Exhibit 10.2
EXECUTIVE SEVERANCE AGREEMENT
AGREEMENT by
and between Mercantile Bankshares Corporation ("Mercshares"),
Mercantile-Safe Deposit & Trust Company ("Merc-Safe")
(collectively the "Company"), and Jay M. Wilson (the "Executive"),
effective as of the 11
th day
of January, 2005.
WHEREAS: The
Executive has agreed to serve as Vice Chairman of Mercshares,
Chairman and CEO of Investment and Wealth Management of Mercshares
and Merc-Safe; and
WHEREAS: The
Board of Directors of Mercshares (the "Board"), acting upon the
recommendation of its Compensation Committee, has determined that
it is in the best interests of Mercshares and its shareholders to
assure that the Company will have the continued dedication of the
Executive as a key executive of Mercshares and Merc-Safe,
notwithstanding the possibility, threat or occurrence of a Change
of Control (as defined below) of Mercshares. The Board believes it
is necessary to diminish the inevitable distraction of the
Executive by virtue of the personal uncertainties and risks created
by a pending or threatened Change of Control, to encourage the
Executive's full attention and dedication to the Company currently
and in the event of any threatened or pending Change of Control
(including determinations as to the best interests of Mercshares
and its shareholders should the possibility of a Change of Control
of Mercshares arise), and to provide the Executive with
compensation arrangements upon a Change of Control which provide
the Executive with individual financial security and which are
competitive with those of other corporations and, in order to
accomplish these objectives, the Board has caused Mercshares to
enter into this Agreement. The Board of Directors of Merc-Safe has
made similar determinations and has caused Merc-Safe to enter into
this Agreement.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS
:
1.
Certain Definitions
.
(a)
"
Cause "
shall mean (i) an act or acts of personal dishonesty taken by the
Executive and intended to result in substantial personal enrichment
of the Executive at the expense of the Company, (ii) repeated
material violations by the Executive of his duties to the Company
(as in effect immediately prior to the Effective Date) which are
demonstrably willful and deliberate on the Executive's part and
which are not remedied in a reasonable period of time after receipt
of written notice from the Company, or (iii) the conviction of the
Executive of a felony.
(b)
"
Change of Control "
shall mean:
(i)
The
acquisition (other than from Mercshares) by any person, entity
or "group", within the meaning of Section 13(d)(3) or 14(d)(2)
of the Securities Exchange Act of 1934 as in effect on the
date hereof (the "Exchange Act"), (excluding, for this
purpose, Mercshares or its subsidiaries, and excluding any
acquisition of securities by any employee benefit plan of
Mercshares or its subsidiaries which shall have occurred prior
to any other event constituting a Change of Control hereunder)
of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act as in effect on the date
hereof) of 20% or more of either the then outstanding shares
of common stock of Mercshares or the combined voting power of
Mercshares' then outstanding voting securities entitled to
vote generally in the election of directors (such common stock
or then outstanding voting securities being referred to herein
as "Voting Securities"), calculated on the date of the
transaction causing the foregoing 20% test to be met, without
regard to any limitation upon the voting rights of any
acquiring person under Maryland statutes and without regard to
the potential exercisability of rights, not exercised on such
date, pursuant to any Shareholder Protection Rights Agreement
of Mercshares then in effect; or
(ii)
Individuals
who, as of the date hereof, constitute the Board (as of the
date hereof the "Incumbent Board") cease for any reason to
constitute at least 75% of the members of the Board, provided
that any person becoming a director
subsequent to the date hereof whose election,
or nomination for election by the shareholders of Mercshares, is
approved by a vote of at least a majority of the directors then
comprising the Incumbent Board (other than an election or
nomination of an individual whose initial assumption of office is
in connection with an actual or threatened election contest
relating to the election of the Directors of Mercshares or other
actual or threatened solicitation of proxies by or on behalf of
persons other than the Board) shall be, for purposes of this
Agreement, considered as though such person were a member of the
Incumbent Board; or
(iii)
Approval
by the stockholders of Mercshares of (A) a
reorganization, merger, consolidation or statutory share
exchange, in each case, with respect to which persons who are
the holders of the outstanding Voting Securities of Mercshares
immediately prior to such reorganization, merger,
consolidation or statutory share exchange do not, immediately
thereafter, own more than 75% of the combined voting power
entitled to vote generally in the election of directors of the
entity resulting from such reorganization, merger,
consolidation or statutory share exchange, or (B) a
liquidation or dissolution of Mercshares or the sale of all or
substantially all of the assets of Mercshares.
(c)
"
Change of Control Period "
shall mean the period commencing on the date hereof and ending on
the third anniversary of such date;
provided ,
however ,
that commencing on the date one year after the date hereof, and on
each annual anniversary of such date (such date and each annual
anniversary thereof hereinafter referred to as the "Renewal Date"),
the Change of Control Period shall be extended automatically so as
to terminate on the third anniversary of such Renewal Date, unless
at least 60 days prior to the Renewal Date the Company shall give
notice that the Change of Control Period shall not be so extended,
but no such notice shall be given by the Company which would cause
the Change of Control Period to expire during the term of any
employment agreement between the Company and the
Executive.
(d)
"
Date of Termination "
shall mean for purposes of this Agreement the date of receipt of
the Notice of Termination or any later date specified therein, as
the case may be;
provided ,
however ,
that if the Executive's employment is terminated by the Company
other than for Cause or Disability, the Date of Termination shall
be the date on which the Company notifies the Executive of such
termination.
(e)
"
Effective Date "
shall mean the first date during the "Change of Control Period" on
which a Change of Control occurs provided that the Executive is
employed by the Company on such date. Anything in this Agreement to
the contrary notwithstanding, if the Executive's employment with
the Company has terminated for any reason prior to the first date
on which a Change of Control occurs, this Agreement shall be null
and void as of the date of such termination of employment;
provided ,
however ,
that if it is reasonably demonstrated that such termination
(i) was at the request of a third party who has taken steps
reasonably calculated to effect a Change of Control, or
(ii) otherwise arose in connection with or anticipation of a
Change of Control, then for all purposes of this Agreement the
"Effective Date" shall mean the date immediately prior to the date
of such termination.
(f)
"
Good Reason "
shall mean any of the following actions which is effected by the
Company without the consent of the Executive:
(i)
The
assignment to the Executive of any duties inconsistent in any
respect with the Executive's position immediately prior to the
Effective Date (including status, offices, titles and
reporting requirements, authority, duties or responsibilities)
or any other action by the Company that results in a
diminution in such position or in the nature and quality of
Executive's office facilities, secretarial and support
assistance, excluding for this purpose an isolated,
insubstantial and inadvertent action that is not taken in bad
faith and that is remedied by the Company promptly after
receipt of notice thereof given by the Executive;
(ii)
Any
reduction in Executive's compensation or benefits from the
levels of compensation and benefits in effect immediately
prior to the Effective Date (whether or not such reduction
would be permitted under any employment
agreement), including but not limited to
salary, bonuses (under an annual incentive compensation plan or
otherwise), expense allowance, vacation time or other vacation
benefits, excusal from performance of duties under Company policies
or agreements (by reason of illness, disability or other factors),
continuance of all Executive benefits and benefit plans and
preservation of Executive's levels of participation and benefits
thereunder (including any agreement between the Company and
Executive, incentive compensation plan, deferred compensation
arrangement, pension or other retirement or profit-sharing plan,
thrift and medical reimbursement plan, health insurance or other
health or disability plan, life insurance plan, omnibus stock plan,
stock option plan, stock purchase plan, stock appreciation right
plan, or any other Executive benefit plan or provision for fringe
benefits in effect immediately prior to the Effective Date), other
than an isolated, insubstantial or inadvertent failure to provide
compensation or benefits that is remedied by the Company promptly
after receipt of notice thereof given by the
Executive;
(iii)
The
Company's requiring the Executive to be based at any office or
location other than the Company's principal offices within the
City of Baltimore, except for travel reasonably required in
the performance of the Executive's
responsibilities;
(iv)
Any
purported termination by the Company of the Executive's
employment otherwise than as expressly contemplated hereunder
in the case of Cause, or death pursuant to Section 2(a) of
this Agreement, or Disability pursuant to Section 2(b) of this
Agreement; or
(v)
Any
failure by the Company to comply with and satisfy Section 6(c)
of this Agreement.
For
purposes of this Agreement, any good faith determination of
"Good Reason" made by the Executive shall be
conclusive.
(g)
"
Notice of Termination "
shall mean a written notice (from the Executive to the Company, or
from the Company to the Executive, as the case may be) that (i)
indicates the specific basis for termination of employment, (ii)
sets forth in
reasonable detail the facts and circumstances
claimed to provide the basis for termination of the Executive's
employment, and (iii) if the Date of Termination is other than the
date of receipt of such notice, specifies the termination date
(which date shall be not more than 15 days after the giving of such
notice). The failure by the Executive to set forth in a Notice of
Termination any fact or circumstance that contributes to a showing
of Good Reason shall not waive any right of the Executive hereunder
or preclude the Executive from asserting such fact or circumstance
in enforcing his rights hereunder.
2.
Obligations of the Company upon Termination
.
(a)
Death .
If the Executive's employment is terminated by reason of the
Executive's death prior to the delivery (i) by the Executive to the
Company of a Notice of Termination for Good Reason or (ii) by the
Company to the Executive of any notification of termination of the
Executive's employment other than for Cause or Disability, then
this Agreement shall terminate without further obligations to the
Executive's legal representatives under this
Agreement.
(b)
Disability .
If the Executive's employment is terminated by reason of the
Executive's Disability, this Agreement shall terminate without
further obligations to the Executive under this Agreement. For
purposes of this Agreement, "Disability" shall mean termination of
the E
