Exhibit 10.21

DEFERRED COMPENSATION PLAN FOR KEY EXECUTIVES

SOUTHERN NATIONAL

DEFERRED COMPENSATION PLAN

FOR

KEY EXECUTIVES

Effective January 1, 1989

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TABLE OF CONTENTS

 

          PAGE  

ARTICLE I

   STATEMENT OF PURPOSE      1   

ARTICLE II

   DEFINITIONS      2   

ARTICLE III

   ELIGIBILITY, PARTICIPATION AND DEFERRALS      8   

ARTICLE IV

   SEVERANCE BENEFITS      13   

ARTICLE V

   SURVIVOR BENEFITS      15   

ARTICLE VI

   NONCOMPETITION      17   

ARTICLE VII

   ADMINISTRATIVE COMMITTEE      20   

ARTICLE VIII

   AMENDMENT AND TERMINATION      21   

ARTICLE IX

   MISCELLANEOUS      22   

ARTICLE X

   CONSTRUCTION      28   

 

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ARTICLE I

STATEMENT OF PURPOSE

This Plan provides retirement and survivor benefits to or on behalf of certain
key executives of Southern National Corporation and its Participating
Subsidiaries, and thereby helps Southern National attract and retain superior
key management employees and gives such employees additional incentive to work
to make Southern National more profitable.

For executives who participate in the Southern National Employee Stock Ownership
Plan (the “ESOP”), a qualified stock bonus plan with a qualified 401(k) cash or
deferred arrangement feature, the Plan restores benefits lost or denied because
of certain limitations imposed by the rules governing qualified retirement
plans.

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ARTICLE II

DEFINITIONS

When used herein and capitalized, the following terms shall have the meanings
denoted, unless the context clearly requires otherwise.

2.01 Actuarial Equivalent and Actuarially Equivalent. A form of benefit
differing in time, period or manner of payment from a specified benefit provided
by this Plan or provided by the Pension Plan, but having the same value when
computed using the same assumptions used for computing actuarial equivalence
under the Pension Plan.

2.02 Change in Control. A Change in Control shall be deemed to have occurred
upon the happening of any of the following:

(a) the adoption of a plan of merger or consolidation of Southern National
Corporation with any other corporation or association as a result of which the
holders of the voting capital stock of Southern National Corporation would
receive less than 50% of the voting capital stock of the surviving or resulting
corporation;

(b) the occurrence of any event (including, without limitation, any merger or
consolidation) as a result of which Southern National Corporation is not the
owner beneficially and of record of 50% or more of the voting power of the
capital stock of Southern National Bank of North Carolina, N.A. (the “Bank”);

 

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(c) the sale, lease, exchange or other transfer (in one transaction or a series
of transactions contemplated or arranged by any party as a single plan) of all
or substantially all of the assets of Southern National Corporation or the Bank
(other than as security for the obligations of Southern National Corporation or
the Bank);

(d) the approval by the shareholders of Southern National Corporation or the
Bank of any plan or proposal for the liquidation or dissolution of Southern
National Corporation or the Bank;

(e) the acquisition by any person (as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”)),
other than any Trustee under any employee benefit plan of Southern National
Corporation or the Bank, and persons (as such term is so used) who are then
affiliates and associates (as defined on January 1, 1989 in Rule 12b-2 under the
Exchange Act) of such person, or any one of them, after the date this Plan is
executed, directly or indirectly, of beneficial ownership (as defined on
January 1, 1989 in Rules 13d-3 and 13d-5 under the Exchange Act) of securities
of Southern National Corporation representing in the aggregate 20% or more of
the voting power of all then outstanding securities of Southern National
Corporation having the right under ordinary circumstances to vote in an election
of the Board of Directors of Southern National Corporation (without limitation,
any securities having such voting power that any such

 

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person has the right to acquire pursuant to any agreement, or upon exercise of
conversion of rights, warrants or options, or otherwise, shall be deemed
beneficially owned by such person); or

(f) the failure, for any reason, during any period of two consecutive years, of
the individuals who at the beginning of such period constitute the entire Board
of Directors of Southern National Corporation (the “Board”) and any new
directors whose election by the Board, or whose nomination for election by the
shareholders, shall have been approved by a vote of at least two-thirds (2/3) of
the directors of the Board then still in office who either were directors at the
beginning of the period or whose election or nomination for election shall
previously have been so approved, to constitute a majority of the members of the
Board.

2.03 Code. The Internal Revenue Code of 1986, as amended, and as it may be
amended from time to time.

2.04 Committee. The committee which administers the Plan and which is more
particularly described in Article VIII below. The Committee shall be made up of
the individuals who hold the following offices of Southern National Bank of
North Carolina, N.A.: Chairman of the Board of Directors, President, Director of
Human Resources, and Chief Financial Officer.

2.05 Company. Southern National Corporation, Participating Subsidiaries, and any
successor by merger, acquisition or otherwise. All references to “Company” shall
be

 

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“Compensation,” as that definition is amended from time to time, such definition
being expressly incorporated herein by reference.

7. Deferral Election. An irrevocable election by a Participant to defer a
portion of his Compensation for a calendar year, such election to be made in the
manner prescribed by Article III, Section 3 of this Plan. Amounts so deferred
are “elective deferrals.”

8. Designated Beneficiary. One or more beneficiaries, as designated in a writing
filed with the Committee, to whom payments otherwise due to or for the benefit
of the Participant hereunder shall be made in the event of his death prior to
the complete payment of such benefit. In the event no such written designation
is made by the Participant or if such beneficiary shall not be in existence at
the Participant’s death or if such beneficiary predeceases the Participant, the
Participant shall be deemed to have designated his estate as such beneficiary.

9. Employee. A person who is employed the Company.

10. ERISA. The Employee Retirement Income Security Act of 1974, as amended, and
as it may be further amended from time to time.

11. ESOP. The Southern National Employee Stock Ownership Plan, as amended and
restated effective July 1, 1987, as it may be further amended from time to time.

12. ESOP Excess Plan. The Southern National ESOP Excess Plan, effective
January 1, 1989, and as it may be amended from time to time.

 

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13. Insurable. Insurable shall mean that at the time of the Participant’s
election to defer Compensation pursuant to this Plan the life of the Participant
is insurable by an insurance company approved by the Committee and at premium
rates acceptable to the Committee in the exercise of its sole and absolute
discretion.

14. Participant. An Employee who has been notified pursuant to Article III,
Section 1 that he is eligible to participate in the Plan and who has made a
Deferral Election.

15. Participating Subsidiaries. Each subsidiary of Southern National Corporation
which, pursuant to action duly adopted by its board of directors, has adopted
this Plan. “Subsidiary” means a corporation over 50% of the voting stock of
which is owned by Southern National Corporation, by another subsidiary or other
subsidiaries of Southern National Corporation. The foregoing notwithstanding,
the Board of Directors of Southern National Corporation may designate any
company affiliated with Southern National Corporation as a “subsidiary” for
purposes of this Plan.

16. Plan. The Southern National Deferred Compensation Plan for Key Executives as
contained herein, and as it may be amended from time to time.

17. Pre-Tax Employee Contributions. Amounts contributed to the ESOP on behalf of
a Participant pursuant to the Participant’s election to have his Compensation
for a calendar year reduced and contributed to the ESOP in accordance with
Section 401(k)

 

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(or any successor section) of the Code and corresponding provisions of the ESOP.

18. Severance Date. The date the Participant’s employment with the Company
terminates for any reason other than death; provided, however, that if the
Participant’s employment ceases because of Total Disability, his Severance Date
shall be the earlier of (i) the first date he is no longer under a Total
Disability and does not return to active employment with the Company or (ii) his
sixty-fifth (65th) birthday.

19. Total Disability. Total Disability shall have the same meaning as is
ascribed to such term by the long-term disability benefits plan sponsored by the
Company and in which the Participant participates. If the Participant does not
participate in such plan or if the Company does not sponsor such a plan, then
the Participant shall be under a Total Disability if by reason of sickness or
injury he cannot perform each of the material duties of his regular occupation;
provided, however, that after the first twenty-four (24) months he shall be
under a Total Disability if he cannot perform each of the material duties of any
gainful occupation for which he is reasonably fitted by training, education or
experience.

 

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ARTICLE III

ELIGIBILITY, PARTICIPATION AND DEFERRALS

1. Eligibility. The Committee shall have the sole discretion to determine the
Employees who are eligible to become Participants; provided, however, that no
Employee who is not a member of the “select group of management or highly
compensated employees,” as defined in Sections 201(2), 301(a)(3) and 401(a) of
ERISA shall be eligible to become a Participant in the Plan. An Employee shall
become eligible upon being notified by the Committee that he is eligible.

2. Participation. An Employee who is eligible to participate shall become a
Participant by making a Deferral Election.

3. Elective Deferrals.

(a) For each calendar year, each eligible Employee is entitled to make a
Deferral Election in such manner and form as the Committee prescribes to defer
Compensation for the calendar year which, by reason of the application of
Sections 401(k), 402(g) and 415 of the Code and the corresponding provisions of
the ESOP, the Employee is prohibited from deferring and having contributed to
the ESOP as Pre-Tax Employee Contributions.

(b) Deferral Elections shall be made as follows:

(i) Within thirty (30) days following the adoption of this Plan to defer
Compensation to be earned in the remainder of such calendar year;

 

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(ii) Within thirty (30) days following the date on which an Employee first
becomes eligible to participate in this Plan to defer Compensation to be earned
in the remainder of such calendar year; or

(iii) In all other cases on or before December 31 to defer Compensation to be
earned in succeeding calendar years.

4. Limitations on Elective Deferrals.

(a) The maximum amount by which an eligible Employee or Participant may reduce
his Compensation for a calendar year pursuant to a Deferral Election under
Article III, Section 3 shall be the difference between (i) fifteen percent
(15%) of his Compensation for the calendar year and (ii) his maximum permissible
amount of Pre-Tax Employee Contributions for the calendar year. The eligible
Employee’s or Participant’s “maximum permissible amount of Pre-Tax Employee
Contributions for the calendar year” is (i) the annual $7,000 limitation—set
forth in Code Section 402(g) and any corresponding provisions of the ESOP, as
amended and adjusted for inflation, on elective deferrals to certain qualified
retirement plans or, if less, (ii) the maximum amount of Pre-Tax Employee
Contributions permitted to be made by the eligible Employee or Participant for
such calendar year by reason of the application of the actual deferral
percentage nondiscrimination test and annual addition limitation set forth in
Sections 401(k) and 415 of the Code and in any corresponding provisions of the
ESOP.

 

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(b) Anything to the contrary herein notwithstanding, a Participant’s elective
deferrals of Compensation for a calendar year shall not be permitted under this
Plan unless the Participant has made the maximum permissible amount of Pre-Tax
Employee Contributions for the calendar year.

5. Deemed Deferrals. In addition to any elective deferrals pursuant to a
Deferral Election in accordance with Sections 3 and 4 of this Article III, for
each calendar year for which a Participant has made a Deferral Election, the
Participant shall receive credit for “deemed deferrals” equal to the difference
between (A) and (B) where (A) is the amount of Company Matching Contributions
which would have been credited to the Participant’s account in the ESOP (i) had
the ESOP permitted the amount of the elective deferrals the Participant made
pursuant to a Deferral Election under this Plan for the calendar year to have
been contributed as Pre-Tax Employee Contributions, and (ii) had there not been
given effect the compensation, elective deferral, nondiscrimination and annual
addition limitations set forth in Sections 401(a)(17), 402(g), 401(k), 401(m),
and 415 of the Code and in any corresponding provisions of the ESOP, and where
(B) is the amount of Company Matching Contributions actually credited to the
Participant’s account in the ESOP.

6. No ESOP Excess Plan Deferrals. Anything to the contrary herein
notwithstanding, any eligible Employee or Participant who has elected to make
deferrals of compensation under the ESOP Excess Plan for a calendar year
(hereafter called

 

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“ESOP Excess Deferrals”) shall be ineligible to make a Deferral Election under
this Plan for such calendar year. The foregoing notwithstanding, any eligible
Employee who has elected to make ESOP Excess Deferrals for the 1989 calendar
year shall be permitted to make a Deferral Election to defer Compensation under
this Plan for the calendar year 1989; provided, however (i) such Deferral
Election shall supersede his deferral election under the ESOP Excess Plan,
(ii) no additional ESOP Excess Deferrals for the calendar year 1989 shall be
made after the making of such Deferral Election, (iii) any ESOP Excess Deferrals
for the calendar year 1989 which were made prior to such Deferral Election shall
be transferred to this Plan and treated for all purposes as elective deferrals
made under such Deferral Election and subject to Sections 3 and 4 of this
Article III, and (iv) such Deferral Election shall not be honored unless the
eligible Employee has properly executed a release of liability in a form
acceptable to the Committee with respect to deferred compensation benefits which
would have been payable under the ESOP Excess Plan with respect to ESOP Excess
Deferrals for the 1989 calendar year.

7. Benefits. The total amount of deferred compensation or other benefits payable
under this Plan to a Participant or his Designated Beneficiary pursuant to
Articles IV or V shall be the sum of the amounts payable with respect to each
individual calendar year for which the Participant has a deferral amount
(whether elective or deemed) for such calendar year. The amount of deferred
compensation or other benefits payable with respect

 

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to deferrals (elective or deemed) for any calendar year shall be determined in
accordance with the appropriate column in the schedule of benefits attached as
an exhibit to the Deferral Election for the calendar year.

 

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ARTICLE IV

SEVERANCE BENEFITS

1. Benefits. After the Severance Date of a Participant, the Company shall pay
the Participant a level fifteen (15) year annuity payable in equal monthly
installments. The amount of the monthly payments are determined in accordance
with the appropriate column on the schedule of benefits provided for in Article
III, Section 7. Payment of the benefit shall commence on the first January 1st
following the Severance Date; provided, however, that if the Severance Date
occurs after the Participant attains age sixty (60) but before he attains age
sixty-five (65), payment shall commence on the first January 1st following the
Participant’s sixty-fifth (65th) birthday unless the Participant files a written
election with the Committee no later than the later of the date of the making of
his last Deferral Election or the date two (2) years prior to his Severance
Date, to have his benefits commence on the first January 1st following his
Severance Date. Payment shall continue on the first day of each month thereafter
until one hundred eighty (180) monthly payments have been made.

2. Payments to Beneficiary. In the event a Participant dies prior to full
payment of his benefits under this Article IV, all remaining payments due
hereunder shall be made to such Participant’s Designated Beneficiary, provided
such Designated Beneficiary is living at the time of the Participant’s death. In

 

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the event the Designated Beneficiary is not living at the time of the
Participant’s death, all remaining payments due hereunder shall be paid to the
Participant’s estate. In the event the Designated Beneficiary survives the
Participant but dies prior to full payment of all remaining payments due
hereunder, all payments then remaining due hereunder shall be paid to the
Designated Beneficiary’s estate.

 

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ARTICLE V

SURVIVOR BENEFITS

1. Benefits. Upon the death of the Participant prior to his Severance Date the
Company shall pay to the Participant’s Designated Beneficiary a level fifteen
(15) year annuity payable in equal monthly installments. Payment of the benefit
shall commence on the first January 1st following the Participant’s death and
shall continue on the first day of each month thereafter until one hundred
eighty (180) monthly payments have been made. The amount of the monthly payments
shall be the sum of (A) and (B) below:

(A) With respect to elective and deemed deferrals made in calendar years in
which the Participant was deemed Insurable, the amount determined with reference
to the appropriate column in the schedule of benefits for calculating survivor
benefits attached to the Participant’s Deferral Elections for those calendar
years.

(B) With respect to elective and deemed deferrals made in calendar years in
which the Participant was deemed not Insurable, the amount determined in
accordance with the appropriate column on the schedule of benefits attached to
the Participant’s Deferral Elections for those calendar years on the basis of
the assumption that the Participant terminated employment with the Company on
the day immediately preceding his death.

 

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2. Payments to Beneficiary. In the event that a Designated Beneficiary dies
prior to full payment of his survivor benefits under this Article V, all
remaining payments due hereunder shall be made to such Designated Beneficiary’s
estate. In the event the Designated Beneficiary is not living at the time of the
Participant’s death, the survivor benefits shall be paid to the Participant’s
estate.

 

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ARTICLE VI

NONCOMPETITION

Notwithstanding any provision of this Plan to the contrary but subject to the
proviso below, if any Participant terminates employment with the Company for any
reason and later accepts employment with, or assumes any other position with,
any national bank, state bank, savings and loan association, or any other
similar financial institution which has one or more offices in a state in which
a subsidiary of Southern National Corporation has a banking office, the Company
may at its discretion and in full and complete discharge of its obligations to
the Participant under this Plan and his Deferral Elections, make a lump sum
payment to the Participant equal to the present value (calculated using the
“Present Value Monthly Discount Rate” stated on the schedule of benefits
attached to the Participant’s various Deferral Elections) of the remaining
benefit payments due to or on behalf of the Participant; provided, however, that
the Company shall have no right to make such lump sum payment if, within two
(2) years following a Change in Control, either the Company terminates the
Participant’s employment other than for cause or the Participant quits or
resigns for good reason. Termination by the Company of the Participant’s
employment for “cause” shall mean termination due to (i) an act or acts of
dishonesty by the Participant constituting a felony and resulting or intended to
result in substantial gain or

 

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personal enrichment for the Participant at the expense of the Company or
(ii) willful and continued failure by the Participant to substantially perform
his duties with the Company, other than for incapacity due to mental or physical
illness, after a written demand for substantial performance is delivered to the
Participant by the Chairman of the Board of Directors of the Company which
specifies how the Participant has failed to substantially perform his duties;
provided, however, in no event shall the Participant’s termination by the
Company be considered to have been for cause if such termination shall have been
the result of (i) the Participant’s bad judgment or negligence, (ii) any act or
omission without intent of gaining a profit to which the Participant was not
legally entitled, or (iii) any act or omission believed by the Participant in
good faith to have been in, or not opposed to, the interests of the Company.
“Good reason” shall mean: (i) the assignment to the Participant of any duties
inconsistent with his duties immediately prior to the Change in Control or any
removal of the Participant from or any failure to reelect or reappoint the
Participant to his positions, except in connection with promotions to higher
office; (ii) a reduction by the Company in the Participant’s base salary as in
effect immediately prior to the Change in Control; (iii) the failure by the
Company to maintain, and to continue the Participant’s participation in, the
Company’s benefit or compensation plans as in effect immediately prior to the
Change in Control (including but not limited to bonus and incentive

 

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compensation plans, stock option, bonus, award and purchase plans, life
insurance, medical, health and accident insurance, disability plans and deferred
compensation plans); or the taking of any action by the Company which would
adversely affect the Participant’s participation in or reduce the Participant’s
benefits under any of such plans or deprive the Participant of any fringe
benefit he enjoyed immediately prior to the Change in Control; or the failure to
provide the Participant with the number of paid vacation days to which he was
entitled under the Company’s normal vacation policy in effect immediately prior
to the Change in Control; (iv) the relocation of the Participant’s office to
anywhere other than a location within 25 miles of the Participant’s office
immediately prior to the Change in Control or the Company’s requiring the
Participant to be based anywhere other than within 25 miles of the Participant’s
office immediately prior to the Change in Control, except for required travel on
the Company’s business to an extent consistent with the Participant’s business
travel obligations immediately prior to the Change in Control; or (v) Total
Disability.

 

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ARTICLE VII

ADMINISTRATIVE COMMITTEE

1. This Plan shall be administered by the Committee. The Committee shall have
all powers necessary to enable it to carry out its duties in the administration
of the Plan. Not in limitation, but in application of the foregoing, the
Committee shall have the duty and power to determine all questions that may
arise hereunder as to the status and rights of Participants.

2. The Committee shall act by a majority of the number then constituting the
Committee, and such action may be taken either by a vote at a meeting or in
writing without a meeting.

3. The Committee shall keep a complete record of all its proceedings and all
data relating to the administration of the Plan.

4. The Committee shall select one of its members as a Chairman. The Committee
shall appoint a Secretary to keep minutes of its meetings and the Secretary may
or may not be a member of the Committee. The Committee shall make such rules and
regulations for the conduct of its business as it shall deem advisable.

5. No member of the Committee shall be personally liable for any actions taken
by the Committee unless the member’s action involves willful misconduct.

 

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ARTICLE VIII

AMENDMENT AND TERMINATION

Southern National Corporation reserves the right, at any time or from time to
time, by action of its Board of Directors, to amend in whole or in part any or
all provisions of the Plan. In addition, Southern National Corporation reserves
the right by action of its Board of Directors to terminate the Plan in whole or
in part, and each Participating Subsidiary reserves the right by action of its
Board of Directors to terminate the Plan with respect to such Participants
employed by it. Anything to the contrary herein notwithstanding, any such
amendment or termination shall not adversely affect any benefits attributable to
elective or deemed deferrals made in the calendar year in which the amendment or
termination is adopted or in any prior calendar years.

 

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ARTICLE IX

MISCELLANEOUS

1. Early Death or Suicide. Notwithstanding any provision in this Plan to the
contrary, in the event (i) the Participant dies prior to the first May 1
following the making of a Deferral Election pursuant to Section 3(b)(iii) of
Article III, (ii) the Participant dies within one hundred twenty (120) days
after making a Deferral Election pursuant to Section 3(b)(i) or (ii) of Article
III, or (iii) the Participant dies as a result of suicide within twenty-eight
(28) months after making a Deferral Election, then in lieu of all other benefits
to which the Designated Beneficiary would otherwise be entitled pursuant to such
Deferral Election(s), the Company shall pay to the Designated Beneficiary,
within sixty (60) days of receipt of written proof of the Participant’s death, a
lump sum equal to the Participant’s actual deferrals pursuant to such Deferral
Election(s) plus interest thereon from the date of deferral at the rate of nine
percent (9%) per annum compounded annually. The payment of such lump sum shall
fully and completely discharge the Company’s obligations under such Deferral
Election(s) and shall fully and completely satisfy all the Participant’s and his
Designated Beneficiary’s rights thereunder.

2. Nonalienation of Benefits. No right or benefit under the Plan shall be
subject to anticipation, alienation, sale, assignment, pledge, encumbrance, or
charge, and any attempt to

 

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anticipate, alienate, sell, assign, pledge, encumber, or charge any right or
benefit under this Plan shall be void. No right or benefit hereunder shall in
any manner be liable for or subject to the debts, contracts, liabilities or
torts of the person entitled to such benefits. If the Participant or any
beneficiary hereunder shall become bankrupt, or attempt to anticipate, alienate,
sell, assign, pledge, encumber, or charge any right hereunder, then such right
or benefit shall, in the discretion of the Committee, cease and terminate, and
in such event, the Committee may hold or apply the same or any part thereof for
the benefit of the Participant or his beneficiary, spouse, children, or other
dependents, or any of them in such manner and in such amounts and proportions as
the Committee may deem proper.

3. No Trust Created. The obligations of Southern National Corporation and
Participating Subsidiaries to make payments hereunder shall constitute a
liability of Southern National Corporation and Participating Subsidiaries to a
Participant. Such payments shall be made from the general funds of Southern
National Corporation and its Participating Subsidiaries, and no such Company
shall be required to establish or maintain any special or separate fund, or
purchase or acquire life insurance on a Participant’s life, or otherwise to
segregate assets to assure that such payment shall be made, and neither a
Participant, his estate nor Designated Beneficiary shall have any interest in
any particular asset of either Southern National Corporation or its
Participating Subsidiaries by reason of its

 

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obligations hereunder. Nothing contained in the Plan shall create or be
construed as creating a trust of any kind or any other fiduciary relationship
between the Company and a Participant or any other person.

4. No Employment Agreement. Neither the execution of this Plan nor any action
taken by the Company pursuant to this Plan shall be held or construed to confer
on a Participant any legal right to be continued as an Employee of the Company
in an executive position or in any other capacity whatsoever. This Plan shall
not be deemed to constitute a contract of employment between the Company and a
Participant, nor shall any provision herein restrict the right of the Company to
discharge any Participant or restrict the right of any Participant to terminate
his employment with the Company.

5. Designation of Beneficiary. Participants shall file with the Company a notice
in writing designating one or more Designated Beneficiaries to whom payments
otherwise due to or for the benefit of the Participant hereunder shall be made
in the event of his death prior to the complete payment of such benefit.
Participants shall have the right to change the beneficiary or beneficiaries so
designated from time to time; provided, however, that any change shall not
become effective until received in writing by the Committee.

6. Payment to Incompetents. The Committee shall make payment provided herein
directly to a Participant or such Designated Beneficiary entitled thereto, or if
such Participant or

 

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such Designated Beneficiary has been determined by a court of competent
jurisdiction to be mentally or physically incompetent, then payment shall be
made to the duly appointed guardian, committee or other authorized
representative of such Participant or such Designated Beneficiary and his
estate. The Company shall have the right to make payment directly to a
Participant or such Designated Beneficiary or until it has received actual
notice of the physical or mental incapacity of such Participant or such
Designated Beneficiary, and notice of the appointment of a duly authorized
representative of his estate. Any such payment for the benefit of the
Participant or such Designated Beneficiary or to such representative for his
benefit, shall be a complete discharge of all liability of the Company therefor.
The Company is authorized to interpret and administer this Section in accordance
with the laws of the State of North Carolina.

7. Claims for Benefits. Each Participant or beneficiary must claim any benefit
to which he is entitled under this Plan by a written notification to the
Committee. If a claim is denied, it must be denied within a reasonable period of
time, and be contained in a written notice stating the following:

 

  A. The specific reason for the denial.

 

  B. Specific reference to the Plan provision on which the denial is based.

 

  C. Description of additional information necessary for the claimant to present
his claim, if any, and an explanation of why such material is necessary.

 

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  D. An explanation of the Plan’s claims review procedure.

The claimant will have 60 days to request a review of the denial by the
Committee, which will provide a full and fair review. The request for review
must be in writing delivered to the Committee. The claimant may review pertinent
documents, and he may submit issues and comments in writing.

The decision by the Committee with respect to the review must be given within 60
days after receipt of the request, unless special circumstances require an
extension (such as for a hearing). In no event shall the decision be delayed
beyond 120 days after receipt of the request for review. The decision shall be
written in a manner calculated to be understood by the claimant, and it shall
include specific reasons and refer to specific Plan provisions as to its effect.

8. Binding Effect. Southern National Corporation shall be jointly and severally
liable with respect to obligations incurred by a Participating Subsidiary under
this Plan. Obligations incurred by the Company pursuant to this Plan shall be
binding upon and inure to the benefit of the Company, its successors and
assigns, and the Participant and the beneficiary or beneficiaries designated
pursuant to Article IX, Section 5 hereinabove.

9. Entire Plan. This document and any amendments contains all the terms and
provisions of the Plan and shall constitute the entire Plan, any other alleged
terms or provisions being of no effect.

 

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10. Merger or Consolidation. In the event of a merger or a consolidation by the
Company with another corporation, or the acquisition of substantially all of the
assets or outstanding stock of the Company by another corporation, then and in
such event the obligations and responsibilities of the Company under this Plan
shall be assumed by any such successor or acquiring corporation, and all of the
rights, privileges and benefits of the Participants hereunder shall continue.

11. Participant Transfers. In the event a Participant is transferred between
Southern National Corporation and a Participating Subsidiary, or between
Participating Subsidiaries, the Company to which the Participant is transferred
(i) shall assume, to the extent it is executory at the time of the transfer, any
obligation under a Deferral Election to defer Compensation of the Participant,
and (ii) shall become jointly liable with the transferring Company to pay any
benefits due the Participant under such Deferral Election.

 

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DECLARATION OF AMENDMENT TO

SOUTHERN NATIONAL DEFERRED COMPENSATION PLAN

FOR KEY EXECUTIVES

THIS DECLARATION OF AMENDMENT, made the 25th day of March, 1997, by SOUTHERN
NATIONAL CORPORATION (the “Company”), as sponsor of the Southern National
Deferred Compensation Plan for Key Executives (the “Plan”).

R E C I T A L S:

Effective January 1, 1989, Southern National Bank of North Carolina established
the Plan for the benefit of selected key employees. The purpose of the Plan was
to restore to employees certain benefits (the “Restoration Benefits”) that would
have been provided under the Southern National Employee Stock Ownership Plan
(which has subsequently been merged into the Southern National Corporation 401
(k) Savings Plan) except for the limitations imposed by Sections 401(a)(17),
401(k), 401(m), 402(g) and 415 of the Internal Revenue Code of 1986, as amended.
Branch Banking and Trust Company (“BB&T”) established a similar plan (the “BB&T
Plan”) effective as of January 1, 1988, for the benefit of its selected key
employees. The BB&T Plan was entitled the Branch Banking and Trust Company
Supplemental Executive Retirement Plan. On February 28, 1995, 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 and
the Company became the sponsor of the Plan. Effective as of January 1, 1996, the
Company assumed the sponsorship of the BB&T Plan and the name of the BB&T Plan
was changed to the Southern National Corporation Supplemental Executive
Retirement Plan. Since the Restoration Benefits were also provided under the
BB&T Plan, the BB&T Plan eliminated the need for the Plan. Accordingly, the Plan
was frozen as of December 31, 1995. Effective as of January

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1, 1997, the BB&T Plan was amended and restated and the name of the BB&T Plan
was changed to the Southern National Corporation Non-Qualified Defined
Contribution Plan. It is deemed advisable for the Company to amend the Plan to
reflect the Plan’s frozen status.

NOW, THEREFORE, it is declared that the Plan shall be and hereby is amended as
follows:

1. Effective as of January 1,1996, Article III of the Plan shall be amended by
adding the following new material to the end of Section 2:

“Effective as of December 31, 1995, no new Employees of the Company shall become
Participants in the Plan. The Participants in the Plan as of such date are
designated in Exhibit A attached hereto.”

2. Effective as of January 1, 1996, Article III of the Plan shall be further
amended by adding the following new material to the end of Section 3(a):

“Effective as of December 31, 1995, no additional Deferral Elections shall be
made by Participants under the Plan.”

IN WITNESS WHEREOF, this Amendment has been executed by the Company on the day
and year first above stated.

 

SOUTHERN NATIONAL CORPORATION

By:

 

/s/ Robert E. Greene

  Authorized Officer

Attest:

 

/s/ Jerone C. Herring

(Assistant) Secretary

[Corporate Seal]

 

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