Exhibit 10.UU

 

As Amended December 13, 2005

 

MERCANTILE BANKSHARES CORPORATION

 

2004 RESTRICTED STOCK PROGRAM

 

Article 1:  Introduction

 

On March 3, 2004, the Compensation Committee (the “Committee”) of the Board of
Directors of Mercantile Bankshares Corporation (“MBC”), pursuant to Section 3.2
of the Mercantile Bankshares Corporation 1999 Omnibus Stock Plan (the “Stock
Plan”), approved and adopted this Mercantile Bankshares Corporation 2004
Restricted Stock Program (“Incentive Program”). Awards of Restricted Stock
hereunder are conditioned upon and subject to the prior (a) approval by MBC
stockholders of the Stock Plan, as amended, and (b) certification in writing by
the Committee that the performance goals and other requirements set forth herein
have been met. The awards of Restricted Stock hereunder are subject to the
provisions of the Stock Plan, as amended, and are intended to qualify as
qualified performance-based compensation under Section 162(m) of the Internal
Revenue Code of 1986, as amended (“Code”) and the Treasury Regulations
thereunder. The Incentive Program shall be interpreted and administered in
compliance with such provisions. Capitalized terms under this Incentive Program
shall have the same meaning as under the Stock Plan unless defined differently
herein.

 

Article 2. Administration.

 

The Incentive Program shall be administered by the Committee as provided in
Article 3 of the Stock Plan. The Committee consists solely of two (2) or more
“outside directors” within the meaning of Code Section 162(m) and “nonemployee
directors” as defined for purposes of Rule 16b-3 of the Securities Exchange Act
of 1934 (the “Exchange Act”).

 

Article 3. Participants

 

Participants under the Incentive Program shall mean those executives of MBC or
its Affiliates listed on Appendix A hereto. Participation in the Incentive Plan
neither guarantees nor precludes participation in other incentive and/or equity
compensation plans of MBC or its Affiliates for 2004 or other years.

 

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Article 4. Performance Period.

 

(a)           Definition:  The period over which the performance goals set forth
below must be met is the period from January 1, 2004 to December 31, 2005 (the
“Performance Period”).

 

(b)           Sale of MBC. Notwithstanding the above, the Performance Period
shall end on the date of a “Sale” of MBC, if earlier than December 31, 2005,
which shall mean:

 

(i)            The acquisition by any person, entity or “group”, within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act (excluding for this
purpose, MBC or its Affiliates, and excluding any acquisition of securities by
any employee benefit plan of MBC or its Affiliates), of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of fifty
percent (50%) or more of either the then outstanding shares of common stock of
MBC or the combined voting power of MBC’s 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
fifty percent (50%) 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 Stockholder Protection Rights Agreement of MBC then in effect; or

 

(ii)           Approval by the stockholders of MBC 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 MBC
immediately prior to such reorganization, merger, consolidation or statutory
share exchange do not, immediately thereafter, own more than fifty percent (50%)
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 MBC or the sale of all or substantially all of the assets of MBC to an entity
other than an Affiliate.

 

Article 5. Incentive Awards.

 

(a)           Amount. The award payable to each Participant hereunder, subject
to the conditions herein (including the provisions of Article 5(c) below), shall
be shares of Restricted Stock in an amount whose Value (as defined below), as of
the last day of the Performance Period, equals one hundred percent (100%) of the
Participant’s annual base salary (not total base salary during the Performance
Period) as of the date of adoption and approval of this Incentive Program by the
Committee. “Value” of the Restricted Stock shall mean the Fair Market Value as
defined in the Stock Plan or, in the case of a Sale of MBC, the average weighted
closing price of the shares for the thirty (30)-day trading period immediately
preceding the closing date of the transaction.

 

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(b)           Award and Issuance of Shares. Any awards the Committee determines
to make hereunder shall be made by the Committee within ninety (90) days of the
end of the Performance Period, provided the Stock Plan, as amended, has been
approved by MBC stockholders and the Committee certifies in writing after the
end of the Performance Period and prior to making such award that the
performance goals and other requirements herein have been met. As provided in
Section 5.2 of the Stock Plan, any award made by the Committee hereunder shall
be documented in the form of a Restricted Stock Agreement (in the form attached
hereto as Appendix B) executed by MBC and the recipient of such award, and no
shares of Restricted Stock shall be issued prior to the execution of such
Restricted Stock Agreement. No fractional shares shall be issued under this
Incentive Program.

 

(c)           Adjustments. The Committee may not increase the amount of any
award hereunder that would be issued and payable upon attainment of the
performance goals herein but may within its discretion reduce or eliminate any
such award.

 

Article 6. Performance and Employment Requirements

 

The following must be certified in writing as met by the Committee as of the end
of the Performance Period before the award and issuance of Restricted Stock
hereunder to a Participant:

 

(a)           Performance Goal:  Total Stockholder Return during the Performance
Period, as measured by the dividends payable on MBC common stock during the
Performance Period together with the increase from the Beginning Stock Price to
the Ending Stock Price, must reflect a compound annual growth rate of at least
twelve percent (12%). For this purpose the following definitions apply:

 

(i)            “Total Stockholder Return” means dividends paid on MBC Common
Stock based on each record date during the Performance Period plus appreciation
of MBC common stock as measured by the excess, if any, of the Ending Stock Price
over the Beginning Stock Price. In the event of stock splits or other
recapitalizations involving MBC (excepting stock repurchases or issuances of new
stock for acquisitions), the Committee shall make such adjustment as it deems
appropriate to maintain comparability between the Beginning Stock Price and
Ending Stock Price.

 

(ii)           “Beginning Stock Price” means the average weighted closing price
of MBC common stock for the thirty (30)-day trading period beginning on January
1, 2004.

 

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(iii)          “Ending Stock Price” means:

 

(A) if the Performance Period ends on December 31, 2005, other than as a result
of the Sale of MBC, the average weighted closing price of MBC common stock for
the thirty (30)-day trading period ending on such date; or

 

(B)  if the Performance Period ends on the date of the Sale of MBC, the average
weighted closing price of MBC common stock for the thirty (30)-day trading
period immediately preceding the closing date of the transaction.

 

(b)           Continued Employment:  The Participant must remain in the
continued employment of MBC or its Affiliates from the beginning of the
Performance Period through the last day of the Performance Period.
Notwithstanding the foregoing, if a Participant does not remain in continued
employment during the Performance Period solely because of death or total
disability (as defined in MBC’s long-term disability plan), the Participant (or
his estate, in the event of his death) shall nevertheless be entitled to receive
an award hereunder at the end of the Performance Period on the same basis as if
he had remained in continued employment during the Performance Period, so long
as the performance goal described in Article 6 has been attained.

 

Article 7. Tax Withholding

 

MBC or any Affiliate shall have the right to deduct from any compensation or any
other payment of any kind (including withholding the issuance of shares of MBC
common stock) due the Participant the amount of any federal, state or local
taxes required by law to be withheld as a result of the award, issuance or
vesting of the Restricted Stock hereunder. In lieu of such deduction, MBC may
require the Participant to make a cash payment to MBC or an Affiliate equal to
the amount required to be withheld. If the Participant does not make such
payment when requested, MBC may refuse to issue any MBC common stock certificate
hereunder until arrangements satisfactory to the Committee for such payment have
been made.

 

Article 8. Miscellaneous

 

(a)           Employment. Nothing in the Incentive Program shall confer upon any
Participant the right to remain in the employ of MBC or its Affiliates or shall
interfere or restrict in any way the rights of the Participant’s employer to
discharge or change the terms of employment of any Participant at any time for
any reason whatsoever, with or without cause.

 

(b)           Other Plans. The adoption of the Incentive Program shall not
affect any other equity or other compensation or incentive plan in effect for
MBC or any Affiliate, and the Incentive Program shall not preclude the Committee
or MBC’s Board of Directors from establishing any other forms of incentive
compensation.

 

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APPENDIX A

 

LIST OF PARTICIPANTS UNDER

THE MERCANTILE BANKSHARES CORPORATION

 2004 RESTRICTED STOCK PROGRAM.

 

1.             Edward J. Kelly, III

2.             Alexander Mason

3.             Michael Reid

4.             Peter Floeckher

5.             John Unger

6.             Terry Troupe

7.             Michael Paese

 

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APPENDIX B

 

FORM OF  RESTRICTED STOCK AGREEMENT

 

OMNIBUS STOCK PLAN

 

RESTRICTED STOCK AWARD AGREEMENT

 

AGREEMENT, made effective as of                        , 2006, by and between
Mercantile Bankshares Corporation, a Maryland corporation (“Company”), and
                         (“Award Recipient”):

 

WHEREAS, the Company maintains the Mercantile Bankshares Corporation 1999
Omnibus Stock Plan (“Omnibus Stock Plan”) under which the Company’s Compensation
Committee (“Committee”) of the Board of Directors (“Board”) may, among other
things, award shares of the Company’s Common Stock of $2.00 par value (“Common
Stock”) to such members of the Company’s management team as the Committee may
determine, subject to such terms, conditions, or restrictions as the Committee
may deem appropriate; and

 

WHEREAS, pursuant to the Stock Plan, in March 2004 the Company approved and
adopted the Mercantile Bankshares Corporation 2004 Restricted Stock Program (the
“2004 Program”): and

 

WHEREAS, pursuant to the Omnibus Stock Plan and the 2004 Program, the Committee,
with the approval of the Board, has granted to the Award Recipient a restricted
stock award subject to this Agreement setting forth the terms and conditions
applicable to such award in accordance with Article 5 of the Omnibus Stock Plan
and Article 5 of the 2004 Program; and

 

WHEREAS, the Award Recipient desires to accept said award in accordance with the
terms and provisions of the Omnibus Stock Plan, the 2004 Program and this
Agreement.

 

NOW, THEREFORE, in consideration of the premises and mutual covenants and
agreements contained herein, the Company and Award Recipient agree as follows:

 

1.             AWARD OF SHARES:

 

Under the terms of the Omnibus Stock Plan and the 2004 Program, the Committee
has granted to the Award Recipient, and has caused to be recorded on the books
of the Company, a restricted stock award made on                         , 2006
(“Award Date”), of                          shares of Common Stock (“Award
Shares”) subject to the terms, conditions,

 

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and restrictions set forth in this Agreement. The Award Recipient has paid to
the Company a purchase price of $             , equal to $0.01 for each Award
Share granted hereunder.

 

2.            AWARD RESTRICTIONS:

 

The Award Shares shall be nontransferable and subject to forfeiture until such
shares vest in accordance with the provisions set forth below. Subject to
Section 4 of this Agreement, all of the Award Shares shall become fully vested
at the end of the one-year period ending on the first anniversary of the Award
Date (the “Restriction Period”), but only if the Award Recipient shall have been
continuously employed by the Company throughout such Restriction Period.

 

Upon the vesting of Award Shares by virtue of the lapse of the restriction
period set forth above or under Section 4 of this Agreement, the Company shall
deliver to the Award Recipient (or the person or persons entitled thereto under
Section 12 of this Agreement in the event of his death) a stock certificate
covering the requisite number of vested shares registered on the Company’s books
within 30 days after vesting. Upon receipt of such stock certificate, the holder
is free to hold or dispose of such certificate at will, subject to any
applicable securities laws or regulations governing transferability of shares of
the Company.

 

During the Restriction Period and prior to vesting, Award Shares are not
transferable by the Award Recipient by means of sale, assignment, exchange,
pledge, hypothecation, or otherwise (other than by will or other instrument
taking effect upon his death or the laws of descent and distribution).

 

3.            STOCK CERTIFICATES:

 

Prior to the vesting of the Award Shares, the stock certificate(s) evidencing
the Award Shares shall be registered on the Company’s books in the name of the
Award Recipient as of the Award Date. Physical possession or custody of such
stock certificate(s) shall be retained by the Company until such time as the
shares are vested. While in its possession, the Company reserves the right to
place a legend on the stock certificate(s) restricting the transferability of
such certificate(s) and referring to the terms and conditions (including
forfeiture) approved by the Committee and applicable to the shares represented
by the certificate(s). The Award Recipient shall deliver to the Company such
number of stock powers, endorsed in blank, as the Committee shall require with
respect to the Award Shares to be held by the Company during the Restriction
Period.

 

Prior to the vesting of the Award Shares, the Award Recipient shall be entitled
to vote the Award Shares and to all other rights of a holder of Common Stock of
the Company, except that cash dividends will not be paid to the Award Recipient
but shall be withheld by the Company on the following terms. The Company shall
maintain and record a calculation of the number of additional shares of Common
Stock (“Additional

 

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Award Shares”) that the Award Recipient would own at the end of the Restriction
Period (or at such earlier date on which Award Shares shall become vested under
Section 4 of this Agreement) as if cash dividends (commencing with the dividend
payable in March 2006) had been payable to the Award Recipient and had been
reinvested in Common Stock (including fractional shares) of the Company by him
as a participant in the Company’s Dividend Reinvestment and Stock Purchase Plan
(as in effect on the date hereof, or any such amended or successor plan). Upon
the vesting of the Award Shares, a certificate for the Additional Award Shares
shall be issued to the Award Recipient in the same manner as will apply to the
Award Shares and shall be deemed to be awarded as a supplemental restricted
stock award under the Omnibus Stock Plan, in consideration of the amount of cash
dividends withheld, with cash paid in lieu of any fractional Additional Award
Share. If any Award Shares do not become vested, the Additional Award Shares
attributable thereto will not be issued and no payments to the Award Recipient
with respect to such Award Share cash dividends will be made.

 

Any securities or other property distributable to holders of Common Stock of the
Company, other than cash dividends, prior to the vesting of Award Shares, shall
be treated in the same way, subject to the same vesting and forfeiture
conditions, as Award Shares and shall not be distributed to the Award Recipient
unless and until such Award Shares become vested.

 

4.            TERMINATION OF EMPLOYMENT:

 

If the Award Recipient’s employment with the Company terminates due to death or
total and permanent disability or by reason of involuntary termination of his
employment by the Company in violation of any employment agreement (or, if the
Award recipient is not subject to an employment agreement with the Company, such
termination is without “good cause” as defined below) during the Restriction
Period, any Award Shares which are then subject to restriction shall become
fully vested as of such date of termination of employment. If the employment of
the Award Recipient with the Company is terminated for any other reason during
the Restriction Period, no Award Shares which are then subject to restriction
shall become vested and such Award Shares shall be forfeited by the Award
Recipient and revert to the Company, without payment of any consideration to the
Award Recipient. The Committee shall have absolute discretion (subject to any
applicable laws) to determine whether an authorized leave of absence or absence
on military or government service or otherwise shall constitute a termination of
employment for purposes of this Agreement. The Committee shall have absolute
discretion to determine whether an Award Recipient’s termination of employment
is due to total and permanent disability. The Committee may require the Award
Recipient to provide whatever evidence the Committee deems desirable to
ascertain whether the Award Recipient is totally and permanently disabled. For
purposes of this Agreement, “good cause” shall be limited to (i) Award
Recipient’s gross negligence, recklessness, dishonesty, misrepresentation or
willful misconduct with respect to the Company, or (ii) the arrest or indictment
of the Award Recipient on any felony charge relating to fraud, embezzlement or
any other offence involving dishonesty or constituting a breach of trust.

 

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5.            WITHHOLDING TAXES AND TAX ELECTIONS:

 

The Company shall have the right to deduct from any compensation or any other
payment of any kind (including withholding the issuance of shares of Common
Stock) due the Award Recipient the amount of any federal, state or local taxes
required by law to be withheld as a result of the grant of the restricted stock
award or the lapse of the restriction period in whole or in part; provided,
however, that the value of the shares of Common Stock withheld may not exceed
the statutory minimum withholding amount required by law. In lieu of such
deduction, the Company may require the Award Recipient to make a cash payment to
the Company or an Affiliate equal to the amount required to be withheld. If the
Award Recipient does not make such payment when requested, the Company may
refuse to issue any Common Stock certificate under this Agreement until
arrangements satisfactory to the Committee for such payment have been made.

 

The Award Recipient has received an information letter disclosing that an
election could be made under Section 83(b) of the Internal Revenue Code of 1986,
as amended, under which he could recognize income on the grant of Award Shares
at the time of the grant and prior to the vesting of such Award Shares.

 

6.             IMPACT ON OTHER BENEFITS:

 

The value of the restricted stock award (either on the Award Date or at the time
the shares are vested) shall not be includable as compensation or earnings for
purposes of any other benefit plan offered by the Company.

 

7.             ADMINISTRATION:

 

The Committee or the Board shall have full authority and discretion (subject
only to the express provisions of the Omnibus Stock Plan and the 2004 Program)
to decide all matters relating to the administration, interpretation and
implementation of the Omnibus Stock Plan, the 2004 Program and this Agreement.
All such Committee determinations shall be final, conclusive, and binding upon
the Company, the Award Recipient, and any and all interested parties.

 

8.             RIGHT TO CONTINUED EMPLOYMENT:

 

Nothing in the Omnibus Stock Plan or this Agreement shall be construed as a
contract of employment between the Company and the Award Recipient, or as a
contractual right of the Award Recipient to continue in the employ of the
Company or any affiliate.

 

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9.             AMENDMENTS:

 

This Agreement contains the entire agreement between the parties with respect to
the subject matter contained herein and may not be modified, except as provided
in the Omnibus Stock Plan or in a written document signed by each of the parties
hereto.

 

10.          FORCE AND EFFECT:

 

This Agreement is intended to conform in all respects with, and is subject to
all applicable provisions of, the Omnibus Stock Plan (including, without
limitation, the antidilution and other provisions of Article 7), which is
incorporated herein by reference. Inconsistencies between the Agreement and the
Omnibus Stock Plan shall be resolved in accordance with the terms of the Omnibus
Stock Plan. In the event of any ambiguity in the Agreement or any matters as to
which the Agreement is silent, the Omnibus Stock Plan shall govern.

 

11.          PREVAILING LAWS:

 

This Agreement shall be construed and enforced in accordance with and governed
by the laws of the State of Maryland, without regard to the conflict of laws
principles thereof.

 

12.          SUCCESSORS:

 

This Agreement shall be binding upon and inure to the benefit of the Company,
its successors and assigns, and the Award Recipient and his heirs, personal
representatives and assigns.

 

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its
duly authorized officer, and the Award Recipient has hereunto set his hand and
seal, on this                day of                         , 2006.

 

 

ATTEST:

MERCANTILE BANKSHARES CORPORATION

 

 

 

 

 

By:

 

 

 

 

 

 

WITNESS:

 

 

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STOCK POWER

 

FOR VALUE RECEIVED, the undersigned,                          , an individual
residing at
                                                                           ,
whose social security number is                          , hereby sells, assigns
and transfers unto Mercantile Bankshares Corporation or its successor
                          shares of Common Stock, $2.00 par value per share, of
the Mercantile Bankshares Corporation (the “Company”) standing in my name of the
books of the Company, represented by Certificate No.                       ,
which is attached hereto, and hereby irrevocably constitutes and appoints
Mercantile Bankshares Corporation as my attorney to transfer the said stock on
the books of the Company with full power of substitution in the premises.

 

WITNESS:

 

 

 

 

 

 

 

 

 

Shareholder

 

 

 

 

 

 

Dated:

 

 

 

 

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