Exhibit 10 JJ
AGREEMENT AND GENERAL RELEASE
This is an Agreement and General Release (Agreement) between
Mercantile Bankshares Corporation (Bankshares) and Mercantile-Safe Deposit and
Trust Company (Merc-Safe) (Bankshares and Merc-Safe are sometimes collectively
referred to herein as the Companies) and Xxxx X. Xxxxx (Xx. Xxxxx), dated as of
December 31, 2002 (the Effective Date). The parties agree as follows:
1. Severance Payments.
(a) Merc-Safe will pay Xx. Xxxxx, in bi-weekly payments, his current
regular salary which is $400,000 annually (less all lawful deductions) for the
period from the effective date of this Agreement to December 31, 2004. This
obligation shall survive in the event of Xx. Xxxxx'x death prior to December 31,
2004, in which event any remaining payments shall be due and payable to Xx.
Xxxxx'x estate or such other beneficiary designated by Xx. Xxxxx in a written
notice delivered to the Companies.
(b) In addition, subject to the offset described in the following
sentence, Merc-Safe will pay Xx. Xxxxx, in bi-weekly payments, the aggregate sum
of $94,400 (less all lawful deductions) during 2005 and the aggregate sum of
$86,533 (less all lawful deductions) for the period from January 1, 2006 to
November 30, 2006 (collectively, the Additional Payments). The obligation of
Merc-Safe to make any Additional Payments shall be reduced by the gross amount
of any income earned by Xx. Xxxxx from employment (including self-employment)
during such periods (regardless of when such income is received), and an
accounting shall be conducted at the end of each such period to determine if any
amount of such Additional Payments previously paid to
Xx. Xxxxx must be repaid. Such Additional Payments shall terminate upon Xx.
Xxxxx'x death.
2. Additional Severance Payments. With respect to the Annual
Incentive Compensation Plan of Bankshares and its affiliates ("AICP"), Xx. Xxxxx
shall be entitled to receive an incentive award for the 2002 Award Year in
accordance with and subject to the terms of the AICP, based on his 2002 annual
salary of $400,000 and his designation as a Class I participant for that year.
The amount of such award is $184,600 and will be payable no later than March 31,
2003, and shall be subject to all lawful deductions. The Companies agree that
Xx. Xxxxx will be eligible to receive bonus payments for the 2003 Award Year
(payable in 2004) and 2004 Award Year (payable in 2005) to be calculated in
accordance with and subject to the terms of the AICP as if he were still a Class
I participant and based on his base annual salary of $400,000; provided,
however, that such bonus payments shall be made only if and to the same extent
that the Companies make incentive awards generally under the AICP to Class I
participants for the 2003 and 2004 Award Years, and the parties expressly agree
that if the AICP changes for Class I participants generally for the 2003 or 2004
Award Years, the calculation of any bonus payments to Xx. Xxxxx for such Award
Years will change in a like manner. The obligations set forth in this paragraph
2 shall survive in the event of Xx. Xxxxx'x death prior to December 31, 2004, in
which event any remaining payments due under this paragraph 2 shall be due and
payable to Xx. Xxxxx'x estate or such other beneficiary designated by Xx. Xxxxx
in a written notice delivered to the Companies.
3. Continuation of Employee Benefits. The Companies will provide Xx.
Xxxxx his current level of employee benefits (exclusive of any retirement
benefits,
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which are covered elsewhere under this Agreement) during the period from January
1, 2003 through December 31, 2004. The Companies will provide these benefits to
Xx. Xxxxx in the following areas: dental coverage, medical and vision coverage,
life insurance coverage, employee assistance program, blood program, annual
physical and checking account benefits. Payment for benefits and premiums for
benefit coverage will continue to be made in the same manner as prior to this
Agreement, and allowable deductions from Xx. Xxxxx'x bi-weekly payments as set
forth in paragraph 1 above shall be made for such payments. The Companies and
Xx. Xxxxx will continue to make payment for benefits and benefit premiums in
substantially the same proportion as before this Agreement. The level of
benefits specified in this paragraph shall be at the same level as if Xx. Xxxxx
remained employed in his current capacities for the Companies, except that the
parties expressly agree that if any of the benefit programs or plans change for
comparable employees of the Companies, Xx. Xxxxx'x level of benefits and
proportional share of payments or premiums will change in a like manner. After
December 31, 2004, should Xx. Xxxxx elect to continue his medical, dental and
vision coverages, he will be responsible for all premiums, subject to certain
credits allowed under the Companies' retiree medical program.
4. Existing Cash Balance SERP. With respect to the Supplemental Cash
Balance Executive Retirement Plan (Cash Balance SERP) in which Xx. Xxxxx
participated prior to the Effective Date, the Companies will continue to
allocate annual credits, in accordance with and subject to the terms and
conditions the Cash Balance SERP then in effect, for Xx. Xxxxx through December
31, 2006 (or until his death, if earlier). The calculation of such annual
credits shall be made as set forth in Exhibit A
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attached hereto and made a part hereof. In all other respects, the terms of the
Cash Balance SERP will continue to apply to Xx. Xxxxx; provided, however, that
for purposes of the Cash Balance SERP, Xx. Xxxxx'x termination of employment
will be deemed to occur on December 31, 2006 (or upon his death, if earlier) and
payment to Xx. Xxxxx will be made or commence as soon as practicable after
December 31, 2006 (or upon his death, if earlier). Notwithstanding the
foregoing, nothing in this paragraph 4 or in Exhibit A shall be deemed to create
any obligation on the part of the Companies to pay any salary or bonus to Xx.
Xxxxx after December 31, 2004 other than any bonus provided in paragraph 2 above
for the 2004 Award Year which is payable in 2005 and the Additional Payments as
defined in paragraph 1(b) above.
5. Additional Cash Balance SERP. The parties acknowledge and agree
that after December 31, 2002 Xx. Xxxxx shall not be eligible to participate in
the Bankshares qualified cash balance plan. The Companies agree to establish,
after the effective date of this Agreement, an additional cash balance SERP
(Additional SERP) for Xx. Xxxxx. The Additional SERP will provide a benefit,
commencing at age 60, which, when added to Xx. Xxxxx'x vested benefit as of
December 31, 2002 under the qualified cash balance plan, will produce a combined
benefit equal to the benefit Xx. Xxxxx would have been entitled to under the
qualified cash balance plan had he continued to be employed through, and then
retired at, age 60 and commenced receiving benefits at that time (i.e., $94,400
if Xx. Xxxxx elected to take the lifetime annuity option).
6. Exisiting 401(k) SERP
(a) With respect to the Supplemental 401(k) Executive Retirement
Plan (401(k) SERP) in which Xx. Xxxxx participated prior to the Effective Date,
the
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Companies will continue to allocate annual credits, in accordance with and
subject to the terms and conditions the 401(k) SERP then in effect, for Xx.
Xxxxx through December 31, 2006 (or until his death, if earlier). The
calculation of such annual credits shall be made as set forth in Exhibit A
attached hereto and made a part hereof.
(b) In addition to the above allocations, the Companies also
will allocate annual credits for Xx. Xxxxx under the 401(k) SERP through
December 31, 2006 (or until Xx. Xxxxx'x death, if earlier) for the maximum basic
contribution. The calculation of such annual credits shall be made as set forth
in Exhibit A attached hereto and made a part hereof.
(c) In addition to the above allocations, the Companies also
will allocate annual credits for Xx. Xxxxx under the 401(k) SERP through
December 31, 2006 (or until Xx. Xxxxx'x death, if earlier) for the maximum
matching contribution. The calculation of such annual credits shall be made as
set forth in Exhibit A attached hereto and made a part hereof.
(d) In all other respects, the terms of the 401(k) SERP will
continue to apply to Xx. Xxxxx; provided, however, that for purposes of the
401(k) SERP, Xx. Xxxxx'x termination of employment will be deemed to occur on
December 31, 2006 (or upon his death, if earlier) and payment to Xx. Xxxxx will
be made as soon as practicable after December 31, 2006 (or upon his death, if
earlier). Furthermore, notwithstanding the foregoing, nothing in this paragraph
6 or in Exhibit A shall be deemed to create any obligation on the part of the
Companies to pay any salary or bonus to Xx. Xxxxx after December 31, 2004 other
than any bonus provided in paragraph 2 above
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for the 2004 Award Year which is payable in 2005 and the Additional Payments as
defined in paragraph (b) above.
7. Automobile Use. The Companies will provide to Xx. Xxxxx use of a
car through December 31, 2004, will provide insurance coverage on such vehicle,
and will reimburse him for the cost of gas and any scheduled maintenance or
repairs required or reasonably necessary in connection with the use of such
vehicle during such period, but only to the extent that the annual usage during
such period does not materially exceed the amount of annual usage by Xx. Xxxxx
of his company-owned vehicle during 2002. His current automobile (2001 Toyota
Sequoia) will continue to be provided for his use, and when it reaches the
standard mileage limit of 70,000 miles, it will be traded for a new vehicle of
equivalent value (based on MSRP of a Toyota Sequoia at the time of such trade).
The title to this new vehicle on December 31, 2004 shall be transferred to Xx.
Xxxxx. The Companies shall be responsible for transfer taxes incurred in this
transfer of title. After December 31, 2004, Xx. Xxxxx will be solely responsible
for any insurance coverage on or related to the vehicle. The parties expressly
agree that the Companies, as of December 31, 2004, will cease all travel and
accident coverage applicable to Xx. Xxxxx.
8. Memberships Dues. The Companies agree to pay the base monthly
dues for Xx. Xxxxx'x Center Club membership through December 31, 2004. Any
charges in addition to the base monthly dues and all charges subsequent to
December 31, 2004 shall be the sole responsibility of Xx. Xxxxx.
9. Matching Gift Program. The Companies will allow Xx. Xxxxx to be
eligible for participation in their matching gift program through December 31,
2004.
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10. Computer. The Companies agree to transfer ownership to Xx. Xxxxx,
on the effective date of this Agreement, of the computer currently provided for
his use.
11. Cell Phone. The Companies agree to pay the base monthly charges,
through December 31, 2004, of the cell phone service plan provided to Xx. Xxxxx
as of December 31, 2002. Any charges in addition to the base monthly charges and
all charges subsequent to December 31, 2004 shall be the sole responsibility of
Xx. Xxxxx.
12. Stock Options. With respect to options ("Options") granted to Xx.
Xxxxx prior to the date hereof pursuant to the Mercantile Bankshares Corporation
Omnibus Stock Plan (Omnibus Plan) and as reflected in Option Agreements dated
August 21, 1995, November 28, 2000 and May 7, 2002, Xx. Xxxxx shall be deemed to
be employed by the Companies through December 31, 2005 (other than in the event
of his death prior to such date) solely for purposes of determining the
exercisability of the Options in accordance with the terms of such Option
Agreements. The vesting of such Options, to the extent applicable, shall
continue to remain subject to the satisfaction of the applicable financial
performance criteria. Notwithstanding the foregoing, such Option Agreements are
hereby amended to provide that any and all Options which are currently vested or
which vest subsequent to December 31, 2002 must be exercised by December 31,
2005, after which date they will expire. The parties acknowledge and agree that
attached hereto as Exhibit B is a schedule setting forth the current status of
all such options.
13. Restricted Stock. Further with respect to the Omnibus Stock Plan,
as to those shares subject to the Restricted Stock Award Agreement dated as of
April 29,
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2002 between Xx. Xxxxx and Bankshares, such shares will vest in accordance with
the terms of such Agreement, and shall not be subject to forfeiture after such
vesting.
14. Miscellaneous Expenses. The Companies agree to pay Xx. Xxxxx
through December 31, 2004 a monthly stipend in the amount of $850 to assist him
with office and parking expenses associated with the transitional activities
referenced in paragraph 15. In addition, the Companies agree to pay Xx. Xxxxx'x
reasonable legal expenses incurred in connection with the negotiation of this
agreement, not to exceed $5,000.
15. Resignation; Ongoing Obligations. Xx. Xxxxx resigned his
positions with the Companies on December 31, 2002. Xx. Xxxxx'x positions as an
officer of the Companies, as an officer or director of any subsidiaries of the
Companies, and as a member of committees of the Companies and subsidiaries, and
their Boards of Directors have terminated. Xx. Xxxxx shall, after the effective
date of this Agreement, not be required to perform any executive or line
management responsibilities for the Companies but he shall make himself
available for transitional activities during the period specified for salary
payments in paragraph 1(a) of this Agreement.
16. Release. Xx. Xxxxx agrees that the benefits listed in paragraphs
1 through 14 are not benefits to which he is otherwise entitled by reason of his
employment, and that in consideration of the promises set forth in paragraphs 1
through 14, he will, and hereby does, forever and irrevocably release and
discharge the Companies, their officers, directors, employees, agents,
subsidiaries, affiliates, predecessors, successors, purchasers, assigns, and
representatives, of any and all grievances, claims, demands, debts, defenses,
actions or causes of action, obligations,
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damages, and liabilities whatsoever which he now has, has had, or may have,
whether the same be at law, in equity, or mixed, in any way arising from or
relating to any act, occurrence, or transaction before the date of this
Agreement; provided, however, that nothing herein shall be construed as a
release by Xx. Xxxxx of any claim relating to any benefit vested in favor of Xx.
Xxxxx prior to the date hereof under any employee benefit or retirement plan
maintained by the Companies. This is a General Release. Xx. Xxxxx expressly
acknowledges that this General Release includes, but is not limited to, Xx.
Xxxxx'x intent to release the Companies from any claim of age, race, sex,
religion, national origin or any other claim of employment discrimination under
the Age Discrimination in Employment Act (29 U.S.C. section 2000 et seq.), the
Employee Retirement Income Security Act (29 U.S.C. section 1001 et seq.),
Article 49B of the Maryland Annotated Code, and any other law prohibiting
employment discrimination or related to abusive discharge, or whistleblowing.
Xx. Xxxxx agrees not to xxx the Companies or to join in any lawsuit against the
Companies, or any other person or entity specified in this paragraph, concerning
any matter which arose on or before the effective date of this Agreement.
17. Non-Disparagement.
(a) Xx. Xxxxx agrees that for a period of three (3) years after
the effective date of the execution of this Agreement, he will not, either by
conversation or any other oral expression, by letter or any other written
expression, or by any other deed or act of communication (including, but not
limited to allowing himself to be referred to or quoted as the source of
information) to the public or to any individual person or entity or groups of
persons or entities, specifically including but not limited to such persons or
entities as are, have been, or may be, employees, Customers (as defined herein),
or
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business associates of the Companies, disparage, condemn or impugn the
reputation or character of the Companies or any of its officers or directors, or
any of the actions or writings, specifically including but not limited to any of
the policies, practices, procedures or advertisements, which are, have been or
may be taken or produced by the Companies or its predecessors, subsidiaries,
parents, successors, successors in interest, assigns, trustees, officers,
directors, agents, attorneys, servants or employees on behalf of the Companies.
Xx. Xxxxx understands that by agreeing to the provisions of this Paragraph, he
is waiving rights guaranteed by the First Amendment of the United States
Constitution and State counterparts. Xx. Xxxxx further agrees that a material
violation of the terms of this Paragraph, or repeated non-material violations
after written notice from the Company asserting a non-material violation, is a
material breach of this Agreement, entitling the Companies to recover any
payments made to Xx. Xxxxx under this Agreement, to stop any payments or
obligations owing under this Agreement, to recover the costs and attorneys' fees
the Companies incurs to recover under this paragraph and to obtain injunctive,
monetary or other relief permitted by law.
(b) The Companies agree that for a period of three (3) years
after the effective date of the execution of this Agreement, they will use
reasonable efforts to ensure that their senior executive officers do not, either
by conversation or any other oral expression, by letter or any other written
expression, or by any other deed or act of communication (including, but not
limited to allowing themselves to be referred to or quoted as the source of
information) to the public or to any individual person or entity or groups of
persons or entities, disparage, condemn or impugn the reputation or character of
Xx. Xxxxx. Notwithstanding the foregoing, nothing shall prevent any such senior
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executive officer from discussing business related matters concerning Xx. Xxxxx
that are factually true where he or she reasonably believes that the disclosure
of such facts serves a reasonable business purpose.
18. Customers. The Parties agree and stipulate that as used herein
"Customer" means all persons, firms or entities that have either sought or
purchased the Companies' services, have contacted the Companies for the purpose
of seeking or purchasing the Companies' services, or have been contacted by the
Companies for the purpose of selling services during Xx. Xxxxx'x employment, and
all persons, firms, or entities subject to the control of those persons, firms,
or entities. The Customers covered by this Agreement shall include any Customer
of the Companies at any time during Xx. Xxxxx'x employment. The Parties further
stipulate and agree that the Companies' business is commercial banking.
19. Confidential Information. The Parties agree and stipulate that as
used herein "Confidential Information" means all non-public information which
becomes known to Xx. Xxxxx as a consequence of his employment by the Companies
and which has been treated as confidential by the Companies or is generally
considered as confidential by corporations within the commercial banking
industry, and includes, but is not limited to, information about the Companies'
Customers, potential Customers, methods of operation, products, prices, costs,
discounts, business plans, prospective and executed contracts, trade secrets,
business contacts, customer lists, and all technological, business, financial,
accounting, statistical and personnel information regarding the Companies and
Customers or potential Customers of the Companies. The Parties further agree and
stipulate that this Confidential Information was developed by the Companies at
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considerable expense, that this information is a valuable asset to the Companies
and part of their goodwill, that this information is vital to the Companies'
success and is the sole property of the Companies.
20. Confidentiality; Non-Compete; Non-Solicitation.
(a) Xx. Xxxxx recognizes and acknowledges that during his employment
by the Companies, Xx. Xxxxx had access to, worked with and became familiar with
the Companies' Confidential Information, and that he was called upon to
establish close relationships with the Companies' Customers and co-workers.
(b) Xx. Xxxxx recognizes and acknowledges that his experience,
skills, education and training are readily transferable and of such breadth that
he can employ them to his advantage in many other fields of endeavor, and that
consequently, the terms of this Agreement will not unreasonably impair Xx.
Xxxxx'x ability to engage in business or employment activities after the
effective date of this Agreement.
(c) Xx. Xxxxx recognizes and acknowledges that the Companies are
engaged in a highly competitive enterprise, so that any unauthorized disclosure
or unauthorized use by Xx. Xxxxx of the Confidential Information protected under
this Agreement, or any unauthorized competition, whether during his employment
with the Companies or after its termination, would cause immediate, substantial
and irreparable injury to the business and goodwill of the Companies.
(d) Xx. Xxxxx agrees that upon the effective date of this Agreement
he will surrender to the Companies every item and every document that is the
Companies' property (including keys, records, computer files and disks, notes,
memoranda, models,
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inventory and equipment) or contains Confidential Information, in whatever form.
All of these materials are the sole and absolute property of the Companies.
(e) Xx. Xxxxx agrees that from the effective date of this Agreement
until December 31, 2004, he will not, on his own behalf or as a partner,
officer, director, employee, agent, or consultant of any other person or entity,
directly or indirectly, disclose the Companies' Confidential Information to any
person or entity other than agents of the Companies, and he will not use or aid
others in obtaining or using any such Confidential Information without the
express written permission of the President of the Companies.
(f) Xx. Xxxxx agrees that from the effective date of this Agreement
until December 31, 2004, he will not, on his own behalf or as a partner,
officer, director, employee, agent, or consultant of any other person or entity,
directly or indirectly, engage or attempt to engage in the business of providing
services the same as or similar to the services of the Companies, i.e.
commercial banking, within Maryland, Virginia, Pennsylvania, Delaware or
Washington, D.C. Xx. Xxxxx expressly acknowledges that the Companies are
entitled to a court order enjoining any violation of this paragraph even if Xx.
Xxxxx has not personally solicited or serviced the Companies' Customers. Xx.
Xxxxx agrees that the geographic, temporal, and other restrictions on his
ability to obtain other employment in this Agreement are reasonable, waives any
right to contest same and agrees in the future not to challenge these
restrictions.
(g) Xx. Xxxxx agrees from the effective date of this Agreement until
December 31, 2004, he will not, on his own behalf or as a partner, officer,
director, employee, agent, or consultant of any other person or entity, directly
or indirectly contact
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any of the Companies' Customers or potential Customers for the purposes of
conducting any commercial banking business or solicit or induce (or attempt to
solicit or induce) any of the Companies' Customers or potential Customers not to
conduct business with the Companies, or to stop conducting business with the
Companies, or to conduct business with or contract with any other person or
entity for the commercial banking services then provided by the Companies.
(h) Xx. Xxxxx agrees that from the effective date of this Agreement
until December 31, 2004, he will not, on his own behalf or as a partner,
officer, director, employee, agent, or consultant of any other person or entity,
directly or indirectly, contact, solicit or induce (or attempt to solicit or
induce) any employee of the Companies to leave their employment with the
Companies or consider employment with any other person or entity.
(i) The Parties agree that any breach by Xx. Xxxxx of any of the
provisions contained in this paragraph 20 will cause the Companies immediate,
material and irreparable injury and damage, and there is no adequate remedy at
law for such breach. Accordingly, in the event of a breach of any of the
provisions of this paragraph 20 by Xx. Xxxxx, in addition to any other remedies
it may have at law or in equity, the Companies shall be entitled immediately to
seek enforcement of this Agreement in a court of competent jurisdiction by means
of a decree of specific performance, an injunction without the posting of a bond
or the requirement of any other guarantee, any other form of equitable relief,
liquidated damages in the amount of $10,000.00 (ten thousand dollars), and the
Companies are entitled to recover from Xx. Xxxxx the costs and attorneys' fees
it incurs to recover under or enforce this Agreement. In addition, all
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severance payments and other benefits, including options and restricted stock
grants, not vested at December 31, 2002, shall immediately cease and the
Companies shall have no further obligation to make any such payments or to grant
such rights. This provision is not a waiver of any other rights which the
Companies may have under this Agreement, including the right to receive money
damages.
21. No Waiver. The Parties agree that the failure of the Companies to
enforce any term of this Agreement (or any agreement with any other person)
shall not constitute a waiver of the Companies' rights or deprive the Companies
of the right to insist thereafter upon strict adherence to that or any other
term of this Agreement, nor shall a waiver of any breach of this Agreement
constitute a waiver of any preceding or succeeding breach, nor shall the passage
of any amount of time after the Companies becomes aware of a breach of this
Agreement constitute a waiver of the Companies' rights to enforcement. No waiver
of a right under any provision of this Agreement shall be binding on the
Companies unless expressly made in writing and signed by the President of the
Companies.
22. Enforceability; Severability. It is the intention of the Parties
that this Agreement shall be enforceable to the fullest extent allowed by law.
In the event that a court holds any provision of this Agreement to be
unenforceable, the Parties agree that, if allowed by law, that provision shall
be reduced to the degree necessary to render it enforceable without affecting
the rest of this Agreement, and, if such reduction is not allowed by law, the
Parties shall promptly agree in writing to a provision to be substituted
therefore which will have an effect as close as possible to the invalid
provision that is consistent with applicable law. The Parties agree that the
invalidity or unenforceability
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of any provision of this Agreement shall not affect or limit the validity and
enforceability of the other provisions hereof.
23. Non-Disclosure.
(a) Xx. Xxxxx agrees that the existence of and terms of this
Agreement are strictly confidential and expressly covenants not to display,
publish, disseminate or disclose the existence or terms of this Agreement to any
person or entity, other than his spouse, any prospective employer, any bank or
other lending institution in connection with a loan application, or his
financial advisor and except as required by law.
(b) The Companies agree that the existence of and terms of this
Agreement are strictly confidential and expressly covenant not to display,
publish, disseminate or disclose the existence or terms of this Agreement to any
person or entity, except as the Companies may reasonably determine to be
required or necessary in connection with their respective businesses, and except
as required by law. Xx. Xxxxx acknowledges that Mercshares may be required to
disclose the terms of this Agreement in its annual proxy statement and other
securities filings.
24. Prevailing Party. Xx. Xxxxx agrees that he shall not be regarded
as the prevailing party for any purpose, including, but not limited to,
determining responsibility for or entitlement to attorneys' fees, under any
statute or otherwise.
25. Acknowledgement.
(a) Xx. Xxxxx has received this Agreement on March 10, 2003. Xx.
Xxxxx understands that he has twenty-one (21) days from his receipt of this
Agreement to consider his decision to sign it. By signing this Agreement, Xx.
Xxxxx expressly acknowledges that his decision to sign this Agreement was of his
own free will. Xx. Xxxxx
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understands that he may revoke this Agreement for up to and including seven (7)
days after his execution of the Agreement, and that the Agreement shall not
become effective until the expiration of seven days from its execution, the
effective date of this Agreement. Xx. Xxxxx has been advised by the Companies to
consult an attorney regarding the terms of this Agreement before signing it.
(b) Xx. Xxxxx expressly acknowledges and understands that this
Agreement is not an admission of liability under any statute or otherwise by the
Companies, and does not admit any violation of Xx. Xxxxx'x legal rights, but is
solely entered into as an exchange for the terms described above.
(c) Xx. Xxxxx represents that he has read this Agreement, that he
understands all of its terms, and that he enters into this Agreement, after
consultation with counsel, voluntarily and with knowledge of its effect.
26. Miscellaneous.
(a) This Agreement shall be binding upon and inure to the benefit of
the assigns, heirs, executors, and administrators of Xx. Xxxxx and the
Companies, their officers, directors, employees, agents, subsidiaries,
affiliates, predecessors, successors, purchasers, assigns, and representatives,
that this Agreement contains the entire agreement and understanding of the
parties, that there are no additional promises or terms among the parties other
than those contained herein, and that this Agreement shall not be modified
except in writing signed by each of the parties.
(b) This Agreement shall in all respects be interpreted, enforced,
and governed under the laws of the State of Maryland. The language of all parts
of this Agreement shall in all cases be construed as a whole, according to its
fair meaning.
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March 12, 2003 /s/ Xxxx X. Xxxxx
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Date Xxxx X. Xxxxx
MERCANTILE BANKSHARES
CORPORATION
March 11, 2003 By: /s/ Xxxxxx X. Xxxxx, III
--------------------------------- --------------------------------
Date Xxxxxx X. Xxxxx, III
Chairman, President and Chief
Executive Officer
MERCANTILE-SAFE DEPOSIT AND
TRUST COMPANY
March 11, 2003 By: /s/ Xxxxxx X. Xxxxx, III
--------------------------------- --------------------------------
Date Xxxxxx X. Xxxxx, III
Chairman and Chief Executive
Officer
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Exhibit A
Calculation of Retirement Credits
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Agreement
Reference Retirement Benefit Covered Compensation (1) (2) (3) Calculation of Annual Credits
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Existing Cash Balance ($400,000 + actual bonus) minus then 18% of Covered Compensation in
Paragraph 4 SERP current IRS maximum applicable year
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Additional Cash Balance N/A No annual credit or contribution.
Paragraph 5 SERP Strictly a contractual obligation to
supplement current vested benefit
under the qualified Cash Balance
Plan so that the aggregate annual
payment from the qualified cash
balance plan and this additional cash
balance SERP upon retirement at age
60 will be $94,400 (4)
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Existing 401(k) SERP ($400,000 + actual bonus) minus then 3% of Covered Compensation in
Paragraph 6a current IRS maximum applicable year
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Additional credits to Then current IRS maximum 3% of Covered Compensation in
Paragraph 6b Existing 401(k) SERP: applicable year
Maximum basic
contribution
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Additional credits to Then current IRS maximum 3% of Covered Compensation in
Paragraph 6c Existing 401(k) SERP: applicable year
Maximum matching
contribution
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(1) For purposes of determining covered compensation, $400,000 is the base
salary for the 2003, 2004, 2005 and 2006 calculations. That amount is
actually paid, however only in 2003 and 2004; it is used for calculation
purposes only in 2005 and 2006. The $86,533 and $94,400 Additional Payments
referred to in paragraph 1(b) of the Agreement are not included in covered
compensation in any year.
(2) For purposes of determining covered compensation, bonus is included for the
2003, 2004, 2005 and 2006 calculations. Bonus is included in covered
compensation for year in which it is paid (or would have been paid). Thus,
bonus of $184,600 for 2002 but paid in 2003 is included in covered
compensation for the 2003 calculation. Bonuses for 2003 and 2004 will count
in the 2004 and 2005 calculations, respectively, but only if the bonuses
are actually earned and paid. Bonus for 2005 will count in the 2006
calculation if the bonus would have been earned under the incentive plan,
but no bonus will actually be paid for 2005.
(3) IRS maximum refers to the Internal Revenue Code Section 401(a)(17) limit.
The current amount of such limit is $200,000. This amount may change.
Calculation will be based on then current limit in effect for the
applicable year.
(4) The $94,400 number assumes that Xx. Xxxxx elects to receive his aggregate
cash balance benefit in the form of a single life annuity and beginning at
age 60. Annual amount will differ if Xx. Xxxxx elects a different payment
option available under the cash balance plan (i.e, ten year certain and
continuous, joint and 50% to surviving spouse, joint and 66.7% to surviving
spouse, or joint and 100% to surviving spouse) and/or elects to begin
payments earlier than age 60.
-19-
Exhibit B
Summary of Stock Options
As of 3/1/03
--------------------------------------------------------------------------------------------------------------------
Option Agreement Dated:
--------------------------------------------------------------------------------------------------------------------
8/21/95 (1) 11/28/00 (2) 5/29/02 (3) TOTAL (4)
--------------------------------------------------------------------------------------------------------------------
Grant Date 3/14/95 3/14/00 3/12/02 --
--------------------------------------------------------------------------------------------------------------------
Exercise Price $14.583 $25.344 $44.99 --
--------------------------------------------------------------------------------------------------------------------
Expiration Date 3/13/05 3/13/10 3/11/12 --
--------------------------------------------------------------------------------------------------------------------
Performance Based Yes Yes No --
--------------------------------------------------------------------------------------------------------------------
Number Granted 37,500 40,000 15,000 92,500
--------------------------------------------------------------------------------------------------------------------
(Exercised) (1,688) --0-- --0-- (1,688)
--------------------------------------------------------------------------------------------------------------------
(Forfeited) (2,813) (19,000) N/A (21,813)
--------------------------------------------------------------------------------------------------------------------
Total Current Outstanding 32,999 21,000 15,000 68,999
--------------------------------------------------------------------------------------------------------------------
Total Current Outstanding Vested 32,999 11,000 5,000 48,999
--------------------------------------------------------------------------------------------------------------------
Total Current Outstanding Non-Vested --0-- 10,000 10,000 20,000
--------------------------------------------------------------------------------------------------------------------
----------------
(1) All share amounts with respect to this Option Agreement have been adjusted
to reflect the 3-for-2 stock split effected in June 1997.
(2) Based on 2002 performance, on March 14, 2003 options for 8,000 shares will
be forfeited and options for 2,000 shares will become exercisable under
this Option Agreement. These actions are reflected in the chart
information.
(3) Assumes vesting of 5,000 shares on March 12, 2003, the anniversary date of
the grant of these options.
(4) Does not include 5,000 restricted shares granted 4/29/02.
-20-
