DEF 14A 1 g05126ddef14a.htm WACHOVIA CORPORATION Wachovia Corporation
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Schedule 14A
(Rule 14A-101)
Information Required In Proxy Statement
SCHEDULE 14A INFORMATION
 
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )
 
Filed by the Registrant þ
 
Filed by a Party other than the Registrant o
 
Check the appropriate box:
 
     
o Preliminary Proxy Statement
o Confidential, For Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
þ Definitive Proxy Statement
o Definitive Additional Materials
o Soliciting Material Under Rule 14a-12
   
 
WACHOVIA CORPORATION
(Name of Registrant as Specified In Its Charter)
 
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
 
PAYMENT OF FILING FEE (Check the appropriate box):
þ   No fee required
o   Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
  1)   Title of each class of securities to which transaction applies:
 
 
  2)   Aggregate number of securities to which transaction applies:
 
 
  3)   Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
 
 
  4)   Proposed maximum aggregate value of transaction:
 
 
  5)   Total Fee Paid:
 
 
o   Fee paid previously with preliminary materials:
 
o   Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing
 
  1)   Amount Previously Paid:
 
 
  2)   Form, Schedule or Registration Statement No.:
 
 
  3)   Filing Party:
 
 
  4)   Date Filed:
 


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(WACHOVIA CORPORATION LOGO)
 
March 9, 2007
 
Dear Stockholder:
 
On behalf of the board of directors, we are pleased to invite you to the Annual Meeting of Stockholders in Charlotte, North Carolina, on Tuesday, April 17, 2007, at 9:30 a.m. The notice of meeting and proxy statement on the following pages contain information about the meeting.
 
In addition to the matters contained in this proxy statement, we will also review operating results for the past year and present other information concerning Wachovia. The meeting should be interesting and informative, and we hope you will be able to attend.
 
We are again pleased to offer record holders of common stock (those who hold shares directly registered in their own names and not in the name of a bank, broker or other nominee) the option of voting through the telephone or Internet.
 
In order to ensure your shares are voted at the meeting, please return the enclosed proxy card at your earliest convenience or vote through the telephone or Internet. Voting procedures are described on the proxy card. Every stockholder’s vote is important.
 
Sincerely yours,
 
(-s- G. Kennedy Thompson)
 
G. Kennedy Thompson
Chairman, President and Chief Executive Officer
 
Wachovia Corporation, 301 South College Street, Charlotte, North Carolina 28288


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Wachovia Corporation
301 South College Street, Charlotte, North Carolina 28288
 
NOTICE OF ANNUAL MEETING
TO BE HELD ON APRIL 17, 2007
 
March 9, 2007
 
 
The Annual Meeting of Stockholders will be held at the Charlotte Convention Center, 501 South College Street, Charlotte, North Carolina 28202, on Tuesday, April 17, 2007, at 9:30 a.m., to consider the following:
 
  •      A Wachovia proposal to elect the eight nominees named in the attached proxy statement as directors, six nominees to serve as Class III directors with terms expiring at the 2010 Annual Meeting of Stockholders, one nominee to serve as a Class II director with a term expiring at the 2009 Annual Meeting of Stockholders, and one nominee to serve as a Class I director with a term expiring at the 2008 Annual Meeting of Stockholders, in each case until their successors are duly elected and qualified.
 
  •      A Wachovia proposal to amend Wachovia’s articles of incorporation to eliminate the provisions classifying the terms of its board of directors.
 
  •      A Wachovia proposal to amend Wachovia’s articles of incorporation to provide for majority voting in uncontested director elections.
 
  •      A Wachovia proposal to ratify the appointment of KPMG LLP as auditors for the year 2007.
 
  •      A number of stockholder proposals, which management and Wachovia’s board of directors oppose.
 
  •      Such other business as may properly come before the meeting or any adjournments.
 
Only holders of record of Wachovia common stock on February 12, 2007, are entitled to notice of and to vote at the meeting.
 
By order of the board of directors,
 
(-s- Mark C. Treanor)
 
Mark C. Treanor
Secretary
 
 
Whether or not you plan to attend, please either return the enclosed proxy card or vote through the telephone or Internet voting procedures described on your proxy card, to ensure your shares are voted at the meeting. Your vote is important, whether you own a few shares or many.


 

 
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PROXY STATEMENT
 
General Information
 
The enclosed proxy card is solicited on behalf of the board of directors in connection with the Annual Meeting of Stockholders to be held at the Charlotte Convention Center, 501 South College Street, Charlotte, North Carolina 28202, on Tuesday, April 17, 2007, at 9:30 a.m., and at any adjournment, referred to as the “meeting”. The proxy may be used whether or not you attend the meeting. If you are a registered stockholder (that is, you hold shares directly registered in your own name), you may also vote by telephone or through the Internet, by following the instructions described on your proxy card. If your shares are held in the name of a bank, broker or other nominee, referred to as “street name”, you will receive separate voting instructions with your proxy materials. Although most brokers and nominees offer telephone and Internet voting, availability and specific procedures will depend on their voting arrangements.
 
This proxy statement, the enclosed proxy card and Wachovia’s 2006 Annual Report to Stockholders are being first mailed to our stockholders on or about March 9, 2007.
 
The merger of Wachovia Corporation (“legacy Wachovia”) and First Union Corporation (“legacy First Union”) was effective September 1, 2001. As the surviving corporate entity in the merger, legacy First Union changed its name to “Wachovia Corporation” on the date of the merger. Whenever we use the “Wachovia” name in this proxy statement, we mean the combined company and, before the merger, legacy First Union, unless indicated otherwise.
 
Your vote is very important. For this reason, the board of directors is requesting that you permit your common stock to be represented at the meeting by the individuals named on the enclosed proxy card. This proxy statement contains important information for you to consider when deciding how to vote on the matters brought before the meeting. Please read it carefully.
 
ABOUT THE MEETING
 
Who Can Vote
 
You may vote if you owned Wachovia common stock as of the close of business on the record date, February 12, 2007. Each share of Wachovia common stock is entitled to one vote. At the close of business on February 12, 2007, 1,906,881,015 shares of Wachovia common stock were outstanding and eligible to vote. The enclosed proxy card shows the number of shares that you are entitled to vote. If you own any shares in Wachovia’s Dividend Reinvestment and Stock Purchase Plan, the enclosed proxy includes the number of shares you have in that plan on the record date for the meeting, as well as the number of shares directly registered in your name, including those held through our direct registration service. Your individual vote is confidential and will not be disclosed to persons other than those recording the vote or as applicable law may require.
 
How Do I Vote
 
You have four voting options:
 
  •      Over the Internet, which we encourage if you have Internet access, at the address shown on your proxy card;
 
  •      By telephone through the number shown on your proxy card;
 
  •      By mail by completing, signing, dating and returning the enclosed proxy card; or
 
  •      By attending the meeting and voting your shares in person.
 
Even if you plan to attend the meeting, we encourage you to vote your shares by proxy. If you choose to attend the meeting, please bring proof of stock ownership and proof of identification for entrance to the meeting.


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If you hold your Wachovia shares in nominee or “street name”, your ability to vote by Internet or telephone depends on the voting process of the bank, broker or other nominee. Please follow their directions carefully. If you want to vote Wachovia shares that you hold in street name at the meeting, you must request a legal proxy from your bank, broker or other nominee that holds your shares and present that proxy and proof of identification for entrance to the meeting.
 
Every vote is important! Please vote your shares promptly.
 
What Am I Voting On
 
There are eight proposals that will be presented for your consideration at the meeting:
 
  •      Electing eight directors;
 
  •      Amending Wachovia’s articles of incorporation to eliminate the provisions classifying the terms of our board of directors;
 
  •      Amending Wachovia’s articles of incorporation to provide for majority voting in uncontested director elections;
 
  •      Ratifying the appointment of KPMG LLP as Wachovia’s auditors for 2007;
 
  •      If properly presented, four stockholder proposals:
 
  •      Regarding a non-binding stockholder vote ratifying executive compensation;
 
  •      Regarding qualifications of director nominees;
 
  •      Regarding reporting political contributions; and
 
  •      Regarding separating the offices of Chairman and Chief Executive Officer.
 
The first four proposals have been submitted on behalf of Wachovia’s board of directors. The remaining proposals have been submitted on behalf of certain stockholders. Other business may be addressed at the meeting if it properly comes before the meeting. However, we are not aware of any such other business.
 
Can I Change My Vote
 
You may revoke your proxy and change your vote at any time before the time voting begins on any proposal. You may do this by either giving our Corporate Secretary written notice of your revocation, submitting a new signed proxy card with a later date, voting on a later date by telephone or by the Internet (only your last telephone or Internet proxy is counted), or by attending the meeting and voting in person. However, your attendance at the meeting will not automatically revoke your proxy; you must specifically revoke your proxy. If your shares are held in nominee or street name, you should contact your bank, broker or other nominee regarding the revocation of proxies or, if you have obtained a legal proxy from your bank, broker or other nominee giving you the right to vote your shares, you may change your vote by attending the meeting and voting in person.
 
Quorum Needed To Hold The Meeting
 
In order to conduct the meeting, a majority of Wachovia shares entitled to vote must be present in person or by proxy. This is called a quorum. If you return valid proxy instructions or vote in person at the meeting, you will be considered part of the quorum. Abstentions and broker “non-votes” will be counted as present and entitled to vote for purposes of determining a quorum. New York Stock Exchange (“NYSE”) rules allow banks, brokers or other nominees to vote shares held by them for a customer on matters that the NYSE determines to be routine, even though the bank, broker or nominee has not received instructions from the customer. A broker “non-vote” occurs when a bank, broker or other nominee has not received voting instructions from the customer and the bank, broker or nominee cannot vote the customer’s shares because the matter is not considered routine under NYSE rules.


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Counting Your Vote
 
If you provide specific voting instructions, your shares will be voted as instructed. If you hold shares in your name and sign and return a proxy card or vote by telephone or Internet without giving specific voting instructions, your shares will be voted as recommended by our board of directors. If you hold your shares in your name and do not return valid proxy instructions or vote in person at the meeting, your shares will not be voted. If you hold your Wachovia shares in the name of a bank, broker or other nominee, and you do not give that nominee instructions on how you want your shares to be voted, the nominee generally has the authority to vote your shares on certain “routine” matters as described above. At the meeting, proposals 1, 2, 3 and 4 are deemed “routine” which means that the nominee can vote your shares on those proposals if you do not timely provide instructions for voting your shares. However, the remaining proposals are deemed “non-routine” which means that the nominee cannot vote your shares on those proposals if you do not timely provide instructions for voting your shares.
 
What Vote Is Needed
 
Directors are elected by a plurality of the votes cast at the meeting. “Plurality” means that the nominees receiving the largest number of votes cast are elected as directors up to the maximum number of directors who are nominated to be elected at the meeting. Shares cannot be voted for a greater number of persons than the number of nominees named in this proxy statement, and at our meeting the maximum number of directors to be elected is eight. Shares not voted, whether by marking “ABSTAIN” on your proxy card or otherwise, will have no impact on the election of directors. Unless a properly executed proxy card is marked “WITHHOLD” authority as to any or all nominees, the proxy given will be voted “FOR” each of the nominees for director.
 
In February 2006, our board of directors amended its Corporate Governance Guidelines to provide for a new policy regarding director elections. The policy provides that in an uncontested election, any nominee for director who receives a greater number of votes “withheld” for his or her election than votes “for” his or her election must promptly tender his or her resignation to the Corporate Governance & Nominating Committee. The Corporate Governance & Nominating Committee will consider the resignation and recommend to the board whether to accept or reject it. The board will act on the Corporate Governance & Nominating Committee’s recommendation within 90 days following the date of the stockholders’ meeting at which the election occurred, and will promptly disclose its decision, including an explanation of the process by which the decision was reached and, if applicable, the reasons for rejecting the tendered resignation, in a publicly filed SEC filing. Any director tendering his or her resignation would not participate in the Corporate Governance & Nominating Committee’s and the board’s deliberations. In deciding whether to accept or reject any tendered resignation, the Corporate Governance & Nominating Committee and the board will consider all factors they deem relevant, including the reasons, if known, why stockholders “withheld” or were requested to “withhold” votes from the director, the director’s length of service and qualifications, the director’s contributions to Wachovia, and the current mix of skills and attributes of the directors on the board. If the board does not accept a tendered resignation, it may elect to address the underlying stockholder concerns related to “withheld” votes or take any other action it deems appropriate and in the best interests of Wachovia and its stockholders. If a majority of the members of the Corporate Governance & Nominating Committee received a majority withheld vote at the same election, then one or more independent directors who did not receive a majority withheld vote would be added to the Corporate Governance & Nominating Committee, or a special committee of independent directors would be formed to consider resignation offers. This policy will be in effect for the vote on Proposal 1 at the meeting. As described in Proposal 3, our board is proposing to amend Wachovia’s articles of incorporation to provide for majority voting in uncontested director elections. If stockholders approve Proposal 3 at the meeting, the new majority vote standard would apply in uncontested elections of directors following the meeting. See “Proposal 3”.
 
For Proposal 2, Wachovia’s articles of incorporation require that at least 80% of the shares outstanding and entitled to vote at the meeting must vote in favor of amending the articles of incorporation to eliminate


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the provisions classifying the terms of our board of directors. Abstentions and votes not cast will have the same effect as votes against Proposal 2. Therefore, the board urges stockholders to vote their shares.
 
A majority of votes cast at the meeting is required to approve the remaining proposals, including Proposal 3 to amend our articles of incorporation to provide for majority voting in uncontested director elections. Abstentions will not be counted as votes cast for these proposals. In addition, broker ’‘non-votes” will not be counted as votes cast for Proposals 5-8.
 
Our Voting Recommendations
 
Our board of directors recommends that you vote:
 
  •      “FOR” each of our nominees to the board of directors;
 
  •      “FOR” amending our articles of incorporation to eliminate the provisions classifying the terms of our board of directors;
 
  •      “FOR” amending our articles of incorporation to provide for majority voting in uncontested director elections;
 
  •      “FOR” ratifying KPMG LLP as our auditors;
 
  •      “AGAINST” the stockholder proposal regarding a non-binding stockholder vote ratifying executive compensation;
 
  •      “AGAINST” the stockholder proposal regarding qualifications of director nominees;
 
  •      “AGAINST” the stockholder proposal regarding reporting political contributions; and
 
  •      “AGAINST” the stockholder proposal regarding separating the offices of Chairman and Chief Executive Officer.
 
Proxy cards that are timely signed, dated and returned but do not contain instructions on how you want to vote will be voted in accordance with our board of directors’ recommendations.
 
Voting Results
 
The preliminary voting results will be announced at the meeting. The final voting results will be published in our quarterly report on Form 10-Q for the first quarter of fiscal year 2007.
 
Cost of This Proxy Solicitation
 
Wachovia will pay the costs of the solicitation. We have hired Georgeson Inc. as proxy solicitors to assist in the proxy solicitation and tabulation. Their base fee is $22,500, plus expenses and an additional fee per proxy tabulated. We may also, upon request, reimburse brokerage firms and other persons representing beneficial owners of shares for their expenses in forwarding voting materials to their customers who are beneficial owners and obtaining their voting instructions. In addition to Wachovia soliciting proxies by mail, over the Internet and by the telephone, our board members, officers and employees may solicit proxies on our behalf, without additional compensation.
 
Delivery of Proxy Materials
 
To reduce the expenses of delivering duplicate proxy materials to our stockholders, we are relying upon SEC rules that permit us to deliver only one proxy statement and annual report to multiple stockholders who share an address unless we received contrary instructions from any stockholder at that address. If you share an address with another stockholder and have received only one proxy statement and annual report, you may write or call us as specified below to request a separate copy of these materials and we will promptly send them to you at no cost to you. For future meetings, if you hold shares directly registered in your own name, you may request separate copies of our proxy statement and annual report, or request that we send only one set of these materials to you if you are receiving multiple copies, by contacting us at:


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Investor Relations, Wachovia Corporation, 301 South College Street, Charlotte, North Carolina 28288-0206, or by telephoning us at (704) 374-6782. If your shares are held in the name of a bank, broker, or other nominee and you wish to receive separate copies of our proxy statement and annual report, or request that they send only one set of these materials to you if you are receiving multiple copies, please contact the bank, broker or other nominee.
 
Electronic Delivery of Proxy Materials
 
You can also access Wachovia’s proxy statement and 2006 Annual Report on Form 10-K, which includes our annual report to stockholders, via the Internet at www.wachovia.com under the tab “About Wachovia—Investor Relations”. For next year’s stockholders’ meeting, you can help us save significant printing and mailing expenses by consenting to access the proxy statement, proxy card and annual report electronically over the Internet. If you hold your shares in your own name (instead of through a bank, broker or other nominee), you can choose this option by following the instructions at the Internet voting website at http://proxy.georgeson.com, which has been established for you to vote your shares for the meeting. If you choose to receive your proxy materials and annual report electronically, then prior to next year’s stockholders’ meeting you will receive an e-mail notification when the proxy materials and annual report are available for on-line review over the Internet, as well as the instructions for voting electronically over the Internet. Your choice for electronic distribution will remain in effect until you revoke it by sending a written request to: Investor Relations, Wachovia Corporation, 301 South College Street, Charlotte, North Carolina 28288-0206. New SEC rules, which will be in effect for next year’s stockholders’ meeting, also will permit us to deliver your proxy materials to you electronically over the Internet.
 
A copy of our 2006 Annual Report on Form 10-K will be provided to you without charge (except for exhibits) upon written request to Wachovia Corporation, Investor Relations, 301 South College Street, Charlotte, NC 28288-0206.
 
PROPOSAL 1.  ELECTION OF DIRECTORS
 
General Information and Nominees
 
Our articles of incorporation require Wachovia’s board of directors to be divided into three classes. At each annual meeting of stockholders, you elect the members of one of the three classes to three-year terms. Our directors determine the size of the board, but the total number of directors cannot be fewer than nine or more than 30. For purposes of the meeting, the number of directors is fixed at 18, with six directors in Class I, six directors in Class II, and six directors in Class III.
 
The terms of the directors serving in Class III will expire at the meeting and the terms of the directors serving in Classes I and II will expire at the 2008 and 2009 annual meetings of stockholders, respectively. Robert J. Brown, currently a Class III director, will retire as a director as of the meeting and consequently will not stand for election at the meeting.
 
John T. Casteen, III, Maryellen C. Herringer, Joseph Neubauer, Timothy D. Proctor, Van L. Richey, and Dona Davis Young are being nominated to serve as directors of Class III with terms expiring at the 2010 annual meeting of stockholders. Mr. Richey currently serves as a Class I director and is moving to Class III to keep the size of each class as equal as possible. Jerry Gitt is being nominated to serve as a director in Class II with a term expiring at the 2009 annual meeting of stockholders, and Ernest S. Rady, currently a Class III director, is being nominated to serve as a director in Class I with a term expiring at the 2008 annual meeting of stockholders.
 
The board, with the assistance of the Corporate Governance & Nominating Committee, has conducted an evaluation of whether Wachovia’s classified board structure continues to be in the best interests of Wachovia and its stockholders. In conducting its evaluation, the board considered that the general purposes of the classified board are to promote stability and continuity in leadership on the board and provide the board with a greater opportunity to protect the interests of stockholders from abusive takeover tactics in the event of an unsolicited takeover offer. The board also considered that some corporate governance


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experts and institutional stockholders believe that a classified board reduces accountability to stockholders because it prevents stockholders from evaluating all directors on an annual basis. In addition, the board recognized that the annual election of directors continues to evolve as a “best practice” in corporate governance. After a careful review, the board has determined that it would be in the best interests of Wachovia and its stockholders to take steps to eliminate the classified board. Accordingly, the board has recommended stockholders approve Proposal 2 at the meeting, which if adopted would amend Wachovia’s articles of incorporation to eliminate the provisions requiring a classified board of directors. If adopted at the meeting, Wachovia directors would stand for election annually, beginning at Wachovia’s 2008 annual meeting of stockholders. Approval of Proposal 2 to amend our articles of incorporation to declassify the board requires the affirmative vote of at least 80% of Wachovia’s outstanding shares of common stock entitled to vote at the meeting. See “Proposal 2”.
 
In the event stockholders approve Proposal 2 by the requisite number of affirmative votes, Wachovia’s articles of incorporation will be amended to eliminate the provisions classifying the terms of the board. In such case, as described in Proposal 2, it is expected that at the 2008 annual meeting of stockholders, all Wachovia directors, including those whose terms do not expire at that meeting, will be nominated to serve a one-year term. In the event stockholders do not approve Proposal 2 by the requisite number of affirmative votes, Wachovia’s articles of incorporation will remain the same as they currently are and the directors elected at the meeting will serve for the applicable term for the Class in which they are nominated.
 
Directors who reach retirement age (70) during their term in office are to retire from the board at the annual meeting of stockholders next following their 70th birthday, subject to the board authorizing the retirement to be deferred when deemed appropriate.
 
Should any nominee be unavailable for election by reason of death or other unexpected occurrence, the enclosed proxy, to the extent permitted by applicable law, may be voted with discretionary authority in connection with the nomination by the board and the election of any substitute nominee. In addition, the board may reduce the number of directors to be elected at the meeting.
 
Proxies, unless indicated to the contrary, will be voted “FOR” the election of the six nominees named below as Class III directors of Wachovia with terms expiring at the 2010 annual meeting of stockholders, “FOR” the election of the one nominee named below as a Class II director of Wachovia with a term expiring at the 2009 annual meeting of stockholders, and “FOR” the election of the one nominee named below as a Class I director of Wachovia with a term expiring at the 2008 annual meeting of stockholders.
 
All of the nominees are currently directors. Listed below are the names of the eight nominees to serve as directors and the ten incumbent directors who will be continuing in office following the meeting, together with: their ages; their principal occupations during the past five years; any other directorships they serve with any company with a class of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended (the “1934 Act”), or subject to Section 15(d) of the 1934 Act or any investment company registered under the Investment Company Act of 1940; and the year during which each was first elected a director of Wachovia.


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NOMINEES FOR ELECTION AS CLASS III DIRECTORS—TERMS EXPIRING IN 2010
 
     

CASTEEN PHOTO
  JOHN T. CASTEEN, III (63). President of the University of Virginia, Charlottesville, Virginia. A director since 2001.

HERRINGER PHOTO
  MARYELLEN C. HERRINGER (63). Attorney-at-law, Piedmont, California. Previously, Executive Vice President, General Counsel and Secretary, APL Limited, Oakland, California, an intermodal shipping and rail transportation company, until 1997. Director, ABM Industries Incorporated, Pacific Gas & Electric Company and PG&E Corporation. A director since October 2006.

NEUBAUER PHOTO
  JOSEPH NEUBAUER (65). Chairman and Chief Executive Officer, ARAMARK Holdings Corporation, Philadelphia, Pennsylvania, a service management company, since January 2007. Previously, Chairman and Chief Executive Officer, ARAMARK Corporation, from September 2004 to January 2007, Executive Chairman of the Board, from January 2004 to September 2004, and Chairman and Chief Executive Officer of ARAMARK Corporation, prior to January 2004. Director, ARAMARK Corporation, Federated Department Stores, Inc. and Verizon Communications, Inc. A director since 1996.

PROCTOR PHOTO
  TIMOTHY D. PROCTOR (57). General Counsel of Diageo plc, London, England, a premium spirits, beer and wine company, since January 2000. A director since November 2006.


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RICHEY PHOTO
  VAN L. RICHEY (57). President and Chief Executive Officer, American Cast Iron Pipe Company, Birmingham, Alabama, a manufacturer of products for the waterworks, capital goods and energy industries. A director since 2004.

YOUNG PHOTO
  DONA DAVIS YOUNG (53). Chairman (since April 2003), President (since November 2000) and Chief Executive Officer (since January 2003) of The Phoenix Companies, Inc., Hartford, Connecticut, a provider of wealth management products and services, and its subsidiary Phoenix Life Insurance Company. Previously, Chief Operating Officer (February 2001 to January 2003) of The Phoenix Companies, Inc., and President (since February 2000) and Chief Operating Officer (since February 2001) of Phoenix Life Insurance Company. Director, Foot Locker, Inc. and The Phoenix Companies, Inc. A director since 2001.
 
NOMINEE FOR ELECTION AS A CLASS I DIRECTOR—TERM EXPIRING IN 2008
 
     

RADY PHOTO
  ERNEST S. RADY (69). Principal shareholder, manager and consultant to a group of companies engaged in real estate management and development, property and casualty insurance and investment management through American Assets, Inc. (President and founder) and Insurance Company of the West (Chairman), Irvine, California. Also, Chairman of Dealer Finance business and California banking business, Wachovia Corporation, from March 1, 2006 to March 1, 2007. Previously, Chairman and Chief Executive Officer, Westcorp, and Chairman, WFS Financial Inc, Irvine, California, commercial banking and automobile finance companies, prior to March 1, 2006. A director since 2006.
 
NOMINEE FOR ELECTION AS A CLASS II DIRECTOR—TERM EXPIRING IN 2009
 
     

GITT PHOTO
  JERRY GITT (64). Retired, Palm Desert, California. Previously, First Vice President of Equity Research, Merrill, Lynch & Company, prior to 2000. A director since October 2006.

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INCUMBENT CLASS I DIRECTORS—TERMS EXPIRING IN 2008
 
     

BAKER PHOTO
  JOHN D. BAKER, II (58). President and Chief Executive Officer, Florida Rock Industries, Inc., Jacksonville, Florida, a heavy building materials company. Director, Florida Rock Industries, Inc. and Patriot Transportation Holding, Inc. A director since 2001.

BROWNING PHOTO
  PETER C. BROWNING (65). Lead Director of Nucor Corporation, Charlotte, North Carolina, a steel products manufacturing company, since May 2006. Previously, Non-Executive Chairman of Nucor Corporation, prior to May 2006 and Dean, McColl Graduate School of Business, Queens University of Charlotte, from March 2002 to May 2005. Director, Acuity Brands Inc., EnPro Industries, Inc., Lowe’s Companies, Inc., Nucor Corporation and The Phoenix Companies, Inc. A director since 2001.

JAMES PHOTO
  DONALD M. JAMES (58). Chairman and Chief Executive Officer, Vulcan Materials Company, Birmingham, Alabama, a construction materials company. Director, The Southern Company and Vulcan Materials Company. A director since 2004.

THOMPSON PHOTO
  G. KENNEDY THOMPSON (56). Chairman (since February 2003), President (since December 1999) and Chief Executive Officer (since April 2000), Wachovia Corporation. Director, Hewlett-Packard Company and Wachovia Preferred Funding Corp. A director since 1999.


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WHITAKER JR PHOTO
  JOHN C. WHITAKER, JR. (69). Chairman of the Board and Chief Executive Officer, Inmar, Inc., Winston-Salem, North Carolina, an information services company. A director since 2001.
 
INCUMBENT CLASS II DIRECTORS—TERMS EXPIRING IN 2009
 
     

GOODWIN JR. PHOTO
  WILLIAM H. GOODWIN, JR. (66). Chairman and President, CCA Industries, Inc., Richmond, Virginia, a diversified holding company. Also, Chairman, Chief Executive Officer and Chief Operating Officer of The Riverstone Group, LLC, Richmond, Virginia, a diversified holding company. A director since 1993.

INGRAM PHOTO
  ROBERT A. INGRAM (64). Vice Chairman Pharmaceuticals, of GlaxoSmithKline, Research Triangle Park, North Carolina, a pharmaceutical research and development company, since January 2003. Also, Chairman of the Board, OSI Pharmaceuticals, Inc., Melville, New York, a biotechnology company, since January 2003, and Chairman of the Board, Valeant Pharmaceuticals International, Costa Mesa, California, a specialty pharmaceutical company focused on neurology, dermatology and infectious disease, since August 2006. Previously, Chief Operating Officer and President, Pharmaceutical Operations, of GlaxoSmithKline plc, from December 2000 to January 2003. Director, Allergan, Inc., Edwards Lifesciences Corporation, Lowe’s Companies, Inc., OSI Pharmaceuticals, Inc. and Valeant Pharmaceuticals International. A director since 2001.
     

McDONALD PHOTO
  MACKEY J. MCDONALD (60). Chairman and Chief Executive Officer (and President prior to March 2006), VF Corporation, Greensboro, North Carolina, an apparel manufacturer. Director, Hershey Foods Corporation and VF Corporation. A director since 1997.

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SHAW PHOTO
  RUTH G. SHAW (59). Executive Advisor to the Chairman and Chief Executive Officer, Duke Energy Corporation, one of the largest electric power companies in the United States, Charlotte, North Carolina, since October 2006. Previously, Group Executive Public Policy and President, Duke Nuclear, from April 2006 to October 2006, President (from March 2003 to April 2006) and Chief Executive Officer (from October 2004 to April 2006), Duke Power Company, and Executive Vice President and Chief Administrative Officer, Duke Energy Corporation, prior to March 2003. Director, The Dow Chemical Company. A director since 1990.

SMITH PHOTO
  LANTY L. SMITH (64). Chairman, Soles Brower Smith & Co., Greensboro, North Carolina, an investment and merchant banking firm. Also, Chairman, Precision Fabrics Group, Inc., Greensboro, North Carolina, a manufacturer of high technology specification textile products. A director since 1987.
 
Board Matters
 
Wachovia’s business is managed under the direction and oversight of the board of directors. The board appoints Wachovia’s Chief Executive Officer and its senior management team who are responsible for the day-to-day conduct of Wachovia’s business. The board’s primary responsibilities, thereafter, are to oversee management and to exercise its business judgment to act in good faith and in what each director reasonably believes to be in the best interests of Wachovia.
 
Committee Structure
 
The board has established various committees to assist the board in fulfilling its responsibilities. These committees currently consist of
 
  •      the Executive Committee,
 
  •      the Risk Committee,
 
  •      the Management Resources & Compensation Committee,
 
  •      the Corporate Governance & Nominating Committee, and
 
  •      the Audit Committee.
 
Subject to applicable law and regulatory requirements, the board may establish additional or different committees from time to time.
 
The board has adopted written charters for each of the above committees, and copies of the current charters for the Audit, Management Resources & Compensation, Corporate Governance & Nominating and Risk Committees are available on Wachovia’s website at www.wachovia.com under the tab “About Wachovia—Investor Relations” and then under the heading “Corporate Governance—Board Committee Composition”, and are available in print to any stockholder who requests them by contacting us at: Investor Relations, Wachovia Corporation, 301 South College Street, Charlotte, North Carolina 28288-0206, or by

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telephone at (704) 374-6782. The following is additional information regarding each of the board’s existing committees:
 
Executive Committee.  The Executive Committee held one meeting in 2006. The Committee is authorized, between meetings of the board, to perform all duties and exercise all authority of the board, except for those duties and authorities delegated to other committees of the board or that are exclusively reserved to the board by our bylaws or by applicable law. The Executive Committee is not expected to meet frequently, if at all, and its primary function would be to consider matters that require immediate attention. The following directors are the current members of the Committee: Smith (Chair), Browning, Goodwin, Ingram, Neubauer, Thompson, Whitaker and Young.
 
Risk Committee.  The Risk Committee held six meetings in 2006. The primary responsibilities of the Risk Committee are to assist the board in overseeing, and receiving information regarding, Wachovia’s policies, procedures and practices relating to liquidity, interest rate, credit, market and operational risk. The following directors are the current members of the Committee: Young (Chair), Goodwin, Herringer, James, Richey and Whitaker.
 
Management Resources & Compensation Committee.  The Management Resources & Compensation Committee (the “Compensation Committee”) held eight meetings in 2006. The Compensation Committee’s principal responsibilities are described below under “— Compensation of Directors” and “Compensation Discussion & Analysis” and include assisting the board by reviewing, establishing or making recommendations to the board, as applicable, regarding employee compensation, administering various employee benefit plans, acting as the executive compensation committee, evaluating management resources, including regarding succession planning, monitoring compliance of our employment and personnel policies and studying the compensation of directors and recommending changes when appropriate. The following directors are the current members of the Compensation Committee: Shaw (Chair), Brown, Browning, Ingram, McDonald and Proctor. The board has determined that all of the members of the Compensation Committee are independent under the NYSE Corporate Governance Listing Standards, which we refer to as the NYSE rules, and the board’s Director Independence Standards described below.
 
Corporate Governance & Nominating Committee.  The Corporate Governance & Nominating Committee held six meetings in 2006. The Committee assists the board and management in establishing and maintaining effective corporate governance practices and procedures, identifies individuals qualified to become board members, and recommends to the board the individuals for nomination as members of the board and its committees. The following directors are the current members of the Committee: Ingram (Chair), Browning, Goodwin, McDonald, Neubauer, Shaw and Smith. The board has determined that all of the members of the Corporate Governance & Nominating Committee are independent under the NYSE rules and the board’s Director Independence Standards.
 
Audit Committee.  The Audit Committee held 14 meetings in 2006. The Committee’s principal responsibilities are described below under “Audit Committee Report” and include assisting the board in overseeing Wachovia’s financial reporting process. The following directors are the current members of the Committee: Neubauer (Chair), Baker, Casteen, Gitt and Smith. The board has determined that all of the members of the Audit Committee are independent under the NYSE rules, the board’s Director Independence Standards, and applicable SEC rules and regulations. The board has also determined that at least one member of the Audit Committee qualifies as an audit committee financial expert within the meaning of SEC rules and regulations, and has designated Mr. Neubauer, the Chair of the Committee, as the audit committee financial expert.
 
Meetings and Attendance
 
The board held 11 meetings in 2006. In 2006, all of the directors attended at least 75% of the meetings of the board and the committees on which they served.


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Corporate Governance Policies and Practices
 
Corporate Governance Guidelines
 
Wachovia has developed, and operated under, corporate governance principles and practices that are designed to maximize long-term stockholder value, align the interests of the board and management with those of Wachovia’s stockholders, and promote the highest ethical conduct among Wachovia’s directors and employees. The board has focused on continuing to build upon Wachovia’s strong corporate governance practices, and over the years Wachovia has adopted various corporate governance enhancements. For example, during the past few years the board has:
 
  •      designated a lead independent director;
 
  •      increased reliance on stock-based compensation for senior management and the board;
 
  •      adopted stock ownership guidelines for senior executives and the board;
 
  •      adopted a policy in 2006 requiring directors who receive more votes “withheld” from their election than “for” their election at a meeting of stockholders to tender their resignation;
 
  •      proposed to amend Wachovia’s articles of incorporation to remove the requirement of having a classified board, as described in Proposal 2;
 
  •      proposed to amend Wachovia’s articles of incorporation to provide for majority voting in uncontested director elections, as described in Proposal 3; and
 
  •      adopted a policy that requires stockholder approval of future severance agreements for executive officers that provide for benefits above certain limits.
 
In April 2003, the board formally adopted written corporate governance policies, principles and guidelines, known as our Corporate Governance Guidelines, which reflect many of the matters mentioned above. The Corporate Governance Guidelines are not intended to be a static statement of Wachovia’s policies, principles and guidelines, but are subject to continual assessment and refinement as the board may determine advisable or necessary in view of the best interests of Wachovia and its stockholders. A copy of the board’s Corporate Governance Guidelines is available on Wachovia’s website at www.wachovia.com under the tab “About Wachovia—Investor Relations” and then under the heading “Corporate Governance—Corporate Governance Guidelines”, and is available in print to any stockholder who requests it by contacting us at: Investor Relations, Wachovia Corporation, 301 South College Street, Charlotte, North Carolina 28288-0206, or by telephone at (704) 374-6782. Highlights of portions of the Corporate Governance Guidelines, as well as some of Wachovia’s other corporate governance policies, practices and procedures are described below.
 
Director Independence
 
As described in the Corporate Governance Guidelines, the board believes that a substantial majority of the board should consist of directors who are independent under the NYSE rules, as determined by the board in its business judgment. As described below, the board has determined that 17 of the board’s 19 current directors and nominees, or approximately 89%, are independent directors within the meaning of the Director Independence Standards adopted by the board, the NYSE rules and the applicable SEC rules and regulations.
 
The NYSE rules provide that a Wachovia director does not qualify as independent unless the board of directors affirmatively determines that the director has no material relationship with Wachovia (either directly or as a partner, stockholder or officer of an organization that has a relationship with Wachovia). The NYSE rules require a board to consider all of the relevant facts and circumstances in determining the materiality of a director’s relationship with Wachovia and permit the board to adopt and disclose standards to assist the board in making determinations of independence. Accordingly, the board has adopted Director Independence Standards to assist the board in determining whether a director has a material relationship with Wachovia. The Director Independence Standards should be read together with the NYSE rules. The Director Independence Standards are attached to this proxy statement as Appendix A and are also available


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on Wachovia’s website at www.wachovia.com under the tab “About Wachovia—Investor Relations” and then under the heading “Corporate Governance—Director Independence”.
 
In February 2007, the board, with the assistance of the Corporate Governance & Nominating Committee, conducted an evaluation of director independence, based on the Director Independence Standards, the NYSE rules and applicable SEC rules and regulations. In connection with this review, the board evaluated banking, commercial, charitable, consulting, familial or other relationships with each director or immediate family member and their related interests and Wachovia and its subsidiaries, including those relationships described below under “Other Matters Relating to Executive Officers and Directors and Related Party Transactions Policy”.
 
As a result of this evaluation, the board affirmatively determined that each of Mr. Baker, Mr. Brown, Mr. Browning, Mr. Casteen, Mr. Gitt, Mr. Goodwin, Ms. Herringer, Mr. Ingram, Mr. James, Mr. McDonald, Mr. Neubauer, Mr. Proctor, Mr. Richey, Dr. Shaw, Mr. Smith, Mr. Whitaker, and Ms. Young is an independent director under the Director Independence Standards, the NYSE rules and the applicable SEC rules and regulations. Each member of the Audit, Management Resources & Compensation and Corporate Governance & Nominating Committees is independent. Lloyd U. Noland, III and James S. Balloun were independent directors prior to their retirements as directors in April 2006.
 
In connection with its independence evaluation, the board considered the following relationships and transactions, as described by category or type in the Director Independence Standards:
 
Customer Relationships
 
Wachovia provides in the ordinary course of business lending and/or other financial services to all of its directors, some of their immediate family members and their affiliated organizations, including to former directors who retired as directors in 2006.
 
Supplier or Other Business Relationships
 
Some entities affiliated with some of our directors or their immediate family members may provide services to or do business with Wachovia in the ordinary course of business, including the following entities:
 
  •      ARAMARK Holdings Corporation, where Mr. Neubauer is the chief executive officer and beneficially owns approximately 9.7% of the voting securities, is a service management company, and in 2006, ARAMARK provided food and vending services to Wachovia;
 
  •      The Riverstone Group, LLC, where Mr. Goodwin is the chief executive officer and which is owned by members of Mr. Goodwin’s immediate family, is an owner and operator of, among other things, resort and hospitality properties, and in 2006, the Riverstone Group, LLC provided certain hotel, restaurant and meeting services to Wachovia;
 
  •      The Greenwood Group, Inc., where Mr. Smith is a director and beneficially owns approximately 30% of the voting interests, is a Manpower staffing services franchisee, and in 2006, The Greenwood Group provided contract-staffing services to Wachovia;
 
  •      Bradley Arant Rose & White LLP, where a relative of Mr. James is a partner, is a large law firm, and in 2006, Bradley Arant provided legal services to Wachovia. The relative, however, was not directly involved in providing legal services to Wachovia other than de minimis services involving an amount less than $1,000; and
 
  •      Duke Energy, the University of Virginia, and the Phoenix Companies, where Dr. Shaw, Mr. Casteen, and Ms. Young, respectively, are employed provide services or may otherwise do business with Wachovia. Duke Energy is one of the largest electric power companies in the United States and it provides utility services to Wachovia, the University of Virginia is one of several educational institutions that participates in sports marketing sponsorship arrangements with Wachovia, and Wachovia offers some of the Phoenix Companies’ products to its customers.


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Family Relationships
 
A relative of Mr. Proctor is employed as a customer relations manager at Wachovia, but is not an executive officer or officer required to file reports with the SEC under Section 16(a) of the 1934 Act, and a relative of Mr. Whitaker was employed as an investment advisor at Wachovia, but not an executive officer or Section 16(a) reporting officer, before retiring from Wachovia in March 2006.
 
Charitable and Other Relationships
 
Mr. Casteen is employed at an organization that received contributions from Wachovia that did not exceed the thresholds described in the Director Independence Standards. In addition, some Wachovia directors or their immediate family members are non-management directors or trustees, but not officers or significant equity owners, of entities that may be customers of Wachovia or otherwise do business in the ordinary course with, or may have received charitable contributions from, Wachovia. Under the Director Independence Standards, these relationships are not deemed to be material and are not considered by the board in determining independence.
 
The board determined pursuant to the Director Independence Standards and the NYSE rules that each of the above relationships was not material. In particular, in connection with considering the supplier or other business relationships described above, the amounts involved or paid by Wachovia to each of the above entities did not approach the 2% of consolidated gross revenues threshold contained in the Director Independence Standards and the NYSE rules, and in each case the amounts involved were less than 0.5% of the consolidated gross revenues of the entity, except for payments to Bradley Arant, which were less than 1% of the law firm’s consolidated gross revenues. The board determined pursuant to the Director Independence Standards that these relationships were not material to Wachovia or the other entity and that none of the above directors or, to the extent applicable, their immediate family members had a direct or indirect material interest in the relationships or transactions with these entities.
 
The board also determined that Mr. Thompson and Mr. Rady are not independent because of their Wachovia employment.
 
Lead Independent Director
 
The board has long recognized the importance of independent leadership on the board, as evidenced by its designation of a lead independent director in 2000. As provided in the Corporate Governance Guidelines, the independent directors elect the lead independent director, and in February 2007, the independent directors elected Mr. Smith to continue in his role as the board’s lead independent director. The duties and responsibilities of the lead independent director include the following:
 
  •      assisting the Chairman of the Board with board-related matters, including approving board meeting agendas, board meeting schedules and various information sent to the board;
 
  •      serving as the principal liaison between the independent directors and the Chairman of the Board;
 
  •      presiding at any meetings of the non-employee directors or independent directors or at any meetings of the board at which the Chairman of the Board is not present; and
 
  •      any other duties or responsibilities that may be requested by the independent directors or the Chairman of the Board, including, as the lead independent director deems appropriate, calling any meetings of the non-employee directors or independent directors or meeting with any of Wachovia’s executive officers, stockholders or other constituents.
 
Executive Sessions
 
The Corporate Governance Guidelines provide that the non-management directors will meet in regularly scheduled executive sessions (no management or directors who are also members of management present) at least three times each year. The lead independent director, Mr. Smith, presides at the regularly scheduled


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executive sessions of the non-management directors. Four of these executive sessions were held in 2006, including at least one session where only the independent directors were present. The Corporate Governance Guidelines also provide that the board will meet in executive sessions with the Chief Executive Officer at least two times each year to discuss strategic or other key issues regarding Wachovia, and may contact the Chief Executive Officer at any other time to discuss Wachovia’s business.
 
Director Nomination Process
 
The Corporate Governance & Nominating Committee is responsible for identifying individuals qualified to become board members and for recommending to the board the individuals for nomination as members of the board. In furtherance of the board’s Corporate Governance Guidelines, the Corporate Governance & Nominating Committee and the board expect to create a board that will demonstrate objectivity and the highest degree of integrity on an individual and collective basis. In evaluating current members and new candidates, the Corporate Governance & Nominating Committee considers the needs of the board and Wachovia in light of the current mix of director skills and attributes. In addition to requiring that each director possess unquestionable integrity and character, the Corporate Governance & Nominating Committee’s evaluation of director candidates includes an assessment of issues and factors regarding an individual’s education, business experience, accounting and financial expertise, age, diversity, reputation, civic and community relationships, and knowledge and experience in matters impacting financial institutions such as Wachovia. The Corporate Governance & Nominating Committee also takes into consideration the board’s policies outlined in its Corporate Governance Guidelines, including those relating to the board’s retirement policy, the ability of directors to devote adequate time to board and committee matters, and the board’s belief that a substantial majority of the board should consist of independent directors. When the Corporate Governance & Nominating Committee is considering current board members for nomination for reelection, the Committee also considers prior board and committee contributions and performance, as well as meeting attendance records.
 
The Corporate Governance & Nominating Committee may seek the input of the other members of the board and management in identifying and attracting director candidates that are consistent with the criteria outlined above. In addition, the Corporate Governance & Nominating Committee may use the services of consultants or a search firm, although it has not done so in the past. Each of Mr. Gitt and Ms. Herringer, who are standing for election by Wachovia stockholders for the first time at the meeting, are former directors of Golden West Financial Corporation who were recommended by Golden West and appointed to the board following the Golden West merger. Mr. Proctor, who also is standing for election by Wachovia stockholders for the first time at the meeting, was identified and recommended by the Corporate Governance & Nominating Committee.
 
The Corporate Governance & Nominating Committee will consider recommendations by Wachovia stockholders of qualified director candidates for possible nomination by the board. Stockholders may recommend qualified director candidates by writing to Wachovia’s Corporate Secretary, at our offices at 301 South College Street, Charlotte, North Carolina 28288-0013. Submissions should include information regarding a candidate’s background, qualifications, experience, and willingness to serve as a director. Based on a preliminary assessment of a candidate’s qualifications, the Corporate Governance & Nominating Committee may conduct interviews with the candidate and request additional information from the candidate. The Corporate Governance & Nominating Committee uses the same process for evaluating all nominees, including those recommended by stockholders.
 
In addition, Wachovia’s bylaws contain specific conditions under which persons may be nominated directly by stockholders for election as directors at an annual meeting of stockholders. The provisions include the condition that stockholders comply with the advance notice time frame requirements described below under “Other Stockholder Matters.”
 
Communications with Directors
 
The board has established a process for stockholders and other interested parties to communicate directly with the lead independent director or with the non-management directors individually or as a group. Any


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stockholder or other interested party who desires to contact one or more of Wachovia’s non-management directors, including the board’s lead independent director, may send a letter to the following address:
 
Board of Directors (or lead independent director or name of individual director)
c/o Corporate Secretary
Wachovia Corporation
301 South College Street
Charlotte, North Carolina 28288-0013
 
All such communications will be forwarded to the lead independent director or the appropriate director or directors specified in such communications as soon as practicable.
 
In addition, as provided on Wachovia’s website at www.wachovia.com under the tab “About Wachovia— Investor Relations” and then under the heading “Corporate Governance—Contact Wachovia’s Directors”, any stockholder or interested party who has any concerns or complaints relating to accounting, internal accounting controls or auditing matters, may contact the Audit Committee by writing to the following address:
 
Wachovia Audit Committee
c/o Corporate Secretary
Wachovia Corporation
301 South College Street
Charlotte, North Carolina 28288-0013
 
Annual Meeting Policy
 
Directors are expected to attend Wachovia’s annual meeting of stockholders. In furtherance of this policy, Wachovia’s board usually holds one of its regularly scheduled board meetings on the same day as the annual stockholders’ meeting. In 2006, all but one member of the board attended the annual meeting of stockholders.
 
Code of Conduct & Ethics
 
Wachovia has had a written code of conduct for many years. The code, which applies to Wachovia’s directors and employees, including our Chief Executive Officer, Chief Financial Officer and Principal Accounting Officer, includes guidelines relating to the ethical handling of actual or potential conflicts of interest, compliance with laws, accurate financial reporting, and procedures for promoting compliance with, and reporting violations of, the code. The Code of Conduct & Ethics is available on Wachovia’s website at www.wachovia.com under the tab “About Wachovia—Investor Relations” and then under the heading “Corporate Governance—Code of Conduct & Ethics”, and is available in print to any stockholder who requests it by contacting us at: Investor Relations, Wachovia Corporation, 301 South College Street, Charlotte, North Carolina 28288-0206, or by telephone at (704) 374-6782. Wachovia intends to post any amendments to or waivers of its Code of Conduct & Ethics (to the extent applicable to Wachovia’s Chief Executive Officer, Chief Financial Officer or Principal Accounting Officer) at this location on our website.
 
Stock Ownership Requirements
 
Our board has adopted a common stock ownership policy for members of the board and our executive officers. This policy requires our executive officers to own shares of common stock having a value equal to five times base salary in the case of our CEO and Chairman, and four times base salary for all other executive officers. In addition, all of these executives are required to retain ownership of at least 75% of any common stock acquired by them through our stock compensation plans, after taxes and transaction costs. Each of our directors must own common stock or common stock equivalents having a value equal to at least five times the annual cash retainer, which is currently $70,000. In 2005, Wachovia expanded our stock ownership policy to the level of management that reports directly to our executive officers, who must own shares of common stock having a value equal to two times base salary, and have three years to meet this requirement. These ownership levels will be calculated annually and executive officers and directors


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have three years to meet the minimum level. Our board believes this stock ownership policy substantially enhances stockholder value by materially aligning management’s interest with those of stockholders. See also “Security Ownership of Management”.
 
Compensation of Directors
 
The Compensation Committee is responsible for studying the compensation of directors and recommending changes for consideration by the full board when appropriate. The Compensation Committee annually reviews market data provided by professionals in our Human Resources Division, outside independent compensation consultants engaged by the Compensation Committee, and legal counsel. Based on this analysis, no changes to director compensation occurred in 2006.
 
Non-employee directors receive a quarterly cash retainer and quarterly credits under Wachovia’s Deferred Compensation Plan for Non-Employee Directors, which is described below, in each director’s common stock equivalent deferred account. In addition, the lead independent director and the Chair of each committee receive a quarterly fee.
 
The following table summarizes Wachovia’s director compensation amounts:
 
         
    Annual
 
Compensation Element
  Compensation($)  
 
Annual Cash Retainer
    70,000  
Annual Mandatory Stock Unit Contribution
    150,000  
Total Annual Compensation
    220,000  
Annual Committee Chair Fee
    15,000  
Annual Audit Committee Chair Fee
    25,000  
Annual Lead Independent Director Fee
    25,000  
Special Board Meeting Fee *
    2,000  
Special Committee Meeting Fee *
    1,500  
 
 
* If more than six board or committee meetings are held in an annual period, directors receive an additional $1,500 for each additional committee meeting attended and $2,000 for each additional board meeting attended.
 
Wachovia reimburses directors for travel and accommodation expenses. Directors who are Wachovia employees do not receive any directors’ fees.
 
Director Compensation Table
 
The following table sets forth with respect to each person who served as a director of Wachovia in 2006: (i) their name (column (a)); (ii) the aggregate dollar amount of all fees earned or paid in cash for services as a director, including annual retainer fees, committee and/or chairmanship fees, and meeting fees (column (b)); (iii) for awards of stock, the dollar amount recognized for financial statement reporting purposes with respect to the fiscal year in accordance with Statement of Financial Accounting Standards No. 123R (“SFAS 123R”) (column (c)); (iv) the sum of (A) the aggregate change in the actuarial present value of the accumulated benefit under all defined benefit and actuarial pension plans from the pension plan measurement date used for financial statement reporting purposes with respect to Wachovia’s audited financial statements for the prior completed fiscal year to the pension plan measurement date used for financial statement reporting purposes with respect to Wachovia’s audited financial statements for the covered fiscal year, and (B) above-market or preferential earnings on compensation that is deferred on a basis that is not tax-qualified, including such earnings on nonqualified defined contribution plans (column (d)); (v) all other compensation for the covered fiscal year that Wachovia could not properly report in columns (b)-(d) (column (e)); and (vi) the dollar value of total compensation for the covered fiscal year (column (f)), representing the sum of all amounts reported in columns (b)-(e).


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2006 DIRECTOR COMPENSATION
 
                                         
                Change in
             
                Pension Value
             
                and Nonqualified
             
    Fees
          Deferred
             
    Earned or Paid
    Stock
    Compensation
    All Other
    Total
 
    in Cash
    Awards
    Earnings
    Compensation
    Compensation
 
Name
  ($) (6)     ($) (7)     ($) (8)     ($) (9)     in 2006 ($)  
(a)   (b)     (c)     (d)     (e)     (f)  
 
Baker II, John
    82,500       150,000       0       0       232,500  
Balloun, James (1)
    26,962       44,918       35,527       0       107,406  
Brown, Robert
    80,000       150,000       18,672       0       248,672  
Browning, Peter
    83,000       150,000       0       0       233,000  
Casteen III, John
    88,500       150,000       0       4,000       242,500  
Gitt, Jerry (3)
    17,500       37,500       0       0       55,000  
Goodwin Jr., William
    85,000       150,000       0       4,000       239,000  
Herringer, Maryellen (3)
    17,500       37,500       0       0       55,000  
Ingram, Robert
    93,750       150,000       0       0       243,750  
James, Donald
    82,000       150,000       2,683       0       234,683  
Malone, Wallace (5)
    0       0       0       0       0  
McDonald, Mackey
    85,000       150,000       4,794       0       239,794  
Neubauer, Joseph
    122,000       150,000       6,877       1,000       279,794  
Noland III, Lloyd (2)
    26,000       37,500       0       0       63,500  
Proctor, Timothy (4)
    11,603       24,864       0       0       36,468  
Rady, Ernest (5) (10)
    0       0       0       0       0  
Richey, Van
    82,000       150,000       0       0       232,000  
Shaw, Ruth
    98,500       150,000       0       0       248,500  
Smith, Lanty
    137,000       150,000       0       0       287,000  
Thompson, G. Kennedy (5)
    0       0       0       0       0  
Whitaker Jr., John
    83,500       150,000       0       4,000       237,500  
Young, Dona
    97,000       150,000       0       4,000       251,000  
                                         
Total
    1,399,315       2,282,282       68,552       17,000       3,767,149  
                                         
 
 
(1) Mr. Balloun retired as a director on April 18, 2006. Reported compensation reflects amounts earned or accrued for fiscal year 2006 through his retirement date.
 
(2) Mr. Noland retired as a director on April 18, 2006. Reported compensation reflects amounts earned or accrued for fiscal year 2006 through his retirement date.
 
(3) Mr. Gitt and Ms. Herringer were appointed to the board of directors on October 1, 2006. Reported compensation reflects amounts earned or accrued from October 1, 2006 through year end.
 
(4) Mr. Proctor was appointed to the board of directors on November 1, 2006. Reported compensation reflects amounts earned or accrued from November 1, 2006 through year end.
 
(5) Wachovia employees do not receive compensation for their role as directors.
 
(6) All or a portion of the reported cash compensation may be deferred through the Deferred Compensation Plan for Non-Employee Directors, which is discussed below. See table on the preceding page for elements of director compensation.
 
(7) Amounts reflect the annual mandatory deferred common stock unit contribution provided to non-employee directors. Awards are made in the form of fully vested common stock unit equivalents and have been reported at the SFAS 123R value. These phantom stock units are hypothetical shares with the underlying value tied to the market price of Wachovia common stock. See “Wachovia Deferred Compensation Plan for Non-Employee Directors” below for additional information.
 
(8) Amounts reflect only that interest earned on deferred compensation amounts that are considered to be above-market. Interest paid on deferred compensation is deemed to be above-market if it exceeds 120% of the applicable federal long-term rate.


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(9) Amounts reflect Wachovia matching contribution component of the Board of Directors Matching Gift Program. Under this program, Wachovia will match, on a $2 for $1 basis, a director’s contributions to accredited educational institutions or other nonprofit institutions in accordance with section 501(c) of the Internal Revenue Code. Wachovia’s contribution is limited to $4,000 in any given year.
 
(10) As a Wachovia employee, Mr. Rady does not receive compensation as a director of Wachovia. However, Wachovia and Mr. Rady signed an offer letter at the time Wachovia and Westcorp entered into their merger agreement that became effective upon completion of the Westcorp merger regarding Mr. Rady’s role with Wachovia. Pursuant to that letter, in 2006 Mr. Rady received a base salary of $500,000 and incentive compensation of $275,000. Mr. Rady is also eligible to participate in Wachovia’s employee benefit plans, including stock incentive plans. The letter also provides that if Mr. Rady’s employment is terminated without cause prior to January 1, 2008, he will receive post-termination payments based on his salary and minimum incentive compensation of $275,000. In March 2007, Mr. Rady retired as an employee of Wachovia and, pursuant to the letter, he will receive $691,667 in post-termination payments in 2007, equal to the remainder of base salary for 2007 plus the minimum incentive compensation. As described in Proposal 1, Mr. Rady has been nominated for election as a Wachovia director at the meeting.
 
Wachovia Deferred Compensation Plan for Non-Employee Directors
 
Under the Deferred Compensation Plan for Non-Employee Directors, directors who are not Wachovia employees may defer payment of all or any part of their directors’ fees. Non-employee directors make these deferral elections prior to each year or upon appointment to the board. In conjunction with this deferral election, non-employee directors also elect whether deferred balances will earn interest set at the prime rate plus 2% compounding quarterly or invested in deferred stock units with the value tied to the market value of Wachovia common stock. The $150,000 annual deferred stock unit component of the directors’ retainer is provided through quarterly contributions of $37,500 to the stock unit component of the plan. These contributions must be invested in deferred stock units during the year of contribution.
 
Directors having their fees in deferred stock units are investing in common stock equivalents that are valued based on the market value of Wachovia common stock. This means that the value of their deferred account is based on the market value of Wachovia common stock and will rise and fall as if the account were actually invested in the stock. Common stock equivalents do not have voting rights. Deferred stock units do not receive dividends when declared on shares of Wachovia common stock but do receive dividend equivalents that are re-invested into additional deferred stock units. Deferred amounts are payable in cash after the end of the calendar year in which the director ceases to be a director, in annual installments over a ten-year period, unless otherwise determined by the Compensation Committee.


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The following table sets forth with respect to each person who served as a director of Wachovia in 2006: (i) their name (column (a)); (ii) the aggregate interest-bearing balance in the director’s Deferred Compensation Plan for Non-Employee Directors account at December 31, 2006 (column (b)); (iii) the aggregate number of deferred stock units in the director’s Deferred Compensation Plan for Non-Employee Directors account at December 31, 2006 (column (c)); (iv) the aggregate dollar value of the deferred stock units in the director’s Deferred Compensation Plan for Non-Employee Directors account at December 31, 2006 (column (d)); and (v) the aggregate value of the director’s Deferred Compensation Plan for Non-Employee Directors account at December 31, 2006 (the sum of columns (b) and (d)) (column (e)).
 
                                 
    Interest
    Deferred Stock
    Deferred Stock
    Total Deferred
 
    Bearing Balance
    Units Held
    Units Held
    Balances
 
    at 12/31/2006
    at 12/31/2006
    at 12/31/2006
    at 12/31/2006
 
Name
  ($)     (#) (1)     ($)     ($)  
  (a)   (b)     (c)     (d)     (e)  
 
Baker II, John
    0       21,767       1,239,603       1,239,603  
Balloun, James
    852,930       15,728       895,719       1,748,649  
Brown, Robert
    333,440       20,680       1,177,751       1,511,191  
Browning, Peter
    0       22,970       1,308,121       1,308,121  
Casteen III, John
    0       22,435       1,277,697       1,277,697  
Gitt, Jerry
    0       679       38,663       38,663  
Goodwin Jr., William
    0       53,434       3,043,072       3,043,072  
Herringer, Maryellen
    17,943       679       38,663       56,606  
Ingram, Robert
    0       35,513       2,022,449       2,022,449  
James, Donald
    87,088       7,445       424,003       511,091  
Malone, Wallace
    0       0       0       0  
McDonald, Mackey
    123,952       40,173       2,287,860       2,411,812  
Neubauer, Joseph
    177,808       40,921       2,330,469       2,508,277  
Noland III, Lloyd
    0       26,333       1,499,645       1,499,645  
Proctor, Timothy
    11,799       456       25,947       37,746  
Rady, Ernest
    0       0       0       0  
Richey, Van
    0       8,970       510,816       510,816  
Shaw, Ruth
    0       39,813       2,267,363       2,267,363  
Smith, Lanty
    0       93,260       5,311,146       5,311,146  
Thompson, G. Kennedy
    0       0       0       0  
Whitaker Jr., John
    0       39,114       2,227,558       2,227,558  
Young, Dona
    0       26,231       1,493,831       1,493,831  
                                 
Total
    1,604,960       516,601       29,420,376       31,025,336  
                                 
 
 
(1) Rounded to the nearest whole share, based on Wachovia’s common stock price on December 29, 2006.
 
In conjunction with the First Union—Wachovia merger, Wachovia terminated and froze accrued benefits under the legacy First Union Retirement Plan for Non-Employee Directors program. Accrued benefits at the time the plan was frozen have been rolled into the Deferred Compensation Plan for Non-Employee Directors at the net present value for all currently active directors with the exception of Mr. Brown. As a former participant in that retirement plan, upon his retirement as a director, Mr. Brown will be eligible to receive an annual payment of $86,991 for a period of three years.
 
Audit Committee Report
 
As detailed in its charter, the role of the Audit Committee is to assist the board in fulfilling its oversight responsibilities regarding the following:
 
  •      the integrity of Wachovia’s financial statements, including matters relating to its internal controls;
 
  •      the qualification and independence of Wachovia’s independent auditors;


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  •      the performance of Wachovia’s internal auditors and the independent auditors; and
 
  •      Wachovia’s compliance with legal and regulatory requirements.
 
Management is responsible for the preparation and presentation of Wachovia’s financial statements and its overall financial reporting process and, with the assistance of Wachovia’s internal auditors, for maintaining appropriate internal controls and procedures that provide for compliance with accounting standards and applicable laws. The independent auditors are responsible for planning and carrying out a proper audit of Wachovia’s financial statements, expressing an opinion as to their conformity with generally accepted accounting principles and annually auditing management’s assessment of the effectiveness of internal control over financial reporting. Members of the Audit Committee are not professionally engaged in the practice of auditing or accounting and are not full-time employees of Wachovia.
 
In the performance of its oversight function, the Audit Committee, among other things, reviewed and discussed the audited financial statements with management and the independent auditors. Management has represented, and the independent auditors have confirmed, to the Audit Committee that the financial statements were prepared in accordance with generally accepted accounting principles. The Audit Committee has also discussed with the independent auditors the matters required to be discussed by Statement on Auditing Standards No. 61, Communications with Audit Committees, as currently in effect. In addition, the Audit Committee has received the written disclosures and the letter from the independent auditors required by Independence Standards Board Standard No. 1, Independence Discussions with Audit Committees, as currently in effect, has considered whether the provision of non-audit services by the independent auditors to Wachovia is compatible with maintaining the auditor’s independence, and has discussed with the auditors the auditors’ independence.
 
Based upon the review and discussions described in this report, and subject to the limitations on the role and responsibilities of the Audit Committee referred to above and in the Audit Committee’s charter, the Audit Committee recommended to the board that the audited financial statements be included in Wachovia’s Annual Report on Form 10-K for the year ended December 31, 2006, to be filed with the SEC.
 
Joseph Neubauer, Chair
John D. Baker, II
John T. Casteen, III
Jerry Gitt
Lanty L. Smith


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Security Ownership of Management
 
The following table shows the number of shares of common stock and common stock equivalents beneficially owned as of February 12, 2007, by each nominee for director, each incumbent director, the executive officers named in the summary compensation table, and all directors and executive officers as a group. Unless otherwise indicated, each of the named individuals and each member of the group has sole voting power and sole investment power with respect to the shares shown. The number of shares beneficially owned, as that term is defined by Rule 13d-3 under the 1934 Act, by all directors, nominees and executive officers as a group totals approximately 2.9% of the outstanding common stock as of February 12, 2007.
 
         
Name of Individual
  Common Stock (2)  
 
John D. Baker, II (1)
    54,720  
Robert J. Brown (4)
    23,419  
Peter C. Browning (1)
    27,840  
David M. Carroll (3)
    964,215  
John T. Casteen, III
    29,725  
Stephen E. Cummings (1) (3)
    478,424  
Jean E. Davis (3)
    786,656  
Jerry Gitt
    1,863  
William H. Goodwin, Jr. 
    1,110,402  
Maryellen C. Herringer (1)
    17,850  
Robert A. Ingram
    40,946  
Donald M. James (3)
    29,043  
Benjamin P. Jenkins, III (1) (3)
    1,572,243  
Robert P. Kelly (1) (3)
    34,847  
Wallace D. Malone, Jr. (1) (3)
    7,575,008  
Mackey J. McDonald
    43,571  
Joseph Neubauer
    50,353  
Timothy D. Proctor
    1,423  
Ernest S. Rady (3) (5)
    35,858,649  
Van L. Richey (3)
    28,617  
Ruth G. Shaw (1)
    42,173  
Lanty L. Smith
    127,430  
G. Kennedy Thompson (1) (3)
    3,762,178  
John C. Whitaker, Jr. 
    52,623  
Thomas J. Wurtz (3) (5)
    253,338  
Dona Davis Young (1)
    34,138  
All directors, nominees, Named Officers and executive officers as a group (31 persons)
    55,153,722  
 
 
(1) The foregoing directors, nominees and named executive officers have sole voting and investment power over the shares of common stock beneficially owned by them on February 12, 2007, except for the following shares over which the directors, nominees and named executive officers share voting and/or investment power: Mr. Baker: 11,630 shares; Mr. Browning: 3,500 shares; Mr. Cummings: 2,400 shares; Ms. Herringer: 3,900 shares; Mr. Jenkins: 37,200 shares; Mr. Kelly: 11,573 shares; Mr. Malone: 1,098,653 shares; Dr. Shaw: 700 shares; Mr. Thompson: 42,726 shares; and Ms. Young: 6,873 shares.
 
(2) The amounts reported include the number of units of common stock equivalents held by directors, as of February 12, 2007, under deferred compensation arrangements, rounded down to the nearest whole share, as follows: Mr. Baker: 22,761 units; Mr. Brown: 21,432 units; Mr. Browning: 23,937 units; Mr. Casteen: 23,346 units; Mr. Gitt: 1,338 units; Mr. Goodwin: 54,402 units; Ms. Herringer: 1,338 units; Mr. Ingram: 36,546 units; Mr. James: 8,413 units; Mr. McDonald: 41,141 units; Mr. Neubauer: 42,025 units; Mr. Proctor: 1,423 units; Mr. Richey: 9,937 units; Dr. Shaw: 40,473 units; Mr. Smith: 94,430 units; Mr. Whitaker: 40,082 units; Ms. Young: 27,264 units; and all directors as a group: 490,288 units. These units will be paid in cash, based on the fair market value of the common stock at


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the time of payment, which would generally occur following retirement as a director. There are no voting rights with respect to these units. In addition, the following directors own shares of Wachovia Dividend Equalization Preferred shares as of February 12, 2007, which securities do not have voting rights at the meeting: Mr. Rady: 4,400 shares; and Ms. Young: 2,000 shares. See “Corporate Governance Policies and Practices—Compensation of Directors”.
 
(3) Included in the shares set forth above are the following shares held under certain of Wachovia’s employee benefit plans, including options exercisable on February 12, 2007, or within 60 days thereafter, by each of the following named executive officers and by all of the directors and all of our executive officers as a group: Mr. Carroll: 785,219 shares; Mr. Cummings: 305,267 shares; Ms. Davis: 657,824 shares; Mr. James: 2,670 shares; Mr. Jenkins: 1,338,654 shares; Mr. Kelly: 3,062 shares; Mr. Malone: 4,677,883 shares; Mr. Rady: 138,320 shares; Mr. Richey: 2,670 shares; Mr. Thompson: 3,062,127 shares; Mr. Wurtz: 182,404 shares; and members of the group (including the foregoing): 12,786,331 shares. Non-employee directors are not eligible to participate in any of Wachovia’s stock option or other employee benefit plans. Messrs. James and Richey were granted options pursuant to SouthTrust Corporation stock option plans, which Wachovia assumed in that merger.
 
(4) Mr. Brown is retiring as a director as of the meeting but was a director as of the record date for the meeting.
 
(5) Of the shares owned by Mr. Rady and certain entities that he controls, 11,328,301 of such shares have been pledged as security in lending transactions in the ordinary course of business for those entities. Of the shares owned by Mr. Wurtz, 27,941 of such shares are subject to pledge in a securities brokerage account.
 
Security Ownership of Certain Beneficial Owners
 
We are not aware of any stockholder who was the beneficial owner of more than 5% of the outstanding shares of common stock on the record date, except for Barclays Global Investors, NA and affiliated entities, 45 Fremont Street, San Francisco, California 94104, bank and investment advisors that, based on a Schedule 13G filed with the SEC, were the holders of 106,626,899 shares of common stock as of December 31, 2006, or approximately 5.6% of the outstanding shares of common stock as of such date. The Barclays entities indicated that they hold such shares for accounts under Barclays’ discretionary management and not for their own account. The Barclays entities also indicated that they have sole voting power with respect to 93,326,113 of such shares and sole dispositive power over all of them.
 
Executive Compensation
 
The following information relates to compensation paid or payable to (i) the current Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), (ii) the three other most highly compensated executive officers that were serving as such at December 31, 2006, (iii) one former executive officer who served as CFO during a portion of 2006, and (iv) two former executive officers who were not serving as executive officers at December 31, 2006 but whose total compensation in 2006 would have been among the three most highly compensated executive officers (the current CEO and CFO and those six other executive officers, the “Named Officers”).


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Summary Compensation Table
 
The following table sets forth for the Named Officers: (i) their name and principal positions (column (a)); (ii) year covered (column (b)); (iii) the dollar value of base salary (cash and non-cash) earned during the year covered (column (c)); (iv) for awards of stock, the dollar amount recognized for financial statement reporting purposes with respect to the fiscal year in accordance with SFAS 123R (column (d)); (v) for awards of stock options, the dollar amount recognized for financial reporting purposes with respect to the fiscal year in accordance with SFAS 123R (column (e)); (vi) the dollar value of all earnings for services performed during the fiscal year pursuant to awards under non-equity incentive plans and all earnings on outstanding awards (column (f)); (vii) the sum of (A) the aggregate change in the actuarial present value of the accumulated benefit under all defined benefit and actuarial pension plans from the pension plan measurement date used for financial statement reporting purposes with respect to Wachovia’s audited financial statements for the prior completed fiscal year to the pension plan measurement date used for financial statement reporting purposes with respect to Wachovia’s audited financial statements for the covered fiscal year, and (B) above-market or preferential earnings on compensation that is deferred on a basis that is not tax-qualified, including such earnings on nonqualified defined contribution plans (column (g)); (viii) all other compensation for the covered fiscal year that is not properly reported in any other column (column (h)); and (ix) the dollar value of total compensation for the covered fiscal year (column (i)), representing the sum of the amounts reported in columns (c)-(h).
 
SUMMARY COMPENSATION TABLE
 
                                                                 
                                  Change in
             
                                  Pension
             
                                  Value and
             
                                  Nonqualified
             
                            Non-Equity
    Deferred
             
                            Incentive Plan
    Compensation
    All Other
       
          Salary
    Stock Awards
    Option Awards
    Compensation
    Earnings
    Compensation
    Total
 
Name and Principal Position   Year     ($) (1)     ($) (2)     ($) (2)     ($) (1) (3)     ($) (4)     ($) (5)     Compensation ($)  
(a)   (b)     (c)     (d)     (e)     (f)     (g)     (h)     (i)  
 
G. Kennedy Thompson
    2006       1,090,000       9,064,002       8,144,728       5,150,000       181,374       216,178       23,846,282  
President, CEO and Chairman
                                                               
Thomas J. Wurtz
    2006       420,833       527,162       328,606       1,750,000       62,159       37,755       3,126,515  
Senior Executive
Vice President and CFO
                                                               
Benjamin P. Jenkins, III
    2006       700,000       3,090,032       2,798,600       3,450,000       410,453       145,120       10,594,205  
Vice Chairman
                                                               
Stephen E. Cummings
    2006       500,000       2,232,105       1,969,274       3,875,000       21,002       91,689       8,689,070  
Senior Executive
Vice President
                                                               
David M. Carroll
    2006       642,000       1,370,566       1,257,909       2,850,000       56,726       60,638       6,237,839  
Senior Executive
Vice President
                                                               
Wallace D. Malone, Jr. (6)
    2006       83,333       0       4,994,443  (9)     0       4,194,102       14,374,812       23,646,690  
Retired Vice Chairman
                                                               
Robert P. Kelly (7)
    2006       56,061       0  (10)     0  (10)     0       392       7,548       64,001  
Former Senior Executive
Vice President and CFO
                                                               
Jean E. Davis (8)
    2006       205,000       2,075,667  (11)     1,846,276  (11)     661,918       1,126,752       1,380,776       7,296,389  
Retired Senior Executive
Vice President
                                                               
 
 
(1) Amounts include compensation earned but deferred by the Named Officers under Wachovia’s deferred compensation plans. Participants in these plans may defer receipt of portions of the salary and/or annual incentive compensation they have earned into investment accounts. See also “Nonqualified Deferred Compensation Table”.
 
(2) Amounts reflect Wachovia’s expense recognized in 2006 for outstanding stock awards calculated in accordance with SFAS 123R.


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The following table provides additional detail on SFAS 123R stock award expense recognition in 2006, including the 2006 stock awards and prior years’ stock awards. The SFAS 123R grant date fair value for 2006 awards is provided for reference and is also reported in “Grants of Plan-Based Awards Table”. See also “Outstanding Equity Awards at Fiscal Year-End Table”.
 
                                 
    2006 Stock
    Prior Year Stock
    Total Stock
    Grant Date
 
    Award Expense
    Award Expense
    Award Expense
    Fair Value
 
    Recognized
    Recognized
    Recognized
    of 2006
 
    in 2006 ($)(a)     in 2006 ($)(b)     in 2006 ($)     Stock Awards ($)(c)  
 
Thompson
                               
Options
    5,520,757       2,623,971       8,144,728       5,520,757  
Restricted Stock
    6,285,447       2,778,555       9,064,002       6,285,447  
Total
    11,806,204       5,402,526       17,208,730       11,806,204  
Wurtz
                               
Options
    146,399       182,207       328,606       975,994  
Restricted Stock
    166,679       360,483       527,162       1,111,191  
Total
    313,078       542,690       855,768       2,087,185  
Jenkins
                               
Options
    1,813,970       984,630       2,798,600       1,813,970  
Restricted Stock
    2,065,218       1,024,814       3,090,032       2,065,218  
Total
    3,879,188       2,009,444       5,888,632       3,879,188  
Cummings
                               
Options
    1,478,780       490,494       1,969,274       1,478,780  
Restricted Stock
    1,683,630       548,475       2,232,105       1,683,630  
Total
    3,162,410       1,038,969       4,201,379       3,162,410  
Carroll
                               
Options
    650,663       607,246       1,257,909       1,084,438  
Restricted Stock
    740,802       629,764       1,370,566       1,234,669  
Total
    1,391,465       1,237,010       2,628,475       2,319,107  
Malone
                               
Options
    0       4,994,443       4,994,443       0  
Restricted Stock
    0       0       0       0  
Total
    0       4,994,443       4,994,443       0  
Kelly
                               
Options
    0       0       0       0  
Restricted Stock
    0       0       0       0  
Total
    0       0       0       0  
Davis
                               
Options
    0       1,846,276       1,846,276       0  
Restricted Stock
    0       2,075,667       2,075,667       0  
Total
    0       3,921,943       3,921,943       0  
 
 
(a) With the implementation of SFAS 123R in 2006, Wachovia recognizes expense associated with 2006 stock awards over the period from the date of grant to the date at which an employee becomes retirement-eligible under Wachovia’s qualified pension plan. Messrs. Thompson, Jenkins and Cummings were eligible for retirement in 2006 and reported amounts include the full SFAS 123R expense for stock awards granted in 2006 rather than prorated over the 5-year vesting term. Mr. Carroll is retirement-eligible in 2007 and the reported amounts include an accelerated 1.25 year expense recognition period for his 2006 stock awards rather than the 5-year vesting term.
 
(b) With the implementation of SFAS 123R in 2006, Wachovia continues to recognize expense associated with stock grants in prior years over the vesting term of those awards. Amounts reflect the expense recognized in 2006 for stock awards granted in years prior to 2006.
 
(c) Amounts reflect the full grant date value of 2006 stock awards calculated in accordance with SFAS 123R and provide a perspective on the aggregate cost of stock awards made in 2006 to the Named Officers. As noted in (a) above, these amounts will be recognized over the lesser of (i) the vesting term of the awards (five years for the 2006 awards) or (ii) the period at which the Named Officer becomes retirement-eligible under Wachovia’s qualified pension plan.
 
(3) Amounts reflect payment of performance-based annual cash incentive awards for fiscal year 2006 performance. Wachovia provides performance-based annual cash incentive awards to executive officers under the covered officer incentive component of the stockholder approved Amended and Restated


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2003 Stock Incentive Plan (the “SIP”). See additional discussion in “Compensation Discussion & Analysis” and “Grants of Plan-Based Awards Table”.
 
(4) Amounts reflect the benefits attributable to the Named Officers for 2006 compensation and services (i) as calculated under Wachovia’s pension plan and non-qualified retirement benefit plans and (ii) above-market return on deferred compensation earned by the Named Officers during 2006:
 
                                                                 
    Thompson     Wurtz     Jenkins     Cummings     Carroll     Malone     Kelly     Davis  
 
Accrued Retirement Plan Benefit ($)(a)
    51,859       47,128       64,555       21,002       25,051       3,359,854       358       1,126,752  
Above Market Earnings on Deferred Compensation ($)(b)
    129,515       15,031       345,898       0       31,675       834,248       34       0  
                                                                 
Total ($)
    181,374       62,159       410,453       21,002       56,726       4,194,102       392       1,126,752  
                                                                 
 
 
(a) Amounts reflect the benefits attributable to the Named Officers for 2006 compensation and services as calculated under Wachovia’s pension plan and non-qualified retirement benefit plans for the Named Officers during 2006.
 
As noted under “Potential Payments Upon Termination or Change-in-Control”, in accordance with her employment agreement, Ms. Davis is receiving compensation continuance through May 31, 2009, including continued service credit in her legacy Wachovia supplemental executive retirement agreement (“SERA”). The reported amount includes accrued benefits under our qualified pension plan and her SERA attributed to 2006. Additional discussion of the benefit to Ms. Davis under the SERA for future years is provided in “Potential Payments Upon Termination or Change-in-Control”.
 
(b) Amounts reflect only interest earned on deferred compensation amounts that is considered to be above-market. Interest paid on deferred compensation is deemed to be above-market if it exceeds 120% of the applicable federal long-term rate.
 
All Wachovia employee deferred compensation plans that provide for above-market earnings were frozen prior to 2006 and are no longer open for additional executive or employer contributions. For additional information on deferred compensation programs, see “Nonqualified Deferred Compensation Table”.
 
(5) Represents personal benefits as outlined in the table below, valued at the incremental cost to Wachovia of providing such benefits:
 
                                                                 
    Thompson     Wurtz     Jenkins     Cummings     Carroll     Malone     Kelly     Davis  
 
Value of life insurance premiums ($)(a)
    56,850       0       63,421       36,587       0       0       0       64,125  
Amounts paid for financial planning and tax preparation services ($)(b)
    20,911       5,900       12,800       15,000       8,520       9,375       2,800       15,000  
Amounts paid for personal use of corporate aircraft ($)(c)
    39,426       0       2,248       0       0       0       0       0  
Amounts paid for taxes on behalf of the executive ($)(d)
    9,080       0       0       0       0       0       0       0  
Savings Plan matching contribution ($)(e)
    65,400       25,250       42,000       30,000       38,520       1,250       3,364       11,310  
Amounts provided for supplemental life insurance benefits ($)(f)
    23,603       6,605       22,118       10,102       12,906       163,929       1,385       6,609  
Value of disability insurance ($)(g)
    908       0       2,533       0       692       0       0       132  
Termination-related payments ($)(h)
    N/A       N/A       N/A       N/A       N/A       14,200,258       0       1,283,600  
                                                                 
Total ($)
    216,178       37,755       145,120       91,689       60,638       14,374,812       7,548       1,380,776  
                                                                 


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(a) In 2003, Wachovia terminated split-dollar life insurance agreements with its executive officers. Following such terminations, Wachovia received our interest in the related life insurance policies under those agreements. These amounts reflect payments made by Wachovia in 2006 to compensate Messrs. Thompson and Cummings and Ms. Davis for the cost of obtaining and maintaining personal supplemental life insurance benefits in lieu of those split-dollar life insurance arrangements.
 
In lieu of continuing his personal supplemental life insurance benefits as replacement for his terminated split-dollar life insurance arrangement, Mr. Jenkins received a one-time payment of $63,421 in 2006 as reimbursement for the value of the split-dollar policy cash surrender value for the policy cancelled in 2003.
 
(b) Amounts reflect the cost of financial planning, including financial planning and tax counseling for executives. All services were provided by an outside vendor and reflect actual expenses incurred in 2006.
 
(c) The value of personal use of corporate aircraft reflects the calculated incremental cost to Wachovia of personal use of company aircraft. Incremental costs have been calculated based on the variable operating costs to Wachovia. Variable costs consist of trip-specific costs, including fuel, catering, mileage, maintenance, universal weather-monitoring, landing/ramp fees and other miscellaneous variable costs. Incremental cost calculations do not include fixed costs.
 
Corporate aircraft are used primarily for business travel. On certain occasions, an executive’s spouse or other family member may accompany the executive on a flight. Calculations exclude spouse or other family member when such travel is necessary for business purposes.
 
(d) The board of directors has required Wachovia’s chief executive officer to use company aircraft for all travel whenever practicable for security reasons and provides for tax gross-up payments to offset the tax impact of imputing this expense as income to him. In 2006, Mr. Thompson was reimbursed $9,080 for taxes associated with personal use of company aircraft. No other executives are required to use company aircraft for all travel and accordingly, do not receive tax gross-ups for their personal use of company aircraft.
 
(e) Amounts reflect Wachovia matching contributions made pursuant to the Wachovia Savings Plan and the Wachovia Savings Restoration Plan in 2006. Wachovia matching contributions are dollar for dollar up to 6% of base salary. See also “Nonqualified Deferred Compensation Table”.
 
(f) Amounts reflect the cost of supplemental term life insurance incurred in 2006 for the Named Officers.
 
(g) Amounts reflect the cost of supplemental disability insurance incurred in 2006 for the Named Officers.


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(h) Amounts reflect termination-related payments paid in 2006. Mr. Malone and Ms. Davis are entitled to receive termination-related payments in future years and such payments are described under “Potential Payments Upon Termination or Change-in-Control”. Termination-related payments in 2006 were as follows:
 
                 
    Malone     Davis  
 
Employment agreement payments ($)(i)
    6,113,794       1,237,553  
Excise tax payments ($)(ii)
    7,449,603       0  
Office space ($)(iii)
    320,000       0  
Automobile transfer ($)(iv)
    78,400       0  
Medical, life and dental insurance ($)(v)
    0       43,208  
Accrued vacation payments ($)(vi)
    238,462       2,838  
                 
Total ($)
    14,200,258       1,283,600  
                 
 
 
(i) Amounts reflect termination-related payments in accordance with the respective employment agreements.
 
(ii) Amounts reflect reimbursement of excise tax payments associated with his termination in 2006 following the change-in-control of SouthTrust in 2004. Payments in 2006 finalize all excise tax gross-up requirements provided for in his employment agreement.
 
(iii) Reflects reimbursement for ongoing office space, including tax gross-up, in accordance with his employment agreement.
 
(iv) Reflects the transfer of a Wachovia-owned automobile he used and related costs, including tax gross-up, in accordance with his employment agreement.
 
(v) Reflects company cost associated with medical, life and dental insurance provided during her three-year compensation continuance period, in accordance with her employment agreement.
 
(vi) Reflects payment for accrued vacation as of the date of termination.
 
(6) Retired effective January 31, 2006.
 
(7) Served as Chief Financial Officer through February 4, 2006.
 
(8) Retired effective May 31, 2006.
 
(9) In connection with his retirement and in accordance with SFAS 123R, his 2005 stock option award fully vested. Amount reflects the SFAS 123R expense recognized in 2006 associated with this award. See footnote (2) above.
 
(10) In connection with his termination, unvested stock options and unvested shares of restricted stock were forfeited. For financial reporting purposes, Wachovia reversed $521,655 in previously recognized stock option expense and $971,173 in previously recognized restricted stock expense in 2006 associated with these forfeited stock awards.
 
(11) In connection with her termination and in accordance with SFAS 123R, amounts reflect the SFAS 123R expense recognized in 2006 associated with unvested stock awards.
 
Grants of Plan-Based Awards Table
 
The following table sets forth for the Named Officers: (i) their name (column (a)); (ii) the grant date for equity-based awards reported in the table (column (b)(i)), and the date on which the compensation committee took actions to grant such awards (column (b)(ii)); (iii) the dollar value of the estimated possible payout upon satisfaction of the conditions in question under non-equity incentive plan awards granted in the fiscal year, denominated in threshold, target and maximum amount (columns (c)-(e)); (iv) the number of shares of stock granted in the fiscal year (column (f)); (v) the number of securities underlying options granted in the fiscal year (column (g)); (vi) the per-share exercise or base price of the options granted in the fiscal year (column (h)); and (vii) the grant date fair value of each equity award computed in accordance with SFAS 123R (column (i)).


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GRANTS OF PLAN-BASED AWARDS
 
                                                                         
                                  All Other
    All Other
             
                Estimated Possible Annual
    Stock Awards:
    Option Awards:
             
                Payouts Under Non-Equity
    Number of
    Number of
    Exercise or
       
          Committee
    Incentive Plan Awards (2)     Shares of
    Securities
    Base Price
    Grant Date
 
          Action
    Threshold
    Target
    Maximum
    Stock
    Underlying
    of Option
    Fair Value of
 
Name
  Grant Date     Date (1)     ($)     ($)     ($)     or Units (#)     Options (#)     Awards ($/Sh)     Equity Awards ($)  
  (a)     (b)(i)     (b)(ii)     (c)     (d)     (e)     (f)     (g)     (h)     (i)  
Thompson
    2006               2,500,000       5,000,000       10,000,000                                  
      02/20/07       02/20/07                               211,641 (3)             N/A       12,351,369 (8)
      02/20/07       02/20/07                                       211,641 (4)     58.36       1,925,933 (9)
      03/31/06       02/21/06 (5)                             112,140 (6)             N/A       6,285,447 (8)
      03/31/06       02/21/06 (5)                                     548,238 (7)     56.05       5,520,757 (10)
Wurtz
    2006               800,000       1,600,000       3,200,000                                  
      02/20/07       02/20/07                               31,747 (3)             N/A       1,852,755 (8)
      02/20/07       02/20/07                                       31,747 (4)     58.36       288,898 (9)
      03/31/06       02/21/06 (5)                             19,825 (6)             N/A       1,111,191 (8)
      03/31/06       02/21/06 (5)                                     96,921 (7)     56.05       975,994 (10)
Jenkins
    2006               1,400,000       2,800,000       5,600,000                                  
      02/20/07       02/20/07                               59,260 (3)             N/A       3,458,414 (8)
      02/20/07       02/20/07                                       59,260 (4)     58.36       539,266 (9)
      03/31/06       02/21/06 (5)                             36,846 (6)             N/A       2,065,218 (8)
      03/31/06       02/21/06 (5)                                     180,136 (7)     56.05       1,813,970 (10)
Cummings
    2006               1,875,000       3,750,000       7,500,000                                  
      02/20/07       02/20/07                               47,972 (3)             N/A       2,799,649 (8)
      02/20/07       02/20/07                                       47,972 (4)     58.36       436,545 (9)
      03/31/06       02/21/06 (5)                             30,038 (6)             N/A       1,683,630 (8)
      03/31/06       02/21/06 (5)                                     146,850 (7)     56.05       1,478,780 (10)
Carroll
    2006               1,375,000       2,750,000       5,500,000                                  
      02/20/07       02/20/07                               35,274 (3)             N/A       2,058,591 (8)
      02/20/07       02/20/07                                       35,274 (4)     58.36       320,898 (9)
      03/31/06       02/21/06 (5)                             22,028 (6)             N/A       1,234,669 (8)
      03/31/06       02/21/06 (5)                                     107,690 (7)     56.05       1,084,438 (10)
Malone
    N/A               N/A       N/A       N/A                                  
Kelly
    2006               1,000,000       2,000,000       4,000,000                                  
Davis
    2006               650,000       1,300,000       2,600,000                                  
 
See also “Compensation Discussion & Analysis”.
 
 
(1) In 2006, Wachovia began transitioning from an April annual stock grant date to a February annual stock grant date to coincide with the Compensation Committee’s annual incentive review process. The transition to a February annual stock grant date was accomplished in February 2007 with a February 20, 2007 stock grant date.
 
Pursuant to SEC regulations, this table includes grants of stock awards made to Named Officers in the last completed fiscal year. Stockholders should note that the stock awards dated March 31, 2006 were based on performance in fiscal year 2005. Although not required by SEC regulations, in order to more accurately inform stockholders of compensation for the Named Officers for 2006, information presented in the table includes stock awards granted in February 2007 to the Named Officers that was based on performance in fiscal year 2006.
 
(2) Wachovia provides performance-based annual cash incentive awards to our executive officers under the covered officer incentive component of the SIP. For 2006, funding for the SIP has been based on an assessment of Wachovia’s actual financial performance relative to the Compensation Committee’s pre-established performance goals. The maximum individual incentive award in a given year under the SIP, including the annual cash incentive award and the grant date value of restricted stock, is limited to 0.5% of Wachovia’s adjusted net income. Actual awards for 2006 performance are set forth in column (f) of “Summary Compensation Table”. See also “Compensation Discussion & Analysis”.
 
(3) Shares of restricted stock granted February 20, 2007 are contingent upon Wachovia achieving a 20% return on tangible common equity for 2007. If Wachovia attains this goal, the restricted shares will vest at a rate of 20% per year over five years from the February 20, 2007 grant date. In the event of termination due to death, retirement (as defined in the SIP), or a “change in control” of Wachovia, any remaining vesting restrictions will lapse.
 
Dividends are paid on shares of restricted stock at the same time as dividends on our other outstanding shares of common stock are paid and have been included in the value of restricted shares reported in accordance with SFAS 123R.


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(4) Stock options granted February 20, 2007 have an exercise price equal to the February 20, 2007 grant date closing price and will vest at a rate of 20% per year over five years. These options have a term of 10 years. In the event of termination due to death, retirement (as defined in the SIP), or a “change in control” of Wachovia, any remaining vesting restrictions will lapse.
 
(5) In 2006, the Compensation Committee determined to transition Wachovia’s annual stock grant from April to February. At the time the Compensation Committee took action with respect to 2006 stock awards for all participants, including the Named Officers, on February 21, 2006, it made such stock award grants effective on March 31, 2006 in order to ensure that all grant and measurement date requirements, including communication of awards, were attained prior to grant in accordance with SFAS 123R. The exercise price of these 2006 stock options was the closing price of Wachovia common stock on March 31, 2006.
 
(6) Shares of restricted stock granted March 31, 2006 were contingent upon Wachovia achieving a 20% return on tangible common equity for 2006. Wachovia met this goal and the restricted shares will vest at a rate of 20% per year over five years from the March 31, 2006 grant date. In the event of termination due to death, retirement (as defined in the SIP), or a “change in control” of Wachovia, any remaining vesting restrictions will lapse.
 
Dividends are paid on shares of restricted stock at the same time as dividends on our other outstanding shares of common stock are paid and have been included in the value of restricted shares reported in accordance with SFAS 123R.
 
(7) Stock options granted March 31, 2006 have an exercise price equal to the March 31, 2006 grant date closing price and will vest at a rate of 20% per year over five years. These options have a term of 10 years. In the event of termination due to death, retirement (as defined in the SIP), or a “change in control” of Wachovia, any remaining vesting restrictions will lapse.
 
(8) The values shown for the shares of restricted stock reflect the SFAS 123R value over the 5-year vesting period for the shares. Dividends are paid on shares of restricted stock at the same time as dividends on our other outstanding shares of common stock and are included in the SFAS 123R valuation as reported.
 
(9) The values shown for the options granted February 20, 2007 reflect the SFAS 123R expense associated with these options based upon application of the Black-Scholes pricing model, estimating the fair value of stock options using the following assumptions: (i) risk-free interest rates of 4.67%; (ii) dividend yield of 3.84%; (iii) volatility of Wachovia common stock of 17.14%; and (iv) weighted average expected lives of the stock options of 7.0 years. Wachovia calculated its volatility estimate from implied volatility of actively traded options on Wachovia common stock with remaining maturities of two years. The values do not take into account risk factors such as non-transferability and limits on exercisability. In assessing the values indicated in the above table, it should be kept in mind that regardless of what theoretical value is placed on a stock option on the date of grant, the ultimate value of the option is dependent on the market value of the common stock at a future date, which will depend to a large degree on the efforts of the Named Officers to bring future success to Wachovia for the benefit of all stockholders.
 
(10) The values shown for the options granted March 31, 2006 reflect the SFAS 123R expense associated with these options based upon application of the Black-Scholes pricing model, estimating the fair value of stock options using the following assumptions: (i) risk-free interest rates of 4.83%; (ii) dividend yield of 3.64%; (iii) volatility of Wachovia common stock of 18.87%; and (iv) weighted average expected lives of the stock options of 7.0 years. Wachovia calculated its volatility estimate from implied volatility of actively traded options on Wachovia common stock with remaining maturities of two years. The values do not take into account risk factors such as non-transferability and limits on exercisability. In assessing the values indicated in the above table, it should be kept in mind that regardless of what theoretical value is placed on a stock option on the date of grant, the ultimate value of the option is dependent on the market value of the common stock at a future date, which will depend to a large degree on the efforts of the Named Officers to bring future success to Wachovia for the benefit of all stockholders.


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Outstanding Equity Awards at Fiscal Year-End Table
 
The following table sets forth for the Named Officers: (i) their name (column (a)); (ii) on an award-by-award basis, the number of securities underlying unexercised options, including awards that have been transferred other than for value, that are exercisable (column (b)); (iii) on an award-by-award basis, the number of securities underlying unexercised options, including awards that have been transferred other than for value, that are unexercisable (column (c)); (iv) for each instrument reported in columns (b) and (c), as applicable, the exercise or base price (column (d)); (v) for each instrument reported in columns (b) and (c), as applicable, the expiration date (column (e)); (vi) the total number of shares of stock that have not vested (column (f)); and (vii) the aggregate market value of shares of stock that have not vested as of December 31, 2006 (column (g)).
 
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
 
                                                 
    Option Awards              
    Number of
    Number of
                Stock Awards  
    Securities
    Securities
                Number of
    Market Value of
 
    Underlying
    Underlying
    Option
          Shares or Units
    Shares or Units
 
    Unexercised
    Unexercised
    Exercise
    Option
    of Stock That
    of Stock That
 
    Options (#)
    Options (#)
    Price
    Expiration
    Have Not
    Have Not
 
Name
  Exercisable     Unexercisable     ($)     Date     Vested (#)     Vested ($)  
  (a)   (b)     (c)     (d)     (e)     (f)     (g)  
 
Thompson
                                    304,096 (1)     17,318,267  
      37,200       0       40.1300       04/15/2007                  
      33,294       0       62.1250       04/21/2008                  
      35,000       0       54.9375       04/20/2009                  
      198,900       0       31.5625       01/03/2010                  
      279,000       0       27.5625       10/17/2010                  
      250,000       0       31.0625       01/04/2011                  
      500,000       0       30.4000       04/17/2011                  
      348,800       0       34.9200       07/31/2011                  
      678,120       0       37.9800       04/16/2012                  
      356,234       237,490 (2)     37.4300       04/22/2013                  
      167,619       251,429 (3)     44.6500       04/19/2014                  
      83,772       335,092 (4)     50.3800       04/18/2015                  
      0       548,238 (5)     56.0500       03/31/2016                  
                                                 
Wurtz
                                    30,270 (1)     1,723,877  
      592       0       40.1300       04/15/2007                  
      1,609       0       62.1250       04/21/2008                  
      1,820       0       54.9375       04/20/2009                  
      2,408       0       40.1300       04/15/2007                  
      3,641       0       62.1250       04/21/2008                  
      6,580       0       54.9375       04/20/2009                  
      13,500       0       34.9375       12/14/2009                  
      93,000       0       34.9200       07/31/2011                  
      36,167       0       37.9800       04/16/2012                  
      20,509       13,673 (2)     37.4300       04/22/2013                  
      13,536       20,306 (3)     44.6500       04/19/2014                  
      6,104       24,418 (4)     50.3800       04/18/2015                  
      0       96,921 (5)     56.0500       03/31/2016                  
                                                 
Jenkins
                                    107,062 (1)     6,097,181  
      631       0       54.9375       04/20/2009                  
      22,982       0       62.1250       04/21/2008                  
      25,969       0       54.9375       04/20/2009                  
      40,500       0       34.9375       12/14/2009                  
      94,500       0       31.5625       01/03/2010                  
      240,000       0       27.5625       10/17/2010                  
      175,000       0       30.4000       04/17/2011                  
      209,300       0       34.9200       07/31/2011                  
      237,342       0       37.9800       04/16/2012                  
      142,494       94,996 (2)     37.4300       04/22/2013                  
      62,857       94,286 (3)     44.6500       04/19/2014                  
      28,998       115,994 (4)     50.3800       04/18/2015                  
      0       180,136 (5)     56.0500       03/31/2016                  


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    Option Awards              
    Number of
    Number of
                Stock Awards  
    Securities
    Securities
                Number of
    Market Value of
 
    Underlying
    Underlying
    Option
          Shares or Units
    Shares or Units
 
    Unexercised
    Unexercised
    Exercise
    Option
    of Stock That
    of Stock That
 
    Options (#)
    Options (#)
    Price
    Expiration
    Have Not
    Have Not
 
Name
  Exercisable     Unexercisable     ($)     Date     Vested (#)     Vested ($)  
  (a)   (b)     (c)     (d)     (e)     (f)     (g)  
 
Cummings
                                    69,339 (1)     3,948,856  
      1,820       0       54.9375       04/20/2009                  
      8,680       0       54.9375       04/20/2009                  
      80,000       0       30.4000       04/17/2011                  
      84,765       0       37.9800       04/16/2012                  
      53,435       35,624 (2)     37.4300       04/22/2013                  
      24,444       36,668 (3)     44.6500       04/19/2014                  
      22,554       90,217 (4)     50.3800       04/18/2015                  
      0       146,850 (5)     56.0500       03/31/2016                  
                                                 
Carroll
                                    65,124 (1)     3,708,812  
      2,492       0       40.1300       04/15/2007                  
      1,609       0       62.1250       04/21/2008                  
      1,820       0       54.9375       04/20/2009                  
      22,708       0       40.1300       04/15/2007                  
      21,373       0       62.1250       04/21/2008                  
      24,780       0       54.9375       04/20/2009                  
      36,450       0       34.9375       12/14/2009                  
      85,050       0       31.5625       01/03/2010                  
      240,000       0       27.5625       10/17/2010                  
      150,000       0       30.4000       04/17/2011                  
      178,300       0       34.9200       07/31/2011                  
      118,671       0       37.9800       04/16/2012                  
      89,058       59,373 (2)     37.4300       04/22/2013                  
      38,412       57,620 (3)     44.6500       04/19/2014                  
      17,721       70,885 (4)     50.3800       04/18/2015                  
      0       107,690 (5)     56.0500       03/31/2016                  
                                                 
Malone 
                                    691,496 (8)     39,380,697  
      155,307 (7)     0       13.6200       01/16/2007                  
      4       0       13.6300       01/15/2007                  
      262,082       0       20.3200       01/27/2008                  
      533,998       0       21.9100       02/05/2008                  
      801,002       0       24.7200       04/15/2008                  
      306,794       0       21.2400       01/20/2009                  
      1       0       21.2500       01/19/2009                  
      640,800       0       20.6000       10/20/2009                  
      305,826 (7)     0       17.6300       01/18/2010                  
      307,057       0       22.5100       01/15/2011                  
      311,500       0       26.9900       01/15/2012                  
      311,499       0       29.4200       01/13/2013                  
      311,500       0       37.7000       01/20/2014                  
      585,824       0       50.3800       04/18/2015                  
                                                 
Kelly
    0       0                       0       0  
                                                 
Davis
                                    41,563 (1)     2,367,013  
      47,670       0       42.9100       01/22/2009                  
      40,000       0       44.5900       04/23/2009                  
      96,876       0       32.0000       08/29/2009                  
      80,000       0       25.5900       08/29/2009                  
      120,000       0       33.6900       08/29/2009                  
      134,607       0       37.9800       04/16/2012                  
      85,496       56,998 (2)     37.4300       04/22/2013                  
      20,952       31,429 (3)     44.6500       04/19/2014                  
      14,502       21,754 (6)     45.0200       06/21/2014                  
      17,721       70,885 (4)     50.3800       04/18/2015                  
 
The table reflects outstanding stock awards as of December 31, 2006. As noted in “Grants of Plan-Based Awards Table”, additional stock awards were granted on February 20, 2007. These stock awards are not reflected in the table above.
 
 
(1) Shares of restricted stock will vest at a rate of 20% per year on the anniversary date of the grant. Information presented aggregates all historical grants of restricted stock awards. Dividends are paid on

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shares of restricted stock at the same time as dividends on our other outstanding shares of common stock are paid.
 
(2) Non-qualified stock options vest at a rate of 20% per year with remaining vesting dates of 4/22/2007 and 4/22/2008. For Ms. Davis, options will continue to vest on the normal vesting schedule during her compensation continuance period.
 
(3) Non-qualified stock options vest at a rate of 20% per year with remaining vesting dates of 4/19/2007, 4/19/2008 and 4/19/2009. For Ms. Davis, options will continue to vest on the normal vesting schedule during her compensation continuance period.
 
(4) Non-qualified stock options vest at a rate of 20% per year with remaining vesting dates of 4/18/2007, 4/18/2008, 4/18/2009 and 4/18/2010. For Ms. Davis, options will continue to vest on the normal vesting schedule during her compensation continuance period and will fully vest on May 31, 2009 when the compensation continuance period ends.
 
(5) Non-qualified stock options vest at a rate of 20% per year with remaining vesting dates of 3/31/2007, 3/31/2008, 3/31/2009, 3/31/2010 and 3/31/2011.
 
(6) Non-qualified stock options vest at a rate of 20% per year with remaining vesting dates of 6/21/2007, 6/21/2008 and 6/21/2009. For Ms. Davis, options will continue to vest on the normal vesting schedule during her compensation continuance period and will fully vest on May 31, 2009 when the compensation continuance period ends.
 
(7) These vested stock options have been gifted to family members.
 
(8) In 1998, SouthTrust entered into the Wallace D. Malone, Jr. Nonqualified Deferred Compensation Plan and Agreement, and amounts represent restricted stock units granted under that agreement. Upon payout on January 15, 2007, these restricted stock units were converted into shares of Wachovia common stock pursuant to the terms of such agreement, and had a market value of approximately $39.4 million at the time of payout.


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Option Exercises and Stock Vested Table
 
The following table sets forth for the Named Officers with respect to fiscal year 2006: (i) their name (column (a)); (ii) the number of securities for which the options were exercised (column (b)); (iii) the aggregate dollar value realized upon exercise of options, or upon the transfer of an award for value (column (c)): (iv) the number of shares of stock that have vested (column (d)); and (v) the aggregate dollar value realized upon vesting of stock, or upon the transfer of an award for value (column (e)).
 
OPTION EXERCISES AND STOCK VESTED
 
                                 
    Option Awards     Stock Awards  
    Number of
    Value
    Number of
    Value
 
    Shares Acquired
    Realized
    Shares Acquired
    Realized
 
    on Exercise
    on Exercise
    on Vesting
    on Vesting
 
Name
  (#) (1)     ($) (2)     (#) (3)     ($) (4)  
  (a)   (b)     (c)     (d)     (e)  
 
Thompson
    30,800       833,140       62,042       3,496,580  
Wurtz
    31,500       768,206       18,346       1,044,173  
Jenkins
    25,200       409,336       23,032       1,298,283  
Cummings
    0       0       11,909       670,694  
Carroll
    18,450       475,088       14,169       798,714  
Malone (5)
    37,647       1,483,401       0       0  
Kelly
    623,279       12,449,730       0       0  
Davis
    57,454       1,189,424       13,603       760,457  
 
(1) Share amounts represent the total number of stock options exercised and have not been adjusted to reflect shares sold to cover the exercise cost of the aggregate stock options exercised or the payment of applicable taxes.
 
(2) Values represent the difference between the stock option exercise price and the market value of Wachovia common stock on the date of exercise, rounded to the nearest dollar.
 
(3) Share amounts are represented on a pre-tax basis. Our SIP permits withholding a number of shares upon vesting to pay applicable income taxes.
 
(4) Values represent the market value of Wachovia common stock on the vesting date, rounded to the nearest dollar.
 
(5) Amounts do not include the 2006 exercise of 267,331 non-qualified stock options that were gifted to family members in previous years. Upon exercise of these options, $11,737,196 in value was realized.


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Pension Benefits Table
 
The following table sets forth for the Named Officers: (i) their name (column (a)); (ii) the name of the plan (column (b)); (iii) the number of years of service credited under the plan, computed as of the same pension plan measurement date used for financial statement reporting purposes with respect to Wachovia’s audited financial statements for the last completed fiscal year (column (c)); (iv) the actuarial present value of the accumulated benefit under the plan, computed as of the same pension plan measurement date used for financial statement reporting purposes with respect to Wachovia’s audited financial statements for the last completed fiscal year (column (d)); and (v) the dollar amount of any payments and benefits paid during Wachovia’s last completed fiscal year (column (e)).
 
PENSION BENEFITS
 
                                     
        Number of
    Present Value
    Payments
       
        Years Credited
    of Accumulated
    During Last
       
        Service
    Benefit
    Fiscal Year
       
Name   Plan Name   (#)     ($) (1)     ($)        
(a)   (b)   (c)     (d)     (e)        
 
Thompson
  Wachovia Pension Plan and Trust     31       812,295       0          
                                     
Wurtz
  Wachovia Pension Plan and Trust     12       163,545       0          
    First Union Benefit Restoration Plan     12       133,171       0          
                                     
Jenkins
  Wachovia Pension Plan and Trust     34.1667       1,269,410       0          
                                     
Cummings
  Wachovia Pension Plan and Trust     8       147,782       0          
                                     
Carroll
  Wachovia Pension Plan and Trust     25       447,885       0          
                                     
Malone
  Wachovia Pension Plan and Trust     46.5       0       1,903,572          
    Additional Retirement Plan     46.5833       0       5,793,745          
    Performance Incentive Retirement Benefit Plan     46.5833       0       17,325,194          
    Enhanced Retirement Benefit Plan     46.5833       0       648,717          
    Second Deferred Benefit Plan     46.5833       0       7,582,538          
    Executive Management Retirement Plan     46.5833       0       8,212,555          
                                     
Kelly
  Wachovia Pension Plan and Trust     5       82,955       0          
                                     
Davis
  Wachovia Pension Plan and Trust     20       512,883       512,883          
    Senior Executive Retirement Agreement     21       7,658,969       0          
 
 
(1) The present value of accumulated benefits has been calculated using the same assumptions, as set forth below, except assumptions used to calculate the present value of Mr. Malone’s and Ms. Davis’ accumulated benefits have been based on actual facts and circumstances in accordance with their lump-sum distributions in 2006. The assumptions used are as follows:
 
             
        Ms. Davis’ Wachovia
   
        Pension Plan and
   
    Named Officers*   Trust   Mr. Malone’s Plans
 
Discount Rate
  5.75%   4.46%   4.46%
Mortality Table (post-retirement)
  2000RP   1994GAM   1994GAM
Retirement Age
  62   50.9166   69.4167
Payment Form (% Lump Sum)
  80% Lump Sum   100% Lump Sum   100% Lump Sum
    20% Life Annuity        
Pre-retirement Mortality, Termination, Disability
  None   None   None
 
  Excluding Mr. Malone and Ms. Davis’s Wachovia Pension Plan and Trust, each presented in columns to the right. Assumes retirement age for: Mr. Cummings—63; Mr. Kelly—65; and Ms. Davis—60.
 
The present value of accumulated benefits have been calculated as of September 30, 2006, which is the measurement date used for financial statement reporting purposes. Ms. Davis received a $512,883 lump sum full distribution under the Wachovia pension plan in December 2006. Accordingly, there was no accumulated benefits balance under the Wachovia pension plan as of December 31, 2006 for Ms. Davis.


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Wachovia Pension Plan and Trust:
 
A qualified retirement benefit plan that provides an annual benefit commencing at age 65 equal to the sum of (i) 1.15% of final average monthly compensation up to covered compensation, times years of benefit service (up to 35 years), (ii) 1.55% of final average monthly compensation above covered compensation, times years of benefit service (up to 35 years), and (iii) 0.5% of final average monthly compensation times years of benefit service in excess of 35 years. For purposes of determining benefits under the plan, “final average monthly compensation” is the greater of the monthly average of “benefits eligible compensation” during (i) any five (or fewer) consecutive full calendar years of service in eligible employment during the last 10 full calendar years of service in eligible employment with Wachovia, or (ii) the final 60 consecutive full calendar months of service in eligible employment with Wachovia, counting benefits eligible compensation in any last partial month as compensation for the preceding month. Benefits eligible compensation reflects base salary before any reductions for contributions to the Wachovia Savings Plan or before-tax contributions for health and welfare benefits or transportation spending accounts.
 
Employees that are classified as a full-time or part-time employee that have reached age 21 and have completed one year of service are eligible to participate in the plan. Participants become vested in plan benefits when they have earned five years of service credit based on 1,000 hours of service in a calendar year. Participants are eligible for Normal Retirement on the first day of the month on or after the date they have reached age 65 and have completed five years of vesting service. Participants are eligible to elect early retirement on the first day of any calendar month after reaching age 50 and having completed 10 years of service. The normal retirement benefit for a 20-year participant is not reduced for retirement between ages 62 and 65.
 
Since 2000, before he became an executive officer, Mr. Wurtz has participated in the First Union Corporation Benefit Restoration Plan, a non-qualified retirement benefit plan intended to restore benefits that are curtailed as a result of legal limits that apply to the Wachovia Pension Plan and Trust. The benefits under the plan represent the benefit Mr. Wurtz would be entitled to under the Wachovia Pension Plan and Trust, calculated without regard to the compensation limit in effect under Internal Revenue Code Section 401(a)(17) or the benefit limit in effect under Section 415.
 
In addition to his participation in the Wachovia Pension Plan and Trust following Wachovia’s acquisition of SouthTrust on November 1, 2004, Mr. Malone participated in the following SouthTrust defined benefit retirement plans, from which all accumulated benefits were paid to him in a lump-sum in 2006 upon his retirement from Wachovia:
 
Additional Retirement Plan: Provides for benefits that mirror those of the Wachovia Pension Plan on compensation excluded by Internal Revenue Service regulations from inclusion in the Pension Plan.
 
Performance Incentive Retirement Benefit Plan: Provides retirement benefits on short-term incentive compensation. The plan formula mirrors the formula in the Wachovia Pension Plan and applies it to the short-term incentive compensation paid to included executives.
 
Enhanced Retirement Benefit Plan: Provides retirement benefits using the same formula as the Wachovia Pension Plan but applying it to a three year average compensation figure for both base salary and short-term incentive income rather than the five year average used in both the Wachovia Pension Plan and the Performance Incentive Retirement Plan.
 
Second Deferred Benefit Plan: SouthTrust adopted in 2000 a retirement plan that provides a deferred compensation benefit equivalent to the present value of a 6% base salary increase over a four year period, including the effect such salary increase would have on his 401(k) and ESOP benefit, pension benefit and short-term incentive payments from SouthTrust.
 
Executive Management Retirement Plan: Effective January 1, 2002, provides a retirement benefit that includes long-term incentive compensation in determining the benefits.
 
In addition, Mr. Malone is currently receiving an annual payment of $480,000 under the SouthTrust Corporation Executive Deferred Compensation Plan. This plan was established to provide an annual benefit in lieu of $30,000 in annual contributions to a SouthTrust defined contribution plan that he elected to


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forego in 1987. The plan provides for payments for the greater of 15 years or his lifetime. Annual payments commenced in 1996.
 
Ms. Davis entered into her SERA with legacy Wachovia in 1999. Ms. Davis’ SERA is a non-qualified retirement benefit plan that provides an annual benefit commencing at age 60 equal to 2.5% of highest 3 year average total cash compensation (base salary and incentive) prior to any deferrals during the final five full years of service multiplied by the number of years of service credit. The benefit has a maximum benefit of 62.5% and is subject to an offset for any qualified defined benefit payments. Under the terms of the SERA and her employment agreement, Ms. Davis receives service credit through May 31, 2009. In conjunction with the Wachovia-First Union merger, which constituted a “change of control” of legacy Wachovia as defined in the SERA, Ms. Davis is fully vested in the benefits of the SERA which may not be terminated, suspended or amended without her agreement.
 
Nonqualified Deferred Compensation Table
 
The following table sets forth for the Named Officers: (i) their name (column (a)); (ii) the dollar amount of total account balances as of the beginning of Wachovia’s last fiscal year (column (b)); (iii) the dollar amount of aggregate executive contributions during Wachovia’s last fiscal year (column (c)); (iv) the dollar amount of aggregate Wachovia contributions during Wachovia’s last fiscal year (column (d)); (v) the dollar amount of aggregate interest or other earnings accrued during Wachovia’s last fiscal year (column (e)); (vi) the aggregate dollar amount of all withdrawals and distributions during Wachovia’s last fiscal year (column (f)); and (vii) the dollar amount of total account balances as of the end of Wachovia’s last fiscal year (column (g)).
 
NONQUALIFIED DEFERRED COMPENSATION
 
                                                 
                      Aggregate
             
          Executive
    Wachovia
    Earnings
    Aggregate
       
    Starting Balance
    Contributions
    Contributions
    in 2006
    Withdrawals/
    Aggregate Balance
 
Name   at 1/1/2006 ($)(1)     in 2006 ($)     in 2006 ($)(2)     ($)(3)     Distributions ($)     at 12/31/2006 ($)(1)  
(a)   (b)     (c)     (d)     (e)     (f)     (g)  
 
Thompson
    3,812,453       49,050       52,200       434,477       9,866       4,338,314  
Wurtz
    2,016,830       431,875       15,938       320,989       0       2,785,632  
Jenkins
    13,613,202       1,651,250       28,800       1,179,982       0       16,473,234  
Cummings
    126,884       15,000       16,800       25,221       0       183,905  
Carroll
    1,800,582       37,450       25,320       167,946       170,267       1,861,031  
Malone
    21,283,547       3,212,500       0       2,355,850       3,113,863       23,738,034  
Kelly
    4,263,656       0       0       137,242       4,400,898       0  
Davis
    408,797       7,380       3,690       24,091       308,948       135,010  
 
 
(1) Represents the aggregate balances in all Wachovia-sponsored non-qualified defined contribution and other deferred compensation plans, including (a) the Wachovia Savings Restoration Plan, (b) the Wachovia deferred compensation plans, and (c) in the case of Mr. Malone, deferred compensation plans sponsored by SouthTrust that Wachovia assumed in the Wachovia—SouthTrust merger. See below for a description of these plans.
 
(2) Represents Wachovia’s contributions matching the Named Officer’s personal contributions in the Wachovia Savings Restoration Plan.
 
(3) Represents earnings on plan balances in 2006. Earnings may increase or decrease depending on the performance of the elected investments. Above-market earnings are reflected in the “Summary Compensation Table”, footnote (4); otherwise earnings on these plans are not reflected in the “Summary Compensation Table”.


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The following table sets forth information about (1) the extent to which deferred compensation contributions and earnings (columns (c), (d) and (e) above) are reported as compensation in the “Summary Compensation Table” in this proxy statement, and (2) the extent to which amounts reported in the aggregate balance at December 31, 2006 (column (g) above) were previously reported as compensation to the Named Officers in the Summary Compensation Table in prior year’s proxy statements.
 
                                                         
    12/31/2006 Balance Reported in
    12/31/2006 Balance Reported in
 
    the Summary Compensation Table for 2006     Prior Year Summary Compensation Tables  
          Deferred
                      Deferred
       
          Compensation
                      Compensation
       
          in Excess of
          Contributions     in Excess of
       
    Contributions ($) (a)     Market ($) (b)     Total ($)     Employee ($) (c)     Employer ($) (d)     Market ($) (e)     Total ($)  
 
Thompson
    101,250       129,515       230,765       900,325       323,600       322,917       1,546,842  
Wurtz
    447,813       15,031       462,844       0       0       0       0  
Jenkins
    1,680,050       345,898       2,025,948       5,531,200       147,520       582,528       6,261,248  
Cummings
    31,800       0       31,800       45,000       46,700       0       91,700  
Carroll
    62,770       31,675       94,445       365,565       65,280       67,283       498,128  
Malone (f)
    3,212,500       834,248       4,046,748       1,687,529       51,000       431,738       2,170,267  
Kelly
    0       34       34       3,306,833       99,600       650       3,407,084  
Davis (g)
    11,070       0       11,070       0       0       0       0  
 
 
(a) Amounts reflect aggregate executive and Wachovia contributions in 2006 to deferred compensation accounts that have been reported in “Summary Compensation Table”.
 
(b) Amounts reflect above-market interest on deferred compensation earned in 2006 and that have been reported in “Summary Compensation Table”.
 
(c) Amounts reflect executive contributions to deferred compensation accounts at the election of the Named Officer in years prior to 2006 and which were reported in “Summary Compensation Table” in prior year proxy statements.
 
(d) Amounts reflect Wachovia contributions to deferred compensation accounts in years prior to 2006 and which were reported in “Summary Compensation Table” in prior year proxy statements.
 
(e) Amounts reflect above-market interest on deferred compensation earned in years prior to 2006 and which were reported in “Summary Compensation Table” in prior year proxy statements.
 
(f) Amounts exclude deferred earnings in excess of market he earned that were reported in SouthTrust proxy statement filings.
 
(g) Amounts exclude deferred earnings in excess of market she earned that were reported in legacy Wachovia proxy statement filings.
 
Wachovia Corporation Savings Restoration Plan:
 
The Wachovia Corporation Savings Restoration Plan is an unfunded, nonqualified deferred compensation plan that provides for pre-tax deferral contributions to restore 401(k) savings plan contributions beyond the IRS qualified savings plan contribution limitations. For 2006, employees with an annual base salary greater than $210,000 as of August 31, 2005 were eligible to participate and could elect to contribute up to 30% of base salary. Wachovia matches participants’ contributions on a dollar for dollar basis up to 6% of base salary.
 
Participants direct deferred balances in eleven investment index benchmarks which mirror those offered in Wachovia’s 401(k) savings plan, with the exception of the Wachovia Common Stock Fund. Participants may reallocate deferred balances among the various investment indexes on a daily basis.
 
At the time participants elect to participate in the plan, they chose whether to receive payments in a lump sum or annual installments paid over ten years. Participants also chose when payments will be made, either at separation or retirement (whichever occurs earlier) or after a specified number of years not to be less than five years.
 
Loans are not permitted under the plan. In the event an unforeseeable emergency resulting from unusual or extraordinary events which cause severe financial hardship, participants may petition for a hardship


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distribution subject to administrative committee approval in accordance with Internal Revenue Code Section 409A and other regulatory constraints. In the event a participant ceases to be employed by Wachovia, the deferral account balance will be distributed in accordance with the elected method of distribution.
 
Wachovia Corporation Elective Deferral Plan
 
The Elective Deferral Plan is an unfunded, nonqualified deferred compensation plan that provides for voluntary deferral of base salary and/or incentive, draw, and commission payments until a future date—generally retirement, death, or separation. For 2006, employees with total cash compensation (base salary, incentive, draw and commission) of $210,000 and greater paid between January 1, 2004 through December 31, 2004 and/or September 1, 2004 through August 31, 2005 were eligible to participate in the plan and could elect to defer 10% to 75% of base salary earned from January 1, 2006 to December 31, 2006 and 10% to 90% of incentive, draw and commission compensation earned in 2006.
 
Participants direct deferred balances in eleven investment index benchmarks which mirror those offered in Wachovia’s 401(k) savings plan, with the exception of the Wachovia Common Stock Fund. Participants may reallocate deferred balances among the various investment indexes on a daily basis.
 
At the time participants elect to participate in the plan, they chose whether to receive payments in a lump sum or annual installments paid over ten years. Participants also chose when payments will be made, either at separation or retirement (whichever occurs earlier) or after a specified number of years not to be less than five years.
 
Loans are not permitted under the plan. In the event an unforeseeable emergency resulting from unusual or extraordinary events which cause severe financial hardship, participants may petition for a hardship distribution subject to administrative committee approval in accordance with Internal Revenue Code Section 409A and other regulatory constraints. In the event a participant ceases to be employed by Wachovia, the deferral account balance will be distributed in accordance with the elected method of distribution.
 
Wachovia Corporation Executive Deferred Compensation Plans I, II and III
 
The Executive Deferred Compensation Plans I, II and III are unfunded, nonqualified deferred compensation plans that provided senior managers selected by Wachovia’s Chief Executive Officer the ability to voluntarily defer base salary and/or incentive payments until a future date—generally retirement, death, or separation. Participation in this plan was frozen and contributions ceased in February 2002.
 
Participant balances are credited with a rate equal to the average of the Prime Rate over four quarters plus 2%. The interest is credited on December 31 each year.
 
The Executive Deferred Compensation Plan I dictates that a participant’s account balance be paid in approximately 10 equal installments. In the event that a participant voluntarily terminates employment and/or becomes affiliated with a competitor, payment will be made in the form of a lump sum. The Executive Deferred Compensation Plan II allows participants to elect whether to receive payments in a lump sum or annual installments paid over ten years in approximately 10 equal installments. In the event that a participant voluntarily terminates employment and/or becomes affiliated with a competitor, payment will be made in the form of a lump sum. The Executive Deferred Compensation Plan III dictates that a participant’s account balance be paid in a lump sum.
 
Loans are not permitted under the plans. In the event an unforeseeable emergency resulting from unusual or extraordinary events which cause severe financial hardship, participants may petition for a hardship distribution subject to administrative committee approval.
 
The Executive Deferred Compensation Plan I allows a participant to irrevocably elect to withdraw an amount from the plan 90 days prior to December 31 every five years. There is a 6% penalty associated with this type of withdrawal.


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SouthTrust Corporation Deferred Compensation Plan
 
The SouthTrust Deferred Compensation Plan is an unfunded, nonqualified deferred compensation plan that provided senior officers of SouthTrust the ability to voluntarily defer base salary and/or incentive payments. Wachovia assumed SouthTrust’s obligations under this plan following the Wachovia—SouthTrust merger in November 2004. Contributions to this plan ceased in February 2005.
 
Participant balances are credited with a rate equal to the average of the Prime Rate for the quarter, plus 2%. The interest is credited on the last day of each quarter.
 
Participants may choose whether to receive payments in a lump sum or in quarterly or annual installments not to exceed 15 years. Participants begin receiving payment upon reaching the age designated for early or normal retirement or upon separation of service (whichever occurs earlier).
 
SouthTrust Corporation Supplemental Retirement Benefit Plan
 
The SouthTrust Supplemental Retirement Benefit Plan is an unfunded, nonqualified deferred compensation plan that provided senior officers of SouthTrust benefits that would have otherwise been provided under the SouthTrust Corporation Profit Sharing Plan if not for the limitations imposed by the Internal Revenue Code. Wachovia assumed SouthTrust’s obligations under this plan following the Wachovia—SouthTrust merger in November 2004. Contributions to this plan ceased in December 2004.
 
Participants direct deferred balances in investment index benchmarks which mirror those offered in Wachovia’s 401(k) savings plan, with the exception of the Wachovia Common Stock Fund. Participants may reallocate deferred balances among the various investment indexes on a daily basis.
 
Participants are paid in a lump sum in the month following their request for distribution in the Wachovia Savings Plan.
 
Legacy Wachovia Executive Deferred Compensation Plan
 
Legacy Wachovia restated the Executive Deferred Compensation Plan effective January 1, 2000 to include the legacy Wachovia Retirement Savings & Profit Sharing Benefit Equalization Plan (RSPSP Equalization Plan). The RSPSP Equalization Plan is a nonqualified deferred compensation plan that provided senior officers of legacy Wachovia benefits that would have otherwise been provided under the legacy Wachovia Retirement Savings & Profit Sharing Plan if not for the limitations imposed by the Internal Revenue Code. Contributions to this plan ceased in December 2001.
 
Participant balances are credited with a rate equal to the AFR Long Term Rate. The balance increases daily based on the rate for the current month.
 
Participants with a balance greater than $25,000 will receive monthly distributions for 10 years beginning the January following the termination date. Participants with a balance less than $25,000 will receive a lump sum distribution the January following the termination date.
 
In the event of an unforeseeable emergency resulting from unusual or extraordinary events which cause severe financial hardship, the participant may petition for a hardship distribution subject to administrative committee approval.
 
Potential Payments Upon Termination or Change-in-Control
 
General Assumptions
 
The presentation herein makes certain assumptions in order to discuss various scenarios, as required by SEC regulation. For these purposes, Wachovia has assumed that each executive’s date of termination as a result of the indicated triggering event or the occurrence of a change in control of Wachovia is December 31, 2006 and the price per share of Wachovia common stock on the date of termination is $56.95, which was the closing price of Wachovia common stock on December 29, 2006 (the last business day of the fiscal year). Unless provided otherwise, all payments would be made by Wachovia under the


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applicable benefit plan, program or agreement. The discussion herein summarizes benefits the Named Officers may be entitled to receive under certain Wachovia plans and/or agreements. Stockholders are encouraged to refer to those agreements which are filed or incorporated by reference in Wachovia’s Annual Report on Form 10-K for the year ended December 31, 2006.
 
Mr. Thompson
 
In December 2005, at his request, Mr. Thompson and Wachovia terminated his employment agreement. Therefore, any payments or benefits to which he would be entitled upon his termination of employment or a change in control of Wachovia would be governed by other existing plans and programs maintained by Wachovia.
 
Stock Award Acceleration
 
Mr. Thompson would be entitled to accelerated vesting of all outstanding stock options and restricted stock awards under the SIP in the event of his early retirement (he was early retirement eligible as of December 31, 2006), involuntary termination not for cause (whether or not in connection with a change of control of Wachovia), death or disability or upon a change in control of Wachovia. For these purposes, we have assumed that the Compensation Committee consented to his early retirement. As of December 31, 2006, 1,372,249 unvested stock options and 304,096 unvested restricted stock awards previously granted to him having a value of $10,423,350 and $17,318,267, respectively, would vest fully in each of these circumstances. A termination of employment for cause would not result in accelerated vesting of such stock awards.
 
Severance Benefits
 
Because Mr. Thompson does not have an employment agreement with Wachovia, if his employment with Wachovia were to cease, he may be eligible to receive payments under Wachovia’s severance plan generally available to Wachovia employees. In such event, Wachovia’s severance plan would entitle him, based on his years of service, to receive 16 months of base salary which would amount to $1,453,333 as of December 31, 2006.
 
Insurance Bonus Agreement
 
As indicated in footnote (5)(a) to “Summary Compensation Table”, following termination of his split dollar life insurance agreement in 2003, Mr. Thompson and Wachovia entered into two Insurance Bonus Agreements in 2003 and 2004 to compensate him for the cost of obtaining and maintaining personal supplemental life insurance benefits in lieu of his split-dollar life insurance arrangement.
 
The aggregate amount payable under Mr. Thompson’s Insurance Bonus Agreements calculated based on the later of his or his spouse’s life expectancy using the RP2000 mortality tables projected forward six years and a 5.50% discount rate would be approximately $878,426 over the life of those agreements, which includes a tax gross-up. Annual bonus amounts are paid by Wachovia directly to the insurer for his benefit. His Insurance Bonus Agreements terminate generally upon the earlier of: (i) the later of his or his spouse’s death; (ii) termination of his employment, other than termination due to retirement with Wachovia’s consent; or (iii) by Wachovia for any reason other than for cause or due to long-term disability, provided that this later termination event would not apply after a change in control of Wachovia.
 
Incentive Award
 
In event of a “change of control”, the covered officer incentive component of the SIP provides that incentive awards will be paid out based on Wachovia’s adjusted net income for the prior year or other method of payment as determined by the Compensation Committee for the award. Assuming a change of control of Wachovia occurred as of December 31, 2006, Mr. Thompson would be entitled to receive his annual cash incentive award based on current year performance. The actual incentive amount paid for


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2006 is reflected in the column titled “Non-Equity Incentive Plan Compensation” in “Summary Compensation Table”.
 
Benefits Generally Available to All Employees
 
Mr. Thompson also would be entitled to receive certain benefits available to Wachovia employees generally, including accrued vacation, 401(k) savings plan and other deferred compensation distributions, retiree medical benefits, group and supplemental life insurance benefits and short-term and long-term disability benefits. He was eligible for early retirement on December 31, 2006 and, therefore, would be entitled to retiree medical benefits under Wachovia’s Retiree Health and Welfare Program. See also “Nonqualified Deferred Compensation Table” and “Pension Benefits Table” for balances Mr. Thompson may be entitled to receive following termination.
 
  Messrs. Wurtz, Jenkins, Cummings and Carroll
 
The following table sets forth information about potential payments to Messrs. Wurtz, Jenkins, Cummings and Carroll in the event their employment was terminated or following a change in control of Wachovia. Refer to the footnotes following the table for an explanation of the presentation. See also “— Employment Agreements” below.
 
                                                                 
    SEVERANCE COMPENSATION     BENEFITS AND PERQUISITES        
                Unvested
    Unvested
    Medical,
                   
                and
    and
    Dental
                   
                Accelerated -
    Accelerated -
    and
                   
    Pro Rata
          Stock
    Restricted
    Life
                   
    Annual
          Options/
    Stock
    Insurance
    Other
    280G Tax
       
Name
  Bonus ($)(1)     Severance ($)(2)     SARs ($)(3)     Awards ($)(3)     Benefits ($)(4)     Perquisites ($)(5)     Gross-Up ($)(6)     Total ($)  
 
Wurtz
                                                               
Voluntary Termination
    0       0       0       0       0       0       0       0  
By Company without Cause (8)
    1,600,000       4,101,000       764,316       1,723,877       135,486       50,000       0       8,374,679  
By Company with Cause
    0       0       0       0       0       0       0       0  
By Company without Cause or by Executive for Good Reason (9)(10)
    1,600,000       4,101,000       764,316       1,723,877       135,486       50,000       159,750       8,534,429  
Change in Control (without termination)
    0       0       764,316       1,723,877       0       0       0       2,488,193  
Death or Disability
    1,600,000       425,000       764,316       1,723,877       0       0       0       4,513,193  
                                                                 
Jenkins
                                                               
Early Retirement (7)
    3,700,000       0       3,938,243       6,097,181       0       0       0       13,735,424  
By Company without Cause (8)
    3,700,000       13,326,000       3,938,243       6,097,181       155,854       70,000       0       27,287,278  
By Company with Cause
    0       0       0       0       0       0       0       0  
By Company without Cause or by Executive for Good Reason (9)
    3,700,000       13,326,000       3,938,243       6,097,181       562,736       70,000       6,396,563       34,090,723  
Change in Control (without termination)
    0       0       3,938,243       6,097,181       0       0       0       10,035,424  
Death or Disability
    3,700,000       700,000       3,938,243       6,097,181       0       0       0       14,435,424  
                                                                 
Cummings
                                                               
Early Retirement (7)
    3,750,000       0       1,871,288       3,948,856       575,031       0       0       10,145,175  
By Company without Cause (8)
    3,750,000       12,840,000       1,871,288       3,948,856       795,275       70,000       0       23,275,419  
By Company with Cause
    0       0       0       0       0       0       0       0  
By Company without Cause or by Executive for Good Reason (9)
    3,750,000       12,840,000       1,871,288       3,948,856       1,819,640       70,000       5,101,139       29,400,923  
Change in Control (without termination)
    0       0       1,871,288       3,948,856       0       0       0       5,820,144  
Death or Disability
    3,750,000       500,000       1,871,288       3,948,856       575,031       0       0       10,645,175  
                                                                 
Carroll
                                                               
Voluntary Termination
    0       0       0       0       0       0       0       0  
By Company without Cause (8)
    2,750,000       10,291,560       2,430,322       3,708,812       211,509       70,000       0       19,462,203  


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    SEVERANCE COMPENSATION     BENEFITS AND PERQUISITES        
                Unvested
    Unvested
    Medical,
                   
                and
    and
    Dental
                   
                Accelerated -
    Accelerated -
    and
                   
    Pro Rata
          Stock
    Restricted
    Life
                   
    Annual
          Options/
    Stock
    Insurance
    Other
    280G Tax
       
Name
  Bonus ($)(1)     Severance ($)(2)     SARs ($)(3)     Awards ($)(3)     Benefits ($)(4)     Perquisites ($)(5)     Gross-Up ($)(6)     Total ($)  
 
By Company with Cause
    0       0       0       0       0       0       0       0  
By Company without Cause or by Executive for Good Reason (9)
    2,750,000       10,291,560       2,430,322       3,708,812       1,174,648       70,000       4,893,286       25,318,628  
Change in Control (without termination)
    0       0       2,430,322       3,708,812       0       0       0       6,139,134  
Death or Disability
    2,750,000       642,000       2,430,322       3,708,812       0       0       0       9,531,134  
 
 
(1) Prorated based on a 365-day calendar year using a December 31, 2006 termination date and the higher of the executive’s current target incentive award or highest incentive award paid during the prior three calendar years. Amounts differ from the annual cash incentive award for the executives in “Summary Compensation Table” because the 2006 incentive award had not been determined as of December 31, 2006.
 
(2) Represents severance payments in accordance with individual employment agreements as further detailed in “—Employment Agreements” below.
 
(3) Values for stock options have been calculated using the difference between $56.95 and the option exercise price; restricted stock awards valued at $56.95.
 
(4) Represents medical, dental and life insurance coverage benefits outlined in the table below, valued at the incremental cost to Wachovia of providing such benefits for the time periods indicated:
 
                                                                 
    Wurtz     Jenkins     Cummings     Carroll  
    2 years     Life (e)     3 years     Life     3 years     Life     3 years     Life  
 
Medical Insurance Coverage ($)(a)
    121,900       121,900       106,700       475,400       185,800       1,122,600       183,000       1,064,500  
Dental Insurance Coverage ($)(a)
    300       300       200       1,900       400       3,300       0       0  
Life Insurance Coverage ($)(b)
    1,300       1,300       3,000       12,700       2,200       11,100       2,800       14,500  
Supplemental Life Insurance Benefits ($)(c)
    N/A       N/A       N/A       N/A       575,031       575,031       N/A       N/A  
Executive Life Insurance Program ($)(d)
    11,986       11,986       45,954       72,736       31,844       107,609       25,709       95,648  
                                                                 
Total ($)
    135,486       135,486       155,854       562,736       795,275       1,819,640       211,509       1,174,648  
                                                                 
 
 
(a) Reflects the maximum projected cost of continued coverage under Wachovia’s special medical program for the executive and his family for the period indicated based the executive’s elections for coverage in 2007. Assumes the following: (i) participation of the executive’s children until age 26; (ii) at age 65, that Medicare pays 65% of the cost of coverage; (iii) a 5.50% discount rate; (iv) an annual rate of cost increase ranging from 5% to 10% depending on the particular year; and (v) life expectancies for the executive and his spouse based on the RP2000 mortality tables projected forward six years.
 
(b) Reflects the cost of continued coverage under Wachovia’s group life insurance plan (providing a benefit equal to base salary) for the period indicated. Assumes a 5.50% discount rate and life expectancies for the executive based on the RP2000 mortality tables projected forward six years.
 
(c) For Mr. Cummings, amount reflects aggregate bonuses payable over the life of his Insurance Bonus Agreement calculated based on the longer life expectancy of the executive or his spouse using the RP2000 mortality tables projected forward six years and a 5.50% discount rate. No cost has been reported in the above table in the event of a change in control without termination as

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these payments would continue during ongoing employment. See additional discussion in footnote (5)(a) to “Summary Compensation Table”.
 
(d) Reflects the cost of continued coverage under Wachovia’s executive life insurance plan (providing a benefit up to eight times base salary) for the period indicated. Assumes a 5.50% discount rate and the remaining term of payment obligation on the existing policies.
 
(e) Reflects the cost of continued coverage at active employee rates for two years after which time Mr. Wurtz is entitled to continued participation in such programs or plans, as applicable, upon payment to Wachovia of its cost of providing such coverage.
 
(5) Represents continued participation in Wachovia’s fringe benefit or perquisite plans or programs in which the executive participated immediately prior to his date of termination for a three year period (two years in the case of Mr. Wurtz) as outlined in the table below, valued at the incremental cost to Wachovia of providing such benefits:
 
                                 
    Wurtz     Jenkins     Cummings     Carroll  
 
Financial Planning ($)(a)
    30,000       45,000       45,000       45,000  
Outplacement Services ($)(b)
    10,000       10,000       10,000       10,000  
Executive Physical ($)(c)
    10,000       15,000       15,000       15,000  
                                 
Total ($)
    50,000       70,000       70,000       70,000  
                                 
 
 
(a) Represents reimbursement of financial planning expenses incurred by the executive (subject to an annual maximum of $15,000).
 
(b) Represents outplacement services to which the executive is entitled for a maximum period of 12 months based on current annual base salary level. This benefit is available generally to all involuntarily terminated employees although the benefit amount varies by salary level.
 
(c) Represents reimbursement for the cost of executive physicals (subject to a maximum of $7,500 every 18 months).
 
(6) Assumes a Section 280G of the Internal Revenue Code excise tax rate of 20%, the Medicare rate is 1.45% (assumes the Social Security Wage Base is reached based on other income prior to application of the gross-up), the Federal tax rate is 35%, the applicable state tax rate is North Carolina at 8% and the city/local tax rate is 0%. The effective Federal tax rate used to calculate the excise tax gross-up is 32.8125%. All amounts would be paid by Wachovia directly to the relevant taxing authority on behalf of the executive. Amounts presented assume that stock options are cashed out for a payment equal to the difference between $56.95 and the option exercise price in the event of a change in control of Wachovia.
 
(7) Assumes the executive is early retirement eligible as of December 31, 2006 based on the eligibility requirements of Wachovia’s pension plan. Messrs. Carroll and Wurtz were not eligible for early retirement on such date.
 
(8) Assumes a termination by Wachovia without cause or by the executive for good reason. Assumes the executive’s termination-related benefit includes: (i) a pro rata incentive award for the period through the executive’s termination date, based on the highest incentive award paid during either the three calendar years prior to termination or the executive’s then applicable target incentive award; (ii) an amount equal to three times (two times in the case of Mr. Wurtz) the executive’s annual base salary and the highest incentive award determined in accordance with (i) above; (iii) an amount equal to three times (two times in the case of Mr. Wurtz) the highest matching contribution by Wachovia for the executive’s benefit in Wachovia’s 401(k) savings plan and Savings Restoration Plan for the preceding five years (three years in the case of Mr. Wurtz); (iv) medical, dental and life insurance benefits for the executive and family members for three years (two years in the case of Mr. Wurtz) after the termination date. See footnote (4) above for a detail of medical, dental, and life insurance benefits; and (v) other perquisites.


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(9) Assumes a termination by Wachovia (or its successor) without cause or by the executive for good reason following a change-in-control. In addition to the severance benefits described in footnote (8) above, assumes that the executive’s severance benefit includes medical, dental and life insurance benefits for the executive and his family for life because the termination date follows a “change in control” of Wachovia. See footnote (4) above for a detail of medical, dental, and life insurance benefits.
 
(10) Aggregate termination-related benefits payable to Mr. Wurtz reflect a reduction of $2,010,938 in accordance with the severance limitations as provided in his employment agreement and Wachovia’s Severance Policy (discussed below in “—Employment Agreements”). The 280G excise tax gross-up benefit as reported reflects this reduction.
 
Employment Agreements
 
  Messrs. Wurtz, Jenkins, Cummings and Carroll
 
As discussed in “Compensation Discussion & Analysis”, Wachovia has entered into employment agreements with Messrs. Wurtz, Jenkins, Carroll and Cummings. Each of these employment agreements has an initial employment period of three years and is automatically extended on an annual basis unless either party determines otherwise prior to the annual extension date.
 
Consistent with Wachovia’s Severance Policy for Shareholder Approval of Future Severance Agreements (the “Severance Policy”) adopted by the board in August 2006, the aggregate amount of all severance benefits to which Mr. Wurtz is entitled under his agreement will not exceed 2.99 times his annual base salary plus his highest annual incentive award awarded in any of the last three fiscal years as determined in accordance with the terms of the Severance Policy. The other employment agreements were entered into prior to the Severance Policy’s adoption. For additional information on Wachovia’s Severance Policy, see “Post-Termination Compensation and Benefits—Employment Agreements” under “Compensation Discussion & Analysis”.
 
Payments Upon Termination Due to Early or Normal Retirement
 
The employment agreements provide that if the executive terminates employment due to early retirement or normal retirement (assuming normal retirement age of 65 as provided under Wachovia’s tax qualified pension plan) during the three year term of the agreement (two year term in the case of Mr. Wurtz), the executive will be entitled to a pro rata annual incentive award for the period prior to the termination date, based on the highest incentive award paid during either the three calendar years prior to termination or the executive’s then current target incentive award. For a description of stock award acceleration upon termination due to retirement, see “—Stock Award Acceleration” below.
 
In addition, the executive would be entitled to benefits under Wachovia’s Retiree Health and Welfare Program. Because this program is available generally to all retired employees, no amounts are presented in the table above for continued retiree medical and dental coverage under these circumstances.
 
Payments Upon Involuntary not for Cause Termination and Termination for Good Reason
 
The employment agreements provide that if Wachovia terminates the executive’s employment for reasons other than “cause”, death, disability or retirement or the executive terminates employment for “good reason”, then the executive will be entitled to receive: (i) a pro rata annual incentive award for the period through the executive’s termination date, based on the highest incentive award paid during either the three calendar years prior to termination or the executive’s then applicable target incentive award; (ii) an amount equal to three times (two times in the case of Mr. Wurtz) the executive’s annual base salary and the highest incentive award determined under (i) above; and (iii) medical, dental and life insurance benefits for the executive and his family for three years (two years in the case of Mr. Wurtz) after the termination date (or for life if the termination date occurs after a “change in control” of Wachovia). Each executive is also entitled to a cash payment equal to the highest matching contribution by Wachovia for the executive’s benefit in Wachovia’s 401(k) savings plan and Savings Restoration Plan for the five years (three years in


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the case of Mr. Wurtz) prior to termination for a three year period (two year period in the case of Mr. Wurtz). Such amounts are payable to the executive in equal annual installments.
 
In addition, the executive is entitled to continue to participate in Wachovia’s fringe benefit and perquisite plans or programs in which the executive participated immediately prior to his date of termination for a three year period (two years in the case of Mr. Wurtz). Those benefits include reimbursement of financial planning expenses (subject to an annual maximum of $15,000 under current company policy) and reimbursement of costs for executive physicals (subject to a maximum of $7,500 every 18 months under current company policy). For purposes of the table above, Wachovia has assumed the maximum amount reimbursable to the executive for financial planning and executive physical expenses.
 
A termination is for “cause” if it is for any of the following reasons: (i) the continued and willful failure of the executive to perform substantially the executive’s duties with Wachovia (other than any such failure resulting from incapacity due to physical or mental illness), after a written demand for substantial performance is delivered to the executive by Wachovia which specifically identifies the manner in which Wachovia believes that the executive has not substantially performed the executive’s duties and a reasonable time for such substantial performance has elapsed since delivery of such demand; or (ii) the willful engaging by the executive in illegal conduct or gross misconduct which is materially injurious to Wachovia.
 
A termination is for “good reason” if it is for any of the following reasons:
 
(ia) as applicable to Messrs. Jenkins, Carroll and Cummings only, the substantial diminution in the overall importance of the executive’s role, as determined by balancing (A) any increase or decrease in the scope of the execu