EXHIBIT (10)
July 9, 2008
Robert K. Steel,
  301 South College Street,
     One Wachovia Center,
          Charlotte, North Carolina - 28288.
Bob,
I am pleased to offer you the position of President and Chief Executive Officer
of Wachovia Corporation and, in connection therewith, to offer you a position on
Wachovia Corporation’s Board of Directors. The Board is unanimous in its
decision that you are the right person to provide sound leadership to build on
Wachovia’s core strengths and successfully manage it through the current
environment as a strong and independent company.
Our offer consists of the following arrangements:

  1.   You will serve as President and Chief Executive Officer, reporting
directly to the Board, and will also be appointed to the Board.     2.   You
will receive a base salary of $1.1 million per year, which may be reviewed and
increased in accordance with Wachovia’s standard policies but may not be
decreased.     3.   Your target annual bonus will be $6 million, with actual
bonuses ranging form $0 to $12 million, based on goals consistent with those
that apply to other Operating Committee members. The target economic value for
your annual long-term incentive will be $15 million. Your target annual bonus
and target annual long-term incentive may be reviewed and changed from time to
time in accordance with Wachovia’s standard policies.     4.   For 2008, your
annual long-term incentive grant will be a combination of options and
performance restricted stock awards (RSAs) that will be granted on July 15, 2008
pursuant to the Wachovia 2003 Stock Incentive Plan (as amended and restated), as
follows:

  •   A non-qualified stock option to purchase a total of 1.5 million Wachovia
shares, at a price per share equal to 100% of Fair Market Value (as defined

 

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      in the Plan) on the date of grant. Subject to the terms of the Plan and
this letter, the shares under this option shall become exercisable in
substantially equal installments on the first, second and third anniversary of
grant and will remain so exercisable until the tenth anniversary of grant, on
which date the option shall terminate, to the extent not previously exercised or
forfeited.     •   Performance RSAs in respect of Wachovia shares having a Fair
Market Value on the date of grant equal to the difference between $15 million
and the value of the stock options (using Wachovia’s standard valuation methods
and based on the average closing price of Wachovia shares over the 30 days
ending on the date of this letter). These RSAs will have both a Performance Goal
and an employment requirement. The Performance Goal for one-half of the RSAs
will be that the Fair Market Value of the shares is at least $25 per share for
15 consecutive trading days on the New York Stock Exchange and for the other
half of the RSAs will be that the Fair Market Value of the shares is at least
$30 per share for 15 consecutive trading days on the New York Stock Exchange.
The employment requirement for all of these RSAs is that you remain employed
until July 15, 2011. Subject to the terms of the Plan and this letter, the RSAs
will vest on the later of satisfaction of the relevant Performance Goal and the
employment requirement and will be forfeited if the relevant Performance Goal is
not satisfied by July 15, 2014.

  5.   In addition, you will be granted a special one-time grant of performance
RSAs on July 15, 2008 in respect of Wachovia shares having a Fair Market Value
on the date of grant equal to $10 million. The Performance Goal for one-half of
these RSAs will be that the Fair Market Value of the shares is at least $20 per
share for 15 consecutive trading days on the New York Stock Exchange and for the
other half of the RSAs will be that the Fair Market Value of the shares is at
least $35 per share for 15 consecutive trading days on the New York Stock
Exchange. The employment requirement of all of these RSAs is that you remain
employed until July 15, 2011. Subject to the terms of the Plan and this letter,
the RSAs will vest on the later of satisfaction of the relevant Performance Goal
and the employment requirement and will be forfeited if the relevant Performance
Goal is not satisfied by July 15, 2014.     6.   Wachovia will issue you award
agreements with respect to the equity awards provided in Section 4 and Section 5
promptly following grant (which shall be consistent with the provisions of this
letter agreement and shall govern the awards). For the avoidance of doubt, the
performance RSAs will pay dividends in accordance with the Plan and will not be
subject to negative discretion to the extent Performance Goals are satisfied.  
  7.   You will be required to use corporate aircraft or other private aircraft
for personal travel, consistent with Wachovia’s current practices (subject to
reconsideration in the event of any material adverse change in the tax treatment
of such travel during your term of employment). In addition, for 2008 you will
be entitled to any additional perquisites consistent with the policies and
programs currently in place for Wachovia’s Chief Executive Officer. After 2008,
these additional perquisites may be reviewed and changed from time to time in a
manner that is at least as favorable to you as

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      it is to any other member of the Operating Committee. In connection with
your acceptance of this offer, Wachovia will provide you with relocation
assistance consistent with Wachovia’s policies (adjusted, to the extent
appropriate, for a Chief Executive Officer in your circumstances) and will pay
reasonable legal fees incurred in connection with your review of these
arrangements. In addition, Wachovia agrees to pay as incurred, to the full
extent permitted by law, all legal fees and expenses that you may reasonably
incur as a result of any contest by Wachovia, you or others of the validity or
enforceability of, or liability under, any provision of this letter (including
as a result of any contest by you about the amount of any payment pursuant to
this letter), plus in each case interest on any delayed payment at the
applicable Federal rate. Notwithstanding the foregoing, if it is finally
judicially determined that you brought any claims contemplated in the previous
sentence in bad faith, you shall reimburse Wachovia for such fees and expenses
which are reasonably related to such bad faith claim. To the extent any taxable
expense reimbursement under this Section 7 is subject to Section 409A, the
amount of any such expenses eligible for reimbursement in one calendar year
shall not affect the expenses eligible for reimbursement in any other taxable
year, in no event shall any expenses be reimbursed after the last day of the
calendar year following the calendar year in which you incurred such expenses,
and in no event shall any right to reimbursement be subject to liquidation or
exchange for another benefit.     8.   You will not be entitled to any severance
payment on termination of your employment with Wachovia. However, if your
employment terminates for a Covered Termination (as defined in Annex A), (1) the
employment requirement relating to the Performance RSAs provided for in
Sections 4 and 5 of this letter will be waived, but the relevant Performance
Goals will continue to apply, and (2) to the extent not otherwise vested in
accordance with the relevant stock compensation plans, all options to purchase
Wachovia shares (including the options provided for in Section 4) and other
equity grants (other than the Performance RSAs provided for in Sections 4 and 5
of this letter) will continue to vest in accordance with the applicable terms of
such grants as if your employment with Wachovia had continued for a period of
two years and then, to the extent not otherwise vested in accordance with the
preceding clause, all such other unvested stock options and other equity grants
will vest (with such other options remaining exercisable until the scheduled
expiration), to the extent not previously exercised or forfeited, as applicable.
In addition, if any payment or benefit provided you by Wachovia (whether in
connection with your termination or otherwise) would be subject to the excise
tax imposed by Section 4999 of the Code (or any successor statute), you shall be
entitled to the benefit set forth in Annex B.     9.   If you are not otherwise
eligible for Wachovia’s retiree medical program on termination of your
employment (other than a termination for Cause, as defined in Annex A), Wachovia
will provide you access to its retiree medical program then in effect, subject
to your paying the full cost of coverage, so long as such access does not
materially impact the tax treatment of such program to Wachovia under any
requirements then in effect.     10.   You agree to comply with the restrictive
covenants set forth in Annex C and with the remedies provided therein.

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  11.   During and after your employment hereunder, Wachovia shall indemnify you
in your capacity as a director and officer of Wachovia to the fullest extent
permitted by applicable law and Wachovia’s charter and by-laws, and shall
provide you with director and officer liability insurance coverage on the same
basis as Wachovia’s other directors and executive officers.

This offer of at-will employment will remain in effect until July 14, 2008. If
you do not accept this offer by that time or start employment by July 14, 2008,
this offer will be void and of no effect.
*            *           *

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     I look forward to your joining the Wachovia team.

            Very truly yours,

Wachovia Corporation
      By:   /s/ Mark C. Treanor         Senior Executive Vice President         
   

I agree with and accept the foregoing offer of at-will employment, subject to
the terms and conditions provided in this letter.

     
/s/ Robert K. Steel
 
Robert K. Steel
   

 

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Annex A
Certain Defined Terms

1.   “Cause” means (a) your continued and willful failure to perform
substantially your duties with Wachovia or one of its affiliates (other than any
such failure resulting from incapacity due to physical or mental illness), after
a written demand for substantial performance is delivered to you by Wachovia
which specifically identifies the manner in which Wachovia believes that you
have not substantially performed your duties and a reasonable time for such
substantial performance has elapsed since delivery of such demand, or (b) your
willful engaging in illegal conduct or gross misconduct which is materially
injurious to Wachovia.       For purposes of this definition, no act, or failure
to act, on your part shall be considered “willful” unless it is done, or omitted
to be done, by you in bad faith or without reasonable belief that your action or
omission was in the best interests of Wachovia. 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 Chairman of the Board or based upon the advice of
counsel for Wachovia shall be conclusively presumed to be done, or omitted to be
done, by you in good faith and in the best interests of Wachovia. Wachovia’s
termination of your employment shall not be deemed to be for Cause unless and
until there shall have been delivered to you a copy of a resolution duly adopted
by the affirmative vote of not less than three-fourths 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 you and you are given an opportunity, together
with counsel, to be heard before such Board), finding that, in the good faith
opinion of such Board, you are guilty of the conduct described in clause (a) or
(b) above, and specifying the particulars thereof in detail.

2.   “Change of Control” has the meaning assigned in the Wachovia 2003 Stock
Incentive Plan (as amended through the date of this letter).

3.   “Covered Termination” means (a) you terminating your employment with
Wachovia for Good Reason or (b) Wachovia terminating your employment other than
for Cause, death, Disability or Retirement. In addition, (i) for purposes of the
equity grants provided for in Sections 4 and 5 of this letter, Covered
Termination will also include a termination of your employment for death,
Disability or Retirement and (ii) for purposes of the performance RSA grants
provided for in Sections 4 and 5 of this letter, a Change of Control will have
the same effect as a Covered Termination and, following a Change of Control, the
Performance Goal relating to the performance RSAs provided for in Sections 4 and
5 of this letter will be adjusted equitably based on the consideration received
in the relevant transaction. For the avoidance of doubt, on a Change of Control,
all shares under the option grant provided for in Section 4 of this letter shall
become immediately exercisable and will remain so until the tenth anniversary of
the date of grant, to the extent not previously exercised or forfeited.

4.   “Disability” means termination of your employment upon satisfaction of the
requirements to receive benefits under Wachovia’s long-term disability plan.

 

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5.   “Good Reason” means the occurrence of one or more of the following
circumstances, in the absence of your written consent, and which are not
remedied by Wachovia within 30 days of you notifying Wachovia of the
circumstances alleged to constitute “Good Reason”:

     (a) A material diminution in your title, authority, duties or
responsibilities, including a failure by the Board to nominate you to reelection
to the Board but excluding your cessation of service as a member of the Board
for any other reason;
     (b) A substantial diminution in the overall importance of your role, as
determined by a reduction in your targeted annual bonus opportunity (but not a
reduction in your actual annual bonus payment) or targeted stock-based incentive
compensation opportunity (but not a reduction in your actual stock-based
incentive awards);
     (c) any failure by Wachovia to comply with any material provision of the
letter agreement; or
     (d) following a Change of Control, the relocation of the principal place of
your employment to a location that is more than 35 miles from such principal
place of employment immediately prior to the date the proposed Change of Control
is publicly announced, or Wachovia’s requiring you to travel on Company business
to a substantially greater extent than required immediately prior to the Change
of Control.
For purposes of this definition, any good faith determination of “Good Reason”
made by you after a Change of Control shall be conclusive (including any such
determination when you are then eligible for Retirement). In the event Wachovia
challenges your determination of Good Reason, Wachovia shall continue to make
the payments and provide the benefits to you as set forth in this letter
agreement. If it is finally determined pursuant to the procedures set forth in
this Agreement that your termination was not for Good Reason, you shall
reimburse Wachovia the amounts to which it is finally determined to be entitled.

6.   “Retirement” means either (1) voluntary termination by you of your
employment upon satisfaction of the requirements for early retirement under
Wachovia’s tax-qualified defined benefit pension plan or (2) voluntary
termination by you of your employment upon satisfaction of the requirements for
normal retirement under the terms of Wachovia’s tax-qualified pension plan.

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Annex B
Certain Additional Payments by Wachovia
     (a) Except as set forth below, in the event it shall be determined that any
payment or distribution by Wachovia or an acquiror of Wachovia to you or for
your benefit (whether paid or payable or distributed or distributable pursuant
to the terms of the letter agreement or otherwise, but determined without regard
to any additional payments required under this Annex) (a “Payment”) would be
subject to the excise tax imposed by Section 4999 of the Code (or any successor
statute) or any interest or penalties are incurred by you 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 you shall be
entitled to receive (as provided below but in no event later than by the end of
your taxable year next following the taxable year in which the Excise Tax is
remitted) an additional payment (a “Gross-Up Payment”) in an amount such that
after payment by you of all taxes (including any interest or penalties imposed
with respect to such taxes), including, without limitation, any income taxes
(and any interest and penalties imposed with respect thereto) and Excise Tax
imposed upon the Gross-Up Payment, you retain an amount of the Gross-Up Payment
equal to the Excise Tax imposed upon the Payments. If you are a “specified
employee” (within the meaning of Section 409A and Wachovia’s procedures), to the
extent such payment is or would be treated as deferred compensation payable upon
separation from service under Section 409A, such payment shall not be made or
provided before the date that is six months after the date of your separation
from service (or your earlier death).
     (b) Subject to the provisions of Section (c) of this Annex, all
determinations required to be made under this Annex, 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 LLP or such other certified public accounting firm reasonably acceptable to
Wachovia (the “Accounting Firm”) which shall provide detailed supporting
calculations both to Wachovia and you within 30 business days of the receipt of
notice from Wachovia that there has been a Payment, or such earlier time as is
requested by Wachovia. All fees and expenses of the Accounting Firm shall be
borne solely by Wachovia. Any Gross-Up Payment, as determined pursuant to this
Annex, shall be paid by Wachovia to you by the due date for the payment of any
Excise Tax, or, if earlier, 30 days after the receipt of the Accounting Firm’s
determination. Any determination by the Accounting Firm shall be binding upon
Wachovia and you. 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 Wachovia should have been made (“Underpayment”), consistent
with the calculations required to be made hereunder. In the event that Wachovia
exhausts its remedies pursuant to Section (c) of this Annex and you thereafter
are 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 Wachovia to you or for your benefit.
     (c) You shall notify Wachovia in writing of any claim by the Internal
Revenue Service that, if successful, would require the payment by Wachovia of
the Gross-Up Payment. Such notification shall be given as soon as practicable
but no later than

 

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ten business days after you are informed in writing of such claim and shall
apprise Wachovia of the nature of such claim and the date on which such claim is
requested to be paid. You shall not pay such claim prior to the expiration of
the 30-day period following the date on which it gives such notice to Wachovia
(or such shorter period ending on the date that any payment of taxes with
respect to such claim is due). If Wachovia notifies you in writing prior to the
expiration of such period that it desires to contest such claim, you shall:
     (i) give Wachovia any information reasonably requested by Wachovia relating
to such claim,
     (ii) take such action in connection with contesting such claim as Wachovia
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 Wachovia,
     (iii) cooperate with Wachovia in good faith in order to effectively contest
such claim, and
     (iv) permit Wachovia to participate in any proceedings relating to such
claim;
provided, however, that Wachovia 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 you 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
(c), Wachovia shall control all proceedings taken in connection with such
contest and, at its sole option, may pursue or forego 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 you to pay the
tax claimed and sue for a refund or contest the claim in any permissible manner,
and you agree 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 Wachovia shall determine; provided, however, that if
Wachovia directs you to pay such claim and sue for a refund, Wachovia shall
advance the amount of such payment to you, on an interest-free basis and shall
indemnify and hold you 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 your taxable year with respect to
which such contested amount is claimed to be due is limited solely to such
contested amount. Furthermore, Wachovia’s control of the contest shall be
limited to issues with respect to which a Gross-Up Payment would be payable
hereunder and you 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 of an amount advanced by Wachovia pursuant to
Section (c) of this Annex, you become entitled to receive any refund with
respect to such claim, you shall (subject to Wachovia’s complying with the
requirements of Section (c)) promptly pay to Wachovia the amount of such refund
(together with any

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interest paid or credited thereon after taxes applicable thereto) upon receipt
thereof, unless such payment would be prohibited under the Sarbanes Oxley Act.
If, after the receipt by you of an amount advanced by Wachovia pursuant to
Section (c), a determination is made that you shall not be entitled to any
refund with respect to such claim and Wachovia does not notify you in writing of
its intent to contest such denial or refund prior to the expiration of 30 days
after such determination, then such advance shall be forgiven and shall not be
required to be repaid and the amount of such advance shall be deemed part of the
Gross-Up Payment.
     (e) For purposes of this Annex, any reference to you shall be deemed to
include your surviving spouse, estate and/or beneficiaries with respect to
payments or adjustments provided by this Annex.
     (f) Notwithstanding Section (a) of this Annex, if it is determined that the
aggregate amount of Payments is not more than 110% of the maximum of Payments
that may be made to you without incurring an Excise Tax, you shall not be
entitled to a Gross-Up Payment and the Payments will instead be reduced to the
maximum amount that would not result in the imposition of the Excise Tax. The
Payments to be reduced will be determined in a manner which has the least
economic cost to you and, to the extent the economic cost is equivalent, will be
reduced in the inverse order of when payment would have been made you until the
reduction is achieved.
     (g) Notwithstanding anything to the contrary in this letter agreement
(including this Annex), aggregate payments by Wachovia that constitute
“Severance Benefits” within the meaning of the Wachovia Corporation Policy
regarding Shareholder Approval of Future Severance Agreements will not exceed
the sum of (1) your annual base salary plus (2) the highest annual bonus awarded
to you in any of the three full fiscal years immediately preceding your
termination of employment, times 2.99, as determined in accordance with such
policy. For purposes of such policy, any Excise Tax and related Gross-Up payment
shall be allocated in a manner consistent with the regulations implementing
Section 4999 of the Code and your “highest annual bonus awarded to you in any of
the three full fiscal years immediately preceding your termination of
employment” will be your target bonus until annual bonuses are awarded for your
first full fiscal year of employment (2009).

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Annex C
Your Continuing Covenants
     (a) You shall hold in a fiduciary capacity for the benefit of Wachovia all
secret, non-public or confidential information, knowledge or data relating to
Wachovia or any of its affiliated companies, and their related businesses, which
shall have been obtained by you during your employment by Wachovia or any of its
affiliated companies (or predecessors thereto). After termination of your
employment with Wachovia, you shall not, without the prior written consent of
Wachovia or as may otherwise be required by law or legal process, communicate or
divulge any such information, knowledge or data to anyone other than Wachovia
and those designated by it.
     (b) While employed by Wachovia and for one year after the termination of
your employment with Wachovia, you shall not, directly or indirectly, on behalf
of you or any other person, (1) solicit for employment by other than Wachovia,
(2) encourage to leave the employ of Wachovia, or (3) interfere with Wachovia’s
or its affiliated companies’ relationship with, any person employed by Wachovia
or its affiliated companies, except in each case in the good-faith performance
of your duties and provided that general advertising and providing references
upon request shall not be deemed to violate this Section (b).
     (c) While employed by Wachovia and for one year after termination of your
employment with Wachovia, you will not become a director, officer, employee or
consultant engaging in activities similar to those performed by a senior officer
for any business which is in competition with any line of business of Wachovia
or its affiliates and in which you participated in a direct capacity while you
were employed by Wachovia or its affiliates (including predecessors thereof) at
any time within the one year period preceding the date of your termination of
employment with Wachovia and which has offices in any location in which you had
supervisory responsibility in the geographic footprint of Wachovia Bank,
National Association (or successors thereto, including but not limited to,
Alabama, Arizona, California, Connecticut, Delaware, Florida, Georgia, Maryland,
Mississippi, Nevada, New Jersey, New York, North Carolina, Pennsylvania, South
Carolina, Tennessee, Texas, Virginia, and Washington, D.C. plus any other state
or states added during your employment) during that one year period. You
expressly acknowledge the reasonableness of such restrictions and such
geographic area. Further, during such period, you will not acquire an equity or
equity-like interest in such an organization for your own account, except that
you may acquire equity interests of not more than 5% of any such organization
from time to time as an investment and you may acquire equity interests of any
such organization as part of a pooled account (including as part of a mutual
fund). Notwithstanding anything to the contrary contained herein, this Section
(c) shall not apply if you terminate employment with Wachovia pursuant to
Retirement or you terminate employment with Wachovia for any reason at the time
of or following a Change of Control or Wachovia terminates your employment for
any reason at the time of or following a Change of Control. Upon your request to
the Board, Wachovia will provide an advance opinion as to whether a proposed
activity would violate the provisions of this Section (c).
     (e) During the two years following termination of your employment with
Wachovia, you shall cooperate with Wachovia at such time or times as Wachovia

 

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shall reasonably request, subject to appropriate notice and to reimbursement by
Wachovia of all reasonable travel and other expenses incurred and paid by you in
accordance with Wachovia’s then-current policy for expense reimbursement, with
respect to matters occurring during your employment or otherwise within
knowledge you gained during your employment. In the event you shall engage in
any employment permitted hereunder (whether for another employer or on a
self-employed basis), your obligation to provide cooperation shall be adjusted
in accordance with the requirements of such employment.
     (f) In the event of a material breach or threatened material breach of this
Annex, you agree that Wachovia shall be entitled to injunctive relief in a court
of appropriate jurisdiction to remedy any such breach or threatened breach and,
prior to a Change of Control, Wachovia may terminate the benefits provided in
Section 8 of the letter agreement in its sole discretion. You acknowledge that
monetary damages would be inadequate and insufficient remedy for a breach or
threatened breach of this Annex. Following the occurrence of a Change of
Control, in no event shall an asserted violation of the provisions of this Annex
constitute a basis for deferring or withholding any amounts otherwise payable to
you under the letter agreement. If it is finally determined that you did not
breach this Annex C, Wachovia shall reimburse you the amounts to which you are
finally determined to be entitled.
     (g) Any termination of your employment or of the letter agreement shall
have no effect on the continuing operation of this Annex.

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