Exhibit 10.24
EMPLOYMENT AGREEMENT
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AGREEMENT by and between SunTrust Banks, Inc. , a Georgia
corporation (the "Company"), and Xxxxx X. Xxxxx III (the "Executive"),
dated as of July 20, 1998, but effective as of the Effective Date (as
hereinafter defined).
The Company has determined that it is in the best interests of
the Company and its stockholders to assure that it will have the benefit
of the valuable services and continued dedication of the Executive
following consummation of the merger (the "Merger") of Crestar Financial
Corporation ("Crestar") with the Company or a subsidiary of the Company
pursuant to the Agreement and Plan of Merger dated as of July 20, 1998,
and the Executive has agreed to serve the Company and Crestar Bank (the
"Bank") on the terms and conditions hereinafter set forth.
NOW, THEREFORE, for good and valuable consideration, the
receipt of which is hereby acknowledged, the Company and the Executive
hereby agree as follows:
1. Effective Date. The "Effective Date" shall mean the date
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of consummation of the Merger. In the event the Merger is not
consummated, this Agreement shall be null and void and of no force and
effect.
2. Employment Period. The Company acting on behalf of the
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Bank hereby agrees to employ the Executive, and the Executive hereby
agrees to be employed by the Bank, subject to the terms and conditions of
this Agreement, for the period commencing on the Effective Date and
ending on December 31, 2001 (the "Employment Period"). The Company in
addition hereby agrees to employ the Executive in accordance with Section
3(a)(iii) for at least a part of the Employment Period, and the Executive
hereby agrees to be so employed by the Company.
3. Terms of Employment.
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(a) Position; Duties; Place of Employment.
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(i) Except as provided in Section 3(a)(iii) hereof, during the
Employment Period, (A) the Executive shall serve as the President and Chief
Operating Officer of the Bank, (B) the Executive's services under this
Agreement shall be performed principally in the same location or locations
as the Executive's services were performed for Crestar immediately prior to
the Effective Date, (C) Executive shall have the duties and responsibility
and authority with respect to the Bank's operations where the Bank does
business which are substantially similar to his duties, responsibilities
and authority with Crestar immediately prior to the Merger, and (D) the
Executive shall report directly to the Bank's Chief Executive Officer and
shall perform such additional duties as may be reasonably requested by such
Chief Executive Officer.
(ii) During the Employment Period, and excluding any periods of
vacation and sick leave to which the Executive is entitled, the Executive
agrees to devote substantially all of his attention and time during normal
business hours to the business and affairs of the Bank and to use the
Executive's reasonable best efforts to perform faithfully and efficiently
the responsibilities assigned to him under this Agreement. During the
Employment Period, it shall not be a violation of this Agreement for the
Executive to (A) serve on corporate, civic or charitable boards or
committees, (B) deliver lectures, fulfill speaking engagements or teach at
educational institutions and (C) manage personal investments, so long as
such activities do not unreasonably interfere with the performance of the
Executive's responsibilities as an employee of the Bank in accordance with
this Agreement. It is expressly understood and agreed that to the extent
that any such activities have been conducted regularly by the Executive
prior to the Effective Date, the continued conduct of such activities (or
the conduct of activities similar in nature and scope thereto) subsequent
to the Effective Date shall not thereafter be deemed to unreasonably
interfere with the performance of the Executive's responsibilities to the
Bank.
(iii) At such time during the Employment Period as the person
who was the Bank's Chief Executive Officer on the Effective Date (the
"Current Bank CEO") ceases for any reason to serve in such capacity, the
Company and the Bank shall take all actions necessary or appropriate to
cause the Executive to be appointed as an Executive Vice President of the
Company and to be nominated and elected the Chairman of the Bank's Board of
Directors and Chief Executive Officer of the Bank, with such duties,
authorities and reporting responsibilities as are normally associated from
time to time with such status.
(b) Board Membership. As of the Effective Date, the Company
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shall cause the Board of Directors of the Bank (the "Bank Board") to
nominate the Executive (and the Bank Board shall elect Executive) as a
member of the Bank Board. So long as the Executive serves as an employee
of the Company or the Bank during the Employment Period, the Company shall
cause the Bank Board to continue to elect Executive as a member of the Bank
Board. Executive shall resign from the Bank Board effective as of the date
his employment terminates, and his resignation shall be accepted.
(c) Compensation.
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(i) Base Salary. With respect to each full calendar year during
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the Employment Period, the Executive shall be entitled to receive base
salary ("Annual Base Salary") at an annual rate equal to $500,000 for
calendar year 1998, $525,000 for calendar year 2000 and $550,000 for
calendar year 2001. Such Annual Base Salary shall be paid in accordance
with the Company's payroll policies and practices for executive employees.
(ii) Annual Bonus. With respect to each full calendar year
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during the Employment Period, the Executive shall receive an annual cash
bonus ("Annual Bonus") in an amount equal to $300,000 for calendar year
1999, $315,000 for calendar year 2000 and, for calendar year 2001, the
greater of $330,000 or the aggregate amount paid to the Executive for such
calendar year under the Company's Management Incentive Plan ("MIP") and
Performance Unit Plan ("PUP"). Such Annual Bonus shall be paid in
accordance with the Company's payroll policies and practices for executive
employees.
(iii) Initial Equity-Based Awards. As of the Effective Date,
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the Company shall grant to the Executive an aggregate of 30,000 shares of
restricted the Company's common stock (the "Restricted Stock") and a ten-
year nonqualified option (the "Option") to acquire an aggregate of 90,000
shares of the Company's common stock (the "Company Stock"). The Option
shall have an exercise price per share equal to the closing price per share
of the Company Stock on the New York Stock Exchange on the Effective Date
and shall be subject to the anti-dilution adjustments set forth in the
Company's 1995 stock option plan under which the option is granted. Except
as otherwise provided herein, the Option and the Restricted Stock shall
vest in accordance with the vesting schedule applicable to Executive Vice
Presidents of the Company, but the Option and the Restricted Stock shall
fully vest in no event later than the earlier of (1) the end of the
Employment Period or (2) the occurrence of an event which fully vests all
options granted under the Company's 1995 stock option plan. The Option and
the Restricted Stock shall also become fully vested upon Executive's death,
Disability, termination of Executive's employment by the Company or the
Bank without Cause and termination of Executive's employment by the
Executive for Good Reason. The Option shall have a ten year term and shall
remain exercisable until the expiration of such term unless the Executive's
employment is terminated by the Company for Cause or by the Executive
without Good Reason; provided, however, that in the event of a merger
transaction in which the Company is not the surviving corporation, the
foregoing shall not be construed as precluding the Option from being
treated in such transaction in the same manner as other outstanding options
held by Company employees. As promptly as practicable, and in any event
within six (6) months after the Effective Date, the Company shall, at its
expense, cause all shares of Restricted Stock and all shares of Company
Stock subject to the Option (and the options referred to in paragraph (iv)
below) to be registered under the Securities Act of 1933, as amended (the
"Securities Act"), and registered or qualified under applicable state laws,
to be freely resold. The Company shall maintain the effectiveness of such
registration and qualification for so long as the Executive or any member
of the Executive's immediate family owns the shares of Restricted Stock or
hold any option described in this Agreement or owns the underlying shares
of Company Stock or until such earlier date as all such shares, without
such registration or qualification, may be freely sold without any
restrictions under the Securities Act.
(iv) Future Grants. During the Employment Period, Executive
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shall receive grants of PUP units, stock options, restricted stock and
other equity-based awards (and, for calendar year 2001, MIP units) at the
same time as and consistent with the grants made to Executive Vice
Presidents of the Company who have substantially the same duties and
responsibilities as the Executive but in no event shall the Executive be
granted options to purchase Company Stock under the Company's stock option
plan for less than 15,000 shares in 1999 (the "1999 option"), for less than
15,000 shares in 2000 (the "2000 option") and for less than 15,000 shares
in 2001 (the "2001 option"). Each such option shall be granted subject to
the terms of such plan for a ten (10) year term, provided, however, that
(A) each such option shall fully vest no later than the earlier of (1) the
end of the Employment Period or (2) the occurrence of an event which fully
vests all options granted under the Company's stock option plan, (B) each
such option shall fully vest upon Executive's death, Disability,
termination of employment by the Company without Cause and termination of
employment by the Executive for Good Reason, and (C) each such option shall
remain exercisable until the expiration of such term unless the Executive's
employment is terminated by the Company for Cause or by the Executive
without Good Reason. Notwithstanding clause (C) of the preceding sentence,
if the Executive's employment terminates pursuant to his resignation under
Section 4(c)(ii), the 1999 option shall remain exercisable by the
Executive until expiration of the five (5) year period starting on the date
of the grant of such option without regard to such termination; and the
2000 option shall remain exercisable until expiration of the two and one
half (2 1/2) year period starting on the date of the grant of such option
and, if the Executive does not resign under Section 4(c)(ii), until at
least the expiration of the 5-year period starting on such date of grant.
The 2001 option shall remain exercisable after a termination of employment
on the same basis as options granted to the Company's Executive Vice
Presidents who have substantially the same duties and responsibilities as
the Executive. However, no option shall be granted to the Executive under
this Section 3(c)(iv) if his employment by the Company and the Bank
terminates before the date the option is granted; provided, however, that
any such option not theretofore granted shall be deemed to have been
granted immediately prior to the date as of which Executive's employment is
terminated by the Company without Cause or by the Executive for Good Reason
(other than pursuant to Section 4(c)(ii) hereof). These grants shall be
made by the Board or an appropriate Committee thereof.
(v) Supplemental Retirement Benefit. The Company agrees that,
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upon the Executive's ceasing to be employed by the Company for any reason
on or before the end of the Employment Period, the Executive shall have the
right to receive, at his election (or, in the event of his death, at the
election of his surviving spouse) either (A) the benefit payable to or in
respect of Executive under the terms of the supplemental retirement plan of
Crestar as in effect on July 20, 1998 treating all service and compensation
(salary and bonus) earned by the Executive with the Company on and after
the Effective Date as service and compensation with Crestar or (B) the
benefit payable to or in respect of the Executive under the terms of the
Company's supplemental retirement plan as in effect on July 20, 1998,
treating all service with and compensation from Crestar prior to the
Effective Date as service with, and compensation from, the Company to the
extent such service and compensation would have been taken into account
under such plan if such service had been performed for the Company and such
compensation had been paid by the Company. No compensation under Crestar's
value share program shall be taken into account under this Section 3(c)(v).
(vi) Other Employee Benefit Plans; Perquisites. During the
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Employment Period, the Executive shall be provided with employee benefits
(including, but not limited to, medical benefits and life insurance, but
excluding benefits which are like the benefits described in Section 3(c)(i)
through section 3(c)(v) of this Agreement) and fringe benefits and other
perquisites, at a level not less favorable than that provided to the
Executive by Crestar immediately prior to the Effective Date.
(vii) Expenses. During the Employment Period, the Executive
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shall be entitled to receive prompt reimbursement for all reasonable
expenses incurred by the Executive in accordance with the Company's and the
Bank's policies.
(viii) Office and Support Staff. During the Employment Period,
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the Executive shall be entitled to an office or offices of a size and with
furnishings and to administrative and other support services as are
provided generally to other senior executives of the Company and the Bank.
(ix) Vacation. During the Employment Period, the Executive shall
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be entitled to paid vacation in accordance with the plans, policies,
programs and practices of the Company and the Bank with respect to other
senior executives of the Company and the Bank.
4. Termination of Employment.
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(a) Death or Disability. The Executive's employment shall
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terminate automatically upon the Executive's death during the Employment
Period. If the Company determines in good faith that the Disability of the
Executive has occurred during the Employment Period (pursuant to the
definition of Disability set forth below), it may give to the Executive
written notice in accordance with Section 13(b) of this Agreement of its
intention to terminate the Executive's employment. In such event, the
Executive's employment with the Company and the Bank shall terminate
effective on the 30th day after receipt of such notice by the Executive
(the "Disability Effective Date"), provided that, within the 30 days after
such receipt, the Executive shall not have returned to the full-time
performance of the Executive's duties. For purposes of this Agreement,
"Disability" shall mean the absence of the Executive from the Executive's
duties with the Company and the Bank on a full-time basis for 180
consecutive business days as a result of incapacity due to mental or
physical illness which is determined to be total and permanent by a
physician selected by the Company or its insurers and acceptable to the
Executive or the Executive's legal representative.
(b) Cause. The Company or the Bank may terminate the Executive's
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employment during the Employment Period for Cause. For purposes of this
Agreement, "Cause" shall mean:
(i) the continued failure of the Executive to perform
substantially the Executive's duties with the Company or the Bank (other
than any such failure resulting from incapacity due to physical or mental
illness), after a written demand for substantial performance is delivered
to the Executive by the Board of Directors of the Company (the "Board")
which specifically identifies the manner in which the Board believes that
the Executive has not substantially performed the Executive's duties, or
(ii) the willful engaging by the Executive in illegal conduct or
gross misconduct, which is materially and demonstrably injurious to the
Company or the Bank, or
(iii) conviction of a felony or guilty or nolo contendere plea
by the Executive with respect thereto, which is materially and demonstrably
injurious to the Company or the Bank.
For purposes of this provision, no act or failure to act, on the part of
the Executive, shall be considered "willful" unless it is done, or omitted
to be done, by the Executive in bad faith or without reasonable belief that
the Executive's action or omission was in the best interests of the Company
or the Bank. Any act, or failure to act, based upon authority given
pursuant to a resolution duly adopted by the Board or upon the instructions
of the Chief Executive Officer of the Company or based upon the advice of
counsel for the Company shall be conclusively presumed to be done, or
omitted to be done, by the Executive in good faith and in the best
interests of the Company and the Bank. The cessation of employment of the
Executive shall not be deemed to be for Cause unless and until there shall
have been delivered to the Executive a copy of a resolution duly adopted by
the affirmative vote of not less than two-thirds of the entire membership
of the Board at a meeting of the Board called and held for such purpose
(after reasonable notice is provided to the Executive and the Executive is
given an opportunity, together with counsel, to be heard before the Board),
finding that, in the good faith opinion of the Board, the Executive is
guilty of the conduct described in subparagraph (i), (ii) or (iii) above
and specifying the particulars thereof in detail.
(c) Good Reason. (i) The Executive's employment may be
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terminated by the Executive for Good Reason. For purposes of this
Agreement, "Good Reason" shall occur upon a good faith determination by the
Executive that the Company or the Bank has materially breached any of its
obligations under this Agreement, which breach is not cured within 20 days
of the receipt of written notice of such breach by the Company or the Bank
from the Executive.
(ii) If the Executive tenders his resignation to the Chairman of
the Board effective as of the end of the eighteen (18) month period which
starts on the Effective Date and he does so before the end of such eighteen
(18) month period, the Company shall treat his resignation under this
Section 4(c)(ii) the same as a termination of employment for Good Reason
under this Agreement.
(d) Notice of Termination. Any termination by the Company or the
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Bank for Cause, or by the Executive for Good Reason, shall be communicated
by Notice of Termination to each other party hereto given in accordance
with Section 13(b) of this Agreement. For purposes of this Agreement, a
"Notice of Termination" shall mean a written notice which (i) indicates the
specific termination provision in this Agreement relied upon, (ii) to the
extent applicable, sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive's
employment under the provision so indicated and (iii) if the Date of
Termination (as defined below) is other than the date of receipt of such
notice, specifies the termination date (which date shall be not more than
thirty days after the giving of such notice).
(e) Date of Termination. "Date of Termination" shall mean (i) if
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the Executive's employment is terminated by the Company or the Bank for
Cause, or by the Executive for Good Reason, the date of receipt of the
Notice of Termination or any later date specified therein in accordance
with this Agreement, (ii) if the Executive's employment is terminated by
the Company or the Bank other than for Cause or Disability, the Date of
Termination shall be the date on which the Company or the Bank notifies the
Executive of such termination and (iii) if the Executive's employment is
terminated by reason of death or Disability, the Date of Termination shall
be the date of death of the Executive or the Disability Effective Date, as
the case may be.
5. Company and Bank Obligations upon Termination.
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(a) Good Reason; Other Than for Cause or Disability. If, during
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the Employment Period, the Company or the Bank shall terminate the
Executive's employment other than for Cause or Disability or the Executive
shall terminate employment for Good Reason:
(i) the Company shall pay (or cause the Bank to pay) to the
Executive, in addition to any earned but unpaid portion of the Executive's
Annual Base Salary and Annual Bonus through the Date of Termination (the
"Accrued Obligations"), a lump sum cash payment, within 10 days after the
Date of Termination, in an amount equal to the Annual Base Salary and the
Annual Bonus (which for the year 2001 shall be deemed to be $330,000) which
would have been paid to the Executive for the remainder of the Employment
Period absent such termination;
(ii) for the remainder of the Employment Period, the Company
shall continue to provide to the Executive (and, to the extent applicable,
his spouse) medical and dental benefits (collectively "Medical Benefits")
and other welfare benefits, fringe benefits and perquisites on the same
basis as such benefits and perquisites were provided to the Executive
immediately prior to the Date of Termination;
(iii) the Option, the Restricted Stock and any other nonvested
stock option or restricted stock awards, as well as the options referred to
in Section 3(c)(iv) hereof, shall vest immediately;
(iv) the Company shall pay (or cause the Bank of pay) to the
Executive a lump sum cash payment, within 30 days after the Date of
Termination, in an amount equal to the amount the Company or the Bank would
have contributed on the Executive's behalf to any qualified or supplemental
defined contribution plan for the period from the Date of Termination
through and including the end of the Employment Period, had the Executive's
employment not terminated hereunder;
(v) to the extent not theretofore paid or provided, the Company
shall timely pay or provide (or cause the Bank to pay or provide) to the
Executive any other amounts or benefits required to be paid or provided or
which the Executive is eligible to receive under any plan, program, policy
or practice or contract or agreement of the Company or the Bank through the
Date of Termination, including retiree medical and dental benefits and
executive life insurance benefits in accordance with Crestar's current
practice with respect to its "grandfathered" executives (such other amounts
and benefits shall be hereinafter referred to as the "Other Benefits"); and
(vi) the Company shall pay (or cause the Bank to pay) to
Executive (and, after his death, his surviving spouse) the supplemental
retirement benefit due under Section 3(c)(iv) as if Executive had worked
for the Bank or the Company until the end of the Employment Period and been
paid the compensation described in Section 5(a)(i).
(b) Death. If the Executive's employment is terminated by reason
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of the Executive's death during the Employment Period, this Agreement shall
terminate without further obligations to the Executive's legal
representatives under this Agreement, other than the payment of Accrued
Obligations, the timely payment or provision of Other Benefits to or in
respect of the Executive and the payment to the Executive's surviving
spouse of the supplemental retirement benefits hereunder. In addition, the
Option and the Restricted Stock, as well as the options referred to in
Section 3(c)(iv) hereof, shall vest immediately. Accrued Obligations shall
be paid to the Executive's estate or beneficiary, as applicable, in a lump
sum in cash within 30 days of the Date of Termination.
(c) Disability. If the Executive's employment is terminated by
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reason of the Executive's Disability during the Employment Period, this
Agreement shall terminate without further obligations to the Executive,
other than for payment of Accrued Obligations, the timely payment or
provision of Other Benefits and the payment of the supplemental retirement
benefit hereunder. In addition, the Option and the Restricted Stock, as
well as the options referred to in Section 3(c)(iv) hereof, shall vest
immediately. Accrued Obligations shall be paid to the Executive in a lump
sum in cash within 30 days of the Date of Termination.
(d) Cause; other than for Good Reason. If the Executive's
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employment shall be terminated for Cause or the Executive terminates his
employment without Good Reason during the Employment Period, this Agreement
shall terminate without further obligations to the Executive other than the
obligation to pay or provide to the Executive the Accrued Obligations and
Other Benefits, in each case to the extent theretofore unpaid or not
provided, and the payment of the supplemental retirement benefit hereunder.
(e) Effect. Any termination of the Executive's employment shall
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have no effect on the continuing operation of this Section 5.
6. Non-exclusivity of Rights. Except as specifically provided,
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nothing in this Agreement shall prevent or limit the Executive's continuing
or future participation in any plan, program, policy or practice provided
by the Company or any of its affiliated companies and for which the
Executive may qualify, nor, subject to Section 13(f), shall anything herein
limit or otherwise affect such rights as the Executive may have under any
contract or agreement with the Company or any of its affiliated companies.
Amounts which are vested benefits or which the Executive is otherwise
entitled to receive under any plan, policy, practice or program of or any
contract or agreement with the Company or any of its affiliated companies
at or subsequent to the Date of Termination shall be payable in accordance
with such plan, policy, practice or program or contract or agreement except
as explicitly modified by this Agreement.
7. No Mitigation, etc. The Company's and the Bank's obligation
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to make the payments provided for in this Agreement and otherwise to
perform their respective obligations hereunder shall not be affected by any
set-off, counterclaim, recoupment, defense or other claim, right or action
which the Company or the Bank may have against the Executive or others. In
no event shall the Executive be obligated to seek other employment or take
any other action by way of mitigation of the amounts payable to the
Executive under any of the provisions of this Agreement and, such amounts
shall not be reduced whether or not the Executive obtains other employment.
The Company agrees to pay (or to cause the Bank to pay) or promptly
reimburse the Executive for all reasonable costs and expenses (including
all reasonable legal fees and expenses) which the Executive may reasonably
incur in connection with any dispute hereunder (regardless of the outcome
thereof) relating to the validity or enforceability of, or liability under,
any provision of this Agreement (including as a result of any claim by the
Executive regarding the amount of any payment pursuant to this Agreement),
plus in each case interest on any delayed payment at the applicable Federal
rate provided for in Section 7872(f)(2)(A) of the Internal Revenue Code of
1986, as amended (the "Code"); provided, however, that the foregoing
obligation shall not apply with respect to any claim by the Executive which
is determined not to have been brought in good faith.
8. Certain Additional Payments by the Company.
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(a) Anything in this Agreement to the contrary notwithstanding,
in the event it shall be determined that any payment, distribution or other
benefit provided by the Company, the Bank or Crestar or any of their
affiliates to or for the benefit of the Executive (whether paid or payable
or distributed or distributable pursuant to the terms of this Agreement or
otherwise, but determined without regard to any additional payments
required under this Section 8) (a "Payment") would be subject to the excise
tax imposed by Section 4999 of the Code or any interest or penalties are
incurred by the Executive with respect to such excise tax (such excise tax,
together with any such interest and penalties, are hereinafter collectively
referred to as the "Excise Tax"), then the Executive shall be entitled to
receive an additional payment (a "Gross-Up Payment") in an amount such that
after payment by the Executive of all taxes (including any interest or
penalties imposed with respect to such taxes), including, without
limitation, any income taxes, employment taxes and Excise Tax imposed upon
the Gross-Up Payment, the Executive retains an amount of the Gross-Up
Payment equal to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 8(c), all determinations
required to be made under this Section 8, including whether and when a
Gross-Up Payment is required and the amount of such Gross-Up Payment and
the assumptions to be utilized in arriving at such determination, shall be
made by KPMG Peat Marwick LLP or such other certified public accounting
firm reasonably acceptable to the Company as may be designated by the
Executive (the "Accounting Firm"), which shall provide detailed supporting
calculations both to the Company and the Executive within 15 business days
of the receipt of notice from the Executive that there has been a Payment,
or such earlier time as is requested by the Company. All fees and expenses
of the Accounting Firm shall be borne solely by the Company. Any Gross-Up
Payment, as determined pursuant to this Section 8, shall be paid by the
Company or the Bank to the Executive within five days of the later of (i)
the due date for the payment of any Excise Tax, and (ii) the receipt of the
Accounting Firm's determination. Any determination by the Accounting Firm
shall be binding upon the Company, the Bank and the Executive. As a result
of the uncertainty in the application of Section 4999 of the Code at the
time of the initial determination by the Accounting Firm hereunder, it is
possible that Gross-Up Payments which will not have been made by the
Company or the Bank should have been made ("Underpayment"), consistent with
the calculations required to be made hereunder. In the event that the
Company exhausts its remedies pursuant to Section 8(c) and the Executive
thereafter is required to make a payment of any Excise Tax, the Accounting
Firm shall determine the amount of the Underpayment that has occurred and
any such Underpayment shall be promptly paid by the Company or the Bank to
or for the benefit of the Executive.
(c) The Executive shall notify the Company in writing of any
claim by the Internal Revenue Service that, if successful, would require
the payment by the Company of the Gross-Up Payment. Such notification shall
be given as soon as practicable but no later than ten business days after
the Executive is informed in writing of such claim and shall apprise the
Company of the nature of such claim and the date on which such claim is
requested to be paid. The Executive shall not pay such claim prior to the
expiration of the 30-day period following the date on which it gives such
notice to the Company (or such shorter period ending on the date that any
payment of taxes with respect to such claim is due). If the Company
notifies the Executive in writing prior to the expiration of such period
that it desires to contest such claim, the Executive shall:
(i) give the Company any information reasonably requested by the
Company relating to such claim,
(ii) take such action in connection with contesting such claim as
the Company shall reasonably request in writing from time to time,
including, without limitation, accepting legal representation with respect
to such claim by an attorney reasonably selected by the Company,
(iii) cooperate with the Company in good faith in order
effectively to contest such claim, and
(iv) permit the Company or the Bank to participate in any
proceedings relating to such claim;
provided, however, that the Company or the Bank shall bear and pay directly
all costs and expenses (including additional interest and penalties)
incurred in connection with such contest and shall indemnify and hold the
Executive harmless, on an after-tax basis, for any Excise Tax or income tax
(including interest and penalties with respect thereto) imposed as a result
of such representation and payment of costs and expenses. Without
limitation on the foregoing provisions of this Section 8(c), the Company
shall control all proceedings taken in connection with such contest and, at
its sole option, may pursue or forgo any and all administrative appeals,
proceedings, hearings and conferences with the taxing authority in respect
of such claim and may, at its sole option, either direct the Executive to
pay the tax claimed and xxx for a refund or contest the claim in any
permissible manner, and the Executive agrees to prosecute such contest to a
determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts as the Company shall
determine; provided, however, that if the Company directs the Executive to
pay such claim and xxx for a refund, the Company or the Bank shall advance
the amount of such payment to the Executive, on an interest-free loan basis
and shall indemnify and hold the Executive harmless, on an after-tax basis,
from any Excise Tax or income tax (including interest or penalties with
respect thereto) imposed with respect to such advance or with respect to
any imputed income with respect to such advance; and further provided that
any extension of the statute of limitations relating to payment of taxes
for the taxable year of the Executive with respect to which such contested
amount is claimed to be due is limited solely to such contested amount.
Furthermore, the Company's control of the contest shall be limited to
issues with respect to which a Gross-Up Payment would be payable hereunder
and the Executive shall be entitled to settle or contest, as the case may
be, any other issue raised by the Internal Revenue Service or any other
taxing authority.
(d) If, after the receipt by the Executive of an amount advanced
by the Company or the Bank pursuant to section 8(c), the Executive becomes
entitled to receive any refund with respect to such claim, the Executive
shall (subject to the Company's or the Bank's complying with the
requirements of Section 8(c)) promptly pay to the Company or the Bank the
amount of such refund (together with any interest paid or credited thereon
after taxes applicable thereto). If, after the receipt by the Executive of
an amount advanced as an interest free loan by the Company or the Bank
pursuant to Section 8(c), a determination is made that the Executive shall
not be entitled to any refund with respect to such claim and the Company or
the Bank does not notify the Executive in writing of its intent to contest
such denial of refund prior to the expiration of 30 days after such
determination, then such loan shall be forgiven and shall not be required
to be repaid and the amount of such loan shall offset, to the extent
thereof, the amount of Gross-Up Payment required to be paid.
9. Confidential Information.
------------------------
(a) The Executive shall hold in a fiduciary capacity for the
benefit of the Company and the Bank all secret or confidential information,
knowledge or data relating to the Company, the Bank or any of their
affiliated companies, and their respective businesses, which shall have
been obtained by the Executive during the Executive's employment by the
Company or the Bank and which shall not be or become public knowledge
(other than by acts by the Executive or representatives of the Executive in
violation of this Agreement). After termination of the Executive's
employment with the Company or the Bank, the Executive shall not, without
the prior written consent of the Company or as may otherwise be required by
law or legal process, communicate or divulge any such information,
knowledge or data to anyone other than the Company or the Bank, and those
designated by it. In no event shall an asserted violation of the provisions
of this Section 9 constitute a basis for deferring or withholding any
amounts otherwise payable to the Executive under this Agreement.
(b) In the event of a breach or threatened breach of this
Section 9, the Executive agrees that the Company or the Bank shall (in
addition to any other remedy available) be entitled to injunctive relief in
a court of appropriate jurisdiction to remedy any such breach or threatened
breach, the Executive hereby acknowledging that damages would be inadequate
and insufficient.
(c) Any termination of the Executive's employment or of this
Agreement shall have no effect on the continuing operation of this Section
9.
10. Anti-Pirating.
-------------
(a) The Executive shall not, during the one year period following
his termination of employment for any reason under this Agreement, seek to
employ on his own behalf or on behalf of any other person, firm, or
corporation which engages, directly or indirectly, in the same business as
the Company or the Bank, any person who was employed as an employee by the
Company or the Bank in an executive, managerial or supervisory capacity at
any time during the Executive's employment by the Company or the Bank and
who has not thereafter ceased to be employed in such capacity by the
Company or the Bank for a period of at least one (1) year.
(b) In the event of a breach or threatened breach of this Section
10, the Executive agrees that the Company or the Bank shall (in addition to
any other remedy available) be entitled to injunctive relief in a court of
appropriate jurisdiction to remedy any such breach or threatened breach,
the Executive hereby acknowledging that damages would be inadequate and
insufficient.
11. Successors.
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(a) This Agreement is personal to the Executive and without the
prior written consent of the Company and the Bank shall not be assignable
by the Executive otherwise than by will or the laws of descent and
distribution. This Agreement shall inure to the benefit of and be
enforceable by the Executive's legal representatives.
(b) This Agreement shall inure to the benefit of and be binding
upon the Company, the Bank and their successors and assigns.
(c) The Company and the Bank each will require any successor
(whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of its business and/or assets to
assume expressly and agree to perform this Agreement in the same manner and
to the same extent that the Company or the Bank would be required to
perform it if no such succession had taken place. As used in this
Agreement, "Company" shall mean the Company and the Bank as hereinbefore
defined and any successor to their businesses and the Bank, respectively,
and/or assets as aforesaid which assumes and agrees to perform this
Agreement by operation of law, or otherwise.
12. Noncompete. (a) If the Executive tenders his resignation
----------
under Section 4(c)(ii), the Executive for the two (2) year period starting
on the date his employment with the Bank terminates pursuant to such
resignation shall not serve as an officer, director or employee, or
consultant to, or be a significant investor in, any organization which
engages in Virginia, Maryland and/or the District of Columbia in the same
business, or same lines of business, engaged in by the Bank in Virginia,
Maryland and/or the District of Columbia on the date his employment so
terminates. The Executive shall not be treated under this Section 12 as a
significant investor in an organization unless he owns directly or
indirectly a ten percent (10%) or more equity interest in the stock or
capital or profits of such organization.
(b) Executive agrees that this Section 12 is reasonable, fair and
equitable in light of his duties and responsibilities under this Agreement
and that it is necessary to protect the ligitimate business interests of
the Company and the Bank and, further, that it consitutes a material
inducement to agree to treating a resignation under Section 4(c)(ii) the
same as a termination for Good Reason. In the event of a breach or
threatened breach of this Section 12, the Executive agrees that the Bank
shall (in addition to any other remedy available) be entitled to injunctive
relief in a court of competent jurisdiction to remedy any such breach or
threatened breach, the Executive hereby acknowledging that damages would be
inadequate and insufficient.
13. Miscellaneous.
-------------
(a) This Agreement shall be governed by and construed in
accordance with the laws of the State of Virginia, without reference to
principles of conflict of laws. The captions of this Agreement are not part
of the provisions hereof and shall have no force or effect. This Agreement
may not be amended or modified otherwise than by a written agreement
executed by the parties hereto or their respective successors and legal
representatives.
(b) All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party or by
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
If to the Executive: Xxxxx X. Xxxxx III
--------------------
Crestar Financial Corporation
000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
If to the Company or the Bank:
------------------------------
SunTrust Banks, Inc.
000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: General Counsel
or to such other address as either party shall have furnished to the other
in writing in accordance herewith. Notice and communications shall be
effective when actually received by the addressee.
(c) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.
(d) The Company or the Bank may withhold from any amounts payable
under this Agreement such federal, state, local or foreign taxes as shall
be required to be withheld pursuant to any applicable law or regulation.
(e) The Executive's or the Company's or the Bank's failure to
insist upon strict compliance with any provision of this Agreement or the
failure to assert any right the Executive or the Company or the Bank may
have hereunder, including, without limitation, the right of the Executive
to terminate employment for Good Reason pursuant to Section 4(c) of this
Agreement, shall not be deemed to be a waiver of such provision or right or
any other provision or right of this Agreement.
(f) From and after the Effective Date, this Agreement shall
supersede any other employment, severance or change in control agreement
between the parties hereto or between the Executive and Crestar, including
Crestar's Executive Severance Plan as in effect for Executive immediately
prior to the Effective Date (the "Severance Agreement") and no such
employment, severance or change in control agreement, including the
Severance Agreement, shall have any further force or effect whatsoever.
14. Dispute Resolution. In the event of any dispute or
------------------
controversy arising under or in connection with this Agreement, the parties
shall settle such dispute or controversy exclusively by arbitration in
Richmond, Virginia, in accordance with the rules of the American
Arbitration Association then in effect. Judgment may be entered on the
arbitrator's award in any court having jurisdiction.
15. Indemnification. To the fullest extent permitted by law,
---------------
the Company and the Bank shall indemnify the Executive (including the
advancement of expenses) for any judgments, fines, amounts paid in
settlement and reasonable expenses, including attorneys' fees, incurred by
the Executive in connection with the defense of any lawsuit or other claim
to which he is made a party by reason of being an officer, director or
employee of the Company or the Bank or any of their affiliates during the
Employment period and for at least three (3) years thereafter, the Company
or the Bank shall make every reasonable effort to maintain customary
director and officer liability insurance covering the Executive for acts
and omissions during the Employment Period. Any termination of the
Executive's employment or of this Agreement shall have no effect on the
continuing operation of this Section 15.
IN WITNESS WHEREOF, the parties have executed this Agreement on
the date and year first above written.
SunTrust Banks, Inc.
By: /s/ L. Xxxxxxx Xxxxxx
--------------------------------------
Name: L. Xxxxxxx Xxxxxx
Title: Chairman of the Board and Chief Executive
Officer
/s/ Xxxxx X. Xxxxx III
-----------------------------------------
Xxxxx X. Xxxxx III
