Exhibit 10.12
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT, made as of the 25th day of October,
1996, by and between WACHOVIA CORPORATION (the "Corporation") and XXXX X. XXXXXX
(the "Executive");
R E C I T A L S:
The Corporation desires to secure the services of the
Executive in its behalf or in behalf of one or more of its subsidiaries for
which the Executive may render services hereunder from time to time, in
accordance with the terms and conditions set forth herein. In addition, the
Corporation desires to provide the Executive with an incentive to remain in the
service of the Corporation or one or more of its subsidiaries by granting to the
Executive compensation security as set forth herein should his employment be
terminated by the Corporation without cause during the term of this Agreement.
NOW, THEREFORE, the Corporation and the Executive hereby
mutually agree as follows:
1. Employment. The Executive shall devote his working time
exclusively to the performance of such services for the Corporation or
one or more of its subsidiaries as may be assigned to him by the
Corporation from time to time, and shall perform such services
faithfully and to the best of his ability. Such services shall be
rendered in a senior management or executive capacity and shall be of a
type for which the Executive is suited by background and training.
References herein to services rendered for the Corporation and
compensation and benefits payable or provided by the Corporation shall
include services rendered for and compensation and benefits payable or
provided by any subsidiary of the Corporation.
2. Term of Agreement. The term of this Agreement shall
commence on the date hereof and shall continue in effect until December
31, 1999; provided, however, that commencing on the first anniversary
of this Agreement, and each anniversary thereafter, the term of this
Agreement shall automatically be extended for one additional year
unless at least 90 days prior to any such anniversary date either party
shall notify the other in writing that it does not wish to extend the
term of this Agreement beyond the then applicable expiration date. In
no event, however, may the term of this Agreement extend beyond the
Executive's sixtieth birthday. References herein to the "term" of this
Agreement shall mean the original term plus any continuation as
provided in this Section 2. The "term" shall not be deemed to refer to
the Compensation Period described in Section 4.
3. Termination of Employment by the Corporation. The
Corporation may terminate the employment of the Executive at any time
for any reason; provided, that except as set forth in Sections 6 and 7,
the Corporation will provide the Executive with Compensation
Continuance to the extent described in Section 4 if the
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Executive's employment is involuntarily terminated. The Executive's
employment shall be deemed to be involuntarily terminated if he is
terminated by the Corporation for any reason other than for "cause" as
defined in Section 6, or if he voluntarily terminates employment within
six months after: (a) his base salary is reduced below its level in
effect on the date hereof without the Executive's consent, or (b) the
Corporation amends the Executive Retirement Agreement between the
Corporation and the Executive dated January 27, 1995 (the "Retirement
Agreement"), without the Executive's consent, and such amendment
reduces benefits to which the Executive would have been entitled had
such amendment not been made, or (c) the duties assigned to the
Executive are not of the status and type described in Section 1 and the
Executive has not consented thereto. The Executive shall be deemed to
have consented to any reduction described in (a) or (b), or assignment
described in (c), unless he shall object thereto in writing within
thirty days after he receives notice thereof.
4. Compensation Continuance. If the Executive's employment
hereunder is involuntarily terminated as described in Section 3, he
will be entitled to receive the cash compensation and benefits
described in (a), (b) and (c) below (herein, "Compensation
Continuance") for the period beginning with the date of such
involuntary termination and ending with the earlier of (i) the third
anniversary of the date of such termination, or (ii) the Normal
Retirement Date of the Executive as defined in the Retirement Agreement
(such period is referred to herein as the "Compensation Period"). The
duration of the Compensation Period shall not be affected by the fact
that the term of this Agreement otherwise would end before such Period
expires. The cash compensation and benefits are as follows:
(a) Cash Compensation. The amount of cash
compensation to be received monthly during the Compensation
Period shall equal one-twelfth of the sum of (i) the
Executive's highest annual rate of salary from the Corporation
in effect during the 12-month period prior to his involuntary
termination, plus (ii) an amount equal to the average of the
annual amounts, if any, awarded to the Executive under the
Corporation's Senior Management Incentive Plan for the three
consecutive calendar years next preceding the year of such
termination, plus (iii) the average of any annual
contributions by the Corporation (excluding participant
contributions) in behalf of the Executive under the Retirement
Savings and Profit-Sharing Plan of Wachovia Corporation and
the Wachovia Corporation Retirement Savings and Profit-Sharing
Benefit Equalization Plan for the three consecutive calendar
years preceding the year of such termination. Each monthly
payment of such cash compensation shall have deducted
therefrom all payroll taxes and withholdings required by law.
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(b) Employee Benefits. During the Compensation Period
the Executive shall be carried on the payroll of the
Corporation, and shall be deemed to be continuing in the
employment of the Corporation for the purpose of applying and
administering employee benefit plans of the Corporation (other
than any tax-qualified retirement plans) and individual
contracts between the Corporation and the Executive providing
supplemental or equalization payments or benefits with respect
to the Executive. The Executive shall participate in any
changes during the Compensation Period in benefit plans or
programs applicable generally to employees of the Corporation,
or to a class of employees which includes senior executives of
the Corporation, but shall not have any right or option to
participate in any such plan or program in which he was not a
participant immediately prior to his involuntary termination
of employment. Any individual contract between the Corporation
and the Executive in effect at the time of his involuntary
termination of employment may be terminated or amended by the
Corporation to the extent permitted by the terms of such
contract; provided, that during the Compensation Period the
Corporation shall not, without the written consent of the
Executive or except to the extent required by law, make any
amendment to or terminate any one or more of the following
individual contracts or plans as applied to the Executive: (i)
the Retirement Agreement; (ii) the Wachovia Corporation
Retirement Savings and Profit-Sharing Benefit Equalization
Plan; and (iii) the Wachovia Corporation Retirement Income
Benefit Enhancement Plan. The Corporation shall have no
obligation to the Executive to make any change or improvement
in any such contract during the Compensation Period even if
the Corporation shall make changes or improvements during such
period in similar contracts, if any, with other senior
executives of the Corporation.
(c) Acceleration of Stock Options and Restricted
Awards. Immediately upon termination of the Executive's
employment, all options previously granted to the Executive
and outstanding on the date of termination to acquire shares
of common stock of the Corporation shall become fully vested
and exercisable (or subject to surrender) in full and all
restricted awards shall be deemed to be earned in full;
provided, that restricted awards based upon performance
criteria or a combination of performance criteria and
continued service shall be deemed to be earned in accordance
with the terms, conditions and procedures of the plan or plans
pursuant to which any such restricted awards were granted.
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In the event that the Executive shall engage in full-time employment
permitted hereunder for another employer or on a self-employed basis
during the Compensation Period, his employment with the Corporation
shall be deemed to have terminated for purposes of Section 4(b) as of
the date he begins such full-time employment, but the payments in
Section 4(a) shall continue for the remainder of the Compensation
Period and the rights under Section 4(c) shall be applicable, in each
case subject to the provisions of Section 7.
5. Voluntary Termination of Employment by the Executive. The
Executive reserves the right to terminate his employment voluntarily at
any time for any reason following at least six months' notice to the
Corporation. If such notice shall be given, this Agreement shall
terminate as of the effective date of termination as set forth in such
notice (or the date six months from the date of receipt by the
Corporation of such notice, if no effective date shall be set forth
therein), unless sooner terminated as provided in Section 3, 6 or 8.
The Executive shall not be entitled to any form of Compensation
Continuance as a result of such voluntary termination.
6. Termination for Cause. This Agreement shall immediately be
terminated and neither party shall have any obligation hereunder
(including but not limited to any obligation on the part of the
Corporation to provide Compensation Continuance) if the Executive's
employment is terminated for "cause." Termination for cause shall occur
when termination results from the Executive's (a) criminal dishonesty,
(b) refusal to perform his duties hereunder on substantially a
full-time basis, (c) refusal to act in accordance with any specific
substantive instructions of the Chief Executive Officer or the Board of
Directors of the Corporation, or (d) engaging in conduct which could be
materially damaging to the Corporation without a reasonable good faith
belief that such conduct was in the best interests of the Corporation.
The determination of whether a termination is for cause shall be made
by the Management Resources and Compensation Committee of the Board of
Directors of the Corporation (the "Committee"), and such determination
shall be final and conclusive on the Executive and all other persons
affected thereby.
7. Executive's Obligations; Early Termination of
Compensation Period.
(a) During the Compensation Period, the Executive
shall provide consulting services to the Corporation at such
time or times as the Corporation shall reasonably request,
subject to appropriate notice and to reimbursement by the
Corporation of all reasonable travel and other expenses
incurred and paid by the Executive. In the event the Executive
shall engage in full-time employment permitted hereunder
during the Compensation Period for another employer or on a
self-employed basis, his obligation to provide the consulting
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services hereunder shall be limited by the requirements of
such employment.
(b) The Executive shall not disclose to any other
person any material information or trade secrets concerning
the Corporation or any of its subsidiaries at any time during
or after the Compensation Period. The Executive will at all
times refrain from taking any action or making any statements,
written or oral, which are intended to and do disparage the
business, goodwill or reputation of the Corporation or any of
its subsidiaries, or their respective directors, officers,
executives or other employees, or which could adversely affect
the morale of employees of the Corporation or any
subsidiaries.
(c) The Executive shall not, without the
Corporation's written consent, engage in competitive
employment at any time during the Compensation Period. The
Executive shall be deemed to engage in competitive employment
if he shall render services as an employee, officer, director,
consultant or otherwise, for any employer which conducts a
principal business or enterprise that competes directly with
the Corporation or affiliate of the Corporation.
(d) In the event that the Executive shall refuse to
provide consulting services in accordance with paragraph (a),
or shall materially violate the terms and conditions of
paragraph (b) or (c), the Corporation may, at its election,
terminate the Compensation Period and Compensation Continuance
to the Executive. The Corporation may also initiate any form
of legal action it may deem appropriate seeking damages or
injunctive relief with respect to any material violations of
paragraph (a), (b) or (c).
(e) The Committee shall be responsible for
determining whether the Executive shall have violated this
Section 7, and all such determinations shall be final and
conclusive. Upon the request of the Executive, the Committee
will provide an advance opinion as to whether a proposed
activity would violate the provisions of paragraph (c).
8. Death and Disability. In the event that, during the term of
this Agreement or during the Compensation Period, the Executive shall
die or shall become entitled to benefits under the Corporation's
Long-Term Disability Plan, this Agreement shall thereupon terminate and
neither the Executive nor any other person shall have any further
rights or benefits hereunder (including any rights to Compensation
Continuance).
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9. Other Severance Benefits. Except as otherwise provided in
this Agreement, the Executive shall not be entitled to any form of
severance benefits, including benefits otherwise payable under any of
the Corporation's regular severance plans or policies, irrespective of
the circumstances of his termination of employment. The Executive
agrees that the payments and benefit provided hereunder, subject to the
terms and conditions hereof, shall be in full satisfaction of any
rights which he might otherwise have or claim by operation of law, by
implied contract or otherwise, except for rights which he may have
under employee benefit plans of the Corporation or individual written
contracts with the Corporation.
10. Waiver of Claims. In consideration of the obligations of
the Corporation hereunder, the Executive unconditionally releases the
Corporation, its directors, officers, employees and shareholders, from
any and all claims, liabilities and obligations of any nature
pertaining to termination of the Executive's employment by the
Corporation, including but not limited to (a) any claims under federal,
state or local laws prohibiting discrimination, including without
limitation the Age Discrimination in Employment Act of 1967, as
amended, or (b) any claims growing out of any alleged legal
restrictions on the Corporation's right to terminate the Executive's
employment, such as any alleged implied contract of employment or
termination contrary to public policy. The Executive acknowledges that
he has been advised to consult with an attorney prior to signing this
Agreement, that he has had no less than twenty-one days to consider
this Agreement prior to the execution hereof, and that he may revoke
this Agreement at any time within seven days following the execution
hereof.
11. Notices. All notices hereunder shall be in writing
and deemed properly given if delivered by hand and receipted or if
mailed by registered mail, return receipt requested. Notices to the
Corporation shall be directed to the Secretary of the Corporation with
a copy directed to the Chief Executive Officer. Notices to the
Executive shall be directed to his last known address.
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12. Miscellaneous.
(a) The waiver, whether express or implied, by either
party of a violation of any of the provisions of this
Agreement shall not operate or be construed as a waiver of any
subsequent violation of any such provision.
(b) No right, benefit or interest hereunder shall be
subject to assignment, encumbrance, charge, pledge,
hypothecation or set off in respect of any claim, debt or
obligation, or similar process.
(c) This Agreement may not be amended, modified or
canceled except by written agreement of the parties.
(d) In the event that any provision or portion of
this Agreement shall be determined to be invalid or
unenforceable for any reason, the remaining provisions of this
Agreement shall remain in full force and effect to the fullest
extent permitted by law.
(e) This Agreement shall be binding upon and inure to
the benefit of the Executive and the Corporation, and their
respective heirs, successors and assigns.
(f) No benefit or promise hereunder shall be secured
by any specific assets of the Corporation. The Executive shall
have only the rights of an unsecured general creditor of the
Corporation in seeking satisfaction of such benefits or
promises.
(g) This Agreement shall be governed by the construed
in accordance with the laws of the State of North Carolina.
(h) This Agreement sets forth the entire agreement
and understanding of the parties hereto with respect to the
matters covered hereby, and amends and supersedes any
predecessor Employment Agreement between the parties hereto.
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IN WITNESS WHEREOF, this Agreement has been executed by or in
behalf of the parties hereto as of the date first above written.
WACHOVIA CORPORATION
By: ____________________________
Chief Executive Officer
Attest:
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Secretary
[Corporate Seal]
/s/ Xxxx X. Xxxxxx (Seal)
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Executive
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