Ex-(10)(o)



 






Exhibit (10)(o)


EMPLOYMENT AGREEMENT




     This Employment Agreement, made and entered into as of the 1st day of November, 2001,
by and between Wachovia Corporation (the “Company”), a North Carolina corporation, and Jean E.
Davis (the “Executive”);



     WHEREAS, the Management Resources & Compensation Committee (the “Committee”) of the Board of
Directors of the Company (the “Board”) has determined that it is in the best interests of the
Company and its stockholders to assure that the Company will have the continued service of the
Executive. The Committee believes it is imperative to encourage the Executive’s full attention and
dedication to the Company, and to provide the Executive with compensation and benefits arrangements
upon a termination of employment with the Company which ensure that the compensation and benefits
expectations of the Executive will be satisfied and which are competitive with those of other
corporations.



     NOW, THEREFORE, in order to accomplish the objectives set forth above and in consideration of
the mutual covenants herein contained, the parties hereby agree as follows:



     1. Employment Period. (a) The “Effective Date” shall mean the date hereof.



          (b) The Company hereby agrees to continue the Executive in its employ, and the Executive
hereby agrees to remain in the employ of the Company upon the terms and conditions set forth in
this Agreement, for the period commencing on the Effective Date and ending on the third anniversary
thereof (the “Employment Period”); 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 shall be hereinafter referred to as the “Renewal Date”), unless previously terminated, the
Employment Period shall be automatically extended so as to terminate three years from such Renewal
Date, unless at least 90 days prior to the Renewal Date the Company or the Executive, respectively,
shall give notice to the Executive or the Company, respectively, that the Employment Period shall
not be so extended. Notwithstanding the foregoing, in the event a “Change in Control” (as defined
herein) occurs, the Employment Period, unless previously terminated, shall be extended immediately
prior to the Change in Control so that the Employment Period shall terminate no earlier than three
years from such Change in Control.




     2. Terms of Employment. (a) Positions and Duties. (i) During the Employment
Period, the Company agrees to employ the Executive, and the Executive agrees to serve as an
employee of the Company and as an employee of one or more of its subsidiaries. The Executive shall
perform such duties and responsibilities, in such capacity and with such authority, for the Company
(or one or more of its subsidiaries) as the Company may designate from time to time. Such duties
shall be of a type for which the Executive is suited by background, experience and training, in the
Company’s reasonable discretion.



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          (ii) During the Employment Period, and excluding any periods of vacation and sick leave to
which the Executive is entitled, the Executive agrees to devote his full professional attention and
time during normal business hours to the business and affairs of the Company and to perform the
responsibilities assigned to the Executive hereunder. During the Employment Period it shall not be
a violation of this Agreement for the Executive to (A) serve on corporate, civic or charitable
boards or committees, (B) deliver lectures, fulfill speaking engagements or teach at educational
institutions, and (C) manage personal investments, so long as such activities do not interfere with
the performance of the Executive’s responsibilities as an employee of the Company in accordance
with this Agreement and are consistent with the Company’s policies. It is expressly understood and
agreed that to the extent that any such activities have been conducted by the Executive prior to
the Effective Date, the continued conduct of such activities (or the conduct of activities similar
in nature and scope thereto) subsequent to the Effective Date shall not thereafter be deemed to
interfere with the performance of the Executive’s responsibilities to the Company.




     (b) Compensation. (i) Salary and Bonus. For all services rendered by the
Executive in any capacity under this Agreement, the Company shall pay the Executive during the
Employment Period as compensation (i) an annual salary in an amount not less than the amount of the
Executive’s annual salary as of the Effective Date (the “Annual Base Salary”) and (ii) such annual
cash incentive bonus, if any, as may be awarded to him by the Board or by a Committee designated by
the Board (the “Annual Bonus”). Such salary shall be payable in accordance with the Company’s
customary payroll practices, and any such bonus shall be payable in cash in accordance with the
Company’s incentive bonus plans from which the Annual Bonus is awarded. During the Employment
Period prior to the Date of Termination, the Annual Base Salary shall be reviewed in accordance
with the Company’s policies and procedures applicable to the Executive and may be increased from
time to time consistent with such procedures. Any increase in Annual Base Salary shall not serve
to limit or reduce any other obligation to the Executive under this Agreement. In the event the
Executive’s actual Annual Base Salary is increased above the then current Annual Base Salary during
the Employment Period, such increased Annual Base Salary shall constitute “Annual Base Salary” for
purposes of this Agreement, and may not thereafter be reduced except with the written consent of
the Executive.



          (ii) Employee Benefits. During the Employment Period prior to the Date of
Termination, the Executive and/or the Executive’s family, as the case may be, shall be eligible to
participate in employee benefit plans generally available to other peer executives of the Company
or its subsidiaries, including without limitation, employee stock purchase plans, savings plans,
retirement plans, welfare benefit plans (including, without limitation, medical, prescription,
dental, disability, life, accidental death, and travel accident insurance, but excluding severance
plans) and similar plans, practices, policies and programs. In addition, during the Employment
Period, the Executive shall be eligible to participate in the Company’s stock-based incentive
compensation plans then available to other peer executives of the Company with awards
thereunder determined by the Board or by a Committee designated by the Board, in its sole
discretion, except as provided in this Agreement.




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          (iii) Expenses. During the Employment Period prior to the Date of Termination, the
Executive shall be entitled to receive prompt reimbursement for all reasonable expenses incurred by
the Executive in accordance with the policies, practices and procedures of the Company and its
affiliated companies in effect for the Executive at the time the expense is incurred.




          (iv) Fringe Benefits. During the Employment Period prior to the Date of Termination,
the Executive shall be entitled to fringe benefits and perquisite plans or programs of the Company
and its affiliated companies generally available to executives who are peers of the Executive;
provided that the Company reserves the right to modify, change or terminate such fringe benefits
and perquisite plans or programs from time to time, in its sole discretion.




          (v) Indemnification/D&O Insurance. During the Employment Period for acts prior to the
Date of Termination, the Executive shall be entitled to indemnification with respect to the
performance of his duties hereunder, and directors’ and officers’ liability insurance, on the same
terms and conditions as generally available to other peer executives of the Company and its
affiliated companies.




          (vi) SERP Benefits. During the Employment Period, the Executive shall continue to
accrue the benefits under the Senior Executive Retirement Agreement, dated October 22, 1999,
between the Company (as successor to the former Wachovia Corporation) and the Executive (the “SERP
Agreement”). Pursuant to Section 2(b) of the SERP Agreement, the provisions of this Agreement,
including Section 1(b) above, constitute an agreement between the Company and the Executive to
extend the Executive’s employment past the “Normal Retirement Date” (as defined in the SERP
Agreement) if the Executive’s employment extends beyond such date. In addition, the Company hereby
agrees that the “Committee” (as defined in the SERP Agreement) has approved and the Executive may
elect a lump sum payment option under Section 5 of the SERP Agreement.




     3. Termination of Employment. (a) Retirement, Death or Disability. The
Executive’s employment shall terminate automatically upon the Executive’s death or Retirement (as
defined herein) during the Employment Period. For purposes of this Agreement, “Retirement” shall
mean either (i) voluntary termination by the Executive of the Executive’s employment upon
satisfaction of the requirements for early retirement under the Company’s tax-qualified defined
benefit pension plan or (ii) voluntary termination by the Executive of the Executive’s employment
upon satisfaction of the requirements for normal retirement under the terms of the Company’s
tax-qualified pension plan. If the Company determines in good faith that Disability of the
Executive has occurred during the Employment Period (pursuant to the definition of Disability set
forth below), it may give to the Executive written notice in accordance with this Agreement of its
intention to terminate the Executive’s employment. In such event, the
Executive’s employment with the Company shall terminate effective on the 30th day
after receipt of such notice by the Executive (the “Disability Effective Date”), provided that,
within the 30 days after such receipt, the



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Executive shall not have returned to full-time
performance of the Executive’s duties. For purposes of this Agreement, “Disability” shall mean
termination of the Executive’s employment upon satisfaction of the requirements to receive benefits
under the Company’s long-term disability plan.



     (b) Cause. The Company may terminate the Executive’s employment during the Employment
Period for Cause. For purposes of this Agreement, “Cause” shall mean:



          (i) the continued and willful failure of the Executive to perform substantially the
Executive’s duties with the Company 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 the Executive by the Company which specifically identifies the manner
in which the Company believes that the Executive has not substantially performed the Executive’s
duties and a reasonable time for such substantial performance has elapsed since delivery of such
demand, or




          (ii) the willful engaging by the Executive in illegal conduct or gross misconduct which is
materially injurious to the Company.



For purposes of this provision, no act or failure to act, on the part of the Executive, shall be
considered “willful” unless it is done, or omitted to be done, by the Executive in bad faith or
without reasonable belief that the Executive’s action or omission was in the best interests of the
Company. 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 a senior executive
officer of the Company or based upon the advice of counsel for the Company shall be conclusively
presumed to be done, or omitted to be done, by the Executive in good faith and in the best
interests of the Company. Following a Change in Control (as defined herein), the Company’s
termination of the Executive’s employment shall not be deemed to be for Cause unless and until
there shall have been delivered to the Executive 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 the Executive
and the Executive is given an opportunity, together with counsel, to be heard before such Board),
finding that, in the good faith opinion of such Board, the Executive is guilty of the conduct
described in subparagraph (i) or (ii) above, and specifying the particulars thereof in detail.




     (c) Good Reason. The Executive’s employment may be terminated by the Executive for
Good Reason. For purposes of this Agreement, “Good Reason” shall mean, in the absence of a written
consent of the Executive which expressly refers to a provision of this Section 3(c):



          (i) prior to a Change in Control, the substantial diminution in the
overall importance of the Executive’s role, as determined by balancing (A) any increase or
decrease in the scope of the Executive’s management responsibilities against (B) any increase or
decrease in the relative sizes of the businesses, activities or functions

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(or portions thereof) for
which the Executive has responsibility; provided, however, that none of (I) a change in the
Executive’s title, (II) a change in the hierarchy, (III) a change in the Executive’s
responsibilities from line to staff or vice versa, and (IV) placing the Executive on temporary
leave pending an inquiry into whether the Executive has engaged in conduct that could constitute
“Cause” under this Agreement, either individually or in the aggregate shall be considered Good
Reason;




          (ii) any failure by the Company to comply with any material provision of this Agreement
(including, without limitation, any provision of Section 2 of this Agreement), other than an
isolated, insubstantial and inadvertent failure not occurring in bad faith and which is remedied by
the Company promptly after receipt of notice thereof given by the Executive;




          (iii) any purported termination by the Company of the Executive’s employment otherwise than
as expressly permitted by this Agreement;




          (iv) at any time prior to the Executive reaching age 63, the Company giving notice to the
Executive of its intention not to extend the term of this Agreement as provided in Section 1(b);




          (v) following a Change in Control, the relocation of the principal place of the Executive’s
employment to a location that is more than 35 miles from such principal place of employment
immediately prior to the date the proposed Change in Control is publicly announced, or the
Company’s requiring the Executive to travel on Company business to a substantially greater extent
than required immediately prior to the Change in Control;




          (vi) following a Change in Control, the Company’s requiring the Executive or all or
substantially all of the employees of the Company who report directly to the Executive immediately
prior to the date the proposed Change in Control is publicly announced to be based at any office or
location other than such person’s office or location on such date;




          (vii) any failure by the Company to comply with and satisfy Section 9(c) of this Agreement;




          (viii) following a Change in Control, assignment to the Executive of any duties inconsistent
in any respect with the Executive’s position as in effect immediately prior to the public
announcement of the proposed Change in Control (including status, offices, titles and reporting
requirements), authority, duties or responsibilities, or any other action by the Company which
results in any diminution in such position, authority, duties or responsibilities; or




          (ix) the Executive terminating employment for any reason during the period from January 1,
2003 to June 30, 2003.



For purposes of this Section 3(c), any good faith determination of “Good Reason” made


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by the
Executive after a Change in Control shall be conclusive (including any such determination when the
Executive is then eligible for Retirement). In the event the Company challenges the Executive’s
determination of Good Reason, the Company shall continue to make the payments and provide the
benefits to the Executive as set forth in Section 4(a). If it is finally determined pursuant to
the procedures set forth in this Agreement that the Executive’s termination was not for Good
Reason, the Executive shall reimburse the Company the amounts to which it is finally determined to
be entitled.




     (d) Notice of Termination. Any termination by the Company for Cause, or by the
Executive for Good Reason, shall be communicated by Notice of Termination to the other party hereto
given in accordance with this Agreement. For purposes of this Agreement, a “Notice of Termination”
means a written notice which (i) indicates the specific termination provision in this Agreement
relied upon, (ii) to the extent applicable, sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive’s employment under the
provision so indicated and (iii) if the Date of Termination (as defined below) is other than the
date of receipt of such notice, specifies the termination date (which date shall be not more than
30 days after the giving of such notice). The failure by the Executive or the Company to set forth
in the Notice of Termination any fact or circumstance which contributes to a showing of Good Reason
or Cause shall not waive any right of the Executive or the Company, respectively, hereunder or
preclude the Executive or the Company, respectively, from asserting such fact or circumstance in
enforcing the Executive’s or the Company’s rights hereunder. To be effective, a Notice of
Termination given by the Executive terminating employment with the Company for Good Reason must be
received by the Company no later than 60 days from the event(s) giving rise to the Good Reason
termination.



     (e) Date of Termination. “Date of Termination” means (i) if the Executive’s
employment is terminated by the Company for Cause, the date of receipt of the Notice of
Termination, unless the Company agrees to a later date no more than 30 days after such notice, as
the case may be, (ii) if the Executive’s employment is terminated by the Executive for Good Reason
or Retirement, the date of receipt of the Notice of Termination or any later date specified therein
within 30 days of such notice, as the case may be, (iii) if the Executive’s employment is
terminated by the Company other than for Cause or Disability, the date on which the Company
notifies the Executive of such termination or any later date specified therein within 30 days of
such notice, as the case may be, (iv) if the Executive’s employment is terminated by reason of
death or Disability, the date of death of the Executive or the Disability Effective Date, as the
case may be, and (v) if the Executive’s employment is terminated by the Executive for other than
Good Reason, death, Disability or Retirement, the date that is 60 days after the date of receipt of
the Notice of Termination by the Company, provided, however, the Company may elect to waive such
notice or place the Executive on paid leave for all or
any part of such 60-day period during which the Executive will be entitled to continue to
receive the Annual Base Salary but shall not receive any Annual Bonus or any other payment from the
Company other than reimbursement for expenses as contemplated in Section 2(b)(iii) and continued
participation in the



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employee benefit plans as contemplated in Section 2(b)(ii).



     (f) Change in Control. For purpose of this Agreement, a “Change in Control” shall
mean:



          (i) The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3)
or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”)
of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of
20% or more of either (A) the then outstanding shares of common stock of the Company (the
“Outstanding Company Common Stock”) or (B) the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the election of directors (the “Outstanding
Company Voting Securities”; provided, however, that for purposes of this subsection (i), the
following acquisitions shall not constitute a Change in Control: (1) any acquisition directly from
the Company, (2) any acquisition by the Company, (3) any acquisition by any employee benefit plan
(or related trust) sponsored or maintained by the Company or any corporation controlled by the
Company or (4) any acquisition by any corporation pursuant to a transaction which complies with
clauses (A), (B) and (C) of subsection (iii) of this Section 3(f); or




          (ii) Individuals who, as of the date hereof, constitute the Board (the “Incumbent Board”)
cease for any reason to constitute at least a majority of the Board; provided, however, that any
individual becoming a director subsequent to the date hereof whose election, or nomination for
election by the Company’s shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board (either by a specific vote or by approval of the
proxy statement of the Company in which such person is named as a nominee for director, without
written objection to such nomination) shall be considered as though such individual were a member
of the Incumbent Board, but excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of an actual or threatened election contest with respect to
the election or removal of directors or other actual or threatened solicitation of proxies or
contests by or on behalf of a Person other than the Board; or




          (iii) Consummation of a reorganization, merger, share exchange or consolidation or sale or
other disposition of all or substantially all of the assets of the Company (a “Business
Combination”), in each case, unless, following such Business Combination, (A) all or substantially
all of the individuals and entities who were the beneficial owners, respectively, of the
Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to
such Business Combination beneficially own, directly or indirectly, more than 60% of, respectively,
the then outstanding shares of common stock and the combined voting power of the then outstanding
voting securities entitled to vote generally in the election of directors, as the
case may be, of the corporation resulting from such Business Combination (including, without
limitation, a corporation which as a result of such transaction owns the Company or all or
substantially all of the Company’s assets either directly or through one or more subsidiaries) in
substantially the same proportions as their

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ownership, immediately prior to such Business
Combination of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as
the case may be, (B) no Person (excluding any corporation resulting from such Business Combination
or any employee benefit plan (or related trust) of the Company or such corporation resulting from
the Business Combination) beneficially owns, directly or indirectly, 20% or more of, respectively,
the then outstanding shares of common stock of the corporation resulting from such Business
Combination or the combined voting power of the then outstanding voting securities of such
corporation except to the extent that such ownership existed prior to the Business Combination and
(C) at least a majority of the members of the board of directors of the corporation resulting from
such Business Combination were members of the Incumbent Board immediately prior to the time of the
execution of the initial agreement, or of the action of the Board, providing for such Business
Combination; or




          (iv) Approval by the stockholders of the Company of a complete liquidation or dissolution of
the Company.




     4. Obligations of the Company upon Termination. (a) Good Reason; Company
Termination other than for Cause, Death, Disability or Retirement. If, during the Employment
Period, the Company shall terminate the Executive’s employment other than for Cause, Death,
Disability or Retirement or the Executive shall terminate employment for Good Reason:



               (i) the Company shall pay to the Executive in a lump sum in cash within 30 days after the
Date of Termination the aggregate of (A) the Executive’s Annual Base Salary through the Date of
Termination to the extent not theretofore paid, and (B) the product of (1) an Annual Bonus of an
amount equal to the greater of (x) the highest annual cash incentive bonus paid by the Company to
the Executive for the three calendar years prior to the Date of Termination or (y) the Executive’s
then applicable “target” incentive bonus under the then applicable cash incentive compensation plan
prior to the Date of Termination (the greater of clauses (x) or (y) is defined as the “Base
Bonus”), and (2) a fraction, the numerator of which is the number of days in the fiscal year in
which the Date of Termination occurs through the Date of Termination, and the denominator of which
is 365, to the extent not theretofore paid (the “Pro Rata Bonus”), (C) any unpaid Annual Bonus for
the prior year, (D) any compensation previously deferred by the Executive (together with any
accrued interest or earnings thereon) and (E) any accrued paid time off, in each case to the extent
not theretofore paid (the sum of the amounts described in clauses (A), (B), (C), (D) and (E) shall
be hereinafter referred to as the “Accrued Obligations”).


For purposes of determining the Base Bonus hereunder, the Company shall exclude any special or
one-time bonuses and any premium enhancements to bonuses but shall
include any portions of bonuses (other than the excluded bonuses) which have been deferred by the
Executive;




          (ii) for each of the three years after the Executive’s Date of Termination (the “Compensation
Continuance Period”), the Company shall pay to the




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Executive a cash benefit equal to the sum of (A)
the Executive’s highest Annual Base Salary during the twelve months immediately prior to the Date
of Termination, (B), the Base Bonus, and (C) the amount equal to the highest matching contribution
by the Company to the Executive’s account in the Company’s 401(k) plan for the five years
immediately prior to the Date of Termination (the payments described in clauses (A), (B) and (C)
shall be hereinafter referred to as the “Compensation Continuance Payments” and, together with the
benefits referred to in Sections 4(a)(iii), (iv), (v), (vi), (vii) and (viii), shall be hereinafter
referred to as the “Compensation Continuance Benefits”). The Company shall make the Compensation
Continuance Payments no more frequently than semi-monthly (and may make the Compensation
Continuance Payments in accordance with the Company’s normal payroll policies and practices), and
shall withhold from the Compensation Continuance Payments all applicable federal, state and local
taxes. Notwithstanding anything contained in this Agreement to the contrary, in the event a Change
of Control has occurred on or prior to the Date of Termination, the Company shall pay the
Compensation Continuance Payments to the Executive in a lump sum in cash within 30 days after the
Date of Termination.




          (iii) during the Compensation Continuance Period (or for the remainder of the Executive’s life
if such Date of Termination is after a Change in Control), or such longer period as may be provided
by the terms of the appropriate plan, program, practice or policy, the Company shall continue
medical, dental and life insurance benefits to the Executive and/or the Executive’s family on a
substantially equivalent basis to those which would have been provided to them in accordance with
the medical, dental and life insurance plans, programs, practices and policies described in Section
2(b)(iv) of this Agreement if the Executive’s employment had not been terminated. Notwithstanding
the foregoing, in the event the Executive becomes reemployed with another employer and becomes
eligible to receive medical, dental and/or life insurance benefits from such employer, the medical,
dental and/or life insurance benefits described herein shall be secondary to such benefits during
the period of the Executive’s eligibility, but only to the extent that the Company reimburses the
Executive for any increased cost and provides any additional benefits necessary to give the
Executive the benefits provided hereunder. For purposes of determining eligibility (but not the
time of commencement of benefits) of the Executive for retiree benefits pursuant to such plans,
practices, programs and policies, the Executive shall be considered to have terminated employment
with the Company on the Date of Termination. Notwithstanding the foregoing, if the Company
reasonably determines that providing continued coverage under one or more of its welfare benefit
plans contemplated herein could adversely affect the tax treatment of other participants covered
under such plans, or would otherwise have adverse legal ramifications, the Company may, in its
discretion, either (A) provide other coverage at least as valuable as the continued coverage
through insurance or otherwise, or (B) pay the Executive a lump
sum cash amount that reasonably approximates the after-tax value to the Executive of the
premiums for continued coverage, in lieu of providing such continued coverage;




          (iv) during the Compensation Continuance Period, to the extent not otherwise vested in
accordance with the Company’s stock compensation plans, all




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unvested options to purchase shares of
Company common stock and restricted stock awards will continue to vest in accordance with the
applicable terms of such stock option or restricted stock grants as if the Executive’s employment
with the Company had not been terminated. At the end of the Compensation Continuance Period, to
the extent not otherwise vested in accordance with the preceding sentence, all unvested stock
options and restricted stock awards will vest. Notwithstanding the termination of the Executive’s
employment with the Company, all stock options granted to the Executive as of the date of this
Agreement and during the Employment Period will be exercisable until the scheduled expiration date
of such stock options; provided, however, in the event any such stock options are designated as
“incentive stock options” pursuant to section 422 of the Code (as defined herein), such stock
options shall be treated as non-qualified stock options for purposes of this sentence to the extent
that they are exercised after the period specified in section 422(a)(2) of the Code (to the extent
such provision applies);




          (v) during the Compensation Continuance Period, the Executive shall be entitled to continue
to participate in the Company’s fringe benefit and perquisite plans or programs in which the
Executive participated immediately prior to the Date of Termination, in each case in accordance
with the Company’s plans, programs, practices and policies;




          (vi) to the extent not theretofore paid or provided, the Company shall timely pay or provide
to the Executive any other amounts or benefits required to be paid or provided or which the
Executive is eligible to receive under any plan, program, policy or practice or contract or
agreement of the Company and its affiliated companies (excluding any severance plan, program,
policy or practice) through the Date of Termination (such other amounts and benefits shall be
hereinafter referred to as the “Other Benefits”);




          (vii) the Company will provide outplacement services to the Executive in accordance with the
Company’s policies generally applicable to involuntarily terminated employees; and




          (viii) for the purpose of computing the benefits payable to the Executive under the SERP
Agreement (A) the Executive shall be credited with service as if the Executive continued to be
employed by the Company during the Compensation Continuance Period, and (B) one-third of the
aggregate Compensation Continuance Payments (whether or not such payments are paid in a lump sum)
shall be considered as the annual compensation paid to the Executive during each year of the
Compensation Continuance Period.




     (b) Death. If the Executive’s employment is terminated by reason of
the Executive’s death during the Employment Period, this Agreement shall terminate without
further obligations to the Executive’s legal representatives under this Agreement, other than for
payment of Accrued Obligations, Other Benefits, and the payment of an amount equal to the
Executive’s Annual Base Salary. Accrued Obligations and cash payments pursuant to the preceding
sentence shall be paid to



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the Executive’s estate or beneficiary, as applicable, in a lump sum in
cash within 30 days of the Date of Termination. With respect to the provision of Other Benefits,
the term Other Benefits as utilized in this Section 4(b) shall include, without limitation, and the
Executive’s estate and/or beneficiaries shall be entitled to receive, death benefits then
applicable to the Executive.



          (c) Retirement. If the Executive’s employment is terminated by reason of the
Executive’s Retirement during the Employment Period, this Agreement shall terminate without further
obligations to the Executive under this Agreement, other than for payment of Accrued Obligations
and Other Benefits. Accrued Obligations shall be paid to the Executive in a lump sum in cash
within 30 days of the Date of Termination. With respect to the provision of Other Benefits, the
term Other Benefits as utilized in this Section 4(c) shall include, without limitation, and the
Executive shall be entitled to receive, all retirement benefits then applicable to the Executive,
including but not limited to any SERP benefits then applicable to the Executive under the SERP
Agreement.




          (d) Disability. If the Executive’s employment is terminated by reason of the
Executive’s Disability during the Employment Period, this Agreement shall terminate without further
obligations to the Executive, other than for payment of Accrued Obligations, Other Benefits, and
the payment of an amount equal to the Executive’s Annual Base Salary. Accrued Obligations and the
cash payments pursuant to the preceding sentence shall be paid to the Executive in a lump sum in
cash within 30 days of the Date of Termination. With respect to the provision of Other Benefits,
the term Other Benefits as utilized in this Section 4(d) shall include, and the Executive shall be
entitled after the Disability Effective Date to receive, disability and other benefits then
applicable to the Executive.




          (e) Cause; Other than for Good Reason. If the Executive’s employment shall be
terminated by the Company for Cause or by the Executive without Good Reason (other than for
Retirement) during the Employment Period, this Agreement shall terminate without further
obligations of the Company to the Executive other than the obligation to pay to the Executive (x)
his Annual Base Salary through the Date of Termination, (y) the amount of any compensation
previously deferred by the Executive, and (z) Other Benefits, in each case only to the extent owing
and theretofore unpaid.




     5. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or limit the
Executive’s continuing or future participation in any plan, program, policy or practice provided by
the Company or any of its affiliated companies and for which the Executive may qualify (excluding
any severance plan or program of the Company), nor subject to Section 11(f), shall anything herein
limit or otherwise affect such rights as the
Executive may have under any contract or agreement with the Company or any of its affiliated
companies. Amounts which are vested benefits or which the Executive is otherwise entitled to
receive under any plan, policy, practice or program of or any contract or agreement with the
Company or any of its affiliated companies at or subsequent to the Date of Termination shall be
payable in accordance with such plan,



11









 







policy, practice or program or contract or agreement except
as explicitly modified by this Agreement.



     6. Full Settlement. Except as specifically provided in this Agreement, 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 which 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
and, such amounts shall not be reduced whether or not the Executive obtains other employment. The
Executive acknowledges and agrees that subject to the payment by the Company of the benefits
provided in this Agreement to the Executive, in no event will the Company or its subsidiaries or
affiliates be liable to the Executive for damages under any claim of breach of contract as a result
of the termination of the Executive’s employment. In the event of such termination, the Company
shall be liable only to provide the benefits specified in this Agreement. The Company agrees to
pay as incurred, to the full extent permitted by law, all legal fees and expenses which the
Executive may reasonably incur as a result of any contest by the Company, the Executive 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 this Agreement), plus in each case interest on any delayed
payment at the applicable Federal rate provided for in Section 7872(f)(2)(A) of the Internal
Revenue Code of 1986, as amended (the “Code”). Notwithstanding the foregoing, if it is finally
judicially determined that the Executive brought any claims contemplated in the previous sentence
in bad faith, the Executive shall reimburse the Company for such fees and expenses which are
reasonably related to such bad faith claim.



     7. Covenants. (a) The Executive shall hold in a fiduciary capacity for the benefit of
the Company all secret, non-public or confidential information, knowledge or data relating to the
Company or any of its affiliated companies, and their related businesses, which shall have been
obtained by the Executive during the Executive’s employment by the Company or any of its affiliated
companies (or predecessors thereto). After termination of the Executive’s employment with the
Company, the Executive shall not, without the prior written consent of the Company or as may
otherwise be required by law or legal process, communicate or divulge any such information,
knowledge or data to anyone other than the Company and those designated by it. In addition to the
foregoing, the Executive will refrain from taking any action or making any statements, written or
oral, which are intended to or which disparage the business, goodwill or reputation of the Company
or any of its affiliated companies, or their respective
directors, officers, executives or other employees, or which could adversely affect the morale
of employees of the Company or any of its affiliated companies.



          (b) (i) While employed by the Company and for three years after the Date of Termination
(which may include the Compensation Continuance Period), the




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Executive shall not, directly or
indirectly, on behalf of the Executive or any other person, (A) solicit for employment by other
than the Company, (B) encourage to leave the employ of the Company, or (C) interfere with the
Company’s or its affiliated companies’ relationship with, any person employed by the Company or its
affiliated companies.




          (ii) While employed by the Company and for three years after the Date of Termination
(which may include the Compensation Continuance Period), the Executive 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 the Company or its
affiliates and in which the Executive participated in a direct capacity while he was employed by
the Company or its affiliates (including predecessors thereof) at any time within the one year
period preceding the Effective Date and which has offices in any location in which the Executive
had supervisory responsibility in the geographic footprint of First Union National Bank (or
successors thereto, including but not limited to, Florida, Georgia, South Carolina, Tennessee,
North Carolina, Virginia, Maryland, Pennsylvania, New Jersey, Delaware, New York, Connecticut, and
Washington, D.C. plus any other state or states added during the Employment Period) during that one
year period. The Executive expressly acknowledges the reasonableness of such restrictions and such
geographic area. Further, during such period, the Executive will not acquire an equity or
equity-like interest in such an organization for his own account, except that he may acquire equity
interests of not more than 5% of any such organization from time to time as an investment.
Notwithstanding anything to the contrary contained herein, this Section 7(b)(ii) shall not apply if
the Executive terminates employment with the Company pursuant to Retirement or the Executive
terminates employment with the Company for any reason following a Change in Control or the Company
terminates the Executive’s employment for any reason following a Change in Control. Upon the
Executive’s request to the Company’s Chief Executive Officer, the Company will provide an advance
opinion as to whether a proposed activity would violate the provisions of this Section 7(b)(ii).




          (iii) During the Compensation Continuance Period, the Executive shall provide consulting
services to the Company at such time or times as the Company shall reasonably request, subject to
appropriate notice and to reimbursement by the Company of all reasonable travel and other expenses
incurred and paid by the Executive in accordance with the Company’s then-current policy for expense
reimbursement. In the event the Executive shall engage in any employment permitted hereunder
during the Compensation Continuance Period for another employer or on a self-employed basis, the
Executive’s obligation to provide the consulting services hereunder shall be adjusted in accordance
with the requirements of such employment.




     (c) In the event of a breach or threatened breach of this Section 7, the
Executive agrees that the Company 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 in
Control, the Company may terminate the Compensation Continuance



13









 







Period and the Compensation
Continuance Benefits, if applicable, in its sole discretion. The Executive acknowledges that
monetary damages would be inadequate and insufficient remedy for a breach or threatened breach of
Section 7. Following the occurrence of a Change in Control, in no event shall an asserted
violation of the provisions of this Section 7 constitute a basis for deferring or withholding any
amounts otherwise payable to the Executive under this Agreement. If it is finally determined
pursuant to the procedures set forth in this Agreement that the Executive did not breach this
Section 7, the Company shall reimburse the Executive the amounts to which it is finally determined
to be entitled.



          (d) Any termination of the Executive’s employment or of this Agreement shall have no effect on
the continuing operation of this Section 7; provided, however, upon termination of this Agreement
due to the Company’s or the Executive’s failure to extend the term of this Agreement pursuant to
Section 1(b), Section 7(b)(ii) shall no longer apply to the Executive if the Executive’s employment
shall terminate after the term of this Agreement expires; and provided, further, Section 7(b)(ii)
shall not apply if the Executive terminates employment with the Company pursuant to Retirement or
the Executive terminates employment with the Company for any reason following a Change in Control
or the Company terminates the Executive’s employment for any reason following a Change in Control.




          (e) The Executive hereby agrees that prior to accepting employment with any other person or
entity during the Employment Period or during the three years following the Date of Termination
(which may include the Compensation Continuance Period), the Executive will provide such
prospective employer with written notice of the existence of this Agreement and the provisions of
Section 3(e) and this Section 7, with a copy of such notice delivered simultaneously to the Company
in accordance with Section 11(c). The foregoing provision shall not apply if the Company
terminates the Executive’s employment without Cause following a Change in Control, or if the
Executive terminates his employment for Good Reason following a Change in Control.




     8. Certain Additional Payments by the Company. (a) Anything in this Agreement to the
contrary notwithstanding and except as set forth below, in the event it shall be determined that
any payment or distribution by the Company to or for the benefit of the Executive following a
Change in Control (whether paid or payable or distributed or distributable pursuant to the terms of
the Agreement or otherwise, but determined without regard to any additional payments required under
this Section 8) (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 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”), then the Executive shall be entitled to
receive an additional payment (a “Gross-Up Payment”) 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



14









 







the Gross-Up Payment equal to the Excise Tax imposed
upon the Payments.



     (b) Subject to the provisions of Section 8(c), all determinations required to be made under
this Section 8, 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 the
Company (the “Accounting Firm”) which shall provide detailed supporting calculations both to the
Company and the Executive within 30 business days of the receipt of notice from the Company that
there has been a Payment, or such earlier time as is requested by the Company. 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 8, shall be paid by the Company to the Executive 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 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 8(c) and the Executive thereafter is
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 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 to effectively contest such claim, and




15









 








          (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 the foregoing provisions of this Section 8(c), the
Company 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 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 of an amount advanced by the Company pursuant to Section 8(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 8(c)) promptly pay to the
Company the amount of such refund (together with any interest paid or credited thereon after taxes
applicable thereto) upon receipt thereof. If, after the receipt by the Executive of an amount
advanced by the Company pursuant to Section 8(c), a determination is made that the Executive shall
not 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 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 offset, to the extent thereof, the amount of Gross-Up
Payment required to be paid.



     (e) For purposes of this Section 8, any reference to the Executive shall be deemed to include
the Executive’s surviving spouse, estate and/or beneficiaries



16









 







with respect to payments or
adjustments provided by this Section 8.



     9. Successors. (a) This Agreement is personal to the Executive and without the prior
consent of the Company shall not be assignable by the Executive otherwise than by will or the laws
of descent and distribution.



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




          (c) The Company will require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or assets of the
Company to assume expressly in writing 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.




     10. Arbitration. Except with respect to the Company’s rights to injunctive relief for
matters arising under Section 7 of this Agreement, any disputes or controversies arising under or
in connection with this Agreement (including, without limitation, whether any such disputes or
controversies have been brought in bad faith) shall be settled exclusively by arbitration in
Charlotte, North Carolina in accordance with the commercial arbitration rules of the American
Arbitration Association then in effect; provided, however, that the Company may invoke the American
Arbitration Association’s Optional Rules for Emergency Measures of Protection. Judgment may be
entered on the arbitrator’s award in any court having jurisdiction.



     11. General Provisions. (a) Governing Law; Amendment; Modification. This
Agreement shall be governed and construed in accordance with the laws of the State of North
Carolina, without reference to principles of conflict of laws. This Agreement may not be modified
or amended except by an instrument in writing signed by the parties hereto.



          (b) Severability. If, for any reason, any provision of this Agreement is held
invalid, such invalidity shall not affect any other provision of this Agreement not held so
invalid, and each such other provision shall to the full extent consistent with law continue in
full force and effect. If any provision of this Agreement shall be held invalid in part, such
invalidity shall in no way affect the rest of such provision not held so invalid and the rest of
such provision, together with all other provisions of this Agreement, shall to the full extent
consistent with law continue in full force and effect.




          (c) Notices. All notices under this Agreement shall be in writing and
shall be deemed effective when delivered in person (in the Company’s case, to its Secretary)
or forty-eight (48) hours after deposit thereof in the U.S. mail, postage prepaid, for delivery as
registered or certified mail — addressed, in the case of the Executive, to such Executive at his
residential address, and in the case of the

17









 








Company, to its corporate headquarters, attention of
the Secretary, or to such other address as the Executive or the Company may designate in writing at
any time or from time to time to the other party. In lieu of notice by deposit in the U.S. mail, a
party may give notice by telegram or telex.




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




          (e) Strict Compliance. The Executive’s or the Company’s failure to insist upon strict
compliance with any provision of this Agreement or the failure to assert any right the Executive or
the Company may have hereunder, including, without limitation, the right of the Executive to
terminate employment for Good Reason pursuant to Section 3(c) of this Agreement, shall not be
deemed to be a waiver of such provision or right or any other provision or right of this Agreement.
The waiver, whether express or implied, by either party of a violation of any of the provisions of
this Agreement shall not operate or be construed as a waiver of any subsequent violation of any
such provision.




          (f) Entire Understanding. From and after the Effective Date this Agreement shall
supersede any other agreement between the parties with respect to the subject matter hereof,
including without limitation, the Employment Agreement between the Company (as successor to the
former Wachovia Corporation) and the Executive dated as of October 22, 1999, but excluding, except
as provided herein, the SERP Agreement.




          (g) Conflicts with Plans. To the extent any plan, policy, practice or program of or
contract or agreement with the Company attempts to cap, restrict, limit or reduce payments to the
Executive hereunder, such caps, restrictions, limitations or reductions are expressly modified to
permit the payments contemplated hereby and the parties intend that the terms of this Agreement
shall be construed as having precedence over any such caps, restrictions, limitations or
reductions.




          (h) Release and Waiver of Claims. In consideration of any Compensation Continuance
Benefits the Company provides to the Executive under this Agreement, the Executive upon termination
of employment with the Company shall execute a separate general release and waiver of claims in
favor of the Company, its affiliates and personnel in a form acceptable to the Company. The
Executive shall not be eligible for any Compensation Continuance Benefits until the Executive has
executed such release and waiver of claims.




          (i) Creditor Status. No benefit or promise hereunder shall be secured by any specific
assets of the Company. The Executive shall have only the rights of an
unsecured general creditor of the Company in seeking satisfaction of such benefits or
promises.




          (j) No Assignment of Benefits. No right, benefit or interest hereunder

18









 








shall be
subject to assignment, encumbrance, charge, pledge, hypothecation or set off in respect of any
claim, debt or obligation, or similar process.




          (k) SERP Agreement. Sections 2(b)(vi) and 4(a)(viii) of this Agreement constitute an
amendment to the SERP Agreement. All provisions in the SERP Agreement not affected by such
amendment shall remain in full force and effect.




19









 








     IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its officers
thereunto duly authorized, and the Executive has signed this Agreement under seal, all as of the
date and year first above written.



	 	 	 	 	 	 	 	 	 
	WACHOVIA CORPORATION	 	 	 	ATTEST:	 	[SEAL]
	 
	 	 	 	 	 	 	 	 
	By:
	 	 /s/ G. KENNEDY THOMPSON	 	 	 	 /s/ MARK C. TREANOR	 	 
	 

	 	 
	 	 	 	 	 	 
	Name:

	 	G. Kennedy Thompson
	 	 	 	Mark C. Treanor	 	 
	Title:

	 	Chief Executive Officer
	 	 	 	Secretary	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 /s/ JEAN E. DAVIS	 	(SEAL)	 	 	 	 
	 	 	 	 	 	 	 
	Jean E. Davis	 	 	 	 	 	 







20