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
:
(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 Executive's employment on account of
disability as determined under any governing agreement between the
Executive and the Co
