EXHIBIT 10(q)
1996 AMENDED AND RESTATED
SOUTHERN NATIONAL CORPORATION
SHORT-TERM INCENTIVE PLAN
1. The Plan. The purpose of this 1996 Amended and Restated Southern National
--------
Corporation Short-Term Incentive Plan (the "Plan") is to provide select
"key executives" of Southern National Corporation or an affiliate thereof
(the "Company") with cash awards (the "Awards") based upon preestablished,
objective performance goals, thereby promoting a closer identification of
the participating employees' interests with the interests of the Company
and its shareholders, and further stimulating such employees' efforts to
enhance the efficiency, profitability, growth and value of the Company.
2. Plan Administration. The Plan shall be administered by the Compensation
-------------------
Committee of the Board of Directors of the Company or a subcommittee
thereof (the "Committee"). The Committee shall have full authority to
interpret and administer the Plan and establish rules and regulations for
the administration of the Plan. Any actions of the Committee may be taken
by a written instrument signed by all of the members of the Committee and
such action so taken by written consent shall be as fully effected as if it
had been taken by a majority of the members at a meeting duly held and
called. The decisions and determinations of the Committee in all matters
regarding the Plan shall be in its sole discretion. Any decision made, or
action taken, by the Committee in connection with the administration of the
Plan shall be final, binding and conclusive. No member of the Committee
shall be liable for any action, determination or decision made in good
faith with respect to the Plan or any Award paid under it. Notwithstanding
the foregoing, the Committee may delegate the administration of the Plan to
one or more of its designees, but only with respect to matters regarding
participants who are not in the executive management class. All matters
regarding the participants in the executive management class shall be the
sole responsibility of the Committee.
3. Eligibility. The participants in the Plan (collectively, the "Participants"
-----------
or individually, a "Participant") shall be those key executives of the
Company who are designated each year as Participants by the Committee. Such
designation shall be made during the first 90 days of each calendar year.
Participation in the Plan in any one calendar year does not guarantee that
1
a key executive will be selected to participate in the Plan in any
following calendar year.
4. Size of Awards. Each calendar year, the Committee shall establish a target
--------------
award for each Participant in the Plan, which shall be expressed as a
percentage of his "Base Compensation" (the "Target Award"). For this
purpose, "Base Compensation" means the base compensation actually paid to
the Participant during the calendar year; provided, however, that the Base
Compensation of a Participant who is in the executive management class
shall not exceed the limit established by the Committee (the "Base
Compensation Limit"). If and to the extent the performance goals
established for the Participant by the Committee pursuant to Section 5 are
met, the Participant's Award shall range from the amount of his "Threshold
Award" to the amount of his "Superior Award." A Participant's "Threshold
Award" shall be equal to 25 percent of his Target Award and his Superior
Award shall be equal to a maximum percentage (the "Maximum Percentage")
established by the Committee of his Target Award. The Target Award of each
Participant or class of Participants (e.g., executive management), the
----
Maximum Percentage and the Base Compensation Limit shall be established in
writing by the Committee within the first 90 days of each calendar year.
5. Establishment of Performance Goals. Within the first 90 days of each
----------------------------------
calendar year and at a time when the outcome is substantially uncertain,
the Committee shall establish performance goals for each Participant. The
performance goals established for each Participant or class of Participants
(e.g., executive management) shall be in writing and shall be attached
----
hereto as an Exhibit following establishment thereof. The following rules
and guidelines shall apply in establishing performance goals:
a. Types of performance. The performance goals established by the
--------------------
Committee shall be based on one or more performance measures that
apply to the Participant alone ("Individual Performance"), the
Participant's business unit/function performance ("Business
Unit/Function Performance"), the Company as a whole ("Corporate
Performance"), or any combination of Individual Performance, Business
Unit/Function Performance or Corporate Performance. If a Participant's
performance goals are based on a combination of Individual
Performance, Business Unit/Function Performance or Corporate
Performance, the Committee shall weight the importance of each type of
performance that applies to such Participant by assigning a percentage
to it (the "Weighted Percentage"). In no event shall the aggregate
Weighted Percentages exceed 100 percent.
2
b. Performance measures. The Committee shall establish the performance
---------------------
measures that apply to Individual Performance, Business Unit/Function
Performance and Corporate Performance.
(i) Individual Performance. The performance measures for Individual
----------------------
Performance shall be established separately for each Participant
whose performance goals are based in whole or in part on
Individual Performance. Such performance measures shall be based
on such business criteria as process improvement, sales, loan
growth, deposit growth and expense management.
(ii) Business Unit/Function Performance. The performance measures for
----------------------------------
Business Unit/Function Performance shall be established
separately for each Participant whose performance goals are
based in whole or in part on Business Unit/Function Performance.
Such performance measures shall be based on such business
criteria as achievement of financial or non-financial goals,
growth, and market share.
(iii) Corporate Performance. The performance measures for Corporate
---------------------
Performance shall be established based on such factors as stock
price, market share, sales, earnings per share, return on
equity, return on average assets or expense management.
If more than one business criteria is used as a performance measure
for a type of performance (e.g., Corporate Performance), the Committee
---
shall weight the importance of each business criteria by assigning a
percentage to it. In no event shall the aggregate percentages exceed
100 percent.
c. Levels of performance. The Committee shall establish a threshold,
---------------------
target and superior level of performance with respect to each measure
of performance. A Performance Value shall be assigned to each such
level of performance as follows:
Level of Performance Performance Value
-------------------- -----------------
Threshold 25%
Target 100%
Superior Maximum Percentage
Interpolation shall be used to determine the Performance Value
associated with performance between the threshold, target and superior
performance levels. Performance below the threshold level shall have a
0 value and performance above the superior level shall have a value
equal to the Maximum Percentage.
3
6. Determination and Payment of Awards. The determination of the Award
(if any) payable to a Participant shall be made as soon as practicable
as of the end of each calendar year by the Committee. The amount of
the Award shall be determined in accordance with the following
formula:
(AxBxC) + (AxDxE) + (AxFxG) = Award
where:
(A) is the Participant's Target Award;
(B) is the Participant's Weighted Percentage (if any) for
Individual Performance;
(C) is the Performance Value assigned to the level of
performance attained by the Participant for Individual
Performance;
(D) is the Participant's Weighted Percentage (if any) for
Business Unit/Function Performance;
(E) is the Performance Value assigned to the level of
performance attained by the Participant for Business
Unit/Function Performance;
(F) is the Participant's Weighted Percentage (if any) for
Corporate Performance; and
(G) is the Performance Value assigned to the level of
performance attained by the Participant for Corporate
Performance.
The Award, if any, earned by a Participant with respect to a calendar
year shall be paid to him in cash as soon as practicable following the
determination of the Award and the Committee's written certification
that the Participant achieved his performance goals. The Committee
shall not have any discretion to increase the amount of an Award
otherwise earned and payable pursuant to the terms of the Plan to a
Participant who is in the executive management class. The Committee
shall have the discretion to reduce or eliminate the amount of an
Award otherwise earned and payable pursuant to the terms of the Plan
to any Participant. No Award shall be paid to a Participant if his
performance is below the threshold level of performance established by
the Committee.
7. Termination For Reasons Other Than Death, Disability or Retirement. If
------------------------------------------------------------------
a Participant's employment with the Company is terminated for any
reason other than death, disability or retirement during a calendar
year, he shall forfeit his right to receive any Award under this Plan,
except that the Committee may elect, in its sole and absolute
discretion, to pay an Award to such Participant based on his
performance and Base Compensation for that portion of the calendar
year during which he was employed.
4
8. Termination Due to Death, Disability or Retirement. If a Participant's
--------------------------------------------------
employment with the Company is terminated during a calendar year by
reason of death, disability or retirement, and the Participant has
been actively employed by the Company for a minimum of 6 calendar
months during such calendar year, he shall be eligible for an Award
based on his performance and Base Compensation for that portion of the
calendar year in which he was employed. The determination and payment
of such Award shall be made by the Committee at the end of such
calendar year in the manner described in Section 6. If a Participant
shall terminate employment during the calendar year for any reason
with less than 6 calendar months of employment, he shall forfeit his
right to receive any Award under this Plan, except that the Committee
may elect, in its sole and absolute discretion, to pay an Award to
such Participant based on his performance and Base Compensation for
that portion of the calendar year during which he was employed.
9. No Implied Contract. Nothing contained in this Plan shall be construed
-------------------
as conferring upon any Participant the right or imposing upon him the
obligation to continue in the employment of the Company, nor shall it
be construed as imposing upon the Company the obligation to continue
to employ the Participant.
5
10. Amendments. The Board of Directors of the Company may amend or
----------
terminate the Plan in whole or in part at any time; provided, that no
such action shall adversely affect any Award earned and payable under
the Plan as of the date of such amendment or termination. .
11. Effective Date. The Plan, as amended and restated, shall become
--------------
effective on February 27, 1996, subject to the approval of the Board
of Directors of the Company.
12. Miscellaneous.
a. Taxes. Any tax required to be withheld by any government
-----
authority shall be deducted from each Award.
b. Non-assignability. Awards under the Plan shall not be subject to
-----------------
anticipation, alienation, pledge, transfer or assignment by any
person entitled thereto, except by designation of a beneficiary
or by will or the laws of descent and distribution.
c. No trust. The obligation of the Company to make payments
---------
hereunder shall constitute a liability of the Company to the
Participants. Such payments shall be made from the general funds
of the Company, and the Company shall not be required to
establish or maintain any special or separate fund, or otherwise
to segregate assets to assure that such payments shall be made,
and neither the Participants nor their beneficiaries shall have
any interest in any particular assets of the Company by reason of
its obligations hereunder. Nothing contained in this Plan shall
create or be construed as creating a trust of any kind or any
other fiduciary relationship between the Company and the
Participants or any other person. To the extent that any person
acquires a right to receive payments from the Company hereunder,
such right shall be no greater than the right of an unsecured
creditor of the Company.
d. Facility of payments. If a Participant or any other person
--------------------
entitled to receive an Award under this Plan (the "recipient")
shall, at the time payment of any such amount is due, be
incapacitated so that such recipient cannot legally receive or
acknowledge receipt of the payment, then the Committee, in its
sole and absolute discretion, may direct that the payment be made
to the legal guardian, attorney-in-fact or person with whom such
recipient is residing, and such payment shall be in full
satisfaction of the Company's obligation under the Plan with
respect to such amount.
6
e. Beneficiary designation. Each Participant may designate a
-----------------------
beneficiary hereunder. Such designation shall be in writing,
shall be made in the form and manner prescribed by the Committee,
and shall be effective only if filed with the Committee prior to
the Participant's death. A Participant may, at any time prior to
his death, and without the consent of his beneficiary, change his
designation of beneficiary by filing a written notice of such
change with the Committee in the form and manner prescribed by
the Committee. In the absence of a designated beneficiary, or if
the designated beneficiary and any designated contingent
beneficiary predecease theParticipant, the beneficiary shall be
the Participant's surviving spouse, or if the Participant has no
surviving spouse, the Participant's estate.
f. Governing Law. The Plan shall be construed and its provisions
--------------
enforced and administered in accordance with the laws of the
State of North Carolina.
This 1996 Amended and Restated Southern National Corporation
Short-Term Incentive Plan has been executed in behalf of the Company as of the
27th day of February, 1996.
SOUTHERN NATIONAL CORPORATION
By: /s/ Kelly S. King
---------------------------
President
Attest:
/s/ Jerone C. Herring
- -----------------------------
Secretary
[Corporate Seal]
7