EXHIBIT 3.1

RESTATED
ARTICLES OF INCORPORATION
OF
NATIONSBANK CORPORATION

NationsBank Corporation, a business corporation incorporated under the
North Carolina Business Corporation Act, pursuant to action by its Board of
Directors, hereby sets forth its Restated Articles of Incorporation:

1. The name of the Corporation is NationsBank Corporation.

2. The purposes for which the Corporation is organized are to engage in
any lawful act or activity for which corporations may be organized under Chapter
55 of the North Carolina General Statutes, as amended.

3. The number of shares the Corporation is authorized to issue is One
Billion Two Hundred Ninety-Five Million (1,295,000,000), divided into the
following classes:

Class Number of Shares

.......................Common 1,250,000,000
....................Preferred 45,000,000

The class of common has unlimited voting rights and, after satisfaction
of claims, if any, of the holders of preferred shares, is entitled to receive
the net assets of the Corporation upon distribution.

The Board of Directors of the Corporation shall have full power and
authority to establish one or more series within the class of preferred shares
(the "Preferred Shares"), to define the designations, preferences, limitations
and relative rights (including conversion rights) of shares within such class
and to determine all variations between series.

The Board of Directors of the Corporation has designated, established
and authorized the following series of Preferred Shares:

(a) Cumulative Convertible Preferred Stock, Series A.

A. Designation.

The designation of the series of Preferred Stock created by
this resolution shall be Cumulative Convertible Preferred Stock, Series
A, $100 stated value, of the Corporation (hereinafter referred to as
"Series A



Preferred Stock"), and the number of shares constituting such series
shall be 250,000, which number may be increased (but not above the
total number of shares of Preferred Stock of the Corporation then
authorized by the Restated Articles of Incorporation, as amended from
time to time) or decreased (but not below the number of shares then
outstanding) from time to time by the Board of Directors. The Series A
Preferred Stock shall rank prior to the Common Stock, the 7% Cumulative
Redeemable Preferred Stock, Series B, $100 stated value per share, and
the ESOP Convertible Preferred Stock, Series C, with respect to the
payment of dividends and the distribution of assets.

B. Dividend Rights.

(1) The holders of shares of Series A Preferred Stock shall be
entitled to receive, when and as declared by the Board of Directors,
out of funds legally available therefor, cash dividends, accruing from
the date of initial issuance, at the annual rate of 7.00% of the
liquidation preference per annum, and no more, payable, when and as
declared by the Board of Directors, quarterly on March 1, June 1,
September 1, and December 1 of each year (each quarterly period ending
on any such date being hereinafter referred to as a "dividend period"),
commencing on the first March 1, June 1, September 1, or December 1 to
occur after the Issue Date (as hereafter defined), at such annual rate.
Each dividend will be payable to holders of record as they appear on
the stock books of the Corporation on such record dates as shall be
fixed by the Board of Directors of the Corporation. The date of initial
issuance of shares of Series A Preferred Stock is hereinafter referred
to as the "Issue Date". Dividends payable on the Series A Preferred
Stock (i) for any period other than a full dividend period shall be
computed on the basis of a 360-day year consisting of twelve 30-day
months and (ii) for each full dividend period shall be computed by
dividing the annual dividend rate by four.

(2) Dividends on shares of Series A Preferred Stock shall be
cumulative from the Issue Date whether or not there shall be funds
legally available for the payment thereof. If there shall be
outstanding shares of any other series of Preferred Stock ranking
junior to or on a parity with the Series A Preferred Stock as to
dividends, no dividends shall be declared or paid or set apart for
payment on any such other series for any period unless full cumulative
dividends have been or contemporaneously are declared and paid or
declared and a sum sufficient for the payment thereof is set apart for
such payment on the Series A Preferred Stock for all dividend periods
terminating on or prior to the date of payment of such dividends. If
dividends on the Series A Preferred Stock and on any other series of
Preferred Stock ranking on a parity as to dividends with the Series A


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Preferred Stock are in arrears, in making any dividend payment on
account of such arrears, the Corporation shall make payments ratably
upon all outstanding shares of the Series A Preferred Stock and shares
of such other series of Preferred Stock in proportion to the respective
amounts of dividends in arrears on the Series A Preferred Stock and on
such other series of Preferred Stock to the date of such dividend
payment. Holders of shares of the Series A Preferred Stock shall not be
entitled to any dividend, whether payable in cash, property or stock,
in excess of full cumulative dividends on such shares. No interest or
sum of money in lieu of interest shall be payable in respect of any
dividend payment or payments which may be in arrears.

(3) Unless full cumulative dividends on all outstanding shares
of the Series A Preferred Stock shall have been paid or declared and
set aside for payment for all past dividend periods, no dividend (other
than a dividend in Common Stock or in any other stock ranking junior to
the Series A Preferred Stock as to dividends and the distribution of
assets upon liquidation, dissolution or winding up) shall be declared
upon the Common Stock or upon any other stock ranking junior to the
Series A Preferred Stock as to dividends and the distribution of assets
upon liquidation, dissolution, or winding up, nor shall any Common
Stock or any other stock of the Corporation ranking junior to or on a
parity with the Series A Preferred Stock as to dividends or upon the
distribution of assets upon liquidation, dissolution or winding up be
redeemed, purchased or otherwise acquired for any consideration (or any
moneys be paid to or made available for a sinking fund for the
redemption of any shares of any such stock) by the Corporation (except
by conversion into or exchange for stock of the Corporation ranking
junior to the Series A Preferred Stock as to dividends and the
distribution of assets upon liquidation, dissolution or winding up).

C. Liquidation Preferences.

(1) In the event of any liquidation, dissolution or winding up
of the affairs of the Corporation, whether voluntary or involuntary,
the holders of Series A Preferred Stock shall be entitled to receive
out of the assets of the Corporation available for distribution to
stockholders an amount equal to $400.00 per share plus an amount equal
to any accrued and unpaid dividends thereon to and including the date
of such distribution, and no more, before any distribution shall be
made to the holders of Common Stock or any other class of stock of the
Corporation ranking junior to the Series A Preferred Stock as to the
distribution of assets. After payment of such liquidating
distributions, the holders of shares of Series A Preferred Stock will
not be entitled to any further participation in any distribution of
assets by the Corporation.

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(2) In the event the assets of the Corporation available for
distribution to stockholders upon any liquidation, dissolution or
winding up of the affairs of the Corporation, whether voluntary or
involuntary, shall be insufficient to pay in full the amounts payable
with respect to the Series A Preferred Stock and any other shares of
Preferred Stock ranking on a parity with the Series A Preferred Stock
as to the distribution of assets, the holders of Series A Preferred
Stock and the holders of such other Preferred Stock shall share ratably
in any distribution of assets of the Corporation in proportion to the
full respective preferential amounts to which they are entitled.

(3) The merger or consolidation of the Corporation into or
with any other corporation, the merger or consolidation of any other
corporation into or with the Corporation or the sale of the assets of
the Corporation substantially as an entirety shall not be deemed a
liquidation, dissolution or winding up of the affairs of the
Corporation within the meaning of this Section 3.

D. Redemption.

(1) Subject to obtaining the prior approval of the Board of
Governors of the Federal Reserve System, the Corporation, at its
option, may redeem any or all shares of Series A Preferred Stock, at
any time or from time to time, on or after March 1, 1997 at a
redemption price of $400.00 per share, plus an amount equal to accrued
and unpaid dividends thereon to and including the date of redemption
(the "Redemption Price").

(2) If less than all the outstanding shares of Series A
Preferred Stock are to be redeemed, the shares to be redeemed shall be
selected pro rata as nearly as practicable or by lot, or by such other
method as the Board of Directors may determine to be fair and
appropriate.

(3) Notice of any redemption shall be given by first class
mail, postage prepaid, mailed not less than 30 nor more than 60 days
prior to the date fixed for redemption to the holders of record of the
shares of Series A Preferred Stock to be redeemed, at their respective
addresses appearing on the books of the Corporation. Notice so mailed
shall be conclusively presumed to have been duly given whether or not
actually received. Such notice shall state: (i) the date fixed for
redemption; (ii) the Redemption Price; (iii) that the holder has the
right to convert such shares into Common Stock until the close of
business on the tenth day preceding the redemption date; (iv) the
then-effective conversion price and the place where certificates for
such shares may be surrendered for conversion; (v) the number of shares
of Series A Preferred Stock to be redeemed and if less than all the
shares held by such holder are to be redeemed, the number of such
shares to be so


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redeemed from such holder; (vi) the place where certificates for such
shares are to be surrendered for payment of the Redemption Price; and
(vii) that after such date fixed for redemption the shares to be
redeemed shall not accrue dividends. If such notice is mailed as
aforesaid, and if on or before the date fixed for redemption funds
sufficient to redeem the shares called for reemption are set aside by
the Corporation in trust for the account of the holders of the shares
to be redeemed, notwithstanding the fact that any certificate for
shares called for redemption shall not have been surrendered for
cancellation, on and after the redemption date the shares represented
thereby so called for redemption shall be deemed to be no longer
outstanding, dividends thereon shall cease to accrue and all rights of
the holders of such shares as stockholders of the Corporation shall
cease (except the right to receive the Redemption Price, without
interest, upon surrender of the certificate representing such shares).
Upon surrender in accordance with the aforesaid notice of the
certificate for any shares so redeemed (duly endorsed or accompanied by
appropriate instruments of transfer, if so required by the Corporation
in such notice), the holders of record of such shares shall be entitled
to receive the Redemption Price, without interest. Notwithstanding the
foregoing, however, as and to the extent that the Corporation is
required or permitted under the abandoned property laws of any
jurisdiction to escheat any redemption funds held in trust for the
benefit of any holder, the Corporation shall be absolved of any further
obligation or liability to such holder to the full extent provided by
any such law. In case fewer than all the shares represented by any such
certificate are redeemed, a new certificate shall be issued
representing the unredeemed shares without cost to the holder thereof.

(4) At the option of the Corporation, if notice of redemption
is mailed as aforesaid, and if prior to the date fixed for redemption
funds sufficient to pay in full the Redemption Price are deposited in
trust, for the account of the holders of the shares to be redeemed,
with a bank or trust company named in such notice doing business in the
State of North Carolina or the Borough of Manhattan, The City of New
York, State of New York, and having capital and surplus of at least $50
million (which bank or trust company also may be the transfer agent
and/or paying agent for the Series A Preferred Stock) notwithstanding
the fact that any certificate(s) for shares called for redemption shall
not have been surrendered for cancellation, on and after such date of
deposit the shares represented thereby so called for redemption shall
be deemed to be no longer outstanding, and all rights of the holders of
such shares as shareholders of the Corporation shall cease, except the
right of the holders thereof to convert such shares in accordance with
the provisions of Section 5 at any time prior to the close of business
on the tenth day preceding the redemption date and the right of the
holders thereof to receive out of the funds so deposited in trust the
Redemption Price, without interest, upon surrender of the
certificate(s) representing such shares. Any


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funds so deposited with such bank or trust company in respect of shares
of Series A Preferred Stock converted before the close of business on
the tenth day preceding the redemption date shall be returned to the
Corporation upon such conversion. Unless otherwise required by law, any
funds so deposited with such bank or trust company which shall remain
unclaimed by the holders of shares called for redemption at the end of
two years after the redemption date shall be repaid to the Corporation,
on demand, and thereafter the holder of any such shares shall look only
to the Corporation for the payment, without interest, of the Redemption
Price. Notwithstanding the foregoing, however, as and to the extent
that the Corporation is required or permitted under the abandoned
property laws of any jurisdiction to escheat any redemption funds held
in trust for the benefit of any holder, the Corporation shall be
absolved of any further obligation or liability to such holder to the
full extent provided by any such laws.

(5) Any provision of this Section 4 to the contrary
notwithstanding, in the event that any quarterly dividend payable on
the Series A Preferred Stock shall be in arrears and until all such
dividends in arrears shall have been paid or declared and set apart for
payment, the Corporation shall not redeem any shares of Series A
Preferred Stock unless all outstanding shares of Series A Preferred
Stock are simultaneously redeemed and shall not purchase or otherwise
acquire any shares of Series A Preferred Stock except in accordance
with a purchase or exchange offer made on the same terms to all holders
of record of Series A Preferred Stock for the purchase of all
outstanding shares thereof.

E. Conversion Rights.

The holders of shares of Series A Preferred Stock shall have
the right, at their option, to convert such shares into shares of
Common Stock on the following terms and conditions:

(1) Shares of Series A Preferred Stock shall be convertible at
any time into fully paid and nonassessable shares of Common Stock at a
conversion price of $44.44 per share of Common Stock (the "Conversion
Price"). For purposes of this Section 5, references to shares of Series
A Preferred Stock shall apply equally to fractional shares thereof, but
only to the extent that such fractional shares are integral multiples
of 1/16 of one share. The Conversion Price shall be subject to
adjustment from time to time as hereinafter provided. For purposes of
such conversion, each share of Series A Preferred Stock will be valued
at $400. No payment or adjustment shall be made on account of any
accrued and unpaid dividends on shares of Series A Preferred Stock
surrendered for conversion prior to the record date for the
determination of stockholders entitled to such dividends or on account


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of any dividends on the shares of Common Stock issued upon such
conversion subsequent to the record date for the determination of
stockholders entitled to such dividends. If any shares of Series A
Preferred Stock shall be called for redemption, the right to convert
the shares designated for redemption shall terminate at the close of
business on the tenth day preceding the date fixed for redemption
unless default is made in the payment of the Redemption Price. In the
event of default in the payment of the Redemption Price, the right to
convert the shares designated for redemption shall terminate at the
close of business on the business day immediately preceding the date
that such default is cured.

(2) In order to convert shares of Series A Preferred Stock
into Common Stock, the holder thereof shall surrender the certificates
therefor, duly endorsed if the Corporation shall so require, or
accompanied by appropriate instruments of transfer satisfactory to the
Corporation, at the office of the transfer agent for the Series A
Preferred Stock, or at such other office as may be designated by the
Corporation, together with written notice that such holder irrevocably
elects to convert such shares or any fraction of a share of Series A
Preferred Stock having a denominator of 16, each such fractional
interest, measured in 1/16 of a share, being valued for purposes of
conversion at $25; references in this Section 5 to the conversion of
any share of Series A Preferred Stock shall also apply, mutatis
mutandis, to such fractional interests. Such notice shall also state
the name and address in which such holder wishes the certificate for
the shares of Common Stock issuable upon conversion to be issued. As
soon as practicable after receipt of the certificates representing the
shares of Series A Preferred Stock to be converted and the notice of
election to convert the same, the Corporation shall issue and deliver
at said office a certificate for the number of whole shares of Common
Stock issuable upon conversion of the shares of Series A Preferred
Stock surrendered for conversion, together with a cash payment in lieu
of any fraction of a share, as hereinafter provided, to the person
entitled to receive the same. If more than one stock certificate for
Series A Preferred Stock shall be surrendered for conversion at one
time by the same holder, the number of full shares of Common Stock
issuable upon conversion thereof shall be computed on the basis of the
aggregate number of shares represented by all the certificates so
surrendered. Shares of Series A Preferred Stock shall be deemed to have
been converted immediately prior to the close of business on the date
such shares are surrendered for conversion and notice of election to
convert the same is received by the Corporation in accordance with the
foregoing provision, and the person entitled to receive the Common
Stock issuable upon such conversion shall be deemed for all purposes as
the record holder of such Common Stock as of such date.


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(3) In the case of any share of Series A Preferred Stock which
is converted after any record date with respect to the payment of a
dividend on the Series A Preferred Stock and on or prior to the date on
which such dividend is payable by the Corporation (the "Dividend Due
Date"), the dividend due on such Dividend Due Date shall be payable on
such Dividend Due Date to the holder of record of such shares as of
such preceding record date notwithstanding such conversion. Shares of
Series A Preferred Stock surrendered for conversion during the period
from the close of business on any record date with respect to the
payment of a dividend on the Series A Preferred Stock next preceding
any Dividend Due Date to the opening of business on such Dividend Due
Date shall (except in the case of shares of Series A Preferred Stock
which have been called for redemption on a redemption date within such
period) be accompanied by payment in New York Clearing House funds or
other funds acceptable to the Corporation of an amount equal to the
dividend payable on such Dividend Due Date on the shares of Series A
Preferred Stock being surrendered for conversion. The dividend with
respect to a share of Series A Preferred Stock called for redemption on
a redemption date during the period from the close of business on any
record date with respect to the payment of a dividend on the Series A
Preferred Stock next preceding any Dividend Due Date to the opening of
business on such Dividend Due Date shall be payable on such Dividend
Due Date to the holder of record of such share on such dividend record
date, notwithstanding the conversion of such share of Series A
Preferred Stock after such record date and prior to such Dividend Due
Date, and the holder converting such share of Series A Preferred Stock
called for redemption need not include a payment of such dividend
amount upon surrender of such share of Series A Preferred Stock for
conversion. Except as provided in this subsection, no payment or
adjustment shall be made upon any conversion on account of any
dividends accrued on shares of Series A Preferred Stock surrendered for
conversion or on account of any dividends on the shares of Common Stock
issued upon conversion.

(4) No fractional shares of Common Stock shall be issued upon
conversion of any shares of Series A Preferred Stock. If more than one
share of Series A Preferred Stock is surrendered at one time by the
same holder, the number of full shares issuable upon conversion thereof
shall be computed on the basis of the aggregate number of shares so
surrendered. If the conversion of any shares of Series A Preferred
Stock results in a fractional share of Common Stock, the Corporation
shall pay cash in lieu thereof in an amount equal to such fraction
multiplied by the closing price, determined as provided in subsection
(vi) of Section 5(e) below, on the date on which the shares of Series A
Preferred Stock were duly surrendered for conversion, or if such date
is not a trading date, on the next succeeding trading date.


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(5) The Conversion Price shall be adjusted from time to time
as follows:

(i) In case the Corporation shall pay or make a
dividend or other distribution on shares of Common Stock in Common
Stock, the Conversion Price in effect at the opening of business on the
date following the date fixed for the determination of stockholders
entitled to receive such dividend or other distribution shall be
reduced by multiplying such Conversion Price by a fraction of which the
numerator shall be the number of shares of Common Stock outstanding at
the close of business on the date fixed for such determination and the
denominator shall be the sum of such number of shares and the total
number of shares constituting such dividend or other distribution, such
reduction to become effective immediately after the opening of business
on the day following the date fixed for such determination. For
purposes of this subsection, the number of shares of Common Stock at
any time outstanding shall not include shares held in the treasury of
the Corporation but shall include shares issuable in respect of scrip
certificates issued in lieu of fractions of shares of Common Stock. The
Corporation will not pay any dividend or make any distribution on
shares of Common Stock held in the treasury of the Corporation.

(ii) In case the Corporation shall issue additional
rights or warrants to all holders of its Common Stock entitling them to
subscribe for or purchase shares of Common Stock at a price per share
less than the then current market price per share (determined as
provided in subsection (vi) below) of the Common Stock on the date
fixed for the determination of stockholders entitled to receive such
rights or warrants (other than pursuant to a dividend reinvestment
plan), the Conversion Price in effect at the opening of business on the
day following the date fixed for such determination shall be reduced by
multiplying such Conversion Price by a fraction of which the numerator
shall be the number of shares of Common Stock outstanding at the close
of business on the date fixed for such determination plus the number of
shares of Common Stock which the aggregate of the offering price of the
total number of shares of Common Stock so offered for subscription or
purchase would purchase at such current market price (determined as
provided in subsection (vi) below) and the denominator shall be the
number of shares of Common Stock outstanding at the close of business
on the date fixed for such determination plus the number of shares of
Common Stock so offered for subscription or purchase, such reduction to
become effective immediately after the opening of business on the day
following the date fixed for such determination. For the purposes of
this subsection (ii), the number of shares of Common Stock at any time
outstanding shall not include shares held in the treasury of the
Corporation but shall include shares issuable in respect of scrip
certificates issued in lieu of fractions of shares of Common Stock. The
Corporation will not issue any


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rights or warrants in respect of shares of Common Stock held in the
treasury of the Corporation during the period so held.

(iii) In case outstanding shares of Common Stock
shall be subdivided into a greater number of shares of Common Stock,
the Conversion Price in effect at the opening of business on the day
following the day upon which such subdivision becomes effective shall
be proportionately reduced, and, conversely, in case outstanding shares
of Common Stock shall be combined into a smaller number of shares of
Common Stock, the Conversion Price in effect at the opening of business
on the day following the day upon which such combination becomes
effective shall be proportionately increased, such reduction or
increase, as the case may be, to become effective immediately after the
opening of business on the day following the day upon which such
subdivision or combination becomes effective.

(iv) In case the Corporation shall, by dividend or
otherwise, distribute to all holders of its Common Stock evidences of
its indebtedness or assets (including securities, but excluding (1) any
rights or warrants referred to in subsection (ii) above, (2) any
dividend or distribution paid in cash out of the retained earnings of
the Corporation and (3) any dividend or distribution referred to in
subsection (i) above), the Conversion Price shall be adjusted so that
the same shall equal the price determined by multiplying the Conversion
Price in effect immediately prior to the close of business on the date
fixed for the determination of stockholders entitled to receive such
distribution by a fraction of which the numerator shall be the current
market price per share (determined as provided in subsection (vi)
below) of the Common Stock on the date fixed for such determination
less the then fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and shall be
described in a statement filed with the transfer agent for the Series A
Preferred Stock) of the portion of the evidences of indebtedness or
assets so distributed applicable to one share of Common Stock and the
denominator shall be such current market price per share of the Common
Stock, such adjustment to become effective immediately prior to the
opening of business on the day following the date fixed for the
determination of stockholders entitled to receive such distribution.

(v) For the purposes of this Section 5, the
reclassification of Common Stock into securities including securities
other than Common Stock (other than any reclassification upon a
consolidation or merger to which Section 5(g) below applies) shall be
deemed to involve (A) a distribution of such securities other than
Common Stock to all holders of Common Stock (and the effective date of
such reclassification shall be deemed to be "the date fixed for the
determination of stockholders entitled to receive such distribution"
and the "date fixed for such determination" within the meaning of
subsection (iv) above), and (B) a subdivision or combination, as the
case


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may be, of the number of shares of Common Stock outstanding immediately
prior to such reclassification into the number of shares of Common
Stock outstanding immediately thereafter (and the effective date of
such reclassification shall be deemed to be "the day upon which such
sudivision became effective" or "the day upon which such combination
becomes effective" as the case may be, and "the day upon which such
subdivision or combination becomes effective" within the meaning of
subsection (iii) above).

(vi) For the purpose of any computation under
subsections (ii) and (iv) above, the current market price per share of
Common Stock on any day shall be deemed to be the average of the daily
closing prices for the 30 consecutive trading days commencing 45
trading days before the day in question. The closing price for each day
shall be as reported on the New York Stock Exchange Composite Tape or,
if the Common Stock is no longer listed on such exchange, as reported
on the principal national securities exchange or national automated
stock quotation system on which the Common Stock is listed, traded or
quoted, or, if the Common Stock is not listed, traded or quoted on any
national securities exchange or national automated stock quotation
system, the closing price shall be deemed to be the average of the
closing bid and asked prices in the over-the-counter market as
furnished by any New York Stock Exchange member firm selected from time
to time by the Board of Directors for that pupose.

(vii) Notwithstanding the foregoing, no adjustment in
the Conversion Price for the Series A Preferred Shares shall be
required unless such adjustment would require an increase or decrease
of at least 1% in such price; provided, however, that any adjustments
which by reason of this subsection (vii) are not required to be made
shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section shall be made to the
nearest cent or to the nearest one-hundredth of a share, as the case
may be.

(6) Whenever the Conversion Price shall be adjusted as herein
provided (i) the Corporation shall forthwith make available at the
office of the transfer agent for the Series A Preferred Stock a
statement describing in reasonable detail the adjustment, the facts
requiring such adjustment and the method of calculation used; and (ii)
the Corporation shall cause to be mailed by first class mail, postage
prepaid, as soon as practicable to each holder of record of shares of
Series A Preferred Stock a notice stating that the Conversion Price has
been adjusted and setting forth the adjusted Conversion Price.

(7) In the event of any consolidation of the Corporation with
or merger of the Corporation into any other corporation (other than a
merger in

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which the Corporation is the surviving corporation) or a sale, lease or
conveyance of the assets of the Corporation as an entirety or
substantially as an entirety, or any statutory exchange of securities
with another corporation, the holder of each share of Series A
Preferred Stock shall have the right, after such consolidation, merger,
sale or exchange, to convert such share into the number and kind of
shares of stock or other securities and the amount and kind of property
which such holder would have been entitled to receive upon such
consolidation, merger, sale or exchange of the number of shares of
Common Stock that would have been issued to such holder had such shares
of Series A Preferred Stock been converted immediately prior to such
consolidation, merger or sale. The provisions of this Section 5(g)
shall similarly apply to successive consolidations, mergers, sales or
exchanges.

(8) The Corporation shall pay any taxes that may be payable in
respect of the issuance of shares of Common Stock upon conversion of
shares of Series A Preferred Stock, but the Corporation shall not be
required to pay any taxes which may be payable in respect of any
transfer involved in the issuance of shares of Common Stock in the name
other than that in which the shares of Series A Preferred Stock so
converted are registered, and the Corporation shall not be required to
issue or deliver any such shares unless and until the person requesting
such issuance shall have paid to the Corporation the amount of any such
taxes, or shall have established to the satisfaction of the Corporation
that such taxes have been paid.

(9) The Corporation may (but shall not be required to) make
such reductions in the Conversion Price, in addition to those required
by subsections (i) through (iv) of Section 5(e) above, as it considers
to be advisable in order that any event treated for federal income tax
purposes as a dividend of stock or stock rights shall not be taxable to
the recipients.

(10) The Corporation shall at all times reserve and keep
available out of its authorized but unissued Common Stock the full
number of shares of Common Stock issuable upon the conversion of all
shares of Series A Preferred Stock then outstanding.

(11) In the event that:

(i) the Corporation shall declare a dividend
or any other distribution on its Common Stock, payable otherwise than
in cash out of retained earnings; or

(ii) the Corporation shall authorize the
granting to the holders of its Common Stock of rights to subscribe for
or purchase any shares of capital stock of any class or of any other
rights; or



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(iii) any capital reorganization of the
Corporation, reclassification of the capital stock of the Corporation,
consolidation or merger of the Corporation with or into another
corporation (other than a merger in which the Corporation is the
surviving corporation), or sale, lease or conveyance of the assets of
the Corporation as an entirety or substantially as an entirety to
another corporation occurs; or

(iv) the voluntary or involuntary dissolution,
liquidation or winding up of the Corporation occurs, the Corporation
shall cause to be mailed to the holders of record of Series A Preferred
Stock at least 15 days prior to the applicable date hereinafter
specified a notice stating (x) the date on which a record is to be
taken for the purpose of such dividend, distribution of rights or, if a
record is not to be taken, the date as of which the holders of Common
Stock of record to be entitled to such dividend, distribution or rights
are to be determined or (y) the date on which such reorganization,
reclassification, consolidation, merger, sale, lease, conveyance,
dissolution, liquidation or winding up is expected to take place, and
the date, if any is to be fixed, as of which holders of Common Stock of
record shall be entitled to exchange their shares of Common Stock for
securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, sale, lease, conveyance,
dissolution, liquidation or winding up. Failure to give such notice, or
any defect therein, shall not affect the legality or validity of such
dividend, distribution, reorganization, reclassification,
consolidation, merger, sale, lease, conveyance, dissolution,
liquidation or winding up.

F. Voting Rights.

Other than as required by applicable law, the Series A
Preferred Stock shall not have any voting powers either general or
special, except that:

(1) Unless the vote or consent of the holders of a greater
number of shares shall then be required by law, the affirmative vote or
consent of the holders of at least 66-2/3% of all of the shares of the
Series A Preferred Stock, and any one or more other series of preferred
stock of the Corporation similarly affected, at the time outstanding,
given in person or by proxy, either in writing or by a vote at a
meeting called for the purpose at which the holders of shares of the
Series A Preferred Stock and any such other series of preferred stock
shall vote together as a separate class, shall be necessary for
authorizing, effecting or validating the amendment, alteration or
repeal of any of the provisions of the Restated Articles of
Incorporation, as amended, or of any amendment or supplement thereto
(including any certificate of designation or any similar document
relating to any series of preferred stock) of the Corporation, which
would adversely affect the preferences, rights,



-13-


powers or privileges, qualifications, limitations and restrictions of
the Series A Preferred Stock.

(2) Unless the vote or consent of the holders of a greater
number of shares shall then be required by law, the affirmative vote or
consent of the holders of at least 66-2/3% of all of the shares of the
Series A Preferred Stock and any other series of preferred stock of the
Corporation ranking on a parity with shares of the Series A Preferred
Stock, either as to dividends or the distribution of assets upon
liquidation, dissolution or winding up, at the time outstanding, given
in person or by proxy, either in writing or by a vote at a meeting
called for the purpose at which the holders of shares of the Series A
Preferred Stock and any such other series of preferred stock of the
Corporation shall vote together as a single class without regard to
series, shall be necessary to create, authorize or issue, or reclassify
any authorized stock of the Corporation into, or create, authorize or
issue any obligation or security convertible into or evidencing a right
to purchase, any shares of any class of stock of the Corporation
ranking prior to the Series A Preferred Stock or ranking prior to any
other series of preferred stock of the Corporation which ranks on a
parity with the Series A Preferred Stock as to dividends or upon the
distribution of assets upon liquidation, dissolution or winding up.
Subject to the foregoing, the Corporation's Restated Articles of
Incorporation, as amended, may be amended to increase the number of
authorized shares of preferred stock without the vote of the holders of
preferred stock, including the Series A Preferred Stock.

(3) Whenever, at any time or times, dividends payable on the
shares of Series A Preferred Stock shall be in arrears in an amount
equal to at least six full quarterly dividends on shares of the Series
A Preferred Stock at the time outstanding, the holders of the
outstanding shares of Series A Preferred Stock shall have the exclusive
right, voting separately as a class together with holders of shares of
any one or more other series of preferred stock ranking on a parity
with the Series A Preferred Stock either as to dividends or the
distribution of assets upon liquidation, dissolution or winding up and
upon which like voting rights have been conferred and are exercisable,
to elect two directors of the Corporation for one-year terms at the
Corporation's next annual meeting of stockholders and at each
subsequent annual meeting of stockholders. At elections for such
directors, each holder of Series A Preferred Stock shall be entitled to
one vote for each share held (the holders of shares of any other series
of preferred stock ranking on such a parity being entitled to such
number of votes, if any, for each share of stock held as may be granted
to them). Upon the vesting of such right of the holders of Series A
Preferred Stock, the maximum authorized number of members of the Board
of Directors shall automatically be increased by two and the two
vacancies so created shall be filled by vote of the holders of the
outstanding shares of Series A Preferred Stock (either alone or
together with


-14-

the holders of shares of any one or more other series of preferred
stock ranking on such a parity) as hereinafter set forth. The right of
the holders of Series A Preferred Stock, voting separately as a class
to elect (either alone or together with the holders of shares of any
one or more other series of preferred stock ranking on such a parity)
members of the Board of Directors of the Corporation as aforesaid shall
continue until such time as all dividends accumulated on the Series A
Preferred Stock shall have been paid in full or declared and set apart
for payment, at which time such right shall immediately terminate,
except as herein or by law expressly provided, subject to revesting in
the event of each and every subsequent default of the character above
mentioned.

(4) Upon termination of such special voting rights
attributable to all holders of the Series A Preferred Stock and any
other series or preferred stock ranking on a parity with the Series A
Preferred Stock as to dividends or the distribution of assets upon
liquidation, dissolution or winding up and upon which like voting
rights have been conferred and are exercisable, the term of office of
each director elected by the holders of shares of Series A Preferred
Stock and such parity preferred stock (a "Preferred Stock Director")
pursuant to such special voting rights shall immediately terminate and
the number of directors constituting the entire Board of Directors
shall be reduced by the number of Preferred Stock Directors. Any
Preferred Stock Director may be removed by, and shall not be removed
otherwise than by, the vote of the holders of record of a majority of
the outstanding shares of Series A Preferred Stock and all other series
of preferred stock ranking on a parity with the Series A Preferred
Stock with respect to dividends who were entitled to participate in
such Preferred Stock Director's election, voting as a separate class,
at a meeting called for such purposes. If the office of any Preferred
Stock Director becomes vacant by reason of death, resignation,
retirement, disqualification, removal from office, or otherwise, the
remaining Preferred Stock Director may choose a successor who shall
hold office for the unexpired term in respect of which such vacancy
occurred.

G. Reacquired Shares.

Shares of Series A Preferred Stock converted, redeemed, or
otherwise purchased or acquired by the Corporation shall be restored to
the status of authorized but unissued shares of Series A Preferred
Stock without designation as to series.

H. Ranking.

Any class or classes of stock of the Corporation shall be
deemed to rank:


-15-


(1) prior to the Series A Preferred Stock, as to dividends or
as to distribution of assets upon liquidation, dissolution or winding
up, if the holders of such class shall be entitled to the receipt of
dividends or of amounts distributable upon liquidation, dissolution or
winding up, as the case may be, in preference or priority to the
holders of the Series A Preferred Stock;

(2) on a parity with the Series A Preferred Stock, as to
dividends or as to distribution of assets upon liquidation, dissolution
or winding up, whether or not the dividend rates, dividend payment
dates or redemption or liquidation prices per share thereof be
different from those of the Series A Preferred Stock, if the holders of
such class of stock and the Series A Preferred Stock shall be entitled
to the receipt of dividends or of amounts distributable upon
liquidation, dissolution or winding up, as the case may be, in
proportion to their respective amounts of accrued and unpaid dividends
per share or liquidation prices, without preference or priority one
over the other; and

(3) junior to the Series A Preferred Stock, as to dividends or
as to the distribution of assets upon liquidation, dissolution or
winding up, if such stock shall be Common Stock or if the holders of
Series A Preferred Stock shall be entitled to receipt of dividends or
of amounts distributable upon liquidation, dissolution or winding up,
as the case may be, in preference or priority to the holders of shares
of such stock.

I. No Sinking Fund.

Shares of Series A Preferred Stock are not subject to the
operation of a sinking fund or other obligation of the Corporation to
redeem or retire the Series A Preferred Stock.

(b) 7% Cumulative Redeemable Preferred Stock, Series B.

A. Designation.

The designation of this series is "7% Cumulative Redeemable
Preferred Stock, Series B" (hereinafter referred to as the "Series B
Preferred Stock") and the number of shares constituting such series is
Thirty-Five Thousand and Forty-Five (35,045). Shares of Series B
Preferred Stock shall have a stated value of $100.00 per share.


-16-

B. Dividends.

The holders of record of the shares of the Series B Preferred
Stock shall be entitled to receive, when and as declared by the Board
of Directors of the corporation, out of any funds legally available for
such purpose, cumulative cash dividends at an annual dividend rate per
share of 7% of the stated value thereof, which amount is $7.00 per
annum, per share, and no more. Such dividends shall be payable each
calendar quarter at the rate of $1.75 per share on such dates as shall
be fixed by resolution of the Board of Directors of the Corporation.
The date from which dividends on such shares shall be cumulative shall
be the first day after said shares are issued. Accumulations of
dividends shall not bear interest. No cash dividend shall be declared,
paid or set apart for any shares of Common Stock unless all dividends
on all shares of the Series B Preferred Stock at the time outstanding
for all past dividend periods and for the then current dividend shall
have been paid, or shall have been declared and a sum sufficient for
the payment thereof, shall have been set apart. Subject to the
foregoing provisions of this paragraph (2), cash dividends or other
cash distributions as may be determined by the Board of Directors of
the Corporation, may be declared and paid upon the shares of the Common
Stock of the corporation from time to time out of funds legally
available therefor, and the shares of the Series B Preferred Stock
shall not be entitled to participate in any such cash dividend or other
such cash distribution so declared and paid or made on such shares of
Common Stock.

C. Redemption.

From and after October 31, 1988, any holder may, by written
request, call upon the Corporation to redeem all or any part of said
holder's shares of said Series B Preferred Stock at a redemption price
of $100.00 per share plus accumulated unpaid dividends to the date said
request for redemption is received by the Corporation and no more (the
"Redemption Price"). Any such request for redemption shall be
accompanied by the certificates for which redemption is requested, duly
endorsed or with appropriate stock power attached, in either case with
signature guaranteed. Upon receipt by the Corporation of any such
request for redemption from any holder of the Series B Preferred Stock,
the Corporation shall forthwith redeem said stock at the Redemption
Price, provided that: (i) full cumulative dividends have been paid or
declared and set apart for payment upon all shares of any series of
preferred stock ranking superior to the Series B Preferred Stock as to
dividends or other distributions (collectively the "Superior Stock");
and (ii) the Corporation is not then in default or in arrears with
respect to any sinking or analogous fund or call for tenders obligation
or agreement for the purchase, redemption or retirement of any shares
of Superior Stock. In the


-17-

event that, upon receipt of a request for redemption, either or both of
the conditions set forth in clauses (i) and (ii) above are not met, the
Corporation shall forthwith return said request to the submitting
shareholder along with a statement that the Corporation is unable to
honor such request and explanation of the reasons therefor. From and
after the receipt by the Corporation of a request for redemption from
any holder of said Series B Preferred Stock, which request may be
honored consistent with the foregoing provisions, all rights of such
holder in the Series B Preferred Stock for which redemption is
requested shall cease and terminate, except only the right to receive
the Redemption Price thereof, but without interest.

D. Liquidation Preference.

In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the corporation, the holders of the Series
B Preferred Stock shall be entitled to receive, subject to the
provisions of paragraph 7 and before any payment shall be made to the
holders of the shares of Common Stock, the amount of $100.00 each
share, plus accumulated dividends. After payment to the holders of the
Series B Preferred Stock of the full amount as aforesaid, the holders
of the Series B Preferred Stock as such shall have no right or claim to
any of the remaining assets which shall be distributed ratably to the
holders of the Common Stock. If, upon any such liquidation, dissolution
or winding up, the assets available therefore are not sufficient to
permit payments to the holders of Series B Preferred Stock of the full
amount as aforesaid, then subject to the provisions of paragraph 7, the
holders of the Series B Preferred Stock then outstanding shall share
ratably in the distribution of assets in accordance with the sums which
would be payable if such holders were to receive the full amounts as
aforesaid.

E. Sinking Fund.

There shall be no sinking fund applicable to the shares of Series B
Preferred Stock.

F. Conversion.

The shares of Series B Preferred Stock shall not be
convertible into any shares of Common Stock or any other class of
shares, nor exchanged for any shares of Common Stock or any other class
of shares.

-18-


G. Superior Stock.

The corporation may issue stock with preferences superior or
equal to the shares of the Series B Preferred Stock without the consent
of the holders thereof.

H. Voting rights.

Each share of the Series B Preferred Stock shall be entitled
to equal voting rights, share for share, with each share of the Common
Stock.

(c) ESOP Convertible Preferred Stock, Series C.

The shares of the ESOP Convertible Preferred Stock, Series C,
of the Corporation shall be designated "ESOP Convertible Preferred
Stock, Series C," and the number of shares constituting such series
shall be 3,000,000. The ESOP Convertible Preferred Stock, Series C,
shall hereinafter be referred to as the "ESOP Preferred Stock."

A. Special Purpose Restricted Transfer Issue.

Shares of ESOP Preferred Stock shall be issued only to a
trustee acting on behalf of an employee stock ownership plan or other
employee benefit plan of the Corporation or any subsidiary of the
Corporation. In the event of any transfer of shares of ESOP Preferred
Stock to any person other than any such plan trustee or the
Corporation, the shares of ESOP Preferred Stock so transferred, upon
such transfer and without any further action by the Corporation or the
holder, shall be automatically converted into shares of Common Stock on
the terms otherwise provided for the conversion of shares of ESOP
Preferred Stock into shares of Common Stock pursuant to paragraph E
hereof and no such transferee shall have any of the voting powers,
preferences and relative, participating, optional or special rights
ascribed to shares of ESOP Preferred Stock hereunder but, rather, only
the powers and rights pertaining to the Common Stock into which such
shares of ESOP Preferred Stock shall be so converted. Certificates
representing shares of ESOP Preferred Stock shall be legended to
reflect such restrictions on transfer. Notwithstanding the foregoing
provisions of this paragraph A, shares of ESOP Preferred Stock (i) may
be converted into shares of Common Stock as provided by paragraph E
hereof and the shares of Common Stock issued upon such conversion may
be transferred by the holder thereof as permitted by law and (ii) shall
be redeemable by the Corporation upon the terms and conditions provided
by paragraphs F, G and H hereof.


-19-


B. Dividends and Distributions.

(1) Subject to the provisions for adjustment hereinafter set
forth, the holders of shares of ESOP Preferred Stock shall be entitled
to receive, when, as and if declared by the Board of Directors out of
funds legally available therefor, cash dividends ("Preferred
Dividends") in an amount equal to $3.30 per share per annum, and no
more, payable semi-annually, one-half on the first day of January and
one-half on the first day of July of each year (each a "Dividend
Payment Date") commencing the first such day following the effective
time of the Merger (as defined below), to holders of record at the
start of business on such Dividend Payment Date. Preferred Dividends
shall begin to accrue on shares of ESOP Preferred Stock on the last
dividend payment date on the outstanding shares of ESOP Convertible
Preferred Stock, Series C, of C&S/Sovran Corporation ("C&S/Sovran")
(which shares are to be converted on a one-for-one basis into shares of
ESOP Preferred Stock at the effective time of the merger (the "Merger")
of C&S/Sovran Merger Corporation ("Merger Corporation"), a Delaware
corporation and a wholly owned subsidiary of the Corporation, with and
into C&S/Sovran, as provided in the Agreement and Plan of
Consolidation, dated July 21, 1991, between the Corporation and
C&S/Sovran). Preferred Dividends shall accrue on a daily basis whether
or not the Corporation shall have earnings or surplus at the time, but
Preferred Dividends on the shares of ESOP Preferred Stock for any
period less than a full semi-annual period between Dividend Payment
Dates shall be computed on the basis of a 360-day year of 30-day
months. Accumulated but unpaid Preferred Dividends shall accumulate as
of the Dividend Payment Date on which they first become payable, but no
interest shall accrue on accumulated but unpaid Preferred Dividends.

(2) So long as any ESOP Preferred Stock shall be outstanding,
no dividend shall be declared or paid or set apart for payment on any
other series of stock ranking on a parity with the ESOP Preferred Stock
as to dividends, unless there shall also be or have been declared and
paid or set apart for payment on the ESOP Preferred Stock, like
dividends for all dividend payment periods of the ESOP Preferred Stock
ending on or before the dividend payment date of such parity stock,
ratably in proportion to the respective amounts of dividends
accumulated and unpaid through such dividend payment period on the ESOP
Preferred Stock and accumulated and unpaid or payable on such parity
stock through the dividend payment period on such parity stock next
preceding such Dividend Payment Date. In the event that full cumulative
dividends on the ESOP Preferred Stock have not been declared and paid
or set apart for payment when due, the Corporation shall not declare or
pay or set apart for payment any dividends or make any other
distributions on, or make any payment on account of the purchase,


-20-

redemption or other retirement of any other class of stock or series
thereof of the Corporation ranking, as to dividends or as to
distributions in the event of a liquidation, dissolution or winding-up
of the Corporation, junior to the ESOP Preferred Stock until full
cumulative dividends on the ESOP Preferred Stock shall have been paid
or declared and provided for; provided, however, that the foregoing
shall not apply to (i) any dividend payable solely in any shares of any
stock ranking, as to dividends or as to distributions in the event of
the liquidation, dissolution or winding-up of the Corporation, junior
to the ESOP Preferred Stock, or (ii) the acquisition of shares of any
stock ranking, as to dividends or as to distributions in the event of a
liquidation, dissolution or winding-up of the Corporation, junior to
the ESOP Preferred Stock either (A) pursuant to any employee or
director incentive or benefit plan or arrangement (including any
employment, severance or consulting agreement) of the Corporation or
any subsidiary of the Corporation heretofore or hereafter adopted or
(B) in exchange solely for shares of any other stock ranking junior to
the ESOP Preferred Stock.

C. Voting Rights.

The holders of shares of ESOP Preferred Stock shall have the
following voting rights:

(1) The holders of ESOP Preferred Stock shall be entitled to
vote on all matters submitted to a vote of the holders of Common Stock
of the Corporation, voting together with the holders of Common Stock as
one class. Each share of the ESOP Preferred Stock shall be entitled to
the number of votes equal to the number of shares of Common Stock into
which such share of ESOP Preferred Stock could be converted on the
record date for determining the shareholders entitled to vote, rounded
to the nearest whole vote; it being understood that whenever the
"Conversion Price" (as defined in paragraph E hereof) is adjusted as
provided in paragraph I hereof, the voting rights of the ESOP Preferred
Stock shall also be similarly adjusted.

(2) Except as otherwise required by the North Carolina
Business Corporation Act or set forth in paragraph C(1), holders of
ESOP Preferred Stock shall have no special voting rights and their
consent shall not be required for the taking of any corporate action.

D. Liquidation, Dissolution or Winding-Up.

(1) Upon any voluntary or involuntary liquidation, dissolution
or winding-up of the Corporation, the holders of ESOP Preferred Stock
shall be entitled to receive out of the assets of the Corporation which
remain after satisfaction in full of all valid claims of creditors of
the Corporation and


-21-

which are available for payment to shareholders and subject to the
rights of the holders of any stock of the Corporation ranking senior to
or on a parity with the ESOP Preferred Stock in respect of
distributions upon liquidation, dissolution or winding-up of the
Corporation, before any amount shall be paid or distributed among the
holders of Common Stock or any other shares ranking junior to the ESOP
Preferred Stock in respect of the distributions upon liquidation,
dissolution or winding-up of the Corporation, liquidating distributions
in the amount of $42.50 per share, plus an amount equal to all accrued
and unpaid dividends thereon to the date fixed for distribution, and no
more. If upon any liquidation, dissolution or winding-up of the
Corporation, the amounts payable with respect to the ESOP Preferred
Stock and any other stock ranking as to any such distribution on a
parity with the ESOP Preferred Stock are not paid in full, the holders
of the ESOP Preferred Stock and such other stock shall share ratably in
any distribution of assets in proportion to the full respective
preferential amounts to which they are entitled. After payment of the
full amount to which they are entitled as provided by the foregoing
provisions of this paragraph D(1), the holders of shares of ESOP
Preferred Stock shall not be entitled to any further right or claim to
any of the remaining assets of the Corporation.

(2) Neither the merger or consolidation of the Corporation
with or into any other corporation, nor the merger or consolidation of
any other corporation with or into the Corporation, nor the sale,
transfer or lease of all or any portion of the assets of the
Corporation, shall be deemed to be a dissolution, liquidation or
winding-up of the affairs of the Corporation for purposes of this
paragraph D, but the holders of ESOP Preferred Stock shall nevertheless
be entitled in the event of any such merger or consolidation to the
rights provided by paragraph H hereof.

(3) Written notice of any voluntary or involuntary
liquidation, dissolution or winding-up of the Corporation, stating the
payment date or dates when, and the place or places where, the amounts
distributable to holders of ESOP Preferred Stock in such circumstances
shall be payable, shall be given by first-class mail, postage prepaid,
mailed not less than twenty (20) days prior to any payment date stated
therein, to the holders of ESOP Preferred Stock, at the address shown
on the books of the Corporation or any transfer agent for the ESOP
Preferred Stock.

E. Conversion into Common Stock.

(1) A holder of shares of ESOP Preferred Stock shall be
entitled, at any time prior to the close of business on the date fixed
for redemption of such shares pursuant to paragraph F, G or H hereof,
to cause any or all of such shares to be converted into shares of
Common Stock, initially at a


-22-

conversion rate equal to the ratio of 1.0 shares of ESOP Preferred
Stock to 0.84 shares of Common Stock and a conversion price the amount
of which initially shall be $42.50 (as adjusted as hereinafter
provided, the "Conversion Price") for, initially, each 0.84 shares of
Common Stock. Each of the Conversion Price and the resulting conversion
ratio is subject to adjustment as hereinafter provided.

(2) Any holder of shares of ESOP Preferred Stock desiring to
convert such shares into shares of Common Stock shall surrender the
certificate or certificates representing the shares of ESOP Preferred
Stock being converted, duly assigned or endorsed for transfer to the
Corporation (or accompanied by duly executed stock powers relating
thereto), at the principal executive office of the Corporation or the
offices of the transfer agent for the ESOP Preferred Stock or such
office or offices in the continental United States of an agent for
conversion as may from time to time be designated by notice to the
holders of the ESOP Preferred Stock by the Corporation or the transfer
agent for the ESOP Preferred Stock, accompanied by written notice of
conversion. Such notice of conversion shall specify (i) the number of
shares of ESOP Preferred Stock to be converted and the name or names in
which such holder wishes the certificate or certificates for Common
Stock and for any shares of ESOP Preferred Stock not to be so converted
to be issued, and (ii) the address to which such holder wishes delivery
to be made of such new certificates to be issued upon such conversion.

(3) Upon surrender of a certificate representing a share or
shares of ESOP Preferred Stock for conversion, the Corporation shall
issue and send by hand delivery (with receipt to be acknowledged) or by
first-class mail, postage prepaid, to the holder thereof or to such
holder's designee, at the address designated by such holder, a
certificate or certificates for the number of shares of Common Stock to
which such holder shall be entitled upon conversion. In the event that
there shall have been surendered a certificate or certificates
representing shares of ESOP Preferred Stock, only part of which are to
be converted, the Corporation shall issue and deliver to such holder or
such holder's designee a new certificate or certificates representing
the number of shares of ESOP Preferred Stock which shall not have been
converted.

(4) The issuance by the Corporation of shares of Common Stock
upon a conversion of shares of ESOP Preferred Stock into shares of
Common Stock made at the option of the holder thereof shall be
effective as of the earlier of (i) the delivery to such holder or such
holder's designee of the certificate or certificates representing the
shares of Common Stock issued upon conversion thereof or (ii) the
commencement of business on the second business day after the surrender
of the certificate or certificates for the shares of ESOP Preferred
Stock to be converted, duly assigned or endorsed


-23-

for transfer to the Corporation (or accompanied by duly executed stock
powers relating thereto) as provided hereby. On and after the effective
date of conversion, the person or persons entitled to receive the
Common Stock issuable upon such conversion shall be treated for all
purposes as the record holder or holders of such shares of Common
Stock, but no allowance or adjustment shall be made in respect of
dividends payable to holders of Common Stock in respect of any period
prior to such effective date. The Corporation shall not be obligated to
pay any dividends which shall have been declared and shall be payable
to holders of shares of ESOP Preferred Stock on a Dividend Payment Date
if such Dividend Payment Date for such dividend shall coincide with or
be on or subsequent to the effective date of conversion of such shares.

(5) The Corporation shall not be obligated to deliver to
holders of ESOP Preferred Stock any fractional share or shares of
Common Stock issuable upon any conversion of such shares of ESOP
Preferred Stock, but in lieu thereof may make a cash payment in respect
thereof in any manner permitted by law.

(6) The Corporation shall at all times reserve and keep
available out of its authorized and unissued Common Stock, solely for
issuance upon the conversion of shares of ESOP Preferred Stock as
herein provided, free from any preemptive rights, such number of shares
of Common Stock as shall from time to time be issuable upon the
conversion of all shares of ESOP Preferred Stock then outstanding. The
Corporation shall prepare and shall use its best efforts to obtain and
keep in force such governmental or regulatory permits or other
authorizations as may be required by law, and shall comply with all
requirements as to registration or qualification of the Common Stock,
in order to enable the Corporation lawfully to issue and deliver to
each holder of record of ESOP Preferred Stock such number of shares of
its Common Stock as shall from time to time be sufficient to effect the
conversion of all shares of ESOP Preferred Stock then outstanding and
convertible into shares of Common Stock.

F. Redemption At the Option of the Corporation.

(1) The ESOP Preferred Stock shall be redeemable, in whole or
in part, at the option of the Corporation at any time after July 1,
1992, or on or before July 1, 1992 if permitted by paragraph F(3) or
F(4), at the following redemption prices per share (except as to
redemption pursuant to paragraph F(3)):


-24-



During the Twelve-Month Price Per
Period Beginning July 1, Share

............................1991 $45.14
............................1992 44.81
............................1993 44.48
............................1994 44.15
............................1995 43.82
............................1996 43.49
............................1997 43.16
............................1998 42.83

and thereafter at $42.50 per share, plus, in each case, an amount equal
to all accrued and unpaid dividends thereon to the date fixed for
redemption. Payment of the redemption price shall be made by the
Corporation in cash or shares of Common Stock, or a combination
thereof, as permitted by paragraph F(5). From and after the date fixed
for redemption, dividends on shares of ESOP Preferred Stock called for
redemption will cease to accrue, such shares will no longer be deemed
to be outstanding and all rights in respect of such shares of the
Corporation shall cease, except the right to receive the redemption
price. If less than all of the outstanding shares of ESOP Preferred
Stock are to be redeemed, the Corporation shall either redeem a portion
of the shares of each holder determined pro rata based on the number of
shares held by each holder or shall select the shares to be redeemed by
lot, as may be determined by the Board of Directors of the Corporation.

(2) Unless otherwise required by law, notice of redemption
will be sent to the holders of ESOP Preferred Stock at the address
shown on the books of the Corporation or any transfer agent for the
ESOP Preferred Stock by first-class mail, postage prepaid, mailed not
less than twenty (20) days nor more than sixty (60) days prior to the
redemption date. Each such notice shall state: (i) the redemption date;
(ii) the total number of shares of the ESOP Preferred Stock to be
redeemed and, if fewer than all the shares held by such holder are to
be redeemed, the number of such shares to be redeemed from such holder;
(iii) the redemption price; (iv) the place or places where certificates
for such shares are to be surrendered for payment of the redemption
price; (v) that dividends on the shares to be redeemed will cease to
accrue on such redemption date; and (vi) the conversion rights of the
shares to be redeemed, the period within which conversion rights may be
exercised, and the Conversion Price and number of shares of Common
Stock issuable upon conversion of a share of ESOP Preferred Stock at
the time. These notice provisions may be supplemented if necessary in
order to comply with optional redemption provisions for preferred stock
which may be required under the Internal Revenue Code of 1986, as
amended, or the


-25-

Employee Retirement Income Security Act of 1974, as amended ("ERISA").
Upon surrender of the certificates for any shares so called for
redemption and not previously converted (properly endorsed or assigned
for transfer, if the Board of Directors of the Corporation shall so
require and the notice shall so state), such shares shall be redeemed
by the Corporation at the date fixed for redemption and at the
applicable redemption price set forth in this paragraph F.

(3) In the event of a change in the federal tax law of the
United States of America which has the effect of precluding the
Corporation from claiming any of the tax deductions for dividends paid
on the ESOP Preferred Stock when such dividends are used as provided
under Section 404(k)(2) of the Internal Revenue Code of 1986, as
amended and in effect on the date shares of ESOP Preferred Stock are
initially issued, the Corporation may, within 180 days following the
effective date of such tax legislation and implementing regulations of
the Internal Revenue Service, if any, in its sole discretion and
notwithstanding anything to the contrary in paragraph F(1), elect to
redeem any or all such shares for the amount payable in respect of the
shares upon liquidation of the Corporation pursuant to paragraph D.

(4) In the event the C&S/Sovran Retirement Savings, ESOP and
Profit Sharing Plan (as amended, together with any successor plan, the
"Plan") is terminated, the Corporation shall, notwithstanding anything
to the contrary in paragraph F(1), redeem all shares of ESOP Preferred
Stock for the amount payable in respect of the shares upon redemption
of the ESOP Preferred Stock pursuant to paragraph F(1) hereof.

(5) The Corporation, at its option, may make payment of the
redemption price required upon redemption of shares of ESOP Preferred
Stock in cash or in shares of Common Stock, or in a combination of such
shares and cash, any such shares to be valued for such purpose at their
Fair Market Value (as defined in paragraph I(7) hereof).

G. Other Redemption Rights.

Shares of ESOP Preferred Stock shall be redeemed by the
Corporation at a price which is the greater of the Conversion Value (as
defined in paragraph I) of the ESOP Preferred Stock on the date fixed
for redemption or a redemption price of $42.50 per share plus accrued
and unpaid dividends thereon to the date fixed for redemption, for
shares of Common Stock (any such shares of Common Stock to be valued
for such purpose as provided by paragraph F(5) hereof), at the option
of the holder, at any time and from time to time upon notice to the
Corporation given not less than five (5) business days prior to the
date fixed by the Corporation in such notice for such


-26-

redemption, when and to the extent necessary (i) to provide for
distributions required to be made under, or to satisfy an investment
election provided to participants in accordance with, the Plan to
participants in the Plan or (ii) to make payment of principal, interest
or premium due and payable (whether as scheduled or upon acceleration)
on any indebtedness incurred by the holder or Trustee under the Plan
for the benefit of the Plan.

H. Consolidation, Merger, etc.

(1) In the event that the Corporation shall consummate any
consolidation or merger or similar transaction, however named, pursuant
to which the outstanding shares of Common Stock are by operation of law
exchanged solely for or changed, reclassified or converted solely into
stock of any successor or resulting company (including the Corporation
and any company that directly or indirectly owns all of the outstanding
capital stock of such successor or resulting company) that constitutes
"qualifying employer securities" with respect to a holder of ESOP
Preferred Stock within the meaning of Section 409(l) of the Internal
Revenue Code of 1986, as amended, and Section 407(d)(5) of ERISA, or
any successor provisions of law, and, if applicable, for a cash payment
in lieu of fractional shares, if any, the shares of ESOP Preferred
Stock of such holder shall be assumed by and shall become preferred
stock of such successor or resulting company, having in respect of such
company insofar as possible the same powers, preferences and relative,
participating, optional or other special rights (including the
redemption rights provided by paragraphs F, G and H hereof), and the
qualifications, limitations or restrictions thereon, that the ESOP
Preferred Stock had immediately prior to such transaction, except that
after such transaction each share of the ESOP Preferred Stock shall be
convertible, otherwise on the terms and conditions provided by
paragraph E hereof, into the qualifying employer securities so
receivable by a holder of the number of shares of Common Stock into
which such shares of ESOP Preferred Stock could have been converted
immediately prior to such transaction if such holder of Common Stock
failed to exercise any rights of election to receive any kind or amount
of stock, securities, cash or other property (other than such
qualifying employer securities and a cash payment, if applicable, in
lieu of fractional shares) receivable upon such transaction (provided
that, if the kind or amount of qualifying employer securities
receivable upon such transaction is not the same for each non-electing
share, then the kind and amount of qualifying employer securities
receivable upon such transaction for each non-electing share shall be
the kind and amount so receivable per share by a plurality of the
non-electing shares). The rights of the ESOP Preferred Stock as
preferred stock of such successor or resulting company shall
successively be subject to adjustments pursuant to paragraph I hereof
after any such transaction as nearly equivalent to the adjustments
provided


-27-

for by such paragraph prior to such transaction. The Corporation shall
not consummate any such merger, consolidation or similar transaction
unless all then outstanding shares of the ESOP Preferred Stock shall be
assumed and authorized by the successor or resulting company as
aforesaid.

(2) In the event that the Corporation shall consummate any
consolidation or merger or similar transaction, however named, pursuant
to which the outstanding shares of Common Stock are by operation of law
exchanged for or changed, reclassified or converted into other stock or
securities or cash or any other property, or any combination thereof,
other than any such consideration which is constituted solely of
qualifying employer securities (as referred to in paragraph H(1)) and
cash payments, if applicable, in lieu of fractional shares, outstanding
shares of ESOP Preferred Stock shall, without any action on the part of
the Corporation or any holder thereof (but subject to paragraph H(3)),
be deemed converted by virtue of such merger, consolidation or similar
transaction immediately prior to such consummation into the number of
shares of Common Stock into which such shares of ESOP Preferred Stock
could have been converted at such time, and each share of ESOP
Preferred Stock shall, by virtue of such transaction and on the same
terms as apply to the holders of Common Stock, be converted into or
exchanged for the aggregate amount of stock, securities, cash or other
property (payable in like kind) receivable by a holder of the number of
shares of Common Stock into which such shares of ESOP Preferred Stock
could have been converted immediately prior to such transaction if such
holder of Common Stock failed to exercise any rights of election as to
the kind or amount of stock, securities, cash or other property
receivable upon such transaction (provided that, if the kind or amount
of stock, securities, cash or other property receivable upon such
transaction is not the same for each non- electing share, then the kind
and amount of stock, securities, cash or other property receivable upon
such transaction for each non-electing share shall be the kind and
amount so receivable per share by a plurality of the non-electing
shares).

(3) In the event the Corporation shall enter into any
agreement providing for any consolidation or merger or similar
transaction described in paragraph H(2), then the Corporation shall as
soon as practicable thereafter (and in any event at least ten (10)
business days before consummation of such transaction) give notice of
such agreement and the material terms thereof to each holder of ESOP
Preferred Stock and each such holder shall have the right to elect, by
written notice to the Corporation, to receive, upon consummation of
such transaction (if and when such transaction is consummated), from
the Corporation or the successor of the Corporation, in redemption and
retirement of such ESOP Preferred Stock, a cash payment equal to the
amount payable in respect of shares of ESOP Preferred Stock upon
redemption pursuant to paragraph F(1) hereof. No such notice of



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redemption shall be effective unless given to the Corporation prior to
the close of business on the second business day prior to consummation
of such transaction, unless the Corporation or the successor of the
Corporation shall waive such prior notice, but any notice of redemption
so given prior to such time may be withdrawn by notice of withdrawal
given to the Corporation prior to the close of business on the second
business day prior to consummation of such transaction.

I. Anti-dilution Adjustments.

(1) In the event the Corporation shall, at any time or from
time to time while any of the shares of the ESOP Preferred Stock are
outstanding, (i) pay a dividend or make a distribution in respect of
the Common Stock in shares of Common Stock, (ii) subdivide the
outstanding shares of Common Stock, or (iii) combine the outstanding
shares of Common Stock into a smaller number of shares, in each case
whether by reclassification of shares, recapitalization of the
Corporation (including a recapitalization effected by a merger or
consolidation to which paragraph H hereof does not apply) or otherwise,
the Conversion Price in effect immediately prior to such action shall
be adjusted by multiplying such Conversion Price by the fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately before such event and the denominator of which is the
number of shares of Common Stock outstanding immediately after such
event. An adjustment made pursuant to this paragraph I(l) shall be
given effect, upon payment of such a dividend or distribution, as of
the record date for the determination of shareholders entitled to
receive such dividend or distribution (on a retroactive basis) and in
the case of a subdivision or combination shall become effective
immediately as of the effective date thereof.

(2) In the event that the Corporation shall, at any time or
from time to time while any of the shares of ESOP Preferred Stock are
outstanding, issue to holders of shares of Common Stock as a dividend
or distribution, including by way of a reclassification of shares or a
recapitalization of the Corporation, any right or warrant to purchase
shares of Common Stock (but not including as such a right or warrant
any security convertible into or exchangeable for shares of Common
Stock) at a purchase price per share less than the Fair Market Value
(as hereinafter defined) of a share of Common Stock on the date of
issuance of such right or warrant, then, subject to the provisions of
paragraphs I(5) and I(6), the Conversion Price shall be adjusted by
multiplying such Conversion Price by the fraction the numerator of
which shall be the number of shares of Common Stock outstanding
immediately before such issuance of rights or warrants plus the number
of shares of Common Stock which could be purchased at the Fair Market
Value of a share


-29-

of Common Stock at the time of such issuance for the maximum aggregate
consideration payable upon exercise in full of all such rights or
warrants and the denominator of which shall be the number of shares of
Common Stock outstanding immediately before such issuance of rights or
warrants plus the maximum number of shares of Common Stock that could
be acquired upon exercise in full of all such rights and warrants.

(3) In the event the Corporation shall, at any time and from
time to time while any of the shares of ESOP Preferred Stock are
outstanding, issue, sell or exchange shares of Common Stock (other than
pursuant to any right or warrant to purchase or acquire shares of
Common Stock (including as such a right or warrant any security
convertible into or exchangeable for shares of Common Stock) and other
than pursuant to any dividend reinvestment plan or employee or director
incentive or benefit plan or arrangement, including any employment,
severance or consulting agreement, of the Corporation or any subsidiary
of the Corporation heretofore or hereafter adopted) for a consideration
having a Fair Market Value on the date of such issuance, sale or
exchange less than the Fair Market Value of such shares on the date of
such issuance, sale or exchange, then, subject to the provisions of
paragraphs I(5) and (6), the Conversion Price shall be adjusted by
multiplying such Conversion Price by the fraction the numerator of
which shall be the sum of (i) the Fair Market Value of all the shares
of Common Stock outstanding on the day immediately preceding the first
public announcement of such issuance, sale or exchange plus (ii) the
Fair Market Value of the consideration received by the Corporation in
respect of such issuance, sale or exchange of shares of Common Stock,
and the denominator of which shall be the product of (i) the Fair
Market Value of a share of Common Stock on the day immediately
preceding the first public announcement of such issuance, sale or
exchange multiplied by (ii) the sum of the number of shares of Common
Stock outstanding on such day plus the number of shares of Common Stock
so issued, sold or exchanged by the Corporation. In the event the
Corporation shall, at any time or from time to time while any shares of
ESOP Preferred Stock are outstanding, issue, sell or exchange any right
or warrant to purchase or acquire shares of Common Stock (including as
such a right or warrant any security convertible into or exchangeable
for shares of Common Stock), other than any such issuance to holders of
shares of Common Stock as a dividend or distribution (including by way
of a reclassification of shares or a recapitalization of the
Corporation) and other than pursuant to any dividend reinvestment plan
or employee or director incentive or benefit plan or arrangement
(including any employment, severance or consulting agreement) of the
Corporation or any subsidiary of the Corporation heretofore or
hereafter adopted, for a consideration having a Fair Market Value on
the date of such issuance, sale or exchange less than the Non-Dilutive
Amount (as hereinafter defined), then, subject to the provisions of
paragraphs I(5) and (6), the Conversion Price shall be adjusted


-30-

by multiplying such Conversion Price by a fraction the numerator of
which shall be the sum of (a) the Fair Market Value of all the shares
of Common Stock outstanding on the day immediately preceding the first
public announcement of such issuance, sale or exchange plus (b) the
Fair Market Value of the consideration received by the Corporation in
respect of such issuance, sale or exchange of such right or warrant
plus (c) the Fair Market Value at the time of such issuance of the
consideration which the Corporation would receive upon exercise in full
of all such rights or warrants, and the denominator of which shall be
the product of (a) the Fair Market Value of a share of Common Stock on
the day immediately preceding the first public announcement of such
issuance, sale or exchange multiplied by (b) the sum of the number of
shares of Common Stock outstanding on such day plus the maximum number
of shares of Common Stock which could be acquired pursuant to such
right or warrant at the time of the issuance, sale or exchange of such
right or warrant (assuming shares of Common Stock could be acquired
pursuant to such right or warrant at such time).

(4) In the event the Corporation shall, at any time or from
time to time while any of the shares of ESOP Preferred Stock are
outstanding, make any Extraordinary Distribution (as hereinafter
defined) in respect of the Common Stock, whether by dividend,
distribution, reclassification of shares or recapitalization of the
Corporation (including a recapitalization or reclassification effected
by a merger or consolidation to which paragraph H hereof does not
apply) or effect a Pro Rata Repurchase (as hereinafter defined) of
Common Stock, the Conversion Price in effect immediately prior to such
Extraordinary Distribution or Pro Rata Repurchase shall, subject to
paragraphs I(5) and (6), be adjusted by multiplying such Conversion
Price by the fraction the numerator of which is (a) the product of (i)
the number of shares of Common Stock outstanding immediately before
such Extraordinary Distribution or Pro Rata Repurchase multiplied by
(ii) the Fair Market Value (as herein defined) of a share of Common
Stock on the Valuation Date (as hereinafter defined) with respect to an
Extraordinary Distribution, or on the applicable expiration date
(including all extensions thereof) of any tender offer which is a Pro
Rata Repurchase, or on the date of purchase with respect to any Pro
Rata Repurchase which is not a tender offer, as the case may be, minus
(b) the Fair Market Value of the Extraordinary Distribution or the
aggregate purchase price of the Pro Rata Repurchase, as the case may
be, and the denominator of which shall be the product of (i) the number
of shares of Common Stock outstanding immediately before such
Extraordinary Distribution or Pro Rata Repurchase minus, in the case of
a Pro Rata Repurchase, the number of shares of Common Stock repurchased
by the Corporation multiplied by (ii) the Fair Market Value of a share
of Common Stock on the record date with respect to an Extraordinary
Distribution or on the applicable expiration date (including all
extensions thereof) of any tender offer which is a Pro Rata Repurchase
or on the date of purchase with respect


-31-

to any Pro Rata Repurchase which is not a tender offer, as the case may
be. The Corporation shall send each holder of ESOP Preferred Stock (x)
notice of its intent to make any Extraordinary Distribution and (y)
notice of any offer by the Corporation to make a Pro Rata Repurchase,
in each case at the same time as, or as soon as practicable after, such
offer is first communicated (including by announcement of a record date
in accordance with the rules of any stock exchange on which the Common
Stock is listed or admitted to trading) to holders of Common Stock.
Such notice shall indicate the intended record date and the amount and
nature of such dividend or distribution, or the number of shares
subject to such offer for a Pro Rata Repurchase and the purchase price
payable by the Corporation pursuant to such offer, as well as the
Conversion Price and the number of shares of Common Stock into which a
share of ESOP Preferred Stock may be converted at such time.

(5) Notwithstanding any other provisions of this paragraph I,
the Corporation shall not be required to make any adjustment of the
Conversion Price unless such adjustment would require an increase or
decrease of at least one percent (1%) in the Conversion Price. Any
lesser adjustment shall be carried forward and shall be made no later
than the time of, and together with, the next subsequent adjustment
which, together with any adjustment or adjustments so carried forward,
shall amount to an increase or decrease of at least one percent (1%) in
the Conversion Price.

(6) If the Corporation shall make any dividend or distribution
on the Common Stock or issue any Common Stock, other capital stock or
other security of the Corporation or any rights or warrants to purchase
or acquire any such security, which transaction does not result in an
adjustment to the Conversion Price pursuant to the foregoing provisions
of this paragraph I, the Board of Directors of the Corporation shall
consider whether such action is of such a nature that an adjustment to
the Conversion Price should equitably be made in respect of such
transaction. If in such case the Board of Directors of the Corporation
determines that the adjustment to the Conversion Price should be made,
an adjustment shall be made effective as of such date, as determined by
the Board of Directors of the Corporation. The determination of the
Board of Directors of the Corporation as to whether an adjustment to
the Conversion Price should be made pursuant to the foregoing
provisions of this paragraph I(6), and, if so, as to what adjustment
should be made and when, shall be final and binding on the Corporation
and all shareholders of the Corporation. The Corporation shall be
entitled to make such additional adjustments in the Conversion Price,
in addition to those required by the foregoing provisions of this
paragraph I, as shall be necessary in order that any dividend or
distribution in shares of capital stock of the Corporation,
subdivision, reclassification or combination of shares of stock of the
Corporation or any recapitalization of the Corporation shall not be
taxable to holders of the Common Stock.



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(7) For purposes of this paragraph I, the following
definitions shall apply:

"Conversion Value" shall mean the Fair Market Value of the
aggregate number of shares of Common Stock into which a share of ESOP
Preferred Stock is convertible.

"Extraordinary Distribution" shall mean any dividend or other
distribution (effected while any of the shares of ESOP Preferred Stock
are outstanding) (a) of cash, where the aggregate amount of such cash
dividend and distribution together with the amount of all cash
dividends and distributions made during the preceding period of 12
months, when combined with the aggregate amount of all Pro Rata
Repurchases (for this purpose, including only that portion of the
aggregate purchase price of such Pro Rata Repurchase which is in excess
of the Fair Market Value of the Common Stock repurchased as determined
on the applicable expiration date (including all extensions thereof) of
any tender offer or exchange offer which is a Pro Rata Repurchase, or
the date of purchase with respect to any other Pro Rata Repurchase
which is not a tender offer or exchange offer made during such period),
exceeds Twelve and One-Half percent (12.5%) of the aggregate Fair
Market Value of all shares of Common Stock outstanding on the record
date for determining the shareholders entitled to receive such
Extraordinary Distribution and (b) any shares of capital stock of the
Corporation (other than shares of Common Stock), other securities of
the Corporation (other than securities of the type referred to in
paragraph I(2)), evidence of indebtedness of the Corporation or any
other person or any other property (including shares of any subsidiary
of the Corporation), or any combination thereof. The Fair Market Value
of an Extraordinary Distribution for purposes of paragraph I(4) shall
be the sum of the Fair Market Value of such Extraordinary Distribution
plus the amount of any cash dividends which are not Extraordinary
Distributions made during such twelve-month period and not previously
included in the calculation of an adjustment pursuant to paragraph
I(4).

"Fair Market Value" shall mean, as to shares of Common Stock
or any other class of capital stock or securities of the Corporation or
any other issuer which are publicly traded, the average of the Current
Market Prices (as hereinafter defined) of such shares or securities for
each day of the Adjustment Period (as hereinafter defined). "Current
Market Price" of publicly traded shares of Common Stock or any other
class of capital stock or other security of the Corporation or any
other issuer for a day shall mean the last reported sales price,
regular way, or, in case no sale takes place on such day, the average
of the reported closing bid and asked prices, regular way, in either
case as reported on the New York Stock Exchange Composite Tape or,


-33-

if such security is not listed or admitted to trading on the New York
Stock Exchange, on the principal national securities exchange on which
such security is listed or admitted to trading or, if not listed or
admitted to trading on any national securities exchange, on the NASDAQ
National Market System or, if such security is not quoted on such
National Market System, the average of the closing bid and asked prices
on each such day in the over-the-counter market as reported by NASDAQ
or, if bid and asked prices for such security on each such day shall
not have been reported through NASDAQ, the average of the bid and asked
prices for such day as furnished by any New York Stock Exchange member
firm selected for such purpose by the Board of Directors of the
Corporation or a committee thereof on each trading day during the
Adjustment Period. "Adjustment Period" shall mean the period of five
(5) consecutive trading days preceding the date as of which the Fair
Market Value of a security is to be determined. The "Fair Market Value"
of any security which is not publicly traded or of any other property
shall mean the fair value thereof as determined by an independent
investment banking or appraisal firm experienced in the valuation of
such securities or property selected in good faith by the Board of
Directors of the Corporation or a committee thereof, or, if no such
investment banking or appraisal firm is in the good faith judgment of
the Board of Directors or such committee available to make such
determination, as determined in good faith by the Board of Directors of
the Corporation or such committee.

"Non-Dilutive Amount" in respect of an issuance, sale or
exchange by the Corporation of any right or warrant to purchase or
acquire shares of Common Stock (including any security convertible into
or exchangeable for shares of Common Stock) shall mean the remainder of
(a) the product of the Fair Market Value of a share of Common Stock on
the day preceding the first public announcement of such issuance, sale
or exchange multiplied by the maximum number of shares of Common Stock
which could be acquired on such date upon the exercise in full of such
rights and warrants (including upon the conversion or exchange of all
such convertible or exchangeable securities), whether or not
exercisable (or convertible or exchangeable) at such date, minus (b)
the aggregate amount payable pursuant to such right or warrant to
purchase or acquire such maximum number of shares of Common Stock;
provided, however, that in no event shall the Non-Dilutive Amount be
less than zero. For purposes of the foregoing sentence, in the case of
a security convertible into or exchangeable for shares of Common Stock,
the amount payable pursuant to a right or warrant to purchase or
acquire shares of Common Stock shall be the Fair Market Value of such
security on the date of the issuance, sale or exchange of such security
by the Corporation.

"Pro Rata Repurchase" shall mean any purchase of shares of
Common Stock by the Corporation or any subsidiary thereof, whether for
cash, shares


-34-

of capital stock of the Corporation, other securities of the
Corporation, evidences of indebtedness of the Corporation or any other
person or any other property (including shares of a subsidiary of the
Corporation), or any combination thereof, effected while any of the
shares of ESOP Preferred Stock are outstanding, pursuant to any tender
offer or exchange offer subject to Section 13(e) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), or any successor
provision of law, or pursuant to any other offer available to
substantially all holders of Common Stock; provided, however, that no
purchase of shares by the Corporation or any subsidiary thereof made in
open market transactions shall be deemed a Pro Rata Repurchase. For
purposes of this paragraph I(7), shares shall be deemed to have been
purchased by the Corporation or any subsidiary thereof "in open market
transactions" if they have been purchased substantially in accordance
with the requirements of Rule 10b-18 as in effect under the Exchange
Act, on the date shares of ESOP Preferred Stock are initially issued by
the Corporation or on such other terms and conditions as the Board of
Directors of the Corporation or a committee thereof shall have
determined are reasonably designed to prevent such purchases from
having a material effect on the trading market for the Common Stock.

"Valuation Date" with respect to an Extraordinary Distribution
shall mean the date that is five (5) business days prior to the record
date for such Extraordinary Distribution.

(8) Whenever an adjustment to the Conversion Price is required
pursuant hereto, the Corporation shall forthwith place on file with the
transfer agent for the Common Stock and the ESOP Preferred Stock if
there be one, and with the Secretary of the Corporation, a statement
signed by two officers of the Corporation, stating the adjusted
Conversion Price determined as provided herein and the resulting
conversion ratio, and the voting rights (as appropriately adjusted), of
the ESOP Preferred Stock. Such statement shall set forth in reasonable
detail such facts as shall be necessary to show the reason and the
manner of computing such adjustment, including any determination of
Fair Market Value involved in such computation. Promptly after each
adjustment to the Conversion Price and the related voting rights of the
ESOP Preferred Stock, the Corporation shall mail a notice thereof and
of the then prevailing conversion ratio to each holder of shares of the
ESOP Preferred Stock.

J. Ranking; Retirement of Shares.

(1) The ESOP Preferred Stock shall rank (a) senior to the
Common Stock as to the payment of dividends and the distribution of
assets on liquidation, dissolution and winding-up of the Corporation,
(b) junior to the


-35-

shares of Series B Cumulative Perpetual Convertible Preferred Stock, no
par value per share, of the Corporation as to the payment of dividends
and the distribution of assets on liquidation, dissolution or
winding-up of the Corporation, and (c) unless otherwise provided in the
Articles of Incorporation of the Corporation or an amendment to such
Articles of Incorporation relating to a subsequent series of Preferred
Stock, without par value, of the Corporation (the "Preferred Stock"),
junior to all other series of the Preferred Stock as to the payment of
dividends and the distribution of assets on liquidation, dissolution or
winding-up.

(2) Any shares of ESOP Preferred Stock acquired by the
Corporation by reason of the conversion or redemption of such shares as
provided hereby, or otherwise so acquired, shall be retired as shares
of ESOP Preferred Stock and restored to the status of authorized but
unissued shares of Preferred Stock, undesignated as to series, and may
thereafter be reissued as part of a new series of such Preferred Stock
as permitted by law.

K. Miscellaneous.

(1) All notices referred to herein shall be in writing, and
all notices hereunder shall be deemed to have been given upon the
earlier of receipt thereof or three (3) business days after the mailing
thereof if sent by registered mail (unless first-class mail shall be
specifically permitted for such notice under the terms hereof) with
postage prepaid, addressed: (a) if to the Corporation, to its office at
NationsBank Corporate Center, Charlotte, North Carolina 28255
(Attention: Treasurer) or to the transfer agent for the ESOP Preferred
Stock, or other agent of the Corporation designated as permitted hereby
or (b) if to any holder of the ESOP Preferred Stock or Common Stock, as
the case may be, to such holder at the address of such holder as listed
in the stock record books of the Corporation (which may include the
records of any transfer agent for the ESOP Preferred Stock or Common
Stock, as the case may be) or (c) to such other address as the
Corporation or any such holder, as the case may be, shall have
designated by notice similarly given.

(2) The term "Common Stock" as used herein means the
Corporation's Common Stock, as the same existed at the date of filing
of the Amendment to the Corporation's Articles of Incorporation
relating to the ESOP Preferred Stock or any other class of stock
resulting from successive changes or reclassification of such Common
Stock consisting solely of changes in par value, or from par value to
no par value. In the event that, at any time as a result of an
adjustment made pursuant to paragraph I hereof, the holder of any share
of the ESOP Preferred Stock upon thereafter surrendering such shares
for conversion shall become entitled to receive any shares or other
securities of the Corporation other than shares of Common


-36-

Stock, the Conversion Price in respect of such other shares or
securities so receivable upon conversion of shares of ESOP Preferred
Stock shall thereafter be adjusted, and shall be subject to further
adjustment from time to time, in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to Common
Stock contained in paragraph I hereof, and the provisions of paragraphs
A through H, J, and K hereof with respect to the Common Stock shall
apply on like or similar terms to any such other shares or securities.

(3) The Corporation shall pay any and all stock transfer and
documentary stamp taxes that may be payable in respect of any issuance
or delivery of shares of ESOP Preferred Stock or shares of Common Stock
or other securities issued on account of ESOP Preferred Stock pursuant
hereto or certificates representing such shares or securities. The
Corporation shall not, however, be required to pay any such tax which
may be payable in respect of any transfer involved in the issuance or
delivery of shares of ESOP Preferred Stock or Common Stock or other
securities in a name other than that in which the shares of ESOP
Preferred Stock with respect to which such shares or other securities
are issued or delivered were registered, or in respect of any payment
to any person with respect to any such shares or securities other than
a payment to the registered holder thereof, and shall not be required
to make any such issuance, delivery or payment unless and until the
person otherwise entitled to such issuance, delivery or payment has
paid to the Corporation the amount of any such tax or has established,
to the satisfaction of the Corporation, that such tax has been paid or
is not pay able.

(4) In the event that a holder of shares of ESOP Preferred
Stock shall not by written notice designate the name in which shares of
Common Stock to be issued upon conversion of such shares should be
registered or to whom payment upon redemption of shares of ESOP
Preferred Stock should be made or the address to which the certificate
or certificates representing such shares, or such payment, should be
sent, the Corporation shall be entitled to register such shares, and
make such payment, in the name of the holder of such ESOP Preferred
Stock as shown on the records of the Corporation and to send the
certificate or certificates representing such shares, or such payment,
to the address of such holder shown on the records of the Corporation.

(5) The Corporation may appoint, and from time to time
discharge and change, a transfer agent for the ESOP Preferred Stock.
Upon any such appointment or discharge of a transfer agent, the
Corporation shall send notice thereof by first-class mail, postage
prepaid, to each holder of record of ESOP Preferred Stock.



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4. The address of the registered office of the Corporation is
NationsBank Corporate Center, NC1-007-56, Charlotte, Mecklenburg County, North
Carolina 28255, and the name of its registered agent at such address is James W.
Kiser.

5. No holder of any stock of the Corporation of any class now or
hereafter authorized shall have any preemptive right to purchase, subscribe for,
or otherwise acquire any shares of stock of the Corporation of any class now or
hereafter authorized, or any securities exchangeable for or convertible into any
such shares, or any warrants or other instruments evidencing rights or options
to subscribe for, purchase or otherwise acquire any such shares whether such
shares, securities, warrants or other instruments be unissued, or issued and
thereafter acquired by the Corporation.

6. To the fullest extent permitted by the North Carolina Business
Corporation Act, as the same exists or may hereafter be amended, a director of
the Corporation shall not be personally liable to the Corporation, its
shareholders or otherwise for monetary damage for breach of his duty as a
director. Any repeal or modification of this Article shall be prospective only
and shall not adversely affect any limitation on the personal liability of a
director of the Corporation existing at the time of such repeal or modification.



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