The South Financial Group

2006 – 2008 LONG TERM INCENTIVE PLAN

Restricted Stock Unit Award Agreement

This Agreement is made as of April 21, 2006 (the “Grant Date”), by and between
The South Financial Group (the "Company") and (the “Participant”).

 

DISCLAIMER

THIS DOCUMENT IS NOT A CONTRACT OF EMPLOYMENT. THE EMPLOYMENT RELATIONSHIP
BETWEEN THE SOUTH FINANCIAL GROUP AND ITS EMPLOYEES WHO DO NOT HAVE A SPECIFIC
INDIVIDUAL EMPLOYMENT CONTRACT IS AT-WILL AND VOLUNTARY. THIS MEANS THAT EITHER
THE SOUTH FINANCIAL GROUP OR AN EMPLOYEE CAN TERMINATE THE EMPLOYMENT
RELATIONSHIP AT ANY TIME WITH OR WITHOUT CAUSE AND WITH OR WITHOUT NOTICE. THE
EMPLOYMENT AT-WILL STATUS OF SUCH EMPLOYEES CANNOT BE ALTERED BY THIS DOCUMENT
OR ANY OTHER STATEMENT OR REPRESENTATION, BUT CAN ONLY BE CHANGED BY A WRITTEN
CONTRACT, WHICH MUST BE SIGNED BY THE APPROPRIATE MEMBER OF THE EXECUTIVE
COMMITTEE.

 

ALL EMPLOYEES WHICH HAVE ENTERED INTO OR MAY LATER ENTER INTO SUCH A WRITTEN
CONTRACT ARE FURTHER ADVISED THAT THIS DOCUMENT DOES NOT AND CANNOT IN ANY WAY
ALTER, MODIFY, OR AMEND SUCH A CONTRACT.

 

ALL EMPLOYEES ARE FURTHER ADVISED THAT THE EMPLOYMENT RELATIONSHIP BETWEEN THE
SOUTH FINANCIAL GROUP AND ITS EMPLOYEES CANNOT BE AND IS NOT INTENDED TO BE
MODIFIED IN ANY WAY BY ANY EMPLOYEE’S OWNERSHIP, VESTING, OR OTHER INTEREST OF
ANY KIND IN ANY BENEFIT OR ASSET THAT MAY BE PROVIDED OR AWARDED UNDER THIS
PLAN.

 

SOME PROVISIONS OF THIS PLAN MAY BE CONDITIONED UPON CONTINUED EMPLOYMENT WITH
THE SOUTH FINANCIAL GROUP OR MAY OTHERWISE BE RELATED TO THE DURATION OF
EMPLOYMENT WITH THE SOUTH FINANCIAL GROUP. NO RELATIONSHIP BETWEEN THE
PROVISIONS OF THIS PLAN AND A PARTICIPANT’S STATUS AS AN EMPLOYEE WITH THE SOUTH
FINANCIAL GROUP SHALL CONSTITUTE AN ALTERATION OF ANY KIND TO THE EMPLOYMENT
RELATIONSHIP BETWEEN THE SOUTH FINANCIAL GROUP AND ANY EMPLOYEE.

WHEREAS, the Compensation Committee of the Board of Directors (Committee) has,
pursuant to the Plan, made an Award to the Participant and authorized and
directed the execution and delivery of this Agreement;

NOW, THEREFORE, in consideration of the foregoing, the mutual promises
hereinafter set forth, and other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the Company and the Participant
hereby agree as follows:

1.

Award. The Participant is hereby granted an Award of x Stock Units (hereinafter
sometimes “Units”). Of this award, one-third or x Units which will be subject to
Employment Conditions and two-thirds or x Units will be subject to Performance
Conditions with respect to the Performance Period January 1, 2006 through
December 31, 2008. If maximum or stretch levels of performance are achieved,
than the number of Units that can be earned can increase by 50%. For your award,
the x Units subject to Performance Conditions can increase to x Units at stretch
performance. The Performance Measures, Performance Goals, Performance Formula
and Employment Conditions applicable to this Award are set forth in the Award
Schedule attached hereto and made a part hereof.

 

 

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2.

Payment.

 

(i)

As soon as practicable after the close of the Performance Period, the Committee
shall determine whether, and to what extent, the Performance Goals for the
Performance Period have been achieved. If the Performance Goals have been
achieved, the Committee will determine the number of Units that have vested
based upon the Performance Formula set forth in the Award Schedule. Units that
have not met the Performance Conditions will be forfeited.

 

(ii)

Units subject to the Employment Conditions will vest according to the Award
Schedule.

 

(iii)

As soon as practical after the Units have vested, the Company shall deliver to
the Participant one share of Stock for each Restricted Stock Unit so earned.

3.

Termination. No payment shall be made with respect to this Award and all of the
Units granted hereunder will be forfeited if the Participant is not an Employee
as of the date of vesting.

4.

Change of Control. Anything in this Agreement to the contrary notwithstanding,
in the event of a Change of Control as defined by the Plan document, all Units
subject to Employment Conditions will vest as of the date of the Change in
Control. All Units subject to Performance Conditions will vest at the 100% level
as of the date of the Change in Control.

5.

Overlap with 2004 to 2006 LTIP Plan. 50% of any award earned in 2006 under the
2004 to 2006 LTIP plan will reduce the number of Units that vest based on the
Employment Condition beginning with shares that vest in early 2007.

6.

Taxes. The Company shall withhold all applicable taxes required by law from all
amounts paid in satisfaction of the Award. A Participant may satisfy the tax
obligation with respect to the Award (i) by paying the amount of any such taxes
in cash or check (subject to collection), (ii) by the delivery (or attestation
of ownership) of shares of Stock, or (iii) with the approval of the Committee,
by having shares of Stock deducted from the payment. The amount of the
withholding and, if applicable, the number of shares of Stock to be deducted
shall be determined by the Committee as of when the withholding is required to
be made, provided that the number of shares of Stock so withheld shall not
exceed the minimum required amount of such withholding.

7.

Non-Assignability. Stock Equivalent Units are not assignable or transferable
other than by will or by the laws of descent and distribution.

8.

Rights as a Stockholder. Subject to the terms and provisions of applicable law
and of this Agreement, the Participant shall have all rights of a stockholder of
the Company with respect to the Units, including the right to vote the Units and
receive all dividends or other distributions paid or made with respect thereto.

9.

Distributions with Respect to Stock.

 

(i)

While the Performance Conditions are in force, any cash dividends paid with
respect to the Company’s common stock will be payable to Restricted Stock Unit
holders subject to the terms below. The cash dividends shall be held un-invested
by the Company and subject to the same terms and conditions as the Units while
the performance conditions are still in force. Cash dividends related to Units
that have satisfied the performance conditions will be paid to the participant
as soon as practical after the performance conditions have been satisfied. Cash
dividends related to Units that were forfeited will also be forfeited.

 

(ii)

While the Employment Conditions are in force, cash dividends will be paid on the
same basis and timing as common stock holders.

 

(iii)

Restricted Stock Unit participants will receive any stock dividends on the same
basis as common stock holders, except their dividends will be in the form of
additional Units. Any Units received by a recipient as a stock dividend, or as a
result of stock splits, recapitalizations, combinations, exchanges

 

 

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of shares, reorganizations, mergers, consolidations or otherwise, directly or
indirectly, the Restricted Stock Unit shall have the same status and be subject
to this Agreement.

 

10.

No Right to Continued Service. Nothing herein shall obligate the Company or any
Subsidiary or Affiliate of the Company to continue the Participant’s employment
or other service for any particular period or on any particular basis of
compensation.

11.

Burden and Benefit. The terms and provisions of this Agreement shall be binding
upon, and shall inure to the benefit of, the Participant and his or her
executors or administrators, heirs, and personal and legal representatives.

12.

Execution. This Award is not enforceable until this Agreement has been signed by
the Participant and the Company. By executing this Agreement, the Participant
shall be deemed to have accepted and consented to any action taken under the
Plan by the Committee, the Board of Directors or their delegates.

13.

Governing Law. This Agreement shall be construed and enforced in accordance with
the laws of the State of South Carolina, without regard to the conflict of laws
principles thereof.

14.

Modifications. No change or modification of this Agreement shall be valid unless
it is in writing and signed by the parties hereto.

15.

Entire Agreement. This Agreement, together with the Plan, sets forth all of the
promises, agreements, conditions, understandings, warranties and representations
between the parties hereto with respect to the Units granted hereunder, and
there are no promises, agreements, conditions, understandings, warranties or
representations, oral or written, express or implied, between them with respect
to the Units other than as set forth herein or therein. The terms and conditions
of the Plan are incorporated by reference herein, and to the extent that any
conflict may exist between any term or provision of this Agreement and any term
or provision of the Plan, the term or provision of the Plan shall control.

16.

Construction. The use of any gender herein shall be deemed to include the other
gender and the use of the singular herein shall be deemed to include the plural
and vice versa, wherever appropriate.

17.

Notices. Any and all notices required herein shall be addressed: (i) if to the
Company, to the principal executive office of the Company; and (ii) if to the
Participant, to his or her address as reflected in the records of the Company.

18.

Invalid or Unenforceable Provisions. The invalidity or unenforceability of any
particular provision of this Agreement shall not affect the other provisions
hereof, and this Agreement shall be construed in all respects as if the invalid
or unenforceable provisions were omitted.

 

IN WITNESS WHEREOF, the Company and the Participant have executed this Agreement
as of the day and year first above written.

 

 

The South Financial Group

 

 

By:

                                                                       

 

Executive Vice President

 

 

                                          
                                      

 

Name

 

 

 

 

 

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Award Schedule For 2006 – 2008 Restricted Stock Units

(Based On Employment Conditions)

 

Grant
Year

% of Restricted
Stock Units

Number of Restricted
Stock Units - Target

2006

100%

 

 

Employment Conditions

Cumulative Percent of Award

Restrictions Lapse as of

33.30%

January 31, 2007

33.30%

January 31, 2008

33.40%

January 31, 2009

 

 

 

 

AWARD SCHEDULE FOR 2006 – 2008 Restricted Stock Units

(Based On Performance)

 

Performance
Period

% of Restricted
Stock Units

Number of Restricted
Stock Units - Target

Number of Restricted Stock Units - Stretch

2006 to 2008

100%

 

 

 

 

Performance Rating

For each performance period, the Board will evaluate the performance of The
South Financial Group versus two established performance measures and the
approved threshold, target and stretch performance levels. The percentage
performance of each measure will be determined independently. Once the
percentage performance has been determined, an overall percentage performance
will be calculated by adding together each performance measure’s weight times
the percentage performance for that measure. The percentage of Units that have
met the performance conditions is equal to the overall percentage performance
times the number of Units awarded.

The percentage performance for each measure will be determined in the following
manner:

1.

If performance is below the threshold, then that measures percentage performance
is 0%.

2.

If performance is below the target but exceeds the threshold, then that measures
percentage performance is calculated based on straight-line interpolation and
will be between 50% and 100%.

3.

If performance is exactly equal to the target, then that measures percentage
performance is 100%.

4.

If performance is in between the target and the stretch, then that measures
percentage performance is calculated based on straight-line interpolation and
will be between 100% and 150%.

5.

If performance is equal to or exceeds the stretch, then the percentage
performance is 150%.

 

Operating EPS Growth versus Peers (50% Weight)

 

Net Income ROE (50% Weight)

 

 

 

 

 

 

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