1986 Key Employee Salary Reduction Deferred Compensation Plan

Exhibit 10(aj)


FIRST VIRGINIA BANKS, INC.

1986 KEY EMPLOYEE SALARY REDUCTION DEFERRED COMPENSATION PLAN

FIRST VIRGINIA BANKS, INC.

1986 KEY EMPLOYEE SALARY REDUCTION DEFERRED COMPENSATION PLAN

TABLE OF CONTENTS


Section Page No.


ARTICLE I

Purpose of the Plan - Effective Date

Section 1.01 Purpose 1

Section 1.02 Effective Date 1

ARTICLE II

Definitions

Section 2.01 Beneficiary 1

Section 2.02 Board of Directors 1

Section 2.03 Committee 1

Section 2.04 Compensation 1

Section 2.05 Corporation 1

Section 2.06 Deferred Compensation Agreement 1

Section 2.07 Disability 1

Section 2.08 Employee 2

Section 2.09 Employer 2

Section 2.10 Highly Paid Employee 3

Section 2.11 Insurance Company 3

Section 2.12 Participant 3

Section 2.13 Pension Trust Plan 3

Section 2.14 Plan 3

Section 2.15 Plan Year 3

Section 2.16 Policy 3

Section 2.17 Reduction Period 3

Section 2.18 Secondary Beneficiary 3

ARTICLE III

Administration

Section 3.01 Administration 3

ARTICLE IV

Eligibility 4

Section 4.01 Eligibility

ARTICLE V

Participation and Deferral

Section 5.01 Participation 4


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Section 5.02 Deferral of Compensation 4

ARTICLE VI

Benefits

Section 6.01 Normal Retirement Benefits 5

Section 6.02 Early Retirement Benefits 5

Section 6.03 Termination of Participation 5

Section 6.04 Pre-Retirement Survivor Benefits 6

Section 6.05 Benefits After Payments Begin Under This Plan 6

ARTICLE VII

Discretionary Purchase of Policies

Section 7.01 Discretionary Purchase of Policies 6

Section 7.02 Interest of Participant 6

ARTICLE VIII

Termination and Amendment

Section 8.01 Termination and Amendment 7

ARTICLE IX

Claims Procedure

Section 9.01 Determination 7

Section 9.02 Review 7

ARTICLE X

Miscellaneous Provisions

Section 10.01 General Undertaking 8

Section 10.02 Binds Heirs, etc 8

Section 10.03 No Guarantee of Employment 8

Section 10.04 Nonalienation of Benefits 8

Section 10.05 Withholding 8

Section 10.06 Gender and Number 8

Section 10.07 Titles and Headings 8

Section 10.08 Governing Law 8

Section 10.09 Prevention of Escheat 8

Section 10.10 Separability Clause 9


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FIRST VIRGINIA BANKS, INC.

1986 KEY EMPLOYEE SALARY REDUCTION DEFERRED COMPENSATION PLAN

Purpose of the Plan - Effective Date

Purpose. The purpose of this Plan is to provide key Employees of First Virginia Banks, Inc. or its subsidiaries with the opportunity to receive supplemental retirement benefits and to provide for the payment of survivor benefits in the event of death before the date on which retirement payments are scheduled to commence under the Plan. An additional purpose is to establish a method of paying additional compensation that will aid First Virginia Banks, Inc. and its subsidiaries in continuing to attract and retain as Employees persons whose abilities, experience and judgment can contribute to the continued progress of First Virginia Banks, Inc. and its subsidiaries.


Effective Date. This Plan shall be effective January 1, 1986.


Definitions

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

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

Committee. Shall mean the Executive Committee of the Board.

Compensation. Shall mean the basic rate of annual remuneration being paid to an Employee. No bonuses, overtime pay, commissions or other type of additions to basic remuneration shall be taken into consideration.

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


Deferred Compensation Agreement. Shall mean a written agreement between a Participant and the Corporation, pursuant to which a Participant agrees to a deferral of his compensation and the Corporation agrees to pay retirement or survivor benefits in accordance with the terms of the Plan and the agreement.


Disability. Shall mean the incapacity of a Participant by reason of bodily injury or disease which prevents the Participant from performing each and all the material duties of his own occupation with the Employer or any occupation or employment for wage or profit for which he is

reasonably qualified by education, training or experience as determined by the Committee with the advice of one or more physicians. A determination with respect to a Participant' s Disability shall be as of the date on which the Disability commenced.

Employee. Shall mean an individual who is employed by an Employer and is on the payroll of such Employer.

Employer. Shall mean the Corporation and its subsidiaries.

The term " Employer" shall be used throughout this Plan to designate the respective Employer entities unless the context demands otherwise, and each Employer shall be deemed such only as to those Participants who are on its payroll and in each case only to the extent of the Compensation which it pays to each of those Participants.

Highly Paid Employee. Shall mean an Employee who is receiving Compensation equal to or greater than Forty Seven Thousand Five Hundred Dollars ($47,500) or such other amount as may be established from time to time by the Committee.

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

Participant. Shall mean an Employee who is eligible and becomes covered under Articles IV and V of this Plan.


Pension Trust Plan. Shall mean the First Virginia Pension Trust Plan as currently in effect and as the same may be amended from time to time and any successor thereto or replacement thereof.

Plan. Shall mean the Corporation' s 1986 Key Employee Salary Reduction Deferred Compensation Plan as set forth herein and as it may be amended from time to time.


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


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


Reduction Period. Shall mean a period of five (5) consecutive Plan Years, the first period beginning January 1,1986 and ending on December 31, 1990.


Secondary Beneficiary. Shall mean the person or persons designated by a Participant in a Designation of Beneficiary Form filed with the Corporation' s Secretary to receive payments under the Plan if the Participant' s primary Beneficiary should predecease Participant.

Administration


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

The Corporation shall maintain accurate bookkeeping accounts with respect to each Participant' s Compensation credited and deferred under his Deferred Compensation Agreement.


Eligibility


Eligibility. Each Highly Paid Employee who is a key Employee designated by the Committee and who satisfies such medical requirements as the Committee may impose, shall be eligible to participate in the Plan.


Participation and Deferral


Participation. An eligible Employee may become a Participant by completing a Deferred Compensation Agreement and filing it with the Corporation' s Secretary prior to the beginning of a Plan Year. The effective date of participation will be the first day of the Plan Year after the Deferred Compensation Agreement has been filed. In the Deferred Compensation Agreement, the Participant must indicate (a) the amount of Compensation the Participant wishes to defer (which must be at least One Thousand Dollars ($1,000), and must be in multiples of One Thousand Dollars ($1,000)), and (b) the three specific Plan Years during the Reduction Period in which the Participant wishes to defer. A Participant may redesignate the specific Plan Years during the Reduction Period in which he wishes to defer by entering into a new Deferred Compensation Agreement and redesignating the new Plan Years on the new Deferred Compensation Agreement, provided, however, that the new Deferred Compensation Agreement is executed prior to the beginning of a redesignated Plan Year. In this case, the new Deferred Compensation Agreement would amend the old Agreement. Otherwise, the Deferred Compensation Agreement is irrevocable and may not be amended prior to the completion of the deferrals.


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


Deferral of Compensation. The Employer shall defer payment of the Participant' s Compensation in the manner and amount stated in his Deferred Compensation Agreement. Deferrals shall cease automatically once a Participant has deferred the total amount specified in his Deferred Compensation Agreement.


If a Participant is receiving long-term disability benefits from the Corporation' s Long-Term Disability Plan and suffers from a Disability during any of the Plan Years in which deferments are to be made such that Participant cannot continue his deferments as indicated in

the Deferred Compensation Agreement, none of the Participant' s benefits under the Plan shall be in any way reduced solely because the Participant cannot defer while under such a Disability. The Participant' s participation in the Plan will continue as if the Participant continued to make, and the Participant will be given credit for as if he had made, the deferments during the period of the Disability. If the Participant' s Disability ends prior to the Reduction Period, the Participant must resume making deferments in accordance with his Deferred Compensation Agreement.

Benefits


Normal Retirement Benefits. A Participant who has made sufficient deferrals for at least one Plan Year and who is sixty-five (65) years old, shall be entitled to receive Normal Retirement Benefits under this Plan. Normal Retirement Benefits shall be equal to the amount specified in the Participant' s Deferred Compensation Agreement multiplied by the ratio (expressed to the nearest thousandth of a percent) of: (a) the amount of deferrals the Participant has made pursuant to the terms of his Deferred Compensation Agreement to (b) the total amount of deferrals that the Participant indicated in his Deferred Compensation Agreement he would make during the Reduction Period. This amount shall be payable by the Corporation in fifteen (15) equal annual payments. The first payment shall begin on the later of: (a) the first day of the month following the last day of the Reduction Period, or (b) the first day of the month following the Participant' s sixty-fifth (65th) birthday, and subsequent payments shall be made on the same day of each subsequent year.

Early Retirement Benefits. In lieu of Normal Retirement Benefits, a Participant who has made sufficient deferrals for at least one Plan Year and who is retired and eligible for an earlier retirement benefit under the Pension Trust Plan may elect to receive Early Retirement Benefits under this Plan. Early Retirement Benefits shall be equal to the amount specified in the Participant' s Deferred Compensation Agreement multiplied by the ratio (expressed to the nearest thousandth of a percent) of: (a) the amount of deferrals the Participant has made pursuant to the terms of his Deferred Compensation Agreement to (b) the total amount of deferrals that the Participant indicated in his Deferred Compensation Agreement he would make during the Reduction Period. This amount shall be payable by the Corporation in fifteen (15) equal annual payments. The first payment shall begin on the later of: (a) the first day of the month following the last day of the Reduction Period, or (b) the first day of the month following the date on which Participant retires under the earlier retirement provisions under the Plan, and subsequent payments shall be made on the same day of each subsequent year.

Termination of Participation. A Participant' s participation will be terminated under the Plan only by Participant' s failure to complete deferrals for the first Plan Year that Participant has designated in his Deferred Compensation Agreement as the first Plan Year to defer, for any reason other than death. If Participant' s participation is terminated, then he shall receive a lump sum payment of the total amount of his Compensation deferred within sixty (60) days after the first day of the month following his termination of participation. The effective date of termination shall be the date of termination of employment if Employee' s employment is


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terminated prior to completing deferrals for at least one Plan Year; otherwise, the date of termination shall be the first date of the next Plan Year following the first Plan Year designated by Participant as the first Plan Year to defer.

The transfer of a Participant from the payroll of one of the Employers hereunder to the payroll of one or more of the other Employers hereunder shall not be construed as a termination of employment for purposes of this Plan.


Pre-Retirement Survivor Benefits. Provided that a Participant' s participation in the Plan has not been terminated and Participant has not been paid any retirement benefits under his Deferred Compensation Agreement, then, upon Participant' s death, Participant' s Beneficiary (or Secondary Beneficiary, as the case may be) shall be entitled to receive the pre-retirement survivor benefits specified in the Participant' s Deferred Compensation Agreement. This amount shall be payable by the Corporation in fifteen (15) equal annual payments. The first payment shall be made as of the first day of the second month following the Participant' s death and subsequent payments shall be made on the same day of each subsequent year.


Benefits After Payments Begin Under This Plan. If a Participant should die after having been paid at least one payment of retirement benefits under either Section 6.01 or 6.02 of this Plan, the Participant' s Beneficiary (or Secondary Beneficiary, as the case may be) shall be entitled to receive the remaining retirement benefits payable to Participant at the same time and in the same manner as Participant would have received them.

If Participant' s Beneficiary (or Secondary Beneficiary) should die after having been paid at least one payment of survivor benefits, then the remaining survivor benefits shall be paid pursuant to the Last Will and Testament of the said Beneficiary (or Secondary Beneficiary) or in the absence of such a Will being admitted to probate within one year from the date of death, then to the Personal Representative of the said Beneficiary (or Secondary Beneficiary). Such payments shall be made at the same time and in the same manner as said Beneficiary (or Secondary Beneficiary) would have received them.

Discretionary Purchase of Policies

Discretionary Purchase of Policies. The Corporation may, but shall not be required to, offset its obligations under this Plan through the purchase of life insurance on the life of each Participant. Each Participant agrees to cooperate in the securing of life insurance on the Participant' s life by furnishing such information as the Corporation and the Insurance Company may require, taking such physical examinations as may be necessary and taking any other such action as may be requested by the Corporation and the Insuran ...