FIRST VIRGINIA BANKS, INC. 1983 DIRECTORS? DEFERRED COMPENSATION PLAN

Exhibit 10(ai)

 

FIRST VIRGINIA BANKS, INC.

1983 DIRECTORS’ DEFERRED COMPENSATION PLAN

FIRST VIRGINIA BANKS, INC.

1983 DIRECTORS’ DEFERRED COMPENSATION PLAN

 

TABLE OF CONTENTS

 

FIRST VIRGINIA BANKS, INC.

 

1986 DIRECTORS’ DEFERRED COMPENSATION PLAN

(As Amended and Restated on September 26, 1990)

 

PURPOSE OF THE PLAN - EFFECTIVE DATE

 

Purpose

 

The purpose of this Plan is to provide each eligible Director of First Virginia Banks, Inc. with the opportunity to receive deferred compensation and to provide for the payment of survivor benefits in the event of his death. An additional purpose is to establish a method of paying Director’s compensation that will aid First Virginia Banks, Inc. in continuing to attract and retain as members of their Board of Directors persons whose abilities, experience and judgment can contribute to the continued progress of First Virginia Banks, Inc.

 

Section 1.02 - Effective Date

 

This Plan shall be effective January 1, 1986.

 

DEFINITIONS

 

Beneficiary

 

Shall mean either the Primary Beneficiary or the Secondary Beneficiary as those terms are defined herein.

 

Board of Directors

 

Shall mean the Board of Directors of the Corporation, sometimes referred to as the Board.

 

Committee

 

Shall mean the Executive Committee of the Board.

 

Corporation

 

Shall mean First Virginia Banks, Inc. and its successors and assigns.

Deferred Compensation Agreement

 

Shall mean a written agreement between a Participant and the Corporation, pursuant to which a Participant agrees to a deferral of his Director’s Fees and the Corporation agrees to pay deferred compensation (or a survivor benefit) in accordance with the terms of the Plan and the agreement.

 

Director

 

Shall mean a regular bylaw member of the Board or a regular member of the Senior Advisory Board of the Corporation.

 

Director’s Fees

 

Shall mean any compensation, whether for Board meetings, committee meetings or otherwise, earned for services rendered to the Corporation by a Director in any capacity as an individual during a particular Plan Year in which he is a Participant, but includes only compensation earned during those Plan Years designated in his Deferred Compensation Agreement.

 

Employee

 

Shall mean an individual who is employed by the Corporation or any of its subsidiaries and who is on the payroll of the Corporation or a subsidiary.

 

Insurance Company

 

Shall mean any legal reserve life insurance company which shall issue a Policy in accordance with Article VII of this Plan.

 

Officer

 

Shall mean an Officer of the Corporation, or any of its subsidiaries, as the term Officer is defined in the bylaws or governing resolutions of the Corporation or any applicable subsidiary.

 

Participant

 

Shall mean a Director who is eligible and becomes covered under Articles IV and V of this Plan. Once a Director becomes a Participant, he shall continue to be a Participant even though he is serving as a member of the Senior Advisory Board of the Corporation and no longer serves as a bylaw Director.

 

Personal Representative

 

Shall mean the Executor or Personal Representative appointed in the Last Will and Testament of the Participant, Primary Beneficiary or Secondary Beneficiary as appropriate. In

the absence of such a will being admitted to probate within one year from the date of death of the Participant, Primary or Secondary Beneficiary, then “Personal Representative” shall mean the administrator or personal representative of the decedent appointed by a court of competent jurisdiction.

 

Plan

 

Shall mean the Corporation’s 1986 Directors’ Deferred Compensation Plan as set forth herein and as it may be amended from time to time.

 

Plan Year

 

Shall mean a twelve (12) consecutive month period which shall begin on January 1 and end on December 31.

 

Policy

 

Shall mean any life insurance policy purchased by the Corporation on the life of a Participant.

 

Primary Beneficiary

 

Shall mean the person or persons designated as the Primary Beneficiary by a Participant in a Designation of Beneficiary Form filed with the Corporation’s Secretary to receive payment under the Plan after Participant’s death.

 

Reduction Period

 

Shall mean the period of five (5) consecutive Plan Years, the first period beginning January 1, 1986 and ending on December 31, 1990, except that with respect to Director E. Cabell Brand, the Reduction Period for the first period shall mean a period of six Plan Years beginning January 1, 1986 and ending on December 31, 1991. The Committee shall be able to designate as many Reduction Periods as it wants during which deferrals may be made.

 

Secondary Beneficiary

 

Shall mean the person or persons designated as Secondary Beneficiary by a Participant in a Designation of Beneficiary Form filed with the Corporation’s Secretary to receive payments under the Plan if the Participant’s Primary Beneficiary is not alive at Participant’s death.

ADMINISTRATION

 

Administration

 

This Plan will be administered by and under the direction of the Committee. The Committee shall adopt, and may from time to time modify or amend, such rules and guidelines consistent herewith as it deems necessary or appropriate for carrying out the provisions and purposes of the Plan, which, upon its adoption and so long as in effect, shall be deemed a part hereof to the same extent as if set forth in the Plan (hereinafter referred to as the “Administrative Guidelines”). If any matter pertaining to the individual participation of a member of the Committee comes up for action of the Committee, that member shall be disqualified to act upon the particular matter, which matter shall be resolved by the remaining members of the Committee. Any interpretation and construction by the Committee of any provision of, and the determination of any question arising under, the Plan, the Administrative Guidelines, and any Deferred Compensation Agreement under the Plan, shall be final and conclusive.

 

The Corporation shall maintain accurate bookkeeping accounts with respect to each Participant’s Compensation credited and deferred under his Election Form.

 

ELIGIBILITY

 

Eligibility

 

Each Director who is not a current Employee of the Corporation or of a subsidiary of the Corporation, who satisfies such medical requirements as the Committee may impose, and who enters into a Deferred Compensation Agreement, shall be eligible to participate in the Plan.

 

PARTICIPATION AND DEFERRAL

 

Participation

 

An eligible Director may become a Participant by completing a Deferred Compensation Agreement and filing it with the Corporation’s Secretary prior to the beginning of a Plan Year. The effective date of participation will be the first day of the Plan Year after the Deferred Compensation Agreement has been filed. In the Deferred Compensation Agreement, the Participant must indicate: (a) the amount of Director’s Fees the Participant wishes to defer (which must be at least One Thousand Dollars ($1,000), and must be in multiples of One Thousand Dollars ($1,000)), and (b) the three specific Plan Years during the Reduction Period the Participant wishes to defer. A Participant may redesignate the three specific Plan Years

during the Reduction Period in which he wishes to defer by entering into a new Deferred Compensation Agreement and redesignating the new Plan Years on the new Deferred Compensation Agreement, provided, however, that the new Deferred Compensation Agreement is executed prior to the beginning of a redesignated Plan Year. In this case, the new Deferred Compensation Agreement would amend the old Agreement. Otherwise, the Deferred Compensation Agreement is irrevocable and may not be amended prior to the completion of the deferrals.

 

A Participant may increase the amount deferred by entering into a new Deferred Compensation Agreement for the increased amount, subject to approval of the Committee. Execution of a new Deferred Compensation Agreement will result in a new Reduction Period for the increased deferral amount. A new Deferred Compensation Agreement will be in addition to, and not supersede, any existing Deferred Compensation Agreement. Participation in the Plan will be determined separately for each Deferred Compensation Agreement.

 

Deferral of Director’s Fees

 

The Corporation shall defer payment of the Participant’s Director’s Fees in the manner and amount as stated in his Deferred Compensation Agreement. Deferrals shall cease automatically once a Participant has deferred his Director’s Fees for the total amount specified in his Deferred Compensation Agreement.

 

BENEFITS

 

Deferred Compensation Benefits

 

Provided that a Participant has made sufficient deferrals for at least one Plan Year, he shall be entitled to deferred compensation benefits equal to the amounts specified in his Deferred Compensation Agreement multiplied by the ratio (expressed to the nearest thousandth of a percent) of: (a) the amount of deferrals the Participant has made pursuant to the terms of his Deferred Compensation Agreement to (b) the total amount of deferrals the Participant agreed to make in his Deferred Compensation Agreement. At the election of the Participant, deferred compensation benefits shall be paid a lump sum or in equal annual installments over a period of five, ten or fifteen years. A Participant must make his election as to how he wishes to receive his deferred compensation benefits 45 days prior to the date the first installment (or lump sum payment) is to begin. The first installment (or lump sum payment) shall be made on the later of: (a) the first day of the month following the last day of the Reduction Period or (b) the first day of the month following the Director’s sixty-fifth (65th) birthday, and subsequent installments, if any, shall be made on the same day of each subsequent year.

Termination of Participation

 

A Participant’s participation will be terminated under the Plan only by a Participant’s failure to complete deferrals for the first Plan Year designated by Participant in his Deferred Compensation Agreement (or amended Deferred Compensation Agreement) as the first Plan Year to defer, for any reason other than death. If a Participant’s participation is terminated, then he shall receive a lump sum payment of the total amount of his Director’s Fees deferred within sixty (60) days after the first day of the month following his termination of participation and shall not be entitled to any of the benefits under this Plan. The effective date of termination shall be the date that the Participant’s status as a Director is terminated prior to completing deferrals for at least one Plan Year; otherwise the date of termination shall be the first date of the next Plan Year following the first Plan Year designated by Participant as the first Plan Year to defer.

 

Survivor Benefits Before Payments Begin Under the Plan

 

Provided that a Participant’s participation in the Plan has not been terminated and Participant has not been paid any deferred compensation benefits under Section 6.01 of this Plan, then, upon Participant’s death, Participant’s Primary Beneficiary (or Secondary Beneficiary or Personal Representative, as the case may be) shall be entitled to receive the survivor benefits specified in Participant’s Deferred Compensation Agreement multiplied by the ratio (expressed to the nearest thousandth of a percent) of: (a) the amount of deferrals the participant has made pursuant to the terms of his Deferred Compensation Agreement to (b) the total amount of deferrals the Participant agreed to make in his Deferred Compensation Agreement. These survivor benefits ^- shall be paid over a period of fifteen years or, at the request of Participant’s Beneficiary (or Personal Representative) and with the approval of the Committee, these survivor benefits may be paid in a lump sum or over a period of five or ten years. The first payment (whether a lump sum payment or first installment) shall be made as of the first day of the second month following the Participant’s death and any subsequent payments shall be made on the same day of each subsequent year.

 

If Participant’s Primary Beneficiary or Secondary Beneficiary are not alive on the date of Participant’s death, then payments shall be made to Participant’s Personal Representative. If Participant’s Primary Beneficiary should die after the commencement of payments to him, then the balance of the payments shall be paid to the Secondary Beneficiary. If the Secondary Beneficiary is not alive at the time of the Primary Beneficiary’s death, then the balance of the payments shall be made to the Personal Representative of the Primary Beneficiary. If the Secondary Beneficiary dies after payments have commenced to him, then the balance of the payments due shall be made to the Personal Representative of the Secondary Beneficiary.

 

Survivor Benefits After Payments Begin Under This Plan

 

If a Participant should die after having been paid at least one installment under Section 6.01 of this Plan , the Participant’s Primary Beneficiary (or Secondary Beneficiary or Personal Representative, as the case may be) shall be entitled to receive the remaining installments payable to Participant under Section 6.01 at the same time and in the same manner

as Participant would have received them. At the request of Participant’s Beneficiary (or Personal Representative) and with the approval of the Committee, Participant’s Beneficiary (or Personal Representative) may receive these remaining installments over a shorter period of time or receive them as a lump sum payment.

 

If Participant’s Primary Beneficiary or Secondary Beneficiary are not alive on the date of Participant’s death, then the remaining payments will be made to Participant’s Personal Representative. If Participant’s Primary Beneficiary should die after the commencement of payments to him, then the balance of the payments shall be paid to the Secondary Beneficiary. If the Secondary Beneficiary is not alive at the time of the Primary Beneficiary’s death, then the balance of the payments shall be made to the Personal Representative of the Primary Beneficiary. If the Secondary Beneficiary dies after payments have commenced to him, then the balance of the payments due shall be made to the Personal Representative of the Secondary Beneficiary.

 

DISCRETIONARY PURCHASE OF POLICIES

 

Discretionary Purchase of Policies

 

The Corporation may, but shall not be required to, offset its obligations under this Plan through the purchase of life insurance on the life of each Participant. Each Participant agrees to cooperate in the securing of life insurance on the Participant’s life by furnishing such information as the Corporation and the Insurance Company may require, taking such physical examinations as may be necessary and taking any other such action as may be requested by the Corporation and the Insurance Company to obtain such insurance coverage. If the Participant refuses to cooperate in the securing of life insurance, the Corporation shall have no further obligation under this Plan.

 

Interest of Participant

 

Neither the Participant nor any Beneficiary shall have any interest in any Policy purchased under Section 7.01 nor in any other assets of the Corporation. The Participant’s and Beneficiary’s only interest hereunder shall be the right to receive the benefits provided under the Plan. Nothing in this Plan shall be construed as the creation by the Corporation of an escrow account or trust fund or as any other form of asset segregation, it being the intention and understanding of the parties that the Corporation’s obligations under this Plan shall be unfunded and that the Participant and any Beneficiary shall, as to claims under this Plan, be no more than a general creditor of the Corporation.

TERMINATION AND AMENDMENT

 

Termination and Amendment

 

The Board of Directors of the Corporation reserves in its sole and exclusive discretion the right at any time, and from time to time, to amend this Plan in any respect or terminate this Plan without restriction and without the consent of any Participant, Primary Beneficiary, or Secondary Beneficiary, provided, however, that neither termination nor any amendment of the Plan may, without written approval of a Participant, reduce or terminate any benefit to or in respect of a Participant under this Plan.

 

MISCELLANEOUS PROVISIONS

 

Nonalienation of Benefits

 

No benefits payable hereunder may be assigned, pledged, mortgaged or hypothecated and, to the extent permitted by law, no such benefits shall be subject to legal process or attachment for the payment of any claims against any person entitled to receive the same.

 

Withholding

 

Deferrals by a Participant under this Plan and payments made by the Corporation under this Plan shall be subject to withholding at the time of such deferral or payment, as shall be required under any income tax or other law, whether of the United States or any other jurisdiction.

 

Gender and Number

 

The masculine pronoun wherever used herein shall include the feminine gender and the feminine the masculine, and the singular number as used herein shall include the plural and the plural the singular, unless the context clearly indicates a different meaning.

 

Titles and Headings

 

The titles to Articles and headings of Sections or subsections of this Plan are for convenience of reference and, in case of any conflict, the text of the Plan, rather than titles and headings, shall control.

 

Governing Law

 

The validity, construction and effect of the provisions of this Plan in all respects shall be governed and regulated according to and by the laws of the Commonwealth of Virginia and to

the extent the laws of the Commonwealth of Virginia are superseded by the laws of the United States of America, by the laws of the United States of America.

 

Separability Clause

 

The invalidity or unenforceability of any provision of this Plan shall in no way affect the validity or enforceability of any other provision.

EXTRACT FROM MINUTES

OF

MEETING OF DIRECTORS

CONTAINING

FIRST AMENDMENT

TO

1983 DIRECTORS’ DEFERRED

COMPENSATION PLAN

 

The undersigned, being the Secretary of FIRST VIRGINIA BANKS, INC., hereinafter referred to as the Corporation, a Virginia corporation with principal office located at One First Virginia Plaza, 6400 Arlington Boulevard, Falls Church, Virginia 22046, does hereby certify that the following Resolutions were adopted by the Board of Directors of the Corporation at a meeting duly held on January 25, 1984, at which a quorum was present:

 

W I T N E S S E T H

 

WHEREAS, effective December 21, 1983, the Corporation established the 1983 DIRECTORS’ DEFERRED COMPENSATION PLAN to provide each eligible Director of the Corporation with the opportunity to receive deferred compensation (or survivor benefits in lieu thereof); and

 

WHEREAS, the Corporation, under the provisions of the Plan is authorized to amend the Plan at any time and from time to time; and

 

WHEREAS, the Corporation is desirous of amending the Plan;

 

NOW, THEREFORE, the premises considered,

 

BE IT

 

RESOLVED, That the 1983 DIRECTORS’ DEFERRED COMPENSATION PLAN be, and the same is, hereby amended, effective December 21, 1983, in the following respect:

 

ARTICLE VI

 

Section 6.01(b) - Amended by striking the word, symbols and number “seven (7)” in the last sentence and substituting in lieu thereof the following word, symbols and number: “five (5)”.

IN GENERAL

 

Any provision of the aforesaid Plan inconsistent with the foregoing change is hereby amended to be consistent therewith.

 

AND BE IT

 

FURTHER RESOLVED, That the Secretary of the Corporation be, and he is, hereby authorized and directed to notify the Directors affected by the foregoing change of the change made in the Plan by the foregoing Resolution.

FIRST VIRGINIA BANKS, INC.

FALLS CHURCH, VIRGINIA

 

EXTRACT FROM MINUTES

OF

MEETING OF DIRECTORS

CONTAINING

SECOND AMENDMENT

TO

AND AUTHORIZING THE PARTICIPATION OF

FIRST VIRGINIA LIFE INSURANCE COMPANY

UNDER THE

1983 DIRECTORS’ DEFERRED

COMPENSATION PLAN

 

The undersigned, being the Secretary of FIRST VIRGINIA BANKS, INC., hereinafter referred to as the Corporation, a Virginia corporation with principal office located at One First Virginia Plaza, 6400 Arlington Boulevard, Falls Church, Virginia 22046, does hereby certify that the following Resolutions were adopted by the Board of Directors of the Corporation at a meeting duly held on May 23, 1984, at which a quorum was present:

 

W I T N E S S E T H

 

WHEREAS, effective December 21, 1983, the Corporation established the 1983 DIRECTORS’ DEFERRED COMPENSATION PLAN to provide each eligible Director of the Corporation with the opportunity to receive deferred compensation (or survivor benefits in lieu thereof); and

 

WHEREAS, the Corporation, under the provisions of the Plan, is authorized to amend the Plan at any time and from time to time, which right has been exercised on one occasion; and

 

WHEREAS, the Corporation is desirous of amending the Plan;

 

NOW, THEREFORE, the premises considered,

BE IT

 

RESOLVED, That the 1983 DIRECTORS’ DEFERRED COMPENSATION PLAN be, and the same is, hereby amended, effective May 23, 1984, in the following respects:

 

ARTICLE II

 

Section 2.04 - Amended by adding at the end thereof the following: “, except that the term ‘Corporation’ as used in Sections 2.02 , 2.07 , 2.08 , 2.10 and 4.01 shall mean FIRST VIRGINIA BANKS, INC., and its successors and assigns and any non-banking subsidiary of FIRST VIRGINIA BANKS, INC. that was formed pursuant to Section 4(c)(8) of the Bank Holding Company Act which shall agree to adopt this Plan as provided in Section 9.02 ”.

 

ARTICLE V

 

Section 5.02 - Amended by adding between the first and second sentence thereof, the following new sentence: “In addition, if a subsidiary of FIRST VIRGINIA BANKS, INC. as described in Section 2.04 should adopt this Plan at any time during