to vesting
have been met. Award recipients subject to Section 16 of the Exchange Act may
not, without the consent of the Committee, dispose of shares of Common Stock
acquired pursuant to an award until six months have elapsed since the granting
of the award. Recipients of awards payable in shares of Common Stock shall have
no dividend rights or voting rights until the awards have vested.
The plan provides that the Company will withhold all required local, state and
federal taxes from award amounts payable in cash. With respect to awards payable
in shares of Common Stock, the plan requires recipients to pay in cash the
amount of withholding taxes unless the recipient elects to satisfy
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<PAGE>
PROPOSAL TO ADOPT WACHOVIA CORPORATION STOCK PLAN - CONTINUED
such obligation by having the Company withhold shares and the election satisfies
certain plan provisions designed to comply with Rule 16b-3.
Change of Control
The plan also provides that, upon a change of control, (i) all options and
SARs outstanding as of the date of the change of control shall become fully
exercisable, whether or not then otherwise exercisable; (ii) any restrictions
applicable to any restricted awards shall be deemed to have expired, and such
restricted awards shall become fully vested and payable to the fullest extent of
the original award; and (iii) any restrictions on Director awards shall be
deemed to have expired and such awards shall be deemed earned and payable
immediately. Notwithstanding the foregoing, the plan authorizes the Committee,
in the event of a merger, share exchange, reorganization or other business
combination affecting the Company or a related corporation, to determine that
any or all awards shall not vest or become exercisable on an accelerated basis,
if the Board of Directors or the surviving or acquiring corporation takes such
action (including but not limited to the grant of substitute awards) which, in
the opinion of the Committee, is equitable or appropriate to protect the rights
and interests of participants under the plan.
For the purposes of this section, a change of control is considered to have
occurred on the earliest of the following dates: (i) the date any entity or
person shall become the beneficial owner, or shall have obtained voting control
over, 30 percent or more of the outstanding Common Stock; (ii) the date the
shareholders of the Company approve a definitive agreement (A) to merge or
consolidate the Company with or into another corporation, in which the Company
is not the surviving corporation or pursuant to which shares of Common Stock are
converted into cash, securities or property of another corporation (other than a
merger in which the proportionate ownership of the shareholders of the Company
remains unchanged) or (B) to sell or dispose of substantially all of the assets
of the Company; or (iii) the date there shall have been a change in a majority
of the Board of Directors of the Company within a twelve month period (unless
the nomination for election by the Company's shareholders of each new director
was approved by a two-thirds vote of the directors then still in office who were
in office at the beginning of the twelve month period).
Certain Federal Income Tax Consequences
The following summary generally describes the principal federal (and not state
and local) income tax consequences of awards granted under the plan. The summary
is general in nature and is not intended to cover all tax consequences that may
apply to a particular employee or to the Company. The provisions of the Code and
regulations thereunder relating to these matters are complicated and their
impact in any one case may depend upon the particular circumstances.
Incentive Stock Options
Incentive stock options granted under the plan are intended to qualify as
incentive stock options under Section 422 of the Code. Pursuant to Section 422,
the grant and exercise of an incentive stock option generally will not result in
taxable income to the optionee (with the possible exception of alternative
minimum tax liability) if the optionee does not dispose of shares received upon
exercise of such option less than one year after the date of exercise and two
years after the date of grant, and if the optionee has continuously been an
employee of the Company from the date of grant to three months before the date
of exercise (or twelve months in the event of retirement, death or disability).
The Company will not be entitled to a deduction for income tax purposes in
connection with the exercise of an incentive stock option. Upon the disposition
of shares acquired upon exercise of an incentive stock option, the optionee will
be taxed on the amount by which the amount realized upon such disposition
exceeds the option price, and such amount will be treated as long-term capital
gain or loss. If the holding period requirements for incentive stock option
treatment described above are not met, the option will be treated as a
nonqualified stock option.
Pursuant to the Code and the terms of the plan, in no event can there first
become exercisable by an optionee in any one calendar year incentive stock
options granted by the Company with respect to shares having an aggregate fair
market value (determined at the time an option is granted) greater than
$100,000. To the extent an incentive stock option granted under the plan exceeds
the foregoing limitation, it will be treated for all purposes under the plan
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<PAGE>
PROPOSAL TO ADOPT WACHOVIA CORPORATION STOCK PLAN - CONTINUED
as a nonqualified stock option. In addition, no incentive stock option may be
granted to an individual who owns, immediately before the time that the option
is granted, stock possessing more than ten percent (10%) of the total combined
voting power of all classes of stock of the Company. For this purpose, an
individual will be deemed to own stock which is attributable to him under
Section 424(d) of the Code.
Nonqualified Stock Options
If an optionee receives a nonqualified stock option, the difference between
the market value of the stock on the date of exercise and the option price will
constitute taxable ordinary income to the optionee on the date of exercise. The
Company will be entitled to a deduction in the same year in an amount equal to
the income taxable to the optionee. The optionee's basis in shares of Common
Stock acquired upon exercise of an option will equal the option price plus the
amount of income taxable at the time of exercise. Any subsequent disposition of
the stock by the optionee will be taxed as a capital gain or loss to the
optionee, and will be long-term capital gain or loss if the optionee has held
the stock for more than one year at the time of sale.
Pursuant to the terms of the plan, the Committee will require any recipient of
shares of Common Stock pursuant to exercise of a nonqualified stock option to
pay the Company in cash the amount of any tax or other amount required by any
governmental authority to be withheld and paid over by the Company to such
authority for the account of such recipient.
Stock Appreciation Rights
For federal income tax purposes, the grant of a SAR will not result in taxable
income to the holder or a tax deduction to the Company. At the time of exercise
of a SAR, the SAR holder will forfeit the right to benefit from any future
appreciation of the stock subject to the SAR. Accordingly, taxable income to the
SAR holder is deferred until the SAR is exercised. Upon exercise, the amount of
cash and fair market value of shares received by the SAR holder, less cash or
other consideration paid (if any), is taxed to the SAR holder as ordinary income
and the Company will receive a corresponding income tax deduction to the extent
the amount represents reasonable compensation and an ordinary and necessary
business expense, subject to any required income tax withholding.
Restricted Stock Subject to Restricted Awards and Director Awards.
Similar to SARs, awards of restricted stock will not result in taxable income
to the employee or a tax deduction to the Company for federal income tax
purposes at the time of grant. Upon expiration of the restricted period
applicable to the restricted stock awarded, the fair market value of such shares
at such date and any cash amount awarded, less cash or other consideration paid
(if any), will be included in the recipient's ordinary income as compensation,
except that, in the case of restricted stock issued at the beginning of the
restriction period, the recipient may elect to include in his ordinary income as
compensation, at the time the restricted stock is awarded, the fair market value
of such shares at such time less any amount paid therefor. The Company will be
entitled to a corresponding income tax deduction to the extent that the amount
represents reasonable compensation and an ordinary and necessary business
expense, subject to any required income tax withholding.
Restricted Units and Restricted Awards Other Than Restricted Stock
The federal income tax consequences of the award of restricted units and other
restricted awards other than restricted stock will depend on the conditions of
the award. Generally, the transfer of cash or property will result in ordinary
income to the recipient and a tax deduction to the Company. If there is a
substantial risk that the property transferred will be forfeited (for example,
because receipt of the property is conditioned upon the performance of
substantial future services), the taxable event is deferred until the risk of
forfeiture lapses. However, the recipient generally may elect to accelerate the
taxable event to the date of transfer, even if the property is subject to a
substantial risk of forfeiture. If this election is made, subsequent
appreciation is not taxed until the property is sold or exchanged (and the lapse
of the forfeiture restriction does not create a taxable event). Generally, any
deduction by the Company occurs only when ordinary income in respect of an award
is recognized by the employee (and then the deduction is subject to reasonable
compensation and withholding requirements). Because restricted stock awards will
be subject to whatever conditions may be determined by the Committee, the
federal income tax consequences to the recipient and to the
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PROPOSAL TO ADOPT WACHOVIA CORPORATION STOCK PLAN - CONTINUED
Company will depend on the specific conditions of the award.
Performance-Based Compensation -- Section 162(m) Requirements
The plan is intended to preserve the Company's tax deduction for certain
awards paid under the plan by complying with the terms of Section 162(m) of the
Code and proposed regulations relating to Section 162(m). Section 162(m) of the
Code was amended as part of the Omnibus Budget Reconciliation Act of 1993 to
deny an employer a deduction for compensation paid to covered employees of a
publicly held corporation that exceeds $1 million unless the compensation is
exempt from the $1 million limitation because it is performance-based
compensation or paid on a commission basis. Covered employees, as defined in the
proposed regulations relating to Section 162(m) of the Code, include each person
who, on the last day of the taxable year, serves as the chief executive officer
of the corporation (or acts in such capacity) or is among the four highest
compensated officers (other than the chief executive officer), as determined
under the executive compensation rules of the Exchange Act. The Company's
employees who would have been covered for 1993 are Messrs. Medlin, Baker,
Prendergast, Furr and McCoy.
In order to qualify as performance-based compensation, the compensation paid
to covered employees must be paid under pre-established objective performance
goals determined by a committee comprised of outside directors (as that term is
defined in Section 162(m) of the Code and the regulations thereunder) in writing
before an employee performs the relevant services and while the outcome under
the goal is substantially uncertain. The committee is also required to certify
prior to payment of the compensation that the performance goals and other
material terms were satisfied.
In addition to other requirements for the performance-based exception,
shareholders must be advised of, and must approve, the material terms (or change
in material terms) of the performance goal under which compensation is to be
paid. Material terms include the individuals eligible to receive compensation, a
description of the business criteria on which the performance goal is based, and
either the maximum amount of the compensation to be paid or the formula used to
calculate the amount of compensation if the performance goal is met.
As proposed, the plan provides that the Company intends to qualify for the
performance-based compensation exception contained in Section 162(m) of the Code
and contains certain provisions to comply with Section 162(m). In particular,
the plan authorizes the Committee, comprised of two or more outside directors,
to establish performance goals for covered employees and certify satisfaction of
such goals and other material terms prior to payment of compensation under the
plan. In addition, a separate subcommittee or committee is authorized to take
action under the plan if necessary to qualify as outside directors (as that term
is defined in Section 162(m) of the Code and the regulations thereunder).
Pursuant to the plan, restricted awards that are performance-based shall be
based upon such Company, business unit and/or individual performance factors and
criteria as the Committee in its sole discretion determines, including but not
limited to earnings per share, return on equity, return on assets or total
return to shareholders. Options and SARs which may be granted under the plan
meet the Section 162(m) performance-based criteria since, by their terms,
compensation is based solely on an increase in the value of stock after the date
of grant.
The plan also contains certain limitations on the maximum amount of awards
that may be granted to any employee. In particular, the plan provides that
(subject to capital adjustments), in no event may an employee be granted (i)
options for more than 75,000 shares of common stock during any 12-month period;
(ii) SAR's for more than 75,000 shares during any 12-month period; or (iii)
restricted awards having an aggregate dollar value greater than $1,000,000
during any 12-month period. The plan also provides that the Committee shall not
have discretion to increase the amount of performance-based compensation payable
to a plan participant over the amount determined in accordance with plan terms.
The Committee shall have the discretion to reduce or eliminate the amount of an
award that would be otherwise payable to a participant in accordance with plan
terms.
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PROPOSAL TO ADOPT WACHOVIA CORPORATION STOCK PLAN - CONTINUED
The provisions in the plan relating to Section 162(m) are based on the
proposed regulations relating to Section 162(m) of the Code. The plan may be
further amended, without shareholder approval, to comply with the final
regulations relating to Section 162(m). In addition, the deductibility by the
Company of compensation paid in the future to executives may be reduced if those
persons who are treated as covered employees under Section 162(m) differ from
the executives anticipated at this time to be covered employees.
As an illustration of benefits to be provided by the plan, the following table
sets forth the awards, to the extent determinable, expected to be received by
each of the following under the plan in 1994, provided the plan is approved by
the shareholders:
NEW PLAN BENEFITS (1)
WACHOVIA CORPORATION STOCK PLAN
<TABLE>
<CAPTION>
Number of Number of
Name and Position Restricted Awards Director Awards
<S> <C> <C>
John G. Medlin, Jr. (2)
Chairman of the Board and
Chief Executive Officer -0- -0-
Leslie M. Baker, Jr.
President, Chief Operating Officer and a Director 25,000 -0-
G. Joseph Prendergast
Executive Vice President 5,000 N/A
Anthony L. Furr
Executive Vice President 3,000 N/A
Robert S. McCoy, Jr.
Executive Vice President
and Chief Financial Officer 4,000 N/A
Executive Group 59,500 N/A
Non-Executive Director Group N/A 250 per director
Non-Executive Officer Employee Group 1,000 N/A
</TABLE>
(1) Options and SARs, if any, that may be granted pursuant to the plan in 1994
are not determinable at this time.
(2) Mr. Medlin retired as an employee of the Company on December 31, 1993, and
therefore is not eligible to participate in the plan.
The Board of Directors believes that the adoption of the Wachovia Corporation
Stock Plan is in the best interests of the Company and recommends that the
shareholders vote FOR the proposal to adopt the plan.
PROPOSAL TO APPROVE CERTAIN AMENDMENTS TO THE COMPANY'S
SENIOR MANAGEMENT INCENTIVE PLAN
Background; Purposes; Administration; and Eligibility
The Board of Directors initially adopted the Company's Senior Management
Incentive Plan (the plan) effective January 1, 1987. On January 28, 1994, the
Board of Directors authorized the CNO Committee (the Committee) to amend the
Senior Management Incentive plan to comply with the performance-based
compensation exception set forth in Section 162(m) of the Code and the proposed
regulations thereunder so that, to the extent possible, compensation payable
under the plan would be fully deductible by the Company. Effective March 10,
1994, the Committee adopted amendments to the plan, subject to shareholder
approval of those provisions of the plan requiring shareholder approval under
Section 162(m) of the Code. The plan as amended incorporates the requirements of
Section
16
<PAGE>
PROPOSAL TO APPROVE CERTAIN AMENDMENTS TO THE COMPANY'S
SENIOR MANAGEMENT INCENTIVE PLAN - CONTINUED
162(m) and contains certain additional amendments designed to facilitate
administration of the plan. The discussion which follows is qualified in its
entirety by reference to the plan, a copy of which is attached hereto as Exhibit
B.
The purposes of the plan are to (i) motivate and reward a greater degree of
excellence and teamwork among the senior officers of the Company and related
corporations by providing incentive compensation award opportunities; (ii)
provide attractive and competitive total cash compensation opportunities for
exceptional corporate, organizational unit and personal performance; (iii)
reinforce the communication and achievement of the mission, objectives and goals
of the Company; and (iv) enhance the Company's ability to attract, retain and
motivate the highest caliber senior officers. The purposes of the plan are
carried out by payment to eligible participants of annual incentive cash awards,
subject to the terms and conditions of the plan and the discretion of the
Committee.
The plan is administered by the Committee, which has full authority and
responsibility for establishing and administering the plan. The plan may be
amended by the Board of Directors or the Committee, upon delegation of authority
by the Board.
Participants in the plan must be (i) employees of the Company or a related
corporation; (ii) senior officers of the Company or a related corporation; and
(iii) selected for participation by the Chief Executive Officer of the Company
prior to the beginning of each plan year. Senior officers include those officers
who are deemed to have sufficient responsibility, ability and potential to make
significant contributions to the success of the Company or a related
corporation. Approximately 925 employees of the Company and related corporations
have been selected as participants for 1994.
Performance Criteria and Evaluation; Payment of Awards
The performance goals upon which awards shall be made are based upon
performance criteria applicable to the Company, the business unit to which a
participant is assigned and the participant individually. The corporate
performance criteria upon which awards are based are the following earnings
factors, weighted as indicated: (i) net income per share fully diluted (50%);
(ii) return on assets (net income) (25%); and (iii) return on equity (net
income) (25%). Results from these three earnings measures are combined to
produce a corporate performance evaluation factor (the Corporate Factor), which,
as discussed below, is used to calculate individual award amounts.
Individual executive and applicable business unit performance is determined by
evaluating each executive's accomplishments compared to established annual goals
and objectives. An assessment is made of the individual's contribution to the
achievement of the annual profit and business plan as well as success in meeting
the Company's high standards in such areas as leadership, teamwork, personal
behavior and the advancement and achievement of the Company's basic mission and
objectives. At the end of each plan year, a participant receives a composite
individual performance evaluation percentage factor (the Individual Factor).
The plan also provides for the payment of awards upon termination of
employment as a result of death, disability or approved retirement and upon a
change of control of the Company (regardless of whether the participant
continues service in the same position following the change of control, has a
change in position or responsibilities or is terminated from employment).
The Corporate Factor is multiplied by the Individual Factor and the
participant's base salary paid during the plan year to determine the amount of a
participant's award. The maximum amount an individual may be awarded ranges from
10% to 65% of the participant's base salary for the plan year depending upon the
participant's job classification, responsibility and performance.
The plan also provides for the payment of awards upon termination of
employment as a result of death, disability or approved retirement and upon a
change of control of the Company (regardless of whether the participant
continues service in the same position following the change of control, has a
change in position or responsibilities or is terminated from employment). See
Proposal to Adopt Wachovia Corporation Stock Plan -- Change of Control, above.
17
<PAGE>
PROPOSAL TO APPROVE CERTAIN AMENDMENTS TO THE COMPANY'S
SENIOR MANAGEMENT INCENTIVE PLAN -- CONTINUED
Performance-Based Compensation Exception -- Section 162(m) Requirements
The plan has been amended and restated to preserve, to the extent possible,
the Company's tax deduction for certain awards paid under the plan, as required
by Section 162(m) and proposed regulations relating to Section 162(m). As
discussed above, Section 162(m) of the Code was amended as part of the Omnibus
Budget Reconciliation Act of 1993 to deny an employer a deduction for
compensation paid to covered employees of a publicly held corporation that
exceeds $1 million unless the compensation is exempt from the $1 million
limitation because it is performance-based compensation or paid on a commission
basis. In order to qualify as performance-based compensation, the compensation
paid to covered employees must be paid under pre-established objective
performance goals determined in writing by a committee comprised of outside
directors (as that term is defined in Section 162(m) and the regulations
thereunder) before an employee performs the relevant services and while the
outcome under the goal is substantially uncertain. The committee also is
required to certify prior to payment of the compensation that the performance
goals and other material terms were satisfied. In addition to other requirements
for the performance-based exception, shareholders must be advised of, and must
approve, the material terms of the performance goal under which compensation is
to be paid. See Proposal to Adopt Wachovia Corporation Stock
Plan -- Performance-Based Compensation -- Section 162(m) Requirements above.
Proposed Plan Amendments To Qualify For
Performance-Based Compensation Exception
The plan as currently in effect states the requirements for eligibility and
the performance goals upon which compensation under the plan is based, including
the business criteria on which the performance goal is based. See Background;
Purposes;
Administration; and Eligibility and Performance Criteria and Evaluation; Payment
of Awards, above.
As amended, the plan provides that the Company intends to qualify for the
performance-based compensation exception contained in Section 162(m) of the Code
and contains certain provisions to comply with Section 162(m). In particular,
the plan authorizes the Committee to establish targets for performance goals for
covered employees prior to the beginning of each plan year and certify
satisfaction of such goals and other material terms prior to payment of
compensation under the plan. The amendments also authorize the Committee to
reduce or eliminate the amount of an award otherwise payable under the plan and
provide that the Committee shall not have discretion to increase the amount of
an award payable to a participant over the amount determined in accordance with
the plan. In addition, the plan provides that the Committee shall be comprised
of two or more outside directors (as such term is defined in Section 162(m) of
the Code and the regulations thereunder) and authorizes a separate subcommittee
or committee to take action under the plan if necessary to qualify as outside
directors.
According to the proposed regulations relating to Section 162(m), if the
Committee has authority to change the targets under a performance goal, as
provided in the amendments to the plan, the amendments must be reapproved by the
shareholders if the terms of the performance goal are materially changed and, in
any event, five years after initial shareholder approval.
The amendments to the plan are based on the proposed regulations relating to
Section 162(m) of the Code. The plan may be further amended, without shareholder
approval, to comply with the final regulations relating to Section 162(m). In
addition, the deductibility by the Company of compensation paid to executives
may be reduced if those persons who are treated as covered employees under
Section 162(m) differ from the executives anticipated at this time to be covered
employees.
18
<PAGE>
PROPOSAL TO APPROVE CERTAIN AMENDMENTS TO THE COMPANY'S
SENIOR MANAGEMENT INCENTIVE PLAN -- CONTINUED
New Plan Benefits
As an illustration of the benefits to be provided by the plan, the following
table sets forth the awards granted under the plan for 1993 to the individuals
and groups indicated. The awards for the named executives were the maximum
amount payable as
determined by 1993 base salaries and were in recognition of the exceptional
performance of the Company in relation to its established performance goals as
described in the Board Compensation Committee Report on Executive Compensation,
below:
PLAN BENEFITS
SENIOR MANAGEMENT INCENTIVE PLAN
<TABLE>
<CAPTION>
1993
Name and Position Awards
<S> <C>
John G. Medlin, Jr. (1) $ 487,500
Chairman of the Board
and Chief Executive Officer
Leslie M. Baker, Jr. 247,500
President and Chief Operating Officer
G. Joseph Prendergast 159,000
Executive Vice President
Anthony L. Furr 150,000
Executive Vice President
Robert S. McCoy, Jr. 143,900
Executive Vice President
and Chief Financial Officer
Executive Group 1,997,500
Non-Executive Officer Employee Group 5,477,700
</TABLE>
(1) Mr. Medlin retired as an employee of the Company on December 31, 1993, and
is not eligible to receive further benefits under the plan.
The Board of Directors believes it is in the best interests of the Company for
the shareholders to approve the material terms of the performance goals under
which compensation is paid pursuant to the plan. Thus, the Board recommends that
shareholders vote FOR the proposal to amend the plan.
PROPOSAL TO RATIFY APPOINTMENT OF
INDEPENDENT AUDITORS
Ernst & Young has been appointed independent auditors to make the annual
examination of the consolidated financial statements of Wachovia and its
subsidiaries for the year 1994, upon ratification of that appointment by the
shareholders. Ernst & Young has acted as the independent auditors for WCNC since
1969 and for Wachovia since its organization as First Wachovia Corporation in
1985. Wachovia has been advised by Ernst & Young that to the best of its
knowledge no member of the firm has any direct or material indirect financial
interest in Wachovia or any of its subsidiaries, nor has any such member had any
connection during the past three years with Wachovia or any of its subsidiaries
in the capacity of promoter, underwriter, voting trustee, director, officer or
employee. Representatives of Ernst & Young will be present at the Annual Meeting
and will have an opportunity to make a statement if they desire to do so. Such
representatives will be available to respond to appropriate questions. The Board
of Directors recommends that shareholders vote FOR this proposal.
19
<PAGE>
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The senior management compensation program is administered by the CNO
Committee of the Board of Directors of Wachovia (the Committee). The Committee
consists of five nonemployee directors who are not eligible to participate in
any of the management compensation programs. The Committee is responsible for
the establishment, review, administration and oversight of all senior management
compensation and benefit policies, plans, programs and agreements. The Committee
meets at least quarterly to evaluate, review and act on senior management
compensation and benefit recommendations.
Wachovia's senior management compensation program consists of base salary and
annual incentive and stock awards based on the performance of the Company and
participating individuals. These plans utilize competitive peer group
information and are administered to reinforce the alignment of the interests of
senior management employees with the performance of the Company and the
interests of its shareholders. The peer institutions used for comparison are
sixteen of the highest performing regional banking companies in the country, all
of which are included in the KBW Index used in the Performance Graph below.
As a result of certain provisions of the Omnibus Budget Reconciliation Act of
1993 which limit the tax deductibility of annual compensation earned by certain
executive officers in excess of $1 million, the Committee has taken reasonable
and appropriate actions to modify all senior management compensation plans,
including certain proposed amendments to the Wachovia Corporation Senior
Management Incentive Plan and certain terms of the proposed new Wachovia
Corporation Stock Plan, for 1994 in order that the Company receive full
deductions for permissible executive compensation expense.
In 1993, the Committee engaged an independent executive compensation
consultant not previously involved in developing Company compensation programs
to assist the Committee in their assessment and evaluation of the
appropriateness of the senior management compensation program. The Committee has
determined that Wachovia's senior management compensation programs, plans and
awards are well within conventional industry standards of reasonableness and
competitive necessity and are clearly justified by sustained performance which
exceeds industry norms.
A description of each of the major elements of the senior management
compensation program and its specific relationship to corporate performance, and
a summary of the decisions and actions taken by the Committee with regard to
1993 senior management compensation and the Chief Executive Officer's
compensation, are set forth below.
Base Salary
Members of senior management receive base salaries determined by the
responsibilities, skills and experience required for their respective positions.
The following factors also are considered in salary determination: median salary
ranges as reported in peer group survey information, individual performance and
Wachovia's ability to pay an appropriate and competitive salary. Members of
senior management are eligible for periodic increases in their base salary as a
result of individual performance or significant increases in their duties and
responsibilities. The amount and timing of an increase depend upon the
individual's performance, position of salary within the salary range, the time
interval and any added responsibilities since the last merit increase and peer
group survey comparisons.
During 1993, the Committee increased the base salaries of the Chief Executive
Officer and certain other executive officers including the named executives. The
increases in base salaries were based on each individual's level of
responsibility in the Company and individual performance and on the success of
each business unit in the individual's area of responsibility in achieving
established profit and business plans. These factors were considered in relation
to comparable base salaries of the individual's peer group in sixteen of the
highest performing regional banking companies in the United States. Base salary
payments in 1993 reflected the top management transition which resulted in
increased responsibilities for Messrs. Furr, McCoy and Prendergast, and for Mr.
Baker, who was elected President and Chief Operating Officer of Wachovia during
1993.
20
<PAGE>
COMMITTEE REPORT - CONTINUED
Senior Management Incentive Plan
Certain members of senior management participate in the Senior Management
Incentive Plan. Personal award opportunities pursuant to the plan are based upon
the performance criteria applicable to the Company, the individual performance
of each participant and related business unit performances. The plan is proposed
to be amended to preserve the Company's tax deduction for compensation paid to
certain employees and to facilitate plan administration. See Proposal to Approve
Certain Amendments to the Company's Senior Management Incentive Plan, above.
The Committee establishes annual corporate performance benchmarks and
potential awards as a percentage of base salary determined, for 1993 and 1994,
upon review of Wachovia's historical performance, the annual business plan and
comparison with the performance of the sixteen peer banks. The annual corporate
performance benchmarks are established in terms of: (1) net income per share
fully diluted (50% weight), (2) return on assets (net income) (25% weight) and
(3) return on equity (net income) (25% weight). The composite corporate
performance evaluation factor is determined by actual financial results in
relation to these three established goals.
The performance of each individual and the business unit for which he or she
is responsible is determined by evaluating each individual's accomplishments
compared to established annual business goals and key strategic objectives.
Based on Committee policies, an individual assessment is made of the employee's
contribution to the achievement of overall Company profits, goals and
objectives. The resulting individual performance evaluation factor may reduce,
but not increase, the employee's award based upon the composite corporate
evaluation factor.
In December 1993, the Committee reviewed and approved the 1993 Senior
Management Incentive Plan award payments to the Chief Executive Officer and
other senior management employees, including the named executives. The payments
were based on individual and business unit performances as compared to goals
established for 1993 and on the Company achieving net income per fully diluted
share of $2.82 (50% weight), an increase of 13.5 percent from 1992, and a return
of 1.46 percent on assets (25% weight) and 17.13 percent on equity (25% weight).
Each of these key indicators of financial performance exceeded both 1992
performance and the business plan goals of the Company for 1993.
Senior Management and Director Stock Plan
The purpose of the stock plan is to encourage and enable members of senior
management to own stock in the Company, thereby further enhancing the
identification of their interests with the interests of other shareholders.
Members of senior management are eligible to receive an annual benefit under the
plan in the form of incentive stock options, non-qualified stock options and/or
restricted stock. The stock options and awards usually are earned over a five
year period. The number of shares granted an individual is based upon level of
responsibility, individual performance and the value of the options and awards
in relation to the individual's base salary.
The stock plan is administered in a manner that encourages and enables members
of senior management to increase their stock ownership in the Company over time
and to retain for long-term investment the shares obtained through the stock
plan.
In early 1993, the Committee awarded restricted stock to the Chief Executive
Officer and stock options and restricted stock to other members of senior
management including the named executives. The Committee took into account the
responsibility level and performance of each individual as well as the
competitive practices of the sixteen peer group banks.
As of January 31, 1994, approximately 34,768 shares of Common Stock were
available for issuance under the Senior Management and Director Stock Plan. If
the Wachovia Corporation Stock Plan is approved by the shareholders, the Senior
Management and Director Stock Plan will be replaced by the Wachovia Corporation
Stock Plan effective April 22, 1994 and no further options or awards will be
granted under the Senior Management and Director Stock Plan after April 22,
1994. Options and awards granted under the current plan will continue in effect
until they are exercised, vest, expire or are forfeited.
1993 Compensation for the Chief Executive Officer
The Chief Executive Officer's compensation is determined pursuant to the same
basic factors as described above for other members of senior man-
21
<PAGE>
COMMITTEE REPORT - CONTINUED
agement. In establishing the base salary and incentive and stock awards of the
Chief Executive Officer for 1993, the Committee considered Wachovia's financial
performance, its success in increasing shareholder value and meeting strategic
objectives and the incumbent's personal leadership and accomplishments. These
factors were considered in conjunction with the Company's performance for 1993,
established business plan and financial results for 1993, and the performance
and compensation practices of financial institutions in Wachovia's peer group.
In its deliberations and decisions, the Committee also considered the completion
by Mr. Medlin of seventeen years of exemplary service as Chief Executive Officer
during which Wachovia's financial performance and shareholder value appreciation
were exceptional. In addition, the Committee took into consideration his skilled
orchestration of top executive management transition and succession. There was
no specific formula or weighting applied to the various factors the Committee
considered in the evaluation of the performance of Mr. Medlin, except his 1993
management incentive award was based on the Company achieving and surpassing its
annual performance goals (net income per fully-diluted share, return on assets
and return on equity) as described above in this Report under the heading Senior
Management Incentive Plan.
The Committee amended the Executive Retirement Agreement previously entered
into with Mr. Medlin by extending his previously-established retirement date
from December 1, 1993 to December 31, 1993, to permit chief executive officer
succession to coincide with the fiscal and calendar year end.
The Committee transferred ownership of certain company owned life insurance
policies to Mr. Medlin as additional compensation in recognition for his past
service to Wachovia. The amounts determined to be compensation as a result of
this transfer are included in the column All Other Compensation in the Summary
Compensation Table.
COMPENSATION, NOMINATING AND ORGANIZATION COMMITTEE
BOARD OF DIRECTORS OF WACHOVIA CORPORATION
Sherwood H. Smith, Jr., Chairman
J. Mack Robinson, Vice Chairman
Hayne Hipp
James W. Johnston
Charles McKenzie Taylor
22
<PAGE>
FIVE YEAR STOCK PERFORMANCE COMPARISON GRAPH
The graph of five-year cumulative total returns below compares Wachovia, the
Standard & Poor's 500 Stock Index and the Keefe, Bruyette & Woods 50 Index (the
KBW 50) in stock price appreciation and dividends, assuming investment of $100
on the last trading day before the beginning of
1989, with dividends reinvested quarterly through December 31, 1993. The KBW
Index is a published industry index providing a market capitalization weighted
measure of the total return of fifty money center and major regional banks.
(Five Year Stock Performance Comparison Graph appears here--see appendix)
<TABLE>
<CAPTION>
1988 1989 1990 1991 1992 1993
<S> <C> <C> <C> <C> <C> <C>
Wachovia $100 $134.34 $143.59 $206.31 $250.14 $ 253.34
S&P 500 100 131.68 127.58 166.46 179.14 197.19
KBW 50 100 118.91 85.40 135.17 172.23 181.77
</TABLE>
23
<PAGE>
COMPENSATION
The following table sets forth, for the years ended December 31, 1993, 1992 and
1991, the cash compensation paid by Wachovia and its subsidiaries, as well as
other compensation paid or accrued for each of these years, to each of the named
executives.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
OTHER
NAME AND ANNUAL
PRINCIPAL POSITION YEAR SALARY BONUS (1) COMPENSATION (2)
<S> <C> <C> <C> <C>
John G. Medlin, Jr. (7) 1993 $750,000 $ 487,500 $ 5,129
Chairman of the Board and 1992 $710,833 $ 462,000 $ 2,865
Chief Executive Officer 1991 $665,000 $ 33,000 $ 2,473
Leslie M. Baker, Jr. (8) 1993 $450,000 $ 247,500 $ 12,395
President and 1992 $346,667 $ 200,000 $ 9,650
Chief Operating Officer 1991 $327,500 $ 18,000 $ 3,182
G. Joseph Prendergast 1993 $317,917 $ 159,000 $ 15,012
Executive Vice President 1992 $237,500 $ 106,900 $ 12,861
1991 $225,000 $ 12,000 $ 17,245
Anthony L. Furr 1993 $300,000 $ 150,000 $ 1,485
Executive Vice President 1992 $257,500 $ 134,500 $ 3,766
1991 $221,917 $ 12,000 $ 4,350
Robert S. McCoy, Jr. 1993 $287,708 $ 143,900 $ 19,458
Executive Vice President 1992 $279,815 $ 118,900 $ 18,999
and Chief Financial Officer 1991 $226,000 $ 85,579 $ 20,438
</TABLE>
(1) Performance-based incentive awards were paid for 1992 and 1993 pursuant to
Wachovia's Senior Management Incentive Plan. Messrs. Medlin, Baker, Furr and
Prendergast received a special cash payment for 1991. Mr. McCoy received an
incentive award for 1991 pursuant to the SCNC Executive Incentive
Compensation Plan.
(2) All amounts disclosed are attributable to supplemental life insurance,
Company-provided automobiles or automobile allowances, tax return
preparation and financial planning services, and dues for social clubs used
for business purposes, and are below the amounts required to be disclosed.
(3) All outstanding restricted awards have a five-year restriction period.
Aggregate outstanding restricted awards and their value at December 31, 1993
were: for Mr. Baker, 29,000 awards valued at $971,500; for Mr. Furr, 22,000
awards valued at $737,000; for Mr. McCoy, 8,000 awards valued at $268,000;
and for Mr. Prendergast, 18,000 awards valued at $603,000. Amounts
equivalent to dividends are payable quarterly, beginning on the first
anniversary of the date of grant, on one-fifth of the total number of shares
per year.
(4) The Company's Senior Management and Director Stock Plan does not provide for
the grant of SARs except for a stock witholding election available for
certain options and awards, which is considered a SAR by the Securities and
Exchange Commission (the Commission).
24
<PAGE>
COMPENSATION - CONTINUED
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
RESTRICTED LONG-TERM
STOCK SECURITIES UNDERLYING INCENTIVE PLAN ALL OTHER
AWARDS (3) OPTIONS (POUND)(4) PAYOUTS (5) COMPENSATION (6)
<S> <C> <C> <C>
$ 662,600 0 $ 0 $348,250
$ 890,625 0 $ 0 $ 41,450
$ 650,625 0 $ 0 $ 23,220
$ 331,250 14,000 $ 0 $ 36,000
$ 178,125 0 $ 0 $ 20,800
$ 151,813 0 $ 0 $ 11,790
$ 198,750 10,000 $ 0 $ 25,434
$ 118,750 0 $ 0 $ 14,250
$ 86,750 0 $ 0 $ 11,154
$ 132,500 5,000 $ 0 $ 24,000
$ 118,750 0 $ 0 $ 15,001
$ 86,750 0 $ 0 $ 8,025
$ 165,625 5,000 $ 0 $ 23,017
$ 89,063 0 $ 0 $ 15,322
$ 0 6,750 $ 71,759 $ 24,441
</TABLE>
(5) Wachovia does not have a long-term cash incentive award plan. SCNC made
long-term incentive payments to Mr. McCoy in 1991 pursuant to its Executive
Incentive Compensation Plan.
(6) The amounts shown reflect company matching contributions with respect to the
individual's participation in Wachovia's Retirement Savings and
Profit-Sharing Plan and the associated equalization plan; the cash surrender
value of certain life insurance policies transfered to Mr. Medlin in 1993
($289,850); company contributions to SCNC's Amended and Restated Savings,
Thrift and Deferred Cash Plan for Mr. McCoy in 1991 ($6,841); and a payment
made to Mr. McCoy in 1991 pursuant to the value adjustment provision of
SCNC's Management Restricted Stock Award Plan which provided that if the
value of restricted shares granted under such plan was less on the date the
forfeiture restrictions lapsed than on the date of the award, the difference
between the award date value and the value at a fixed date subsequent to the
lapse of the restrictions would be paid to the holder in cash ($17,600).
(7) Mr. Medlin retired as an employee of Wachovia on December 31, 1993.
(8) Mr. Baker was elected President and Chief Executive Officer effective
January 1, 1994, and President and Chief Operating Officer effective
February 1, 1993. He previously served as Executive Vice President of the
Company.
25
<PAGE>
STOCK OPTIONS
The following table sets forth information with respect to the named executives
concerning the
grant of employee stock options during 1993.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
INDIVIDUAL GRANTS VALUE AT ASSUMED
NUMBER OF % OF TOTAL ANNUAL RATES OF
SECURITIES OPTIONS STOCK
UNDERLYING GRANTED TO EXERCISE OR PRICE APPRECIATION
OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION FOR OPTION TERM (3)
NAME GRANTED(1) FISCAL YEAR ($/SHARE)(2) DATE 5%($) 10%($)
<S> <C> <C> <C> <C> <C> <C>
John G. Medlin, Jr. 0 0.00% N/A N/A N/A N/A
Leslie M. Baker, Jr. 14,000 1.81% $33.1250 1/22/03 $291,650 $739,098
G. Joseph Prendergast 10,000 1.29% $33.1250 1/22/03 $208,321 $527,927
Anthony L. Furr 5,000 0.65% $33.1250 1/22/03 $104,161 $263,964
Robert S. McCoy, Jr. 5,000 0.65% $33.1250 1/22/03 $104,161 $263,964
</TABLE>
(1) All stock options become exercisable over a five-year period in 20% annual
increments.
(2) The exercise price equals the market price of Wachovia's Common Stock on the
date of the option grant as adjusted for the stock dividend paid in the form
of a two-for-one stock split on April 1, 1993.
(3) As required by the rules of the Commission, potential net gain from the
exercise of stock options is based on the assumed annual rates of stock
price appreciation of 5% and 10%, over the term of each option. Any actual
net gains are dependent on the future performance of the Company's Common
Stock and general market conditions. There is no assurance that the assumed
rates of stock price appreciation utilized in these calculations will be
achieved. In order for these options to have value to the executive, the
stock price must increase above the option exercise price. Increases in the
stock price will benefit all shareholders. All options have a term of 10
years.
26
<PAGE>
STOCK OPTIONS - CONTINUED
The following table sets forth information with respect to the named executives
concerning the
exercise of options during 1993 and unexercised options held at year-end.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES
UNDERLYING VALUE OF
UNEXERCISED UNEXERCISED
OPTIONS AT IN-THE-MONEY
VALUE FISCAL OPTIONS AT
REALIZED (1) YEAR-END FISCAL
SHARES ACQUIRED ON EXERCISE (POUND) YEAR-END (2)
YEAR OF NUMBER OPTION EXERCISABLE/ EXERCISABLE/
NAME GRANT OF SHARES PRICE UNEXERCISABLE UNEXERCISABLE
<S> <C> <C> <C> <C> <C> <C>
John G. Medlin, Jr. -- -- -- -- 0/0 0/0
Leslie M. Baker, Jr. 1985 7,200 $13.177 $ 176,025.60 20,732/14,000 $694,522/469,000
G. Joseph Prendergast 1985 4,800 13.177 121,550.40 15,840/10,000 530,640/335,000
1986 6,000 17.9165 123,501.00
Anthony L. Furr -- -- -- -- 31,800/8,200 106,530/274,700
Robert S. McCoy, Jr. 1991 3,500 12.50 87,937.50 1,900/6,350 63,650/212,725
</TABLE>
(1) Values calculated by subtracting the exercise price from the market value on
the date of exercise.
(2) Based on market price of $33.50 (market price of Common Stock on December
31, 1993).
OTHER EXECUTIVE COMPENSATION PLANS AND ARRANGEMENTS
Pension Plan
Wachovia has a defined benefit pension plan entitled the Retirement Income
Plan of Wachovia Corporation. Employees of Wachovia and its subsidiaries who
have completed one year of service, as defined in the plan, are eligible to
participate in the plan. Upon retirement at the later of age 65 or completion of
five years of service, a participant receives (subject to certain limitations)
an annual benefit which equals 1.2% of the average of the highest five
consecutive years of base compensation paid during the ten consecutive years
preceding termination or retirement (final average compensation), multiplied by
years of service after December 31, 1989. (For certain highly compensated
employees, including the executive officers, this formula applies to service in
1989).
The table below sets forth estimated annual benefits which would become
payable upon retirement at age 65 under the plan to persons in certain specified
salary and years-of-service classifications who are hired on and after January
1, 1990.
<TABLE>
<CAPTION>
AVERAGE BASE SALARY DURING
HIGHEST FIVE CONSECUTIVE
YEARS IN THE LAST TEN ESTIMATED ANNUAL RETIREMENT BENEFITS FOR YEARS OF
YEARS CREDITED SERVICE SHOWN BELOW (1)(2)
BEFORE RETIREMENT 10 15 20 25 30 35
<S> <C> <C> <C> <C> <C> <C>
$ 50,000 $ 4,986 $ 7,479 $ 9,972 $ 12,465 $ 14,958 $ 17,451
100,000 9,972 14,958 19,944 24,930 29,916 34,902
500,000 49,860 74,790 99,720 124,650 149,580 174,510
1,000,000 99,720 149,580 199,440 249,300 299,160 349,020
1,200,000 119,664 179,496 239,328 299,160 358,992 418,824
</TABLE>
27
<PAGE>
OTHER EXECUTIVE COMPENSATION PLANS AND ARRANGEMENTS - CONTINUED
(1) Pursuant to the terms of the plan, annual retirement income benefits are not
reduced or offset by Social Security benefits. Estimated annual retirement
benefits shown above are based on a joint and 100% survivor form of
retirement income. The precise amount of the benefit is contingent upon the
ages of a participant and his or her surviving spouse.
(2) Some of the amounts shown exceed the limits imposed by federal law for
qualified pension plans and are payable only to participants in the other
retirement arrangements described below.
Persons hired before January 1, 1990, including the named executives, will
receive an annual benefit which is generally greater than the amounts shown in
the table above. The benefit computation of such a person will depend upon the
final average compensation and number of years of service before January 1,
1990, and the benefit formula in effect during such years. For employees of SCNC
and its subsidiaries prior to January 1, 1992, the benefits described above will
only apply to service after December 31, 1991.
For persons employed by Wachovia and its subsidiaries before January 1, 1990
and after December 31, 1986, a participant will receive an annual benefit equal
to 1.4% of final average compensation as of December 31, 1989, plus .6% of final
average compensation as of December 31, 1989 in excess of 50% of the 1989 Social
Security taxable wage base, multiplied by years of service from January 1, 1987
through December 31, 1989 (or December 31, 1988 in the case of certain highly
compensated employees). In addition, the plan provides a one-time special
supplemental benefit to employees who were employed by Wachovia and its
subsidiaries on December 31, 1989, such employees who retired, became disabled,
or were terminated without cause during 1989, and the beneficiaries of such
employees who died during 1989. The special supplemental benefit is added to
each such person's accrued benefit under the plan in the amount of .5% of
annualized rate of eligible salary on the earlier of September 1, 1989 or the
last day of service (or, if greater, .5% of final average compensation as of
December 31, 1989) multiplied by full years of service beginning on the January
1 following the employee's date of hire and ending on December 31, 1989. The
special supplemental benefit may be paid in a lump sum upon retirement, at the
employee's option.
For persons employed by WCNC and its subsidiaries before January 1, 1987, a
participant receives an annual benefit equal to 2.5% of final average
compensation as of December 31, 1989 multiplied by years of service (not in
excess of 30 years) before January 1, 1987, reduced by 50% (prorated for less
than 30 years) of the Social Security benefit at his Social Security retirement
age under the law in effect in 1989. In no event may this benefit exceed 65% of
the participant's final average compensation as of December 31, 1989.
For persons employed by WCGA and its subsidiaries before January 1, 1987, a
participant receives an annual benefit calculated as a ten-year certain and life
annuity equal to 1.8% of final average compensation as of December 31, 1989
multiplied by years of service (not in excess of 35 years) before January 1,
1987, reduced by 50% (prorated for less than 35 years) of the Social Security
benefit at his Social Security retirement age under the law in effect in 1989.
For persons employed by SCNC and its subsidiaries before January 1, 1992, a
participant receives an annual benefit equal to 50% of final average
compensation (as determined below) less 50% of the Social Security primary
insurance benefit, proportionately reduced for less than 30 years of service
prior to 1992. The final average compensation of such an employee is equal to
the average of the employee's total cash compensation (which for this purpose
excludes incentive compensation payments made under the SCNC Executive Incentive
Compensation Plan) for the 60 consecutive months within the final 120 months
prior to January 1, 1992 which will produce the highest average. The accrued
benefit of such a participant as determined on December 31, 1991 is multiplied
by a fraction, the numerator of which is final average compensation at
retirement or other termination of service (as otherwise determined under the
plan) and the denominator of which is final average compensation as so
determined on December 31, 1991.
Except as otherwise provided, the benefit amounts described above are computed
on the basis of a straight life annuity, but other payment options are available
which could provide a survivor
28
<PAGE>
OTHER EXECUTIVE COMPENSATION PLANS AND ARRANGEMENTS - CONTINUED
benefit following the death of the participant. Retirement prior to age 65 is
permitted upon certain circumstances under the plan. Either of these
alternatives could result in an adjustment of the amount of the benefit received
by the participant.
Federal law places certain limitations on the amount of benefits payable by
qualified pension plans. The annual benefit paid to a participant at Social
Security retirement age cannot exceed $115,641 for 1993 or $118,800 for 1994
(adjusted annually for inflation). In addition, the annual amount of covered
compensation under the plan is limited to $235,840 in 1993 and $150,000 in 1994
(adjusted periodically for inflation). The 1993 base salary for each of the
named executives is set forth in the Summary Compensation Table under the column
headed Salary. For such individuals, full years of credited service are as
follows: Mr.Medlin, 33 years; Mr. Baker, 23 years; Mr. Furr, 23 years; Mr.
McCoy, 9 years; and Mr. Prendergast, 19 years.
Covered compensation under the plan excludes deferred compensation; however,
Mr. Medlin has a deferred compensation agreement with WBNC which provided for
the monthly accrual of specified amounts until the termination of his employment
and the addition of an amount equivalent to interest at a variable
market-indexed rate (which is not less than 2.5% or more than 3.75%) on the
unpaid balance at the end of each calendar quarter. Deferred benefits are
payable to Mr. Medlin or his designated death beneficiary in 180 approximately
equal monthly installments beginning in January 1994. The agreement provides for
payment upon retirement of an amount equal to the increase in monthly benefits
that he would have received under the plan if his monthly compensation had
included amounts deferred under his agreement.
Retirement Savings and Profit-Sharing Plan
Wachovia has a voluntary defined contribution plan entitled the Retirement
Savings and Profit-Sharing Plan of Wachovia Corporation. All employees who have
completed one year of service are eligible to participate in the plan. Wachovia
contributes a minimum of $.50 for each $1.00 of up to the first 6% of base pay
contributed by a participant and may make an additional contribution of up to
$.50 for each $1.00 of up to the first 6% of base pay contributed by a
participant each year if the Company meets certain earnings performance
criteria. The criteria for determining any such additional matching
contributions are established by the CNO Committee (the Committee) at the
beginning of each year. The Committee also may approve a special discretionary
contribution to the Plan of up to 4% of each eligible employee's base salary
paid during the year if the Committee determines that the Company's performance
during the year was truly outstanding.
Federal law limits the maximum annual compensation from which an employee may
elect to make contributions under qualified plans such as the plan to $235,840
in 1993 and $150,000 in 1994 (adjusted periodically for inflation). Participants
may elect to make all or part of their contributions under these plans on a
before-tax basis provided such before-tax contributions do not exceed $8,994 in
1993 or $9,240 in 1994 (adjusted annually for inflation). Employee contributions
are subject to certain regulatory restrictions which may limit further the
maximum contribution of certain more highly compensated participants (including
the named executives). Wachovia maintains non-qualified equalization plans
designed to protect selected key employees (including the named executives) of
the Company or its subsidiaries from loss of benefits under the plan resulting
from the application of limitations on contributions to qualified plans
contained in the Code. If contributions under the plan are not allocated to any
of the selected key employees due to those limitations on contributions,
Wachovia will credit to a non-qualified reserve account under the appropriate
equalization plan for the employee the amount of such contribution not so
allocated. Amounts credited to each participant's account are periodically
credited with an interest equivalent which is based upon the rate earned in
certain U.S. Treasury obligations or insurance contracts. These amounts will be
paid to the participants in the equalization plans in monthly installments over
a period not to exceed 180 months or in a single lump sum payment, as elected by
the participant with the consent of the Committee, provided that no amounts may
be withdrawn from the equalization plans while the participant is employed by
Wachovia or any of its subsidiaries. The amounts contributed by Wachovia to the
equalization plans are included in the column All Other Compensation in the
Summary Compensation Table.
29
<PAGE>
OTHER EXECUTIVE COMPENSATION PLANS AND ARRANGEMENTS - CONTINUED
Other Retirement Arrangements
To assist in executive management succession planning, Wachovia has entered
into nonqualified, unfunded executive retirement agreements with certain senior
officers of the Company including each of the named executives and five other
executive officers. Under the agreements, the officer will retire at age 60, or
under certain circumstances as early as age 58 or as late as age 62. The officer
will receive an annual benefit equal to 2.5% of final average compensation
multiplied by years of service, up to a maximum of 62.5% of final average
compensation, less the sum of the amounts payable from the Retirement Income
Plan and any other pension plan in which the officer may participate. For this
purpose, final average compensation is the average of the officer's total cash
compensation for the three full calendar years within the final five full
calendar years of employment which will produce the highest average. Base salary
and amounts received by the officer pursuant to the Senior Management Incentive
Plan are included in determining final average compensation. The benefit amount
is computed in the form of a straight life annuity and is payable in monthly
increments or, upon request by the individual and approval by the Committee, may
be payable in a lump sum actuarial equivalent amount.
The following table sets forth estimated total annual benefits which would
become payable under the formula in the executive retirement agreement (which
amounts will be reduced by the benefits paid under the Retirement Income Plan)
to the officers based upon final average compensation and years of credited
service.
<TABLE>
<CAPTION>
AVERAGE
COMPENSATION
DURING
HIGHEST
THREE YEARS
IN THE LAST ESTIMATED ANNUAL RETIREMENT BENEFITS
FIVE YEARS FOR YEARS OF CREDITED SERVICE
BEFORE SHOWN BELOW
RETIREMENT 10 15 20 25
<S> <C> <C> <C> <C>
$ 100,000 $ 25,000 $ 37,500 $ 50,000 $ 62,500
300,000 75,000 112,500 150,000 187,500
500,000 125,000 187,500 250,000 312,500
700,000 175,000 262,500 350,000 437,500
900,000 225,000 337,500 450,000 562,500
1,000,000 250,000 375,000 500,000 625,000
1,100,000 275,000 412,500 550,000 687,500
1,200,000 300,000 450,000 600,000 750,000
</TABLE>
SCNC has a nonqualified, unfunded supplemental plan for a limited group of
highly compensated and key management employees, including Mr. McCoy. The
supplemental plan provides that each participant (who has been employed for at
least 10 years and is at least 55) will receive an annual benefit at age 65, or
age 60 under certain conditions, equal to 55-60% (depending on the participant's
years of service) of final average compensation, less the sum of the amount
payable from the Retirement Income Plan and the amount of any Social Security
benefit. For this purpose, compensation is defined as base salary, including
amounts deferred, plus any payments pursuant to incentive plans. Benefits are
paid on a monthly basis for life, with (subject to specified conditions) 50% of
the monthly payment made for life to the surviving spouse upon the death of a
retired participant. Subject to certain limitations, a participant may elect to
receive the present value of his benefit under the supplemental plan in one lump
sum payment. There are certain adjustments for early retirement and death or
disability prior to age 65.
The following table sets forth the estimated annual benefit which would become
payable under the formula in the supplemental plan (which amounts will be
reduced by the benefits paid under the Retirement Income Plan and by Social
Security) to participants, including Mr. McCoy (who is entitled to the maximum
benefit), based upon final average compensation and payable in the form of a
joint and 50% survivor annuity.
<TABLE>
<CAPTION>
AVERAGE COMPENSATION ESTIMATED MAXIMUM
DURING HIGHEST 60 MONTHS ANNUAL RETIREMENT
IN THE LAST 120 MONTHS BENEFITS AT
BEFORE RETIREMENT AGE 60
<S> <C>
$100,000 $ 60,000
200,000 120,000
300,000 180,000
400,000 240,000
500,000 300,000
600,000 360,000
</TABLE>
Employment Agreements
Wachovia has entered into Employment Agreements with certain senior officers
of the Company, including each of the named executives and five other executive
officers. If the Company terminates the officer's employment without cause, the
officer will receive monthly compensation continuance payments for the period
beginning with the date of
30
<PAGE>
OTHER EXECUTIVE COMPENSATION PLANS AND ARRANGEMENTS - CONTINUED
termination and ending with the earlier of the third anniversary of the date of
termination or the retirement date of the officer as specified in the officer's
executive retirement agreement described above, provided the officer does not
engage in competitive employment during such period. The monthly amount of
compensation continuance is defined as one-twelfth of the sum of (i) an amount
equal to the officer's highest annual rate of salary in effect during the
twelve-month period immediately preceding his date of termination, (ii) an
amount equal to the average of the amounts, if any, awarded to the officer under
Wachovia's Senior Management Incentive Plan, or any predecessor plan, for each
of the three consecutive calendar years immediately preceding the year of
termination, and (iii) an amount equal to the average of any annual
contributions by the Company on behalf of the officer under the Retirement
Savings and Profit-Sharing Plan and the associated equalization plan, described
above, for each of the three consecutive calendar years immediately preceding
the year of termination. During the period of compensation continuance, the
officer also will receive benefits pursuant to certain employee benefit plans in
which he was participating at the time of termination or substantially similar
benefits, all outstanding stock options previously granted to the officer will
become fully vested and exercisable, and all previously granted restricted stock
awards will become fully vested and available for distribution to the officer.
Directors' Compensation
Nonemployee Directors of Wachovia are paid a retainer fee of $10,000 per
calendar quarter for their services as members of the Board of Directors and
$1,000 per meeting for any special meetings beyond the four regularly scheduled
quarterly meetings of the Board and each committee. There are no additional
payments for attendance or committee participation. The Deferred Compensation
Plan for the Board of Directors of Wachovia permits a Director to defer a
percentage of unearned retainer fees until the Director ceases to be a Director
or revokes his or her deferred compensation agreement, or until Wachovia
terminates such plan. The amounts so deferred are accrued on behalf of the
Director, and the total amount accrued is credited with an amount equivalent to
interest at a variable market-indexed rate (not less than 2% or more than 3.75%)
at the end of each quarter. Deferred benefits are payable to the Director after
he or she ceases serving as a member of the Board of Directors, or to the
Director's beneficiary after death, in 120 approximately equal monthly
installments. This plan is administered by the CNO Committee.
The Retirement Pay Plan for the Board of Directors of Wachovia provides for
nonemployee Directors to be paid an annual retirement payment of 5% of the
annual retainer fee in effect when a Director retires, multiplied by the number
of years of service as a Director, up to a maximum of 50% of such annual
retainer fee. Directors must have served a total of at least five years on the
Board of Wachovia and any of its subsidiaries or affiliated companies to be
eligible for such payments. The payments shall be paid in quarterly installments
for a period equal to the Director's length of service as a Director of Wachovia
or, with certain limitations, of any subsidiary or affiliated company, but such
payments shall cease upon the death of the Director.
Wachovia's Senior Management and Director Stock Plan provides for the award of
3,600 shares of restricted stock to each nonemployee Director upon initial
election to the Board of Directors of the Company. The award is deemed to be
earned, and ownership of the shares vests in the Director, immediately following
completion of three years of continuous membership on the Board. Awards also are
fully earned if the Director dies, becomes disabled or retires from the Board
prior to completing three years of service. Awards are forfeited if the service
of the Director is terminated for reasons other than death, disability or
retirement.
Wachovia has entered into an agreement with Mr. Medlin whereby he has agreed
to serve as nonmanagement Chairman of the Board of Directors and to provide
certain other services to the Company from January 1, 1994 until December 31,
1995, if reelected a Director by shareholders and reappointed as Chairman by the
Board. Wachovia will pay Mr. Medlin $25,000 per month for his services during
the term of the agreement.
31
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of Wachovia's compensation committee, the CNO Committee, from
January 1, 1993 to the present are: Sherwood H. Smith, Jr., Chairman; J. Mack
Robinson, Vice Chairman; Hayne Hipp; James W. Johnston; and Charles McKenzie
Taylor. None of these individuals are or have ever been officers or employees of
Wachovia.
Mr. Lindley, who retired from the Company on June 30, 1993, is a Director of
The Liberty Corporation, but he does not serve on the compensation committee of
such board. Mr. Hipp, the President and Chief Executive Officer of The Liberty
Corporation, serves on the CNO Committee of Wachovia's Board of Directors.
Mr. Medlin is a Director of RJR Nabisco Holdings Corp. and RJR Nabisco, Inc.,
but he does not serve on the compensation committee of either board. RJR Nabisco
Holdings Corp. is the parent company of RJR Nabisco, Inc., which is the parent
company of R.J. Reynolds Tobacco Co. Mr. Johnston, Chairman and Chief Executive
Officer of R.J. Reynolds Tobacco Co., serves on the CNO Committee of Wachovia's
Board of Directors.
Certain Transactions Involving Members of the Committee
Directors, nominees and executive officers, members of their immediate
families, and business organizations and individuals associated with them have
been customers of, and have had normal banking transactions with, WBNC, WBGA and
SCNB. All such transactions were made in the ordinary course of business, were
made on substantially the same terms, including interest rates and collateral,
as those prevailing at the time for comparable transactions with other persons,
and did not involve more than the normal risk of collectibility or present other
unfavorable features. In addition, Wachovia and its subsidiaries have engaged in
other transactions with such persons, all of which were made on substantially
the same terms as those prevailing at the time for comparable transactions with
other persons.
Wachovia began construction on a new headquarters building in Winston-Salem,
North Carolina in January 1994. The building will be a 28 story office tower of
525,000 rentable square feet, all or most of which is expected to be occupied by
Wachovia. Prior to beginning this project, the Company retained an independent
consulting company to act as Planning and Control Manager whose responsibilities
include reviewing all contracts, pricing and fees; validating all costs;
assisting in negotiations; and insuring that competitive pricing and proper
quality are obtained for the project. After careful consideration and review of
possible alternatives, the independent consultant recommended that Wachovia
enter into an agreement with Taylor & Mathis, Inc., a real estate development
firm of which Charles McKenzie Taylor, a Director of Wachovia, is an officer,
director and minority shareholder. The Company's Board of Directors met on July
24, 1992, and during the absence of Mr. Taylor from their deliberations,
approved such arrangement after thorough discussion and review. Wachovia has
entered into a development management agreement and contract with Taylor &
Mathis, Inc. to act as Development and Construction Manager under the terms of
which the firm will manage the planning, design and construction of the new
building. Wachovia will pay the firm a fee of 2.5% of qualified project costs,
payable one half when construction begins, one quarter upon certified
substantial completion of the project, and one quarter upon occupancy of the
building by the Company. No amounts were paid under this agreement in 1993. The
first installment is expected to be paid in the second quarter of 1994. It is
estimated that the total fee ultimately payable to the firm will be
approximately $1.65 million.
The Development and Construction Manager and the Planning and Control Manager
jointly advised Wachovia to select a qualified general contractor for the new
building project early in the design process. After a thorough evaluation of
three highly qualified general contractors, which included review of similar
work by them as well as financial considerations and interviews with the senior
executives of each company, the Development and Construction Manager and the
Planning and Control Manager recommended and Wachovia selected Holder-Russell
Construction Company, a joint venture of two construction companies, as General
Contractor. The two companies have frequently worked together in similar joint
ventures. Robert M. Holder, Jr., a Director of Wachovia, is an officer, director
and majority shareholder of one of these companies, and Herman J. Russell, a
Director of Wachovia, is an officer, director and majority shareholder of the
other company. At its meeting on October 23, 1992, Wachovia's
32
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION - CONTINUED
Board of Directors thoroughly discussed, considered and approved such selection
during the absence of Messrs. Holder and Russell from these deliberations.
Taylor & Mathis has entered into a construction agreement with the General
Contractor pursuant to which Wachovia will pay the General Contractor a fee
based on 3% of qualified project costs. No fees or expense reimbursements were
paid to the General Contractor during 1993. Fees of approximately $626,000 and
expense reimbursements of approximately $50,000 are expected to be paid in 1994.
It is estimated that the total fee ultimately payable to the General Contractor
will be approximately $1.3 to $1.6 million.
The Board of Directors of the Company, after review and discussion, approved
in advance by unanimous vote of those present (and in the absence of the
interested Directors), the agreements with the Development and Construction
Manager and the General Contractor and, in each instance, determined that (1)
the business dealings were intended for the benefit of the Company; and (2) the
business dealings were made on terms and under circumstances that are
substantially the same, or at least as favorable, as those prevailing at the
time for comparable business dealings with independent third parties.
An employee parking facility is planned to be constructed on a site one block
east of the headquarters building. The Planning and Control Manager has advised
Wachovia that the retention of Taylor & Mathis, Inc. to manage and
Holder-Russell Construction Company to construct the parking facility will
permit this phase to be incorporated into the overall development plan for the
project and should result in time and cost savings to the Company. It is
proposed that the respective agreements with the Development and Construction
Manager and the General Contractor be amended in scope to include the parking
facility work. The Development and Construction Manager would receive additional
fees totalling $125,000 to $150,000 and the General Contractor would be paid an
additional $150,000 to $175,000. These amendments are expected to be presented
to the Board of Directors of Wachovia for discussion and action at its April
1994 meeting.
Mr. Taylor is a partner in a partnership which leases five properties used as
banking offices to WBGA. One of the leases expired in December of 1993, one
lease which was due to expire in December 1993 was extended to and expired on
January 15, 1994, another lease which was due to expire in November 1993 was
extended to June 1995, and the remaining two leases will expire in May and June
of 1995. During 1993, WBGA paid approximately $954,017 to the partnership or on
behalf of the partnership as a result of its lease obligations.
Rufus C. Barkley, Jr., Hayne Hipp and James G. Lindley are directors of The
Liberty Corporation, which is the parent of Liberty Life Insurance Company, for
which Mr. Hipp serves as a director. Mr. Hipp also serves as President and Chief
Executive Officer of The Liberty Corporation. The Hipp family has significant
share holdings in The Liberty Corporation. SCNC places with Liberty Life
Insurance Company certain credit life insurance purchased by installment loan
customers of its subsidiary corporations. The net premium benefit on this credit
life insurance retained by Liberty Life Insurance Company in 1993 was
approximately $27,385. Liberty Life Insurance Company sells certain mortgage
protection life, disability and accidental death insurance to mortgage loan
customers of Wachovia. The gross service fee on this insurance retained by
Liberty Life Insurance Company in 1993 was approximately $148,936.
Employee-owned universal life insurance policies are also written for certain
Wachovia employees by Liberty Life Insurance Company. During 1993, Wachovia paid
approximately $166,664 in premiums for this plan coverage, including
approximately $66,918 in employee payments toward universal life insurance plan
coverage. SCNC's corporate-owned life insurance policies associated with the
SCNC Supplemental Executive Retirement Plan and the SCNC Deferred Compensation
Plan are written by Liberty Life Insurance Company. During 1993, SCNC paid
approximately $1,366,964 in premiums for this coverage.
33
<PAGE>
CERTAIN TRANSACTIONS INVOLVING OTHER DIRECTORS AND EXECUTIVE OFFICERS
A Georgia general partnership of which Mr. Holder and members of his family
are the principals constructed a 100,100 square foot, five story building
located on 2.9 acres in Atlanta. The partnership has entered into a $12,415,000
construction and term loan with WBGA secured by the building and real property,
and Mr. Holder has personally guaranteed 12.5% of the loan commitment. This loan
(i) was made in the ordinary course of business, (ii) was made on substantially
the same terms, including interest rates and collateral, as those prevailing at
the time for comparable transactions with other persons, and (iii) did not
involve more than the normal risk of collectibility or present other unfavorable
features. The highest amount outstanding under the loan during 1993 was
approximately $11,191,400.
WBGA has entered into a lease agreement with the Georgia general partnership
described above for branch and drive-in banking facilities and office space in
the new building. WBGA employed an independent professional consulting firm to
review the lease proposal and insure that the lease terms and arrangements were
fair and competitive. WBGA moved into the building during 1992 and began making
payments under the lease on April 1, 1992. The lease agreement relates to 40,813
square feet of space for the branch banking location and office space for a term
of 15 years with two five-year extension options. Base rent is $79,016.61 per
month in years one through five, $94,415.07 per month in years six through ten,
and $107,407.43 per month in years 11 through 15. If the extension options are
exercised, rent will be at a negotiated fair market rate at that time. The lease
agreement has been amended to add an additional 11,450 square feet of office
space for a term of five years and base rent of $21,945.83 per month following
an initial free rent period for 15 months. The amendment provides for a ten-year
extension option at a base rent of $24,216.75 per month in years six through ten
and $27,508.62 per month in years eleven through fifteen, followed by two
five-year extension options at negotiated fair market rates. The lease agreement
also provides that WBGA will pay its pro-rata share of the operating expenses of
the building in excess of 1992 levels of such expenses which are paid by the
lessor. The total rent paid by WBGA during 1993 was approximately $1,117,536. In
addition, WBGA paid approximately $34,648 in 1993 to a construction company of
which Mr. Holder is an officer, director and majority shareholder for various
small renovation and construction projects for WBGA's space in the building.
A Georgia limited partnership of which Mr. Holder is the sole general partner
has constructed a 41,967 gross square foot medical office building in Atlanta.
The partnership entered into a $4,406,000 construction and term loan with WBGA
secured by the building and real property, and Mr. Holder has personally
guaranteed $417,000 of the loan commitment. This loan (i) was made in the
ordinary course of business, (ii) was made on substantially the same terms,
including interest rates and collateral, as those prevailing at the time for
comparable transactions with other persons, and (iii) did not involve more than
the normal risk of collectibility or present other unfavorable futures. The
highest amount outstanding under the loan during 1993 was approximately
$1,172,548.
A Georgia corporation of which Mr. Holder is a one-third shareholder, director
and officer has constructed an airplane hanger and office building in Atlanta.
The corporation entered into a $11,500,000 construction loan with WBGA secured
by the building and real property, and Mr. Holder has personally guaranteed 50%
of the loan commitment. The loan was (i) was made in the ordinary course of
business, (ii) was made on substantially the same terms, including interest
rates and collateral, as those prevailing at the time for comparable
transactions with other persons, and (iii) did not involve more than the normal
risk of collectibility or present other unfavorable futures. The highest amount
outstanding under the loan during 1993 was approximately $11,468,709, and the
entire loan was paid off during the first quarter of 1994.
A subsidiary of WBGA began the relocation of its principal offices in 1993 and
leased approximately 118,000 square feet of office space in an existing building
in Atlanta. In choosing a contractor to complete the interior build out of this
space, WBGA employed an independent professional consulting company to review
all contracts, pricing and fees and to insure that competitive pricing was
obtained. A construction company of which Mr. Holder is an officer, and majority
shareholder director won the bid and entered into a contract with WBGA. The
construction was substantially completed in 1993, and
34
<PAGE>
CERTAIN TRANSACTIONS INVOLVING OTHER DIRECTORS AND EXECUTIVE OFFICERS -
CONTINUED
the contract was extended in 1994 for the construction build out of an
additional approximately 6,000 square feet of space in the building. The cost of
WBGA with respect to such contract was $1,782,464 during 1993.
In December 1990, SCNB entered into a lease of premises for an automated
teller machine near Charleston, South Carolina. The lessors under such lease
include Mr. Barkley, then a director of SCNB and SCNC, and certain members of
his family. The lease is for an initial term of five years and gives SCNB the
option to extend the term for an additional three-year period. For the first
three years of the lease, the rent is $6,600 per year and for the remaining two
years the rent is $7,200 per year. The Board of Directors of SCNB (excluding Mr.
Barkley) approved this transaction and believes the terms of this transaction
are no less favorable to SCNB than those which would be offered by the lessors
to other prospective lessees in comparable transactions.
COMPLIANCE WITH STOCK
OWNERSHIP REPORTING REQUIREMENTS
Section 16(a) of the Securities Exchange Act of 1934 requires Wachovia's
Directors and executive officers, and any persons who own beneficially more than
10% of the outstanding shares of Wachovia Common Stock (there being, to
Wachovia's knowledge, no such 10% shareholders as of December 31, 1993), to file
with the Commission and the New York Stock Exchange (the NYSE) reports
disclosing their initial ownership of Wachovia common stock, as well as
subsequent reports disclosing changes in such ownership. To Wachovia's
knowledge, based solely on a review of the copies of such reports furnished to
Wachovia and written representations that no other reports were required during
the fiscal year ended December 31, 1993, Wachovia's Directors and executive
officers complied with all Section 16(a) filing requirements, except that Mr.
Hipp inadvertently failed to report timely his purchase on March 26, 1993 of 100
shares of Wachovia's common stock. This report, which should have been received
by the Commission and the NYSE by April 10, 1993, was mailed on April 28, 1993.
SHAREHOLDER PROPOSALS
In order to be considered for inclusion in the Proxy Statement and Form of
Proxy to be used in connection with Wachovia's 1995 Annual Meeting of
Shareholders, shareholder proposals must be received by the Secretary of
Wachovia no later than November 17, 1994.
OTHER MATTERS
The management of Wachovia knows of no other business which will be presented
for consideration at the meeting. However, if other matters are properly
presented at the meeting, it is the intention of the proxy holders named in the
accompanying Form of Proxy to vote the Proxies in accordance with their best
judgment.
L. M. Baker, Jr.
Chief Executive Officer
March 18, 1994
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EXHIBIT A
WACHOVIA CORPORATION
STOCK PLAN
1. Purpose.
The purpose of the Wachovia Corporation Stock Plan (the Plan) is to encourage
and enable selected key employees of Wachovia Corporation (the Corporation) and
its subsidiaries, and nonemployee Directors of the Corporation, to acquire or to
increase their holdings of common stock of the Corporation (the Common Stock)
and other proprietary interests in the Corporation in order to promote a closer
identification of their interests with those of the Corporation and its
shareholders, thereby further stimulating their efforts to enhance the
efficiency, soundness, profitability, growth and shareholder value of the
Corporation. This purpose will be carried out through the granting of benefits
(collectively referred to herein as Awards) to selected key employees and
nonemployee Directors, including but not limited to the granting of incentive
stock options (Incentive Options), nonqualified stock options (Nonqualified
Options), stock appreciation rights (SAR's), restricted stock awards (Restricted
Stock Awards), and restricted units (Restricted Units) to selected key
employees; and the granting of initial restricted stock awards (Initial Director
Awards) and annual restricted stock awards (Annual Director Awards) to members
of the Board of Directors (individually, a Director) who are not employees of
the Corporation or a related corporation. (Incentive Options and Nonqualified
Options shall be referred to herein collectively as Options. Restricted Stock
Awards and Restricted Units shall be referred to herein collectively as
Restricted Awards. Initial Director Awards and Annual Director Awards shall be
referred to herein collectively as Director Awards.)
2. Administration of the Plan.
(a) Subject to Section 11 herein, the Plan shall be administered by the
Compensation, Nominating and Organization Committee of the Board of Directors
of the Corporation (the Committee), each member of which shall be a
disinterested person, as such term is defined in Rule 16b-3 promulgated under
the Securities Exchange Act of 1934, as amended (the Exchange Act). The
Committee shall be comprised of no fewer than the minimum number of
disinterested persons as may be required by Rule 16b-3.
(b) Any action of the Committee with respect to the Plan may be taken by a
written instrument signed by all of the members of the Committee and any such
action so taken by written consent shall be as fully effective as if it had
been taken by a majority of the members at a meeting duly held and called.
Subject to the provisions of the Plan, and unless authority is granted to the
Chief Executive Officer as provided in Section 2(c), the Committee shall have
full and final authority in its discretion to take any action with respect to
the Plan including, without limitation, the authority (i) to determine all
matters relating to Awards, including selection of individuals to be granted
Awards, the types of Awards, the number of shares of the Common Stock, if any,
subject to an Award, and all terms, conditions, restrictions and limitations
of an Award; (ii) to prescribe the form or forms of the Agreements evidencing
any Awards granted under the Plan; (iii) to establish, amend and rescind rules
and regulations for the administration of the Plan; and (iv) to construe and
interpret the Plan and Agreements evidencing Awards granted under the Plan, to
establish and interpret rules and regulations for administering the Plan and
to make all other determinations deemed necessary or advisable for
administering the Plan.
(c) Notwithstanding Section 2(b), and subject to Section 11 herein, the
Committee may delegate to the Chief Executive Officer of the Corporation the
authority to grant Awards, and to make any or all of the determinations
reserved for the Committee in the Plan and summarized in subsection (b)(i)
with respect to such Awards, to any individual who, at the time of said grant
or other determination (i) is not deemed to be an officer or Director of the
Corporation within the meaning of Section 16 of the Exchange Act; (ii) is not
deemed to be a Covered Employee; and (iii) is otherwise eligible under Section
5.
3. Effective Date.
The effective date of the Plan shall be April 22, 1994 (the Effective Date).
Awards may be granted
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EXHIBIT A - CONTINUED
under the Plan on and after the effective date, but not after April 21, 2004.
4. Shares of Stock Subject to the Plan.
The shares of Common Stock that may be issued pursuant to Awards shall not
exceed in the aggregate 6,000,000 shares of authorized but unissued shares of
the Corporation. The Corporation hereby reserves sufficient authorized shares of
Common Stock to meet the grant of Awards hereunder. Any shares subject to an
Award which is subsequently forfeited, expires or is terminated may again be the
subject of an Award granted under the Plan; provided, that if an Option or SAR
shall be accepted for surrender by the Committee pursuant to the terms of the
Plan, the shares subject thereto shall not thereafter be available for the
granting of other Options or Awards. If there is any change in the shares of
Common Stock because of a merger, consolidation or reorganization involving the
Corporation or a related corporation, or if the Board of Directors of the
Corporation declares a stock dividend or stock split distributable in shares of
Common Stock, or if there is a change in the capital stock structure of the
Corporation or a related corporation affecting the Common Stock, the number of
shares of Common Stock reserved for issuance under the Plan shall be
correspondingly adjusted, and the Committee shall make such adjustments to
Awards or to any provisions of this Plan as the Committee deems equitable to
prevent dilution or enlargement of Awards.
5. Eligibility.
An Award may be granted only to an individual who satisfies the following
eligibility requirements on the date the Award is granted:
(a) With respect to the grant of Awards other than Director Awards, the
individual is an employee of the Corporation or a related corporation. For
this purpose, an individual shall be considered to be an employee only if
there exists between the individual and the Corporation or a related
corporation the legal and bona fide relationship of employer and employee. In
determining whether such a relationship exists, the regulations of the United
States Treasury Department relating to the determination of the employment
relationship for the purpose of collection of income tax on wages at the
source shall be applied.
(b) With respect to the grant of an Award other than a Director Award, the
individual, being otherwise eligible to receive an Award under this Section 5,
(i) is a key employee of the Corporation or a related corporation; and (ii) is
selected by the Committee as an individual to whom a Restricted Stock Award or
Restricted Unit shall be granted (a Grantee), an individual to whom an Option
shall be granted (an Optionee), or an individual to whom an SAR shall be
granted (an SAR Holder). For the purposes herein, a key employee shall mean an
employee of the Corporation or a related corporation who makes significant and
important contributions to the Corporation or a related corporation. The
Committee shall determine which employees qualify as key employees.
(c) With respect to the grant of Incentive Options, the individual does not
own, immediately before the time that the Incentive Option is granted, stock
possessing more than ten percent of the total combined voting power of all
classes of stock of the Corporation. For this purpose, an individual will be
deemed to own stock which is attributable to him under Section 424(d) of the
Internal Revenue Code of 1986, as amended (the Code).
(d) With respect to the grant of a Director Award, the individual shall be
eligible to receive such an Award under the provisions of Section 9.
6. Options.
(a) Grant of Options. Subject to the limitations of the Plan, the Committee
may in its sole and absolute discretion grant Options to such eligible key
employees in such numbers, upon such terms and at such times as the Committee
shall determine. Both Incentive Options and Nonqualified Options may be granted
under the Plan.
(b) Option Price. The price per share at which an Option may be exercised (the
Option Price) shall be not less than the fair market value per share of the
shares on the date the Option is granted. For this purpose, the following rules
shall apply:
(i) An Option shall be considered to be granted on the date that the
Committee acts to grant the Option, or on any later date specified by the
Committee as the effective date of the Option.
(ii) The fair market value of the shares shall be determined in good faith
by the Committee and shall be the price per share of the last sale of such
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EXHIBIT A - CONTINUED
shares on the New York Stock Exchange as reported in The Wall Street Journal
on the last trading day prior to the date the Option is granted; or if there
was no such sale on such trading day, the fair market value shall be
determined in accordance with the applicable provisions of Section 20.2031-2
of the Federal Estate Tax Regulations, or in any other manner consistent with
the Code and accompanying regulations.
(iii) In no event shall there first become exercisable by the Optionee in
any one calendar year Incentive Options granted by the Corporation or any
related corporation with respect to shares having an aggregate fair market
value (determined at the time an Incentive Option is granted) greater than
$100,000.
(c) Option Period and Limitations on the Right to Exercise Options.
(i) The period during which an Option may be exercised (the Option Period)
shall be determined by the Committee at the time the Option is granted. Such
period shall not extend more than ten years from the date on which the Option
is granted. Any Option or portion thereof not exercised before expiration of
the Option Period shall terminate.
(ii) An Option may be exercised by giving written notice to the Corporation
at such place as the Committee shall direct. Such notice shall specify the
number of shares to be purchased pursuant to an Option and the aggregate
purchase price to be paid therefor, and shall be accompanied by the payment of
such purchase price. Such payment shall be in the form of cash or shares owned
by the Optionee at the time of exercise, or in any combination of cash and
shares; provided, that the Committee may, in its sole and absolute discretion
and subject to such terms and conditions as it deems appropriate, permit all
or a portion of the purchase price to be paid by (i) funds borrowed from a
related corporation, (ii) delivery of written notice of exercise to the
Committee and delivery to a broker of written notice of exercise and
irrevocable instructions to promptly deliver to the Corporation the amount of
sale or loan proceeds to pay the Option Price, or a combination of such
methods. Shares tendered in payment on the exercise of an Option shall be
valued at their fair market value on the date of exercise, as determined by
the Committee by applying the provisions of Section 6(b)(ii).
(iii) No Option shall be exercised unless the Optionee is, at the time of
exercise, an employee, as described in Section 5(a), and has been an employee
continuously since the date the Option was granted, subject to Section 12
herein and the following:
(A) The employment relationship of an Optionee shall be treated as
continuing intact for any period that the Optionee is on military or sick
leave or other bona fide leave of absence; provided, that the period of
such leave does not exceed ninety days or, if longer, as long as the
Optionee's right to reemployment is guaranteed either by statute or by
contract. The employment relationship of an Optionee shall also be treated
as continuing intact while the Optionee is not in active service because of
disability; provided, that shares acquired by the Optionee pursuant to
exercise of an Incentive Option shall be subject to Sections 421 and 422 of
the Code only if and to the extent that such exercise occurs within twelve
months less one day following the date the Optionee's employment is
considered to be terminated because of such disability under Section 422.
The Committee shall determine whether there is a disability within the
meaning of this section.
(B) If the employment of an Optionee is terminated because of retirement,
which shall mean termination on or after the date of his retirement as
provided in Section 8(b)(ii), or because of early retirement under the
Retirement Income Plan of Wachovia Corporation, or any successor plan
thereto applicable to the Optionee (herein, retirement), or if the Optionee
dies while he is an employee or after retirement, the Option may be
exercised only to the extent exercisable on the date of the Optionee's
retirement or death (the termination date), except that the Committee, in
its sole and absolute discretion, may accelerate the date that any Option
which was not otherwise exercisable on the termination date shall be
exercisable in whole or in part, without any obligation to accelerate such
date with respect to other Options granted to the Optionee or to accelerate
such date with respect to Options granted to any
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EXHIBIT A - CONTINUED
other Optionee, or to treat all Optionees similarly situated in the same
manner. The Option must be exercised, if at all, prior to the earlier of:
(1) the close of the period of twelve months next succeeding the
termination date, or (2) the close of the Option Period. In the event of
the Optionee's death, such Option shall be exercisable by such person or
persons as shall have acquired the right to exercise the Option by will or
by the laws of intestate succession.
(C) If the employment of the Optionee is terminated for any reason other
than as provided in subparagraph (B) above, his Option may be exercised
only to the extent exercisable on the date of such termination of
employment, except that the Committee, in its sole and absolute discretion,
may accelerate the date that any Option which was not otherwise exercisable
on the date of such termination of employment shall be exercised in whole
or in part, without any obligation to accelerate such date with respect to
other Options granted to the Optionee or to accelerate such date with
respect to Options granted to any other Optionee, or to treat all Optionees
similarly situated in the same manner. The Option must be exercised, if at
all, prior to the earlier of: (1) the close of the period of three months
less one day next succeeding the date of termination of employment, or (2)
the close of the Option Period. If the Optionee dies following such
termination of employment and prior to the earlier of the dates specified
in (1) and (2) in the immediately preceding sentence, the Optionee shall be
treated as having died while employed under subparagraph (B) above
(treating for this purpose the Optionee's date of termination of employment
as the termination date).
(iv) A certificate or certificates for shares of Common Stock acquired upon
exercise of an Option shall be issued in the name of the Optionee and
distributed to the Optionee (or his beneficiary) as soon as practicable
following receipt of notice of exercise.
(d) Nontransferability of Options. Except to the extent, if any, as may be
permitted by the Code, Rule 16b-3 under the Exchange Act or any successor
statutes or rule:
(i) Options shall not be transferable other than by will, the laws of
intestate succession or pursuant to a qualified domestic relations order (as
defined by the Code, or Title I of the Employee Retirement Income Security Act
(ERISA), or the rules thereunder). The designation of a beneficiary does not
constitute a transfer. An option shall be exercisable during the Optionee's
lifetime only by him or by his guardian or legal representative.
(ii) If an Optionee is subject to Section 16 of the Exchange Act, shares of
Common Stock acquired upon exercise of an Option may not, without the consent
of the Committee, be disposed of by the Optionee until the expiration of six
months after the date the Option was granted.
7. Stock Appreciation Rights.
(a) Grant of SAR's. Subject to the limitations of the Plan, the Committee may
in its sole and absolute discretion grant SAR's to such eligible key employees
in such numbers, upon such terms and at such times as the Committee shall
determine. SAR's may be granted to an Optionee of an Option (hereinafter called
a related Option) with respect to all or a portion of the shares of Common Stock
subject to the related Option (a Tandem SAR) or may be granted separately to an
eligible key employee (a Freestanding SAR). Subject to the limitations of the
Plan, SAR's shall be exercisable in whole or in part upon notice to the
Corporation upon such terms and conditions as are provided in the Agreement
relating to the grant of the SAR.
(b) Tandem SAR's. A Tandem SAR may be granted either concurrently with the
grant of the related Option or (if the related Option is a Nonqualified Option)
at any time thereafter prior to the complete exercise, termination, expiration
or cancellation of such related Option. Tandem SAR's shall be exercisable only
at the time and to the extent that the related Option is exercisable (and may be
subject to such additional limitations on exercisability as the Committee may
provide in the Agreement), and in no event after the complete termination or
full exercise of the related Option. For purposes of determining the number of
shares of Common Stock that remain subject to such related Option and for
purposes of determining the number of shares of Common Stock in respect of which
other Awards may be granted, upon the exercise of Tandem SAR's, the related
Option shall be considered to have been
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EXHIBIT A - CONTINUED
surrendered to the extent of the number of shares of Common Stock with respect
to which such Tandem SAR's are exercised. Upon the exercise or termination of
the related Option, the Tandem SAR's with respect thereto shall be cancelled
automatically to the extent of the number of shares of Common Stock with respect
to which the related Option was so exercised or terminated. Subject to the
limitations of the Plan, upon the exercise of a Tandem SAR, the SAR Holder shall
be entitled to receive from the Corporation, for each share of Common Stock with
respect to which the Tandem SAR is being exercised, consideration equal in value
to the excess of the fair market value of a share of Common Stock (as determined
in accordance with Section 6(b)(ii) herein) on the date of exercise over the
related Option Price per share; provided, that the Committee may, in any
Agreement granting Tandem SAR's, establish a maximum value payable for such
SAR's.
(c) Freestanding SAR's. The base price of a Freestanding SAR shall be not less
than 100% of the fair market value of the Common Stock (as determined in
accordance with Section 6(b)(ii) herein) on the date of grant of the
Freestanding SAR. Subject to the limitations of the Plan, upon the exercise of a
Freestanding SAR, the SAR Holder shall be entitled to receive from the
Corporation, for each share of Common Stock with respect to which the
Freestanding SAR is being exercised, consideration equal in value to the excess
of the fair market value of a share of Common Stock on the date of exercise over
the base price per share of such Freestanding SAR; provided, that the Committee
may, in any Agreement granting Freestanding SAR's, establish a maximum value
payable for such SAR's.
(d) Exercise of SAR's.
(i) Subject to the terms of the Plan, SAR's shall be exercisable in whole or
in part upon such terms and conditions as are provided in the Agreement
relating to the grant of the SAR. The period during which an SAR may be
exercisable shall not exceed ten years from the date of grant or, in the case
of Tandem SAR's, such shorter Option Period as may apply to the related
Option. Any SAR or portion thereof not exercised before expiration of the
period stated in the Agreement relating to the grant of the SAR shall
terminate.
(ii) SAR's may be exercised by giving written notice to the Corporation at
such place as the Committee shall direct. The date of exercise of the SAR
shall mean the date on which the Corporation shall have received notice from
the SAR Holder of the exercise of such SAR.
(iii) No SAR may be exercised unless the SAR Holder is, at the time of
exercise, an employee, as described in Section 5(a), and has been an employee
continuously since the date the SAR was granted, subject to Section 12 and the
provisions of Section 6(c)(iii) herein.
(e) Consideration; Election.
(i) The consideration to be received upon the exercise of the SAR by the SAR
Holder shall be paid in cash, shares of Common Stock (valued at fair market
value on the date of exercise of such SAR in accordance with Section 6(b)(ii)
herein) or a combination of cash and shares of Common Stock, as elected by the
SAR Holder, subject to the discretion of the Committee and the terms herein.
The Corporation's obligation arising upon the exercise of the SAR may be paid
currently or on a deferred basis with such interest or earnings equivalent as
the Committee may determine. A certificate or certificates for shares of
Common Stock acquired upon exercise of an SAR for shares shall be issued in
the name of the SAR Holder and distributed to the SAR Holder (or his
beneficiary) as soon as practicable following receipt of notice of exercise.
No fractional shares of Common Stock will be issuable upon exercise of the SAR
and, unless otherwise provided in the applicable Agreement, the SAR Holder
will receive cash in lieu of fractional shares.
(ii) The Committee shall have the sole and absolute discretion to approve or
disapprove the election by the SAR Holder to receive cash in full or partial
settlement of the SAR, which approval or disapproval may be given at any time
after such election is made. If the SAR Holder is subject to Section 16 of the
Exchange Act, to the extent necessary to comply with Rule 16b-3, (i) no
election shall be made within six months of the date of exercise of the SAR;
or (ii)(A) the election by the SAR Holder to receive cash in full or partial
settlement of the SAR, as well as the exercise by the SAR Holder of the SAR
for cash (unless the date of such exercise is automatic or fixed in advance
and is outside the control of the SAR Holder), shall be made during the period
beginning on the third business day following the date of release for
publication of the Corporation's quarterly or annual
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EXHIBIT A - CONTINUED
summary statements of revenues and earnings and ending on the twelfth business
day following such date, and (B) the SAR must be held for six months from the
date of acquisition to the date of cash settlement.
(f) Limitations. The applicable Agreement may provide for a limit on the
amount payable to the SAR Holder upon exercise of SAR's at any time or in the
aggregate, for a limit on the number of SAR's that may be exercised by the SAR
Holder in whole or in part for cash during any specified period, for a limit on
the time periods during which the SAR Holder may exercise SAR's, and for such
other limits on the rights of the SAR Holder and such other terms and conditions
of the SAR as the Committee may determine, including, without limitation, a
condition that the SAR may be exercised only in accordance with rules and
regulations adopted by the Committee from time to time. Unless otherwise so
provided in the applicable Agreement or the Plan, any such limit relating to a
Tandem SAR shall not restrict the exercisability of the related Option.
(g) Nontransferability. Except to the extent, if any, as may be permitted by
the Code, Rule 16b-3 or any successor statutes or rule:
(i) SAR's shall not be transferable other than by will, the laws of
intestate succession or pursuant to a qualified domestic relations order (as
defined by the Code, or Title I of ERISA or the rules thereunder). The
designation of a beneficiary does not constitute a transfer. SAR's may be
exercised during the SAR Holder's lifetime only by him or by his guardian or
legal representative.
(ii) If the SAR Holder is subject to Section 16 of the Exchange Act, shares
of Common Stock acquired upon exercise of the SAR may not, without the consent
of the Committee, be disposed of by the SAR Holder until the expiration of six
months after the date the SAR was granted.
8. Restricted Awards.
(a) Grant of Restricted Awards. Subject to the limitations of the Plan, the
Committee may in its sole and absolute discretion grant Restricted Awards to
such eligible key employees in such numbers, upon such terms and at such times
as the Committee shall determine. A Restricted Award may consist of a Restricted
Stock Award or a Restricted Unit, or both. Restricted Stock Awards and
Restricted Units shall be payable in cash or whole shares of Common Stock
(including Restricted Stock), or partly in cash and partly in whole shares of
Common Stock, in accordance with the terms of the Plan and the sole and absolute
discretion of the Committee. Restricted Stock Awards and Restricted Units
payable in shares of Common Stock shall be granted only from shares reserved and
then available for the granting of Awards under the Plan. The Committee may
condition the grant or vesting, or both, of a Restricted Stock Award or
Restricted Unit, or both, upon the continued service of the Grantee for a
certain period of time, attainment of such performance objectives as the
Committee may determine, or upon a combination of continued service and
performance objectives. The Committee shall determine the nature, length and
starting date of the period during which the Restricted Award may be earned (the
Restriction Period) for each Restricted Award, which shall be as stated in the
Agreement to which the Award relates. In the case of Restricted Awards based
upon performance criteria, or a combination of performance criteria and
continued service, the Committee shall determine the performance objectives to
be used in valuing Restricted Awards and determining the extent to which such
Awards have been earned. Performance objectives may vary from participant to
participant and between groups of participants and shall be based upon such
Corporation, business unit and/or individual performance factors and criteria as
the Committee in its sole discretion may deem appropriate, including, but not
limited to, earnings per share, return on equity, return on assets or total
return to shareholders. Restriction Periods may overlap and participants may
participate simultaneously with respect to Restricted Awards that are subject to
different Restriction Periods, performance factors and performance criteria. The
measure of whether and to what degree such objectives have been attained, and
the resulting Awards to be paid, will be determined by the Committee. The earned
portion of a Restricted Award may be paid currently or on a deferred basis with
such interest as may be determined by the Committee, in its sole and absolute
discretion. Payment may be made either in a lump sum payment or in annual
installments commencing as soon as practicable after the end of the relevant
Restriction Period, as determined by the Committee, in its sole and absolute
discretion.
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EXHIBIT A - CONTINUED
(b) Earning of Restricted Stock. A Restricted Stock Award or Restricted Unit
granted to a Grantee shall be deemed to be earned as of the first to occur of
the completion of the Restriction Period, retirement of the Grantee, death or
disability of the Grantee or acceleration of the Restricted Stock Award or
Restricted Unit, subject to the following:
(i) Completion of Restriction Period. For this purpose, a Restricted Stock
Award or Restricted Unit shall be deemed to be earned upon completion of the
Restriction Period; provided that, in the case of Restricted Awards based upon
performance criteria or a combination of performance criteria and continued
service, the Committee shall have sole discretion to determine if, and to what
degree, the Restricted Award shall be deemed earned at the end of the
Restriction Period. In order for a Restricted Award to be deemed earned, the
Grantee must have been continuously employed during the Restriction Period.
Continuous employment shall mean employment with any combination of the
Corporation and one or more related corporations, and a temporary leave of
absence with consent of the Corporation shall not be deemed to be a break in
continuous employment.
(ii) Retirement of the Grantee. For this purpose, the Grantee shall be
deemed to have retired as of the earlier of (A) his normal retirement date
under the Retirement Income Plan of Wachovia Corporation, or any successor
plan thereto applicable to the Grantee, or (B) his retirement date under a
contract, if any, between the Grantee and the Corporation providing for his
retirement from the employment of the Corporation or a related corporation
prior to such normal retirement date.
(iii) Death or Disability of the Grantee. If the Grantee shall terminate
continuous employment because of death or disability before a Restricted Stock
Award or Restricted Unit is otherwise deemed to be earned pursuant to this
Section 8(b), the Grantee shall be deemed to have earned a percentage of the
Award (rounded to the nearest whole share in the case of Restricted Stock
Awards and Restricted Units payable in shares) determined by dividing the
number of his full years of continuous employment then completed during the
Restriction Period with respect to the Award by the number of years of such
Restriction Period.
(iv) Acceleration of the Restricted Stock Award or Restricted Unit by the
Committee. Notwithstanding the provisions of this Section 8(b), the Committee,
in its sole and absolute discretion, may accelerate the date that any
Restricted Stock Award or Restricted Unit shall be deemed to be earned in
whole or in part, without any obligation to accelerate such date with respect
to other Restricted Awards or granted to the Grantee or to accelerate such
date with respect to Restricted Awards granted to any other Grantee, or to
treat all Grantees similarly situated in the same manner.
(c) Forfeiture of Restricted Stock. If the employment of a Grantee shall be
terminated for any reason, and the Grantee has not earned all or part of a
Restricted Award pursuant to Section 8(b), such Award to the extent not then
earned shall be forfeited immediately upon such termination and the Grantee
shall have no further rights with respect thereto.
(e) Dividend and Voting Rights; Share Certificates. A Grantee shall have no
dividend rights or voting rights with respect to shares reserved in his name
pursuant to a Restricted Award payable in shares but not yet earned pursuant to
Section 8(b). A certificate or certificates for shares of Common Stock
representing a Restricted Award payable in shares shall be issued in the name of
the Grantee and distributed to the Grantee (or his beneficiary) as soon as
practicable following the date that the shares subject to the Award are earned
as provided in Section 8(b). No certificate shall be issued hereunder in the
name of the Grantee except to the extent the shares represented thereby have
been earned.
(f) Nontransferability. Except to the extent, if any, as may be permitted by
the Code, Rule 16b-3 or any successor statutes or rule:
(i) The recipient of a Restricted Award payable in shares shall not sell,
transfer, assign, pledge or otherwise encumber shares subject to the Award
until the Restriction Period has expired or until all conditions to vesting
have been met.
(ii) Restricted Units shall not be transferable other than by will, the laws
of intestate succession or pursuant to a qualified domestic relations order
(as defined by the Code, or Title I of ERISA or the rules thereunder). The
designation of a beneficiary does not constitute a transfer.
(iii) If a Grantee of a Restricted Award is subject to Section 16 of the
Exchange Act, shares of Common Stock subject to such Award may not,
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EXHIBIT A - CONTINUED
without the consent of the Committee, be sold or otherwise disposed of within
six months following the date of grant of such Award.
9. Director Awards.
(a) Initial Award. Each nonemployee Director who is newly-elected or appointed
to the Board of Directors on or after the Effective Date of the Plan shall
receive a Director Award of 1,000 shares of Restricted Stock (an Initial
Director Award). An Initial Director Award shall be deemed granted following the
close of business of the Corporation on the date of the annual or special
meeting of shareholders at which the Director was initially elected or the date
of the Board of Directors meeting at which the Director was initially appointed.
Such Initial Director Award shall be restricted for a period of three years and
shall be deemed earned and shall vest on the third anniversary of the date of
grant. A Director who is not a member of the Board of Directors on the date an
Initial Director Award vests shall forfeit the Award.
(b) Annual Award. Commencing with the 1994 annual meeting of shareholders and
for each annual meeting thereafter, each nonemployee Director who has been a
Director for at least a year shall receive an annual grant of 250 shares of
Restricted Stock (an Annual Director Award) following the close of business of
the Corporation on the date of the annual meeting of shareholders. An Annual
Director Award shall be deemed earned and shall vest one year after the date of
grant; provided, that a Director who is not a member of the Board of Directors
at the time an Annual Director Award vests shall forfeit the Award.
(c) Dividends and Voting Rights. Directors shall have no dividend or voting
rights with respect to shares subject to Director Awards until such Awards have
vested.
(d) Share Certificates. A certificate or certificate for shares of Common
Stock representing a Director Award shall be issued in the name of the Director
(or his beneficiary) and distributed to the Director (or his beneficiary) as
soon as practicable following the date that the shares subject to the Director
Award are vested as provided herein. No certificate shall be issued hereunder in
the name of the Director except to the extent that the shares represented
thereby have been vested. At the time the Director Award or a portion thereof is
vested, the Director shall have full and immediate rights to the shares
represented by such certificates (except to the extent of restrictions imposed
by law).
(e) Death, Disability or Retirement of Director. If the service of a Director
as a member of the Board is terminated due to death, disability or retirement
(in accordance with the policies of the Corporation then in effect for
retirement of Directors), and the Director has not yet earned a Director Award
as provided in Section 9(a) or (b), such Director Award shall be deemed to be
fully vested.
(f) Forfeiture. If the service of a Director as a member of the Board is
terminated for any other reason, and the Director has not earned a Director
Award as provided in Section 9(a) and (b), such Director Award shall be
forfeited immediately upon such termination and the Director shall have no
further rights with respect to such Director Award.
(g) Nontransferability. Except to the extent, if any, as may be permitted by
the Code, Rule 16b-3 or any successor statutes or rule:
(i) A recipient of a Director Award shall not sell, transfer, assign, pledge
or otherwise encumber shares subject to a Director Award until all conditions,
if any, subsequent to vesting have been met.
(ii) Shares subject to a Director Award may not be sold or otherwise
disposed of within six months following the date of grant of such Award.
(h) Nonemployee Directors. For the purposes herein, a nonemployee Director
shall mean a Director who is not now an employee of the Corporation or a related
corporation and has never served as a senior officer of the Corporation or a
related corporation.
(i) Amendment of Director Award Terms. The provisions of the Plan relating to
the number of shares of Common Stock subject to a Director Award and the timing
of such Awards may not be amended more than once every six months, other than to
comport with changes in the Code, ERISA or the rules thereunder.
10. Withholding.
The Corporation shall withhold all required local, state and federal taxes
from any amount payable in cash with respect to an Award. The Committee shall
require any recipient of an Award payable in shares of the Common Stock to pay
to the Corporation in cash the amount of any tax or other amount required by any
governmental authority to be withheld and paid
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EXHIBIT A - CONTINUED
over by the Corporation to such authority for the account of such recipient.
Notwithstanding the foregoing, the recipient may satisfy such obligation in
whole or in part, and any other local, state or federal income tax obligations
relating to such an Award, by electing (the Election) to have the Corporation
withhold shares of Common Stock from the shares to which the recipient is
entitled. The number of shares to be withheld shall have a fair market value as
of the date that the amount of tax to be withheld is determined (the Tax Date)
as nearly equal as possible to (but not exceeding) the amount of such
obligations being satisfied. The following rules shall apply with respect to
Elections:
(a) Each Election must be made in writing to the Committee prior to the Tax
Date. The Committee may reject any Election, in whole or in part, or may
suspend or terminate the right to make an Election. An Election, once made by
the recipient and accepted by the Committee, shall be irrevocable.
(b) Notwithstanding the foregoing, if a recipient is subject to Section 16
of the Exchange Act, then, to the extent necessary to comply with Rule 16b-3,
(i) no Election shall be made within six months of the Tax Date to which the
Election relates; or (ii)(A) the Election by the recipient to have the
Corporation withhold shares, as well as the withholding of shares (unless the
date of such withholding is automatic or fixed in advance and is outside the
control of the recipient), shall be made during a period beginning on the
third business day following the date of release for publication of the
Corporation's quarterly or annual summary statements of revenues and earnings
and ending on the twelfth business day following such date, and (B) the right
to make an Election is held for six months prior to the date of cash
settlement.
(c) The fair market value of shares shall be determined pursuant to the
provisions of Section 6(b)(ii).
11. Performance-Based Compensation. To the extent to which it is necessary
to comply with Section 162(m) of the Code and the regulations thereunder, the
following provisions shall apply:
(a) Compliance with Code Section 162(m). It is the intent of the
Corporation that Awards conferred under the Plan to Covered Employees, as
such term is defined in Section 14(f) herein, shall comply with the
qualified performance-based compensation exception to employer compensation
deductions set forth in Section 162(m) of the Code, and the Plan shall be
construed in favor of meeting the requirements of Section 162(m) of the
Code and the regulations thereunder to the extent possible.
(b) Committee Authority and Composition. The Committee shall be
authorized to establish performance goals for participants, certify
satisfaction of performance goals and other material terms for
participants, and to take such other action as may be necessary in order to
qualify for the performance-based compensation exception. The Committee
shall be comprised of two or more outside directors (as such term is
defined in Section 162(m) of the Code and the regulations thereunder).
Notwithstanding the foregoing, the committee authorized to take such
actions may be comprised of a subcommittee of the Committee or other
directors who qualify as outside directors (as such term is defined in
Section 162(m) of the Code and the regulations thereunder), and the actions
taken by such subcommittee or other group of outside directors shall be
effective as the action of the Committee to the extent permitted by the
Plan, Rule 16b-3 under the Exchange Act, and Section 162(m) of the Code and
the regulations thereunder.
(c) Limitations on Awards.
(i) Subject to Sections 6, 7, and 8 herein:
(A) In no event shall an employee be granted Options for more than
75,000 shares of Common Stock during any 12-month period; and
(B) In no event shall an employee be granted SAR's for more than
75,000 shares of Common Stock during any 12-month period;
(C) In no event shall an employee be granted Restricted Awards having
an aggregate dollar value greater than $1,000,000 during any 12-month
period;
provided, however, that the limitations set forth in Section 11(c)(i) and (ii)
shall be subject to adjustment as provided in Section 4 herein.
(ii) The Committee shall not have discretion to increase the amount of
performance-based compensation payable to a participant in the
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EXHIBIT A - CONTINUED
Plan over the amount determined in accordance with the terms of the Plan.
The Committee shall in any event have the discretion to reduce or eliminate
the amount of an Award that would otherwise be payable to any participant
in accordance with the terms of the Plan.
(d) Change in Performance Goals. The material terms of the performance goal
or goals pursuant to which Awards are to be made shall be disclosed to, and
subject to the approval of, the shareholders of the Corporation. Material
terms of a performance goal or goals, the targets of which may be changed by
the Committee, shall be disclosed to and subject to the reapproval of, the
shareholders of the Corporation upon a change of the material terms of the
performance goal or goals by the Committee or as may be otherwise required by
Section 162(m) of the Code or the regulations thereunder.
12. No Right or Obligation of Continued
Employment.
Nothing contained in the Plan shall require the Corporation or a related
corporation to continue to employ a Grantee or Optionee or to continue an
individual as a member of the Board of Directors of the Corporation, nor shall
any such individual be required to remain in the employment of the Corporation
or a related corporation or on the Board of Directors of the Corporation. Except
as otherwise provided in the Plan, Awards granted under the Plan to employees of
the Corporation shall not be affected by any change in the duties or position of
the participant, as long as such individual remains an employee of the
Corporation or a related corporation.
13. Retirement Plans.
In no event shall any amounts accrued, distributable or payable under the Plan
be treated as compensation for the purpose of determining the amount of
contributions or benefits to which any person shall be entitled under any
retirement plan sponsored by the Corporation or a related corporation that is
intended to be a qualified plan within the meaning of Section 401(a) of the
Code.
14. Certain Definitions.
For purposes of the Plan, the following terms shall have the meaning
indicated:
(a) Agreement means any written agreement or agreements between the
Corporation and the recipient of an Award pursuant to the Plan relating to the
terms, conditions and restrictions of Options, SAR's, Restricted Awards,
Director Awards and any other Awards conferred herein.
(b) Covered employee shall mean any individual who, on the last day of the
taxable year, is (i) the chief executive officer of the Corporation or is
acting in such capacity or (ii) among the four highest compensated officers
(other than the chief executive officer), as determined in accordance with the
executive compensation disclosure rules under the Exchange Act, unless
otherwise provided in Section 162(m) of the Code or the regulations
thereunder.
(c) Disability shall mean the inability to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment
which can be expected to result in death, or which has lasted or can be
expected to last for a continuous period of not less than twelve months.
(d) Parent or parent corporation shall mean any corporation (other than the
Corporation) in an unbroken chain of corporations ending with the Corporation
if each corporation other than the Corporation owns stock possessing fifty
percent or more of the total combined voting power of all classes of stock in
another corporation in the chain.
(e) Predecessor or predecessor corporation means a corporation which was a
party to a transaction described in Section 424(a) of the Code (or which would
be so described if a substitution or assumption under that Section had
occurred) with the Corporation, or a corporation which is a parent or
subsidiary of the Corporation, or a predecessor of any such corporation.
(f) Related corporation means any parent, subsidiary or predecessor of the
Corporation.
(g) Restricted Stock shall mean shares of Common Stock which are subject to
Director Awards or Restricted Awards payable in shares, the vesting of which
is subject to restrictions set forth in the Plan or the Agreement relating to
such Award.
(h) Subsidiary or subsidiary corporation means any corporation (other than the
Corporation) in an unbroken chain of corporations beginning with the Corporation
if each corporation other than the
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EXHIBIT A - CONTINUED
last corporation in the unbroken chain owns stock possessing fifty percent or
more of the total combined voting power of all classes of stock in another
corporation in the chain.
15. Amendment and Termination of the Plan.
The Plan may be amended or terminated at any time by the Board of Directors of
the Corporation; provided, that such amendment or termination shall not, without
the consent of the recipient of an Award, adversely affect the rights of the
recipient with respect to an Award previously granted; and provided further,
that approval by the shareholders of the Corporation shall be required for any
amendment which would (i) increase the number of shares of Common Stock which
may be issued under the Plan, except to the extent of adjustments pursuant to
Section 4; (ii) permit the granting of Awards to any member of the Committee
(except for nondiscretionary Director Awards granted hereunder); or (iii)
materially change the requirements for eligibility to be a recipient of an
Award. Notwithstanding the foregoing, shareholder approval shall be required for
any other amendments which require such approval in order to secure an exemption
from Section 16(b) of the Exchange Act.
16. Restrictions on Shares.
The Committee may impose such restrictions on any shares representing Awards
and Options hereunder as it may deem advisable, including without limitation
restrictions under the Securities Act of 1933, as amended, under the
requirements of the New York Stock Exchange and under any Blue Sky or securities
laws applicable to such shares. The Committee may cause a restrictive legend to
be placed on any certificate issued pursuant to an Award or Option hereunder in
such form as may be prescribed from time to time by applicable laws and
regulations or as may be advised by legal counsel.
17. Applicable Law.
The Plan shall be governed by and construed in accordance with the laws of the
State of North Carolina.
18. Shareholder Approval.
The Plan is subject to approval by the shareholders of the Corporation on or
before April 22, 1994. Awards granted prior to such shareholder approval shall
be conditioned upon and shall be effective only upon approval of the Plan by
such shareholders on or before such date.
19. Predecessor Plan.
As of the Effective Date of the Plan, no further options or awards shall be
granted under the Wachovia Corporation Senior Management and Director Stock
Plan, as amended (the Predecessor Plan). The Predecessor Plan shall continue in
effect and shall be applicable with respect to all options and awards issued or
granted prior to the Effective Date under the Predecessor Plan.
20. Section 16(b) Compliance.
It is the intention of the Corporation that the Plan shall comply in all
respects with Rule 16b-3 under the Exchange Act, and, if any Plan provision is
later found not to be in compliance with Section 16 of the Exchange Act, the
provision shall be deemed null and void, and in all events the Plan shall be
construed in favor of it meeting the requirements of Rule 16b-3. Notwithstanding
anything in the Plan to the contrary, the Committee, in its sole and absolute
discretion, may bifurcate the Plan so as to restrict, limit or condition the use
of any provision of the Plan to participants who are officers or Directors
subject to Section 16 of the Exchange Act without so restricting, limiting or
conditioning the Plan with respect to other participants.
21. Change of Control.
(a) Notwithstanding any other provision of the Plan to the contrary, in the
event of a Change of Control (as defined in Section 21(b) herein):
(i) All Options and SAR's outstanding as of the date of such Change of
Control shall become fully exercisable, whether or not then otherwise
exercisable.
(ii) Any restrictions including but not limited to the Restriction Period
applicable to any Restricted Stock Award or Restricted Unit shall be deemed
to have expired, and such Restricted Stock Awards and Restricted Stock
Units shall become fully vested and payable to the fullest extent of the
original grant of the applicable Award.
(iii) The restrictions, if any, applicable to any Director Award shall be
deemed to have
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EXHIBIT A - CONTINUED
expired, and such Director Awards shall be deemed earned immediately.
(iv) Notwithstanding the foregoing, in the event of a merger, share
exchange, reorganization or other business combination affecting the
Corporation or a related corporation, the Committee may, in its sole and
absolute discretion, determine that any or all Awards granted pursuant to
the Plan shall not vest or become exercisable on an accelerated basis, if
the Board of Directors or the surviving or acquiring corporation, as the
case may be, shall have taken such action, including but not limited to the
grant of substitute awards, as in the opinion of the Committee is equitable
or appropriate to protect the rights and interests of participants under
the Plan. For the purposes herein, the Committee authorized to make the
determinations provided for in this Section 21(a)(iv) shall be appointed by
the Board of Directors, two-thirds of the members of which shall have been
Directors of the Corporation prior to the merger, share exchange,
reorganization or other business combinations affecting the Corporation or
a related corporation.
(v) Notwithstanding the foregoing, any recipient of an Award who is
subject to Section 16 of the Exchange Act may not sell or otherwise dispose
of shares of Common Stock subject to an Award for a period of six months
following the date of grant of the Award.
(b) For the purposes herein, as Change of Control shall be deemed to have
occurred on the earliest of the following dates:
(i) The date any entity or person shall have become the beneficial owner
of, or shall have obtained voting control over, thirty percent or more of
the outstanding Common Stock of the Corporation;
(ii) The date the shareholders of the Corporation approve a definitive
agreement (A) to merge or consolidate the Corporation with or into another
corporation, in which the Corporation is not the continuing or surviving
corporation or pursuant to which any shares of Common Stock of the
Corporation would be converted into cash, securities or other property of
another corporation, other than a merger of the Corporation in which
holders of Common Stock immediately prior to the merger have the same
proportionate ownership of Common Stock of the surviving corporation
immediately after the merger as immediately before, or (B) to sell or
otherwise dispose of substantially all the assets of the Corporation ; or
(iii) The date there shall have been a change in a majority of the Board
of Directors of the Corporation within a twelve month period unless the
nomination for election by the Corporation's shareholders of each new
director was approved by the vote of two-thirds of the directors then still
in office who were in office at the beginning of the twelve month period.
(For the purposes herein, the term person shall mean any individual,
corporation, partnership, group, association or other person, as such term is
defined in Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, other
than the Corporation, a subsidiary of the Corporation or any employee benefit
plan(s) sponsored or maintained by the Corporation or any subsidiary thereof,
and the term beneficial owner shall have the meaning given the term in Rule
13d-3 under the Exchange Act.)
IN WITNESS WHEREOF, this Wachovia Corporation Stock Plan is, by the
authority of the Board of Directors of the Corporation, executed in behalf of
the Corporation, the 22nd day of April, 1994.
WACHOVIA CORPORATION
Attest:
Secretary
[Corporate Seal]
By:
Chief Executive Officer
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EXHIBIT B
WACHOVIA CORPORATION
SENIOR MANAGEMENT INCENTIVE PLAN
1. Purpose.
The purposes of the Wachovia Corporation Senior Management Incentive Plan (the
Plan) are to motivate and reward a greater degree of excellence and team work
among the senior officers of Wachovia Corporation (the Corporation) and related
corporations by providing incentive compensation award opportunities; to provide
attractive and competitive total cash compensation opportunities for exceptional
corporate, organizational unit and personal performance; to reinforce the
communication and achievement of the mission, objectives and goals of the
Corporation; and to enhance the Corporation's ability to attract, retain and
motivate the highest caliber senior officers. The purposes of the Plan shall be
carried out by payment to eligible participants of annual incentive cash awards
(individually, an Award and collectively, Awards), subject to the terms and
conditions of the Plan and the discretion of the Committee.
2. Effective Date and Plan Year.
The Wachovia Corporation Senior Management Incentive Plan was originally
adopted by the Board of Directors of the Corporation (the Board) effective
January 1, 1987. The Plan (as amended) was approved by the Board of Directors on
January 28, 1994, and by the Compensation Nominating and Organization Committee
effective March 10, 1994, and shall be effective as of April 22, 1994. The plan
year shall be the calendar year.
3. Administration of the Plan.
Subject to Section 11 herein, the Plan shall be administered by the
Compensation, Nominating and Organization Committee of the Board of Directors
(the Committee). The Committee has full authority and responsibility for the
establishment and administration of the Plan, including, without limitation, the
authority (i) to determine all matters relating to Awards, including selection
of individuals to be granted Awards and the terms, conditions, restrictions and
limitations of Awards; (ii) to establish, amend and rescind rules and
regulations for the administration of the Plan; and (iii) to construe and
interpret the Plan and any agreements related to Awards, to establish and
interpret rules and regulations for administering the Plan and to make all other
determinations deemed necessary or advisable for administering the Plan. All
determinations and decisions of the Committee must be made by a majority of the
members present and shall be final and binding on all persons, except that no
member of the Committee may at any time participate in any decision affecting
the bonus of such member. Should the Committee be unable to render any decision
by reason of a deadlock, the majority vote of the entire Board of Directors
shall govern and be final and binding upon all parties.
4. Eligibility.
An individual shall be eligible to become a participant in the Plan (a
Participant) who satisfies the following requirements:
(a) The individual is an employee of the Corporation or a related
corporation. For this purpose, an individual shall be considered to be an
employee if there exists between the individual and the Corporation or a
related corporation the legal and bona fide relationship of employer and
employee.
(b) The individual is a senior officer of the Corporation or a related
corporation. For the purposes herein, a senior officer of the Corporation or a
related corporation shall mean an officer who is deemed to have sufficient
responsibility, ability and potential to make significant contributions to the
success of the Corporation or a related corporation.
(c) The individual is recommended each year by the Chief Executive Officer
of the Corporation (the Chief Executive Officer) and considered and approved
by the Committee as a Participant in the Plan.
5. Participation.
Prior to the beginning of each Plan Year (or, with respect to the 1994 Plan
Year, prior to March 31, 1994), the Chief Executive Officer shall recommend to
the Committee each senior officer of the Corporation or a related corporation
who is eligible to become a Participant in the Plan with respect to such Plan
Year. Participants shall be approved by the Committee in its sole and absolute
discretion. In
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EXHIBIT B - CONTINUED
the event of the promotion of an employee or the hiring of a new employee during
the Plan Year, the Committee, upon the recommendation of the Chief Executive
Officer, may approve the entry of a Participant into the Plan during the Plan
Year. In such case, the Award determined pursuant to the terms of the Plan with
respect to such Participant shall be multiplied by a fraction, the numerator of
which is the number of full calendar months during the Plan Year in which he is
a Participant and the denominator of which is twelve. Participation in the Plan
shall be subject to the provisions of the Plan and such other terms and
conditions as the Committee shall provide.
6. Performance Criteria and Evaluation.
(a) Performance Goals. The performance goals upon which Awards shall be made
shall be based upon business criteria applicable to the Corporation, the
business unit to which the Participant is assigned and the Participant
individually. The corporate business criteria upon which such Awards shall be
based shall include the following earnings factors, weighted as indicated: net
income per share fully diluted (50%); return on assets (net income) (25%); and
return on equity (net income) (25%).
The three earnings measures will be combined to produce a composite corporate
performance evaluation percentage factor (the Composite Percentage Factor) to be
used along with the individual performance evaluation percentage factor (the
Individual Percentage Factor) in calculating individual awards.
(b) Individual Performance Criteria and Evaluation. A Participant's Individual
Percentage Factor will be based on a composite rating of (i) relevant
performance of the organizational unit to which the Participant is assigned (the
Unit) as compared to goals for the Plan Year and (ii) quantitative and
qualitative elements of personal performance of the Participant in relation to
goals and expectations established for the Plan Year. Each of these two
components will have a 50 percent weighting in determining a Participant's
Individual Percentage Factor.
(i) The evaluation of the performance of the Unit will be based primarily on
the degree of success in achieving the Unit's annual profit and business plan.
The assessment will include, as applicable to the Unit, such factors as
business development, expense management, earnings growth, credit quality,
investment results, audit findings, affirmative action goals, staff
development, operational efficiency and strategic planning. For purposes of
this evaluation, the Unit will be the assigned responsibility area of the
Participant. In the case of Participants in administrative and support
functions, the evaluation will include the performance of line business units
whose results can be influenced significantly by such persons.
(ii) The evaluation of a Participant's personal performance will be based on
the Participant's success in meeting expectations of subjective, qualitative
and quantitative goals for the Plan Year. A Participant's personal performance
evaluation will include an assessment of performance relative to the
Corporation's standards in such areas as leadership, initiative, professional
skills, teamwork, problem solving, personal behavior and advancement and
achievement of the Corporation's mission and objectives. The following
criteria shall apply in measuring a Participant's personal performance:
(A) Performance Level IV -- Superior: Participants performing at this
level would be rated in the range of 90 percent to 100 percent. With little
guidance, a Participant at this level consistently performs in the superior
manner that always exceeds normal requirements and expectations. The
Participant's performance clearly is a model of excellence.
(B) Performance Level III -- Exceptional: Participants performing at this
level would be rated in the range of 75 percent to 89 percent. A
Participant at the level consistently performs in an exceptional manner in
which requirements and expectations are always accomplished. The
Participant frequently accomplishes more than is expected.
(C) Performance Level II -- Satisfactory: Participants performing at this
level would be rated in the range of 50 percent to 74 percent. The
Participant performs in an overall satisfactory manner, generally
accomplishing requirements and expectations. The Participant does not
always perform in an exceptional manner and needs guidance with certain
tasks.
(D) Performance Level I -- Meets Minimum Level: No Award will be paid to
Participants at this performance level. The Participant generally meets
minimum levels of performance but
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EXHIBIT B - CONTINUED
sometimes has difficulty in achieving requirements and expectations. The
Participant is capable of satisfactory performance with additional effort,
guidance, training and experience.
7. Recommendation and Determination of Awards.
In December of each Plan Year, the responsible managers and executives will
evaluate each Participant's performance in meeting Unit and personal goals and
objectives for the Plan Year. A recommended composite individual performance
evaluation factor for each Participant with appropriate supporting documentation
will be submitted by Division Executives of the Corporation to the Personnel
Director of the Corporation for a review of completeness and compliance with the
Plan. The recommended composite individual performance evaluation percentage
factor to be used in calculating Awards for Participants shall be subject to
review and approval by the Chief Executive Officer and the Committee.The
composite corporate performance evaluation percentage factor will be calculated
using net income per share fully diluted, return on assets and return on equity
as plotted in the benchmark table. The resulting percentage representing the
composite corporate performance evaluation factor will be multiplied by the
composite individual performance evaluation percentage factor and the
Participant's base salary paid during the Plan Year to determine the amount of
each Participant's Award. Amounts that would otherwise have been payable to a
Participant if the composite corporate performance evaluation factor had been
higher or if the Participant had received a higher performance individual
performance evaluation percentage factor shall not be re-allocated to other
Participants.
8. Payment of Awards; Deferral.
(a) Unless otherwise determined by the Committee, the Committee will determine
the Participants entitled to receive Awards and the amount of such Awards in
January following the end of the Plan Year, and the Awards for a Plan Year shall
be paid by the Corporation to the Participant (or his beneficiary) on February 1
following the end of the Plan Year. Payment of Awards shall be made by a deposit
to the Corporation's payroll system, with a written statement of the amount of
each Award provided to each Participant. The amount of each Award shall be
rounded to the nearest $100.
(b) Prior to the beginning of the Plan Year in which an Award is earned, a
Participant may make an irrevocable election to defer receipt of a portion of
the Award in an amount not less than $1,000 nor greater than 50 percent of the
Award. Such election shall be set forth in, and governed by the terms of, the
Wachovia Corporation Senior Management Incentive Plan Deferral Arrangement.
9. Termination of Employment.
(a) Termination Due to Death, Disability or Retirement. If termination of
employment occurs during a Plan Year as the result of death, disability or
approved retirement, a proportional award shall be paid to the Participant (or
his estate in the event of death), for the period of active employment during
the Plan Year. In such event, the Award determined pursuant to the terms of the
Plan with respect to such Participant shall be multiplied by a fraction, the
numerator of which is the number of full calendar months during the Plan Year in
which the employee is a Participant and the denominator of which is twelve, and
such Award shall be paid in accordance with Section 8 herein. In the event of a
Participant's death, any Award payable under the Plan shall be paid to the
Participant's estate.
(b) Other Termination. Except to the extent otherwise provided in Section 10,
if termination occurs during the Plan Year for any reason other than death,
disability or approved retirement, no Award shall be paid.
(c) Termination After End of Plan Year. If termination occurs between the end
of the Plan Year and the date of payment of an Award, the full amount of the
Award shall be paid in accordance with Section 8 herein unless the termination
was the direct result of dishonesty or misconduct.
(d) Certain Definitions. For the purposes herein:
(i) Disability shall mean the inability to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment
which can be expected to result in death, or which has lasted or can be
expected to last for a continuous period of not less than twelve months.
(ii) Approved retirement shall mean early or normal retirement as provided
under the Retirement Incentive Plan of Wachovia Corporation or any successor
plan thereto applicable to a Participant or the retirement date under a
contract, if any, between a Participant and the Corporation or a
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EXHIBIT B - CONTINUED
related corporation providing for the Participant's retirement from the
employment of the Corporation or a related corporation prior to the normal
retirement date.
10. Change of Control.
(a) In the event of a Change of Control (as defined in Section 10(b)
herein), all Awards made pursuant to the Plan shall be deemed earned and shall
become immediately due and payable for the full Plan Year (notwithstanding the
date of the Change of Control event during the Plan Year), subject to the
following: (i) the corporate Composite Percentage Factor shall be based on
corporate performance on an annualized basis as of the date of the Change of
Control, and (ii) each Participant shall receive the highest Award that may be
granted based on the individual Participant's job classification. Awards that
become due and payable upon a Change of Control shall be deemed earned, due
and payable regardless of whether the Participant continues service in the
same position following the change of control, has a change in position or
responsibility, or is terminated from employment with the Corporation or a
related corporation.
(b) A Change of Control shall be deemed to have occurred on the earliest of
the following dates:
(i) The date any entity or person shall have become the beneficial owner
of, or shall have obtained voting control over, thirty percent or more of
the outstanding Common Stock of the Corporation;
(ii) The date the shareholders of the Corporation approve a definitive
agreement (A) to merge or consolidate the Corporation with or into another
corporation, in which the Corporation is not the continuing or surviving
corporation or pursuant to which any shares of Common Stock of the
Corporation would be converted into cash, securities or other property of
another corporation, other than a merger of the Corporation in which
holders of Common Stock immediately prior to the merger have the same
proportionate ownership of Common Stock of the surviving corporation
immediately after the merger as immediately before, or (B) to sell or
otherwise dispose of substantially all the assets of the Corporation; or
(iii) The date there shall have been a change in a majority of the Board
of Directors of the Corporation within a twelve month period unless the
nomination for election by the Corporation's shareholders of each new
director was approved by the vote of two-thirds of the directors then still
in office who were in office at the beginning of the twelve month period.
(For the purposes herein, the term person shall mean any individual,
corporation, partnership, group, association or other person, as such term is
defined in Section 13(d)(3) or Section 14(d)(2) of the Securities Exchange Act
of 1934, as amended (the Exchange Act), other than the Corporation, a
subsidiary of the Corporation or any employee benefit plans(s) sponsored or
maintained by the Corporation or any subsidiary thereof, and the term
beneficial owner shall have the meaning given the term in Rule 13d-3 under the
Exchange Act.)
(c) Notwithstanding the foregoing, in the event of a merger, share
exchange, reorganization or other business combination affecting the Corporation
or a related corporation, the Committee may, in its sole and absolute
discretion, determine that any or all Awards shall not be paid, if the Board of
Directors or the surviving or acquiring corporation, as the case may be, shall
have taken such action, including but not limited to the making of substitute
awards, as in the opinion of the Committee is equitable or appropriate to
protect the rights and interests of participants in the Plan.
11. Performance-Based Compensation. To the extent to which it is necessary
to comply with Section 162(m) of the Internal Revenue Code of 1986, as amended
(the Code), and the regulations thereunder, the following provisions shall
apply:
(a) Compliance with Code Section 162(m). It is the intent of the
Corporation that Awards conferred under the Plan to Covered Employees, as such
term is defined in Section 19(e) herein, shall comply with the qualified
performance-based compensation exception to employer compensation deductions
set forth in Section 162(m) of the Code, and the Plan shall be construed in
favor of meeting the requirements of Section 162(m) of the Code and the
regulations thereunder to the extent possible.
(b) Committee Authority and Composition. The Committee shall be
authorized to establish
B-4
<PAGE>
EXHIBIT B - CONTINUED
performance goals for Covered Employees, certify satisfaction of performance
goals and other material terms for such Covered Employees, and to take such
other action as may be necessary in order to qualify for the performance-based
compensation exception. The Committee shall be comprised of two or more
outside directors (as such term is defined in Section 162(m) of the Code and
the regulations thereunder). Notwithstanding the foregoing, the committee
authorized to take such actions may be comprised of a subcommittee of the
Committee or other directors who qualify as outside directors (as such term is
defined in Section 162(m) of the Code and the regulations thereunder), and the
actions taken by such subcommittee or other group of outside directors shall
be effective as the action of the Committee to the extent permitted by the
Plan, and Section 162(m) of the Code and the regulations thereunder.
(c) The Committee shall not have discretion to increase the amount of an
Award payable to an employee over the amount that is determined in accordance
with Sections 6 and 7 herein. The Committee shall in any event have the
discretion to reduce or eliminate the amount of an Award that would otherwise
be payable to any Participant in accordance with the terms of the Plan.
(d) The material terms of the performance goal or goals pursuant to which
Awards are to be made shall be disclosed to, and subject to the approval of,
the shareholders of the Corporation. Material terms of a performance goal or
goals, the targets of which may be changed by the Committee, shall be
disclosed to, and subject to the reapproval of, the shareholders of the
Corporation upon a change of the material terms of a performance goal or goals
by the Committee or as may be otherwise required by Section 162(m) of the Code
or the regulations thereunder.
12. Nonassignability of Incentive Awards.
The right to receive payment of an Award shall not be assignable or
transferrable (including by pledge or hypothecation) other than by will or the
laws of intestate succession.
13. No Trust Fund; Unsecured Interest.
A Participant shall have no interest in any fund or specified asset of
the Corporation. No trust fund shall be created in connection with the Plan or
any Award, and there shall be no required funding of amounts which may become
payable under the Plan. Any amounts which are or may be set aside under the
provisions of this Plan shall continue for all purposes to be a part of the
general assets of the Corporation, and no person or entity other than the
Corporation shall, by virtue of the provisions of this Plan, have any interest
in such assets. No right to receive payments from the Corporation pursuant to
this Plan shall be greater than the right of any unsecured creditor of the
Corporation.
14. No Right or Obligation of Continued Employment.
Nothing contained in the Plan shall require the Corporation or a related
corporation to continue to employ a Participant, nor shall the Participant be
required to remain in the employment of the Corporation or a related
corporation.
15. Withholding.
The Corporation shall withhold all required local, state and federal
taxes from any amount of an Award.
16. Retirement Plans.
In no event shall any amounts accrued or payable under this Plan be
treated as compensation for the purpose of determining the amount of
contributions or benefits to which a Participant shall be entitled under any
retirement plan to which the Corporation or a related corporation may be a
party.
17. Dilution or Other Adjustments.
If there is any change in the Corporation because of a merger, share
exchange, reorganization or other business combinations affecting the
Corporation or a related corporation, or if extraordinary items of income or
expense of the Corporation or a related corporation occur, the Committee may
make such adjustments to any provisions of this Plan, including but not
limited to adjustments to determinations of performance and Awards, as the
Committee deems desirable to prevent the dilution or enlargement of rights
granted hereunder.
B-5
<PAGE>
EXHIBIT B - CONTINUED
18. Amendment and Termination of the Plan.
The Plan may be amended or terminated at any time by the Board or by the
Committee as delegated by the Board, provided that such termination or
amendment shall not, without the consent of the Participant, affect such
Participant's rights with respect to Awards previously awarded to him. With
the consent of the Participant affected, the Board, or by delegation of
authority by the Board, the Committee, may amend outstanding Awards in a
manner not inconsistent with the Plan.
19. Certain Definitions.
For purposes of the Plan, the following terms shall have the meaning
indicated:
(a) Related corporation means any parent, subsidiary or predecessor of
the Corporation.
(b) Parent or parent corporation shall mean any corporation (other than
the Corporation) in an unbroken chain of corporations ending with the
Corporation if each corporation other than the Corporation owns stock
possessing fifty percent or more of the total combined voting power of all
classes of stock in another corporation in the chain.
(c) Subsidiary or subsidiary corporation means any corporation (other
than the Corporation) in an unbroken chain of corporations beginning with the
Corporation if each corporation other than the last corporation in the
unbroken chain owns stock possessing fifty percent or more of the total
combined voting power of all classes of stock in another corporation in the
chain.
(d) Predecessor or predecessor corporation means a corporation which was
a party to a transaction described in Section 425(a) of the Code (or which
would be so described if a substitution or assumption under that Section had
occurred) with the Corporation, or a corporation which is a parent or
subsidiary of the Corporation, or a predecessor of any such corporation.
(e) Covered Employee shall mean any individual who, on the last day of
the taxable year, is (i) the Chief Executive Officer or is acting in such
capacity or (ii) among the four highest compensated officers (other than the
Chief Executive Officer), as determined in accordance with the executive
compensation disclosure rules under the Exchange Act, unless otherwise
provided in Section 162(m) of the Code or the regulations thereunder.
20. Binding on Successors.
The obligations of the Corporation under the Plan shall be binding upon any
organization which shall succeed to all or substantially all of the assets of
the Corporation, and the term Corporation, whenever used in the Plan, shall mean
and include any such organization after the succession.
21. Applicable Law.
The Plan shall be governed by and construed in accordance with the laws of
the State of North Carolina.
IN WITNESS WHEREOF, the Wachovia Corporation Senior Management Incentive
Plan, as amended, is, by the authority of the Board of Directors of the
Corporation, executed as of the 22nd day of April, 1994.
WACHOVIA CORPORATION
Attest:
Secretary
[Corporate Seal]
By:
Chief Executive Officer
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<PAGE>
(Wachovia logo appears here)
Notice of
ANNUAL MEETING
To Be Held April 22, 1994
and
PROXY STATEMENT
301 NORTH MAIN STREET
P.O. BOX 3099
WINSTON-SALEM, NORTH CAROLINA 27150
191 PEACHTREE STREET, N.E.
P.O. BOX 4148
ATLANTA, GEORGIA 30303
<PAGE>
P
R
O
X
Y
Please mark,
sign and date
on reverse side
and return in
the enclosed
postage-paid
envelope
Proxy for Annual Meeting of Shareholders Wachovia Corporation
The undersigned hereby appoints Alice W. Grogan, Secretary, and
Kenneth W. McAllister, Assistant Secretary, of Wachovia
Corporation as attorneys and proxies to vote all of the shares of
COMMON STOCK of Wachovia Corporation held or owned by the under-
signed at the Annual Meeting of Shareholders on April 22, 1994,
and at any adjournments thereof, as follows:
<TABLE>
<S> <C> <C>
1.Election of Directors [] FOR ALL NOMINEES LISTED BELOW [] WITHHOLD AUTHORITY to
(EXCEPT AS MARKED TO THE VOTE FOR ALL NOMINEES
CONTRARY BELOW) LISTED BELOW
</TABLE>
(INSTRUCTION: To withhold authority to vote for any individual nominee,
strike a line through the nominee's name in the list below.)
3-year term: Rufus C. Barkley, Jr., John L. Clendenin, Robert M. Holder, Jr.,
W. Duke Kimbrell, John G. Medlin, Jr.
2-year term: Leslie M. Baker, Jr.
2.Approve the Wachovia Corporation Stock Plan.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3.Approve certain amendments to the Wachovia Corporation Senior Management
Incentive Plan to preserve the Company's tax
deduction for certain plan awards.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
4.Ratification of the appointment of Ernst & Young as independent auditors.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
5.In their discretion, upon any other business which may properly come
before the meeting or any adjournment thereof.
This Proxy Is Solicited on Behalf of the Board of Directors of the Corporation
(Continued and to be signed on the other side)
THE SHARES OF COMMON STOCK REPRESENTED BY THIS PROXY WILL BE VOTED AS
SPECIFIED. IF NO CHOICE IS SPECIFIED, THE PROXY WILL BE VOTED FOR
PROPOSALS 1, 2, 3 and 4.
DATED , 1994
Shareholders should sign exactly as name appears
at the left. Any person signing in a fiduciary capacity
will please enclose proof of his appointment unless
such proof has already been furnished.
<PAGE>
The South Carolina National Bank, Trustee
South Carolina National Corporation
Amended and Restated Savings, Thrift and Deferred Cash Plan
With respect to shares of Common Stock of Wachovia Corporation
held for my Accounts under the South Carolina National Corporation Amended
and Restated Savings, Thrift and Deferred Cash Plan, you are instructed to
sign and forward the proxy being solicited by the Wachovia Corporation Board
of Directors after having directed said proxy to be voted in the manner I
have directed on the form of such proxy appearing on the reverse hereof.
Unless I have otherwise directed on such form, you are to vote FOR the
proposals referred to therein.
DATED , 1994
Please date and sign your name as it appears
hereon.
(Please indicate instructions by marking appropriate blocks on reverse side.)
<PAGE>
<TABLE>
<S> <C>
Wachovia Bank of North Carolina, N.A., Trustee Wachovia Bank of Georgia, N.A., Trustee
Wachovia Corporation Retirement Savings and Wachovia Bank of Georgia, N.A., Employee Stock Ownership Plan
Profit-Sharing Plan
</TABLE>
With respect to shares of Common Stock of Wachovia Corporation held
for my Accounts under the Wachovia Corporation Retirement Savings and
Profit-Sharing Plan and/or the Wachovia Bank of Georgia, N.A. Employee
Stock Ownership Plan, you are instructed to sign and forward the proxy
being solicited by the Wachovia Corporation Board of Directors after
having directed said proxy to be voted in the manner I have directed on
the form of such proxy appearing on the reverse hereof. Unless I have
otherwise directed on such form, you are to vote FOR the proposals
referred to therein.
DATED , 1994
Please date and sign your name as it appears hereon.
(Please indicate instructions by marking appropriate blocks on reverse side.)
<PAGE>
<TABLE>
<S> <C>
Wachovia Bank of North Carolina, N.A., Trustee Wachovia Deferred Profit-Sharing Incentive Plan
</TABLE>
With respect to shares of Common Stock of Wachovia Corporation held
for my Account under the Wachovia Deferred Profit-Sharing Incentive Plan,
you are instructed to sign and forward the proxy being solicited by the
Wachovia Corporation Board of Directors after having directed said proxy
to be voted in the manner I have directed on the form of such proxy appearing
on the reverse hereof. Unless I have otherwise directed on such form, you
are to vote FOR the proposals referred to therein.
DATED , 1994
Please date and sign your name as it appears hereon.
(Please indicate instructions by marking appropriate blocks on reverse side.)
***************************************************************************
APPENDIX
On Page 1 the Wachovia logo appears where indicated.
On Page 2 the Wachovia logo appears where indicated.
On Page 23 the Comparison Graph appears where noted. The plot points
are listed in the table below that point.
On the Back Cover the Wachovia logo appears where indicated.
The Wachovia logo appears where indicated at the top of the cover letter.
