SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------------
BB&T CORPORATION
-------------------------------------------------------
(Exact name of registrant as specified in its charter)
NORTH CAROLINA 56-0939887
- ------------------------------- ------------------
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)
200 WEST SECOND STREET
WINSTON-SALEM, NORTH CAROLINA 27101
- ------------------------------------------------------------------------
(Address of principal executive offices, including zip code)
BB&T CORPORATION
NON-QUALIFIED DEFINED CONTRIBUTION PLAN
BB&T CORPORATION NON-EMPLOYEE DIRECTORS'
DEFERRED COMPENSATION AND STOCK OPTION PLAN
(Full title of the plans)
-------------------------
Jerone C. Herring, Esq.
BB&T Corporation
200 West Second Street
3rd Floor
Winston-Salem, North Carolina 27101
(336) 733-2180
-------------------------------------------------------
(Name, address and telephone number, including area code,
of agent for service)
<TABLE>
Caption>
CALCULATION OF REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------------
PROPOSED PROPOSED
TITLE OF MAXIMUM MAXIMUM
SECURITIES AMOUNT OFFERING AGGREGATE AMOUNT OF
TO BE TO BE PRICE OFFERING REGISTRATION
REGISTERED REGISTERED PER UNIT PRICE FEE
- ----------- ---------- -------- -------- -------------
<S> <C>
Deferred
Compensation
Obligations $ 40,000,000 (1) 100% $ 40,000,000 (2) $ 11,800 (2)
------------------- ------------- -------------
Common
Stock, par value
$5.00 per share 626,000 shares (1) $ 65.91 (3) $ 41,259,660 (3) $ 12,172 (3)
------------- ------------- -------------
Total N/A N/A $ 81,259,660 $ 23,972
</TABLE>
(1) The Deferred Compensation Obligations are unsecured obligations of BB&T
Corporation to pay deferred compensation in the future in accordance with
the terms of the BB&T Corporation Non-Qualified Defined Contribution Plan
and the BB&T Corporation Non-Employee Directors' Deferred Compensation
and Stock Option Plan, respectively. The shares of Common Stock being
registered are distributable to participants in the BB&T Corporation
Non-Qualified Defined Contribution Plan and the BB&T Corporation
Non-Employee Directors' Deferred Compensation and Stock Option Plan
pursuant to the terms of the respective plan.
(2) Estimated solely for the purpose of determining the registration fee.
(3) Pursuant to Rule 457(c) and (h)(1), based on the average of the high and
low prices of the registrant's common stock on April 8, 1998, as
reported on the New York Stock Exchange.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed by BB&T Corporation (the
"Company" or "BB&T") with the Securities and Exchange Commission (the
"Commission") under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), are incorporated herein by reference:
(a) The Company's Annual Report on Form 10-K for the year
ended December 31, 1997, filed with the Commission on March 18, 1998;
(b) The Company's Registration Statement on Form 8-A, dated
January 10, 1997, with respect to the adoption of its shareholder
rights plan;
(c) The description of the Company's Common Stock in the
Company's registration statement filed under the Exchange Act with
respect to the Common Stock, including all amendments and reports filed
for the purpose of updating such description; and
(d) All other reports filed pursuant to Section 13(a) or 15(d)
of the Exchange Act since the end of the fiscal year referred to in (a)
above.
All documents subsequently filed by the Company pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of
a post-effective amendment which indicates that all securities offered hereby
have been sold or which deregisters all securities remaining unsold, shall be
deemed to be incorporated by reference herein and to be a part hereof from the
date of the filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
The deferred compensation obligations of the Company (the
"Deferred Compensation Obligations") being registered herein are issuable under
the terms of the BB&T Corporation Non-Qualified Defined Contribution Plan (the
"Defined Contribution Plan") and the BB&T Corporation Non-Employee Directors'
Deferred Compensation and Stock Option Plan (the "Directors' Plan")
(individually, a "Plan," and collectively, the "Plans"). Shares of Common Stock
of the Registrant, $5.00 par value (the "Shares"), are also being registered
pursuant to this Registration Statement. Of such shares, 500,000 shares are
issuable under the Directors' Plan, the successor plan to the BB&T Corporation
Non-Employee Directors' Stock Option Plan (the "Directors' Stock Option Plan").
A registration statement on Form S-8 covering shares initially issuable under
the Directors' Stock Option Plan has previously been filed with the Commission.
Pursuant to General Instruction E to Form S-8, the Registrant incorporates by
reference the contents of that registration statement (Registration No.
33-55604), filed on December 11, 1992. The remaining Shares being registered
herein are distributable pursuant to the Defined Contribution Plan. Capitalized
terms used without definition herein have the meanings given such terms in the
respective Plan. References to the "Company" include affiliates of the Company
unless the context otherwise requires.
The Defined Contribution Plan is intended to supplement
benefits payable to certain participants in the BB&T Corporation 401(k) Savings
Plan to the extent that such benefits are curtailed by the application of
certain limits imposed by the Internal Revenue Code of 1986, as amended (the
"Code"). The Defined Contribution Plan is also intended to provide certain
participants in the Company's executive incentive compensation plans with an
effective
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<PAGE>
means of deferring on a pre-tax basis all or a portion of the payments such
participants are entitled to receive under such plans.
The Directors' Plan is intended to provide non-employee
director participants the opportunity to defer receipt of all or a portion of
the compensation received for service on the Board of Directors of the Company
(the "Board"). The Directors' Plan also permits certain participants to elect to
receive options for shares of the Company's common stock in lieu of the
compensation received for service on the Board.
The Deferred Compensation Obligations constitute general
unsecured obligations of the Company to the participant and are not convertible
into another security of the Company. However, as described below, certain
amounts previously deferred under a predecessor plan of the Defined Contribution
Plan may be distributed in shares of the Company's Common Stock at the
participant's option.
Benefits are payable solely from the Company's general assets
and are subject to the risk of corporate insolvency. Notwithstanding the
foregoing, the Company has established a separate trust, entitled the "BB&T
Corporation Non-Qualified Deferred Compensation Trust" (the "Trust"), to which
the Company may make contributions from time to time in order to fund its
obligations under the Plans. Branch Banking and Trust Company serves as trustee
(the "Trustee") under the Trust pursuant to a Trust Agreement dated January 1,
1997 between the Company and the Trustee. The Trustee is a wholly-owned bank
subsidiary of the Company. The assets of the Trust are subject to the claims of
the Company's general creditors in the event the Company becomes insolvent or
bankrupt. Pursuant to the terms of the Trust, the Company shall indemnify and
hold the Trustee harmless from and against losses, damages, costs, expenses and
liabilities of the Trustee associated with the Trust except for acts or
omissions of the Trustee which constitute gross negligence or willful
misconduct.
No participant or beneficiary shall have any legal or
equitable rights, interest or claims in any particular asset of the Trust or the
Company by reason of the Company's obligations. Further, the Trust does not
create any preferred claim over creditors of the Company for any Plan
participant. All rights of a Plan participant against the Company shall remain
unsecured contractual rights of a participant. A participant's right to the
Deferred Compensation Obligations cannot be transferred, assigned, pledged or
encumbered except by a written designation of a beneficiary under the terms of
the respective Plan.
The amount of compensation to be deferred by each participant
is determined in accordance with the terms of each respective Plan based on
elections by the participant. Deferred amounts are credited to each
participant's account. Amounts in a participant's account will be indexed to one
or more investment media individually chosen by a participant from the
investment media available under the respective Plan (currently a fixed rate
cash fund and a stock index fund). Each participant's account will be
adjusted to reflect the investment performance of the selected media, including
any appreciation or depreciation. Amounts deferred are fully vested at all times
(except for certain matching contributions made by the Company under the Defined
Contribution Plan). There is no trading market for the Deferred Compensation
Obligations.
Except as provided below, benefits based on the Deferred
Compensation Obligations are payable solely in cash following termination of the
participant's service or employment upon certain distribution dates available to
the participant (and in limited cases where hardship withdrawals are permitted).
Notwithstanding the foregoing, certain amounts previously deferred under a
predecessor plan of the Defined Contribution Plan may be distributed in shares
of the Company's Common Stock.
The Plans may be amended or terminated by the Board at any
time; provided, that in no event may such termination or amendment reduce any
participant's accrued benefit with respect to the Deferred Compensation
Obligations as of the date of such amendment or termination, nor shall any such
amendment affect the terms of the respective Plan relating to the payment of
such accrued benefit without the participant's prior written consent to such
amendment. In addition, with respect to options granted under the Directors'
Plan, no such amendment may adversely affect outstanding options or any
unexercised rights thereunder or in any way impair the rights of an optionee
with
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<PAGE>
respect to his options, without the optionee's consent. The Plans are
administered by an Administrative Committee appointed by the Board.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Sections 55-8-50 through 55-8-58 of the North Carolina
Business Corporation Act contain specific provisions relating to indemnification
of directors and officers of North Carolina corporations. In general, such
sections provide that: (i) a corporation must indemnify a director or officer
who is wholly successful in his defense of a proceeding to which he is a party
because of his status as such, unless limited by the articles of incorporation,
and (ii) a corporation may indemnify a director or officer if he is not wholly
successful in such defense, if it is determined as provided by statute that the
director or officer meets a certain standard of conduct, provided when a
director or officer is liable to the corporation or is adjudged liable on the
basis that personal benefit was improperly received by him, the corporation may
not indemnify him. A director or officer of a corporation who is a party to a
proceeding may also apply to a court for indemnification, and the court may
order indemnification under certain circumstances set forth in statute. A
corporation may, in its articles of incorporation or bylaws or by contract or
resolution of the board of directors, provide indemnification in addition to
that provided by statute, subject to certain conditions.
BB&T's bylaws provide for the indemnification of any director
or officer of BB&T against liabilities and litigation expenses arising out of
his status as such, excluding: (i) any liabilities or litigation expenses
relating to activities which were at the time taken known or believed by such
person to be clearly in conflict with the best interest of BB&T and (ii) that
portion of any liabilities or litigation expenses with respect to which such
person is entitled to receive payment under any insurance policy.
BB&T's articles of incorporation provide for the elimination
of the personal liability of each director of BB&T to the fullest extent
permitted by law.
BB&T maintains directors and officers liability insurance
that, in general, insures: (i) BB&T's directors and officers against loss by
reason of any of their wrongful acts and (ii) BB&T against loss arising from
claims against the directors and officers by reason of their wrongful acts, all
subject to the terms and conditions contained in the policy.
Certain rules of the Federal Deposit Insurance Corporation
limit the ability of certain depository institutions, their subsidiaries and
their affiliated depository institution holding companies to indemnify
affiliated parties, including institution directors. In general, subject to the
ability to purchase directors and officers liability insurance and to advance
professional expenses under certain circumstances, the rules prohibit such
institutions from indemnifying a director for certain costs incurred with regard
to an administrative or enforcement action commenced by any federal banking
agency that results in a final order or settlement pursuant to which the
director is assessed a civil money penalty, removed from office, prohibited from
participating in the affairs of an insured depository institution or required to
cease and desist from or take an affirmative action described in Section 8(b) of
the Federal Deposit Insurance Act (12 U.S.C. ss. 1818(b)).
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
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<PAGE>
ITEM 8. EXHIBITS.
The following exhibits are filed as a part of this
Registration Statement:
NUMBER DESCRIPTION
4 Rights Agreement dated as of December 17, 1996
between the Registrant and Branch Banking and Trust
Company, Rights Agent (incorporated herein by
reference to Exhibit 1 filed under Form 8-A, filed
January 10, 1997)
5.1 Opinion of Jerone C. Herring, Executive Vice
President, General Counsel and Secretary of the
Corporation
5.2 Opinion of Womble Carlyle Sandridge & Rice, PLLC
23.1 Consent of Jerone C. Herring, Executive Vice
President, General Counsel and Secretary of the
Corporation (included in Exhibit 5.1)
23.2 Consent of Womble Carlyle Sandridge & Rice, PLLC
(included in Exhibit 5.2)
23.3 Consent of Arthur Andersen LLP
24 Power of Attorney of Directors and Officers of the
Company
99.1 BB&T Corporation Non-Qualified Defined Contribution
Plan
99.2 BB&T Corporation Non-Employee Directors' Deferred
Compensation and Stock Option Plan
ITEM 9. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration
Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933, as amended
(the "Securities Act");
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration
Statement (or the most recent post-effective
amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the
information set forth in the Registration Statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in
the Registration Statement or any material change to
such information in the Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed with or furnished to the Commission by
the Company pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in the
Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
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<PAGE>
(b) The Company hereby undertakes that, for purposes of determining any
liability under the Securities Act, each filing of the Company's annual
report pursuant to Section 13(a) or Section 15(d) of the Exchange Act
that is incorporated by reference in the Registration Statement shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of
the Company pursuant to the foregoing provisions, or otherwise, the
Company has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Company of expenses incurred or paid by a director, officer or
controlling person of the Company in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered,
the Company will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.
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<PAGE>
SIGNATURES
THE REGISTRANT
Pursuant to the requirements of the Securities Act of 1933, BB&T
Corporation certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Winston-Salem, State of North Carolina,
effective this 13th day of April, 1998.
BB&T CORPORATION
By: /s/ Jerone C. Herring
-------------------------------
Jerone C. Herring
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed by the following persons in
the capacities indicated effective April 13, 1998.
<TABLE>
<CAPTION>
<S> <C>
/s/ John A. Allison IV* /s/ Scott E. Reed*
- ----------------------------------------- ---------------------------------------------
Name: John A. Allison IV Name: Scott E. Reed
Title: Chairman of the Board and Title: Senior Executive Vice President
Chief Executive Officer and Chief Financial Officer
(principal executive officer) (principal financial officer)
/s/ Sherry A. Kellett* /s/ Paul B. Barringer*
- ----------------------------------------- ---------------------------------------------
Name: Sherry A. Kellett Name: Paul B. Barringer
Title: Executive Vice President Title: Director
and Controller
(principal accounting officer)
/s/ W. R. Cuthbertson, Jr.*
- ------------------------------------------ -----------------------------------------------
Name: Alfred E. Cleveland Name: W. R. Cuthbertson, Jr.
Title: Director Title: Director
/s/ Ronald E. Deal* /s/ A. J. Dooley, Sr.*
- ------------------------------------------ ------------------------------------------------
Name: Ronald E. Deal Name: A. J. Dooley, Sr.
Title: Director Title: Director
/s/ Tom D. Efird* /s/ Paul S. Goldsmith*
- ----------------------------------------- ------------------------------------------------
Name: Tom D. Efird Name: Paul S. Goldsmith
Title: Director Title: Director
/s/ L. Vincent Hackley* /s/ Ernest F. Hardee*
- ----------------------------------------- ------------------------------------------------
Name: L. Vincent Hackley Name: Ernest F. Hardee
Title: Director Title: Director
/s/ Richard Janeway, M.D.*
- ---------------------------------------- -------------------------------------------------
Name: Jane P. Helm Name: Richard Janeway, M.D.
Title: Director Title: Director
II-6
<PAGE>
<CAPTION>
<S> <C>
/s/ J. Ernest Lathem, M.D.* /s/ James H. Maynard*
- ---------------------------------------- --------------------------------------------------
Name: J. Ernest Lathem, M.D. Name: James H. Maynard
Title: Director Title: Director
/s/ Joseph A. McAleer, Jr.* /s/ Albert O. McCauley*
- ---------------------------------------- --------------------------------------------------
Name: Joseph A. McAleer, Jr. Name: Albert O. McCauley
Title: Director Title: Director
/s/ Richard L. Player, Jr.* /s/ C. Edward Pleasants, Jr.*
- ---------------------------------------- --------------------------------------------------
Name: Richard L. Player, Jr. Name: C. Edward Pleasants, Jr.
Title: Director Title: Director
/s/ Nido R. Qubein*
- ---------------------------------------- --------------------------------------------------
Name: Nido R. Qubein Name: E. Rhone Sasser
Title: Director Title: Director
- ---------------------------------------- --------------------------------------------------
Name: Jack E. Shaw Name: Harold B. Wells
Title: Director Title: Director
*By: /s/ Jerome C. Herring
------------------------------------
Name: Jerome C. Herring
Attorney-in-Fact
</TABLE>
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<PAGE>
EXHIBIT INDEX
TO
REGISTRATION STATEMENT ON FORM S-8 OF
BB&T CORPORATION
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<S> <C>
4 Rights Agreement dated as of December 17, 1996 between the Registrant and Branch Banking and Trust Company,
Rights Agent (incorporated herein by reference to Exhibit 1 filed under Form 8-A, filed January 10, 1997)
5.1 Opinion of Jerone C. Herring, Executive Vice President,
General Counsel and Secretary of the Corporation
5.2 Opinion of Womble Carlyle Sandridge & Rice, PLLC
23.1 Consent of Jerone C. Herring, Executive Vice President,
General Counsel and Secretary of the Corporation (included in Exhibit 5.1)
23.2 Consent of Womble Carlyle Sandridge & Rice, PLLC (included in Exhibit 5.2)
23.3 Consent of Arthur Andersen LLP
24 Power of Attorney of Directors and Officers of the Company
99.1 BB&T Corporation Non-Qualified Defined Contribution Plan
99.2 BB&T Corporation Non-Employee Directors' Deferred Compensation and Stock Option Plan
</TABLE>
BB&T Corporation
200 West Second Street
Winston-Salem, North Carolina 27101
April 13, 1998
BB&T Corporation
200 West Second Street
Winston-Salem, North Carolina 27101
Re: Registration Statement on Form S-8 Relating to Certain Shares
Issuable Pursuant to BB&T Corporation Non-Qualified Defined
Contribution Plan
Gentlemen:
I am the Executive Vice President, Secretary and General Counsel of BB&T
Corporation (the "Company"), and I am familiar with the proceedings taken by
the Company in connection with the preparation and filing with the Securities
and Exchange Commission (the "Commission") of a Registration Statement on
Form S-8 (the "Registration Statement") under the Securities Act of 1933, as
amended, pertaining to, among other things, the issuance and sale of up to
126,000 shares of the Company's common stock, $5.00 par value (the "Shares"),
which are proposed to be offered and sold pursuant to the BB&T Corporation
Non-Qualified Defined Contribution Plan (the "Defined Contribution Plan"),
which are held in trust (the "Trust") pursuant to a Trust Agreement dated
January 1, 1997 between the Company and Branch Banking and Trust Company.
In rendering this opinion, I have relied upon, among other things, my
examination of the Defined Contribution Plan and the Registration Statement, the
records relating to the organization of the Company, including its articles of
incorporation, bylaws and all amendments thereto, and the records of all
proceedings taken by the Board of Directors of the Company pertinent to the
rendering of this opinion. Without limiting the foregoing, I have also relied
upon (i) representations concerning the purchase of the Shares for the Trust;
and (ii) certain legal opinions previously delivered to or at the request of the
Company relating to the issuance of its shares of Common Stock. In rendering
opinions as to future events, I have assumed the facts and laws existing on the
date hereof.
Based on the foregoing, and having regard for such legal considerations as
I have deemed relevant, I am of the opinion that the Shares have been duly
authorized and validly issued and are fully paid and nonassessable.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Sincerely,
/s/ Jerone C. Herring
Jerone C. Herring,
Executive Vice President, Secretary and General Counsel
EXHIBIT 5.2
<PAGE>
WOMBLE 3300 One First Union Center
CARLYLE 301 South College Street
SANDRIDGE Charlotte, NC 28202-6025
& RICE
A PROFESSIONAL LIMITED Telephone: (704) 331-4900
LIABILITY COMPANY Fax: (704) 331-4955
April 13, 1998
BB&T Corporation
200 West Second Street
Winston-Salem, North Carolina 27101
Re: Registration Statement on Form S-8 with respect to
Certain Securities Issuable Pursuant to
the BB&T Corporation Non-Qualified Defined
Contribution Plan and the BB&T Corporation
Non-Employee Directors' Deferred Compensation and
Stock Option Plan
Ladies and Gentlemen:
We are acting as counsel for BB&T Corporation (the "Company")
in connection with its registration under the Securities Act of 1933, as
amended, of the following:
1. $40,000,000 in deferred compensation obligations of the
Company (the "Deferred Compensation Obligations"), which are proposed to be
offered and sold pursuant to the BB&T Corporation Non-Qualified Defined
Contribution Plan (the "Defined Contribution Plan") and the BB&T Corporation
Non-Employee Directors' Deferred Compensation and Stock Option Plan (the
"Directors' Plan") (individually, a "Plan," and collectively, the "Plans");
2. 500,000 shares of the Company's common stock, $5.00 par
value, which are proposed to be offered and sold pursuant to the Directors' Plan
(the "Directors' Plan Shares"); and
3. 126,000 shares of the Company's common stock, $5.00 par
value, which are proposed to be offered and sold pursuant to the Defined
Contribution Plan (the "Defined Contribution Plan Shares"), which shares are
held in trust pursuant to a Trust Agreement dated January 1, 1997 between the
Company and Branch Banking and Trust Company as trustee.
The Deferred Compensation Obligations, the Directors' Plan
Shares and the Defined Contribution Plan Shares are referred to herein
collectively as the "Securities." The Securities are proposed to be registered
pursuant to the Company's Registration Statement on Form S-8 (the "Registration
Statement") to be filed with the Securities and Exchange Commission (the
"Commission"). Our opinion relates solely to the Deferred Compensation
Obligations and the Directors' Plan Shares, and we express no opinion with
regard to the Defined Contribution Plan Shares.
The Defined Contribution Plan is intended to constitute an
unfunded "top hat" plan described in Sections 201(2), 301(a)(3) and 401(a)(1) of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"). The
Plan is subject to certain disclosure and procedural requirements of ERISA but,
since it is intended to be a "top hat" plan, it is not intended to be subject to
the eligibility, vesting, accrual, funding, fiduciary responsibility and similar
substantive requirements of ERISA. The Directors' Plan is not subject to ERISA.
In rendering this opinion, we have relied upon, among other
things, our examination of such records of the Company and certificates of its
officers and of public officials as we have deemed necessary.
<PAGE>
This opinion is limited to the laws of the United States of
America and the State of North Carolina. In rendering opinions as to future
events, we have assumed the facts and law existing on the date hereof.
Based on the foregoing, and having regard for such legal
considerations as we have deemed relevant, we are of the opinion that:
1. The Deferred Compensation Obligations, when established
pursuant to the terms of the respective Plan, will be valid and binding
obligations of the Company, enforceable against the Company in accordance with
their terms and the terms of the respective Plan, except as enforceability (i)
may be limited by bankruptcy, insolvency, reorganization or other similar laws
affecting creditors' rights generally, and (ii) is subject to general principles
of equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law); and
2. The Directors' Plan Shares have been duly authorized and,
upon issuance pursuant to the terms of the Directors' Plan, will be validly
issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion with the
Commission as an exhibit to the Registration Statement.
Sincerely,
WOMBLE CARLYLE SANDRIDGE & RICE
A PROFESSIONAL LIMITED LIABILITY COMPANY
By: /s/ Jane Jeffries Jones
-----------------------------
Jane Jeffries Jones
Exhibit 23.3
Consent of Independent Public Accountants
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our reports dated January 14, 1998,
included in BB&T Corporation's Form 10-K for the year ended December 31, 1997,
and to all references to our firm included in this registration statement.
Charlotte, North Carolina
April 13, 1998
EXHIBIT 24
<PAGE>
POWER OF ATTORNEY
Each of the undersigned, being a director and/or officer of BB&T
Corporation (the "Company"), hereby nominates, constitutes and appoints John A.
Allison, Scott E. Reed and Jerone C. Herring, or any one of them severally, to
be his or her true and lawful attorney-in-fact and to sign in his or her name
and on his or her behalf in any and all capacities stated below, and to file
with the Securities and Exchange Commission (the "Commission"), a Registration
Statement on Form S-8 (the "Registration Statement") relating to the issuance of
securities of the Company in connection with the BB&T Corporation Non-Employee
Directors' Deferred Compensation and Stock Option Plan and the BB&T Corporation
Non-Qualified Defined Contribution Plan, and to file any and all amendments,
including post-effective amendments, to the Registration Statement, making such
changes in the Registration Statement as such attorney-in-fact deems
appropriate, and generally to do all such things on his or her behalf in any and
all capacities stated below to enable the Company to comply with the provisions
of the Securities Act of 1933, as amended, and all requirements of the
Commission.
This Power of Attorney has been signed by the following persons in the
capacities indicated on February 25, 1997.
<TABLE>
<CAPTION>
<S> <C>
/s/ John A. Allison, IV /s/ Scott E. Reed
- --------------------------------------------- ------------------------------------------
Name: John A. Allison IV Name: Scott E. Reed
Title: Chairman of the Board and Title: Senior Executive Vice President
Chief Executive Officer and Chief Financial Officer
(principal executive officer) (principal financial officer)
/s/ Sherry A. Kellett /s/ Paul B. Barringer
- --------------------------------------------- -------------------------------------------
Name: Sherry A. Kellett Name: Paul B. Barringer
Title: Executive Vice President Title: Director
and Controller
(principal accounting officer)
/s/ W. R. Cuthbertson, Jr. /s/ Ronald E. Deal
- --------------------------------------------- --------------------------------------------
Name: W. R. Cuthbertson, Jr. Name: Ronald E. Deal
Title: Director Title: Director
/s/ A. J. Dooley, Sr. /s/ Joe L. Dudley, Sr.
- --------------------------------------------- -------------------------------------------
Name: A. J. Dooley, Sr. Name: Joe L. Dudley, Sr.
Title: Director Title: Director
/s/ Tom D. Efird /s/ O. William Fenn, Jr.
- --------------------------------------------- ------------------------------------------
Name: Tom D. Efird Name: O. William Fenn, Jr.
Title: Director Title: Director
/s/ Paul S. Goldsmith /s/ L. Vincent Hackley
- --------------------------------------------- ------------------------------------------
Name: Paul S. Goldsmith Name: L. Vincent Hackley
Title: Director Title: Director
<PAGE>
/s/ Ernest F. Hardee /s/ Richard Janeway, M.D.
- ------------------------------------------- ----------------------------------------
Name: Ernest F. Hardee Name: Richard Janeway, M.D.
Title: Director Title: Director
/s/ J. Ernest Lathem, M.D. /s/ James H. Maynard
- ------------------------------------------- -----------------------------------------
Name: J. Ernest Lathem, M.D. Name: James H. Maynard
Title: Director Title: Director
/s/ Joseph A. McAleer, Jr. /s/ Albert O. McCauley
- -------------------------------------------- -----------------------------------------
Name: Joseph A. McAleer, Jr. Name: Albert O. McCauley
Title: Director Title: Director
/s/ Dickson McLean, Jr /s/ Charles E. Nichols
- ------------------------------------------- ----------------------------------------
Name: Dickson McLean, Jr. Name: Charles E. Nichols
Title: Director Title: Director
/s/ L. Glenn Orr, Jr. /s/ A. Winniett Peters
- ------------------------------------------ ----------------------------------------
Name: L. Glenn Orr, Jr. Name: A. Winniett Peters
Title: Director Title: Director
/s/ Richard L. Player, Jr. /s/ C. Edward Pleasants, Jr.
- ------------------------------------------ -----------------------------------------
Name: Richard L. Player, Jr. Name: C. Edward Pleasants, Jr.
Title: Director Title: Director
/s/ Nido R. Qubein /s/ A. Tab Williams, Jr.
- ----------------------------------------- ------------------------------------------
Name: Nido R. Qubein Name: A. Tab Williams, Jr.
Title: Director Title: Director
</TABLE>
EXHIBIT 99.1
<PAGE>
BB&T CORPORATION
(FORMERLY, SOUTHERN NATIONAL CORPORATION)
NON-QUALIFIED DEFINED CONTRIBUTION PLAN
AMENDED AND RESTATED
EFFECTIVE JANUARY 1, 1997
<PAGE>
SOUTHERN NATIONAL CORPORATION
NON-QUALIFIED DEFINED CONTRIBUTION PLAN
TABLE OF CONTENTS
Page
Section 1. Establishment and Purpose...........................1
1.1 Establishment of Plan...............................1
1.2 Purpose of Plan.....................................2
1.3 Application of Plan.................................2
Section 2. Definitions and Construction........................2
2.1 Account.............................................2
2.2 Accrued Benefit.....................................3
2.3 Adjustment Date.....................................3
2.4 Affiliate...........................................4
2.5 Beneficiary.........................................4
2.6 Board...............................................4
2.7 Code................................................4
2.8 Committee...........................................4
2.9 Company.............................................4
2.10 Company Matching Credits............................4
2.11 Company Stock.......................................4
2.12 Company Stock Credit................................4
2.13 Covered Compensation................................4
2.14 Crediting Rate......................................5
2.15 Deferral Election Form..............................5
2.16 Effective Date......................................5
2.17 Eligible Employee...................................6
2.18 Employee............................................6
2.19 Employer............................................6
2.20 Entry Date..........................................6
2.21 ERISA...............................................6
2.22 Incentive Compensation Credits......................6
2.23 Incentive Compensation Plan.........................6
2.24 Index Fund..........................................7
2.25 Index Fund Credit...................................7
2.26 Participant.........................................7
2.27 Plan................................................8
2.28 Plan Year...........................................8
2.29 Prior Plan..........................................8
2.30 Salary Reduction Election Form......................8
2.31 Salary Reduction Credits............................8
2.32 Savings Plan........................................8
2.33 Service.............................................8
2.34 Spouse or Surviving Spouse..........................8
<PAGE>
Section 3. Credits to Account..................................9
3.1 Salary Reduction Credits............................9
3.2 Company Matching Credits............................10
3.3 Incentive Compensation Credits......................10
Section 4. Vesting.............................................11
Section 5. Payment of Benefits.................................11
5.1 Distribution........................................11
5.2 Payment of Benefits for Reasons Other Than Death....11
5.3 Payment of Death Benefit............................13
5.4 Rules...............................................14
Section 6. Unforeseeable Emergency Payments....................14
6.1 Conditions for Request..............................14
6.2 Written Request.....................................15
6.3 Processing of Request...............................15
6.4 Rules...............................................15
Section 7. Deemed Investments and Adjustment of Accounts ......16
7.1 Deemed Investment of Accounts in Index Fund.........16
7.2 Deemed Investment in Company Stock by Former SNC
Excess Plan Participants............................17
7.3 Adjustment of Fixed Rate Account....................19
7.4 Adjustment of Index Fund Account....................21
7.5 Adjustment of Company Stock Account.................22
7.6 Rules...............................................23
7.7 Special Effective Date..............................23
Section 8. Administration by Committee.........................23
8.1 Membership of Committee.............................23
8.2 Committee Officers; Subcommittee....................23
8.3 Committee Meetings..................................24
8.4 Transaction of Business.............................24
8.5 Committee Records...................................24
8.6 Establishment of Rules..............................24
8.7 Conflicts of Interest...............................24
8.8 Correction of Errors................................24
8.9 Authority to Interpret Plan.........................25
8.10 Third Party Advisors................................25
8.11 Compensation of Members.............................25
8.12 Committee Expenses..................................25
8.13 Indemnification of Committee........................25
Section 9. Funding.............................................26
<PAGE>
Section 10. Allocation of Responsibilities......................27
10.1. Board...............................................27
10.2 Committee...........................................27
10.3 Plan Administrator..................................27
Section 11. Benefits Not Assignable; Facility of Payments.......28
11.1 Benefits Not Assignable.............................28
11.2 Payments to Minors and Others.......................28
Section 12. Beneficiary.........................................28
Section 13. Amendment and Termination of Plan...................29
Section 14. Communication to Participants.......................30
Section 15. Claims Procedure....................................30
15.1 Filing of a Claim for Benefits......................30
15.2 Notification to Claimant of Decision................30
15.3 Procedure for Review................................31
15.4 Decision on Review..................................31
15.5 Action by Authorized Representative of Claimant.....31
Section 16. Special Provisions Relating to Southern National
ESOP Excess Plan..................................32
Section 17. Special Provisions Relating to Capital
Accumulation Plan for Eligible Key Employees
of Southern National Corporation.................33
Section 18. Special Provisions Relating to Supplemental
Retirement Benefit of Prior Plan.................33
Section 19. Parties to the Plan.................................34
19.1 Single Plan.........................................34
19.2 Service; Allocation of Costs........................34
19.3 Committee...........................................34
19.4 Authority to Amend and Terminate....................34
Section 20. Compliance with Section 16 of the Securities
Exchange Act of 1934 and Rule 16b-3
Trading Restrictions.............................34
Section 21. Miscellaneous Provisions............................35
21.1 Notices.............................................35
21.2 Lost Distributees...................................35
21.3 Reliance on Data....................................35
21.4 Receipt and Release for Payments....................35
21.5 Headings............................................36
21.6 Continuation of Employment..........................36
21.7 Construction........................................36
<PAGE>
21.8 Nonliability of Employer............................36
21.9 Severability........................................36
21.10 Merger and Consolidation............................36
21.11 Withholding Taxes...................................37
<PAGE>
SOUTHERN NATIONAL CORPORATION
NON-QUALIFIED DEFINED CONTRIBUTION PLAN
SECTION 1. ESTABLISHMENT AND PURPOSE:
1.1 ESTABLISHMENT OF PLAN: Effective as of January 1, 1988,
Branch Banking and Trust Company ("BB&T") established a supplemental retirement
plan (the "Prior Plan") for the benefit of certain eligible executives of BB&T
and participating Affiliates. The Prior Plan was entitled the Branch Banking and
Trust Company Supplemental Executive Retirement Plan. The Prior Plan was amended
and restated effective as of February 1, 1988. On February 28, 1995, Southern
National Corporation (the "Company") and BB&T Financial Corporation, the former
parent corporation of BB&T, were merged. As a result of the merger, the Company
became the parent corporation of BB&T. Effective as of January 1, 1996, the
Company assumed the sponsorship of the Prior Plan, the name of the Prior Plan
was changed to the Southern National Corporation Supplemental Executive
Retirement Plan, and the Prior Plan was amended in certain respects. The Prior
Plan is hereby amended and restated, effective as of January 1, 1997, and shall
be known as the SOUTHERN NATIONAL CORPORATION NON-QUALIFIED DEFINED CONTRIBUTION
PLAN (the "Plan"). All benefits from this Plan shall be payable solely from the
general assets of the Company and participating Affiliates. The Plan is
comprised of both an "excess benefit plan" within the meaning of Section 3(36)
of ERISA and an unfunded plan maintained for the purposes of providing deferred
compensation to a "select group of management or highly compensated employees"
within the meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA. The
Plan, therefore, is intended to be exempt from the participation, vesting,
funding, and fiduciary requirements of Title I of ERISA.
<PAGE>
1.2 PURPOSE OF PLAN: The primary purpose of the Plan is to
supplement the benefits payable to certain participants under the qualified
Southern National Corporation 401(k) Savings Plan to the extent that such
benefits are curtailed by the application of certain limits imposed by the Code.
The Plan is also intended to provide certain participants in the Company's
executive incentive compensation plans with an effective means of deferring on a
pre-tax basis a portion of the payments they are entitled to receive under such
plans.
1.3 APPLICATION OF PLAN: The terms of this Plan are
applicable only to Participants who are in the Service of the Company or a
participating Affiliate on or after January 1, 1997. The benefits with respect
to the Employees who terminated, retired, or died before this date shall be
determined under the Prior Plan, except as explicitly provided elsewhere in this
Plan.
SECTION 2. DEFINITIONS AND CONSTRUCTION:
Wherever appropriate, words used in the Plan in the singular
may include the plural, or the plural may be read as the singular. References to
one gender shall include the other. A capitalized term used, but not defined in
the Plan, shall have the same meaning given in Section 2.1 of the Savings Plan,
depending on the context in which the term is used. Whenever used in this Plan,
including Section 1 and this Section 2, the following capitalized terms shall
have the meaning set forth below (unless otherwise indicated by the context)
rather than any definition provided under the Savings Plan:
2.1 "ACCOUNT" means the aggregate of the unfunded, separate
bookkeeping accounts established and maintained with respect to each Participant
pursuant to the provisions of Section 7. The separate bookkeeping accounts that
may be established and maintained with respect to the Account shall include the
following:
2.1.1 "INCENTIVE COMPENSATION ACCOUNT" means the separate
bookkeeping account to be kept for each Participant to which Incentive
Compensation Credits under any designated Incentive Compensation Plan
shall be credited.
2
<PAGE>
2.1.2 "MATCHING ACCOUNT" means the separate bookkeeping
account to be kept for each Participant to which Company Matching
Credits shall be credited.
2.1.3 "PRIOR PLAN ACCOUNT" means the separate bookkeeping
account to be kept for each Participant to reflect that portion of the
Account (if any) attributable to an account maintained by an Employer
on behalf of a Participant pursuant to any other unfunded nonqualified
plan or contract of deferred compensation which was transferred to this
Plan at the direction of the Committee.
2.1.4 "SALARY REDUCTION ACCOUNT" means the separate
bookkeeping account to be kept for each Participant to which Salary
Reduction Credits shall be credited.
Separate sub-accounts shall be established and maintained with respect to each
separate bookkeeping account known as the "Fixed Rate Account," the "Index Fund
Account" and the "Company Stock Account." The Fixed Rate Account, the Index Fund
Account and the Company Stock Account shall be adjusted in the manner provided
in Section 7.
2.2 "ACCRUED BENEFIT" means with respect to each Participant
the balance credited to his Account as of the applicable Adjustment Date
following adjustment thereof as provided in Section 7.
2.3 "ADJUSTMENT DATE" means the following:
(a) Prior to January 1, 1997, the last day of March,
June, September and December of each year.
(b) On and after January 1, 1997, each day securities
are traded on the New York Stock Exchange, except regularly
scheduled holidays of Branch Banking and Trust Company
("BB&T"), a North Carolina corporation with its principal
office at Winston-Salem, North Carolina.
The 15th day of each calendar month is sometimes referred to herein as a
"Monthly Adjustment Date;" provided, however, that if the 15th day of a calendar
month falls on a weekend or a regularly scheduled holiday of BB&T, the Monthly
Adjustment Date for such calendar month shall be the first Adjustment Date that
immediately precedes the 15th day of the calendar month.
3
<PAGE>
2.4 "AFFILIATE" means any corporation which, with the Company,
is a member of a controlled group of employers as defined in Section 414(b) of
the Code.
2.5 "BENEFICIARY" means the person, persons or entity
designated or determined pursuant to the provisions of Section 12 of the Plan to
receive the balance of the Participant's Account under this Plan, if any, after
his death.
2.6 "BOARD" means the Board of Directors of the Company.
2.7 "CODE" means the Internal Revenue Code of 1986, as
amended, and rules and regulations issued thereunder.
2.8 "COMMITTEE" means the Administrative Committee provided
for in Section 8.
2.9 "COMPANY" means Southern National Corporation, a North
Carolina corporation with its principal office at Winston-Salem, North Carolina,
or any successor thereto by merger, consolidation or otherwise.
2.10 "COMPANY MATCHING CREDITS" means the amounts credited to
the Participant's Matching Account by the Committee pursuant to the provisions
of Section 3.2.
2.11 "COMPANY STOCK" means the Company's $5 par value common
stock.
2.12 "COMPANY STOCK CREDIT" means a bookkeeping unit used for
the purpose of crediting deemed shares of Company Stock to the Company Stock
Accounts of each Former SNC Excess Plan Participant (as defined in Section 7).
Each Company Stock Credit shall be equal to one share of Company Stock. The
value of each Company Stock Credit shall be equivalent to the value of a share
of Company Stock as of the applicable Adjustment Date. Fractional shares shall
be accounted for as such.
2.13 "COVERED COMPENSATION" means the wages within the meaning
of Section 3401(a) of the Code and all other payments of compensation to the
Participant by the Employer (in the course of the Employer's trade or business)
for which the Employer is required to furnish the
4
<PAGE>
Participant a written statement (as currently reportable on Form W-2) under
Sections 6041(d), 6051(a)(3) and 6052 of the Code, but determined without regard
to any rules that limit the remuneration included in wages based on the nature
or location of the employment or the services performed, subject to the
following adjustments:
(a) There shall be excluded amounts paid or reimbursed by the
Employer for moving expenses incurred by the Participant to the extent
that at the time of payment it is reasonable to believe that these
amounts are deductible by the Participant under Section 217 of the
Code;
(b) There shall be excluded any fringe benefits or welfare
benefits;
(c) There shall be included any amounts contributed by the
Participant to an employee benefit plan maintained by the Employer
pursuant to a salary reduction agreement which are not includible in
the gross income of the Participant under Sections 125, 402(e)(3),
402(h) or 403(b) of the Code;
(d) There shall be included any compensation deferred pursuant
to Sections 3.1 and 3.3 of this Plan; and
(e) There shall be included amounts in excess of the
limitation described in Section 401(a)(17) of the Code.
2.14 "CREDITING RATE" means the rate in effect as of the
first day of each Plan Year and utilized throughout the entire Plan Year in
crediting interest to the balance in the Fixed Rate Accounts of each
Participant. The Crediting Rate shall be determined in the manner described in
Exhibit A attached hereto, as the same may be amended from time to time by the
Committee. Prior to the beginning of each Plan Year, the Committee shall notify
the Participants in writing of the Crediting Rate for such Plan Year.
2.15 "DEFERRAL ELECTION FORM" means the election form executed
by the Participant pursuant to the provisions of Section 3.3 of the Plan.
2.16 "EFFECTIVE DATE" means January 1, 1997, except as
otherwise provided in Section 7.7.
5
<PAGE>
2.17 "ELIGIBLE EMPLOYEE" means each Employee who is determined
by the Committee to be a highly compensated or management employee and who is
selected by the Committee to participate in the Plan. An Employee shall cease to
be an Eligible Employee immediately upon the first to occur of the following:
(i) the Employee's termination of Service; (ii) determination by the Committee
that the Employee is no longer a highly compensated or management employee; or
(iii) determination by the Committee in its sole discretion that the Employee
shall no longer be eligible to participate in the Plan. See Section 2.26 with
respect to provisions governing participation in the Plan by an Eligible
Employee.
2.18 "EMPLOYEE" means an individual in the Service of the
Employer if the relationship between him and the Employer is the legal
relationship of employer and employee.
2.19 "EMPLOYER" means the Company and participating
Affiliates. See Section 19 for special provisions concerning participating
Affiliates.
2.20 "ENTRY DATE" means the Effective Date and thereafter
January 1 of each Plan Year. Under special circumstances, such as the
acquisition of an Affiliate, the Committee may designate a date other than
January 1 of a Plan Year as an Entry Date.
2.21 "ERISA" means the Employee Retirement Income Security Act
of 1974, as amended (including amendments of the Code affected thereby) and
rules and regulations issued thereunder.
2.22 "INCENTIVE COMPENSATION CREDITS" means the amounts
credited to the Participant's Incentive Compensation Account by the Committee
pursuant to the provisions of Section 3.3.
2.23 "INCENTIVE COMPENSATION PLAN" means any executive
incentive compensation plan maintained by the Company, as designated by the
Committee on Exhibit B attached hereto as the same may be amended from time to
time, under which a Participant is entitled
6
<PAGE>
to receive an annual or long-term cash award based on the satisfaction of
pre-established, objective performance goals.
2.24 "INDEX FUND" means the mutual fund described in Exhibit
C attached hereto, as the same may be amended from time to time by the
Committee. Prior to the beginning of each Plan Year, the Committee shall notify
the Participants in writing of the Index Fund for such Plan Year.
2.25 "INDEX FUND CREDIT" means a bookkeeping unit used for the
purpose of crediting deemed shares of the Index Fund to the Index Fund Account
of each Participant. Each Index Fund Credit shall be equal to one share of the
Index Fund. The value of each Index Fund Credit shall be equivalent to the net
value of a share of the Index Fund as of the applicable Adjustment Date.
2.26 "PARTICIPANT" means with respect to any Plan Year an
Eligible Employee who has entered the Plan and any former Employee who has an
Accrued Benefit remaining under the Plan. An Eligible Employee or former
Employee on the Effective Date who was a participant in the Prior Plan
immediately preceding the Effective Date, or who was eligible to enter the Prior
Plan as a Participant on the Effective Date and elected to do so, shall be a
Participant in this Plan on the Effective Date. An Eligible Employee who has not
otherwise entered the Plan shall enter the Plan and become a Participant as of
the Entry Date determined by the Committee; provided, that an Eligible Employee
shall not become a Participant in this Plan unless (i) the contributions to his
Matching Contributions Account and his Tax-Deferred Contributions Account under
the Savings Plan are less than such contributions would otherwise be under the
Savings Plan if such plan did not observe the limitations described in Sections
401(a)(17), 401(k), 401(m), 402(g) and 415 of the Code, or if such Plan included
deferrals under Sections 3.1 and 3.3 of this Plan in its definition of
Compensation; or (ii) he is eligible to participate in any Incentive
Compensation Plan. A Participant
7
<PAGE>
shall cease to be a Participant as of the date he ceases to be an Eligible
Employee or ceases to be a participant in the Savings Plan and any Incentive
Compensation Plan. A Participant who separates from Service with the Employer
and who later returns to Service will not be eligible to reenter this Plan and
become a Participant except upon satisfaction of such terms and conditions as
the Committee shall establish following the Participant's return to Service,
whether or not the Participant shall have an Accrued Benefit remaining under the
Plan on the date of his return to Service. The Eligible Employees eligible to
participate in the Plan are designated on Exhibit D attached hereto, as it may
be amended from time to time by the Committee.
2.27 "PLAN" means the unfunded, non-qualified deferred
compensation plan as herein set out or as duly amended.
2.28 "PLAN YEAR" means the 12-calendar-month period ending on
December 31 of each year.
2.29 "PRIOR PLAN" means the Southern National Corporation
Supplemental Executive Retirement Plan as in effect prior to January 1, 1997.
2.30 "SALARY REDUCTION ELECTION FORM" means the election form
executed by the Participant pursuant to the provisions of Section 3.1 of the
Plan.
2.31 "SALARY REDUCTION CREDITS" means the amounts credited to
the Participant's Salary Reduction Account by the Committee pursuant to the
provisions of Section 3.1 of the Plan.
2.32 "SAVINGS PLAN" means the Southern National Corporation
401(k) Savings Plan (as amended and restated as of January 1, 1997), as it may
be amended from time to time.
2.33 "SERVICE" means employment by the Employer as an
Employee.
2.34 "SPOUSE" or "SURVIVING SPOUSE" means, except as otherwise
provided in the Plan, the legally married or surviving spouse of a Participant.
8
<PAGE>
SECTION 3. CREDITS TO ACCOUNT:
3.1 SALARY REDUCTION CREDITS:
3.1.1 Amount of Salary Reduction Credits:
(a) Each Participant who is a participant in the
Savings Plan may elect, by executing a Salary Reduction
Election Form, to reduce on a pre-tax basis his Covered
Compensation from the Employer for any Plan Year by an amount
equal to the difference between (1) and (2), where:
(1) is a whole percentage of Covered
Compensation equal to the same contribution
percentage elected by the Participant under Section
4.3 of the Savings Plan (as such Section may be
hereafter amended); and
(2) is an amount equal to the maximum
Tax-Deferred Contributions that has been, or will be,
made to the Participant's Tax-Deferred Contributions
Account under the Savings Plan (determined with
respect to all Savings Plan provisions, and the
limitations described in Sections 401(a)(17), 401(k),
401(m), 402(g) and 415 of the Code) for such Plan
Year.
(b) An amount equal to the Participant's Salary
Reduction Credits shall be credited by the Committee to the
Salary Reduction Account maintained for the Participant
pursuant to Section 7.
3.1.2 Time for Crediting Salary Reduction Credits: The amount
of Salary Reduction Credits to be credited to the Salary Reduction
Account of a Participant shall be credited to the Participant's Salary
Reduction Account at the same time and in the same manner as
Tax-Deferred Contributions are credited to the Participant's
Tax-Deferred Contribution Account under the Savings Plan.
3.1.3 Administrative Rules Governing Salary Reduction
Elections: A salary reduction election pursuant to Section 3.1.1 shall
be made by the Participant by executing and delivering to the Committee
a Salary Reduction Election Form in accordance with such rules and
procedures as are adopted by the Committee from time to time. The
Salary Reduction Election Form must be received by the Committee prior
to the beginning of each Plan Year (or the date the Participant is
first eligible to participate in the Savings Plan, if he becomes so
eligible during the Plan Year) and shall be irrevocable for the Plan
Year (or remainder of the Plan Year), if applicable.
9
<PAGE>
3.2 COMPANY MATCHING CREDITS:
3.2.1 Amount of Company Matching Credits: With respect to each
Participant who elects to reduce his Covered Compensation under Section
3.1, the Committee shall credit to his Matching Account each month the
Company Matching Credit, which shall be an amount equal to the
difference between (a) and (b), where:
(a) is an amount equal to 100% of the first 6% of Covered
Compensation elected by the Participant for salary
reduction under Section 4.3 of the Savings Plan (as
such Section may be hereafter amended) (but not more
than the amount described in Section 3.1.1(a)(2) of
the Plan) and for salary reduction under Section
3.1.1(a)(1) of the Plan; and
(b) is an amount equal to the maximum Employer
Contributions that has been, or will be, made to the
Matching Contributions Account of the Participant
under the Savings Plan (determined with regard to all
Savings Plan provisions and the limitations described
in Sections 401(a)(17), 401(k), 401(m), 402(g), and
415 of the Code) for such Plan Year.
3.2.2 Time for Crediting Company Matching Credits: The amount
of Company Matching Credits to be credited to the Matching Account of
the Participant shall be credited by the Committee to the Participant's
Matching Account at the same time and in the same manner as Employer
Contributions are credited to the Participant's Matching Contribution
Account under the Savings Plan.
3.3 INCENTIVE COMPENSATION CREDITS:
3.3.1 Amount of Incentive Compensation Credits: Each
Participant who is a participant in any Incentive Compensation Plan may
elect, by executing a Deferral Election Form, to defer, on a pretax
basis, an amount equal to either 10%, 20%, 30%, 40%, 50%, 60%, 70%,
80%, 90%, or 100% of the benefit otherwise payable to him under such
Incentive Compensation Plan. An amount equal to the amount deferred
shall be credited by the Committee as an Incentive Compensation Credit
to the Incentive Compensation Account of the Participant.
3.3.2 Time for Crediting Incentive Compensation Credits: The
amount of Incentive Compensation Credits to be credited to the
Incentive Compensation Account of the Participant shall be credited by
the Committee to the Participant's Incentive Compensation Account as of
that date certain which the benefits payable under the Incentive
Compensation Plan would have otherwise been paid to the Participant.
3.3.3 Administrative Rules Governing Incentive Compensation
Credits: An election by the Participant to defer benefits earned under
an Incentive Compensation Plan pursuant to Section 3.3.1 shall be made
on a Deferral Election Form at a time determined by the Committee and
shall be irrevocable when made. In establishing the time of election,
the Committee shall select a date that will not result in the
10
<PAGE>
constructive receipt of income to a Participant who elects to defer
benefits earned under the Incentive Compensation Plan.
SECTION 4. VESTING:
The interest of a Participant in his Salary Reduction Account,
Incentive Compensation Account and Prior Plan Account shall be fully vested
(i.e., nonforfeitable) at all times. The interest of a Participant in his
Matching Account (and in the Company Stock Account which is a sub-account with
respect to his Matching Account) shall be contingent, except that such interest
shall become vested at the same time and in the same manner as his interest in
his Matching Contribution Account becomes vested under the Savings Plan. A
Participant who is not fully vested in his Company Matching Account shall
forfeit the nonvested portion of such account in the same manner and at the same
time that forfeitures occur with respect to his Matching Contribution Account
under the Savings Plan.
SECTION 5. PAYMENT OF BENEFITS:
5.1 DISTRIBUTION: Except as otherwise provided in Section 6,
the vested Accrued Benefit of a Participant shall be distributed to or with
respect to a Participant only upon termination of the Participant's Service with
the Employer (including all Affiliates thereof). Payment of benefits on account
of a non-death termination of Service shall be made in accordance with Section
5.2. Payment of benefits on account of the death of the Participant shall be
made in accordance with Section 5.3.
5.2 PAYMENT OF BENEFITS FOR REASONS OTHER THAN DEATH:
5.2.1 Form of Distribution: Subject to the provisions of
Section 20, the vested Accrued Benefit of a Participant who has
terminated Service for any reason other than death shall be paid to the
Participant or applied for his benefit under one of the following
options, as elected by the Participant:
(1) Term Certain Option: Payment of his vested
Accrued Benefit to him in approximately equal monthly
installments over a term certain not to exceed 180 months. If
the term certain selected by the Participant
11
<PAGE>
pursuant to this Section 5.2.1 would result in payments of
less than $100.00 per month, payments shall be made at the
rate of $100.00 per month until the Participant's vested
Accrued Benefit is paid in full.
(2) Lump Sum Option: Payment of his vested Accrued
Benefit to him in a lump sum.
The election of the form of distribution (the "Form Election") shall be
made by the Participant on a form approved by the Committee and filed
with the Committee as provided in Section 5.2.3. If the Participant
fails to elect a distribution option, his vested Accrued Benefit shall
be paid to him under the Lump Sum Option. Notwithstanding any election
made by the Participant pursuant to this Section 5.2.1, if prior to the
distribution processing date the Participant advises the Committee in
writing that he desires to have his vested Company Stock Accounts, if
any, paid to him in shares of Company Stock (as provided in Section
5.2.4), his vested Company Stock Accounts shall automatically be paid
to him under the Lump Sum Option, and the balance of his vested Account
shall be paid to him in accordance with the distribution option elected
by him pursuant to this Section 5.2.1. The amount of a Participant's
vested Accrued Benefit for purposes of any distribution made pursuant
to this Section 5 shall be determined as of the Adjustment Date such
distribution is actually processed by the Committee or its designee.
5.2.2 Commencement and Timing of Distribution: Except as
otherwise provided in Section 6 and subject to the provisions of
Section 20, no benefit payments will be made to the Participant from
the Plan under this Section 5.2 until the Service of the Participant is
terminated. Payment of his vested Accrued Benefit shall commence within
one of the following periods, as elected by the Participant:
Option (1) Distribution shall commence within the
60-day period next following the date the
Service of the Participant terminates.
Option (2) Distribution shall commence within the
period beginning on the first day of January
of the Plan Year which next follows the Plan
Year in which the Service of the Participant
terminated and ending on the last day of
February of such Plan Year.
Option (3) Distribution shall commence within the
60-day period next following the date the
Participant attains age 65.
Option (4) Distribution shall commence within the
period beginning on the first day of January
of the Plan Year which next follows the Plan
Year in which the Participant attains age 65
and ending on the last day of February of
such Plan Year.
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The election of the date as of which distribution shall commence (the
"Timing Election") shall be made on a form approved by the Committee
and filed with the Committee as provided in Section 5.2.3. If the
Participant fails to elect one of these options, Option (1) will be
deemed to have been elected by the Participant.
5.2.3 Timing of Election: The Form Election and Timing
Election shall be made by the Participant on or before the Entry Date
the Participant enters the Plan. The Participant's election may be
revoked at any time by the Participant during the "Election Period."
The Election Period begins as of the Entry Date the Participant enters
the Plan and ends on the earlier to occur of (i) the date the
Participant terminates Service; or (ii) the date which precedes the
date payment of his benefit is to commence by twelve (12) calendar
months. The Form Election and Timing Election in effect as of the close
of the Election Period shall be irrevocable.
5.2.4 Medium of Distribution: Subject to the provisions of
Section 20, distributions from the Plan shall be made in cash unless
prior to the distribution processing date the Participant advises the
Committee in writing that he desires to receive payment of his vested
Company Stock Accounts, if any, in Company Stock. The number of shares
of Company Stock distributable to the Participant shall be determined
as of the Adjustment Date the Participant's distribution from the Plan
is actually processed by the Committee or its designee. Any portion of
a payment that would be represented by a fractional share shall be paid
in cash irrespective of the Participant's desire to receive payment in
the form of Company Stock.
5.2.5 Installment Payments: If the Participant's vested
Accrued Benefit is to be distributed in installments pursuant to the
Term Certain Option, the amount of each monthly installment shall be
calculated by dividing the value of the Account as of the payment date
by the number of installment payments remaining in the installment
period. The Account shall continue to be adjusted as provided in
Section 7 until the entire balance credited to the Account has been
paid.
5.3 PAYMENT OF DEATH BENEFIT: On the death of a Participant,
his vested Accrued Benefit shall be paid to his Beneficiary in accordance with
the following special provisions:
5.3.1 Death Before Payments Begin: If the Participant dies
before payment of his vested Accrued Benefit begins under Section 5.2,
payment of his vested Accrued Benefit to his Beneficiary shall commence
as soon as practicable following the date of the Participant's death
but in no event earlier than the sixtieth day next following the date
of the Participant's death. The amount of the Participant's vested
Accrued Benefit for purposes of any distribution made pursuant to this
Section 5.3.1 shall be determined as of the Adjustment Date such
distribution is actually processed by the Committee or its designee.
The vested Accrued Benefit of the Participant shall be paid to the
Beneficiary in cash under the Lump Sum Option described in Section
5.2.1(2). Notwithstanding the foregoing and subject to the provisions
of Section 20, prior to the distribution processing date the
Beneficiary may advise the Committee in writing that he desires to have
the Participant's vested Company Stock
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Accounts, if any, paid to him in shares of Company Stock rather than in
cash. The number of shares of Company Stock distributable to the
Beneficiary shall be determined as of the Adjustment Date the death
benefit from the Plan is actually processed by the Committee or its
designee. Any portion of a payment that would be represented by a
fractional share shall be paid in cash irrespective of the
Beneficiary's desire to receive payment in the form of Company Stock.
5.3.2 Death After Payments Begin: If the Participant dies on
or after payment of his vested Accrued Benefit commences under Section
5.2, the remaining payments (if any) that would have been made to the
Participant had he not died shall be made to the Participant's
Beneficiary in the same manner as they would have been paid to the
Participant had he lived.
5.4 RULES: Subject to the provisions of Section 20, the
Committee may from time to time adopt additional policies or rules governing the
manner in which distributions will be made from the Plan so that the Plan may be
conveniently administered.
SECTION 6. UNFORESEEABLE EMERGENCY PAYMENTS:
6.1 CONDITIONS FOR REQUEST: Subject to the provisions of
Section 20, a Participant may, at any time prior to his termination of Service,
make application to the Committee to receive a cash payment in a lump sum of all
or a portion of the total amount credited to his Account (other than the
nonvested portion of his Matching Account) by reason of an unforeseeable
emergency. The amount of a payment on account of an unforeseeable emergency
shall not exceed the amount required to meet the financial hardship created by
the unforeseeable emergency and not otherwise reasonably available from other
resources of the Participant (including all amounts that may be withdrawn from
the Savings Plan). An unforeseeable emergency is a severe financial hardship to
the Participant resulting from a sudden and unexpected illness or accident of
the Participant or of a dependent of the Participant, loss of a Participant's
property due to casualty, or other similar extraordinary and unforeseeable
circumstances arising as a result of events beyond the control of the
Participant. The determination of whether an unforeseeable emergency exists
within the scope of this Section 6.1 shall be made by the Committee in its sole
and absolute discretion, and
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its decision to grant or deny a payment on account of an unforeseeable emergency
shall be final. The Committee shall apply uniform and nondiscriminatory
standards in making its decision.
6.2 WRITTEN REQUEST: The Participant's request for a payment
on account of an unforeseeable emergency must be made in writing to the
Committee. The request must specify the nature of the financial hardship, the
total amount to be paid from his Account, and the total amount of the actual
expense incurred or to be incurred on account of hardship.
6.3 PROCESSING OF REQUEST: If a payment under this Section 6
is approved, such payment shall be made as soon thereafter as practicable. The
processing of the request shall be completed as soon as practicable from the
date on which the Committee receives the properly completed written request for
a payment on account of an unforeseeable emergency. If a Participant terminates
Service after a request is approved in accordance with this Section 6 but prior
to payment of the full amount approved, the approval of his request shall be
automatically void and the benefits he is entitled to receive under the Plan
shall be paid in accordance with the applicable payment provisions of the Plan.
Only one payment because of an unforeseeable emergency shall be made within any
Plan Year. A hardship withdrawal made under this Section 6 shall be charged to
the separate bookkeeping accounts which comprise the Account in the following
order: (i) Incentive Compensation Account; (ii) Salary Reduction Account; (iii)
Prior Plan Account; and (iv) Matching Account (but only to the extent of the
vested portion of the Matching Account). Subject to the provisions of Section
20, with respect to each such separate bookkeeping account, such hardship
withdrawal shall be charged to the Fixed Rate Account, the Index Fund Account
and the Company Stock Account with respect to such separate bookkeeping account
on a pro rata basis.
6.4 RULES: Subject to the provisions of Section 20, the
Committee may from time to time adopt additional policies or rules governing the
manner in which such payments because of an unforeseeable emergency may be made
so that the Plan may be conveniently administered.
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SECTION 7. DEEMED INVESTMENTS AND ADJUSTMENT OF ACCOUNTS:
The Committee shall establish and maintain in behalf of each
Participant the following four separate bookkeeping accounts with respect to his
Account: (1) Salary Reduction Account; (2) Matching Account; (3) Incentive
Compensation Account; and (4) Prior Plan Account. The Committee shall also
establish and maintain with respect to each separate bookkeeping account two
sub-accounts, one entitled the "Fixed Rate Account" and the other entitled the
"Index Fund Account." With respect to each Participant who was a Participant in
the SNC Excess Plan (as defined in Section 16) (each such Participant sometimes
being referred to herein as a "Former SNC Excess Plan Participant"), the
Committee shall also establish and maintain with respect to his Salary Reduction
Account and his Matching Account a sub-account entitled "Company Stock Account."
In no event shall the Committee establish and maintain a Company Stock Account
on behalf of a Participant other than a Former SNC Excess Plan Participant.
7.1 DEEMED INVESTMENT OF ACCOUNTS IN INDEX FUND: In
accordance with procedures adopted by the Committee, a Participant may elect to
have all or a portion (in whole percentages of 5%) of the amount credited to
each separate bookkeeping account deemed invested in the Index Fund. An election
to invest in the Index Fund shall be made by the Participant in accordance with
such rules and procedures as are adopted by the Committee from time to time.
Subject to the provisions of Section 7.2, any amounts credited to each separate
bookkeeping account of the Participant which are not deemed to be invested in
the Index Fund shall be credited to the Fixed Rate Account (which functions as a
sub-account of the applicable separate bookkeeping account) and shall be
credited with earnings as described in Section 7.3. Unless modified or revoked
by the Participant, an election to invest in the Index Fund shall continue in
effect until such time as the distribution of the Participant's vested Accrued
Benefit is processed by the Committee or its designee in accordance with the
provisions of Section 5. A Participant unilaterally may modify or
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revoke his election as of any Monthly Adjustment Date by providing advance
notice to the Committee in accordance with such rules and procedures as are
adopted by the Committee from time to time. Any amount the Participant has
elected to be deemed invested in the Index Fund shall be converted into Index
Fund Credits in the manner and as of the Adjustment Date described in Exhibit E
attached hereto, as the same may be amended from time to time by the Committee.
The value of any Index Fund Credits the Participant has elected to be deemed
sold from his Index Fund Accounts and credited to his Fixed Rate Accounts shall
be determined in the manner and as of the Adjustment Date described in Exhibit E
attached hereto, as the same may be amended from time to time by the Committee.
All deemed dividends, capital gains or other income distributions payable with
respect to the Index Fund Credits allocated to the Participant's Index Fund
Account shall be converted into Index Fund Credits in the manner and as of the
Adjustment Date described in Exhibit E attached hereto, as the same may be
amended from time to time by the Committee. In the event the Committee shall
change the manner in which amounts are to be converted to Index Fund Credits or
the manner in which Index Fund Credits are to be deemed sold, it shall
communicate such change to Participants in writing in advance of the date such
change is to be effective. Fractional shares shall be accounted for as such. The
Index Fund Accounts shall be adjusted as provided in Section 7.4.
7.2 DEEMED INVESTMENT IN COMPANY STOCK BY FORMER SNC EXCESS
PLAN PARTICIPANTS: Pursuant to Section 16, the amounts transferred from the
accounts under the SNC Excess Plan to the separate bookkeeping accounts of
similar character under this Plan shall remain deemed invested in Company Stock
until a Former SNC Excess Plan Participant elects not to have such amounts
deemed invested in Company Stock as provided in this Section 7.2. In no event
shall any other amounts credited to Accounts under the Plan be deemed invested
in Company Stock. In accordance with procedures adopted by the Committee, a
Former SNC Excess Plan Participant may
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elect as of any Monthly Adjustment Date to have all or a portion (in whole
percentages of 5%) of his Company Stock Credits credited to his Company Stock
Accounts (which accounts function as sub-accounts of the Salary Reduction
Account and the Matching Account) deemed sold and the deemed cash proceeds
therefrom credited to his Fixed Rate Accounts (which accounts function as
sub-accounts of the Salary Reduction Account and the Matching Account) and his
Index Fund Accounts (which accounts function as sub-accounts of the Salary
Reduction Account and the Matching Account) in accordance with the most recent
election made by the Participant pursuant to Section 7.1. An election to sell
Company Stock Credits shall be made by the Participant in accordance with such
rules and procedures as are adopted by the Committee from time to time and shall
be irrevocable when made. The value of any Company Stock Credits the Participant
has elected to be deemed sold shall be determined in the manner and as of the
Adjustment Date described in Exhibit F attached hereto, as the same may be
amended from time to time by the Committee. In the event the Committee shall
change the manner in which the value of Company Stock Credits deemed sold from
the Company Stock Accounts are determined, it shall communicate such change to
Former SNC Excess Plan Participants in writing in advance of the date such
change is to be effective. All deemed cash dividends payable with respect to
Company Stock Credits then allocated to the Participant's Company Stock Accounts
shall be credited to his Fixed Rate Accounts (which accounts function as
sub-accounts of the Salary Reduction Account and the Matching Account) and his
Index Fund Accounts (which accounts function as sub-accounts of the Salary
Reduction Account and the Matching Account) in accordance with the most recent
election made by the Participant pursuant to Section 7.1. Company Stock Credits
which have not been deemed sold shall remain in the Company Stock Accounts and
such Accounts shall be adjusted as provided in Section 7.5.
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7.3 ADJUSTMENT OF FIXED RATE ACCOUNT: Except as provided in
Sections 7.4 and 7.5 with respect to the adjustment of the Index Fund Accounts
and the Company Stock Accounts, as of the close of business of the Company on
each Adjustment Date, each Fixed Rate Account with respect to each separate
bookkeeping account shall be adjusted as follows:
7.3.1 Salary Reduction Fixed Rate Account: The Fixed Rate
Account (which account functions as a sub-account of the Salary
Reduction Account) of each Participant shall be adjusted in this order:
(1) There shall be debited (i) the total amount of
any payments deemed made from such account since the next
preceding Adjustment Date, and (ii) the total amount deemed
applied since the next preceding Adjustment Date to the deemed
purchase of Index Fund Credits for the Index Fund Account of
the Participant (which account functions as a sub-account of
the Salary Reduction Account).
(2) There shall be credited the total amount of any
Salary Reduction Credits made to such account with respect to
the Participant since the last preceding Adjustment Date.
(3) There shall be credited (i) deemed cash dividends
payable with respect to Company Stock Credits then allocated
to the Company Stock Account of the Participant which the
Participant has elected to be credited to his Fixed Rate
Account, (ii) cash proceeds from the deemed sale of any
Company Stock Credits then allocated to the Company Stock
Account of the Participant which the Participant has elected
to be credited to his Fixed Rate Account, and (iii) cash
proceeds from the deemed sale of any Index Fund Credits then
allocated to the Index Fund Account of the Participant.
(4) There shall be credited an amount equal to the
product of (A) and (B), where (A) is the balance credited to
the Fixed Rate Account (which
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account functions as a sub-account of the Salary Reduction
Account) as of such Adjustment Date (after adjustment for any
distributions as of such Adjustment Date but prior to
adjustment for credits as of such date), and (B) is the
Crediting Rate.
7.3.2 Matching Fixed Rate Account: The Fixed Rate Account
(which account functions as a sub-account of the Matching Account) of
each Participant shall be adjusted in this order:
(1) There shall be debited (i) the total amount of
any payments deemed made from such account since the next
preceding Adjustment Date, and (ii) the total amount applied
since the next preceding Adjustment Date to the deemed
purchase of Index Fund Credits for the Index Fund Account
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of the Participant (which account functions as a sub-account
of the Matching Account).
(2) There shall be credited the total amount of any
Matching Credits made to such account with respect to the
Participant since the last preceding Adjustment Date.
(3) There shall be credited (i) deemed cash dividends
payable with respect to Company Stock Credits then allocated
to the Company Stock Account of the Participant which the
Participant has elected to be credited to his Fixed Rate
Account, (ii) cash proceeds from the deemed sale of any
Company Stock Credits then allocated to the Company Stock
Account of the Participant which the Participant has elected
to be credited to his Fixed Rate Account, and (iii) cash
proceeds from the deemed sale of any Index Fund Credits then
allocated to the Index Fund Account of the Participant.
(4) There shall be credited an amount equal to the
product of (A) and (B), where (A) is the balance credited to
the Fixed Rate Account (which
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account functions as a sub-account of the Matching Account) as
of such Adjustment Date (after adjustment for any
distributions as of such adjustment date but prior to
adjustment for credits as of such date), and (B) is the
Crediting Rate.
(5) There shall be debited the amount of his Fixed
Rate Account which was deemed forfeited since the next
preceding Adjustment Date.
7.3.3 Incentive Compensation Fixed Rate Account: The Fixed
Rate Account (which account functions as a sub-account of the Incentive
Compensation Account) of each Participant shall be adjusted in this
order:
(1) There shall be debited (i) the total amount of
any payments deemed made from such account since the next
preceding Adjustment Date and (ii) the total amount deemed
applied since the next preceding Adjustment Date to the
purchase of Index Fund Credits for the Index Fund Account of
the Participant (which account functions as a sub-account of
the Incentive Compensation Account).
(2) There shall be credited the total amount of any
Incentive Compensation Credits made to such account with
respect to the Participant since the last preceding Adjustment
Date.
(3) There shall be credited cash proceeds from the
deemed sale of any Index Fund Credits then allocated to the
Index Fund Account of the Participant.
(4) There shall be credited an amount equal to the
product of (A) and (B), where (A) is the balance credited to
the Fixed Rate Account (which account functions as a
sub-account of the Incentive Compensation Account) as of such
Adjustment Date (after adjustment for any distributions as of
such adjustment date but prior to adjustment for credits as of
such date), and (B) is the Crediting Rate.
7.3.4 Prior Plan Fixed Rate Account: The Fixed Rate Account
(which account functions as a sub-account of the Prior Plan Account) of
each Participant shall be adjusted in this order:
(1) There shall be debited (i) the total amount of
any payments deemed made from such account since the next
preceding Adjustment Date and (ii) the total amount deemed
applied since the next preceding Adjustment Date to the
purchase of Index Fund Credits for the Index Fund Account of
the Participant (which account functions as a sub-account of
the Prior Plan Account).
(2) There shall be credited the total amount of any
Prior Plan Account Credits made to such account with respect
to the Participant since the last preceding Adjustment Date.
(3) There shall be credited cash proceeds from the
deemed sale of any Index Fund Credits then allocated to the
Index Fund Account of the Participant.
(4) There shall be credited an amount equal to the
product of (A) and (B), where (A) is the balance credited to
the Fixed Rate Account (which account functions as a
sub-account of the Prior Plan Account) as of such Adjustment
Date (after adjustment for any distributions as of such
adjustment date but prior to adjustment for credits as of such
date), and (B) is the Crediting Rate.
7.4 ADJUSTMENT OF INDEX FUND ACCOUNT: As of the close of
business of the Company on each Adjustment Date, the number of Index Fund
Credits allocated to the Index Fund Account of each Participant with respect to
each separate bookkeeping account shall be adjusted in the following order:
7.4.1 There shall be debited any Index Fund Credits deemed
sold from the Index Fund Account since the next preceding Adjustment
Date.
7.4.2 There shall be credited (i) any shares of the Index Fund
deemed purchased with amounts converted into Index Fund Credits, and
(ii) any additional shares of Index Fund Credits deemed purchased as a
result of any deemed dividends, capital gains or other income
distributions payable since the next
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preceding Adjustment Date with respect to Index Fund Credits allocated
to the Participant's Index Fund Account.
7.4.3 There shall be debited any Index Fund Credits forfeited
with respect to the Index Fund Account of the Matching Account since
the next preceding Adjustment Date.
7.5 ADJUSTMENT OF COMPANY STOCK ACCOUNT: As of the close of
business of the Company on each Adjustment Date, the number of Company Stock
Credits allocated to the Company Stock Account of each Participant with respect
to each separate bookkeeping account shall be adjusted in the following order:
7.5.1 There shall be debited any Company Stock Credits deemed
distributed or deemed sold from the Company Stock Account since the
next preceding Adjustment Date.
7.5.2 There shall be credited (i) any deemed stock dividends
on Company Stock Credits allocated to the Participant's Company Stock
Account, and (ii) any additional shares of Company Stock Credits deemed
issued in connection with a stock split or similar transaction since
the next preceding Adjustment Date with respect to Company Stock
Credits allocated to the Participant's Company Stock Account.
7.5.3 There shall be debited any Company Stock Credits
forfeited with respect to the Company Stock Account of the Matching
Account since the next preceding Adjustment Date.
The aggregate number of Company Stock Credits credited to the Company Stock
Account may be appropriately adjusted as the Committee may determine for any
increase or decrease in the number of shares of issued Company Stock resulting
from a subdivision or consolidation of shares, whether through reorganization,
recapitalization, stock split-up, stock distribution or combination of shares,
or the payment of a share dividend or other increase or decrease in the number
of such shares outstanding effected without receipt of consideration by the
Company. Adjustments under this Section 7.5 shall be made according to the sole
discretion of the Committee, and its decisions shall be binding and conclusive.
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7.6 RULES: Subject to the provisions of Section 20, the
Committee may establish any rules or regulations necessary to implement the
provisions of this Section 7.
7.7 SPECIAL EFFECTIVE DATE: Notwithstanding any provision of
the Plan to the contrary, the provisions of the Plan relating to the deemed
investment in the Index Fund shall not become effective until the later of (i)
April 1, 1997; or (ii) the date of approval of the Plan by the Board.
SECTION 8. ADMINISTRATION BY COMMITTEE:
8.1 MEMBERSHIP OF COMMITTEE: The Committee shall consist of
not less than three nor more than seven individuals who shall be appointed by
the Board to serve at the pleasure of the Board. Any member of the Committee may
resign, and his successor, if any, shall be appointed by the Board. The
Committee shall be responsible for the general administration and interpretation
of the Plan and for carrying out its provisions, except to the extent all or any
of such obligations are specifically imposed on the Board.
8.2 COMMITTEE OFFICERS; SUBCOMMITTEE: The members of the
Committee shall elect a Chairman and may elect an acting Chairman. They shall
also elect a Secretary and may elect an acting Secretary, either of whom may be
but need not be a member of the Committee. The Committee may appoint from its
membership such subcommittees with such powers as the Committee shall determine,
and may authorize one or more of its members or any agent to execute or deliver
any instruments or to make any payment in behalf of the Committee. The Chairman
of the Committee shall constitute the Plan Administrator and shall be agent for
service of legal process on the Plan. In addition, notwithstanding any provision
herein, any subcommittee established by the Committee or any Board committee or
subcommittee may be granted such authority, and be comprised of such members, as
is necessary to comply with the conditions imposed by Rule 16b-3, promulgated
under Section 16 of the Securities Exchange Act of 1934, as amended (the "1934
Act").
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8.3 COMMITTEE MEETINGS: The Committee shall hold such
meetings upon such notice, at such places and at such intervals as it may from
time to time determine. Notice of meetings shall not be required if notice is
waived in writing by all the members of the Committee at the time in office, or
if all such members are present at the meeting.
8.4 TRANSACTION OF BUSINESS: A majority of the members of the
Committee at the time in office shall constitute a quorum for the transaction of
business. All resolutions or other actions taken by the Committee at any meeting
shall be by vote of a majority of those present at any such meeting and entitled
to vote. Resolutions may be adopted or other action taken without a meeting upon
written consent thereto signed by all of the members of the Committee.
8.5 COMMITTEE RECORDS: The Committee shall maintain full and
complete records of its deliberations and decisions. The minutes of its
proceedings shall be conclusive proof of the facts of the operation of the Plan.
The records of the Committee shall contain all relevant data pertaining to
individual Participants and their rights under the Plan.
8.6 ESTABLISHMENT OF RULES: Subject to the limitations of the
Plan, the Committee may from time to time establish rules or by-laws for the
administration of the Plan and the transaction of its business.
8.7 CONFLICTS OF INTEREST: No individual member of the
Committee shall have any right to vote or decide upon any matter relating solely
to himself or to any of his rights or benefits under the Plan (except that such
member may sign unanimous written consent to resolutions adopted or other action
taken without a meeting).
8.8 CORRECTION OF ERRORS: The Committee may correct errors
and, so far as practicable, may adjust any benefit or credit or payment
accordingly. The Committee may in its discretion waive any notice requirements
in the Plan; provided, that a waiver of notice in one or more cases shall not be
deemed to constitute a waiver of notice in any other case. With respect to
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any power or authority which the Committee has discretion to exercise under the
Plan, such discretion shall be exercised in a nondiscriminatory manner.
8.9 AUTHORITY TO INTERPRET PLAN: Subject to the claims
procedure set forth in Section 15, the Committee and the Plan Administrator
shall have the duty and discretionary authority to interpret and construe the
provisions of the Plan and decide any dispute which may arise regarding the
rights of Participants hereunder, including the discretionary authority to
interpret the Plan and to make determinations as to eligibility for
participation and benefits under the Plan. Interpretations and determinations by
the Committee and the Plan Administrator shall apply uniformly to all persons
similarly situated and shall be binding and conclusive on all interested
persons. Such interpretations and determinations shall only be set aside if the
Committee and the Plan Administrator are found to have acted arbitrarily and
capriciously in interpreting and construing the provisions of the Plan.
8.10 THIRD PARTY ADVISORS: The Committee may engage an
attorney, accountant or any other technical advisor on matters regarding the
operation of the Plan and to perform such other duties as shall be required in
connection therewith, and may employ such clerical and related personnel as the
Committee shall deem requisite or desirable in carrying out the provisions of
the Plan.
8.11 COMPENSATION OF MEMBERS: No fee or compensation shall be
paid to any member of the Committee for his service as such.
8.12 COMMITTEE EXPENSES: The Committee shall be entitled to
reimbursement by the Company for its reasonable expenses properly and actually
incurred in the performance of its duties in the administration of the Plan.
8.13 INDEMNIFICATION OF COMMITTEE: No member of the Committee
shall be personally liable by reason of any contract or other instrument
executed by him or on his behalf as
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a member of the Committee nor for any mistake of judgment made in good faith,
and the Company shall indemnify and hold harmless, directly from its own assets
(including the proceeds of any insurance policy the premiums for which are paid
from the Company's own assets), each member of the Committee and each other
officer, Employee, or director of the Company to whom any duty or power relating
to the administration or interpretation of the Plan may be delegated or
allocated, against any unreimbursed or uninsured cost or expense (including any
sum paid in settlement of a claim with the prior written approval of the Board)
arising out of any act or omission to act in connection with the Plan unless
arising out of such person's own fraud, bad faith, willful misconduct or gross
negligence.
SECTION 9. FUNDING:
The Plan is intended to be both an excess benefit plan and an
unfunded plan of deferred compensation maintained for a select group of highly
compensated or management employees. The obligation of the Employer to make
payments hereunder shall constitute a general unsecured obligation of the
Employer to the Participant. Notwithstanding the foregoing, the Company shall
establish and maintain a special separate fund as provided for in the document
entitled "Southern National Corporation Non-Qualified Deferred Compensation
Trust." The Employer shall make contributions to the trust from time to time in
accordance with Section 5 thereof. Notwithstanding the foregoing, no Participant
or his Beneficiary shall have any legal or equitable rights, interest or claims
in any particular asset of the trust or the Employer by reason of the Employer's
obligation hereunder, and nothing contained herein shall create or be construed
as creating any other fiduciary relationship between the Employer and a
Participant or any other person. To the extent that any person acquires a right
to receive payments from the trust or the Employer hereunder, such right shall
be no greater than the right of an unsecured creditor of the Employer.
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SECTION 10. ALLOCATION OF RESPONSIBILITIES: The persons
responsible for the Plan and the duties and responsibilities allocated to each,
which shall be carried out in accordance with the other applicable terms and
provisions of the Plan, shall be as follows:
10.1. BOARD:
(i) To amend the Plan (other than the Exhibits);
(ii) To appoint and remove members of the
Committee;
(iii) To terminate the Plan; and
(iv) To take any actions required to comply with
federal and state securities laws (except to the extent that
the Committee or a committee or subcommittee established
pursuant to Section 8.2 is authorized to do so).
10.2 COMMITTEE:
(i) To determine the Employees eligible to
participate in the Plan;
(ii) To interpret the provisions of the Plan and to
determine the rights of the Participants under the Plan,
except to the extent otherwise provided in Section 15 relating
to claims procedure;
(iii) To administer the Plan in accordance with its
terms, except to the extent powers to administer the Plan are
specifically delegated to another person or persons as
provided in the Plan;
(iv) To account for the Accrued Benefits of
Participants;
(v) To direct the Employer in the payment of
benefits, and
(vi) To the extent necessary or advisable, to amend
the Exhibits attached hereto.
10.3 PLAN ADMINISTRATOR:
(i) To file such reports as may be required with the
United States Department of Labor, the Internal Revenue
Service and any other government agencies to which reports may
be required to be submitted from time to time;
(ii) To provide for disclosure of Plan provisions and
other information relating to the Plan to Participants and
other interested parties; and
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<PAGE>
(iii) To administer the claims procedure to the
extent provided in Section 15.
SECTION 11. BENEFITS NOT ASSIGNABLE; FACILITY OF PAYMENTS:
11.1 BENEFITS NOT ASSIGNABLE: No portion of any benefit held
or paid under the Plan with respect to any Participant shall be subject in any
manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance or charge, and any attempt so to anticipate, alienate, sell,
transfer, assign, pledge, encumber or charge the same shall be void, nor shall
any portion of such benefit be in any manner payable to any assignee, receiver
or any one trustee, or be liable for his debts, contracts, liabilities,
engagements or torts, or be subject to any legal process to levy upon or attach.
11.2 PAYMENTS TO MINORS AND OTHERS: If any individual
entitled to receive a payment under the Plan shall be physically, mentally or
legally incapable of receiving or acknowledging receipt of such payment, the
Committee, upon the receipt of satisfactory evidence of his incapacity and
satisfactory evidence that another person or institution is maintaining him and
that no guardian or committee has been appointed for him, may cause any payment
otherwise payable to him to be made to such person or institution so maintaining
him. Payment to such person or institution shall be in full satisfaction of all
claims by or through the Participant to the extent of the amount thereof.
SECTION 12. BENEFICIARY:
The Participant's Beneficiary shall be the person or persons
designated by the Participant on the beneficiary designation form provided by
and filed with the Committee or its designee. If the Participant does not
designate a Beneficiary, the Beneficiary shall be his Surviving Spouse. If the
Participant does not designate a Beneficiary and has no Surviving Spouse, the
Beneficiary shall be the Participant's estate. The designation of a Beneficiary
may be changed or
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<PAGE>
revoked only by filing a new beneficiary designation form with
the Committee or its designee. If a Beneficiary (the "Primary Beneficiary") is
receiving or is entitled to receive payments under the Plan and dies before
receiving all of the payments due him, the balance to which he is entitled shall
be paid to the Contingent Beneficiary, if any, named in the Participant's
current beneficiary designation form. If there is no Contingent Beneficiary, the
balance shall be paid to the estate of the Primary Beneficiary. Any Beneficiary
may disclaim all or any part of any benefit to which such Beneficiary shall be
entitled hereunder by filing a written disclaimer with the Committee before
payment of such benefit is to be made. Such a disclaimer shall be made in form
satisfactory to the Committee and shall be irrevocable when filed. Any benefit
disclaimed shall be payable from the Plan in the same manner as if the
Beneficiary who filed the disclaimer had died on the date of such filing.
SECTION 13. AMENDMENT AND TERMINATION OF PLAN:
The Board may amend or terminate the Plan at any time;
provided, that in no event shall such amendment or termination reduce any
Participant's Accrued Benefit as of the date of such amendment or termination,
nor shall any such amendment affect the terms of the Plan relating to the
payment of such Accrued Benefit without the Participant's prior written consent
to such amendment. Any such amendment or termination shall be made pursuant to a
resolution of the Board and shall be effective as of the date specified in such
resolution. Upon termination of the Plan, distribution of the Accrued Benefit of
a Participant shall be made to the Participant or his Beneficiary in the manner
and at the time described in Section 5 of the Plan. No additional credits of
Salary Reduction Credits, Matching Credits, or Incentive Compensation Credits
shall be made to the respective separate bookkeeping accounts of a Participant
following termination of the Plan, but the Account
29
<PAGE>
of each Participant shall continue to be adjusted as provided in Section 7 until
the balance of the Account of the Participant has been fully distributed to him
or his Beneficiary.
SECTION 14. COMMUNICATION TO PARTICIPANTS:
The Company shall communicate the principal terms of the Plan
to the Participants. The Company shall make a copy of the Plan available for
inspection by Participants and their Beneficiaries during reasonable hours, at
the principal office of the Company.
SECTION 15. CLAIMS PROCEDURE:
The following claims procedure shall apply with respect to the
Plan:
15.1 FILING OF A CLAIM FOR BENEFITS: If a Participant or
Beneficiary (the "Claimant") believes that he is entitled to benefits under the
Plan which are not being paid to him or which are not being accrued for his
benefit, he shall file a written claim therefor with the Plan Administrator. In
the event the Plan Administrator shall be the Claimant, all actions which are
required to be taken by the Plan Administrator pursuant to this Section 15 shall
be taken instead by another member of the Committee designated by the Committee.
15.2 NOTIFICATION TO CLAIMANT OF DECISION: Within 90 days
after receipt of a claim by the Plan Administrator (or within 180 days if
special circumstances require an extension of time) the Plan Administrator shall
notify the Claimant of his decision with regard to the claim. In the event of
such special circumstances requiring an extension of time, there shall be
furnished to the Claimant prior to expiration of the initial 90-day period
written notice of the extension, which notice shall set forth the special
circumstances and the date by which the decision shall be furnished. If such
claim shall be wholly or partially denied, notice thereof shall be in writing
and worded in a manner calculated to be understood by the Claimant, and shall
set forth: (i) the specific reason or reasons for the denial; (ii) specific
reference to pertinent provisions of the Plan on which the denial is based;
(iii) a description of any additional material or information necessary for the
Claimant to
30
<PAGE>
perfect the claim and an explanation of why such material or information is
necessary; and (iv) an explanation of the procedure for review of the denial. If
the Plan Administrator fails to notify the Claimant of the decision in a timely
manner, the claim shall be deemed denied as of the close of the initial 90-day
period (or the close of the extension period, if applicable).
15.3 PROCEDURE FOR REVIEW: Within 60 days following receipt
by the Claimant of notice denying his claim, in whole or in part, or, if such
notice shall not be given, within 60 days following the latest date on which
such notice could have been timely given, the Claimant shall appeal denial of
the claim by filing a written application for review with the Committee.
Following such request for review, the Committee shall fully and fairly review
the decision denying the claim. Prior to the decision of the Committee, the
Claimant shall be given an opportunity to review pertinent documents and to
submit issues and comments in writing.
15.4 DECISION ON REVIEW: The decision on review of a claim
denied in whole or in part by the Plan Administrator shall be made in the
following manner:
15.4.1 Within 60 days following receipt by the Committee of
the request for review (or within 120 days if special circumstances
require an extension of time), the Committee shall notify the Claimant
in writing of its decision with regard to the claim. In the event of
such special circumstances requiring an extension of time, written
notice of the extension shall be furnished to the Claimant prior to the
commencement of the extension. If the decision on review is not
furnished in a timely manner, the claim shall be deemed denied as of
the close of the initial 60-day period (or the close of the extension
period, if applicable).
15.4.2 With respect to a claim that is denied in whole or in
part, the decision on review shall set forth specific reasons for the
decision, shall be written in a manner calculated to be understood by
the Claimant, and shall cite specific references to the pertinent Plan
provisions on which the decision is based.
15.4.3 The decision of the Committee shall be final and
conclusive.
15.5 ACTION BY AUTHORIZED REPRESENTATIVE OF CLAIMANT: All
actions set forth in this Section 15 to be taken by the Claimant may likewise be
taken by a representative of the Claimant duly authorized by him to act in his
behalf on such matters. The Plan Administrator and the
31
<PAGE>
Committee may require such evidence as either may reasonably deem necessary or
advisable of the authority to act of any such representative.
SECTION 16. SPECIAL PROVISIONS RELATING TO SOUTHERN NATIONAL
ESOP EXCESS PLAN:
Prior to January 1, 1996, the Company sponsored and maintained
the Southern National ESOP Excess Plan (the "SNC Excess Plan"). The purpose of
the SNC Excess Plan was to restore to employees certain benefits ("restoration
benefits") that would have been provided under the Southern National Corporation
401(k) Savings Plan (formerly known as the "Southern National Employee Stock
Ownership Plan") except for the limitations imposed by Sections 401(k)(3) and
402(g)(1) of the Code. Since the restoration benefits provided by the SNC Excess
Plan are now provided pursuant to Sections 3.1 and 3.2 of this Plan (and which
restoration benefits were also provided under the Prior Plan), this Plan
eliminates the need for the SNC Excess Plan. Accordingly, the SNC Excess Plan
was frozen as of December 31, 1995. All employees who were participants in the
SNC Excess Plan on December 31, 1995, automatically became Participants in the
Prior Plan on January 1, 1996. All participants' accounts under the SNC Excess
Plan were combined with the separate bookkeeping accounts of similar character
under this Plan as of January 1, 1997. Each Former SNC Excess Plan Participant's
Tax-Deferred Contribution Account (formerly known as his "Employee's Pre-Tax
Account") under the SNC Excess Plan became his Salary Reduction Account under
this Plan. Each Former SNC Excess Plan Participant's Matching Contributions
Account (formerly known as his "Company's Pre-Tax Account") became his Matching
Account under this Plan. The balance in the accounts of each Former SNC Excess
Plan Participant under the SNC Excess Plan were deemed invested in Company
Stock. The amounts transferred from the accounts under the SNC Excess Plan to
the separate bookkeeping accounts of similar character under this Plan shall
remain deemed invested in Company Stock until a Former SNC Excess Plan
Participant elects not to have such amounts deemed invested in Company Stock as
provided in Section 7.2.
32
<PAGE>
SECTION 17. SPECIAL PROVISIONS RELATING TO CAPITAL
ACCUMULATION PLAN FOR ELIGIBLE KEY EMPLOYEES OF
SOUTHERN NATIONAL CORPORATION:
Prior to January 1, 1996, the Company sponsored and maintained
the Capital Accumulation Plan for Eligible Key Employees of Southern National
Corporation (the "SNC Cap Plan"). The purpose of the SNC Cap Plan was to provide
selected eligible key employees with the opportunity to defer on a pre-tax basis
certain cash awards under the Company's annual and long-term incentive
compensation award plans. Since the pre-tax deferral opportunity is provided
under Section 3.3 of this Plan (and was also provided under the Prior Plan),
this Plan eliminates the need for the SNC Cap Plan. Accordingly, the SNC Cap
Plan was frozen as of December 31, 1995. All employees who were participants in
the SNC Cap Plan automatically became Participants in the Prior Plan on January
1, 1996. Any deferrals credited to a Participant's account under the SNC Cap
Plan were combined with the credits to his Incentive Compensation Account under
this Plan effective as of January 1, 1997.
SECTION 18. SPECIAL PROVISIONS RELATING TO SUPPLEMENTAL
RETIREMENT BENEFIT OF PRIOR PLAN:
Prior to January 1, 1997, Section 4.1 of the Prior Plan
provided a special supplemental retirement benefit (the "Retirement Plan
Supplement") to supplement the benefits payable to Participants under the
tax-qualified Southern National Corporation Pension Plan (the defined benefit
plan sponsored by BB&T was formerly known as the "Retirement Plan for the
Employees of Branch Banking and Trust Company"). The provisions of the Prior
Plan relating to the Retirement Plan Supplement have been incorporated into a
new non-qualified supplemental retirement plan effective as of January 1, 1997.
The new non-qualified supplemental retirement plan is known as the Southern
National Corporation Non-Qualified Defined Benefit Plan.
33
<PAGE>
SECTION 19. PARTIES TO THE PLAN:
Subject to the approval of the Board, an Affiliate that has
adopted the Savings Plan may adopt this Plan and become an employer-party to
this Plan by resolutions approved by its Board of Directors. The Affiliates
which are employer-parties to this Plan are listed on Exhibit G attached hereto,
as the same may be amended from time to time by the Committee. The following
special provisions shall apply to all employer-parties to the Plan:
19.1 SINGLE PLAN: The Plan shall apply as a single plan with
respect to all parties as if there were only one employer-party.
19.2 SERVICE; ALLOCATION OF COSTS: Service for purposes of
the Plan shall be interchangeable among employer-parties to the Plan and shall
not be deemed interrupted or terminated by the transfer at any time of a
Participant from the Service of one employer-party to the Service of another
employer-party. In determining the cost of providing benefits under the Plan,
each employer-party shall be responsible for the cost associated with the
Employees of such employer-party who are Participants in the Plan.
19.3 COMMITTEE: The Committee which administers the Plan as
applied to the Company shall also be the Committee as applied to each other
employer-party to the Plan.
19.4 AUTHORITY TO AMEND AND TERMINATE: The Board of the
Company shall have the power to amend or terminate the Plan as applied to each
employer-party.
SECTION 20. COMPLIANCE WITH SECTION 16 OF THE
SECURITIES EXCHANGE ACT OF 1934 AND RULE
16B-3 TRADING RESTRICTIONS:
The transactions under the Plan are intended to be structured
in accordance with the 1934 Act, including but not limited to the restrictions
imposed by Rule 16b-3 adopted under the 1934 Act. In addition to the provisions
contained in the Plan, transactions by persons subject to Section 16 shall be
subject to such further conditions as may be required in order to comply with
the terms of Rule 16b-3 and Section 16(b). Without limiting the foregoing,
persons subject to Section
34
<PAGE>
16 shall be required to comply with such rules and procedures regarding Plan
participation and transactions as may be established by the Committee or a
committee or subcommittee established pursuant to Section 8.2.
SECTION 21. MISCELLANEOUS PROVISIONS:
21.1 NOTICES: Each Participant who is not in Service and each
Beneficiary shall be responsible for furnishing the Plan Administrator with his
current address for the mailing of notices, reports, and benefit payments. Any
notice required or permitted to be given to such Participant or Beneficiary
shall be deemed given if directed to such address and mailed by regular United
States mail, first class, postage prepaid. If any check mailed to such address
is returned as undeliverable to the addressee, mailing of checks will be
suspended until the Participant or Beneficiary furnishes the proper address.
This provision shall not be construed as requiring the mailing of any notice or
notification otherwise permitted to be given by posting or by other publication.
21.2 LOST DISTRIBUTEES: A benefit shall be deemed forfeited
if the Plan Administrator is unable after a reasonable period of time to locate
the Participant or Beneficiary to whom payment is due; provided, however, that
such benefit shall be reinstated if a valid claim is made by or on behalf of the
Participant or Beneficiary for the forfeited benefit.
21.3 RELIANCE ON DATA: The Employer, the Committee and the
Plan Administrator shall have the right to rely on any data provided by the
Participant or by any Beneficiary. Representations of such data shall be binding
upon any party seeking to claim a benefit through a Participant, and the
Employer, the Committee and the Plan Administrator shall have no obligation to
inquire into the accuracy of any representation made at any time by a
Participant or Beneficiary.
21.4 RECEIPT AND RELEASE FOR PAYMENTS: Any payment made from
the Plan to or with respect to any Participant or Beneficiary, or pursuant to a
disclaimer by a Beneficiary, shall,
35
<PAGE>
to the extent thereof, be in full satisfaction of all claims hereunder against
the Plan and the Employer with respect to the Plan. The recipient of any payment
from the Plan may be required by the Committee, as a condition precedent to such
payment, to execute a receipt and release with respect thereto in such form as
shall be acceptable to the Committee.
21.5 HEADINGS: The headings and subheadings of the Plan have
been inserted for convenience of reference and are to be ignored in any
construction of the provisions hereof.
21.6 CONTINUATION OF EMPLOYMENT: The establishment of the
Plan shall not be construed as conferring any legal or other rights upon any
Employee or any persons for continuation of employment, nor shall it interfere
with the right of the Employer to discharge any Employee or to deal with him
without regard to the effect thereof under the Plan.
21.7 CONSTRUCTION: The provisions of the Plan shall be
construed and enforced according to the laws of the State of North Carolina.
21.8 NONLIABILITY OF EMPLOYER: The Employer does not
guarantee the Participants, former Participants or Beneficiaries against loss of
or depreciation in value of any right or benefit that any of them may acquire
under the terms of the Plan, nor does the Employer guarantee to any of them that
the assets of the Employer will be sufficient to provide any or all benefits
payable under the Plan at any time, including any time that the Plan may be
terminated or partially terminated.
21.9 SEVERABILITY: All provisions contained in this Plan
shall be severable, and in the event that any one or more of them shall be held
to be invalid by any competent court, this Plan shall be interpreted as if such
invalid provisions were not contained herein.
21.10 MERGER AND CONSOLIDATION: The Employer shall not
consolidate or merge into or with another corporation or entity, or transfer all
or substantially all of its assets to another corporation, partnership, trust or
other entities (a "Successor Entity") unless such Successor Entity
36
<PAGE>
shall assume the rights, obligations and liabilities of the Employer under the
Plan and upon such assumption, the Successor Entity shall become obligated to
perform the terms and conditions of the Plan.
21.11 WITHHOLDING TAXES: The Employer shall satisfy all
federal, state and local withholding tax requirements prior to making any
benefit payment under the Plan. Whenever under the Plan payments are to be made
by the Employer in cash, such payments shall be net of any amounts sufficient to
satisfy all federal, state and local withholding tax requirements. Whenever
payments shall be made in Company Stock, the Employer shall have the right to
require the Participant (or Beneficiary) to remit to the Employer an amount
sufficient to satisfy all federal, state and local withholding tax requirements
as a condition to the registration of the transfer of such Company Stock on the
books of the Company.
IN WITNESS WHEREOF, this non-qualified, deferred compensation
plan is executed in behalf of the Company on the 25th day of March, 1997, to
be effective as of January 1, 1997.
SOUTHERN NATIONAL CORPORATION
By: /s/ Robert E. Greene
----------------------------------
President
Attest:
/s/ Jerone C. Herring
- ---------------------------------
Secretary
[Corporate Seal]
37
<PAGE>
EXHIBIT 99.2
<PAGE>
BB&T CORPORATION
(FORMERLY, SOUTHERN NATIONAL CORPORATION)
NON-EMPLOYEE DIRECTORS'
DEFERRED COMPENSATION AND STOCK OPTION PLAN
AMENDED AND RESTATED
EFFECTIVE JANUARY 1, 1997
<PAGE>
SOUTHERN NATIONAL CORPORATION
NON-EMPLOYEE DIRECTORS'
DEFERRED COMPENSATION AND STOCK OPTION PLAN
TABLE OF CONTENTS
Page No.
Section 1. Establishment and Purpose........................... 1
1.1 Establishment of Plan............................... 1
1.2 Purpose of Plan..................................... 1
1.3 Federal Income Tax Considerations................... 2
Section 2. Definitions and Construction........................ 2
2.1 Accrued Benefit..................................... 3
2.2 Adjustment Date..................................... 3
2.3 Affiliate........................................... 3
2.4 Average Market Value................................ 3
2.5 Beneficiary......................................... 3
2.6 Board............................................... 3
2.7 Code................................................ 3
2.8 Committee........................................... 4
2.9 Company............................................. 4
2.10 Crediting Rate...................................... 4
2.11 Deferral Election Form............................. 4
2.12 Deferred Compensation Account....................... 4
2.13 Deferred Compensation Credits....................... 4
2.14 Deferred Compensation Plan.......................... 4
2.15 Effective Date...................................... 5
2.16 Entry Date.......................................... 5
2.17 Index Fund.......................................... 5
2.18 Index Fund Credit................................... 5
2.19 Meeting Fees........................................ 5
2.20 Non-Employee Director............................... 5
2.21 Non-Employee SNC Director........................... 5
2.22 Option.............................................. 6
2.23 Option Participant.................................. 6
2.24 Option Price........................................ 6
2.25 Participant......................................... 6
2.26 Plan................................................ 6
2.27 Retainer Fee........................................ 7
2.28 Service............................................. 7
2.29 SNC................................................. 7
2.30 SNC Common Stock.....................................7
2.31 Stock Option Plan................................... 7
2.32 Stock Option Subplan................................ 7
<PAGE>
Section 3. Deferred Compensation............................. 7
3.1 Election to Participate........................... 7
3.2 Vesting........................................... 8
3.3 Payment of Deferred Compensation.................. 8
3.4 Unforeseeable Emergency Payments.................. 10
3.5 Deemed Investment in Index Fund................... 11
3.6 Adjustment of Fixed Rate Account.................. 12
3.7 Adjustment of Index Fund Account................. 13
3.8 Rules............................................. 13
3.9 Special Effective Date........................... 13
Section 4. Stock Options.................................... 14
4.1 Eligibility....................................... 14
4.2 Shares Subject to the Stock Option Subplan........ 14
4.3 Option Agreements................................. 15
4.4 Terms of the Options.............................. 15
4.5 Option Exercise Price and Term:................... 17
4.6 Exercise of Options............................... 17
4.7 Transferability of Options........................ 18
4.8 Capital Adjustments Effecting Stock............... 18
4.9 Effective Date, Term, and Approval................ 19
Section 5. Administration by Committee....................... 19
5.1 Membership of Committee.......................... 19
5.2 Committee Officers; Subcommittee.................. 19
5.3 Committee Meetings................................ 20
5.4 Transaction of Business........................... 20
5.5 Committee Records................................. 20
5.6 Establishment of Rules........................... 20
5.7 Conflicts of Interest............................. 21
5.8 Correction of Errors............................. 21
5.9 Authority to Interpret Plan....................... 21
5.10 Third Party Advisors.............................. 22
5.11 Compensation of Members.......................... 22
5.12 Committee Expenses............................... 22
5.13 Indemnification of Committee..................... 22
Section 6. Funding........................................... 23
Section 7. Allocation of Responsibilities.................... 23
7.1 Board............................................. 23
7.2 Committee......................................... 24
7.3 Plan Administrator................................ 24
Section 8. Benefits Not Assignable; Facility of Payments..... 24
8.1 Benefits Not Assignable........................... 24
8.2 Payments to Minors and Others..................... 25
<PAGE>
Section 9. Beneficiary....................................... 25
Section 10. Amendment and Termination of Plan................. 26
Section 11. Communication to Participants..................... 27
Section 12. Claims Procedure.................................. 27
12.1 Filing of a Claim for Benefits.................... 27
12.2 Notification to Claimant of Decision.............. 27
12.3 Procedure for Review.............................. 28
12.4 Decision on Review................................ 28
12.5 Action by Authorized Representative of Claimant... 29
Section 13. Parties to the Plan............................... 29
13.1 Single Plan....................................... 29
13.2 Service; Allocation of Costs...................... 29
13.3 Committee......................................... 29
13.4 Authority to Amend and Terminate.................. 29
Section 14. Miscellaneous Provisions.......................... 30
14.1 Notices........................................... 30
14.2 Lost Distributees................................. 30
14.3 Reliance on Data.................................. 30
14.4 Receipt and Release for Payments.................. 30
14.5 Headings.......................................... 31
14.6 Construction...................................... 31
14.7 Nonliability of Company........................... 31
14.8 Severability...................................... 31
14.9 Merger and Consolidation.......................... 31
14.10 Withholding Taxes................................. 32
<PAGE>
SOUTHERN NATIONAL CORPORATION
NON-EMPLOYEE DIRECTORS'
DEFERRED COMPENSATION AND STOCK OPTION PLAN
SECTION 1. ESTABLISHMENT AND PURPOSE:
1.1 ESTABLISHMENT OF PLAN: Effective as of December 19, 1991,
Southern National Corporation ("SNC") established a stock option plan (the
"Stock Option Plan") for the benefit of certain non-employee directors of SNC
and its Affiliates. The Stock Option Plan was entitled the Southern National
Corporation Non-Employee Directors' Stock Option Plan. The Stock Option Plan was
amended and restated effective as of October 22, 1996. Effective as of April 25,
1995, SNC established a deferred compensation plan (the "Deferred Compensation
Plan") for the benefit of certain non-employee directors of SNC and its
Affiliates. The Deferred Compensation Plan was entitled the Southern National
Corporation Directors' Deferred Compensation Plan. SNC deems it advisable to
combine the provisions of the Stock Option Plan and the Deferred Compensation
Plan into a single plan document. The Stock Option Plan and the Deferred
Compensation Plan are hereby amended and restated, effective as of January 1,
1997, and shall be known as the SOUTHERN NATIONAL CORPORATION NON-EMPLOYEE
DIRECTORS' DEFERRED COMPENSATION AND STOCK OPTION PLAN (the "Plan"). All
benefits from this Plan shall be payable solely from the general assets of SNC
and participating Affiliates.
1.2 PURPOSE OF PLAN: The purpose of the Plan is to promote
the interests of SNC and its Affiliates by affording an incentive to
Non-Employee Directors to remain in Service with SNC and its Affiliates and to
use their best efforts on behalf of SNC and its Affiliates. The Plan
accomplishes this purpose by providing Non-Employee Directors the opportunity to
defer receipt of all or any part of their Board compensation received as a
Non-Employee Director to a future date pursuant to Section 3 of the Plan. In
addition, the Plan provides Non-Employee SNC Directors the opportunity to
acquire or increase their proprietary interest in SNC through the granting of
Options
<PAGE>
to purchase SNC Common Stock pursuant to the Stock Option Subplan. Such Options
are not intended to qualify as incentive stock options within the meaning of
Section 422 of the Code.
1.3 FEDERAL INCOME TAX CONSIDERATIONS: Consistent with the
purpose of the Plan as recited herein, there are certain federal income tax
considerations that will result by the election to defer compensation or to
receive Options under the Plan in lieu of Board compensation otherwise
receivable by Participants.
1.2.1 Election to receive deferred compensation: Under current
Treasury Regulations, the election by a Participant to defer cash
compensation under the Plan will not result in the receipt of taxable
income by such Participant or the allowance of a deduction by SNC for
federal income tax purposes. A Participant who defers compensation
under the Plan will realize ordinary income, however, at the time such
compensation is actually received by such Participant. To the extent
that any Participant realizes such ordinary income, SNC will be
entitled to a corresponding deduction for federal income tax purposes.
1.2.2 Election to receive Options: Under current Treasury
Regulations, neither the election to receive Options in lieu of cash
compensation nor the actual grant of Options will result in the receipt
of taxable income by an Option Participant or the allowance of a
deduction by SNC for federal income tax purposes. However, Option
Participants who receive Options in lieu of cash compensation will
realize ordinary income at the time of exercise of any Option in an
amount measured by the excess of the market value of the shares subject
to the Options on the date of exercise over the Option Price. To the
extent that any Option Participant realizes such ordinary income, SNC
will be entitled to a corresponding deduction for federal income tax
purposes.
SECTION 2. DEFINITIONS AND CONSTRUCTION:
Wherever appropriate, words used in the Plan in the singular
may include the plural, or the plural may be read as the singular. References to
one gender shall include the other. Whenever used in this Plan, including
Section 1 and this Section 2, the following capitalized terms shall have the
meaning set forth below (unless otherwise indicated by the context).
2.1 "ACCRUED BENEFIT" means with respect to each Participant
the balance credited to his Deferred Compensation Account as of the applicable
Adjustment Date following adjustment thereof as provided in Sections 3.6 and
3.7.
2
<PAGE>
2.2 "ADJUSTMENT DATE" means each day securities are traded on
the New York Stock Exchange, except regularly scheduled holidays of Branch
Banking and Trust Company ("BB&T"), a North Carolina corporation with its
principal office at Winston-Salem, North Carolina. The 15th day of each calendar
month is sometimes referred to herein as a "Monthly Adjustment Date;" provided,
however, that if the 15th day of a calendar month falls on a weekend or a
regularly scheduled holiday of BB&T, the Monthly Adjustment Date for such
calendar month shall be the first Adjustment Date that immediately precedes the
15th day of the calendar month.
2.3 "AFFILIATE" means any corporation which, with SNC, is a
member of a controlled group of employers as defined in Section 414(b) of the
Code.
2.4 "AVERAGE MARKET VALUE" means the average of the closing
prices of SNC Common Stock as reported by the New York Stock Exchange for the
period of 30 consecutive full trading days of SNC Common Stock prior to the
actual date of grant.
2.5 "BENEFICIARY" means the person, persons or entity
designated or determined pursuant to the provisions of Section 9 of the Plan (i)
to receive the balance of a Participant's Deferred Compensation Account, if any,
after his death, and (ii) to succeed to an Option Participant's right to
exercise any Option, if any, by reason of such Option Participant's death.
2.6 "BOARD" means the Board of Directors of SNC. For purposes
of Section 2.19, Board shall also include the Board of Directors of each
participating Affiliate.
2.7 "CODE" means the Internal Revenue Code of 1986, as
amended, or as it may be amended from time to time.
2.8 "COMMITTEE" means the Administrative Committee provided
for in Section 5.
2.9 "COMPANY" means SNC and participating Affiliates. See
Section 13 for special provisions concerning participating Affiliates.
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2.10 "CREDITING RATE" means the rate in effect as of the
first day of each Plan Year and utilized throughout the entire Plan Year in
crediting interest to the balance in the Fixed Rate Accounts of each
Participant. The Crediting Rate shall be determined in the manner described in
Exhibit A attached hereto, as the same may be amended from time to time by the
Committee. Prior to the beginning of each Plan Year, the Committee shall notify
the Participants in writing of the Crediting Rate for such Plan Year.
2.11 "DEFERRAL ELECTION FORM" means the election form
executed by the Participant pursuant to the provisions of Sections 3.1 or 4.4.
2.12 "DEFERRED COMPENSATION ACCOUNT" means the separate
bookkeeping account to be kept for each Participant to which Deferred
Compensation Credits shall be credited. Separate sub-accounts shall be
established and maintained with respect to the separate bookkeeping account
known as the "Fixed Rate Account" and the "Index Fund Account." The Fixed Rate
Account and the Index Fund Account shall be adjusted in the manner provided in
Sections 3.6 and 3.7.
2.13 "DEFERRED COMPENSATION CREDITS" means the amounts
credited to the Participant's Deferred Compensation Account by the Committee
pursuant to the provisions of Section 3.6.
2.14 "DEFERRED COMPENSATION PLAN" means the Southern National
Corporation Directors' Deferred Compensation Plan as in effect prior to January
1, 1997.
2.15 "EFFECTIVE DATE" means January 1, 1997, except as
otherwise provided in Sections 3.9, 4.2.2, 4.6 and 4.7.
2.16 "ENTRY DATE" means the Effective Date and thereafter
January 1 of each Plan Year.
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2.17 "INDEX FUND" means the mutual fund described in Exhibit
B attached hereto, as the same may be amended from time to time by the
Committee. Prior to the beginning of each Plan Year, the Committee shall notify
the Participants in writing of the Index Fund for such Plan Year.
2.18 "INDEX FUND CREDIT" means a bookkeeping unit used for the
purpose of crediting deemed shares of the Index Fund to the Index Fund Account
of each Participant. Each Index Fund Credit shall be equal to one share of the
Index Fund. The value of each Index Fund Credit shall be equivalent to the net
value of a share of the Index Fund as of the applicable Adjustment Date.
2.19 "MEETING FEES" means the sum of all Board and any Board
committee meeting fees received by a Non-Employee Director as compensation for
services as a Non-Employee Director.
2.20 "NON-EMPLOYEE DIRECTOR" means (i) any Non-Employee SNC
Director, or (ii) any active member of the Board of Directors of an Affiliate of
SNC who is not an employee of SNC or any of its Affiliates thereof.
2.21 "NON-EMPLOYEE SNC DIRECTOR" means (i) any active member
of the Board of SNC who is not an employee of SNC or any of its Affiliates
thereof, or (ii) any active member of the Board of Directors of a bank
subsidiary of SNC who was serving as an active member of the Board of Directors
of BB&T Financial Corporation or SNC on February 28, 1995 and who is not an
employee of SNC or any of its Affiliates thereof.
2.22 "OPTION" means an Option Participant's right to purchase
one or more shares of SNC Common Stock, as granted and determined in accordance
with the provisions of Section 4.
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2.23 "OPTION PARTICIPANT" means any Participant who is
eligible to receive Options in accordance with the Stock Option Subplan. The
Option Participants are designated on Exhibit C attached hereto, as the same may
be amended from time to time by the Committee.
2.24 "OPTION PRICE" means the amount to be paid by an Option
Participant for the purchase of shares of SNC Common Stock pursuant to the
exercise of an Option, as determined pursuant to Section 4.5.
2.25 "PARTICIPANT" means with respect to any Plan Year a
Non-Employee Director who has entered the Plan and any former Non-Employee
Director who has a vested Accrued Benefit under the Plan. A Non-Employee
Director or former Non-Employee Director on the Effective Date who was a
participant in the Deferred Compensation Plan or the Stock Option Plan
immediately preceding the Effective Date, or who was eligible to enter the
Deferred Compensation Plan or the Stock Option Plan as a Participant on the
Effective Date, shall be a Participant in this Plan on the Effective Date. A
Non-Employee Director who has not otherwise entered the Plan shall enter the
Plan and become a Participant as of the Entry Date determined by the Committee.
A Participant shall cease to be a Participant as of the date he ceases to be a
Non-Employee Director. The Participants in the Plan are designated on Exhibit D
attached hereto, as the same may be amended from time to time by the Committee.
2.26 "PLAN" means the unfunded, non-qualified deferred
compensation and stock option plan as herein set out or as duly amended.
2.27 "RETAINER FEE" means the annual retainer received by a
Non-Employee Director as compensation for services as a Non-Employee Director.
2.28 "SERVICE" means service to the Company as a Non-Employee
Director.
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2.29 "SNC" means Southern National Corporation, a North
Carolina corporation with its principal office in Winston-Salem, North Carolina,
or any successor thereto by merger, consolidation or otherwise.
2.30 "SNC COMMON STOCK" means SNC's $5 par value common
stock.
2.31 "STOCK OPTION PLAN" means the Southern National
Corporation Non-Employee Directors' Stock Option Plan as in effect prior to
January 1, 1997.
2.32 "STOCK OPTION SUBPLAN" means the portion of the Plan
providing for the grant and exercise of Options.
SECTION 3. DEFERRED COMPENSATION:
3.1 ELECTION TO PARTICIPATE:
3.1.1 Deferred Compensation Election: A Participant may elect,
by executing a Deferral Election Form, to defer receipt of an amount
equal to 0%, 50% or 100% of the Retainer Fee and 0%, 50% or 100% of the
Meeting Fees otherwise payable to him during a Plan Year. An amount
equal to the amount deferred shall be credited by the Committee as a
Deferred Compensation Credit to the Deferred Compensation Account of
the Participant.
3.1.2 Time for Crediting Deferred Compensation Credits: The
amount of Deferred Compensation Credits to be credited to the Deferred
Compensation Account of the Participant shall be credited by the
Committee to the Participant's Deferred Compensation Account as of the
date on which the applicable Retainer Fee or Meeting Fee would have
otherwise been paid to the Participant.
3.1.3 Administrative Rules Governing Deferred Compensation
Credits: An election by a Participant to defer his Retainer Fee or
Meeting Fees pursuant to Section 3.1.1 shall be made by executing and
delivering to the Committee a Deferral Election Form at a time
determined by the Committee and shall be irrevocable when made. In
establishing the time of election, the Committee shall select a date
that will not result in the constructive receipt of income to the
Participant.
3.2 VESTING: The interest of a Participant in his Deferred
Compensation Account shall be fully vested (i.e., nonforfeitable) at all times.
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3.3 PAYMENT OF DEFERRED COMPENSATION:
3.3.1 Distribution: Except as otherwise provided in Section
3.4, the vested Accrued Benefit of a Participant shall be distributed
to or with respect to a Participant only upon termination of the
Participant's Service with the Company (including all Affiliates
thereof). Payment of benefits on account of a non-death termination of
Service shall be made in accordance with Section 3.3.2. Payment of
benefits on account of the death of the Participant shall be made in
accordance with Section 3.3.3.
3.3.2 Payment of Benefits for Reasons Other Than Death:
(a) Form of Distribution: The vested Accrued Benefit of a
Participant who has terminated Service for any reason other than death
shall be paid to the Participant or applied for his benefit under one
of the following options, as elected by the Participant:
(i) Term Certain Option: Payment of his vested
Accrued Benefit to him in approximately equal monthly
installments over a term certain not to exceed 180 months. If
the term certain selected by the Participant pursuant to this
Section 3.3.2 would result in payments of less than $100.00
per month, payments shall be made at the rate of $100.00 per
month until the Participant's vested Accrued Benefit is paid
in full.
(ii) Lump Sum Option: Payment of his vested Accrued
Benefit to him in a lump sum.
The election of the form of distribution (the "Form Election") shall be
made by the Participant on a form approved by the Committee and filed
with the Committee as provided in Section 3.3.2(c). If the Participant
fails to elect a distribution option, his vested Accrued Benefit shall
be paid to him under the Lump Sum Option. The amount of a Participant's
vested Accrued Benefit for purposes of any distribution made pursuant
to this Section 3.3.2 shall be determined as of the Adjustment Date
such distribution is actually processed by the Committee or its
designee.
(b) Commencement and Timing of Distribution: Except as
otherwise provided in Section 3.4, no benefit payments will be made to
the Participant from the Plan under this Section 3.3.2 until the
Service of the Participant is terminated. Payment of his vested Accrued
Benefit shall commence within one of the following periods, as elected
by the Participant:
Option (1) Distribution shall commence within the
60-day period next following the date the
Service of the Participant terminates.
Option (2) Distribution shall commence within the
period beginning on the first day of January
of the Plan Year
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which next follows the Plan Year in which
the Service of the Participant terminated
and ending on the last day of February of
such Plan Year.
Option (3) Distribution shall commence within the
60-day period next following the date the
Participant attains age 65.
Option (4) Distribution shall commence within the
period beginning on the first day of January
of the Plan Year which next follows the Plan
Year in which the Participant attains age 65
and ending on the last day of February of
such Plan Year.
The election of the date as of which distribution shall commence (the
"Timing Election") shall be made on a form approved by the Committee
and filed with the Committee as provided in Section 3.3.2(c). If the
Participant fails to elect one of these options, Option (1) will be
deemed to have been elected by the Participant.
(c) Timing of Election: The Form Election and Timing Election
shall be made by the Participant on or before the Entry Date the
Participant enters the Plan. The Participant's election may be revoked
at any time by the Participant during the "Election Period." The
Election Period begins as of the Entry Date the Participant enters the
Plan and ends on the earlier to occur of (i) the date the Participant
terminates Service; or (ii) the date which precedes the date payment of
his benefit is to commence by twelve (12) calendar months. The Form
Election and Timing Election in effect as of the close of the Election
Period shall be irrevocable.
(d) Medium of Distribution: Distribution of a Participant's
vested Accrued Benefit shall be made in cash.
(e) Installment Payments: If the Participant's vested Accrued
Benefit is to be distributed in installments pursuant to the Term
Certain Option, the amount of each monthly installment shall be
calculated by dividing the value of the Deferred Compensation Account
as of the payment date by the number of installment payments remaining
in the installment period. The Deferred Compensation Account shall
continue to be adjusted as provided in Section 3.6 until the entire
balance credited to the Deferred Compensation Account has been paid.
3.3.3 Payment of Death Benefit: On the death of a Participant,
his vested Accrued Benefit shall be paid to his Beneficiary in
accordance with the following special provisions:
(a) Death Before Payments Begin: If the Participant dies
before payment of his vested Accrued Benefit begins under Section
3.3.2, payment of his vested Accrued Benefit to his Beneficiary shall
commence as soon as practicable
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following the date of the Participant's death but in no event earlier
than the sixtieth day next following the date of the Participant's
death. The amount of the Participant's vested Accrued Benefit for
purposes of any distribution made pursuant to this Section 3.3.3 shall
be determined as of the Adjustment Date such distribution is actually
processed by the Committee or its designee. The vested Accrued Benefit
of the Participant shall be paid to the Beneficiary in cash under the
Lump Sum Option described in Section 3.3.2(a)(ii).
(b) Death After Payments Begin: If the Participant dies on or
after payment of his vested Accrued Benefit commences under Section
3.3.2, the remaining payments (if any) that would have been made to the
Participant had he not died shall be made to the Participant's
Beneficiary in the same manner as they would have been paid to the
Participant had he lived.
3.3.4 Rules: The Committee may from time to time adopt
additional policies or rules governing the manner in which
distributions will be made from the Plan so that the Plan may be
conveniently administered.
3.4 UNFORESEEABLE EMERGENCY PAYMENTS:
3.4.1 Conditions for Request: A Participant may, at any time
prior to his termination of Service, make application to the Committee
to receive a cash payment in a lump sum of all or a portion of the
total amount credited to his Deferred Compensation Account by reason of
an unforeseeable emergency. The amount of a payment on account of an
unforeseeable emergency shall not exceed the amount required to meet
the financial hardship created by the unforeseeable emergency and not
otherwise reasonably available from other resources of the Participant.
An unforeseeable emergency is a severe financial hardship to the
Participant resulting from a sudden and unexpected illness or accident
of the Participant or of a dependent of the Participant, loss of a
Participant's property due to casualty, or other similar extraordinary
and unforeseeable circumstances arising as a result of events beyond
the control of the Participant. The determination of whether an
unforeseeable emergency exists within the scope of this Section 3.4.1
shall be made by the Committee in its sole and absolute discretion, and
its decision to grant or deny a payment on account of an unforeseeable
emergency shall be final. The Committee shall apply uniform and
nondiscriminatory standards in making its decision.
3.4.2 Written Request: The Participant's request for a payment
on account of an unforeseeable emergency must be made in writing to the
Committee. The request must specify the nature of the financial
hardship, the total amount to be paid from his Deferred Compensation
Account, and the total amount of the actual expense incurred or to be
incurred on account of hardship.
3.4.3 Processing of Request: If a payment under this Section
3.4 is approved, such payment shall be made as soon thereafter as
practicable. The processing of the request shall be completed as soon
as practicable from the date on which the Committee receives the
properly completed written request for a payment on account of an
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unforeseeable emergency. If a Participant terminates Service after a
request is approved in accordance with this Section 3.4 but prior to
payment of the full amount approved, the approval of his request shall
be automatically void and the benefits he is entitled to receive under
the Plan shall be paid in accordance with the applicable payment
provisions of the Plan. Only one payment because of an unforeseeable
emergency shall be made within any Plan Year. A hardship withdrawal
made under this Section 3.4 shall be charged to the Fixed Rate Account
and the Index Fund Account with respect to the Participant's Deferred
Compensation Account on a pro rata basis.
3.4.4 Rules: The Committee may from time to time adopt
additional policies or rules governing the manner in which such
payments because of an unforeseeable emergency may be made so that the
Plan may be conveniently administered.
3.5 DEEMED INVESTMENT IN INDEX FUND: The Committee shall
establish and maintain in behalf of each Participant a Deferred Compensation
Account. The Committee shall also establish and maintain with respect to each
Participant's Deferred Compensation Account two sub-accounts, one entitled the
"Fixed Rate Account" and the other entitled the "Index Fund Account." In
accordance with procedures adopted by the Committee, a Participant may elect to
have all or a portion (in whole percentages of 5%) of the amount credited to his
Deferred Compensation Account deemed invested in the Index Fund. An election to
invest in the Index Fund shall be made by the Participant in accordance with
such rules and procedures as are adopted by the Committee from time to time. Any
amounts credited to the Participant's Deferred Compensation Account which are
not deemed to be invested in the Index Fund shall be credited to the Fixed Rate
Account and shall be credited with earnings as described in Section 3.6. Unless
modified or revoked by the Participant, an election to invest in the Index Fund
shall continue in effect until such time as the distribution of the
Participant's vested Accrued Benefit is processed by the Committee or its
designee in accordance with the provisions of Section 3.3. A Participant
unilaterally may modify or revoke his election as of any Monthly Adjustment Date
by providing advance notice to the Committee in accordance with such rules and
procedures as are adopted by the Committee from time to time. Any amount the
Participant has elected to be deemed invested
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in the Index Fund shall be converted into Index Fund Credits in the manner and
as of the Adjustment Date described in Exhibit E attached hereto, as the same
may be amended from time to time by the Committee. The value of any Index Fund
Credits the Participant has elected to be deemed sold from his Index Fund
Accounts and credited to his Fixed Rate Accounts shall be determined in the
manner and as of the Adjustment Date described in Exhibit E attached hereto, as
the same may be amended from time to time by the Committee. All deemed
dividends, capital gains or other income distributions payable with respect to
the Index Fund Credits allocated to the Participant's Index Fund Account shall
be converted into Index Fund Credits in the manner and as of the Adjustment Date
described in Exhibit E attached hereto, as the same may be amended from time to
time by the Committee. In the event the Committee shall change the manner in
which amounts are to be converted to Index Fund Credits or the manner in which
Index Fund Credits are to be deemed sold, it shall communicate such change to
Participants in writing in advance of the date such change is to be effective.
Fractional shares shall be accounted for as such. The Index Fund Account shall
be adjusted as provided in Section 3.7.
3.6 ADJUSTMENT OF FIXED RATE ACCOUNT: Except as provided in Section 3.7 with
respect to the adjustment of the Index Fund Account, as of the close of business
of SNC on each Adjustment Date, the Fixed Rate Account with respect to the
Deferred Compensation Account of each Participant shall be adjusted in this
order:
3.6.1 There shall be debited (i) the total amount of any
payments deemed made from such Fixed Rate Account since the next
preceding Adjustment Date, and (ii) the total amount deemed applied
since the next preceding Adjustment Date to the deemed purchase of
Index Fund Credits for the Index Fund Account of the Participant (which
account functions as a sub-account of the Deferred Compensation
Account).
3.6.2 There shall be credited the total amount of any Deferred
Compensation Credits made to such account with respect to the
Participant since the last preceding Adjustment Date.
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3.6.3 There shall be credited the cash proceeds from the
deemed sale of any Index Fund Credits then allocated to the Index Fund
Account of the Participant.
3.6.4 There shall be credited an amount equal to the product
of (A) and (B), where (A) is the balance credited to the Fixed Rate
Account as of such Adjustment Date (after adjustment for any
distributions as of such Adjustment Date but prior to adjustment for
credits as of such date), and (B) is the Crediting Rate.
3.7 ADJUSTMENT OF INDEX FUND ACCOUNT: As of the close of
business of SNC on each Adjustment Date, the number of Index Fund Credits
allocated to the Index Fund Account of each Participant shall be adjusted in the
following order:
3.7.1 There shall be debited any Index Fund Credits deemed
sold from the Index Fund Account since the next preceding Adjustment
Date.
3.7.2 There shall be credited (i) any shares of the Index Fund
deemed purchased with amounts converted into Index Fund Credits, and
(ii) any additional shares of Index Fund Credits deemed purchased as a
result of any deemed dividends, capital gains or other income
distributions payable since the next preceding Adjustment Date with
respect to Index Fund Credits allocated to the Participant's Index Fund
Account.
3.8 RULES: The Committee may establish any rules or
regulations necessary to implement the provisions of this Section 3.
3.9 SPECIAL EFFECTIVE DATE: Notwithstanding any provision of
the Plan to the contrary, the provisions of the Plan relating to the deemed
investment in the Index Fund shall not become effective until the later of (i)
April 1, 1997; or (ii) the date of approval of the Plan by the Board.
SECTION 4. STOCK OPTIONS:
4.1 ELIGIBILITY: A Participant who is a Non-Employee SNC
Director (an "Option Participant") shall be eligible to receive Options under
the Stock Option Subplan. At such time as the Service of an Option Participant
terminates for any reason whatsoever, then the Option
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Participant (or his Beneficiary, if applicable) shall have the right to exercise
any Option granted to the Option Participant for a time period ending on the
expiration date of the term of the Option(s) as provided in the applicable
Option Agreement. Nothing contained in the Stock Option Subplan shall be
construed to limit the right of SNC to grant Options otherwise than under the
Stock Option Subplan for any proper and lawful corporate purpose, including but
not limited to Options granted to employee directors or Non-Employee Directors.
4.2 SHARES SUBJECT TO THE STOCK OPTION SUBPLAN:
4.2.1 Delivery of Shares: The shares of SNC Common Stock to be
delivered upon exercise of Options granted under the Stock Option
Subplan shall be made available, at the discretion of the Board, from
the authorized, unissued and registered shares of SNC Common Stock or
from open market purchases of SNC Common Stock or both. Further, the
Board shall have the authority to take any action (or delegate that
such action be taken) with respect to the Stock Option Subplan which
may be required in connection with the listing of such shares of SNC
Common Stock on the New York Stock Exchange and the registration (or
determination that an exemption from registration is available) of such
shares under any applicable state securities laws.
4.2.2 Aggregate Number of Shares Available: Subject to (i)
adjustments made pursuant to provisions of Section 4.8, and (ii)
shareholder approval, to the extent such approval is required for the
issuance of shares of SNC Common Stock, the aggregate number of shares
which may be issued upon exercise of all Options which may be granted
under the Stock Option Subplan shall not exceed 900,000 shares of SNC
Common Stock.
4.2.3 Expiration or Termination of Option: In the event that
any Option granted under the Stock Option Subplan expires or terminates
for any reason whatsoever without having been exercised in full, the
shares subject to, but not delivered under, such Option shall become
available for other Options to the same Option Participant or other
Option Participants without decreasing the aggregate number of shares
which may be granted under the Stock Option Subplan or shall be
available for any other lawful corporate purpose.
4.2.4 Restrictions: All Options shall be granted on the
condition that the Option Participant shall not resell any SNC Common
Stock purchased by the exercise of an Option except in compliance with
all applicable state and federal securities laws and regulations. Each
Option Participant shall, prior to any transfer of the SNC Common Stock
purchased through the exercise of an Option, advise SNC of the proposed
transfer and demonstrate to the satisfaction of the Board (or its
delegate) that such transfer is in compliance with such laws and
regulations.
4.3 OPTION AGREEMENTS:
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4.3.1 Option Agreement: Each Option granted under the Stock
Option Subplan shall be evidenced by an Option Agreement (an "Option
Agreement") which shall be signed (manually or by facsimile) by a duly
authorized officer of SNC and by the Option Participant, and which
shall contain such provisions as may be approved by the Board or the
Committee.
4.3.2 Binding Contract: An Option Agreement shall constitute a
binding contract between SNC and the Option Participant, and upon
acceptance of any such Option Agreement, each party shall be bound by
the terms and restrictions of the Stock Option Subplan and the Option
Agreement. Any Option Agreement utilized for the purpose of granting
Options to Option Participants under the Stock Option Subplan shall
specify that such Options are non-qualified stock options and that they
are not intended to qualify as incentive stock options within the
meaning of Section 422 of the Code.
4.3.3 Terms of Option Agreement: The terms of an Option
Agreement shall be in accordance with the Stock Option Subplan, but may
include additional provisions and restrictions, provided that they are
not inconsistent with the Stock Option Subplan.
4.4 TERMS OF THE OPTIONS:
4.4.1 Deferred compensation election:
(a) Retainer Fee: If an Option Participant has not elected to
defer any portion of his Retainer Fee pursuant to Section 3.1.1, such
Option Participant may elect, by executing a Deferral Election Form, to
defer receipt of an amount equal to 0%, 50% or 100% of the Retainer Fee
for the application of that amount toward the grant of Options. If an
Option Participant has elected to defer 50% of his Retainer Fee
pursuant to Section 3.1.1, such Option Participant may elect, by
executing a Deferral Election Form, to defer receipt of an amount equal
to 50% of the Retainer Fee for the application of that amount toward
the grant of Options. If an Option Participant has elected to defer
100% of his Retainer Fee pursuant to Section 3.1.1, such Option
Participant may not defer any of his Retainer Fee under this Section
4.4.1(a).
(b) Meeting Fees: If an Option Participant has not elected to
defer any portion of his Meeting Fees pursuant to Section 3.1.1, such
Option Participant may elect, by executing a Deferral Election Form, to
defer receipt of an amount equal to 0%, 50% or 100% of the Meeting Fees
for the application of that amount toward the grant of Options. If an
Option Participant has elected to defer 50% of his Meeting Fees
pursuant to Section 3.1.1, such Option Participant may elect, by
executing a Deferral Election Form, to defer receipt of an amount equal
to 50% of the Meeting Fees for the application of that amount toward
the grant of Options. If an Option Participant has elected to defer
100% of his Meeting Fees pursuant to Section 3.1.1, such Option
Participant may not defer any of his Meeting Fees under this Section
4.4.1(b). Notwithstanding the foregoing, in no event shall any
Non-Employee SNC
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Director described in subparagraph (ii) of Section 2.20 be entitled to
defer any of his Meeting Fees under this Section 4.4.1(b).
4.4.2 Form of Election: Each Participant shall make an
irrevocable election in writing on a Deferral Election Form to receive
Options in lieu of all or a designated percentage of his Retainer Fee
or Meeting Fees, or both, on or before December 31 of the year
preceding the Plan Year for which the Retainer Fee and Meeting Fees
apply.
4.4.3 Grant of Options: On July 1 following the beginning of
the Plan Year for which an election has been made pursuant to this
Section 4.4, Options shall be granted to any Option Participant for the
elected portion of his Retainer Fee for that Plan Year. On that same
date, Options shall be granted to any Option Participant who has so
elected, for the elected portion of the Meeting Fees actually earned by
the Option Participant in the first six-month period of the applicable
Plan Year. For the second six (6) months of the applicable Plan Year,
Options shall be granted to Option Participants for the elected portion
of the Meeting Fees for the second six months on December 31 of the
applicable Plan Year. For purposes of this Section 4.4.3, the following
rules shall apply in making the above calculations:
(a) The elected portion of the Meeting Fees earned in the
first six (6) months of the Plan Year shall be
defined as the fraction of the Meeting Fees that the
Option Participant elected to defer, multiplied by
the cash attendance fee for each Board and committee
meeting, multiplied by the number of such meetings
actually attended by the Option Participant in the
first six (6) months of the applicable Plan Year; and
(b) The elected portion of the Meeting Fees earned in the
second six (6) months of the Plan Year shall be
defined as the fraction of the Meeting Fees that the
Option Participant elected to defer, multiplied by
the cash attendance fee for each Board and committee
meeting, multiplied by the number of such meetings
actually attended by the Option Participant in the
second six (6) months of the applicable Plan Year.
4.4.4 Shares Subject to Options: For purposes of determining
the number of shares to be the subject of Options granted in accordance
with the Stock Option Subplan, the number of shares shall be equal to
the elected portion of the Option Participant's Retainer Fee, the
elected portion of the Meeting Fees earned in the first six (6) months
of the Plan Year and the elected portion of the Meeting Fees earned in
the second six (6) months of the Plan Year, divided by 25 percent of
the Average Market Value of SNC Common Stock on the date of each grant.
4.4.5 Fractional Shares: Fractional shares of SNC Common Stock
shall not be granted under the Plan, and any remaining amount of the
elected Retainer Fee and Meeting
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Fees will be paid to each Option Participant in cash on the date or
dates Option grants are made in accordance with the Stock Option
Subplan.
4.5 OPTION EXERCISE PRICE AND TERM:
4.5.1 Exercise Price: The price at which shares of SNC Common
Stock may be purchased under an Option granted pursuant to the Stock
Option Subplan shall be equal to 75% of the Average Market Value of SNC
Common Stock on the date of the grant.
4.5.2 Term of Options: Except as otherwise provided in Section
4.1, Options granted in accordance with this Stock Option Subplan may
be exercised during the period commencing on a date six (6) months from
the date of grant and ending on the date ten (10) years from the date
of the grant.
4.6 EXERCISE OF OPTIONS:
4.6.1 Delivery of Shares: No shares shall be delivered
pursuant to the exercise of any Option until the requirements of such
laws and regulations as may be deemed by the Committee to be applicable
to them are satisfied and until payment in full in cash or in SNC
Common Stock as provided in Section 4.6.2, of the Option Price for such
Options is received by SNC. No Option Participant, or legal
representative or distributee of an Option Participant, shall be deemed
to be a holder of any shares subject to any Option unless and until the
certificate or certificates for such shares have been issued and
delivered. An Option Participant's right to exercise any Option is
further subject to the terms and conditions of the Option Agreement to
be entered into by and between SNC and the Option Participant.
4.6.2 Payment of Option Price: An Option may be exercised by
payment of the Option Price in full (i) in cash, (ii) by surrender or
withholding of shares of SNC Common Stock having a fair market value as
of the date of exercise equal to the Option Price of the SNC Common
Stock to be purchased (determined in accordance with Section 4.5.1) or
(iii) a combination of cash and SNC Common Stock; provided, however,
that no payment of the Option Price by withholding of shares of SNC
Common Stock shall be permitted before October 31, 1997.
4.6.3 Change in Control: In the event there is a Change in
Control of SNC during the term of the Plan or during the term of
Options granted pursuant to the Stock Option Subplan, all outstanding
Options granted under the Stock Option Subplan shall become immediately
exercisable in full. For the purposes herein, the term "Change in
Control" shall have the meaning ascribed to the term in the form option
agreement adopted by SNC for use in connection with options granted to
participants under the Southern National Corporation 1995 Omnibus Stock
Incentive Plan, as such term may be hereafter amended in such form
agreement.
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4.7 TRANSFERABILITY OF OPTIONS: Except as permitted by the
Committee, an Option granted under the Plan may not be transferred except by
will or the laws of descent and distribution; provided, however, that
notwithstanding the foregoing, no Option shall be transferable (other than by
will or the laws of descent and distribution) before October 31, 1997. During
the Option Participant's lifetime an Option may be exercised only by such Option
Participant or the Option Participant's legal representative.
4.8 CAPITAL ADJUSTMENTS EFFECTING STOCK: The aggregate number
of shares of SNC Common Stock subject to the Stock Option Subplan and the number
of shares subject to an Option shall be appropriately adjusted for any increase
or decrease in the number of shares of issued SNC Common Stock resulting from a
subdivision or consolidation of shares, whether through reorganization,
recapitalization, stock split-up, stock distribution or combination of shares or
the payment of a share dividend or other increase or decrease in the number of
shares outstanding effected without receipt of consideration by SNC. The Option
Price of any share subject to an Option shall be adjusted so that there will be
no change in the aggregate purchase price payable upon exercise of any such
Option. The grant of an Option pursuant to the Stock Option Subplan shall not
affect in any way the right or power of SNC to make adjustments,
reorganizations, reclassification, or changes of its capital or business
structure or to merge, consolidate, dissolve, liquidate, or sell or transfer all
or any part of its business or assets.
4.9 EFFECTIVE DATE, TERM, AND APPROVAL:
4.9.1 Effective Date and Term of Options: The Stock Option
Subplan was adopted effective December 19, 1991, amended and restated
effective October 22, 1996 and further amended and restated effective
January 1, 1997. No Options may be granted under the Stock Option
Subplan after December 18, 2001 unless an earlier termination date is
fixed by action of the Board; provided, however, that any Option
granted prior thereto may be exercised in accordance with its terms.
4.9.2 Approval: The Stock Option Subplan and all Options
granted pursuant to it are subject to all laws, approvals, requirements
and regulations of any governmental
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authority which may be applicable to stock option plans and,
notwithstanding any revisions of the Stock Option Subplan or any Option
Agreement, the holder of an Option shall not be entitled to exercise
his Option nor shall SNC be obligated to issue any shares to the holder
if such exercise or issuance shall constitute a violation by the holder
or SNC of any provisions of any such requirements, laws or regulations.
SECTION 5. ADMINISTRATION BY COMMITTEE:
5.1 MEMBERSHIP OF COMMITTEE: The Committee consist of not
less than three nor more than seven individuals who shall be appointed by the
Board to serve at the pleasure of the Board. Any member of the Committee may
resign, and his successor, if any, shall be appointed by the Board. The
Committee shall be responsible for the general administration and interpretation
of the Plan and for carrying out its provisions, except to the extent all or any
of such obligations are specifically imposed on the Board.
5.2 COMMITTEE OFFICERS; SUBCOMMITTEE: The members of the
Committee shall elect a Chairman and may elect an acting Chairman. They shall
also elect a Secretary and may elect an acting Secretary, either of whom may be
but need not be a member of the Committee. The Committee may appoint from its
membership such subcommittees with such powers as the Committee shall determine,
and may authorize one or more of its members or any agent to execute or deliver
any instruments or to make any payment in behalf of the Committee. The Chairman
of the Committee shall constitute the Plan Administrator and shall be agent for
service of legal process on the Plan. In addition, notwithstanding any provision
herein, any subcommittee established by the Committee or any Board committee or
subcommittee may be granted such authority, and be comprised of such members, as
is necessary to comply with the conditions imposed by Rule 16b-3, promulgated
under Section 16 of the Securities Exchange Act of 1934, as amended (the "1934
Act").
5.3 COMMITTEE MEETINGS: The Committee shall hold such
meetings upon such notice, at such places and at such intervals as it may from
time to time determine. Notice of
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meetings shall not be required if notice is waived in writing by all the members
of the Committee at the time in office, or if all such members are present at
the meeting.
5.4 TRANSACTION OF BUSINESS: A majority of the members of the
Committee at the time in office shall constitute a quorum for the transaction of
business. All resolutions or other actions taken by the Committee at any meeting
shall be by vote of a majority of those present at any such meeting and entitled
to vote. Resolutions may be adopted or other action taken without a meeting upon
written consent thereto signed by all of the members of the Committee.
5.5 COMMITTEE RECORDS: The Committee shall maintain full and
complete records of its deliberations and decisions. The minutes of its
proceedings shall be conclusive proof of the facts of the operation of the Plan.
The records of the Committee shall contain all relevant data pertaining to
individual Participants and their rights under the Plan.
5.6 ESTABLISHMENT OF RULES: Subject to the limitations of the
Plan, the Committee may from time to time establish rules or by-laws for the
administration of the Plan and the transaction of its business.
5.7 CONFLICTS OF INTEREST: No individual member of the
Committee shall have any right to vote or decide upon any matter relating solely
to himself or to any of his rights or benefits under the Plan (except that such
member may sign unanimous written consent to resolutions adopted or other action
taken without a meeting).
5.8 CORRECTION OF ERRORS: The Committee may correct errors
and, so far as practicable, may adjust any benefit or credit or payment
accordingly. The Committee may in its discretion waive any notice requirements
in the Plan; provided, that a waiver of notice in one or more cases shall not be
deemed to constitute a waiver of notice in any other case. With respect to
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<PAGE>
any power or authority which the Committee has discretion to exercise under the
Plan, such discretion shall be exercised in a nondiscriminatory manner.
5.9 AUTHORITY TO INTERPRET PLAN: Subject to the claims
procedure set forth in Section 12, the Committee and the Plan Administrator
shall have the duty and discretionary authority to interpret and construe the
provisions of the Plan and decide any dispute which may arise regarding the
rights of Participants hereunder, including the discretionary authority to
interpret the Plan and to make determinations as to eligibility for
participation and benefits under the Plan. Further, subject to the terms of the
Stock Option Subplan, the Committee shall have exclusive jurisdiction to
establish such terms of an Option Agreement as the Committee may deem necessary
or desirable. Interpretations and determinations by the Committee and the Plan
Administrator shall apply uniformly to all persons similarly situated and shall
be binding and conclusive on all interested persons. Such interpretations and
determinations shall only be set aside if the Committee and the Plan
Administrator are found to have acted arbitrarily and capriciously in
interpreting and construing the provisions of the Plan.
5.10 THIRD PARTY ADVISORS: The Committee may engage an
attorney, accountant or any other technical advisor on matters regarding the
operation of the Plan and to perform such other duties as shall be required in
connection therewith, and may employ such clerical and related personnel as the
Committee shall deem requisite or desirable in carrying out the provisions of
the Plan.
5.11 COMPENSATION OF MEMBERS: No fee or compensation shall be
paid to any member of the Committee for his service as such.
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5.12 COMMITTEE EXPENSES: The Committee shall be entitled to
reimbursement by SNC for its reasonable expenses properly and actually incurred
in the performance of its duties in the administration of the Plan.
5.13 INDEMNIFICATION OF COMMITTEE: No member of the Committee
shall be personally liable by reason of any contract or other instrument
executed by him or on his behalf as a member of the Committee nor for any
mistake of judgment made in good faith, and SNC shall indemnify and hold
harmless, directly from its own assets (including the proceeds of any insurance
policy the premiums for which are paid from SNC's own assets), each member of
the Committee and each other officer, Employee, or director of SNC to whom any
duty or power relating to the administration or interpretation of the Plan may
be delegated or allocated, against any unreimbursed or uninsured cost or expense
(including any sum paid in settlement of a claim with the prior written approval
of the Board) arising out of any act or omission to act in connection with the
Plan unless arising out of such person's own fraud, bad faith, willful
misconduct or gross negligence.
SECTION 6. FUNDING:
The obligation of the Company to make payments pursuant to
Section 3 shall constitute a general unsecured obligation of the Company to the
Participant. Notwithstanding the foregoing, SNC shall establish and maintain a
special separate fund as provided for in the document entitled "Southern
National Corporation Non-Qualified Deferred Compensation Trust." The Company
shall make contributions to the trust from time to time in accordance with
Section 5 thereof. Notwithstanding the foregoing, no Participant or his
Beneficiary shall have any legal or equitable rights, interest or claims in any
particular asset of the trust or the Company by reason of the Company's
obligation under Section 3, and nothing contained herein shall create or be
construed as creating any other fiduciary relationship between the Company and a
Participant or any other person. To the extent that any person acquires a right
to receive payments from the trust or the
22
<PAGE>
Company pursuant to Section 3, such right shall be no greater than the right of
an unsecured creditor of the Company.
SECTION 7. ALLOCATION OF RESPONSIBILITIES:
The persons responsible for the Plan and the duties and
responsibilities allocated to each, which shall be carried out in accordance
with the other applicable terms and provisions of the Plan, shall be as follows:
7.1 BOARD:
(i) To amend the Plan (other than the Exhibits);
(ii) To appoint and remove members of the Committee;
(iii) To terminate the Plan; and
(iv) To take any actions required to comply with
federal and state securities laws (except to the extent that
the Committee or a committee or subcommittee established
pursuant to Section 5.2 is authorized to do so).
7.2 COMMITTEE:
(i) To interpret the provisions of the Plan and to
determine the rights of the Participants under the Plan,
except to the extent otherwise provided in Section 12 relating
to claims procedure;
(ii) To administer the Plan in accordance with its
terms, except to the extent powers to administer the Plan are
specifically delegated to another person or persons as
provided in the Plan;
(iii) To account for the Accrued Benefits of
Participants;
(iv) To direct the Company in the payment of
benefits;
(v) To establish the terms of the Option Agreements;
and
(vi) To the extent necessary or advisable, to amend
the Exhibits attached hereto.
7.3 PLAN ADMINISTRATOR:
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(i) To file such reports with government agencies to
which reports may be required to be submitted from time to
time;
(ii) To provide for disclosure of Plan provisions and
other information relating to the Plan to Participants and
other interested parties; and
(iii) To administer the claims procedure to the
extent provided in Section 12.
SECTION 8. BENEFITS NOT ASSIGNABLE; FACILITY OF
PAYMENTS:
8.1 BENEFITS NOT ASSIGNABLE: Except as provided in Section
4.7, no portion of any benefit held or paid under the Plan with respect to any
Participant shall be subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance or charge, and any attempt so to
anticipate, alienate, sell, transfer, assign, pledge, encumber or charge the
same shall be void, nor shall any portion of such benefit be in any manner
payable to any assignee, receiver or any one trustee, or be liable for his
debts, contracts, liabilities, engagements or torts, or be subject to any legal
process to levy upon or attach.
8.2 PAYMENTS TO MINORS AND OTHERS: If any individual entitled
to receive a payment under the Plan shall be physically, mentally or legally
incapable of receiving or acknowledging receipt of such payment, the Committee,
upon the receipt of satisfactory evidence of his incapacity and satisfactory
evidence that another person or institution is maintaining him and that no
guardian or committee has been appointed for him, may cause any payment
otherwise payable to him to be made to such person or institution so maintaining
him. Payment to such person or institution shall be in full satisfaction of all
claims by or through the Participant to the extent of the amount thereof.
SECTION 9. BENEFICIARY:
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The Participant's Beneficiary shall be the person or persons
designated by the Participant on the beneficiary designation form provided by
and filed with the Committee or its designee. If the Participant does not
designate a Beneficiary, the Beneficiary shall be his Surviving Spouse. If the
Participant does not designate a Beneficiary and has no Surviving Spouse, the
Beneficiary shall be the Participant's estate. The designation of a Beneficiary
may be changed or revoked only by filing a new beneficiary designation form with
the Committee or its designee. If a Beneficiary (the "Primary Beneficiary") is
receiving or is entitled to receive payments under the Plan and dies before
receiving all of the payments due him, the balance to which he is entitled shall
be paid to the Contingent Beneficiary, if any, named in the Participant's
current beneficiary designation form. If there is no Contingent Beneficiary, the
balance shall be paid to the estate of the Primary Beneficiary. Any Beneficiary
may disclaim all or any part of any benefit to which such Beneficiary shall be
entitled hereunder by filing a written disclaimer with the Committee before
payment of such benefit is to be made. Such a disclaimer shall be made in form
satisfactory to the Committee and shall be irrevocable when filed. Any benefit
disclaimed shall be payable from the Plan in the same manner as if the
Beneficiary who filed the disclaimer had died on the date of such filing.
SECTION 10. AMENDMENT AND TERMINATION OF PLAN:
The Board may amend or terminate the Plan at any time;
provided, that in no event shall such amendment or termination reduce any
Participant's Accrued Benefit as of the date of such amendment or termination,
nor shall any such amendment affect the terms of the Plan relating to the
payment of such Accrued Benefit, nor shall any such amendment adversely affect
outstanding Options or any unexercised rights thereunder or in any way impair
the rights of an Option Participant with respect to his Options, without the
Participant's (or Option Participant's) prior
25
<PAGE>
written consent to such amendment. Any such amendment or termination shall be
made pursuant to a resolution of the Board and shall be effective as of the date
specified in such resolution. Upon termination of the Plan, distribution of the
Accrued Benefit of a Participant shall be made to the Participant or his
Beneficiary in the manner and at the time described in Section 3 of the Plan. No
additional credits of Deferred Compensation Credits shall be made to the
Deferred Compensation Account of a Participant following termination of the
Plan, but the Deferred Compensation Account of each Participant shall continue
to be adjusted as provided in Section 3 until the balance of the Deferred
Compensation Account of the Participant has been fully distributed to him or his
Beneficiary. No additional Options shall be granted to an Option Participant
following termination of the Plan, but in no event shall the termination of the
Plan adversely affect outstanding Options or any unexercised rights hereunder or
in any way impair the rights of any Option holder without his consent.
SECTION 11. COMMUNICATION TO PARTICIPANTS:
SNC shall communicate the principal terms of the Plan to the
Participants. SNC shall make a copy of the Plan available for inspection by
Participants and their Beneficiaries during reasonable hours, at the principal
office of SNC.
SECTION 12. CLAIMS PROCEDURE:
The following claims procedure shall apply with respect to the
Plan:
12.1 FILING OF A CLAIM FOR BENEFITS: If a Participant or
Beneficiary (the "Claimant") believes that he is entitled to benefits under the
Plan which are not being paid or provided to him or which are not being accrued
for his benefit, he shall file a written claim therefor with the Plan
Administrator. In the event the Plan Administrator shall be the Claimant, all
actions
26
<PAGE>
which are required to be taken by the Plan Administrator pursuant to
this Section 12 shall be taken instead by another member of the Committee
designated by the Committee.
12.2 NOTIFICATION TO CLAIMANT OF DECISION: Within 90 days
after receipt of a claim by the Plan Administrator (or within 180 days if
special circumstances require an extension of time) the Plan Administrator shall
notify the Claimant of his decision with regard to the claim. In the event of
such special circumstances requiring an extension of time, there shall be
furnished to the Claimant prior to expiration of the initial 90-day period
written notice of the extension, which notice shall set forth the special
circumstances and the date by which the decision shall be furnished. If such
claim shall be wholly or partially denied, notice thereof shall be in writing
and worded in a manner calculated to be understood by the Claimant, and shall
set forth: (i) the specific reason or reasons for the denial; (ii) specific
reference to pertinent provisions of the Plan on which the denial is based;
(iii) a description of any additional material or information necessary for the
Claimant to perfect the claim and an explanation of why such material or
information is necessary; and (iv) an explanation of the procedure for review of
the denial. If the Plan Administrator fails to notify the Claimant of the
decision in timely manner, the claim shall be deemed denied as of the close of
the initial 90-day period (or the close of the extension period, if applicable).
12.3 PROCEDURE FOR REVIEW: Within 60 days following receipt
by the Claimant of notice denying his claim, in whole or in part, or, if such
notice shall not be given, within 60 days following the latest date on which
such notice could have been timely given, the Claimant shall appeal denial of
the claim by filing a written application for review with the Committee.
Following such request for review, the Committee shall fully and fairly review
the decision denying the claim. Prior to the decision of the Committee, the
Claimant shall be given an opportunity to review pertinent documents and to
submit issues and comments in writing.
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12.4 DECISION ON REVIEW: The decision on review of a claim
denied in whole or in part by the Plan Administrator shall be made in the
following manner:
12.4.1 Within 60 days following receipt by the Committee of
the request for review (or within 120 days if special circumstances
require an extension of time), the Committee shall notify the Claimant
in writing of its decision with regard to the claim. In the event of
such special circumstances requiring an extension of time, written
notice of the extension shall be furnished to the Claimant prior to the
commencement of the extension. If the decision on review is not
furnished in a timely manner, the claim shall be deemed denied as of
the close of the initial 60-day period (or the close of the extension
period, if applicable).
12.4.2 With respect to a claim that is denied in whole or in
part, the decision on review shall set forth specific reasons for the
decision, shall be written in a manner calculated to be understood by
the Claimant, and shall cite specific references to the pertinent Plan
provisions on which the decision is based.
12.4.3 The decision of the Committee shall be final and
conclusive.
12.5 ACTION BY AUTHORIZED REPRESENTATIVE OF CLAIMANT: All
actions set forth in this Section 12 to be taken by the Claimant may likewise be
taken by a representative of the Claimant duly authorized by him to act in his
behalf on such matters. The Plan Administrator and the Committee may require
such evidence as either may reasonably deem necessary or advisable of the
authority to act of any such representative.
SECTION 13. PARTIES TO THE PLAN:
Subject to the approval of the Board, an Affiliate may adopt
this Plan and become an employer-party to this Plan by resolutions approved by
its Board of Directors. The Affiliates which are employer-parties to this Plan
are listed on Exhibit F attached hereto, as the same may be amended from time to
time by the Committee. The following special provisions shall apply to all
employer-parties to the Plan:
13.1 SINGLE PLAN: The Plan shall apply as a single plan with
respect to all parties as if there were only one employer-party.
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13.2 SERVICE; ALLOCATION OF COSTS: Service for purposes of
the Plan shall be interchangeable among employer-parties to the Plan and shall
not be deemed interrupted or terminated by the transfer at any time of a
Participant from the Service of one employer-party to the Service of another
employer-party.
13.3 COMMITTEE: The Committee which administers the Plan as
applied to SNC shall also be the Committee as applied to each other
employer-party to the Plan.
13.4 AUTHORITY TO AMEND AND TERMINATE: The Board of SNC shall
have the power to amend or terminate the Plan as applied to each employer-party.
29
<PAGE>
SECTION 14. MISCELLANEOUS PROVISIONS:
14.1 NOTICES: Each Participant who is not in Service and each
Beneficiary shall be responsible for furnishing the Plan Administrator with his
current address for the mailing of notices, reports, and benefit payments. Any
notice required or permitted to be given to such Participant or Beneficiary
shall be deemed given if directed to such address and mailed by regular United
States mail, first class, postage prepaid. If any check mailed to such address
is returned as undeliverable to the addressee, mailing of checks will be
suspended until the Participant or Beneficiary furnishes the proper address.
This provision shall not be construed as requiring the mailing of any notice or
notification otherwise permitted to be given by posting or by other publication.
14.2 LOST DISTRIBUTEES: A benefit shall be deemed forfeited
if the Plan Administrator is unable after a reasonable period of time to locate
the Participant or Beneficiary to whom payment is due; provided, however, that
such benefit shall be reinstated if a valid claim is made by or on behalf of the
Participant or Beneficiary for the forfeited benefit.
14.3 RELIANCE ON DATA: The Company, the Committee and the
Plan Administrator shall have the right to rely on any data provided by the
Participant or by any Beneficiary. Representations of such data shall be binding
upon any party seeking to claim a benefit through a Participant, and the
Company, the Committee and the Plan Administrator shall have no obligation to
inquire into the accuracy of any representation made at any time by a
Participant or Beneficiary.
14.4 RECEIPT AND RELEASE FOR PAYMENTS: Any payment made from
the Plan to or with respect to any Participant or Beneficiary, or pursuant to a
disclaimer by a Beneficiary, shall, to the extent thereof, be in full
satisfaction of all claims hereunder against the Plan and the Company with
respect to the Plan. The recipient of any payment from the Plan may be required
by the
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<PAGE>
Committee, as a condition precedent to such payment, to execute a receipt
and release with respect thereto in such form as shall be acceptable to the
Committee.
14.5 HEADINGS: The headings and subheadings of the Plan have
been inserted for convenience of reference and are to be ignored in any
construction of the provisions hereof.
14.6 CONSTRUCTION: The provisions of the Plan shall be
construed and enforced according to the laws of the State of North Carolina.
14.7 NONLIABILITY OF COMPANY: The Company does not guarantee
the Participants, former Participants or Beneficiaries against loss of or
depreciation in value of any right or benefit that any of them may acquire under
the terms of the Plan, nor does the Company guarantee to any of them that the
assets of the Company will be sufficient to provide any or all benefits payable
under the Plan at any time, including any time that the Plan may be terminated
or partially terminated.
14.8 SEVERABILITY: All provisions contained in this Plan
shall be severable, and in the event that any one or more of them shall be held
to be invalid by any competent court, this Plan shall be interpreted as if such
invalid provisions were not contained herein.
14.9 MERGER AND CONSOLIDATION: The Company shall not
consolidate or merge into or with another corporation or entity, or transfer all
or substantially all of its assets to another corporation, partnership, trust or
other entities (a "Successor Entity") unless such Successor Entity shall assume
the rights, obligations and liabilities of the Company under the Plan and upon
such assumption, the Successor Entity shall become obligated to perform the
terms and conditions of the Plan.
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14.10 WITHHOLDING TAXES: The Company shall satisfy all
federal, state and local withholding tax requirements prior to making any
benefit payment under the Plan. Whenever under the Plan payments are to be made
by the Company in cash, such payments shall be net of any amounts sufficient to
satisfy all federal, state and local withholding tax requirements. Whenever
payments shall be made in SNC Common Stock, the Company shall have the right to
require the Participant (or Beneficiary) to remit to the Company an amount
sufficient to satisfy all federal, state and local withholding tax requirements
as a condition to the registration of the transfer of such SNC Common Stock on
the books of SNC.
IN WITNESS WHEREOF, this non-qualified, deferred compensation
and stock option plan is executed in behalf of SNC on the 25th day of March,
1997, to be effective as of January 1, 1997.
SOUTHERN NATIONAL CORPORATION
By: /s/ Robert E. Greene
----------------------------------
President
Attest:
/s/ Jerone C. Herring
- ---------------------------------
Secretary
[Corporate Seal]
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1997 DECLARATION OF AMENDMENT TO
BB&T CORPORATION
NON-EMPLOYED DIRECTORS' DEFERRED COMPENSATION
AND STOCK OPTION PLAN
THIS DECLARATION OF AMENDMENT, made the 28th day of October, 1997, by
BB&T CORPORATION (the "Company"), as sponsor of the BB&T Corporation
Non-Employee Directors' Deferred Compensation and Stock Option Plan (the
"Plan").
R E C I T A L S:
It is deemed advisable for the Company to amend the Plan to allow an
Option Participant to designate a Beneficiary to exercise any options granted to
him under the Plan under his death and to make certain other changes deemed
necesssary or desirable.
NOW THEREFORE, it is declared, that effective as of the date of the
Plan shall be and hereby is amended by deleting the last sentence of Section 4.7
of the Plan and substituting therefor the following:
"Except with respect to Options transferred in accordance with the
provisions of this Section 4.7, during the Option Participant's lifetime an
Option may be exercised only by such Option Participant or the Option
participant's legal representative. Notwithstanding the foregoing, on a
beneficiary designation form provided by the Committee, an Option participant
may designate a Beneficiary to exercise any Option granted to him under the
Plan upon his death. The designatin of a Beneficiary in accordance with this
Section 4.7 shall not constitute a transfer."
IN WITNESS WHEREOF, this Amendment has been executed by the Company as
of the day and year first above written.
BB&T CORPORATION
By: /s/ Robert E. Greene
-------------------
President
Attest:
/s/ Jerone C. Herring
------------------
Secretary
[Corporte Seal]
