Document:

Ex-10.ee Form of Split Dollar Life Insurance Agr.

 

EXHIBIT 10(EE)

FORM OF SPLIT-DOLLAR LIFE INSURANCE
AGREEMENT1

     This Agreement effective as of the       day of
                    ,      , [See
Exhibit 1] by and among [FIRST UNION][WACHOVIA] CORPORATION, a North Carolina
corporation having its principal office in Charlotte, North Carolina
(hereinafter referred to as the “Employer”), and                
     
(hereinafter referred to as the “Owner”).

     WHEREAS, the Owner desires to purchase a certain life insurance policy
insuring the lives of [see Exhibit 1]
                         
 (hereinafter referred to as the “Employee”) and
                         
(hereinafter referred to as the
“Employee’s Spouse”, the Employee and the Employee’s Spouse are sometimes
hereinafter referred to as the “Insureds”); and

     WHEREAS, the Employee is an employee of the Employer and has discharged
his duties in a capable manner to the benefit of the Employer; and

     WHEREAS, the Employer desires to help the Employee and the Employee’s
Spouse create a life insurance program for the benefit and protection of their
family by the establishment of a split-dollar life insurance plan and is
willing to pay a portion of the premiums due on the policy issued pursuant to
such plan; and

     WHEREAS, the Owner will be the owner of such policy, and as such, will
have all incidents of ownership in and to the policy and agrees to participate
in such split-dollar life insurance plan as hereinafter provided;

     NOW, THEREFORE, in consideration of the premises and of the mutual
promises contained therein, the parties hereto agree as follows:

	 	1.	 	The Employee applied to John Hancock Mutual Life Insurance
Company (hereinafter referred to as the “Insurer”) for a
survivorship policy in the face amount of [See Exhibit 1]
                         
Dollars ($                    )
on the lives of the Employee and
the Employee’s spouse (hereinafter referred to as the “Policy”).
The Policy was issued and the policy number and face amount are
recorded on Schedule A attached hereto, and the Policy has been
subject to the terms of the Agreement prior to this amendment.
	 
	 	2.	 	Employee assigned the Policy to the Employer to secure the
Employer’s rights under the Agreement prior to this amendment. The
collateral assignment (hereinafter referred to as the “Collateral
Assignment”) cannot be altered or changed without the consent of the
Employer.

	 	 	1 This is a form of Split Dollar Life Insurance Agreement that the Corporation
has entered into with certain executive officers, including G. Kennedy
Thompson, Donald A. McMullen, Jr. and Benjamin P. Jenkins, III. Key provisions
of this form of agreement applicable to the executives named in the preceding
sentence are found in Exhibit 1 to this form of agreement.

 

 

	 	3.	 	Employee has assigned to Owner all of Employee’s right, title
and interest in and to
the Policy outright and has also assigned employee’s obligations
under the Collateral Assignment, and the Employer has agreed to
continue to effect the terms of the Agreement, as amended, with the
Owner assuming the obligations of Employee under the Agreement
prior to this amendment, as Employee’s assignee, and as herein set
forth.
	 
	 	4.	 	Subject to the provisions of this Agreement as hereinafter
provided, the Owner, as the sole and exclusive owner of the Policy,
has all the rights of the owner under the terms of the Policy,
including, but not limited to, the right to designate beneficiaries,
select settlement and dividend options, borrow on the security of
the Policy and to surrender the Policy, and such rights may be
exercised by the Owner with the Employer’s consent.
	 
	 	5.	 	The Owner shall pay to the Employer that part of each annual
premium equal to [See Exhibit 1]
$                    
(the “Owner’s Payment”)
for each year until this Agreement is terminated by its terms,
regardless of whether annual premiums are required to be paid to the
Insurer on the Policy and any such amounts paid to the Employer by
the Owner pursuant to this Section 5 which are not required to be
remitted to the Insurer to meet an annual premium payment obligation
shall be retained by the Employer and credited against the Policy
Interest. The Owner agrees to pay the Owner’s Payment to the
Employer no later than thirty (30) days after the annual premium is
due or would otherwise have been due if such premium were so
payable. The Employer shall pay the balance of each annual premium
for the first fifteen (15) years of the Policy as set forth on
Schedule C attached hereto (hereinafter referred to as the “Premium
Advances”) and shall remit to the Insurer the full amount of each
annual premium due in accordance with the mode of premium payment as
provided in the Policy on or before the due date of such premium,
except as provided in Sections 9 and 10 hereof.
	 
	 	6.	 	As long as this Agreement is in effect, any Policy dividend
credited to the Policy shall be applied to provide paid-up additions
and the parties hereto agree the dividend election provisions of the
Policy shall conform to the provisions hereof.
	 
	 	7.	 	The total amount of (i) all Premium Advances plus (ii) any
unpaid Owner’s Payments, plus (iii) an investment return equal to
three percent (3%) interest compounded annually on the outstanding
Premium Advances and unpaid Owner’s Payments to provide Employer an
investment return thereon, shall constitute the Employer’s interest
in the Policy (referred to herein as the “Policy Interest”). As
security for and to secure the repayment of the Policy Interest, as
it may exist from time to time, the Owner shall execute and deliver
to the Employer, at the time this Agreement is executed, a
collateral assignment of the Policy in the form set forth in
Schedule B to this Agreement (hereinafter referred to as the
“Collateral Assignment”), and the Employer may enforce its right to
be paid the Policy Interest pursuant to Sections 9 through 11 of
this Agreement from the cash surrender value of the Policy, provided
that if the cash surrender value exceeds the Policy Interest, such
excess shall remain the property of the Owner.

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	 	8.	 	Except in connection with the payment of the Policy Interest
to the Employer pursuant to Section 9 or Section 10 hereof, the
Owner shall not permit the Contract Debt to exceed the Loan Value of
the Policy, less the Policy Interest (the “Owner’s Borrowing
Limit”). For purposes of this paragraph the terms “Contract Debt”
and “Loan Value” shall have the meanings provided in the Policy and
set forth on Schedule E attached hereto.
	 
	 	9.	 	The Owner may terminate this Agreement upon thirty (30) days’
advance written notice to the Employer, and the Employer shall
release its interest in the Policy, cancel the Collateral
Assignment, and transfer physical possession of the Policy to the
Owner upon payment of the Policy Interest owed by the Owner to the
Employer as of such termination date. Such release, cancellation
and transfer shall terminate all obligations of the Employer under
this Agreement. If the Owner does not pay, or make satisfactory
provision for the payment of, the Policy Interest, then the Employer
may take all action necessary to obtain the cash surrender value
provided under the Policy to satisfy payment of the Policy Interest.
	 
	 	10.	 	The Employer may terminate this Agreement and make demand on
the Owner for payment of the Policy Interest as of such termination
date upon the first to occur of the following events:

						
	 	 	 	(a)	 	the surrender or exchange of the Policy by the Owner;
	 
	 	 	 	(b)	 	failure of the Owner to make a payment of an
Owner’s Payment when due or to comply with any other
provisions set forth in this Agreement;
	 
	 	 	 	(c)	 	the Employee ceases to be an Employee of the
Employer or one of its Subsidiaries (as hereinafter defined)
and becomes a proprietor, officer, partner, employee or
otherwise becomes affiliated with any business that is in
competition with the Employer or any of its Subsidiaries;
provided, however, this Section 10(c) shall not apply
following a Change of Control (as hereinafter defined);
	 
	 	 	 	(d)	 	the Employee voluntarily terminates employment
with the Employer and its Subsidiaries for reasons other than
death, Disability, or Retirement (as hereinafter defined);
provided, however, this Section 10(d) shall not apply
following a Change of Control;
	 
	 	 	 	(e)	 	the Employee is discharged from the Employer and
its Subsidiaries for dishonesty, conviction of a felony,
willful unauthorized disclosure of any confidential material
information of the Employer or any of its Subsidiaries to a
business in competition with the Employer or any of its
Subsidiaries or in violation of federal securities’ laws, or
any other willful, deliberate or gross misconduct of similar
magnitude; or

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	 	 	 	(f)	 	the beginning of the first year of the Policy
after the [See Exhibit 1]           st (     st)
year of the Policy in
which the cash surrender value of the Policy is sufficient to
maintain the $                    
death benefit without the Owner
being required to pay any additional premiums in excess of the
Owner’s Payment. Notwithstanding the foregoing provisions,
the Employer shall have the right to terminate this Agreement
at any time after the beginning of the [See Exhibit 1]
                    
st (     nd) year of the Policy.

	 	 	 	The Employer shall thereupon release its interest in the Policy,
cancel the Collateral Assignment, and transfer physical possession
of the Policy to the Owner upon payment of the Policy Interest owed
by the Owner to the Employer as of such termination date. If the
Owner does not pay, or make satisfactory provision for payment of,
the Policy Interest, then the Employer may take all action
necessary to obtain the cash surrender value provided under the
Policy to satisfy payment of the Policy Interest. For purposes of
this Agreement, the determination of whether the Employee (i) has
become affiliated with a business in competition with the Employer
or any of its Subsidiaries, or (ii) has voluntarily terminated
employment with the Employer and its Subsidiaries for reasons other
than death, Disability, or Retirement, shall rest solely with the
Human Resources Committee of the Board of Directors of the
Employer.
	 
	 	11.	 	The Owner agrees that in the event of the death of the last
to die of the Employee and the Employee’s Spouse while this
Agreement is still in effect, the Owner shall promptly pay to the
Employer an amount equal to the total amount of the Policy Interest
owed by the Owner to the Employer as of the date of the death of the
last to die of the Employee and the Employee’s Spouse. If the Owner
does not pay, or make satisfactory provision for payment of the
Policy Interest, then the Employer may take all action necessary to
obtain the death proceeds provided under the Policy to satisfy
payment of the Policy Interest. Specifically, the Employer shall
have the unqualified right to receive a portion of such death
proceeds equal to the Policy Interest at the time of the death of
the last to die of the Employee and the Employee’s Spouse, plus
interest thereon from ninety (90) days after such date of death to
the date of payment at a rate equal to the published prime rate of
interest of the Employer’s subsidiary banks on such date of death.
In such event, the balance of the death proceeds payable under the
Policy, if any, shall be paid directly to the beneficiary or
beneficiaries designated by the Owner and shall be paid in the
manner in which the Owner has validly specified; provided, however,
no amount shall be paid to such beneficiary or beneficiaries until
the full Policy Interest due the Employer has been paid to the
Employer or otherwise satisfied by the Owner. In no event shall the
amount payable to the Employer hereunder exceed the Policy proceeds
payable at the death of the last to die of the Employee and the
Employee’s Spouse.

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	 	12.	 	It is intended that the Owner shall retain the right to
change the beneficiary under
the Policy at any time and from time to time and that the Employer,
as holder of the Policy as collateral assignee, will make the
Policy available to the Insurer in order to effectuate any change
in the beneficiary designation which the Owner may desire to make,
subject to the rights of the Employer as set forth in this
Agreement. The Owner may assign the Policy outright provided that
the rights of any such assignee shall be subject to and subordinate
to the rights of the Employer as set forth in this Agreement and
that any such assignment shall so provide. The Employer may assign
its interest in the Policy only to the Owner.
	 
	 	13.	 	The benefits, if any, that may be paid under the Policy by
the Insurer, including, without limitation, any borrowing by the
Owner pursuant to Section 8 hereof and any death proceeds, shall be
paid by separate checks to the parties entitled thereto, the check
payable to the Employer to be in the amount of the Policy Interest.
	 
	 	14.	 	This Agreement shall be binding upon the parties hereto,
their heirs, legal representatives, successors, and permitted
assigns.
	 
	 	15.	 	This Agreement shall not be modified or amended except by a
written agreement signed by the parties hereto. Any such action by
the Employer shall be adopted by formal action of the Employer’s
Board of Directors and executed by an officer, director or other
person authorized to act on behalf of the Employer.
	 
	 	16.	 	This Agreement shall be subject to and governed by the
laws of the State of North Carolina, without giving effect to
conflict of law principles.
	 
	 	17.	 	For purposes of meeting the requirements of the Employee
Retirement Income Security Act of 1974, the parties agree that the
funding policy under the Agreement is that all premiums on the
Policy be remitted to the Insurer when due, and direct payment by
the Insurer is the basis of payment of benefits under this
Agreement, with those benefits in full, if any, based on the payment
of premiums as provided in this Agreement.
	 
	 	18.	 	The Employer is hereby designated the “named fiduciary” of
this Agreement. The named fiduciary shall be responsible for the
management, control and administration of this Agreement. The named
fiduciary may allocate to others certain aspects of the management
and operational responsibilities of this Agreement, including the
employment of advisors and the delegation of any ministerial duties
to qualified individuals. The claims procedures under this
Agreement are set forth in Schedule D to this Agreement.
	 
	 	19.	 	For purposes of this Agreement, the following defined terms
shall have the meanings set forth below:

						
	 	 	 	(a)	 	“Subsidiaries” means any corporation (other than
the Employer) in an unbroken chain of corporations beginning
with the Employer if each of the corporations other than the
last corporation in the unbroken chain owns

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	 	 	 	 	 	stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the
other corporations in such chain.
	 
	 	 	 	(b)	 	“Disability” means “totally disabled” as such
term is defined in the “First Union Corporation Long-Term
Disability Plan and Trust” at the time of such Disability.
	 
	 	 	 	(c)	 	“Retirement” means “Early Retirement”, “Normal
Retirement”, “Deferred Retirement”, or “Disability
Retirement”, as such terms are defined in the “First Union
Corporation Pension Plan and Trust” at the time of such
Retirement.
	 
	 	 	 	(d)	 	“Change of Control” means a change in control of
the Employer of a nature that would be required to be reported
in response to Item 6(e) of Schedule 14A of Regulation 14A
promulgated under the Securities Exchange Act of 1934, as
amended; provided that, without limitation, such a Change in
Control shall be deemed to have occurred if (i) any one
person, or more than one person acting as a group, acquires
ownership of stock of a corporation that, together with stock
held by such person or group, possesses more than fifty
percent (50%) of the total fair market value or total voting
power of the stock of such corporation, (ii) any one person,
or more than one person acting as a group, acquires (or has
acquired during the twelve (12) month period ending on the
date of the most recent acquisition by such person or persons)
ownership of stock of a corporation possessing twenty percent
(20%) or more of the total voting power of the stock of such
corporation, or (iii) a majority of members of the
corporation’s board of directors is replaced during any twelve
(12) month period by directors whose appointment or election
is not endorsed by a majority of the members of a
corporation’s board of directors prior to the date of the
appointment or election.

	 	20.	 	It is understood and agreed that the Employer makes no
representations and shall have no responsibility or liability for any tax or
estate planning matters with respect to the foregoing split-dollar insurance
plan or for the payment of any dividends or death benefits under the Policy,
and that the Owner has relied on the Owner’s tax and legal advisors with
respect to the foregoing split-dollar insurance plan.
	 
	 	21.	 	Any dispute, claim or controversy arising out of or connected with
this Agreement shall be resolved by binding arbitration administered and
conducted under the Commercial Rules of the American Arbitration Association
and the General Statutes of North Carolina Article 45A, Arbitration and Award.
A judgment upon the award may be entered in any court having jurisdiction. Any
arbitration hearing shall take place in Charlotte, North Carolina.

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

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	Attest:	FIRST UNION CORPORATION
	 
	 	By:
	
	 	 	

	
               
               
               
Secretary	 	 	
               
               
               
President
	 
	(CORPORATE SEAL)	 	 
	 
	 	OWNER
	 
	 	

I consent to this Agreement and the insurance covering my life and the life of my spouse.

	 	 	 	 
	 	
               
               
               
               
               
               . (SEAL)

Employee
	 
	 	
               
               
               
               
               
                (SEAL)

Employee’s Spouse

- 7 -

 

SCHEDULE A

     It is agreed, pursuant to the foregoing Split-Dollar Life Insurance
Agreement dated the       day of      ,
     , that the following described
policy of life insurance shall be subject to the provisions of said Agreement:

		
	 	     Policy No.
            
        
issued by John Hancock Mutual Life Insurance Company on
	 
	 	                 
        ,         , insuring the lives of [Employee] and Employee’s Spouse] for
	 
	 	     $            
        .

 

 

SCHEDULE B

COLLATERAL ASSIGNMENT

	 	 	 
	Insurer:	 	John Hancock Mutual Life Insurance Company
	 
	Insureds:	 	the Insureds
	 
	Policy No.	 	
               
               

     THIS ASSIGNMENT is made by the undersigned Owner effective this
              day
of                     ,      .

DEFINITIONS:

	 	A.	 	“Assignee”: First Union Corporation, a North Carolina
corporation with its principal offices in Charlotte, North Carolina.
	 

	 	B.	 	“Owner”:           
               .
	 

	 	C.	 	“Policy”: The following policy of insurance issued by the
Insurer on the life of the Insureds, together with any supplementary
contracts issued in conjunction therewith:

	 	 	 	 	 	 	 	 	 
	 	Policy Number	 	Face Amount	 
	 	
	 	
	 
	 	 	 	 	 	$	 	 
	 	 	
	 	 	 	
	 	 

	 	D.	 	“Policy Interest”: That amount as defined in Section 7 of
the Split Dollar Plan. The Insurer shall be entitled to rely on the
Assignee’s certification of the amount of the Policy Interest.
	 
	 	E.	 	“Split Dollar Plan”: That certain Split-Dollar Life
Insurance Agreement of even date herewith between the Owner and the
Assignee.

RECITALS:

	 	A.	 	Under the Split Dollar Plan, the Assignee has agreed to
assist the Owner in payment of premiums on the Policy.
	 
	 	B.	 	In consideration of such premium payments by the Assignee,
the Owner here intends to grant the Assignee certain limited
interests in the Policy.

 

 

THEREFORE, in consideration of the premises and of the mutual promises
contained therein, the parties hereto agree as follows:

	1.	 	Assignment — The Owner hereby assigns, transfers and sets over to the
Assignee, its successors and assigns, the following specific rights in the
Policy subject to the terms and conditions of the Split Dollar Plan:

	 	(a)	 	The right to realize against the cash value of the Policy, to
the extent of the Policy Interest, in the event the Owner fails for
any reason to pay to the Assignee the Policy Interest when required
pursuant to the provisions of the Split Dollar Plan.
	 
	 	(b)	 	The right to realize against proceeds of the Policy as set
forth in Section 11 of the Split Dollar Plan, to the extent of the
Policy Interest, in the event of the death of the last Insured to
die.

	2.	 	Retained Rights — Except as expressly provided in Section 1 hereof and
the Split Dollar Plan, the Owner retains all rights under the Policy
including, but not limited to, the exclusive right to surrender and to
borrow against the Policy with the consent of the Assignee.
	 
	3.	 	Insurer — The Insurer is hereby authorized to recognize, and is fully
protected in recognizing:

	 	(a)	 	The claims of the Assignee to rights hereunder, without
investigating the reasons for such action by the Assignee, or the
validity or the amount of such claims.
	 
	 	(b)	 	The Owner’s request for surrender of the Policy without the
consent of the Assignee. Upon the surrender of the Policy and the
payment to the Employer of the Policy Interest, the Policy shall be
terminated and of no further force or effect.

	4.	 	Release of Assignment — Upon payment by the Owner to the Assignee of the
Policy Interest pursuant to the terms of the Split Dollar Plan, the
Assignee shall execute a written release of this Assignment and deliver
the Policy to the Owner.

     IN WITNESS WHEREOF, the Owner has executed this Assignment on the date
first above written.

	 	 	 
	In the presence of	 	Owner
	 
	
	 	

 

 

SCHEDULE C

PROJECTIONS FOR INSURANCE POLICY

 

 

SCHEDULE D

CLAIMS PROCEDURE

	A.	 	FILING OF BENEFIT CLAIMS

	 	1.	 	When a participant, the Employer, the
Owner, an Insured, a beneficiary, or his, her or its
duly authorized representative has a claim which may be
covered under the provisions of the Policy (the
“claimant”), the claimant should contact the named
fiduciary.
	 
	 	2.	 	Claim forms and claim information can be
obtained from the named fiduciary.
	 
	 	3.	 	The claim must be in writing on a Benefit
Claim Form and delivered to the named fiduciary either
in person or by mail, postage prepaid. The named
fiduciary will forward the claim form to the authorized
representative of the Insurer.

	B.	 	INITIAL DISPOSITION OF BENEFIT CLAIMS

	 	1.	 	Within ninety (90) days after receipt of a
claim, the Insurer shall send to the claimant, by mail,
postage prepaid, a notice granting or denying, in whole
or in part, a claim for benefits.
	 
	 	2.	 	If a claim for benefits is denied, the
Insurer shall provide to the claimant written notice
setting forth in a manner calculated to be understood
by the claimant:

						
	 	 	 	(a)	 	The specific reason or reasons
for the denial;
	 
	 	 	 	(b)	 	Specific reference to
pertinent provisions on which the denial is
based;
	 
	 	 	 	(c)	 	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
	 
	 	 	 	(d)	 	Appropriate information as to
the steps to be taken if the claimant wishes to

submit his or her claim for review.

	 	3.	 	If the claim is payable, a benefit check
will be issued to the named
fiduciary and forwarded to the claimant.

 

 

	 	4.	 	The ninety-day period may be extended if
special circumstances require an extension of time to
process the claim for benefits.
	 
	 	5.	 	Written notice of the extension shall be
furnished to the claimant prior to the termination of
the initial ninety-day period.
	 
	 	6.	 	The extension notice shall indicate the
special circumstances requiring an extension of time
and the date by which the Insurer expects to render the
final decision.
	 
	 	7.	 	In no event shall such extension exceed a
period of ninety (90) days from the end of the initial
ninety-day period.
	 
	 	8.	 	If a notice of denial is not received
within ninety (90) days of the claim being filed, the
claim shall be deemed denied and the claimant shall be
permitted to proceed to the review stage.

	C.	 	REVIEW PROCEDURE

	 	1.	 	Within sixty (60) days of:

						
	 	 	 	(a)	 	the receipt by the claimant of
written notification denying, in whole or in
part, his or her claim, or
	 
	 	 	 	(b)	 	a deemed denial resulting from
the Insurer’s failure to provide the claimant
with written notice of denial within ninety (90)
days of the claim being filed, the claimant upon
written application to the Insurer, delivered in
person or by certified mail, postage prepaid, may
request an opportunity to appeal a denied claim
to the Insurer or a person designated by the
Insurer.

	 	2.	 	The claimant may:

						
	 	 	 	(a)	 	Request a review upon written
application;
	 
	 	 	 	(b)	 	Review pertinent documents;
and
	 
	 	 	 	(c)	 	Submit issues and comments in
writing.

	 	3.	 	The decision on review shall be made
within sixty (60) days of the
Insurer’s receipt of a request for review.

 

 

	 	4.	 	The sixty-day period may be extended if
special circumstances require an extension of time to
process the review.
	 
	 	5.	 	If an extension is required:

						
	 	 	 	(a)	 	written notice of the
extension shall be furnished to the claimant
prior to the commencement of the extension, and
	 
	 	 	 	(b)	 	a decision shall be rendered
as soon as possible but no later than one hundred
twenty (120) days after the Insurer received the
request for review.

	 	6.	 	The decision on review shall be in writing
and shall include specific reasons for the decision,
written in a manner calculated to be understood by the
claimant, as well as specific references to the
pertinent provisions on which the decision is based.
	 
	 	7.	 	If the decision on review is not rendered
within sixty (60) days of the Insurer’s receipt of a
request for review or within one hundred twenty (120)
days after the Insurer received the request for review
if an extension is granted, then the claim shall be
deemed denied on review.

	D.	 	OTHER REMEDIES

	 	1.	 	After exhaustion of the claims procedure,
nothing shall prevent any person from pursuing any
other legal or equitable remedy otherwise available.

 

 

SCHEDULE E

DEFINED TERMS

 

 

EXHIBIT 1

This form of Split-Dollar Life Insurance Agreement has been used for, among
others, the following agreements:

	 	•	 	Amended and Restated Split-Dollar Life Insurance Agreement, dated
December 19, 1996, between G. Kennedy Thompson (the Employee), the
Employer, and Laura J. Starnes, as Trustee of the Thompson Family
Irrevocable Trust dated December 31, 1996 (the Owner) (such Agreement,
“Thompson  #1 Agreement”)
	 
	 	•	 	Split-Dollar Life Insurance Agreement, dated January 25, 2002,
between G. Kennedy Thompson (the Employee), the Employer, and Laura J.
Starnes, as Trustee of the G. Kennedy Thompson 2002 Irrevocable Life
Insurance Trust (the Owner) (such Agreement, “Thompson #2 Agreement”)
	 
	 	•	 	Split-Dollar Life Insurance Agreement, dated February 1995, between
Benjamin P. Jenkins, III (the Employee), the Employer, and Wachovia
Bank, National Association, as Trustee of the Benjamin P. Jenkins, III
Irrevocable Trust (the Owner) (such Agreement, “Jenkins Agreement”)
	 
	 	•	 	Split-Dollar Life Insurance Agreement, dated July 27, 1999, between
Donald A. McMullen, Jr. (the Employee), the Employer, and Donald A.
McMullen, Jr. (the Owner) (such Agreement, “McMullen Agreement”)

Such agreements contain terms substantially identical to this form of
agreement, except for such changes that do not materially deviate from this

form of agreement.

The Thompson #1 Agreement provides for an insurance policy of $3,000,000,
having an Owner’s Payment of $8,121 per year. In Section 10(f), the blank in
the first sentence is “twenty-first” and the blank in the second sentence is
“twenty-second”.

The Thompson #2 Agreement provides for an insurance policy of $7,119,562,
having an Owner’s Payment of $26,744 per year. In Section 10(f), the blank in
the first sentence is “fifteenth” and the blank in the second sentence is
“sixteenth”.

The Jenkins Agreement provides for an insurance policy of $3,000,000, having an
Owner’s Payment of $13,922 per year. In Section 10(f), the blank in the first
sentence is “fifteenth” and the blank in the second sentence is “sixteenth”.

The McMullen Agreement provides for an insurance policy of $3,059,875, having
an Owner’s Payment of $18,461 per year. In Section 10(f), the blank in the
first sentence is “seventeenth” and the blank in the second sentence is
“eighteenth”. In addition, the McMullen Agreement does not provide for an
Employee’s Spouse benefit.Ex-10.ff Wachovia's Employee Retention Stock Plan

 

EXHIBIT 10(FF)

FIRST UNION EMPLOYEE RETENTION STOCK PLAN

1.    ESTABLISHMENT AND PURPOSE

     First Union Corporation, a North Carolina corporation (“First Union”),
hereby establishes an incentive compensation plan, which shall be known as the
“FIRST UNION EMPLOYEE RETENTION STOCK PLAN” (the “Plan”).

     The purposes of the Plan are to (a) help align the long-term financial
interests of Participants with those of stockholders; (b) reinforce a
performance-oriented culture/strategy; (c) incent and reward employees for
increasing First Union’s common stock price over time; and (d) motivate,
attract and retain the services of Participants upon whose judgment, interest
and special effort the successful conduct of First Union’s operations are
dependent.

2.    EFFECTIVE DATE AND DURATION OF THE PLAN

     The Plan shall become effective on April 18, 2000, and shall remain in
effect, subject to the right of the Board to amend or terminate the Plan at any
time pursuant to the terms hereof, until all Shares subject to it shall have
been purchased or acquired according to the Plan’s provisions. In no event may
an Award be granted under the Plan after December 31, 2008.

3.    DEFINITIONS

		
	 	     (a)      “1934 Act” means the Securities Exchange Act of 1934, as
amended, including the rules and regulations promulgated thereunder.
	 
	 	     (b)      “Award” means, individually or collectively, an Option, SAR,
Stock Award, any other award made pursuant to the terms of the Plan, or
any combination thereof.
	 
	 	     (c)      “Award Agreement” means an agreement entered into by the
Corporation and each Participant setting forth the terms and provisions
applicable to Awards.
	 
	 	     (d)      “Beneficial Owner” or “Beneficial Ownership” shall have the
meaning ascribed to such term in Rule 13d-3 of the General Rules and
Regulations under the 1934 Act.
	 
	 	     (e)      “Board” means the Board of Directors of First Union.
	 
	 	     (f)      “Change of Control” means a change in control of First Union of
a nature that would be required to be reported in response to Item 6(e)
of Schedule 14A of Regulation 14A promulgated under the 1934 Act;
provided, however, that, without limitation, such a Change of Control
shall be deemed to have occurred if (i) any one person, or more than one
person acting as a group, acquires Beneficial Ownership of

1

 

		
	 	Shares that, together with Shares held by such person or group,
possesses more than 50 percent of the total Fair Market Value or total
voting power of the Shares, (ii) any one person, or more than one person
acting as a group, acquires (or has acquired during the 12-month period
ending on the date of the most recent acquisition by such person or
persons) Beneficial Ownership of Shares possessing 20 percent or more of
the total voting power of the Shares, or (iii) a majority of members of
the Board is replaced during any 12-month period by directors whose
appointment or election is not endorsed by a majority of the members of
the Board prior to the date of such appointment or election.
	 
	 	     (g)      “Committee” means the Human Resources Committee of the Board or
such other committee as is appointed by the Board to administer the Plan.
	 
	 	     (h)      “Corporation” means (i) First Union and any entity that is
directly or indirectly controlled by First Union, or (ii) any entity in
which First Union has a significant equity interest, as determined by the
Committee.
	 
	 	     (i)      “Date of Termination of Employment” means, with respect to an
Employee who is terminating employment with the Corporation, (i) the last
day such Employee performs actual services for the Corporation as an
Employee, (ii) the 91st day of a bona fide leave of absence when such
Employee’s right to continue employment with the Corporation is not
guaranteed by law or contract or, if later, on the date that such legal
or contractual guarantee lapses, (iii) the date that such Employee is
deemed to have a Disability, or (iv) the date of such Employee’s death,
as applicable.
	 
	 	     (j)      “Disability”, with respect to an Employee, means having received
long-term disability benefits under the Corporation’s Long-Term Disability
Plan for a period of 12 consecutive months.
	 
	 	     (k)      “Early Retirement” means termination of a Participant’s
employment upon satisfaction of the requirements for early retirement
under First Union’s pension plan.
	 
	 	     (l)      “Employee” means an employee of the Corporation.
	 
	 	     (m)      “Fair Market Value” means the closing sales price of the Shares
on the New York Stock Exchange Composite Tape on the valuation date, or,
if there were no sales on the valuation date, the closing sales price on
the New York Stock Exchange Composite Tape on the first trading day
before such valuation date.
	 
	 	     (n)      “First Union” is defined in Section 1 herein.
	 
	 	     (o)      “Normal Retirement” means termination of a Participant’s
employment upon satisfaction of the requirements for normal retirement
under the terms of First Union’s pension plan.
	 
	 	     (p)      “Option” means an option to purchase Shares.

2

 

		
	 	     (q)      “Option Price” means the price at which a Share may be purchased
by a Participant pursuant to an Option.
	 
	 	     (r)      “Participant” means an Employee who has been granted an Award
under the Plan; provided however, no Employee who is required to file
reports with the Securities and Exchange Commission under Section 16 (a)
of the 1934 Act shall be eligible to receive Awards under the Plan.
	 
	 	     (s)      “Period of Restriction” means the period during which the
vesting and/or transfer of Stock Awards is limited in some way, and the
Shares subject to such Stock Awards are subject to a substantial risk of
forfeiture, as provided in Section 7(c) herein.
	 
	 	     (t)      “Plan” is defined in Section 1 herein.
	 
	 	     (u)      “Plan Year” means a twelve-month period beginning with January 1
of each year.
	 
	 	     (v)      “RSAs” means a Stock Award granted to a Participant pursuant to
Section 7(c) herein which contains restrictions on vesting and/or
transfer.
	 
	 	     (w)      “Retirement” means either Early Retirement or Normal Retirement.
	 
	 	     (x)      “SAR” means an Award, granted alone or in connection with a
related Option, designated as an SAR, pursuant to the terms of Section
7(b) herein.
	 
	 	     (y)      “Shares” means the common stock of First Union, par value $3.33
1/3 per share.
	 
	 	     (z)      “Stock Award” shall represent an Award made in Shares or
denominated in units equivalent in value to Shares or any other Award
based on or related to Shares, including, but not limited to, RSAs.

4.    PLAN ADMINISTRATION

		
	 	     (a)      The Committee. The Committee shall be responsible for
administering the Plan.
	 
	 	     (b)      Committee Authority. The Committee may at any time alter,
amend, suspend or discontinue the Plan or any or all agreements granted
under the Plan to the extent permitted by law. Except as limited by law,
or by the Articles of Incorporation or By-laws of First Union, and
subject to the provisions herein, the Committee shall have full and
exclusive power to interpret the Plan and to adopt such rules,
regulations, and guidelines for carrying out the Plan as it may deem
necessary or proper, all of which powers shall be executed in the best
interests of the Corporation and in keeping with the

3

 

		
	 	provisions and objectives of the Plan. These powers include, but
are not limited to (i) selecting Award recipients and the extent of their
participation; (ii) establishing all Award terms and conditions; (iii)
adopting procedures and regulations governing Awards; and (iv) making all
other determinations necessary or advisable for the administration of the
Plan. In addition, except as provided herein, in First Union’s Articles
of Incorporation or By-laws, or pursuant to applicable law, the Committee
shall have authority, in its sole discretion, to accelerate the date that
any Award which was not otherwise exercisable or vested shall become
exercisable or vested in whole or in part without any obligation to
accelerate such date with respect to any other Awards granted to any
Participant. All determinations, interpretations or other actions taken
or made by the Committee pursuant to the provisions of the Plan shall be
final, binding and conclusive on all persons interested herein.
	 
	 	     The Committee may delegate to one or more officers of the
Corporation the authority to carry out some or all of its
responsibilities, provided that the Committee may not delegate its
authority and powers in any way which would be inconsistent with the
requirements of the Code or the 1934 Act. The Committee may at any time
rescind the authority delegated to any such officers.
	 
	 	     No member of the Committee shall be liable for any action or
determination with respect to the Plan, and the members shall be entitled
to indemnification and reimbursement in the manner provided in First
Union’s Articles of Incorporation. In the performance of its functions
under the Plan, the Committee shall be entitled to rely upon information
and advice furnished by the Corporation’s officers, accountants, counsel
and any other party the Committee deems necessary, and no member of the
Committee shall be liable for any action taken or not taken in reliance
upon any such advice.

5.    PARTICIPATION

     The individuals who shall be eligible to receive Awards under the Plan
shall be officers or other selected key employees of the Corporation as the
Committee shall approve from time to time; provided, however, no officer or
employee who is required to file reports with the Securities and Exchange
Commission under Section 16 (a) of the 1934 Act shall be eligible to receive
Awards under the Plan.

     In the event of a change in a Participant’s duties and responsibilities,
or a transfer of the Participant to a different position, the Committee may
terminate any Award granted to such Participant or reduce the number of Shares
subject thereto commensurate with the transfer or change in responsibility, as
determined by the Committee in its discretion.

     Notwithstanding any provision of the Plan to the contrary, in order to
foster and promote achievement of the purposes of the Plan or to comply with
provisions of laws in other countries in which the Corporation operates or has
employees, the Committee, in its sole discretion, shall have the power and
authority to (i) determine which Employees (if any) employed outside the United
States are eligible or required to participate in the Plan, (ii) modify the
terms and

4

 

conditions of any Awards made to such Employees, and (iii) establish
subplans, modified Option exercise and other terms and procedures to the extent
such actions may be necessary or advisable.

6.    AVAILABLE SHARES OF COMMON STOCK

		
	 	     (a)      Share Limitations. The aggregate number of Shares as to which
Awards may be granted under the Plan shall not exceed 25,000,000, subject
to adjustment as described below.
	 
	 	     (b)      Shares not applied to limitations. The following will not be
applied to the share limitations of Section 6(a) above: (i) dividends or
dividend equivalents paid in cash in connection with outstanding Awards,
(ii) stock denominated Awards which by their terms may be settled only in
cash, and (iii) Shares and any Awards that are granted through the
assumption of, or in substitution for, outstanding Awards previously
granted to Employees as the result of a merger, consolidation, or
acquisition of the employing company as the result of which it is merged
with the Corporation or becomes a subsidiary of the Corporation.
	 
	 	     (c)      Adjustments. In the event of any stock dividend, stock split,
combination or exchange of equity securities, merger, consolidation,
recapitalization, divestiture or other distribution (other than ordinary
cash dividends) of assets to stockholders, or any other change affecting
Shares or Share price, such proportionate adjustments, if any, as the
Committee in its discretion may deem appropriate to reflect such change
shall be made with respect to the limitations on the numbers of Shares
that may be issued and represented by Awards under the Plan; provided,
however, that any fractional shares resulting from any such adjustment
shall be eliminated. Upon the occurrence of any such event, the
Committee may also (or in lieu of any of the foregoing adjustments) make
such other adjustments as it shall consider appropriate to preserve the
benefits or potential benefits intended to be made available to
Participants.
	 
	 	     The Shares subject to the provisions of the Plan shall be shares of
authorized but unissued Shares.

7.    AWARDS UNDER THE PLAN

     The types of Awards set forth in this Article 7 may be granted under the
Plan, singly, in combination or in tandem as the Committee may determine.

		
	 	     (a)      Options.

		
	 	     (i)      Grant. An Option shall represent a right to purchase a
specified number of Shares at a stated Option Price during a
specified time, not to exceed ten years from the date of grant, as
determined by the Committee. The Option Price per Share for each
Option shall not be less than 100% of the Fair Market
Value on the date of grant. Each Option grant shall be
evidenced by an Award

5

 

		
	 	Agreement that shall specify the Option
Price, the duration of the Option, the number of Shares to which
the Option pertains, and such other provisions as the Committee
shall determine. Options granted under this Section 7(a) shall be
exercisable at such times and be subject to such restrictions and
conditions as the Committee shall in each instance approve and
which shall be set forth in the applicable Award Agreement, which
need not be the same for each grant or for each Participant. Upon
satisfaction of the applicable conditions to exercisability
specified in the terms and conditions of the Award as set forth in
the Award Agreement, the Participant shall be entitled to exercise
the Option in whole or in part and to receive, upon satisfaction or
payment of the Option Price in the manner contemplated in this
Section 7(a), the number of Shares in respect of which the Option
shall have been exercised.
	 
	 	     (ii)      Exercise. Options shall be exercised by the delivery of
a written notice of exercise to the Corporation, setting forth the
number of Shares with respect to which the Option is to be
exercised, accompanied by full payment for the Shares. The Shares
covered by an Option may be purchased by methods designated by the
Committee, in its discretion, including, but not limited to (A) a
cash payment; (B) tendering Shares owned by the Participant, valued
at the Fair Market Value at the date of exercise; or (C) any
combination of the above. As soon as practicable after receipt of
a written notification of exercise and full payment, the
Corporation shall deliver to the Participant, Share certificates in
an appropriate amount based upon the number of Shares purchased
under the Option.
	 
	 	     (iii)      Termination. If the employment of a Participant with
the Corporation shall terminate by reason of death, Disability or
Retirement, any then outstanding Options granted to such
Participant shall become immediately exercisable on the Date of
Termination of Employment. Unless the Committee determines
otherwise, any such outstanding Options will be forfeited on the
expiration date of such Options. Unless the Committee determines
otherwise, if the employment of a Participant with the Corporation
shall terminate for any reason other than death, Disability or
Retirement, (i) any then outstanding but unexercisable Options
granted to such Participant will be forfeited on the Date of
Termination of Employment, and (ii) any then outstanding and
exercisable Options granted to such Participant will be forfeited
on the expiration date of such Options or three months after the
Date of Termination of Employment, whichever period is shorter.

		
	 	     (b)      SARs.

		
	 	     (i)      Grant. An SAR shall represent a right to receive a
payment in cash, Shares, or a combination thereof, equal to the
excess of the Fair Market Value of a specified number of Shares on
the date the SAR is exercised over an amount which shall be no less
than the Fair Market Value on the date the SAR
was granted (or the Option Price for SARs granted in tandem
with an Option) as

6

 

		
	 	set forth in the applicable Award Agreement.
Each SAR grant shall be evidenced by an Award Agreement that shall
specify the SAR exercise price, the duration of the SAR, the number
of Shares to which the SAR pertains, whether the SAR is granted in
tandem with the grant of an Option or is freestanding, and such
other provisions as the Committee shall determine. SARs granted
under this Section 7(b) shall be exercisable at such times and be
subject to such restrictions and conditions as the Committee shall
in each instance approve and which shall be set forth in the
applicable Award Agreement, which need not be the same for each
grant of for each Participant.
	 
	 	     (ii)      Exercise. SARs shall be exercised by the delivery of a
written notice of exercise to the Corporation, setting forth the
number of Shares with respect to which the SAR is to be exercised.
The date of exercise of the SAR shall be the date on which the
Corporation shall have received notice from the Participant of the
exercise of such SAR. SARs granted in tandem with the grant of an
Option may be exercised for all or part of the Shares subject to
the related Option upon the surrender of the right to exercise the
equivalent portion of the related Option. SARs granted in tandem
with the grant of an Option may be exercised only with respect to
the Shares for which its related Option is then exercisable. SARs
granted independently from the grant of an Option may be exercised
upon the terms and conditions contained in the applicable Award
Agreement. Notwithstanding any other provision of the Plan, the
Committee may impose such conditions on exercise of an SAR
(including, without limitation, the right of the Committee to limit
the time of exercise to specified periods) as may be required to
satisfy the requirements of Section 16 (or any successor law) of
the 1934 Act. In the event the SAR shall be payable in Shares, a
certificate for the Shares acquired upon exercise of an SAR shall
be issued in the name of the Participant as soon as practicable
following receipt of notice of exercise. No fractional Shares will
be issuable upon exercise of the SAR and, unless provided in the
applicable Award Agreement, the Participant will receive cash in
lieu of fractional Shares.
	 
	 	     (iii)      Termination. If the employment of a Participant with
the Corporation shall terminate by reason of death, Disability or
Normal Retirement, any then outstanding SARs granted to such
Participant shall become immediately exercisable on the Date of
Termination of Employment. Unless the Committee determines
otherwise, any such outstanding SARs will be forfeited on the
expiration date of such SARs. Unless the Committee determines
otherwise, if the employment of a Participant with the Corporation
shall terminate for any reason other than death, Disability or
Normal Retirement, (i) any then outstanding but unexercisable SARs
granted to such Participant will be forfeited on the Date of
Termination of Employment, and (ii) any then outstanding and
exercisable SARs granted to such Participant will be forfeited on
the expiration date of such SARs or three months after the Date of
Termination of Employment, whichever period
is shorter.

7

 

		
	 	     (c)      Stock Awards.

		
	 	     (i)      Grant. All or any part of any Stock Award may be subject
to conditions and restrictions established by the Committee, and
set forth in the applicable Award Agreement, which may include, but
are not limited to, continuous service with the Corporation, a
requirement that Participants pay a stipulated purchase price for
each Stock Award, and/or applicable securities laws restrictions.
During the applicable Period of Restriction, Participants holding
RSAs may exercise full voting rights with respect to such Shares.
During the applicable Period of Restriction, Participants holding
RSAs shall be entitled to receive all dividends and other
distributions paid with respect to such Shares while they are so
restricted. If any such dividends or distributions are paid in
Shares, such Shares shall be subject to the same restrictions on
transferability as the RSAs with respect to which they are paid.
	 
	 	     (ii)      Termination. Unless the Committee determines otherwise,
if the employment of a Participant with the Corporation shall
terminate because of Normal Retirement, Disability or death, any
remaining Period of Restriction applicable to Stock Awards granted
to such Participant shall automatically terminate and, except as
otherwise provided in this Section 7(c), such Stock Awards shall be
free of restrictions and freely transferable. Unless the Committee
determines otherwise, if the employment of a Participant with the
Corporation shall terminate for any reason other than death,
Disability or Normal Retirement, then any Stock Awards subject to
restrictions on the date of such termination shall automatically be
forfeited on the Date of Termination of Employment and returned to
the Corporation; provided, however, if such employment terminates
due to Early Retirement or any involuntary termination by the
Corporation, the Committee may, in its sole discretion, waive the
automatic forfeiture of any or all such Stock Awards and/or may add
such new restrictions to such Stock Awards as it deems appropriate.

8.    DIVIDENDS AND DIVIDEND EQUIVALENTS

     The Committee may provide the Awards under Section 7(c) of the Plan earn
dividends or dividend equivalents. Such dividends or dividend equivalents may
be paid currently or may be credited to a Participant’s account. Any crediting
of dividends or dividend equivalents may be subject to such restrictions and
conditions as the Committee may establish, including reinvestment in additional
Shares or Share equivalents.

9.    PAYMENTS AND PAYMENT DEFERRALS

     Payment of Awards may be in the form of cash, Shares, other Awards, or
combinations thereof as the Committee shall determine, and with such
restrictions as it may impose. The
Committee also may require or permit Participants to elect to defer the
receipt or issuance of

8

 

Shares from Options or Stock Awards or the settlement of
Awards in cash under such rules and procedures as it may establish under the
Plan. It also may provide that deferred settlements of Awards include the
payment or crediting of earnings on deferred amounts.

10.    TRANSFERABILITY

		
	 	     (a)      Options and SARs. Except as otherwise provided in a
Participant’s Award Agreement, no Option or SAR granted under the Plan
may be sold, transferred, pledged, assigned or otherwise alienated or
hypothecated, other than by will or by the laws of descent and
distribution. Further, except as otherwise provided in a Participant’s
Award Agreement, all Options and SARs granted to a Participant under the
Plan shall be exercisable during his or her lifetime only by such
Participant.
	 
	 	     (b)      Stock Awards. Stock Awards granted under the Plan may not be
sold, transferred, pledged, assigned or otherwise alienated or
hypothecated until the end of the applicable Period of Restriction
established by the Committee and specified in the applicable Award
Agreement, or upon earlier satisfaction of any other conditions, as
specified by the Committee in its sole discretion and set forth in the
applicable Award Agreement. All rights with respect to a Stock Award
granted to a Participant under the Plan shall be available during his or
her lifetime only to such Participant.

11.    CHANGE OF CONTROL

     In the event of (i) any merger, consolidation, or acquisition where the
stockholders of First Union on the effective date of such merger,
consolidation, or acquisition do not own at least 50% of the outstanding shares
of voting stock of the surviving corporation, or (ii) any Change of Control,
each Award granted under the Plan shall immediately be exercisable and/or fully
vested and nonforfeitable, as the case may be.

12.    AWARD AGREEMENTS

     Each Award under the Plan shall be evidenced by an Award Agreement setting
forth its terms, conditions, and limitations for each Award, the provisions
applicable in the event the Participant’s employment terminates, and the
Corporation’s authority unilaterally or bilaterally to amend, modify, suspend,
cancel, or rescind any Award. The Committee need not require the execution of
any such agreement by the recipient, in which case acceptance of the Award by
the respective Participant shall constitute agreement by the Participant to the
terms and conditions of the Awards.

13.    TAX WITHHOLDING

     The Corporation shall have the right to deduct from any settlement of an
Award made under the Plan, including the delivery of Shares, or require the
payment of, a sufficient amount to cover withholding of any federal, state or
local or other governmental taxes or charges required
by law or such greater amount of withholding as the Committee shall
determine from time to

9

 

time and as permitted or required by applicable rules
and regulations, or to take such other action as may be necessary to satisfy
any such withholding obligations. If the Committee permits or requires Shares
to be used to satisfy required tax withholding, such Shares shall be valued at
the Fair Market Value as of the tax recognition date for such Award or such
other date as may be required by applicable law, rule or regulation. The
Corporation shall collect any required withholding from “other earnings” of the
employee. In the absence of “other earnings” sufficient to satisfy such
withholding, the employee shall remit such amounts required to satisfy such
withholding obligations to the Corporation within 10 business days of any such
notice and request for payment.

14.    OTHER BENEFIT AND COMPENSATION PROGRAMS

     Unless otherwise specifically determined by the Committee, settlements of
Awards received by Participants under the Plan shall not be deemed a part of a
Participant’s regular, recurring compensation for purposes of calculating
payments or benefits from the Corporation’s benefit plans or severance program.
Further, the Corporation may adopt other compensation programs, plans or
arrangements as it deems appropriate or necessary. The Committee may permit a
Participant to defer such Participant’s receipt of the payment of cash or the
delivery of Shares that would otherwise be due to such Participant by virtue of
the exercise of an Option or SAR, or the satisfaction of conditions, lapse or
waiver of restrictions with respect to Stock Awards. If any such deferral
election is required or permitted, the Committee shall, in its sole discretion,
establish rules and procedures for such payment deferrals.

15.    UNFUNDED PLAN

     Unless otherwise determined by the Committee, the Plan shall be unfunded
and shall not create (or be construed to create) a trust or a separate fund or
funds. The Plan shall not establish any fiduciary relationship between the
Corporation and any participant or other person. To the extent any person
holds any rights by virtue of an Award granted under the Plan, such rights
shall constitute general unsecured liabilities of the Corporation and shall not
confer upon any participant any right, title, or interest in any assets of the
Corporation.

16.    REGULATORY APPROVALS

     The implementation of the Plan, the granting of any Award under the Plan,
and the issuance of Shares upon the exercise or settlement or any Award shall
by subject to the Corporation’s procurement of all approvals and permits
required by regulatory authorities having jurisdiction over the Plan, the
Awards granted under it, or the Shares issued pursuant to it.

17.    RIGHTS AS A STOCKHOLDER

     A Participant shall have no rights as a stockholder with respect to Shares
covered by an Award until the date the Participant or his nominee is the holder
of record. No adjustment will be made for dividends or other rights for which
the record date is prior to such date, except as
provided in Section 6(c).

10

 

18.    FUTURE RIGHTS

     No person shall have any claim or right to be granted an Award, and the
grant of an Award shall not be construed as giving a Participant the right to
be retained in the employ of the Corporation or to participate in any other
compensation or benefit plan, program or arrangement of the Corporation. In
addition, the Corporation expressly reserves the right at any time to dismiss a
Participant free from any liability or any claim under the Plan, except as
provided herein or in any agreement entered into hereunder.

19.    GOVERNING LAW

     The Plan and all agreements entered into under the Plan shall be construed
in accordance with and governed by the laws of the State of North Carolina.

20.    SUCCESSORS AND ASSIGNS

     The Plan and any applicable Award Agreement entered into under the Plan
shall be binding on all successors and assigns of a Participant, including,
without limitation, the estate of such Participant and the executor,
administrator or trustee of such estate, or any receiver or trustee in
bankruptcy or representative of the Participant’s creditors.

21.    INDEMNIFICATION

     Each person who is or shall have been a member of the Committee or of the
Board shall be indemnified and held harmless by the Corporation against and
from any loss, cost, liability, or expense that may be imposed upon or
reasonably incurred by him in connection with or resulting from any claim,
action, suit, or proceeding to which he may be a party or in which he may be
involved by reason of any action taken or failure to act under the Plan and
against and from any and all amounts paid by him in settlement thereof, with
the Corporation’s approval, or paid by him in satisfaction of any judgment in
any such action, suit, or proceeding against him, provided he shall give the
Corporation an opportunity, at its own expense, to handle and defend the same
before he undertakes to handle and defend it on his own behalf. The foregoing
right of indemnification shall not be exclusive of any other rights of
indemnification to which such persons may be entitled under First Union’s
Articles of Incorporation or Bylaws, as a matter of law, or otherwise, or any
power that the Corporation may have to indemnify them or hold them harmless.

22.    APPLICATION OF FUNDS

     The proceeds received by the Corporation from the issuance of Shares
pursuant to the exercise of Options will be used for general corporate
purposes.

11

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