EXHIBIT 10.WW


 


EXECUTIVE SEVERANCE AGREEMENT


 


AGREEMENT by and
between Mercantile Bankshares Corporation (“Mercshares”), and Kevin A.
McCreadie (the “Executive”), effective as of the15th day of August, 2002.


 


WHEREAS:  The Executive has agreed to serve as Vice
Chairman of Mercshares; 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, 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.


 


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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


 


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(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


 


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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


 


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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


 


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(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


 


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Company or, if there is no such agreement or such agreement does not
provide a definition of “disability,” then “Disability” shall mean disability
as defined under the Company’s long-term disability insurance plan.


 


(c)           Cause; Other Than
for Good Reason.  If the Executive’s
employment shall be properly terminated for Cause or if the Executive
terminates employment other than for Good Reason, this Agreement shall
terminate without further obligations to the Executive under this Agreement.


 


(d)           Good Reason;
Other Than for Cause or Disability. 
If, at any time during the period beginning with the Effective Date and
ending on the third anniversary of such date, the Company shall terminate the
Executive’s employment other than for Cause, Disability or death, or if the
Executive shall terminate his employment with the Company for Good Reason, the
Company shall pay to the Executive in a lump sum in cash within 30 days after
the Date of Termination a severance payment, the value of which is three times
the Executive’s base amount of compensation (as defined in Section 280G(b)(3)
of the Internal Revenue Code of 1986 (the “Code”)) including, but not limited
to, such items as salary, bonus, fringe benefits, and deferred compensation,
less one dollar ($1.00), subject, however, to Section 3(b) of this agreement.


 


3.             Non-Exclusivity
of Rights.


 


(a) Nothing in this Agreement shall prevent or limit the Executive’s
continuing or future participation in any benefit, bonus, incentive or other
plans, programs, policies or practices, including those of the types identified
in Section 1(f)(ii) hereof, provided by Mercshares and for which the Executive
may qualify, nor shall anything herein limit or otherwise affect such rights as
the Executive may have under any employment agreement, stock option or other
agreements with the Company or any subsidiaries of Mercshares.  Amounts which are vested benefits or which
the Executive is otherwise entitled to receive under any plan, policy, practice
or program of Mercshares or


 


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any subsidiary at or subsequent to the Date of Termination shall be
payable in accordance with such plan, policy, practice or program.


 


(b) If any benefit in the form of continued or additional salary or
bonus, or both, following termination of employment, is provided for the
Executive under any employment agreement with the Company (“Alternate Base
Benefit”), the aggregate amount thereof shall be computed upon the Date of
Termination, and the cash payment to the Executive under Section 2(d) of this
Agreement shall be the greater of the Alternate Base Benefit or the amount set
forth in said Section 2(d), and such payment shall satisfy the Company’s
obligation with respect to the Alternate Base Benefit.


 


4.             Full
Settlement.


 


(a)           The Company’s
obligation to make the payments provided for in this Agreement and otherwise to
perform its obligations hereunder shall not be affected by any set-off,
counterclaim, recoupment, defense or other claim, right or action that the
Company may have against the Executive or others.  In no event shall the Executive be obligated
to seek other employment or take any other action by way of mitigation of the
amounts payable to the Executive under any of the provisions of this
Agreement.  The Company agrees to pay, to
the full extent permitted by law, all legal fees and expenses that the
Executive may reasonably incur as a result of any contest (regardless of the
outcome thereof) by the Company or others of the validity or enforceability of,
or liability under, any provision of this Agreement or any guarantee of
performance thereof (including as a result of any contest by the Executive
about the amount of any payment pursuant to Section 5 of this Agreement), plus
in each case, interest at the applicable Federal rate provided for in Section
7872(f)(2) of the Code.


 


(b)           If there shall be
any dispute between the Company and the Executive (i) in the event of any
termination of the Executive’s employment by the Company, whether such
termination was for Cause, or (ii) in the event of any termination of
employment by the Executive, whether Good Reason existed, then, unless and
until


 


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there is a final, nonappealable judgment by a court of competent
jurisdiction declaring that such termination was for Cause or that the
determination by the Executive of the existence of Good Reason was not made in
good faith, the Company shall pay all amounts, and provide all benefits to the
Executive that the Company would be required to pay or provide pursuant to this
Agreement as though such termination were by the Company without Cause, or by
the Executive with Good Reason; provided, however, that the Company shall not
be required to pay any disputed amount pursuant to this paragraph except upon
receipt of an undertaking by or on behalf of the Executive to repay all such
amounts to which the Executive is ultimately adjudged by such court not to be
entitled.


 


5.             Certain
Tax Matters.


 


(a)           Anything in this
Agreement to the contrary notwithstanding, in the event it shall be determined
that any payment or distribution by the Company to or for the benefit of the
Executive (whether paid or payable or distributed or distributable pursuant to
the terms of this Agreement or otherwise, but determined without regard to any
additional payments required under this Section 5) (a “Payment”) would be
subject to the excise tax imposed by Section 4999 of the Code or any interest
or penalties are incurred by the Executive 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”), payment (a “Gross-Up
Payment”) shall be made to the Executive in an amount such that after payment
by the Executive 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, the Executive retains an amount of the Gross-Up
Payment equal to the Excise Tax imposed upon the Payments.


 


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(b)           Subject to the
provisions of Section 5(c), all determinations required to be made under this
Section 5 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 PricewaterhouseCoopers, LLP, or such
other firm as shall be serving as independent public accountants for Mercshares
immediately prior to the Effective Date (the “Accounting Firm”) which shall
provide detailed supporting calculations both to the Company and the Executive
within 15 business days of the receipt of notice from the Executive that there
has been a Payment, or such earlier time as is requested by the Company.  In the event that the Accounting Firm is
serving as accountant or auditor for the individual, entity or group effecting
the Change of Control, the Executive may appoint another nationally recognized
accounting firm to make the determinations required hereunder (which accounting
firm shall then be referred to as the Accounting Firm hereunder).  All fees and expenses of the Accounting Firm
shall be borne solely by the Company. 
Any Gross-Up Payment, as determined pursuant to this Section 5, shall be
paid by the Company to the Executive within five days of the receipt of the
Accounting Firm’s determination.  If the
Accounting Firm determines that no Excise Tax is payable by the Executive, it
shall furnish the Executive with a written opinion that failure to report the
Excise Tax on the Executive’s applicable federal income tax return would not
result in the imposition of a negligence or similar penalty.  Any determination by the Accounting Firm
shall be binding upon the Company and the Executive.  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 the Company should have been made (“Underpayment”),
consistent with the calculations required to be made hereunder.  In the event that the Company exhausts its
remedies pursuant to Section 5(c) and the Executive thereafter is required to
make a payment of any Excise Tax, the Accounting Firm shall determine the
amount of the


 


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Underpayment that has occurred and any such Underpayment shall be
promptly paid by the Company to or for the benefit of the Executive.


 


(c)           The Executive shall
notify the Company in writing of any claim by the Internal Revenue Service
that, if successful, would require the payment by the Company of the Gross-Up
Payment.  Such notification shall be
given as soon as practicable but no later than ten business days after the
Executive is informed in writing of such claim and shall apprise the Company of
the nature of such claim and the date on which such claim is requested to be
paid.  The Executive shall not pay such
claim prior to the expiration of the 30-day period following the date on which
it gives such notice to the Company (or such shorter period ending on the date
that any payment of taxes with respect to such claim is due).  If the Company notifies the Executive in
writing prior to the expiration of such period that it desires to contest such
claim, the Executive shall:


 


(i)            give the Company
any information reasonably requested by the Company relating to such claim,


 


(ii)           take such action in
connection with contesting such claim as the Company 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
the Company,


 


(iii)          cooperate with the
Company in good faith in order effectively to contest such claim, and


 


(iv)          permit the Company
to participate in any proceedings relating to such claim;


 


provided, however, that the Company 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 the Executive
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


 


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the foregoing provisions of this Section 5(c), the Company shall
control all proceedings taken in connection with such contest and, at its sole
option, may pursue or forgo 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 the Executive to pay the tax claimed and
sue for a refund or contest the claim in any permissible manner, and the
Executive agrees 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 the Company shall determine; provided, however, that if
the Company directs the Executive to pay such claim and sue for a refund, the
Company shall advance the amount of such payment to the Executive, on an
interest-free basis and shall indemnify and hold the Executive 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
the taxable year of the Executive with respect to which such contested amount
is claimed to be due is limited solely to such contested amount.  Furthermore, the Company’s control of the
contest shall be limited to issues with respect to which a Gross-Up Payment
would be payable hereunder and the Executive 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 by the Executive of an amount advanced by the Company pursuant to
Section 5(c), the Executive becomes entitled to receive any refund with respect
to such claim, the Executive shall (subject to the Company’s complying with the
requirements of Section 5(c)) promptly pay to the Company the amount of such
refund (together with any interest paid or credited thereon after taxes applicable
thereto).  If, after the receipt by the
Executive of an amount advanced by the Company pursuant to Section 5(c), a
determination is made that the Executive shall not


 


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be entitled to any refund with respect to such claim and the Company
does not notify the Executive in writing of its intent to contest such denial
of 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 offset, to the extent thereof, the amount of
Gross-Up Payment required to be paid.


 


6.             Successors.


 


(a)           This Agreement is
personal to the Executive and without the prior written consent of the Company
shall not be assignable by the Executive otherwise than by will or the laws of
descent and distribution.  This Agreement
shall inure to the benefit of and be enforceable by the Executive’s legal
representatives.


 


(b)           This Agreement shall
inure to the benefit of and be binding upon the Company and its successors and
assigns.


 


(c)           The Company shall
require any successor (whether direct or indirect, by purchase, merger,
consolidation, share exchange or otherwise) to all or substantially all of the
business and/or assets of the Company to assume expressly and agree to perform
this Agreement in the same manner and to the same extent that the Company would
be required to perform it if no such succession had taken place.  As used in this Agreement, “Company” shall
mean the Company as hereinbefore defined and any successor to its business
and/or assets as aforesaid which assumes and agrees to perform this Agreement
by operation of law or otherwise.


 


7.             Miscellaneous.


 


(a)           This Agreement shall
be governed by and construed in accordance with the laws of the State of
Maryland, without reference to principles of conflict of laws.  The captions of this Agreement are not part
of the provisions hereof and shall have no force or effect.  This Agreement may not be amended or modified
otherwise than by a written agreement executed by the parties hereto or their
respective successors and legal representatives.


 


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(b)           All notices and
other communications hereunder shall be in writing and shall be given by hand
delivery to the other party or by registered or certified mail, return receipt
requested, postage prepaid, addressed as follows:


 


If to the Executive:


 


Kevin A. McCreadie


Mercantile-Safe Deposit and Trust Company


2 Hopkins Plaza


Baltimore, Maryland  21201


 


If to the Company:


 


Mercantile Bankshares Corporation


2 Hopkins Plaza


Baltimore, Maryland  21201


Attention:  Corporate Secretary


 


or to such other address as either party shall have furnished to the
other in writing in accordance herewith. 
Notice and communications shall be effective when actually received by
the addressee.


 


(c)           The invalidity or
unenforceability of any provision of this Agreement shall not affect the
validity or enforceability of any other provision of this Agreement.


 


(d)           The Company may
withhold from any amounts payable under this Agreement such Federal, state or
local taxes as shall be required to be withheld pursuant to any applicable law
or regulation.


 


(e)           The Executive’s
failure to insist upon strict compliance with any provision hereof shall not be
deemed to be a waiver of such provision or any other provision thereof.


 


(f)            This Agreement
contains the entire understanding of the Company and the Executive with respect
to the subject matter hereof, preserving,


 


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however, the rights and obligations of any party under any employment
agreement or other agreements or benefit plans. Notwithstanding any contrary
provision of any other agreement, following any termination of Executive
occurring after the Effective Date, whether for Cause, Good Reason or any other
reason, Executive shall be free to engage in any activity competitive with any
activity of the Company or any affiliate of the Company, through employment by
or ownership of securities of any other entity or otherwise.  Upon and following the Effective Date, the
definition of “Cause” in Section 1(a) of this Agreement shall supercede and
replace any definition of “cause” or “good cause” for termination of employment
in any employment agreement between the Executive and the Company.


 


IN WITNESS WHEREOF,
the Executive has hereunto set his hand and, pursuant to the authorization from
its Board of Directors, Mercshares has caused these presents to be executed in
its name and on its behalf, all as of the day and year first above written.


 


WITNESS:


 


 


	
   

  	
   

  	
   

  	
   

  
	
   

  	
  KEVIN A. MCCREADIE

  
	
   

  	
   

  
	
   

  	
   

  
	
  ATTEST:

  	
  MERCANTILE BANKSHARES

  
	
   

  	
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
  JOHN L. UNGER

  	
   

  	
  EDWARD J. KELLY, III

  
	
  Secretary

  	
   

  	
  Chairman, President and Chief

  
	
   

  	
   

  	
  Executive Officer

  
							



 


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