Wachovia Corporation

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, U6JCdlSSQttZcjsEv3YI7+A7GOZBUSNmeSr3hlgez7mlZK/azpf3QcJVxlqf0//x AZ27HWsjqDSRBSAdktBKHQ== 0000950144-04-001874.txt : 20040302 0000950144-04-001874.hdr.sgml : 20040302 20040302171106 ACCESSION NUMBER: 0000950144-04-001874 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 52 CONFORMED PERIOD OF REPORT: 20031231 FILED AS OF DATE: 20040302 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WACHOVIA CORP NEW CENTRAL INDEX KEY: 0000036995 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 560898180 STATE OF INCORPORATION: NC FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-10000 FILM NUMBER: 04643496 BUSINESS ADDRESS: STREET 1: ONE FIRST UNION CTR CITY: CHARLOTTE STATE: NC ZIP: 28288-0013 BUSINESS PHONE: 7043746565 MAIL ADDRESS: STREET 1: ONE FIRST UNION CENTER CITY: CHARLOTTE STATE: NC ZIP: 28288-0013 FORMER COMPANY: FORMER CONFORMED NAME: FIRST UNION CORP DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: CAMERON FINANCIAL CORP DATE OF NAME CHANGE: 19750522 FORMER COMPANY: FORMER CONFORMED NAME: FIRST UNION NATIONAL BANCORP INC DATE OF NAME CHANGE: 19721115 10-K 1 g87441e10vk.htm WACHOVIA CORPORATION Wachovia Corporation

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

Annual report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”) for the fiscal year ended December 31, 2003

Commission file number 1-10000

WACHOVIA CORPORATION

(Exact name of registrant as specified in its charter)


NORTH CAROLINA		56-0898180
(State of incorporation)		(I.R.S. Employer Identification No.)


ONE WACHOVIA CENTER
CHARLOTTE, NC		28288-0013
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (704) 374-6565
Securities registered pursuant to Section 12(b) of the Exchange Act:


TITLE OF EACH CLASS		NAME OF EXCHANGE ON WHICH REGISTERED

Common Stock, $3.33 1/3 par value (including attached rights)		New York Stock Exchange, Inc. (the “NYSE”)
TEES Targeted Efficient Equity Securities Leveraged Upside Note Linked to the S&P 500® Index due May 23, 2005		American Stock Exchange
TEES Targeted Efficient Equity Securities Leveraged Upside Note Linked to the S&P 500® Index due February 25, 2005		American Stock Exchange
Participating Index Notes (PINS) TEES Targeted Efficient Equity Securities Linked to the S&P 500® Index due August 19, 2009		American Stock Exchange

Securities registered pursuant to Section 12(g) of the Exchange Act:

TITLE OF EACH CLASS

Dividend Equalization Preferred shares, no par value

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes [X] No [ ]

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold as of the last business day of the registrant’s completed second fiscal quarter: $53.1 billion.

As of February 18, 2004, there were 1,314,869,016 shares of the registrant’s common stock outstanding, $3.33 1/3 par value per share.

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ]

DOCUMENTS INCORPORATED BY REFERENCE IN FORM 10-K


	INCORPORATED DOCUMENTS	WHERE INCORPORATED IN FORM 10-K

1.	Certain portions of the Corporation’s Annual Report to Stockholders for the year ended December 31, 2003 (“Annual Report”).	Part I — Items 1 and 2; Part II — Items 5, 6, 7, 7A and 8; and Part IV – Item 15.

2.	Certain portions of the Corporation’s Proxy Statement for the Annual Meeting of Stockholders to be held April 20, 2004 (“Proxy Statement”).	Part III — Items 10, 11, 12, 13 and 14.

PART I

Wachovia Corporation (formerly named First Union Corporation, “Wachovia”) may from time to time make written or oral forward-looking statements, including statements contained in Wachovia’s filings with the Securities and Exchange Commission (including this Annual Report on Form 10-K and the Exhibits hereto and thereto), in its reports to stockholders and in other Wachovia communications, which are made in good faith by Wachovia pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995.

These forward-looking statements include, among others, statements with respect to Wachovia’s beliefs, plans, objectives, goals, guidelines, expectations, financial condition, results of operations, future performance and business of Wachovia, including without limitation, (i) statements relating to the benefits of the retail securities brokerage combination transaction between Wachovia and Prudential Financial, Inc. (the “Brokerage Transaction”), completed on July 1, 2003, including future financial and operating results, cost savings, enhanced revenues and the accretion of reported earnings that may be realized from the Brokerage Transaction, (ii) statements regarding certain of Wachovia’s goals and expectations with respect to earnings, earnings per share, revenue, expenses and the growth rate in such items, as well as other measures of economic performance, including statements relating to estimates of credit quality trends, and (iii) statements preceded by, followed by or that include the words “may”, “could”, “should”, “would”, “believe”, “anticipate”, “estimate”, “expect”, “intend”, “plan”, “projects”, “outlook” or similar expressions. These forward-looking statements involve certain risks and uncertainties that are subject to change based on various factors (many of which are beyond Wachovia’s control). The following factors, among others, could cause Wachovia’s financial performance to differ materially from that expressed in such forward-looking statements: (1) the risk that the businesses involved in the Brokerage Transaction will not be integrated successfully or such integration may be more difficult, time-consuming or costly than expected; (2) expected revenue synergies and cost savings from the Brokerage Transaction may not be fully realized or realized within the expected time frames; (3) revenues following the Brokerage Transaction may be lower than expected; (4) customer attrition, operating costs, and business disruption following the Brokerage Transaction, including, without limitation, difficulties in maintaining relationships with employees, may be greater than expected; (5) the strength of the United States economy in general and the strength of the local economies in which Wachovia conducts operations may be different than expected resulting in, among other things, a deterioration in credit quality or a reduced demand for credit, including the resultant effect on Wachovia’s loan portfolio and allowance for loan losses; (6) the effects of, and changes in, trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System; (7) inflation, interest rate, market and monetary fluctuations; (8) adverse conditions in the stock market, the public debt market and other capital markets (including changes in interest rate conditions) and the impact of such conditions on Wachovia’s capital markets and capital management activities, including, without limitation, Wachovia’s mergers and acquisition advisory business, equity and debt underwriting activities, private equity investment activities, derivative securities activities, investment and wealth management advisory businesses, and brokerage activities; (9) the timely development of competitive new products and services by Wachovia and the acceptance of these products and services by new and existing customers; (10) the willingness of customers to accept third party products marketed by Wachovia; (11) the willingness of customers to substitute competitors’ products and services for Wachovia’s products and services and vice versa; (12) the impact of changes in financial services’ laws and regulations (including laws concerning taxes, banking, securities and insurance); (13) technological changes; (14) changes in consumer spending and saving habits; (15) the effect of corporate restructurings, acquisitions and/or dispositions, including, without limitation, the Brokerage Transaction, and the actual restructuring and other charges related thereto, and the failure to achieve the expected revenue growth and/or expense savings from such corporate restructurings, acquisitions and/or dispositions; (16) the growth and profitability of Wachovia’s noninterest or fee income being less than expected; (17) unanticipated regulatory or judicial proceedings or rulings; (18) the impact of changes in accounting principles; (19) adverse changes in financial performance and/or condition of Wachovia’s borrowers which could impact repayment of such borrowers’ outstanding loans; (20) the impact on Wachovia’s businesses, as well as on the risks set forth above, of various domestic or international military or terrorist activities or conflicts; and (21) Wachovia’s success at managing the risks involved in the foregoing.

Wachovia cautions that the foregoing list of important factors is not exclusive. Wachovia does not undertake to update any forward-looking statement, whether written or oral, that may be made from time to time by or on behalf of Wachovia.

ITEM 1. BUSINESS.

GENERAL

Wachovia was incorporated under the laws of North Carolina in 1967 and is registered as a financial holding company and a bank holding company under the Bank Holding Company Act of 1956, as amended. The merger of the former Wachovia Corporation (“Legacy Wachovia”) and First Union Corporation (“Legacy First Union”) was effective September 1, 2001. Legacy First Union changed its name to “Wachovia Corporation” on the date of the merger. As the surviving corporate entity in the merger, information contained in this Annual Report on Form 10-K, unless indicated otherwise, includes information about Legacy First Union only. Whenever we use the “Wachovia” name in this Annual Report on Form 10-K, we mean the new combined company and, before the merger, Legacy First Union, unless indicated otherwise.

We provide a wide range of commercial and retail banking and trust services through full-service banking offices in Connecticut, Delaware, Florida, Georgia, Maryland, New Jersey, New York, North Carolina, Pennsylvania, South Carolina, Virginia and Washington, D.C. Wachovia Bank, National Association (“WBNA”) operates those banking offices, except those in Delaware, which are operated by Wachovia Bank of Delaware, National Association. We also provide various other financial services, including mortgage banking, investment banking, investment advisory, home equity lending, asset-based lending, leasing, insurance, international and securities brokerage services, through other subsidiaries. Our retail securities brokerage business is conducted through Wachovia Securities, LLC, and operates in 49 states.

Our principal executive offices are located at One Wachovia Center, 301 South College Street, Charlotte, North Carolina 28288-0013 (telephone number (704) 374-6565).

Since the 1985 Supreme Court decision allowing interstate banking expansion, we have concentrated our efforts on building a large, diversified financial services organization, primarily doing business in the eastern region of the United States. Since November 1985, we have completed over 100 banking-related acquisitions.

Our business focus is on generating improved core earnings growth from our four key businesses, including Capital Management, the General Bank, Wealth Management, and the Corporate and Investment Bank. We will continue to evaluate our operations and organizational structures to ensure they are closely aligned with our goal of maximizing performance in our core business lines. When consistent with our overall business strategy, we may consider the disposition of certain assets, branches, subsidiaries or lines of business. We routinely explore acquisition opportunities, particularly in areas that would complement our core business lines, and frequently conduct due diligence activities in connection with possible acquisitions. As a result, acquisition discussions and, in some cases, negotiations frequently take place and future acquisitions involving cash, debt or equity securities can be expected.

Additional information relating to our businesses and our subsidiaries is included in the information set forth on pages 31 through 35 and in Note 13 on pages 103 through 105 in the Annual Report and incorporated herein by reference. Information relating to Wachovia Corporation only is set forth in Note 20 on pages 122 through 124 in the Annual Report and incorporated herein by reference.

Available Information

Wachovia’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 are accessible at no cost on our website, www.wachovia.com, as soon as reasonably practicable after those reports have been electronically filed or submitted to the SEC. These filings are also accessible on the SEC’s website, www.sec.gov. In addition, Wachovia makes available on www.wachovia.com (i) its Corporate Governance Guidelines, (ii) its Code of Conduct & Ethics, which applies to its directors and all employees, and (iii) the charters of the Audit & Compliance, Management Resources & Compensation, and Corporate Governance & Nominating Committees of its Board of Directors. These materials also are available free of charge in print to stockholders who request them by writing to: Investor Relations, Wachovia Corporation, 301 South College Street, Charlotte, North Carolina 28288-0206.

COMPETITION

Our subsidiaries face substantial competition in their operations from banking and non-banking institutions, including savings and loan associations, credit unions, money market funds and other investment vehicles, mutual fund advisory companies, brokerage firms, insurance companies, leasing companies, credit card issuers, mortgage banking companies, investment banking companies, finance companies and other types of financial services providers, including Internet-only financial service providers.

REGULATION AND SUPERVISION

The following discussion sets forth some of the material elements of the regulatory framework applicable to financial holding companies and bank holding companies and their subsidiaries and provides some specific information relevant to us. The regulatory framework is intended primarily for the protection of depositors and the Bank Insurance Fund and not for the protection of security holders and creditors. To the extent that the following information describes statutory and regulatory provisions, it is qualified in its entirety by reference to the particular statutory and regulatory provisions.

Bank Holding Company Activities

General

As a financial holding company and a bank holding company, Wachovia is regulated under the Bank Holding Company Act of 1956, as well as other federal and state laws governing the banking business. The Federal Reserve Board is the primary regulator of Wachovia, and supervises our activities on a continual basis. Our subsidiaries are also subject to regulation and supervision by various regulatory authorities, including the Federal Reserve Board, the Comptroller of the Currency (the “Comptroller”) and the Federal Deposit Insurance Corporation (the “FDIC”).

The Gramm-Leach-Bliley Financial Modernization Act of 1999 was enacted on November 12, 1999. The Modernization Act, which amended the Bank Holding Company Act,

• allows bank holding companies that qualify as “financial holding companies” to engage in a substantially broader range of non-banking activities than was permissible under prior law;

• allows insurers and other financial services companies to acquire banks;

• removes various restrictions that applied to bank holding company ownership of securities firms and mutual fund advisory companies; and

• establishes the overall regulatory structure applicable to bank holding companies that also engage in insurance and securities operations.

The Federal Reserve Board notified us that, effective March 13, 2000, we are authorized to operate as a financial holding company and therefore are eligible to engage in, or acquire companies engaged in, the broader range of activities that are permitted by the Modernization Act. These activities include those that are determined to be “financial in nature”, including insurance underwriting, securities underwriting and dealing, and making merchant banking investments in commercial and financial companies. If any of our banking subsidiaries ceases to be “well capitalized” or “well managed” under applicable regulatory standards, the Federal Reserve Board may, among other things, place limitations on our ability to conduct these broader financial activities or, if the deficiencies persist, require us to divest the banking subsidiary. In addition, if any of our banking subsidiaries receives a rating of less than satisfactory under the Community Reinvestment Act of 1977 (“CRA”), we would be prohibited from engaging in any additional activities other than those permissible for bank holding companies that are not financial holding companies. Our banking subsidiaries currently meet the capital, management and CRA requirements.

Interstate Banking

The Reigle-Neal Interstate Banking and Branching Efficiency Act of 1994 (the “IBBEA”) authorized interstate acquisitions of banks and bank holding companies without geographic limitation. Under IBBEA a bank holding company cannot make an interstate acquisition of a bank if, as a result, it would control more than 10% of the total United States insured depository deposits and more than 30% or applicable state law limit of deposits in that state.

Banking Acquisitions

As a bank holding company, we are required to obtain prior Federal Reserve Board approval before acquiring more than 5% of the voting shares, or substantially all of the assets, of a bank holding company, bank or savings association. In determining whether to approve a proposed bank acquisition, federal bank regulators will consider, among other factors, the effect of the acquisition on competition, the public benefits expected to be received from the acquisition, the projected capital ratios and levels on a post-acquisition basis, and the acquiring institution’s record of addressing the credit needs of the communities it serves, including the needs of low and moderate income neighborhoods, consistent with the safe and sound operation of the bank, under the CRA.

Subsidiary Dividends

Wachovia is a legal entity separate and distinct from its banking and other subsidiaries. A major portion of our revenues results from amounts paid as dividends to us by our national bank subsidiaries. The Comptroller’s prior approval is required if the total of all dividends declared by a national bank in any calendar year will exceed the sum of that bank’s net profits for that year and

its retained net profits for the preceding two calendar years, less any required transfers to surplus. Federal law also prohibits national banks from paying dividends that would be greater than the bank’s undivided profits after deducting statutory bad debt in excess of the bank’s allowance for loan losses.

Under the foregoing dividend restrictions and certain restrictions applicable to certain of our non-banking subsidiaries, as of December 31, 2003, our subsidiaries, without obtaining affirmative governmental approvals, could pay aggregate dividends of $3.8 billion to us during 2004. This amount is not necessarily indicative of amounts that may be available in future periods. In 2003, our subsidiaries paid $4.4 billion in cash dividends to us.

In addition, we and our banking subsidiaries are subject to various general regulatory policies and requirements relating to the payment of dividends, including requirements to maintain adequate capital above regulatory minimums. The appropriate federal regulatory authority is authorized to determine under certain circumstances relating to the financial condition of a bank or bank holding company that the payment of dividends would be an unsafe or unsound practice and to prohibit payment thereof. The appropriate federal regulatory authorities have indicated that paying dividends that deplete a bank’s capital base to an inadequate level would be an unsound and unsafe banking practice and that banking organizations should generally pay dividends only out of current operating earnings.

Source of Strength

Under Federal Reserve Board policy, we are expected to act as a source of financial strength to each of our subsidiary banks and to commit resources to support each of those subsidiaries. This support may be required at times when, absent that Federal Reserve Board policy, we may not find ourselves able to provide it. Capital loans by a bank holding company to any of its subsidiary banks are subordinate in right of payment to deposits and to certain other indebtedness of such subsidiary banks. In the event of a bank holding company’s bankruptcy, any commitment by the bank holding company to a federal bank regulatory agency to maintain the capital of a subsidiary bank will be assumed by the bankruptcy trustee and entitled to a priority of payment.

Federal law also authorizes the Comptroller to order an assessment of Wachovia if the capital of one of our national bank subsidiaries were to become impaired. If we failed to pay the assessment within three months, the Comptroller could order the sale of our stock in the national bank to cover the deficiency.

Capital Requirements

Federal banking regulators have adopted risk-based capital and leverage guidelines that require that our capital-to-assets ratios meet certain minimum standards. Under the risk-based capital requirements for bank holding companies, the minimum requirement for the ratio of capital to risk-weighted assets (including certain off-balance-sheet activities, such as standby letters of credit) is 8%. At least half of the total capital (as defined below) is to be composed of common stockholders’ equity, retained earnings, qualifying perpetual preferred stock (in a limited amount in the case of cumulative preferred stock) and minority interests in the equity accounts of consolidated subsidiaries, less goodwill and certain intangibles (“tier 1 capital”). The remainder of total capital may consist of mandatory convertible debt securities and a limited amount of subordinated debt, qualifying preferred stock and loan loss allowance (“tier 2 capital”, and together with tier 1 capital, “total capital”). At December 31, 2003, our tier 1 capital and total capital ratios were 8.52% and 11.82%, respectively.

In addition, the Federal Reserve Board has established minimum leverage ratio guidelines for bank holding companies. These requirements provide for a minimum leverage ratio of tier 1 capital to adjusted average quarterly assets less certain amounts (“leverage ratio”) equal to 3% for bank holding companies that meet certain specified criteria, including having the highest regulatory rating. All other bank holding companies will generally be required to maintain a leverage ratio of at least 4%. Our leverage ratio at December 31, 2003, was 6.36%. The guidelines also provide that bank holding companies experiencing internal growth or making acquisitions will be expected to maintain strong capital positions substantially above the minimum supervisory levels without significant reliance on intangible assets. Furthermore, the guidelines indicate that the Federal Reserve Board will continue to consider a “tangible tier 1 leverage ratio” (deducting all intangibles) in evaluating proposals for expansion or to engage in new activity. The Federal Reserve Board has not advised us of any specific minimum leverage ratio or tier 1 leverage ratio applicable to us.

Each of our subsidiary banks is subject to similar capital requirements adopted by the Comptroller or other applicable regulatory agency. Neither the Comptroller nor such applicable regulatory agency has advised any of our subsidiary banks of any specific minimum leverage ratios applicable to it. The capital ratios of our bank subsidiaries are set forth in Table 17 on page 68 in the Annual Report and incorporated herein by reference.

The risk-based capital requirements identify concentrations of credit risk and certain risks arising from non-traditional activities, and the management of those risks, as important factors to consider in assessing an institution’s overall capital adequacy. Other factors taken into consideration by federal regulators include: interest rate exposure; liquidity, funding and market risk; the

quality and level of earnings; the quality of loans and investments; the effectiveness of loan and investment policies; and management’s overall ability to monitor and control financial and operational risks, including the risks presented by concentrations of credit and non-traditional activities.

Effective April 1, 2002, Federal Reserve Board rules govern the regulatory capital treatment of merchant banking investments and certain other equity investments, including investments made by our Principal Investing group, in non-financial companies held by bank holding companies. The rules generally impose a capital charge that increases incrementally as the value of the banking organization’s equity investments increase. An 8% tier 1 capital deduction would apply on covered investments that in total represent up to 15% of an organization’s tier 1 capital. For covered investments that total more than 25% of the organization’s tier 1 capital, a capital deduction of 25% would be imposed. Equity investments made through small business investment companies in an amount up to 15% of the banking organization’s tier 1 capital are exempt from the new charges, but the full amount of the equity investments are still included when calculating the aggregate value of the banking organization’s non-financial equity investments.

Changes to the risk-based capital regime are frequently proposed or implemented. The minimum risk-based capital requirements adopted by the federal banking agencies follow the Capital Accord of the Basel Committee on Banking Supervision. The Basel Committee, which is comprised of bank supervisors and central banks from the major industrialized countries, issued its Capital Accord in 1988 to achieve convergence in the capital regulations applicable to internationally active banking organizations. The Basel Committee issued a proposed replacement for the Capital Accord in January 2001, and, subsequently, it issued a number of working papers supplementing various aspects of that replacement (the “New Accord”). Based on these documents, the New Accord would adopt a three-pillar framework for addressing capital adequacy. These pillars would include minimum capital requirements, more emphasis on supervisory assessment of capital adequacy and greater reliance on market discipline. Under the New Accord, minimum capital requirements would be more differentiated based upon perceived distinctions in creditworthiness. Such requirements would be based either on ratings assigned by rating agencies or, in the case of a banking organization that met certain supervisory standards, on the organization’s internal credit ratings. The minimum capital requirements in the New Accord would also include a separate capital requirement for operational risk. In August 2003, U.S. federal banking regulators issued an Advance Notice of Proposed Rulemaking addressing the implementation of the New Accord in the U.S., which contemplates requiring all U.S. banking institutions with over $250 billion in assets (including Wachovia) to implement the advanced approaches for measuring risk under the New Accord on a mandatory basis. Prior to implementing the new capital regime, these large banking institutions, including Wachovia, will be required to demonstrate to their primary regulator (the Federal Reserve in the case of Wachovia) that their internal criteria meet relevant supervisory standards. At present, the target date for implementing the New Accord in the U.S. is January 1, 2007.

Bank Activities

General

WBNA and our other national bank subsidiaries are subject to the provisions of the National Bank Act, are under the supervision of, and subject to periodic examination by, the Comptroller, and are subject to the rules and regulations of the Comptroller, the Federal Reserve Board, and the FDIC. WBNA’s operations in other countries are also subject to various restrictions imposed by the laws of those countries. In addition, all of our banks have FDIC insurance and are subject to the Federal Deposit Insurance Act (the “FDIA”).

Under the Modernization Act, subject to certain conditions imposed by their respective banking regulators, national and state-chartered banks are permitted to form “financial subsidiaries” that may conduct financial or incidental activities, thereby permitting bank subsidiaries to engage in certain activities that previously were impermissible. The Modernization Act imposes several safeguards and restrictions on financial subsidiaries, including that the parent bank’s equity investment in the financial subsidiary be deducted from the bank’s assets and tangible equity for purposes of calculating the bank’s capital adequacy. In addition, the Modernization Act imposes new restrictions on transactions between a bank and its financial subsidiaries similar to restrictions applicable to transactions between banks and nonbank affiliates.

Prompt Corrective Action

The FDIA, among other things, requires the federal banking agencies to take “prompt corrective action” in respect of depository institutions that do not meet minimum capital requirements. The FDIA establishes five tiers for FDIC-insured banks: (i) “well capitalized” if it has a total capital ratio of 10% or greater, a tier 1 capital ratio of 6% or greater and a leverage ratio of 5% or greater and is not subject to any order or written directive by any such regulatory authority to meet and maintain a specific capital level for any capital measure; (ii) “adequately capitalized” if it has a total capital ratio of 8% or greater, a tier 1 capital ratio of 4% or greater and a leverage ratio of 4% or greater (3% in certain circumstances) and is not “well capitalized”; (iii) “undercapitalized” if it has a total capital ratio of less than 8%, a tier 1 capital ratio of less than 4% or a leverage ratio of less than 4% (3% in certain circumstances); (iv) “significantly undercapitalized” if it has a total capital ratio of less than 6%, a tier 1 capital ratio of less than 3% or a leverage ratio of less than 3%; and (v) “critically undercapitalized” if its tangible equity is equal

to or less than 2% of average quarterly tangible assets. An institution may be downgraded to, or deemed to be in, a capital category that is lower than is indicated by its capital ratios if it is determined to be in an unsafe or unsound condition or if it receives an unsatisfactory examination rating with respect to certain matters. As of December 31, 2003, all of our deposit-taking subsidiary banks had capital levels that qualify them as being “well capitalized” under those regulations.

Undercapitalized depository institutions are subject to growth limitations, the requirement to submit a capital restoration plan, and a variety of other restrictions the severity of which are keyed to the bank’s capital tier and other factors. Ultimately, critically undercapitalized institutions are subject to the appointment of a receiver or conservator.

A bank that is not “well capitalized” is subject to certain limitations relating to so-called “brokered” deposits.

Cross Default

Each of our banks can be held liable for any loss incurred, or reasonably expected to be incurred, by the FDIC due to the default of any other of our banks, and for any assistance provided by the FDIC to any of our banks that is in danger of default and that is controlled by the same bank holding company. “Default” means generally the appointment of a conservator or receiver. “In danger of default” means generally the existence of certain conditions indicating that a default is likely to occur in the absence of regulatory assistance. An FDIC cross-guarantee claim against a bank is generally superior in right of payment to claims of the holding company and its affiliates against such depository institution.

If the FDIC is appointed the conservator or receiver of an insured depository institution, upon its insolvency or in certain other events, the FDIC has the power: (i) to transfer any of the depository institution’s assets and liabilities to a new obligor without the approval of the depository institution’s creditors; (ii) to enforce the terms of the depository institution’s contracts pursuant to their terms; or (iii) to repudiate or disaffirm any contract or lease to which the depository institution is a party, the performance of which is determined by the FDIC to be burdensome and the disaffirmance or repudiation of which is determined by the FDIC to promote the orderly administration of the depository institution.

Deposit Insurance

The FDIC assessment rate on our subsidiary bank deposits currently is zero, but may change in the future. The FDIC may increase or decrease the assessment rate schedule on a semiannual basis. An increase in the BIF assessment rate could have a material adverse effect on our earnings, depending on the amount of the increase. The FDIC is authorized to terminate a depository bank’s deposit insurance upon a finding by the FDIC that the bank’s financial condition is unsafe or unsound or that the institution has engaged in unsafe or unsound practices or has violated any applicable rule, regulation, order or condition enacted or imposed by the bank’s regulatory agency. The termination of deposit insurance for one or more of our subsidiary depository banks could have a material adverse effect on our earnings, depending on the collective size of the particular institutions involved. In addition, if the ratio of insured deposits to money in the BIF drops below specified levels, the FDIC would be required to impose premiums on all banks insured by the BIF.

Borrowings

There are also various legal restrictions on the extent to which Wachovia and our non-bank subsidiaries can transfer funds to, or borrow or otherwise obtain credit from, our banking subsidiaries. In general, these restrictions require that any such extensions of credit must be secured by designated amounts of specified collateral and are limited, as to any one of us or those non-bank subsidiaries, to 10% of the lending bank’s capital stock and surplus, and as to us and all non-bank subsidiaries in the aggregate, to 20% of such lending bank’s capital stock and surplus. A bank’s transactions with its non-bank affiliates are also generally required to be on arm’s length terms.

Depositor Preference

Under federal law, deposits and certain claims for administrative expenses and employee compensation against an insured depository institution would be afforded a priority over other general unsecured claims against such an institution, including federal funds and letters of credit, in the “liquidation or other resolution” of such an institution by any receiver. As a result, whether or not the FDIC ever sought to repudiate any obligations held by public noteholders of any subsidiary of Wachovia that is an insured depository institution, the public noteholders would be treated differently from, and could receive, if anything, substantially less than, the depositors of the depository institution.

Other Regulation

Non-Bank Activities

Our bank and certain nonbank subsidiaries are subject to direct supervision and regulation by various other federal and state authorities (many of which will be considered “functional regulators” under the Modernization Act). We also conduct securities underwriting, dealing and brokerage activities through Wachovia Securities, LLC, Wachovia Capital Markets, LLC and other broker-dealer subsidiaries, all of which are subject to the regulations of the SEC, the National Association of Securities Dealers, Inc. (the “NASD”) and the NYSE. The operations of our mutual funds also are subject to regulation by the SEC. Our insurance subsidiaries are subject to regulation by applicable state insurance regulatory agencies. The types of activities in which the foreign branches of WBNA and our international subsidiaries may engage are subject to various restrictions imposed by the Federal Reserve Board. Those foreign branches and international subsidiaries also are subject to the laws and regulatory authorities of the countries in which they operate.

Our subsidiaries acting as consumer lenders also are subject to regulation under various federal laws, including the Truth-in-Lending, the Equal Credit Opportunity, the Fair Credit Reporting, the Fair Debt Collection Practice and the Electronic Funds Transfer Acts, as well as various state laws. These statutes impose requirements on the making, enforcement and collection of consumer loans and on the types of disclosures that need to be made in connection with such loans.

International Money Laundering Abatement and Financial Anti-Terrorism Act of 2001

The President signed the USA Patriot Act of 2001 into law in October 2001. This act contains the International Money Laundering Abatement and Financial Anti-Terrorism Act of 2001 (the “IMLAFA”). The IMLAFA substantially broadens existing anti-money laundering legislation and the extraterritorial jurisdiction of the United States, imposes new compliance and due diligence obligations, creates new crimes and penalties, compels the production of documents located both inside and outside the United States, including those of foreign institutions that have a correspondent relationship in the United States, and clarifies the safe harbor from civil liability to customers. The U.S. Treasury Department has issued a number of regulations implementing the USA Patriot Act that apply certain of its requirements to financial institutions such as our banking and broker-dealer subsidiaries. The regulations impose new obligations on financial institutions to maintain appropriate policies, procedures and controls to detect, prevent and report money laundering and terrorist financing. The Treasury Department is expected to issue a number of additional regulations which will further clarify the USA Patriot Act’s requirements.

Pursuant to the IMLAFA, Wachovia established anti-money laundering compliance and due diligence programs which include, among other things, the designation of a compliance officer, employee training programs, and an independent audit function to review and test the program.

Privacy

Under the Modernization Act, federal banking regulators adopted rules limiting the ability of banks and other financial institutions to disclose nonpublic information about consumers to nonaffiliated third parties. The rules require disclosure of privacy policies to consumers and, in some circumstances, allow consumers to prevent disclosure of certain personal information to nonaffiliated third parties. The privacy provisions of the Modernization Act affect how consumer information is transmitted through diversified financial services companies and conveyed to outside vendors.

Sarbanes-Oxley

The President signed into law the Sarbanes-Oxley Act of 2002, that addresses, among other issues, corporate governance, auditing and accounting, executive compensation, and enhanced and timely disclosure of corporate information. The NYSE has also adopted corporate governance rules that have been approved by the SEC. The changes are intended to allow stockholders to more easily and efficiently monitor the performance of companies and directors.

Future Legislation

Changes to the laws and regulations in the states and countries where we and our subsidiaries do business can affect the operating environment of bank holding companies and their subsidiaries in substantial and unpredictable ways. From time to time, various legislative and regulatory proposals are introduced. These proposals, if codified, may change banking statutes and regulations and our operating environment in substantial and unpredictable ways. If codified, these proposals could increase or decrease the cost of doing business, limit or expand permissible activities or affect the competitive balance among banks, savings associations, credit unions and other financial institutions. We cannot accurately predict whether those changes in laws and regulations will occur, and, if those changes occur, the ultimate effect they would have upon our financial condition or results of operations.

Additional Information

Additional information related to certain accounting and regulatory matters is set forth on pages 25 through 28, and on pages 50 and 51 in the Annual Report and incorporated herein by reference.

ITEM 2. PROPERTIES.

As of December 31, 2003, we and our subsidiaries owned 1,546 locations and leased 3,523 locations in 49 states, Washington, D.C., Puerto Rico and 32 foreign countries from which our business is conducted, including a multi-building office complex in Charlotte, North Carolina, which serves as Wachovia’s administrative headquarters, as well as the headquarters of WBNA, Wachovia Mortgage Corporation, Wachovia Capital Markets, LLC, and most of our non-banking subsidiaries. That multi-office complex is used as administrative headquarters for our General Bank, Corporate and Investment Bank, Capital Management and the Parent segments as identified in our Annual Report. Wachovia’s Wealth Management segment, as identified in our Annual Report, has its principal administrative offices in a multi-office complex in Winston-Salem, North Carolina.

Some of our non-banking subsidiaries have principal administrative offices in other cities in the United States. The principal administrative offices of our retail securities brokerage operations are in Richmond, Virginia. The principal administrative offices of our mutual fund operations are in Boston, Massachusetts. The principal administrative offices of our second mortgage servicing operations are in Sacramento, California. Certain of our institutional securities operations are conducted in offices in New York, New York and Baltimore, Maryland. The vast majority of our leased and owned properties are used for our branch banking operations and retail securities brokerage offices. Additional information relating to our lease commitments is set forth in Note 19 on page 118 in the Annual Report and incorporated herein by reference.

ITEM 3. LEGAL PROCEEDINGS.

Wachovia and certain of our subsidiaries are involved in a number of judicial, regulatory and arbitration proceedings concerning matters arising from the conduct of our business activities. These proceedings include actions brought against Wachovia and/or its subsidiaries with respect to transactions in which Wachovia and/or our subsidiaries acted as banker, lender, underwriter, financial advisor or broker or in activities related thereto. In addition, Wachovia and its subsidiaries may be requested to provide information or otherwise cooperate with governmental authorities in the conduct of investigations of other persons or industry groups. It is Wachovia’s policy to cooperate in all regulatory inquiries and investigations.

Litigation

Although there can be no assurance as to the ultimate outcome, Wachovia and/or our subsidiaries have generally denied, or believe we have a meritorious defense and will deny, liability in all significant litigation pending against us, including the matters described below, and we intend to defend vigorously each such case. Reserves are established for legal claims when payments associated with the claims become probable and the costs can be reasonably estimated. The actual costs of resolving legal claims may be substantially higher or lower than the amounts reserved for those claims.

Securities Litigation. A number of purported class actions were filed in June through August 1999 against us in the United States District Courts for the Western District of North Carolina and for the Eastern District of Pennsylvania. These actions named Legacy First Union and certain executive officers as defendants and were purported to be on behalf of persons who purchased shares of our common stock from August 14, 1998, through May 24, 1999. These actions were consolidated into one case in the U.S. District Court for the Western District of North Carolina in October 1999. These complaints alleged various violations of federal securities law, including violations of Section 10(b) of the Exchange Act, and that the defendants made materially misleading statements and/or material omissions which artificially inflated prices for our common stock. The complaints alleged that management failed to disclose integration problems in the CoreStates Financial Corp merger and misstated the value of our interest in certain mortgage-backed securities of The Money Store, Inc. (“TMSI”) acquired by Legacy First Union on June 30, 1998. Plaintiffs sought a judgment awarding damages and other relief. In January 2001, the U.S. District Court for the Western District of North Carolina granted Wachovia’s motion to dismiss the litigation for failure to state a claim upon which relief could be granted. Although the plaintiffs did not appeal this ruling, they sought, and received permission to file an amended complaint. In August 2001, plaintiffs filed an amended complaint that abandoned their previous allegations concerning the CoreStates Financial Corp merger and primarily raised new allegations of irregularities at TMSI prior to its acquisition by Legacy First Union. In October 2001, Wachovia filed a motion to dismiss the securities litigation consolidated in the U.S. District Court for the Western District of North Carolina. In September 2002, the court granted the motion in part, limiting any new complaint to claims regarding alleged misstatements or omissions pled in earlier complaints. The plaintiffs filed a third consolidated and amended complaint in October 2002, purportedly on behalf of a class of purchasers of our common stock during the period from March 4, 1998 to May 24, 1999. The complaint alleges, among other things, that Legacy First Union disregarded problems at TMSI and did not write down goodwill from the TMSI acquisition soon enough. In December 2003, the court denied Wachovia’s motion to strike portions of this complaint. In February 2004, Wachovia filed a motion to dismiss the amended complaint. We believe the allegations contained in this latest complaint are without merit and will vigorously defend them.

Pioneer Litigation. On July 26, 2000, a jury in the Philadelphia County (PA) Court of Common Pleas returned a verdict in the case captioned Pioneer Commercial Funding Corporation v. American Financial Mortgage Corporation, CoreStates Bank, N.A., et al. The verdict against CoreStates Bank, N.A. (“CoreStates”), a predecessor of Wachovia Bank, National Association, included consequential damages of $13.5 million and punitive damages of $337.5 million. The trial court had earlier directed a verdict against CoreStates for compensatory damages of $1.7 million. The plaintiff, who was not a CoreStates customer, alleged that the sum of $1.7 million, which it claims it owned, was improperly setoff by CoreStates. Upon Wachovia’s motion, the trial court reduced the amount of the punitive damages award to $40.5 million in December 2000. Wachovia believes that numerous reversible errors occurred at the trial, and that the facts do not support the damages awards. In March 2002, the Pennsylvania Superior Court vacated the award of punitive damages, affirmed the awards of consequential and compensatory damages and remanded the case for a new trial on punitive damages. In December 2003, the Pennsylvania Supreme Court approved Wachovia’s petition to allow an appeal to that court. Wachovia filed its brief with the Pennsylvania Supreme Court in January 2004 and expects the court to hear oral arguments in April 2004. Wachovia will continue to vigorously pursue our rights of appeal.

Steele Software Litigation. On March 25, 2002, a judgment was entered on a jury verdict in the Circuit Court for Baltimore City, Maryland in the case captioned Steele Software Systems Corporation v. First Union National Bank. The verdict includes compensatory damages of $39.5 million and punitive damages of $200 million. The plaintiff, a vendor which provided real estate settlement services, alleged that First Union National Bank fraudulently induced the plaintiff to enter into a services agreement with First Union National Bank, and subsequently breached that agreement. Wachovia filed an appeal in the Maryland appellate courts in June 2002, filed its brief on appeal in December 2002 and argued its appeal before the appellate court in April 2003. On December 17, 2003, the appellate court reversed the jury verdict finding fraud, and reversed the $200 million punitive damages award. The appellate court affirmed the jury verdict finding breach of contract and damages of $37.5 million. In February 2004, Wachovia filed a petition for certiorari with the Maryland Court of Appeals seeking further review of the jury verdict finding breach of contract. In addition, in February 2004, the plaintiff filed a petition for certiorari with the Maryland Court of Appeals seeking further review of the appellate court’s reversals of the jury verdict finding fraud and the punitive damages award. Wachovia will continue to vigorously pursue our rights of appeal.

Securities and Exchange Commission. The SEC has subpoenaed certain documents and requested testimony from certain employees of Wachovia and others related to common stock purchases of Legacy Wachovia stock and Legacy First Union stock, including any purchases made by either company during the period from 1996-2001, with a particular focus on stock purchases following the April 2001 merger announcement. Wachovia is cooperating with the SEC in producing documents and employees to testify. The SEC has not accused either legacy company of violating any law or regulation, and Wachovia believes all such stock purchases were conducted in compliance with applicable law.

In the Matter of KPMG LLP Certain Auditor Independence Issues. The SEC has requested Wachovia to produce certain information concerning any agreements or understandings by which Wachovia referred clients to KPMG LLP during the period January 1, 1997 to November 2003 in connection with an inquiry regarding the independence of KPMG LLP as Wachovia’s outside auditors during such period. Wachovia is continuing to cooperate with the SEC in its inquiry, which is being conducted pursuant to a formal order of investigation entered by the SEC on October 21, 2003. Wachovia believes the SEC’s inquiry relates to certain tax services offered to Wachovia customers by KPMG LLP during the period from 1997 to early 2002, and whether these activities might have caused KPMG LLP not to be “independent” from Wachovia, as defined by applicable accounting and SEC regulations requiring auditors of an SEC-reporting company to be independent of the company. Wachovia and/or KPMG LLP received fees in connection with a small number of personal financial consulting transactions related to these services. KPMG LLP has confirmed to Wachovia that during all periods covered by the SEC’s inquiry, including the present, KPMG LLP was and is “independent” from Wachovia under applicable accounting and SEC regulations.

Breakpoint Discount Settlement. On February 12, 2004, the SEC and the NASD announced enforcement actions and settlements against a total of 15 brokerage firms, including Wachovia Securities, LLC, for not delivering correct mutual fund breakpoint discounts during 2001 and 2002. The SEC and the NASD previously had identified an industry wide problem in connection with the calculation and delivery of breakpoint discounts. Breakpoint discounts are discounts on the front-end sales charge offered to investors who invest a significant amount of money in a front-end load mutual fund. In 2003, the NASD directed securities firms to conduct an assessment of their mutual fund transactions to determine if appropriate breakpoint discounts were delivered to customers. In November 2003, the NASD and the SEC notified Wachovia Securities, LLC that they may initiate enforcement actions in connection with the failure to deliver all appropriate breakpoints. Without admitting or denying liability, on February 12, 2004, Wachovia Securities, LLC agreed to settle the matter with the SEC and the NASD by: (1) paying a fine of $4,844,465; (2) notifying customers from January 1, 1999 through November 3, 2003 that they may be due refunds from missed breakpoints; (3) agreeing to conduct a review of all mutual fund trades in excess of $2,500 between January 1, 2001 and November 3, 2003 to determine which transactions may have resulted in missed breakpoints; (4) making prompt refunds to customers where appropriate; (5) disclosing applicable breakpoint information to customers at the point of sale; and (6) developing procedures reasonably designed to ascertain information necessary to determine the availability and appropriate level of breakpoints. Wachovia Securities, LLC has already provided to its affected mutual fund customers notification of the possibility that they may be entitled to refunds; it has begun the trade by trade review process for the period January 1, 2001

through November 3, 2003; and it has retained the national auditing and consulting firm Deloitte & Touche to assist it in the remediation process, and in creating procedures reasonably designed to ascertain information necessary to determine the availability and appropriate level of breakpoints. Wachovia expects all these steps will be completed in the second quarter of 2004.

Other Regulatory Matters. Governmental and self-regulatory authorities have instituted numerous ongoing investigations of various practices in the securities and mutual fund industries, including those relating to market-timing and late trading. The investigations cover advisory companies to mutual funds, broker-dealers, hedge funds and others. Wachovia has received subpoenas and other requests for documents and testimony relating to the investigations, is attempting to comply with those requests, and is cooperating with the investigations. Wachovia is continuing its own internal review of policies, practices, procedures and personnel, and is taking remedial action where appropriate. Wachovia also is cooperating with governmental and self-regulatory authorities in matters relating to the brokerage operations of Prudential Financial, Inc. that were included in Wachovia’s retail brokerage combination with Prudential. Under the terms of that transaction, Wachovia is indemnified by Prudential for liabilities relating to those matters.

Based on information currently available, advice of counsel, available insurance coverage and established reserves, Wachovia believes that the eventual outcome of the actions against Wachovia and/or its subsidiaries, including the matters described above, will not, individually or in the aggregate, have a material adverse effect on Wachovia’s consolidated financial position or results of operations. However, in the event of unexpected future developments, it is possible that the ultimate resolution of those matters, if unfavorable, may be material to Wachovia’s results of operations for any particular period.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

Not applicable.

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

Our common stock is listed on the NYSE. Table 6 on page 57 in the Annual Report sets forth information relating to the quarterly prices of, and quarterly dividends paid on, the common stock for the two-year period ended December 31, 2003, and incorporated herein by reference. Prices shown represent the high, low and quarter-end sale prices of the common stock as reported on the NYSE Composite Transactions tape for the periods indicated. As of December 31, 2003, there were 170,205 holders of record of the common stock.

In connection with the merger with Legacy Wachovia, holders of shares of Legacy Wachovia common stock elected to receive, in addition to 2 shares of Wachovia common stock, either a one-time $0.48 cash payment or 2 shares of a new class of Wachovia preferred stock. At December 31, 2003, 96,536,312 Wachovia Dividend Equalization Preferred shares (“DEPs”) were issued in connection with the merger. Because Wachovia paid common stock dividends equal to $1.25 per share in the four quarters of 2003, holders of DEPs are no longer entitled to receive any dividend on the DEPs and Wachovia will cease to pay any such dividends. The DEPs are not listed on a national securities exchange and have no voting rights.

Subject to the prior rights of holders of any outstanding shares of our preferred stock or Class A preferred stock, holders of common stock are entitled to receive such dividends as may be legally declared by our board of directors and, in the event of dissolution and liquidation, to receive our net assets remaining after payment of all liabilities, in proportion to their respective holdings. Additional information concerning certain limitations on our payment of dividends is set forth above under “Business — Supervision and Regulation; Payment of Dividends” and in Note 20 on page 122 in the Annual Report and incorporated herein by reference.

Under our Shareholder Protection Rights Agreement, each outstanding common stock share has a right attached to it. This right remains attached unless a separation time occurs. At separation time, common shareholders will receive separate certificates for these rights. Each right entitles its owner to purchase at separation time one one-hundredth of a share of a participating series of Class A preferred stock for $105. This series of Class A preferred stock would have economic and voting terms similar to those of one common stock share. Separation time would generally occur at the earlier of the following two dates:

• the tenth business day after any person commences a tender or exchange offer that entitles that person to 10% or more of our outstanding common stock, or

• the tenth business day after we publicly announce that a person has acquired beneficial ownership of 10% or more of our outstanding common stock.

These rights will not trade separately from the shares of common stock until separation time occurs, and may be exercised on the business day immediately after the separation time. The rights will expire at the earliest of:

• the date on which our board of directors elects to exchange the rights for our common stock or preferred stock as described below;

• the close of business on December 28, 2010, unless our board of directors extends that time; or

• the date on which the rights are terminated as described below.

Once we publicly announce that a person has acquired 10% of our outstanding common stock, we can allow for rights holders to buy our common stock for half of its market value. For example, we would sell to each rights holder common stock shares worth $210 for $105 in cash. At the same time, any rights held by the 10% owner or any of its affiliates, associates or transferees will be void. In addition, if we are acquired in a merger or other business combination after a person has become a 10% owner, the rights held by shareholders would become exercisable to purchase the acquiring company’s common stock for half of its market value.

In the alternative, our board of directors may elect to exchange all of the then outstanding rights for shares of common stock at an exchange ratio of two common stock shares for one right. Upon election of this exchange, a right will no longer be exercisable and will only represent a right to receive two common stock shares.

If we are required to issue common stock shares upon the exercise of rights, or in exchange for rights, our board of directors may substitute shares of participating Class A preferred stock. The substitution will be at a rate of two one one-hundredths of a share of participating Class A preferred stock for each right exchanged.

The rights may be terminated without any payment to holders before their exercise date. The rights have no voting rights and are not entitled to dividends.

The rights will not prevent a takeover of Wachovia. The rights, however, may cause substantial dilution to a person or group that acquires 10% or more of common stock unless our board first terminates the rights. Nevertheless, the rights should not interfere with a transaction that is in Wachovia’s and its shareholders’ best interests because the rights can be terminated by the board before that transaction is completed.

The complete terms of the rights are contained in the Shareholder Protection Rights Agreement. The foregoing description of the rights and the rights agreement is qualified in its entirety by reference to the agreement. A copy of the rights agreement can be obtained upon written request to Wachovia Bank, National Association, 1525 West W.T. Harris Blvd., Charlotte, North Carolina 28288-1153.

Additional information relating to our common stock and the DEPs is set forth in Note 11 on pages 99 through 101 in the Annual Report and incorporated herein by reference.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers.

Pursuant to authorizations by our board of directors in 1999 and 2000, Wachovia has repurchased shares of our common stock in private transactions and in open-market purchases. In addition, in January 2004, our board of directors authorized the repurchase of an additional 60 million shares of our common stock, which together with remaining authority from the previous board authorizations, permits Wachovia to repurchase up to 123 million shares of our common stock as of January 15, 2004, the date that authorization was announced. Future stock repurchases may be private or open-market purchases, including block transactions, accelerated or delayed block transactions, forward transactions, collar transactions, and similar transactions. The amount and timing of stock repurchases would be based on various factors, such as management’s assessment of Wachovia’s capital structure and liquidity, the market price of Wachovia common stock compared to management’s assessment of the stock’s underlying value, and applicable regulatory, legal and accounting factors. In 2003, Wachovia repurchased approximately 25.7 million shares of Wachovia common stock in the open market and 2 million shares of Wachovia common stock in private transactions at average prices of $42.94 per share and $45.49 per share, respectively, including 12 million shares in the open market and 2 million shares in private transactions at average prices of $45.34 per share and $45.49 per share, respectively, in the fourth quarter of 2003. In addition, Wachovia settled forward purchase contracts and equity collar contracts in 2003 representing 30.9 million shares at an average cost of $32.81 per share, including 4.9 million shares subject to equity collar contracts at an average cost of $34.95 per share in the fourth quarter of 2003. The following table sets forth information about our stock repurchases for our fiscal fourth quarter in 2003.

Issuer Repurchases of Equity Securities


					Total Number of		Maximum Number (or
					Shares Purchased as		Approximate Dollar Value) of
					Part of Publicly		Shares that May Yet Be
	Total Number of		Average Price Paid		Announced Plans or		Purchased Under the
Period (1)	Shares Purchased (2)		per Share		Programs (3)		Plans or Programs (3)

Month #1 (October 1, 2003 to October 31, 2003)		5,854,000	$	42.46		5,854,000		76,377,564

Month #2 (November 1, 2003 to November 30, 2003)		8,627,000		41.79		8,627,000		67,750,564

Month #3 (December 1, 2003 to December 31, 2003)		4,351,000		44.74		4,351,000		63,399,564

Total		18,832,000		42.68		18,832,000		63,399,564

(1) Based on trade date, not settlement date.

(2) All of these shares were repurchased pursuant to publicly announced share repurchase programs. The nature of these repurchases were as follows: October 2003 — open market repurchases: 2.6 million shares; settlement of equity collar contracts with a third party involving the simultaneous sale of put options and call options entered into in the third quarter of 2002: 1.3 million shares; private transaction: 2.0 million shares; November 2003 — open market repurchases: 5.4 million shares; and settlement of equity collar contracts with a third party involving the simultaneous sale of put options and call options entered into in the third quarter of 2002: 3.2 million shares; and December 2003 — open market repurchases: 4.0 million shares; and settlement of equity collar contracts with a third party involving the simultaneous sale of put options and call options entered into in the third quarter of 2002: 0.4 million shares.

(3) On May 25, 1999, Wachovia announced a stock repurchase program pursuant to which Wachovia was authorized to repurchase up to 50 million shares of its common stock. On June 26, 2000, Wachovia announced a stock repurchase program pursuant to which Wachovia was authorized to repurchase up to 50 million shares of its common stock. Neither program has an expiration date and each respective program will expire upon completion of repurchases totaling the amount authorized for repurchase. In addition, the amounts presented in the table do not include amounts that may be repurchased pursuant to the board of directors’ authorization, announced January 15, 2004, for the repurchase of up to 60 million shares of Wachovia common stock, as such authorization occurred in 2004 after the repurchases set forth in the table.

ITEM 6. SELECTED FINANCIAL DATA.

In response to this Item, the information set forth in Table 3 on page 55 in the Annual Report is incorporated herein by reference.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

In response to this Item, the information set forth on pages 23 through 75 in the Annual Report is incorporated herein by reference.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

In response to this Item, the information set forth on pages 41 through 50, on pages 58 through 61, on pages 69 through 72, and in Note 18 on page 117 in the Annual Report is incorporated herein by reference.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

In response to this Item, the information set forth in Table 6 on page 57 and on pages 76 through 124 in the Annual Report is incorporated herein by reference.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

Not applicable.

ITEM 9A. CONTROLS AND PROCEDURES.

As of December 31, 2003, the end of the period covered by this Annual Report on Form 10-K, Wachovia’s management, including Wachovia’s Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934). Based upon that evaluation, Wachovia’s Chief Executive Officer and Chief Financial Officer each concluded that as of December 31, 2003, the end of the period covered by this Annual Report on Form 10-K, Wachovia maintained effective disclosure controls and procedures. In addition, no change in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934) occurred during the fourth quarter of our fiscal year ended December 31, 2003, that has materially affected, or is reasonably likely to materially affect, Wachovia’s internal control over financial reporting.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

Our executive officers are generally elected to their offices for one-year terms at the board of directors meeting in April of each year. The terms of any executive officers elected after that date expire at the same time as the terms of the executive officers elected on that date. The names of each of our current executive officers, their ages, their positions with us, and, if different, their business experience during the past five years, are as follows:

G. Kennedy Thompson (53). Chairman, since February 2003, Chief Executive Officer, since April 2000, and President, since December 1999. Previously, Chairman, from March 2001 to September 2001, and Vice Chairman, from October 1998 to December 1999. Also, a director of Wachovia.

David M. Carroll (46). Senior Executive Vice President, since September 2001. Previously, Executive Vice President and Chief E-Commerce Officer, from May 1999 to September 2001, and President and CEO, First Union-Florida, from January 1998 to May 1999.

Stephen E. Cummings (48). Senior Executive Vice President and Co-Head, Corporate and Investment Bank, since February 2002. Previously, Senior Vice President of Wachovia Securities, Inc. (formerly named First Union Securities, Inc.) and Co-Head, Corporate and Investment Bank, from January 2000 to February 2002, and Co-Head, Investment Banking from January 1999 to December 1999.

Jean E. Davis (48). Senior Executive Vice President, since September 2001. Previously, Executive Vice President, Wachovia Operational Services, from February 1999 to September 2001, and Human Resources Director, from February 1998 to February 1999.

Paul G. George (52). Senior Executive Vice President, since September 2001. Previously, Executive Vice President, Legacy Wachovia, prior to September 2001.

W. Barnes Hauptfuhrer (49). Senior Executive Vice President and Co-Head, Corporate and Investment Bank, since February 2002. Previously, Senior Vice President of Wachovia Securities, Inc. (formerly named First Union Securities, Inc.) and Co-Head, Corporate and Investment Bank, from January 2000 to February 2002, and Co-Head, Investment Banking from January 1999 to December 1999.

Benjamin P. Jenkins, III (59). Senior Executive Vice President, since September 2001. Previously, Vice Chairman, from August 1999 to September 2001, President, First Union-Florida, from June 1999 to August 1999, and President, First Union-VA/MD/DC, prior to June 1999.

Robert P. Kelly (50). Senior Executive Vice President and Chief Financial Officer, since September 2001. Previously, Executive Vice President and Chief Financial Officer, from November 2000 to September 2001, Vice Chairman-Group Office of Toronto Dominion Bank from February 2000 to July 2000, and Vice Chairman-Retail Banking from 1997 to February 2000.

Stanhope A. Kelly (46). Senior Executive Vice President, since September 2001. Previously, Senior Executive Vice President, from January 2000 to September 2001, and Senior Vice President, prior to January 2000, Legacy Wachovia.

Shannon W. McFayden (43). Senior Executive Vice President, since February 2004. Previously, Executive Vice President,

Director Community Affairs, from December 2003 to February 2004, Senior Vice President, Director of Community Affairs, from September 2001 to December 2003, Senior Vice President, Director of Human Resources Performance Consulting, from January 2001 to September 2001, and Senior Vice President, Director of Human Resources Relationship Teams, prior to January 2001.

Donald A. McMullen, Jr. (55). Senior Executive Vice President, since September 2001. Previously, Vice Chairman, from August 1999 to September 2001, and Executive Vice President prior to August 1999.

Mark C. Treanor (57). Senior Executive Vice President, Secretary and General Counsel, since September 2001. Previously, Executive Vice President, Secretary and General Counsel, from August 1999 to September 2001, and Senior Vice President and Senior Deputy General Counsel, August 1998 to August 1999.

Donald K. Truslow (45). Senior Executive Vice President, since September 2001. Previously, Senior Executive Vice President and Chief Risk Officer, from August 2000 to September 2001, and Comptroller and Treasurer, prior to August 2000, Legacy Wachovia.

Malcolm E. Everett, III served as Senior Executive Vice President and an executive officer prior to his retirement in February 2004. In addition to the foregoing, the information set forth in the Proxy Statement under the headings “General Information and Nominees”, “Board Matters – Committee Structure; Audit & Compliance Committee”, “Corporate Governance Policies and Practices – Code of Conduct & Ethics”, and under the subheading “Section 16(a) Beneficial Ownership Reporting Compliance” under the heading “Other Matters Relating to Executive Officers and Directors” is incorporated herein by reference.

ITEM 11. EXECUTIVE COMPENSATION.

In response to this Item, the information set forth in the Proxy Statement under the headings “Corporate Governance Policies and Practices – Compensation of Directors”, “Executive Compensation”, “Employment Contracts”, and “Compensation Committee Interlocks and Insider Participation”, is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

In response to this Item, the information set forth in the Proxy Statement relating to the ownership of common stock and DEPs by our directors, executive officers and principal stockholders under the headings “Security Ownership of Management” and “Security Ownership of Certain Beneficial Owners”, is incorporated herein by reference.

In addition, set forth below is certain information relating to securities authorized for issuance under our equity compensation plans and a description of material features of equity compensation plans not approved by stockholders.

Additional Information Regarding Wachovia’s Equity Compensation Plans

We maintain several equity compensation plans. Our current primary plan is the Wachovia Corporation 2003 Stock Incentive Plan, which is used for stock awards to our executive officers as well as other key employees. Our shareholders approved the 2003 Plan at our 2003 annual shareholders’ meeting. The 2003 Plan is the only plan Wachovia currently uses to make stock compensation awards. Prior to adopting the 2003 Plan, Wachovia utilized some equity compensation plans that were approved by our stockholders and some equity compensation plans that were not required to be approved by our stockholders. One such plan, named the Wachovia Stock Plan and referred to herein as the “Legacy Wachovia Stock Plan”, was approved by Legacy Wachovia stockholders in 1994. See “Material Features of Stock Plans Not Approved by Stockholders” below.

The following table gives information as of December 31, 2003 with respect to shares of our common stock that may be issued under existing stock incentive plans. The table does not include information with respect to shares subject to outstanding options granted under certain stock incentive plans assumed by Wachovia in connection with mergers and acquisitions of companies that originally granted those options. Footnote (5) to the table indicates the total number of shares of common stock issuable upon the exercise of options under the assumed plans as of December 31, 2003, and the weighted average exercise price of those options. No additional options may be granted under those assumed plans.

EQUITY COMPENSATION PLAN INFORMATION

(a)

(b)

(c)

Number of

securities

remaining available

Number of

for future issuance

securities to be

under equity

issued upon

Weighted-average

compensation plans

exercise of

exercise price of

(excluding

outstanding

securities

options, warrants

reflected in column

Plan category

and rights

(a)) (1)

Equity compensation plans approved by stockholders (2)

99,000,078

39.63

108,488,913

(3)

Equity compensation plans not approved by stockholders(4)

13,620,415

35.93

Total

112,620,493

39.18

108,488,913

(1) Following adoption of the 2003 Stock Incentive Plan, Wachovia will not issue any future awards from any stock compensation plans other than the 2003 Plan. The 2003 Plan contains a provision that enables Wachovia to make new stock awards under the 2003 Plan equal to the number of forfeited, cancelled, terminated, expired or lapsed stock awards granted under any Wachovia stock plan. For purposes of completing this table, Wachovia has assumed that none of such forfeitures, cancellations, terminations, expirations or lapses will occur. The securities remaining available for future issuance set forth in column (c) under the 2003 Plan may be in the form of

• stock options,

• stock appreciation rights, or

• stock awards, including restricted stock awards, restricted stock units, performance stock awards, performance stock units or other awards based on or with a value tied to, shares of Wachovia common stock.

(2) Consists of (A) the 2003 Plan which is currently in effect, and (B) Wachovia’s 1998 Stock Incentive Plan, 1999 Employee Stock Plan, 1996 Master Stock Compensation Plan and 1992 Master Stock Compensation Plan, each of which was approved by stockholders; however, following adoption of the 2003 Plan, Wachovia cannot make new stock awards under these plans. As of December 31, 2003, a total of 78,631,884 shares of Wachovia common stock were issuable upon the exercise of outstanding options under the plans set forth in (B) of the preceding sentence and the weighted average exercise price of those outstanding options is $40.17 per share.

(3) Represents only shares available for issuance under the 2003 Plan.

(4) Consists of the 2001 Stock Incentive Plan, the Employee Retention Stock Plan and the Legacy Wachovia Stock Plan, each discussed below under “Material Features of Stock Plans Not Approved by Stockholders”.

(5) The table does not include information for stock incentive plans Wachovia assumed in connection with mergers and acquisitions of the companies that originally established those plans, except for the Legacy Wachovia Stock Plan. As of December 31, 2003, a total of 30,775,506 shares of common stock were issuable upon exercise of outstanding options under those assumed plans. The weighted average exercise price of those outstanding options is $33.94 per share. No additional options may be granted under those assumed plans.

Material Features of Stock Plans Not Approved by Stockholders

The following is a brief summary of Wachovia’s stock compensation plans that have not been approved by stockholders. Those plans are the 2001 Stock Incentive Plan, the Employee Retention Stock Plan and the Legacy Wachovia Stock Plan. Wachovia issued stock awards under these plans prior to adoption of the 2003 Plan. Wachovia will not issue any future stock awards from any of these plans. Our Management Resources & Compensation Committee of Wachovia’s board of directors administers all of these plans and has authority to make all decisions regarding these plans. These plans share the same general features, except as may be set forth in more detail below.

General. The plans provide for the grant of options and stock awards, including restricted stock awards, to non-executive officer employees. The number of shares available for previously issued but unexercised options is subject to adjustment for any future stock dividends, splits, mergers, combinations or other capitalization changes. In the event of a change in control of Wachovia, all outstanding awards under the plans will be immediately exercisable and/or fully vested, as the case may be. The Legacy Wachovia board and stockholders adopted the Wachovia Stock Plan in April 1994. The Legacy Wachovia Stock Plan was further amended and restated effective April 2002 by Wachovia following the merger between Legacy First Union and Legacy Wachovia. Legacy First Union’s board of directors adopted the 2001 Stock Incentive Plan in July 2001 and adopted the Employee Retention Stock Plan in April 2000.

Options. Each option granted under the plans is evidenced by a written award agreement that specifies the type of option granted, the option exercise price, the option duration, the vesting date(s) and the number of shares of common stock subject to the option. No option granted under the plans has an option exercise price that is less than the fair market value of the common stock on the option grant date. No option will be exercisable later than the tenth anniversary date of its grant.

Payment of the option price upon exercise may be made (i) in cash, (ii) by tendering shares of previously owned common stock having a fair market value at the time of exercise equal to the total option exercise price, (iii) cashless exercise through a broker, or (iv) by a combination of the foregoing.

2001 Stock Incentive Plan and Employee Retention Plan. Unless the compensation committee determines otherwise, in the event the employment of a participant is terminated by reason of death, disability or retirement, any outstanding options will become immediately exercisable at any time prior to the earlier of the expiration date of the options or within three years after employment ceases. If the employment of the participant terminates for any other reason, unless the compensation committee determines otherwise, the rights under any then outstanding and unexercisable options will be forfeited and the rights under any then outstanding and exercisable options will be forfeited upon the earlier of the option expiration date or three months after the day employment ends.

Legacy Wachovia Stock Plan. Unless the compensation committee determines otherwise, in the event the employment of a participant is terminated by reason of displacement, death, disability or retirement, any outstanding options will become immediately exercisable at any time prior to the earlier of the expiration date of the options or within a certain period after employment ceases, depending on the date of option grant. If the employment of the participant terminates for any other reason, unless the compensation committee determines otherwise, the rights under any then outstanding and unexercisable options will be forfeited and the rights under any then outstanding and exercisable options will be forfeited upon the earlier of the option expiration date or three months after the day employment ends.

Stock Awards. During the period of restriction, participants holding shares of restricted stock may exercise full voting rights and be entitled to receive all dividends and other distributions paid with respect to those shares while they are so held. If any such dividends or distributions are paid in shares of common stock, the shares will be subject to the same restrictions on transferability as the shares of restricted stock with respect to which they were paid. Under the Legacy Wachovia Stock Plan, if the stock awards are in the form of restricted stock units, the participant will not have voting rights with respect to those restricted units and may receive dividend equivalent rights if provided in the applicable award agreement.

2001 Stock Incentive Plan and Employee Retention Plan. Unless the compensation committee determines otherwise, in the event that a participant terminates employment because of normal retirement, death or disability, any remaining period of restriction applicable to the stock award will terminate automatically. Unless the compensation committee determines otherwise, if the employment of a participant terminates for any reason other than death, disability or normal retirement, then any stock awards subject to restrictions on the date of such termination will automatically be forfeited on the day employment terminates; provided, however, if employment terminates due to early retirement or any involuntary termination by Wachovia, the compensation committee may, in its sole discretion, waive the automatic forfeiture of any or all such stock awards and/or may add such new restrictions to such stock awards as it deems appropriate.

Legacy Wachovia Stock Plan. Unless the compensation committee determines otherwise, in the event that a participant terminates employment because of displacement, retirement, death or disability, any remaining period of restriction applicable to the stock award terminates automatically. Unless the compensation committee determines otherwise, if the employment of a participant terminates for any reason other than death, disability or normal retirement, then any stock awards subject to restrictions on the date of such termination will automatically be forfeited on the day employment terminates; provided, however, if employment terminates due to early retirement or any involuntary termination by Wachovia, the compensation committee may, in its sole discretion, waive the automatic forfeiture of any or all such stock awards and/or may add such new restrictions to such stock awards as it deems appropriate. Except as may otherwise be provided in the Legacy Wachovia Stock Plan or as the compensation committee otherwise determines, in the event that a participant terminates employment with Wachovia for any reason other than as set forth above, or for any reason provided for in the terms of the grant, then any shares of restricted stock still subject to restrictions at the date of such termination shall automatically be forfeited.

SARs. The Employee Retention Stock Plan and the Legacy Wachovia Stock Plan provided for awards of stock appreciation rights, or “SARs”, to participants. An SAR represents a right to receive a payment in cash, common stock, or a combination of both, equal to the excess of the fair market value of a specified number of shares of common stock on the date the SAR is exercised over an amount equal to the fair market value on the date the SAR was granted (or the option exercise price for SARs granted in tandem with an option). Each SAR grant is evidenced by an award agreement specifying the SAR exercise price, duration, the number of shares of common stock subject to the SAR, and whether the SAR is granted in tandem with an option or is freestanding. SARs granted in tandem with an option may be exercised for all or part of the shares subject to the related option but only to the extent that the related option is then exercisable.

If the employment of a participant terminates by reason of displacement, death, disability or normal retirement, any then outstanding SARs granted to the participant will become immediately exercisable. Unless the compensation committee determines otherwise, any such outstanding SARs will be forfeited on the expiration date of the SARs or within a certain period after employment terminates, depending on the date of grant. Unless the compensation committee determines otherwise, if a participant’s employment terminates for any reason other than displacement, death, disability or normal retirement, (i) any then outstanding but unexercisable SARs granted to the participant will be forfeited, and (ii) any then outstanding and exercisable

SARs granted to the participant will be forfeited on the expiration date of the SARs or three months after employment terminates, whichever period is shorter.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

In response to this Item, the information set forth in the Proxy Statement under the heading “Other Matters Relating to Executive Officers and Directors” is incorporated herein by reference.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

In response to this Item, the information set forth in the Proxy Statement in the table and footnotes under the heading “Proposal to Ratify the Appointment of Auditors – Fees Paid to Independent Auditors” and under the heading “Proposal to Ratify the Appointment of Auditors – Audit & Compliance Committee Pre-Approval of Audit and Permissible Non-Audit Services” is incorporated herein by reference.

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.

(a) Our consolidated financial statements, including the notes thereto and independent auditors’ report thereon, are set forth on pages 77 through 124 of the Annual Report, and are incorporated herein by reference. All financial statement schedules are omitted since the required information is either not applicable, is immaterial or is included in our consolidated financial statements and notes thereto. A list of the exhibits to this Form 10-K is set forth on the Exhibit Index immediately preceding such exhibits and is incorporated herein by reference.

(b) During the quarter ended December 31, 2003, we filed the following Current Report on Form 8-K with the SEC: October 15, 2003. In addition, we filed the following Current Report on Form 8-K with the SEC in the first quarter of 2004: January 15, 2004.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	WACHOVIA CORPORATION

Date: March 2, 2004

	By:	*/s/* DAVID M. JULIAN

		DAVID M. JULIAN
		EXECUTIVE VICE PRESIDENT

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated and on the date indicated.


SIGNATURE		CAPACITY

	G. KENNEDY THOMPSON*	Chairman, President, Chief Executive Officer and Director

	G. KENNEDY THOMPSON

	ROBERT P. KELLY*	Senior Executive Vice President and Chief Financial Officer

	ROBERT P. KELLY

	DAVID M. JULIAN*	Executive Vice President and Corporate Controller (Principal
		Accounting Officer)
	DAVID M. JULIAN

	JOHN D. BAKER, II*	Director

	JOHN D. BAKER, II

	JAMES S. BALLOUN*	Director

	JAMES S. BALLOUN

	ROBERT J. BROWN*	Director

	ROBERT J. BROWN

	PETER C. BROWNING*	Director

	PETER C. BROWNING

	JOHN T. CASTEEN, III*	Director

	JOHN T. CASTEEN, III

	WILLIAM H. GOODWIN, JR.*	Director

	WILLIAM H. GOODWIN, JR.

	ROBERT A. INGRAM*	Director

	ROBERT A. INGRAM

	MACKEY J. MCDONALD*	Director

	MACKEY J. MCDONALD

	JOSEPH NEUBAUER*	Director

	JOSEPH NEUBAUER


SIGNATURE		CAPACITY

	LLOYD U. NOLAND, III*	Director

	LLOYD U. NOLAND, III

	RUTH G. SHAW*	Director

	RUTH G. SHAW

	LANTY L. SMITH*	Director

	LANTY L. SMITH

	JOHN C. WHITAKER, JR.*	Director

	JOHN C. WHITAKER, JR.

	DONA DAVIS YOUNG*	Director

	DONA DAVIS YOUNG

*By Mark C. Treanor, Attorney-in-Fact

/s/ MARK C. TREANOR

MARK C. TREANOR

Date: March 2, 2004

EXHIBIT INDEX


EXHIBIT NO.	DESCRIPTION	LOCATION

(3)(a)	Restated Articles of Incorporation of Wachovia.	Incorporated by reference to Exhibit (3)(a) to Wachovia’s 2001 Third Quarter Report on Form 10-Q.

(3)(b)	Articles of Amendment to Articles of Incorporation of Wachovia.	Incorporated by reference to Exhibit (3)(b) to Wachovia’s. 2002 Annual Report on Form 10-K.

(3)(c)	Articles of Amendment to Articles of Incorporation of Wachovia.	Incorporated by reference to Exhibit (3)(c) to Wachovia’s 2002 Annual Report on Form 10-K.

(3)(d)	Bylaws of Wachovia, as amended.	Incorporated by reference to Exhibit (3)(b) to Wachovia’s 2001 Third Quarter Report on Form 10-Q.

(4)(a)	Instruments defining the rights of the holders of Wachovia’s long-term debt.	*

(4)(b)	Wachovia’s Shareholder Protection Rights Agreement.	Incorporated by reference to Exhibit (4) to Legacy First Union’s Current Report on Form 8-K dated December 20, 2000.

(10)(a)	Wachovia’s Deferred Compensation Plan for Officers.	Incorporated by reference to Exhibit (10)(b) to Legacy First Union’s 1988 Annual Report on Form 10-K.

(10)(b)	Wachovia’s Deferred Compensation Plan for Non-Employee Directors, as amended.	Incorporated by reference to Exhibit (10)(c) to Legacy First Union’s 2000 Annual Report on Form 10-K.

(10)(c)	Wachovia’s Contract Executive Deferred Compensation Plan.	Incorporated by reference to Exhibit (10)(d) to Legacy First Union’s 1997 Annual Report on Form 10-K.

(10)(d)	Wachovia’s Supplemental Executive Long-Term Disability Plan.	Incorporated by reference to Exhibit (10)(d) to Legacy First Union’s 1988 Annual Report on Form 10-K.

(10)(e)	Wachovia’s 1988 Master Stock Compensation Plan.	Incorporated by reference to Exhibit (28) to Legacy First Union’s Registration Statement No. 33-47447.

(10)(f)	Wachovia’s 1992 Master Stock Compensation Plan.	Incorporated by reference to Exhibit (28) to Legacy First Union’s Registration Statement No. 33-47447.

(10)(g)	Wachovia’s Elective Deferral Plan.	Incorporated by reference to Exhibit (4) to Legacy First Union’s Registration Statement No. 33-60913.

(10)(h)	Wachovia’s 1996 Master Stock Compensation Plan.	Incorporated by reference to Exhibit (10) to Legacy First Union’s 1996 First Quarter Report on Form 10-Q.

(10)(i)	Wachovia’s 1998 Stock Incentive Plan, as amended.	Incorporated by reference to Exhibit (10(j) to Wachovia’s 2001 Annual Report on Form 10-K.

(10)(j)	Employment Agreement between Wachovia and G. Kennedy Thompson.	Incorporated by reference to Exhibit (10)(q) to Legacy First Union’s 1999 Annual Report on Form 10-K.

(10)(k)	Amendment No. 1 to Employment Agreement between Wachovia and G. Kennedy Thompson.	Incorporated by reference to Exhibit (10)(l) to Wachovia’s 2001 Annual Report on Form 10-K.

(10)(l)	Employment Agreements between Wachovia and Benjamin P. Jenkins, III, Donald A. McMullen, Jr., and Stephen E. Cummings.	Incorporated by reference to Exhibit (10) to Wachovia’s 2002 Second Quarter Report on Form 10-Q.

(10)(m)	Employment Agreement between Wachovia and Robert P. Kelly.	Incorporated by reference to Exhibit (10)(n) to Wachovia’s 2002 Annual Report on Form 10-K.

(10)(n)	Form of Employment Agreement between Wachovia and certain other Executive Officers of Wachovia.	Incorporated by reference to Exhibit (10)(m) to Wachovia’s 2001 Annual Report on Form 10-K.

(10)(o)	Wachovia’s Senior Management Incentive Plan.	Incorporated by reference to Exhibit (10)(t) to Legacy First Union’s 2000 Annual Report on Form 10-K.

(10)(p)	Employment Agreement between Wachovia and L. M. Baker, Jr.	Incorporated by reference to Exhibit 10.1 to Legacy First Union’s Registration Statement No. 333-59616.

(10)(q)	Senior Executive Retirement Agreement between Wachovia and L. M. Baker, Jr.	Incorporated by reference to Exhibit 10.10 to Legacy Wachovia’s 1999 Annual Report on Form 10-K.


EXHIBIT NO.	DESCRIPTION	LOCATION

(10)(r)	Form of Senior Executive Retirement Agreement between Wachovia and certain Executive Officers of Wachovia.	Incorporated by reference to Exhibit 10.15 to Legacy Wachovia’s 1999 Annual Report on Form 10-K.

(10)(s)	Wachovia’s Senior Management Incentive Plan, as amended.	Incorporated by reference to Exhibit 10.4 to Legacy Wachovia’s 1999 Second Quarter Report on Form 10-Q.

(10)(t)	Wachovia’s Amended and Restated Executive Deferred Compensation Plan.	Incorporated by reference to Exhibit 10.2 to Legacy Wachovia’s 2000 First Quarter Report on Form 10-Q.

(10)(u)	Wachovia’s 2001 Stock Incentive Plan.	Incorporated by reference to Exhibit (10)(v) to Wachovia’s 2001 Annual Report on Form 10-K.

(10)(v)	Wachovia’s Stock Plan, as amended and restated.	Incorporated by reference to Exhibit 10.23 to Legacy Wachovia’s 2000 Third Quarter Report on Form 10-Q.

(10)(w)	Wachovia’s Executive Long-Term Disability Income Plan.	Incorporated by reference to Exhibit 10.34 to Legacy Wachovia’s 1997 Annual Report on Form 10-K.

(10)(x)	Split Dollar Life Insurance Agreement between Wachovia and L. M. Baker, Jr.	Incorporated by reference to Exhibit 10.35 to Legacy Wachovia’s 2000 Third Quarter Report on Form 10-Q.

(10)(y)	Form of Callable Split Dollar Insurance Agreement between Wachovia and certain Executive Officers of Wachovia.	Incorporated by reference to Exhibit 10.39 to Legacy Wachovia’s 2000 Third Quarter Report on Form 10-Q.

(10)(z)	Form of Non-Callable Split Dollar Insurance Agreement between Wachovia and certain Executive Officers of Wachovia.	Incorporated by reference to Exhibit 10.40 to Legacy Wachovia’s 2000 Third Quarter Report on Form 10-Q.

(10)(aa)	Form of Split Dollar Life Insurance Agreement between Wachovia and G. Kennedy Thompson, Benjamin P. Jenkins, III, Donald A. McMullen, Jr. and certain Executive Officers of Wachovia.	Incorporated by reference to Exhibit (10)(ee) to Wachovia’s 2002 Annual Report on Form 10-K.

(10)(bb)	Wachovia’s Employee Retention Stock Plan.	Incorporated by reference to Exhibit (10)(ff) to Wachovia’s 2002 Annual Report on Form 10-K.

(10)(cc)	Wachovia’s Savings Restoration Plan.	Incorporated by reference to Exhibit (10)(gg) to Wachovia’s 2002 Annual Report on Form 10-K.

(10)(dd)	Wachovia’s 2003 Stock Incentive Plan.	Incorporated by reference to Exhibit (10) to Wachovia’s 2003 First Quarter Report on Form 10-Q.

(10)(ee)	Employment Agreement between Wachovia and W. Barnes Hauptfuhrer.	Filed herewith.

(10)(ff)	Split-Dollar Life Insurance Termination Agreement between Wachovia and G. Kennedy Thompson.	Filed herewith.

(10)(gg)	Insurance Bonus Agreement between Wachovia and G. Kennedy Thompson.	Filed herewith.

(10)(hh)	Form of Split-Dollar Life Insurance Termination Agreement between Wachovia and certain Executive Officers of Wachovia, including Donald A. McMullen.	Filed herewith.

(10)(ii)	Form of Insurance Bonus Agreement between Wachovia and Certain Executive Officers of Wachovia, including Donald A. McMullen and W. Barnes Hauptfuhrer.	Filed herewith.

(10)(jj)	Split-Dollar Insurance Special Election Form between Wachovia and Benjamin P. Jenkins, III.	Filed herewith.

(12)(a)	Computations of Consolidated Ratios of Earnings to Fixed Charges.	Filed herewith.

(12)(b)	Computations of Consolidated Ratios of Earnings to Fixed Charges and Preferred Stock Dividends.	Filed herewith.

(13)	Wachovia’s 2003 Annual Report to Stockholders.**	Filed herewith.

(21)	List of Wachovia’s subsidiaries.	Filed herewith.

(23)	Consent of KPMG LLP.	Filed herewith.

(24)	Power of Attorney.	Filed herewith.

(31)(a)	Certification of principal executive officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.	Filed herewith.


EXHIBIT NO.	DESCRIPTION	LOCATION

(31)(b)	Certification of principal financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.	Filed herewith.

(32)(a)	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	Filed herewith.

(32)(b)	Certification pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	Filed herewith.

* We agree to furnish to the SEC upon request, copies of the instruments, including indentures, defining the rights of the holders of our long-term debt and of our subsidiaries’ long-term debt.

** Except for those portions of the Annual Report that are expressly incorporated by reference in this Form 10-K, the Annual Report is furnished for the information of the SEC only and is not to be deemed “filed” as part of this Form 10-K.

EX-10.EE 3 g87441exv10wee.htm EX-10(EE) EMPLOYMENT AGREEMENT EX-10(ee) Employment Agreement

Exhibit 10(ee)

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT, made and entered into as of the 1st day of November, 2001, by and between Wachovia Corporation (the “Company”), a North Carolina corporation, and W. Barnes Hauptfuhrer (the “Executive”);

WHEREAS, the Management Resources & Compensation Committee (the “Committee”) of the Board of Directors of the Company (the “Board”) has determined that it is in the best interests of the Company and its stockholders to assure that the Company will have the continued service of the Executive. The Committee believes it is imperative to encourage the Executive’s full attention and dedication to the Company, and to provide the Executive with compensation and benefits arrangements upon a termination of employment with the Company which ensure that the compensation and benefits expectations of the Executive will be satisfied and which are competitive with those of other corporations.

NOW, THEREFORE, in order to accomplish the objectives set forth above and in consideration of the mutual covenants herein contained, the parties hereby agree as follows:

1. Employment Period. (a) The “Effective Date” shall mean the date hereof.

(b) The Company hereby agrees to continue the Executive in its employ, and the Executive hereby agrees to remain in the employ of the Company upon the terms and conditions set forth in this Agreement, for the period commencing on the Effective Date and ending on the third anniversary thereof (the “Employment Period”); provided, however, that commencing on the date one year after the date hereof, and on each annual anniversary of such date (such date and each annual anniversary thereof shall be hereinafter referred to as the “Renewal Date”), unless previously terminated, the Employment Period shall be automatically extended so as to terminate three years from such Renewal Date, unless at least 90 days prior to the Renewal Date the Company or the Executive, respectively, shall give notice to the Executive or the Company, respectively, that the Employment Period shall not be so extended. Notwithstanding the foregoing, in the event a “Change in Control” (as defined herein) occurs, the Employment Period, unless previously terminated, shall be extended immediately prior to the Change in Control so that the Employment Period shall terminate no earlier than three years from such Change in Control.

2. Terms of Employment. (a) Positions and Duties. (i) During the Employment Period, the Company agrees to employ the Executive, and the Executive agrees to serve as an employee of the Company and as an employee of one or more of its subsidiaries. The Executive shall perform such duties and responsibilities, in such capacity and with such authority, for the Company (or one or more of its subsidiaries) as the Company may designate from time to time. Such duties shall be of a type for which the Executive is suited by background, experience and training, in the Company’s reasonable discretion.

(ii) During the Employment Period, and excluding any periods of vacation and sick leave to which the Executive is entitled, the Executive agrees to devote his full professional attention and time during normal business hours to the business and affairs of the Company and to perform the responsibilities assigned to the Executive hereunder. During the Employment Period it shall not be a violation of this Agreement for the Executive to (A) serve on corporate, civic or charitable boards or committees, (B) deliver lectures, fulfill speaking engagements or teach at educational institutions, and (C) manage personal investments, so long as such activities do not interfere with the performance of the Executive’s responsibilities as an employee of the Company in accordance with this Agreement and are consistent with the Company’s policies. It is expressly understood and agreed that to the extent that any such activities have been conducted by the Executive prior to the Effective Date, the continued conduct of such activities (or the conduct of activities similar in nature and scope thereto) subsequent to the Effective Date shall not thereafter be deemed to interfere with the performance of the Executive’s responsibilities to the Company.

(b) Compensation. (i) Salary and Bonus. For all services rendered by the Executive in any capacity under this Agreement, the Company shall pay the Executive during the Employment Period as compensation (A) an annual salary in an amount not less than the amount of the Executive’s annual salary as of the Effective Date (the “Annual Base Salary”) and (B) such annual cash incentive bonus, if any, as may be awarded to him by the Board or by a Committee designated by the Board (the “Annual Bonus”). Such salary shall be payable in accordance with the Company’s customary payroll practices, and any such bonus shall be payable in cash in

accordance with the Company’s incentive bonus plans from which the Annual Bonus is awarded. During the Employment Period prior to the Date of Termination, the Annual Base Salary shall be reviewed in accordance with the Company’s policies and procedures applicable to the Executive and may be increased from time to time consistent with such procedures. Any increase in Annual Base Salary shall not serve to limit or reduce any other obligation to the Executive under this Agreement. In the event the Executive’s actual Annual Base Salary is increased above the then current Annual Base Salary during the Employment Period, such increased Annual Base Salary shall constitute “Annual Base Salary” for purposes of this Agreement, and may not thereafter be reduced except with the written consent of the Executive.

(ii) Employee Benefits. During the Employment Period prior to the Date of Termination, the Executive and/or the Executive’s family, as the case may be, shall be eligible to participate in employee benefit plans generally available to other peer executives of the Company or its subsidiaries, including without limitation, employee stock purchase plans, savings plans, retirement plans, welfare benefit plans (including, without limitation, medical, prescription, dental, disability, life, accidental death, and travel accident insurance, but excluding severance plans) and similar plans, practices, policies and programs. In addition, during the Employment Period, the Executive shall be eligible to participate in the Company’s stock-based incentive compensation plans then available to other peer executives of the Company with awards thereunder determined by the Board or by a Committee designated by the Board, in its sole discretion, except as provided in this Agreement.

(iii) Expenses. During the Employment Period prior to the Date of Termination, the Executive shall be entitled to receive prompt reimbursement for all reasonable expenses incurred by the Executive in accordance with the policies, practices and procedures of the Company and its affiliated companies in effect for the Executive at the time the expense is incurred.

(iv) Fringe Benefits. During the Employment Period prior to the Date of Termination, the Executive shall be entitled to fringe benefits and perquisite plans or programs of the Company and its affiliated companies generally available to executives who are peers of the Executive; provided that the Company reserves the right to modify, change or terminate such fringe benefits and perquisite plans or programs from time to time, in its sole discretion.

(v) Indemnification/D&O Insurance. During the Employment Period for acts prior to the Date of Termination, the Executive shall be entitled to indemnification with respect to the performance of his duties hereunder, and directors’ and officers’ liability insurance, on the same terms and conditions as generally available to other peer executives of the Company and its affiliated companies.

3. Termination of Employment. (a) Retirement, Death or Disability. The Executive’s employment shall terminate automatically upon the Executive’s death or Retirement (as defined herein) during the Employment Period. For purposes of this Agreement, “Retirement” shall mean either (i) voluntary termination by the Executive of the Executive’s employment upon satisfaction of the requirements for early retirement under the Company’s tax-qualified defined benefit pension plan or (ii) voluntary termination by the Executive of the Executive’s employment upon satisfaction of the requirements for normal retirement under the terms of the Company’s tax-qualified pension plan. If the Company determines in good faith that Disability of the Executive has occurred during the Employment Period (pursuant to the definition of Disability set forth below), it may give to the Executive written notice in accordance with this Agreement of its intention to terminate the Executive’s employment. In such event, the Executive’s employment with the Company shall terminate effective on the 30^th day after receipt of such notice by the Executive (the “Disability Effective Date”), provided that, within the 30 days after such receipt, the Executive shall not have returned to full-time performance of the Executive’s duties. For purposes of this Agreement, “Disability” shall mean termination of the Executive’s employment upon satisfaction of the requirements to receive benefits under the Company’s long-term disability plan.

(b) Cause. The Company may terminate the Executive’s employment during the Employment Period for Cause. For purposes of this Agreement, “Cause” shall mean:

(i) the continued and willful failure of the Executive to perform substantially the Executive’s duties with the Company or one of its affiliates (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 the Company which specifically identifies the manner in which the Company 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 the Company.

For purposes of this provision, no act or failure to act, on the part of the Executive, shall be considered “willful” unless it is done, or omitted to be done, by the Executive in bad faith or without reasonable belief that the Executive’s action or omission was in the best interests of the Company. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board or upon the instructions of the Chairman of the Board or a senior executive officer of the Company or based upon the advice of counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by the Executive in good faith and in the best interests of the Company. Following a Change in Control (as defined herein), the Company’s termination of the Executive’s employment shall not be deemed to be for Cause unless and until there shall have been delivered to the Executive a copy of a resolution duly adopted by the affirmative vote of not less than three-fourths of the entire membership of the Board at a meeting of the Board called and held for such purpose (after reasonable notice is provided to the Executive and the Executive is given an opportunity, together with counsel, to be heard before such Board), finding that, in the good faith opinion of such Board, the Executive is guilty of the conduct described in subparagraph (i) or (ii) above, and specifying the particulars thereof in detail.

(c) Good Reason. The Executive’s employment may be terminated by the Executive for Good Reason. For purposes of this Agreement, “Good Reason” shall mean, in the absence of a written consent of the Executive which expressly refers to a provision of this Section 3(c):

(i) prior to a Change in Control, 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 Executive’s management responsibilities against (B) any increase or decrease in the relative sizes of the businesses, activities or functions (or portions thereof) for which the Executive has responsibility; provided, however, that none of (I) a change in the Executive’s title, (II) a change in the hierarchy, (III) a change in the Executive’s responsibilities from line to staff or vice versa, and (IV) placing the Executive on temporary leave pending an inquiry into whether the Executive has engaged in conduct that could constitute “Cause” under this Agreement, either individually or in the aggregate shall be considered Good Reason;

(ii) any failure by the Company to comply with any material provision of this Agreement (including, without limitation, any provision of Section 2 of this Agreement), other than an isolated, insubstantial and inadvertent failure not occurring in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by the Executive;

(iii) any purported termination by the Company of the Executive’s employment otherwise than as expressly permitted by this Agreement;

(iv) at any time prior to the Executive reaching age 63, the Company giving notice to the Executive of its intention not to extend the term of this Agreement as provided in Section 1(b);

(v) following a Change in Control, the relocation of the principal place of the Executive’s employment to a location that is more than 35 miles from such principal place of employment immediately prior to the date the proposed Change in Control is publicly announced, or the Company’s requiring the Executive to travel on Company business to a substantially greater extent than required immediately prior to the Change in Control;

(vi) following a Change in Control, the Company’s requiring the Executive or all or substantially all of the employees of the Company who report directly to the Executive immediately prior to the date the proposed Change in Control is publicly announced to be based at any office or location other than such person’s office or location on such date;

(vii) any failure by the Company to comply with and satisfy Section 9(c) of this Agreement; or

(viii) following a Change in Control, assignment to the Executive of any duties inconsistent in any respect with the Executive’s position as in effect immediately prior to the public announcement of the proposed Change in Control (including status, offices, titles and reporting requirements), authority, duties or

responsibilities, or any other action by the Company which results in any diminution in such position, authority, duties or responsibilities.

For purposes of this Section 3(c), any good faith determination of “Good Reason” made by the Executive after a Change in Control shall be conclusive (including any such determination when the Executive is then eligible for Retirement). In the event the Company challenges the Executive’s determination of Good Reason, the Company shall continue to make the payments and provide the benefits to the Executive as set forth in Section 4(a). If it is finally determined pursuant to the procedures set forth in this Agreement that the Executive’s termination was not for Good Reason, the Executive shall reimburse the Company the amounts to which it is finally determined to be entitled.

(d) Notice of Termination. Any termination by the Company for Cause, or by the Executive for Good Reason, shall be communicated by Notice of Termination to the other party hereto given in accordance with this Agreement. For purposes of this Agreement, a “Notice of Termination” means a written notice which (i) indicates the specific termination provision in this Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated and (iii) if the Date of Termination (as defined below) is other than the date of receipt of such notice, specifies the termination date (which date shall be not more than 30 days after the giving of such notice). The failure by the Executive or the Company to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Good Reason or Cause shall not waive any right of the Executive or the Company, respectively, hereunder or preclude the Executive or the Company, respectively, from asserting such fact or circumstance in enforcing the Executive’s or the Company’s rights hereunder. To be effective, a Notice of Termination given by the Executive terminating employment with the Company for Good Reason must be received by the Company no later than 60 days from the event(s) giving rise to the Good Reason termination.

(e) Date of Termination. “Date of Termination” means (i) if the Executive’s employment is terminated by the Company for Cause, the date of receipt of the Notice of Termination, unless the Company agrees to a later date no more than 30 days after such notice, as the case may be, (ii) if the Executive’s employment is terminated by the Executive for Good Reason or Retirement, the date of receipt of the Notice of Termination or any later date specified therein within 30 days of such notice, as the case may be, (iii) if the Executive’s employment is terminated by the Company other than for Cause or Disability, the date on which the Company notifies the Executive of such termination or any later date specified therein within 30 days of such notice, as the case may be, (iv) if the Executive’s employment is terminated by reason of death or Disability, the date of death of the Executive or the Disability Effective Date, as the case may be, and (v) if the Executive’s employment is terminated by the Executive for other than Good Reason, death, Disability or Retirement, the date that is 60 days after the date of receipt of the Notice of Termination by the Company, provided, however, the Company may elect to waive such notice or place the Executive on paid leave for all or any part of such 60-day period during which the Executive will be entitled to continue to receive the Annual Base Salary but shall not receive any Annual Bonus or any other payment from the Company other than reimbursement for expenses as contemplated in Section 2(b)(iii) and continued participation in the employee benefit plans as contemplated in Section 2(b)(ii).

(f) Change in Control. For purpose of this Agreement, a “Change in Control” shall mean:

(i) The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (A) the then outstanding shares of common stock of the Company (the “Outstanding Company Common Stock”) or (B) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”; provided, however, that for purposes of this subsection (i), the following acquisitions shall not constitute a Change in Control: (1) any acquisition directly from the Company, (2) any acquisition by the Company, (3) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company or (4) any acquisition by any corporation pursuant to a transaction which complies with clauses (A), (B) and (C) of subsection (iii) of this Section 3(f); or

(ii) Individuals who, as of the date hereof, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a

nominee for director, without written objection to such nomination) shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or contests by or on behalf of a Person other than the Board; or

(iii) Consummation of a reorganization, merger, share exchange or consolidation or sale or other disposition of all or substantially all of the assets of the Company (a “Business Combination”), in each case, unless, following such Business Combination, (A) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 60% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (B) no Person (excluding any corporation resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or such corporation resulting from the Business Combination) beneficially owns, directly or indirectly, 20% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination and (C) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board immediately prior to the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or

(iv) Approval by the stockholders of the Company of a complete liquidation or dissolution of the Company.

4. Obligations of the Company upon Termination. (a) Good Reason; Company Termination other than for Cause, Death, Disability or Retirement. If, during the Employment Period, the Company shall terminate the Executive’s employment other than for Cause, Death, Disability or Retirement or the Executive shall terminate employment for Good Reason:

(i) the Company shall pay to the Executive in a lump sum in cash within 30 days after the Date of Termination the aggregate of (A) the Executive’s Annual Base Salary through the Date of Termination to the extent not theretofore paid, and (B) the product of (1) an Annual Bonus of an amount equal to the greater of (x) the highest annual cash incentive bonus paid by the Company to the Executive for the three calendar years prior to the Date of Termination, (y) the Executive’s then applicable “target” incentive bonus under the then applicable cash incentive compensation plan prior to the Date of Termination, or (z) $5,294,042 (the greater of clauses (x), (y) or (z) is defined as the “Base Bonus”), and (2) a fraction, the numerator of which is the number of days in the fiscal year in which the Date of Termination occurs through the Date of Termination, and the denominator of which is 365, to the extent not theretofore paid (the “Pro Rata Bonus”), (C) any unpaid Annual Bonus for the prior year, (D) any compensation previously deferred by the Executive (together with any accrued interest or earnings thereon) and (E) any accrued paid time off, in each case to the extent not theretofore paid (the sum of the amounts described in clauses (A), (B), (C), (D) and (E) shall be hereinafter referred to as the “Accrued Obligations”).

For purposes of determining the Base Bonus hereunder, the Company shall exclude any special or one-time bonuses and any premium enhancements to bonuses but shall include any Annual Bonus and any portions of bonuses (other than the excluded bonuses) which have been deferred by the Executive;

(ii) for each of the three years after the Executive’s Date of Termination (the “Compensation Continuance Period”), the Company shall pay to the Executive a cash benefit equal to the sum of (A) the Executive’s highest Annual Base Salary during the twelve months immediately prior to the Date of Termination, (B), the Base Bonus, and (C) the amount equal to the highest matching contribution by the Company to the Executive’s account in the Company’s 401(k) plan for the five years immediately prior to the Date of Termination (the payments described in clauses (A), (B) and (C) shall be hereinafter referred to as the “Compensation Continuance Payments” and, together with the benefits referred to in Sections 4(a)(iii), (iv), (v), (vi) and (vii), shall be hereinafter referred to as the “Compensation Continuance Benefits”). The Company shall make

the Compensation Continuance Payments no more frequently than semi-monthly (and may make the Compensation Continuance Payments in accordance with the Company’s normal payroll policies and practices), and shall withhold from the Compensation Continuance Payments all applicable federal, state and local taxes. Notwithstanding anything contained in this Agreement to the contrary, in the event a Change of Control has occurred on or prior to the Date of Termination, the Company shall pay the Compensation Continuance Payments to the Executive in a lump sum in cash within 30 days after the Date of Termination.

(iii) during the Compensation Continuance Period (or for the remainder of the Executive’s life if such Date of Termination is after a Change in Control), or such longer period as may be provided by the terms of the appropriate plan, program, practice or policy, the Company shall continue medical, dental and life insurance benefits to the Executive and/or the Executive’s family on a substantially equivalent basis to those which would have been provided to them in accordance with the medical, dental and life insurance plans, programs, practices and policies described in Section 2(b)(iv) of this Agreement if the Executive’s employment had not been terminated. Notwithstanding the foregoing, in the event the Executive becomes reemployed with another employer and becomes eligible to receive medical, dental and/or life insurance benefits from such employer, the medical, dental and/or life insurance benefits described herein shall be secondary to such benefits during the period of the Executive’s eligibility, but only to the extent that the Company reimburses the Executive for any increased cost and provides any additional benefits necessary to give the Executive the benefits provided hereunder. For purposes of determining eligibility (but not the time of commencement of benefits) of the Executive for retiree benefits pursuant to such plans, practices, programs and policies, the Executive shall be considered to have terminated employment with the Company on the Date of Termination. Notwithstanding the foregoing, if the Company reasonably determines that providing continued coverage under one or more of its welfare benefit plans contemplated herein could adversely affect the tax treatment of other participants covered under such plans, or would otherwise have adverse legal ramifications, the Company may, in its discretion, either (A) provide other coverage at least as valuable as the continued coverage through insurance or otherwise, or (B) pay the Executive a lump sum cash amount that reasonably approximates the after-tax value to the Executive of the premiums for continued coverage, in lieu of providing such continued coverage;

(iv) during the Compensation Continuance Period, to the extent not otherwise vested in accordance with the Company’s stock compensation plans, all unvested options to purchase shares of Company common stock and restricted stock awards will continue to vest in accordance with the applicable terms of such stock option or restricted stock grants as if the Executive’s employment with the Company had not been terminated. At the end of the Compensation Continuance Period, to the extent not otherwise vested in accordance with the preceding sentence, all unvested stock options and restricted stock awards will vest. Notwithstanding the termination of the Executive’s employment with the Company, all stock options granted to the Executive as of the date of this Agreement and during the Employment Period will be exercisable until the scheduled expiration date of such stock options; provided, however, in the event any such stock options are designated as “incentive stock options” pursuant to section 422 of the Code (as defined herein), such stock options shall be treated as non-qualified stock options for purposes of this sentence to the extent that they are exercised after the period specified in section 422(a)(2) of the Code (to the extent such provision applies);

(v) during the Compensation Continuance Period, the Executive shall be entitled to continue to participate in the Company’s fringe benefit and perquisite plans or programs in which the Executive participated immediately prior to the Date of Termination, in each case in accordance with the Company’s plans, programs, practices and policies;

(vi) to the extent not theretofore paid or provided, the Company shall timely pay or provide to the Executive any other amounts or benefits required to be paid or provided or which the Executive is eligible to receive under any plan, program, policy or practice or contract or agreement of the Company and its affiliated companies (excluding any severance plan, program, policy or practice) through the Date of Termination (such other amounts and benefits shall be hereinafter referred to as the “Other Benefits”); and

(vii) the Company will provide outplacement services to the Executive in accordance with the Company’s policies generally applicable to involuntarily terminated employees.

(b) Death. If the Executive’s employment is terminated by reason of the Executive’s death during the Employment Period, this Agreement shall terminate without further obligations to the Executive’s legal representatives under this Agreement, other than for payment of Accrued Obligations, Other Benefits, and the payment of an amount equal to the Executive’s Annual Base Salary. Accrued Obligations and cash payments

pursuant to the preceding sentence shall be paid to the Executive’s estate or beneficiary, as applicable, in a lump sum in cash within 30 days of the Date of Termination. With respect to the provision of Other Benefits, the term Other Benefits as utilized in this Section 4(b) shall include, without limitation, and the Executive’s estate and/or beneficiaries shall be entitled to receive, death benefits then applicable to the Executive.

(c) Retirement. If the Executive’s employment is terminated by reason of the Executive’s Retirement during the Employment Period, this Agreement shall terminate without further obligations to the Executive under this Agreement, other than for payment of Accrued Obligations and Other Benefits. Accrued Obligations shall be paid to the Executive in a lump sum in cash within 30 days of the Date of Termination. With respect to the provision of Other Benefits, the term Other Benefits as utilized in this Section 4(c) shall include, without limitation, and the Executive shall be entitled to receive, all retirement benefits then applicable to the Executive.

(d) Disability. If the Executive’s employment is terminated by reason of the Executive’s Disability during the Employment Period, this Agreement shall terminate without further obligations to the Executive, other than for payment of Accrued Obligations, Other Benefits, and the payment of an amount equal to the Executive’s Annual Base Salary. Accrued Obligations and the cash payments pursuant to the preceding sentence shall be paid to the Executive in a lump sum in cash within 30 days of the Date of Termination. With respect to the provision of Other Benefits, the term Other Benefits as utilized in this Section 4(d) shall include, and the Executive shall be entitled after the Disability Effective Date to receive, disability and other benefits then applicable to the Executive.

(e) Cause; Other than for Good Reason. If the Executive’s employment shall be terminated by the Company for Cause or by the Executive without Good Reason (other than for Retirement) during the Employment Period, this Agreement shall terminate without further obligations of the Company to the Executive other than the obligation to pay to the Executive (x) his Annual Base Salary through the Date of Termination, (y) the amount of any compensation previously deferred by the Executive, and (z) Other Benefits, in each case only to the extent owing and theretofore unpaid.

5. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or limit the Executive’s continuing or future participation in any plan, program, policy or practice provided by the Company or any of its affiliated companies and for which the Executive may qualify (excluding any severance plan or program of the Company), nor subject to Section 11(f), shall anything herein limit or otherwise affect such rights as the Executive may have under any contract or agreement with the Company or any of its affiliated companies. Amounts which are vested benefits or which the Executive is otherwise entitled to receive under any plan, policy, practice or program of or any contract or agreement with the Company or any of its affiliated companies at or subsequent to the Date of Termination shall be payable in accordance with such plan, policy, practice or program or contract or agreement except as explicitly modified by this Agreement.

6. Full Settlement. Except as specifically provided in this Agreement, the Company’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Company may have against the Executive or others. In no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement and, such amounts shall not be reduced whether or not the Executive obtains other employment. The Executive acknowledges and agrees that subject to the payment by the Company of the benefits provided in this Agreement to the Executive, in no event will the Company or its subsidiaries or affiliates be liable to the Executive for damages under any claim of breach of contract as a result of the termination of the Executive’s employment. In the event of such termination, the Company shall be liable only to provide the benefits specified in this Agreement. The Company agrees to pay as incurred, to the full extent permitted by law, all legal fees and expenses which the Executive may reasonably incur as a result of any contest by the Company, the Executive or others of the validity or enforceability of, or liability under, any provision of this Agreement or any guarantee of performance thereof (including as a result of any contest by the Executive about the amount of any payment pursuant to this Agreement), plus in each case interest on any delayed payment at the applicable Federal rate provided for in Section 7872(f)(2)(A) of the Internal Revenue Code of 1986, as amended (the “Code”). Notwithstanding the foregoing, if it is finally judicially determined that the Executive brought any claims contemplated in the previous sentence in bad faith, the Executive shall reimburse the Company for such fees and expenses which are reasonably related to such bad faith claim.

7. Covenants. (a) The Executive shall hold in a fiduciary capacity for the benefit of the Company all secret, non-public or confidential information, knowledge or data relating to the Company or any of its affiliated companies, and their related businesses, which shall have been obtained by the Executive during the Executive’s employment by the Company or any of its affiliated companies (or predecessors thereto). After termination of the Executive’s employment with the Company, the Executive shall not, without the prior written consent of the Company or as may otherwise be required by law or legal process, communicate or divulge any such information, knowledge or data to anyone other than the Company and those designated by it. In addition to the foregoing, the Executive will refrain from taking any action or making any statements, written or oral, which are intended to or which disparage the business, goodwill or reputation of the Company or any of its affiliated companies, or their respective directors, officers, executives or other employees, or which could adversely affect the morale of employees of the Company or any of its affiliated companies.

(b) (i) While employed by the Company and for three years after the Date of Termination (which may include the Compensation Continuance Period), the Executive shall not, directly or indirectly, on behalf of the Executive or any other person, (A) solicit for employment by other than the Company, (B) encourage to leave the employ of the Company, or (C) interfere with the Company’s or its affiliated companies’ relationship with, any person employed by the Company or its affiliated companies.

(ii) While employed by the Company and for three years after the Date of Termination (which may include the Compensation Continuance Period), the Executive will not become a director, officer, employee or consultant engaging in activities similar to those performed by a senior officer for any business which is in competition with any line of business of the Company or its affiliates and in which the Executive participated in a direct capacity while he was employed by the Company or its affiliates (including predecessors thereof) at any time within the one year period preceding the Effective Date and which has offices in any location in which the Executive had supervisory responsibility in the geographic footprint of First Union National Bank (or successors thereto, including but not limited to, Florida, Georgia, South Carolina, Tennessee, North Carolina, Virginia, Maryland, Pennsylvania, New Jersey, Delaware, New York, Connecticut, and Washington, D.C. plus any other state or states added during the Employment Period) during that one year period. The Executive expressly acknowledges the reasonableness of such restrictions and such geographic area. Further, during such period, the Executive will not acquire an equity or equity-like interest in such an organization for his own account, except that he may acquire equity interests of not more than 5% of any such organization from time to time as an investment. Notwithstanding anything to the contrary contained herein, this Section 7(b)(ii) shall not apply if the Executive terminates employment with the Company pursuant to Retirement or the Executive terminates employment with the Company for any reason following a Change in Control or the Company terminates the Executive’s employment for any reason following a Change in Control. Upon the Executive’s request to the Company’s Chief Executive Officer, the Company will provide an advance opinion as to whether a proposed activity would violate the provisions of this Section 7(b)(ii).

(iii) During the Compensation Continuance Period, the Executive shall provide consulting services to the Company at such time or times as the Company shall reasonably request, subject to appropriate notice and to reimbursement by the Company of all reasonable travel and other expenses incurred and paid by the Executive in accordance with the Company’s then-current policy for expense reimbursement. In the event the Executive shall engage in any employment permitted hereunder during the Compensation Continuance Period for another employer or on a self-employed basis, the Executive’s obligation to provide the consulting services hereunder shall be adjusted in accordance with the requirements of such employment.

(c) In the event of a breach or threatened breach of this Section 7, the Executive agrees that the Company shall be entitled to injunctive relief in a court of appropriate jurisdiction to remedy any such breach or threatened breach and, prior to a Change in Control, the Company may terminate the Compensation Continuance Period and the Compensation Continuance Benefits, if applicable, in its sole discretion. The Executive acknowledges that monetary damages would be inadequate and insufficient remedy for a breach or threatened breach of Section 7. Following the occurrence of a Change in Control, in no event shall an asserted violation of the provisions of this Section 7 constitute a basis for deferring or withholding any amounts otherwise payable to the Executive under this Agreement. If it is finally determined pursuant to the procedures set forth in this Agreement that the Executive did not breach this Section 7, the Company shall reimburse the Executive the amounts to which it is finally determined to be entitled.

(d) Any termination of the Executive’s employment or of this Agreement shall have no effect on the continuing operation of this Section 7; provided, however, upon termination of this Agreement due to the Company’s or the Executive’s failure to extend the term of this Agreement pursuant to Section 1(b), Section 7(b)(ii)

shall no longer apply to the Executive if the Executive’s employment shall terminate after the term of this Agreement expires; and provided, further, Section 7(b)(ii) shall not apply if the Executive terminates employment with the Company pursuant to Retirement or the Executive terminates employment with the Company for any reason following a Change in Control or the Company terminates the Executive’s employment for any reason following a Change in Control.

(e) The Executive hereby agrees that prior to accepting employment with any other person or entity during the Employment Period or during the three years following the Date of Termination (which may include the Compensation Continuance Period), the Executive will provide such prospective employer with written notice of the existence of this Agreement and the provisions of Section 3(e) and this Section 7, with a copy of such notice delivered simultaneously to the Company in accordance with Section 11(c). The foregoing provision shall not apply if the Company terminates the Executive’s employment without Cause following a Change in Control, or if the Executive terminates his employment for Good Reason following a Change in Control.

8. Certain Additional Payments by the Company. (a) Anything in this Agreement to the contrary notwithstanding and except as set forth below, in the event it shall be determined that any payment or distribution by the Company to or for the benefit of the Executive following a Change in Control (whether paid or payable or distributed or distributable pursuant to the terms of the Agreement or otherwise, but determined without regard to any additional payments required under this Section 8) (a “Payment”) would be subject to the excise tax imposed by Section 4999 of the Code (or any successor statute) or any interest or penalties are incurred by the Executive with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “Excise Tax”), then the Executive shall be entitled to receive an additional payment (a “Gross-Up Payment”) in an amount such that after payment by the Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any income taxes (and any interest and penalties imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.

(b) Subject to the provisions of Section 8(c), all determinations required to be made under this Section 8, including whether and when a Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by KPMG LLP or such other certified public accounting firm reasonably acceptable to the Company (the “Accounting Firm”) which shall provide detailed supporting calculations both to the Company and the Executive within 30 business days of the receipt of notice from the Company that there has been a Payment, or such earlier time as is requested by the Company. All fees and expenses of the Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this Section 8, shall be paid by the Company to the Executive by the due date for the payment of any Excise Tax, or, if earlier, 30 days after the receipt of the Accounting Firm’s determination. Any determination by the Accounting Firm shall be binding upon the Company and the Executive. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made (“Underpayment”), consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant to Section 8(c) and the Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of the Executive.

(c) The Executive shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of the Gross-Up Payment. Such notification shall be given as soon as practicable but no later than ten business days after the Executive is informed in writing of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid. The Executive shall not pay such claim prior to the expiration of the 30-day period following the date on which it gives such notice to the Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If the Company notifies the Executive in writing prior to the expiration of such period that it desires to contest such claim, the Executive shall:

(i) give the Company any information reasonably requested by the Company relating to such claim,

(ii) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably selected by the Company,

(iii) cooperate with the Company in good faith in order to effectively contest such claim, and

(iv) permit the Company to participate in any proceedings relating to such claim;

provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold the Executive harmless, on an after-tax basis, for any Excise Tax or income tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this Section 8(c), the Company shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forego any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct the Executive to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and the Executive agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company shall determine; provided, however, that if the Company directs the Executive to pay such claim and sue for a refund, the Company shall advance the amount of such payment to the Executive, on an interest-free basis and shall indemnify and hold the Executive harmless, on an after-tax basis, from any Excise Tax or income tax (including interest or penalties with respect thereto) imposed with respect to such advance or with respect to any imputed income with respect to such advance; and further provided that any extension of the statute of limitations relating to payment of taxes for the taxable year of the Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company’s control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and the Executive shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority.

(d) If, after the receipt of an amount advanced by the Company pursuant to Section 8(c), the Executive becomes entitled to receive any refund with respect to such claim, the Executive shall (subject to the Company’s complying with the requirements of Section 8(c)) promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto) upon receipt thereof. If, after the receipt by the Executive of an amount advanced by the Company pursuant to Section 8(c), a determination is made that the Executive shall not be entitled to any refund with respect to such claim and the Company does not notify the Executive in writing of its intent to contest such denial or refund prior to the expiration of 30 days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.

(e) For purposes of this Section 8, any reference to the Executive shall be deemed to include the Executive’s surviving spouse, estate and/or beneficiaries with respect to payments or adjustments provided by this Section 8.

9. Successors. (a) This Agreement is personal to the Executive and without the prior consent of the Company shall not be assignable by the Executive otherwise than by will or the laws of descent and distribution.

(b) This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns.

(c) The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume expressly in writing and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. As used in this Agreement, “Company” shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law, or otherwise.

10. Arbitration. Except with respect to the Company’s rights to injunctive relief for matters arising under Section 7 of this Agreement, any disputes or controversies arising under or in connection with this Agreement (including, without limitation, whether any such disputes or controversies have been brought in bad faith) shall be settled exclusively by arbitration in Charlotte, North Carolina in accordance with the commercial arbitration rules of the American Arbitration Association then in effect; provided, however, that the Company may invoke the American Arbitration Association’s Optional Rules for Emergency Measures of Protection. Judgment may be entered on the arbitrator’s award in any court having jurisdiction.

11. General Provisions. (a) Governing Law; Amendment; Modification. This Agreement shall be governed and construed in accordance with the laws of the State of North Carolina, without reference to principles of conflict of laws. This Agreement may not be modified or amended except by an instrument in writing signed by the parties hereto.

(b) Severability. If, for any reason, any provision of this Agreement is held invalid, such invalidity shall not affect any other provision of this Agreement not held so invalid, and each such other provision shall to the full extent consistent with law continue in full force and effect. If any provision of this Agreement shall be held invalid in part, such invalidity shall in no way affect the rest of such provision not held so invalid and the rest of such provision, together with all other provisions of this Agreement, shall to the full extent consistent with law continue in full force and effect.

(c) Notices. All notices under this Agreement shall be in writing and shall be deemed effective when delivered in person (in the Company’s case, to its Secretary) or forty-eight (48) hours after deposit thereof in the U.S. mail, postage prepaid, for delivery as registered or certified mail — addressed, in the case of the Executive, to such Executive at his residential address, and in the case of the Company, to its corporate headquarters, attention of the Secretary, or to such other address as the Executive or the Company may designate in writing at any time or from time to time to the other party. In lieu of notice by deposit in the U.S. mail, a party may give notice by telegram or telex.

(d) Tax Withholding. The Company may withhold from any amounts payable under this Agreement such Federal, state, local or foreign taxes as shall be required to be withheld pursuant to any applicable law or regulation.

(e) Strict Compliance. The Executive’s or the Company’s failure to insist upon strict compliance with any provision of this Agreement or the failure to assert any right the Executive or the Company may have hereunder, including, without limitation, the right of the Executive to terminate employment for Good Reason pursuant to Section 3(c) of this Agreement, shall not be deemed to be a waiver of such provision or right or any other provision or right of this Agreement. The waiver, whether express or implied, by either party of a violation of any of the provisions of this Agreement shall not operate or be construed as a waiver of any subsequent violation of any such provision.

(f) Entire Understanding. From and after the Effective Date this Agreement shall supersede any other agreement between the parties with respect to the subject matter hereof, including without limitation, the Employment Agreement between the Company and the Executive dated as of January 7, 2000.

(g) Conflicts with Plans. To the extent any plan, policy, practice or program of or contract or agreement with the Company attempts to cap, restrict, limit or reduce payments to the Executive hereunder, such caps, restrictions, limitations or reductions are expressly modified to permit the payments contemplated hereby and the parties intend that the terms of this Agreement shall be construed as having precedence over any such caps, restrictions, limitations or reductions.

(h) Release and Waiver of Claims. In consideration of any Compensation Continuance Benefits the Company provides to the Executive under this Agreement, the Executive upon termination of employment with the Company shall execute a separate general release and waiver of claims in favor of the Company, its affiliates and personnel in a form acceptable to the Company. The Executive shall not be eligible for any Compensation Continuance Benefits until the Executive has executed such release and waiver of claims.

(i) Creditor Status. No benefit or promise hereunder shall be secured by any specific assets of the Company. The Executive shall have only the rights of an unsecured general creditor of the Company in seeking satisfaction of such benefits or promises.

(j) No Assignment of Benefits. No right, benefit or interest hereunder shall be subject to assignment, encumbrance, charge, pledge, hypothecation or set off in respect of any claim, debt or obligation, or similar process.

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its officers thereunto duly authorized, and the Executive has signed this Agreement under seal, all as of the date and year first above written.


WACHOVIA CORPORATION	ATTEST:	[SEAL]

By: /s/ G. Kennedy Thompson	/s/ Mark C. Treanor

Name: G. Kennedy Thompson	Mark C. Treanor
Title: Chief Executive Officer	Secretary

/s/ W. Barnes Hauptfuhrer (SEAL)

W. Barnes Hauptfuhrer

EX-10.FF 4 g87441exv10wff.htm EX-10(FF) SPLIT-DOLLAR LIFE INSURANCE TERMINATION EX-10(ff) Split-Dollar Life Insurance Termination

Exhibit (10)(ff)

SPLIT-DOLLAR LIFE INSURANCE TERMINATION AGREEMENT, dated as of December 29, 2003 (this “Agreement”), among WACHOVIA CORPORATION, a North Carolina corporation, its subsidiaries and affiliates (the “Corporation”), G. Kennedy Thompson (the “Insured”) and The Thompson Family Irrevocable Trust Dated December 31, 1996 (the “Owner”).

WITNESSETH:

WHEREAS, the Corporation, the Insured and the Owner desire to terminate the Split-Dollar Life Insurance Agreement among them; and

WHEREAS, as a condition to and together with the parties executing this Agreement, Wachovia Corporation (“Wachovia”), the Insured and the Owner are executing an Insurance Bonus Agreement, dated the same date as this Agreement (the “Insurance Bonus Agreement”);

NOW, THEREFORE, in consideration of the mutual promises made herein, the parties agree as follows:

1. Termination of the Agreement. The Split-Dollar Life Insurance Agreement, dated as of December 19, 1996, among the Corporation, the Insured and the Owner (the “Split-Dollar Agreement”) is hereby terminated. The Insured and the Owner authorize the Corporation, Wachovia and their respective representatives to take all actions necessary to effectuate the termination.

2. Repayment of the Corporation’s Interest and Investment in a New Policy. The Corporation shall promptly recover all amounts owed it under the Split-Dollar Agreement and the arrangements contemplated by it. Upon receipt by the Corporation of the entire amount owed it, the Owner directs the Corporation, Wachovia and their respective representatives to surrender and/or cancel the insurance policy or policies underlying the Split-Dollar Agreement and apply the Owner’s portion of any value resulting therefrom (after withholding for income taxes) toward the Policy referred to in the Insurance Bonus Agreement.

3. Full Cooperation. The Insured and the Owner shall cooperate fully with the Corporation, Wachovia and the Insurer (as defined in the Split-Dollar Agreement) and take all actions (including but not limited to transferring possession of the underlying insurance policy to the Corporation, or surrendering or canceling the policy to pay the Corporation the amount owed it from the cash value) to the extent reasonably necessary to ensure that the Corporation promptly recovers the amounts owed it under the Split-Dollar Agreement and any excess value in the underlying insurance policy is applied as set forth in Section 2.

4. Liability of the Company. Neither Wachovia nor the Corporation makes any representations or shall have any responsibility or liability for any tax or estate planning matters with respect to the termination of the Split-Dollar Agreement. Wachovia has encouraged the Insured and the Owner to consult tax and legal advisors, and the Insured and the Owner have relied on their own tax and legal advisors with respect to this decision to terminate.

IN WITNESS WHEREOF, the parties hereto have executed this Split-Dollar Life Insurance Termination Agreement on the date first above written.

WACHOVIA CORPORATION


By:		/s/ Charles D. Loring

Name:		Charles D. Loring
Title:		Senior Vice President


Insured			Owner

/s/ G. Kennedy Thompson			By:	/s/ Wachovia Bank, N.A., Trustee

Insured: G. Kennedy Thompson			Trustee: Wachovia Bank, N.A.
			Owner: The Thompson Family Irrevocable Trust
			Dated December 31, 1996

Date:	December 29	, 2003	Date:	December 29	, 2003

EX-10.GG 5 g87441exv10wgg.htm EX-10(GG) INSURANCE BONUS AGREEMENT EX-10(gg) Insurance Bonus Agreement

Exhibit (10)(gg)

INSURANCE BONUS AGREEMENT (the “Agreement”), dated as of December 29, 2003, among Wachovia Corporation, a North Carolina corporation, its subsidiaries and affiliates (the “Company”), G. Kennedy Thompson (the “Insured”) and The Thompson Family Irrevocable Trust Dated December 31, 1996 (the “Owner”).

W I T N E S S E T H:

WHEREAS, the Owner desires to purchase a life insurance policy insuring the life of the Insured;

WHEREAS, the Company desires to provide the Insured with a special bonus for work performed for the Company; and

WHEREAS, the Company, the Insured and the Owner desire to terminate the Split-Dollar Life Insurance Agreement among them and this Agreement is a condition to the termination;

NOW, THEREFORE, in consideration of the preceding and the mutual promises made herein, the Company and the Insured agree as follows:

1. Purchase Of Policy. The Owner agrees that it shall apply to The Travelers Insurance Company (together, the “Insurer”) for a policy of insurance having the terms set forth in the attached Schedule (the “Policy”). The Insured agrees to provide any and all information requested by the Insurer in order for the Insurer to underwrite the Policy, including but not limited to a medical examination and completion of forms as requested by the Insurer.

2. Policy Ownership. The Owner shall be the sole owner of the Policy and shall have all incidents of ownership in and to the Policy.

3. Insurance Bonus. In addition to any and all compensation paid by the Company to the Insured for the Insured’s services, the Company shall cause an annual insurance bonus to be paid to the Insured (or after the Insured’s death, to his or her surviving spouse) in the amount of Seventeen Thousand, Seven Hundred Eighty-Three Dollars and thirty-Three Cents ($17,783.33) (the “Insurance Bonus”). While this Agreement is in force, the Insurance Bonus will be paid during December each year, beginning 2003. The parties agree that the Insurance Bonus is compensation for services and that the Company may withhold any taxes that are required to be withheld under any law, rule or regulation.

4. Premium Payments. The Owner agrees to pay the annual premium on the Policy (the “Annual Premium”) when due. As a convenience to the Insured and the Owner, the Insured directs the Company (a) to pay the Insurance Bonus directly to the Insurer on behalf of the Owner against the Annual Premium and (b) to the extent the Annual Premium exceeds the amount of the Insurance Bonus after all applicable withholding, to pay the excess out of the amount of any other compensation then owed to the Insured. The Company shall notify the Insured of any amounts it has paid under this Section 4, and the Owner shall pay any remainder of the Annual Premium when due. For the avoidance of doubt, this Agreement in no way obligates the Company to extend or maintain credit to or for the Insured or the Owner.

5. Termination. This Agreement shall terminate upon the earlier of:

(a) The death of the Insured;

(b) Termination of Insured’s employment with the Company and its subsidiaries other than as a result of (i) Insured’s Retirement with the Company’s consent, (ii) termination by Insured for Good Reason in accordance with the terms of the Employment Agreement, (iii) termination by the Company for any reason other than for Cause, or (iv) termination of the Insured’s employment due to Long-term Disability (as defined in the Company’s Long-Term Disability Plan); provided that this Section 5(b) shall not apply after a Change in Control;

(d) Written notice by the Company to the Insured, if the Owner has failed to pay any portion of the Annual Premium when due or either the Owner or the Insured has failed to comply with any other provision of this Agreement (and, in each case, such failure has not been cured within 30-days of the Company’s written notice to the Insured);

(e) Mutual agreement by the Company and the Insured.

Except as provided in this Section 5(b), termination of Insured’s employment with the Company and its subsidiaries shall not affect the party’s obligations under this Agreement.

6. Certain Forbearances. Notwithstanding Section 2 of this Agreement, the Owner agrees that during the term of this Agreement that the Owner will not (without the prior written consent of the Company): (a) exchange or surrender any part of the Policy (for its cash value or otherwise); (b) obtain a loan against the Policy from the Insurer; (c) assign any part of the Policy as collateral security; (d) change the ownership of any part of the Policy by endorsement or assignment; or (e) request a settlement of the proceeds of the Policy under any method of settlement other than one which is in reference to the life of the Insured. If applicable, the Owner shall enter into an agreement with the Insurer to effect the foregoing.

7. Amendment Of Agreement. The Agreement shall not be amended, altered or modified, and no term may be waived, without the written agreement of the Insured and the Company. The agreement of the Owner shall not be required unless the amendment, alteration, modification or waiver increases materially the obligations of the Owner under this Agreement. The failure of the Company to enforce any of the provisions of this Agreement shall in no way be construed to be a waiver of any such provision. No waiver of any breach of this Agreement shall be held to be a waiver of any other or subsequent breach.

8. Death Benefits. The Owner shall designate the beneficiary or beneficiaries of the Policy, and the Company shall have no rights or interest in the death proceeds payable under the Policy or in the cash value of the Policy.

9. Miscellaneous. The Company and the Insured agree that (a) this Agreement is not and shall not be construed as an employee benefit plan subject to the Employment Retirement Income Security Act of 1974, as amended (“ERISA”) and (b) the value of the Insured’s Insurance Bonus shall not be considered as salary or compensation for purposes of determining the Insured’s benefits under any of the Company’s or its affiliates’ plans, policies or arrangements, including, but not limited to, pension, retirement, profit sharing, bonus or severance plans or under any agreement between the Insured and the Company or one of its affiliates. Before making any claim under this Agreement, the Owner and the Insured will comply with the Company’s claims procedures, which may be obtained from the Company’s Executive Compensation Department. This agreement shall be subject to and construed under the laws of the state of North Carolina.

10. Use of Certain Definitions. Capitalized terms used herein but not defined herein shall have the meanings ascribed to such terms in the Employment Agreement, dated as of November 15, 1999 (the “Employment Agreement”), by and between the Insured and the Company. This Agreement does not constitute an amendment to the Employment Agreement.

11. Liability Of Insurer. The Insurer is not a party to this Agreement and shall have no liability except as set forth in the Policy.

12. Liability Of the Company. The Company makes no representations to the Insured and shall have no responsibility or liability for the tax effects of this Insurance Bonus Agreement or any related payments under the Policy. The Insured is solely responsible for any taxes owed as a result of the Insurance Bonus. The Owner and the Insured represent that they have relied on their own tax and legal advisors with respect to this Agreement, the Insurance Bonus and the Policy.

13. No Third Party Beneficiaries. This Agreement shall not confer any rights or remedies on any person other than the Company, the Insured or the Owner.

IN WITNESS WHEREOF, the parties hereto have executed this Insurance Bonus Agreement on the date first above written.


WACHOVIA CORPORATION

By:	/s/ Charles D. Loring		/s/ G. Kennedy Thompson

Name: Charles D. Loring			Insured: G. Kennedy Thompson
Title: Senior Vice President

Date:	December 29	, 2003	Date:	December 29	, 2003

			/s/ Wachovia Bank, N.A., Trustee

			Trustee: Wachovia Bank, N.A.
			Owner: The Thompson Family Irrevocable Trust
			Dated December 31, 1996

			Date:	December 29	, 2003

EX-10.HH 6 g87441exv10whh.htm EX-10(HH) FORM OF SPLIT-DOLLAR LIFE INSURANCE TER EX-10(hh) Form of Split-Dollar Life Insurance Ter

Exhibit (10)(hh)

Split-Dollar Life Insurance Termination Agreement, dated as of , 2003 (this “Agreement”), among WACHOVIA CORPORATION, a North Carolina corporation, its subsidiaries and affiliates (the “Corporation”), (the “Insured”) and (the “Owner”).

Witnesseth:

Whereas, the Corporation, the Insured and the Owner desire to terminate the Split-Dollar Life Insurance Agreement among them; and

Whereas, as a condition to and together with the parties executing this Agreement, Wachovia Corporation (“Wachovia”), the Insured and the Owner are executing an Insurance Bonus Agreement, dated the same date as this Agreement (the “Insurance Bonus Agreement”);

Now, therefore, in consideration of the mutual promises made herein, the parties agree as follows:

1. Termination of the Agreement. The Split-Dollar Life Insurance Agreement, dated as of , among the Corporation, the Insured and the Owner (the “Split-Dollar Agreement”) is hereby terminated. The Insured and the Owner authorize the Corporation, Wachovia and their respective representatives to take all actions necessary to effectuate the termination.

In witness whereof, the parties hereto have executed this Split-Dollar Life Insurance Termination Agreement on the date first above written.

WACHOVIA CORPORATION


By:
Name:
Title:


Insured		Owner

		By:
Insured:			Owner:

Date:	, 2003	Date:		, 2003

EX-10.II 7 g87441exv10wii.htm EX-10(II) FORM OF INSURANCE BONUS AGREEMENT EX-10(ii) Form of Insurance Bonus Agreement

Exhibit (10)(ii)

(VESTED)

Insurance Bonus Agreement (the “Agreement”), dated as of , 2003, among Wachovia Corporation, a North Carolina corporation, its subsidiaries and affiliates (the “Company”), (the “Insured”) and (the “Owner”).

WITNESSETH:

Whereas, the Owner desires to purchase a life insurance policy insuring the life of the Insured;

Whereas, the Company desires to provide the Insured with a special bonus for work performed for the Company; and

Whereas, the Company, the Insured and the Owner desire to terminate the Split-Dollar Life Insurance Agreement among them and this Agreement is a condition to the termination;

Now, therefore, in consideration of the preceding and the mutual promises made herein, the Company and the Insured agree as follows:

2. Policy Ownership. The Owner shall be the sole owner of the Policy and shall have all incidents of ownership in and to the Policy.

3. Insurance Bonus. In addition to any and all compensation paid by the Company to the Insured for the Insured’s services, the Company shall cause an annual insurance bonus to be paid to the Insured (or after the Insured’s death, to his or her surviving spouse) in the amount of ($ ) (the “Insurance Bonus”). While this Agreement is in force, the Insurance Bonus will be paid during December each year, beginning 2003. The parties agree that the Insurance Bonus is compensation for services and that the Company may withhold any taxes that are required to be withheld under any law, rule or regulation.

5. Termination. This Agreement shall terminate upon the earlier of:

(a) The later of the death of the Insured or the Insured’s spouse;

(b) Written notice by the Company to the Insured, if the Owner has failed to pay any portion of the Annual Premium when due or either the Owner or the Insured has failed to comply with any other provision of this Agreement (and, in each case, such failure has not been cured within 30-days of the Company’s written notice to the Insured);

Termination of Insured’s employment with the Company and its subsidiaries shall not affect the party’s obligations under this Agreement.

10. Use of Certain Definitions. Capitalized terms used herein but not defined herein shall have the meanings ascribed to such terms in the Employment Agreement, dated as of (the “Employment Agreement”), by and between the Insured and the Company. This Agreement does not constitute an amendment to the Employment Agreement.

11. Liability Of Insurer. The Insurer is not a party to this Agreement and shall have no liability except as set forth in the Policy.

13. No Third Party Beneficiaries. This Agreement shall not confer any rights or remedies on any person other than the Company, the Insured or the Owner.

In witness whereof, the parties hereto have executed this Insurance Bonus Agreement on the date first above written.

WACHOVIA CORPORATION


By:
Name:	Insured:
Title:		[SEAL]


	Owner:
		[SEAL]

(UNVESTED)