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Such duties shall be of a type for which the Executive is suited by background, experience andtraining, in the Company’s reasonable discretion.               (ii) During the Employment Period, and excluding any periods of vacation and sick leave towhich the Executive is entitled, the Executive agrees to devote her full professional attention andtime during normal business hours to the business and affairs of the Company and to perform theresponsibilities assigned to the Executive hereunder. During the Employment Period it shall not bea violation of this Agreement for the Executive to (A) serve on corporate, civic or charitableboards or committees, (B) deliver lectures, fulfill speaking engagements or teach at educationalinstitutions, and (C) manage personal investments, so long as such activities do not interfere withthe performance of the Executive’s responsibilities as an employee of the Company in accordancewith this Agreement and are consistent with the Company’s policies. It is expressly understood andagreed that to the extent that any such activities have been conducted by the Executive prior tothe Effective Date, the continued conduct of such activities (or the conduct of activities similarin nature and scope thereto) subsequent to the Effective Date shall not thereafter be deemed tointerfere with the performance of the Executive’s responsibilities to the Company.          (b) Compensation. (i) Salary and Bonus. For all services rendered by theExecutive in any capacity under this Agreement, the Company shall pay the Executive during theEmployment Period as compensation (i) an annual salary in an amount not less than the amount of theExecutive’s annual salary as of the Effective Date (as set forth in *Appendix A*, the “Annual BaseSalary”) and (ii) such annual cash incentive bonus, if any, as may be awarded to her by the Boardor by a Committee designated by the Board (the “Annual Bonus”). Such salary shall be payable inaccordance with the Company’s customary payroll practices, and any such bonus shall be payable incash 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 bereviewed in accordance with the Company’s policies and procedures applicable to the Executive andmay be increased from time to time consistent with such procedures. Any increase in Annual BaseSalary shall not serve to limit or reduce any other obligation to the Executive under thisAgreement. In the event the Executive’s actual Annual Base Salary is increased above the thencurrent Annual Base Salary during the Employment Period, such increased Annual Base Salary shallconstitute “Annual Base Salary” for purposes of this Agreement, and may not thereafter be reducedexcept with the written consent of the Executive.               (ii) Employee Benefits. During the Employment Period prior to the Date ofTermination, the Executive and/or the Executive’s family, as the case may be, shall be eligible toparticipate in employee benefit plans generally available to other peer executives of the Companyor its subsidiaries, including without limitation, savings plans, retirement plans, welfare benefitplans (including, without limitation, medical, dental, disability and life, but excluding severanceplans) and similar plans, practices, policies and programs. In addition, during the EmploymentPeriod, the Executive shall be eligible to participate in the Company’s stock-based incentivecompensation plans then available to other peer executives of the
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Company with awards thereunder determined by the Board or by a Committee designated by theBoard, in its sole discretion, except as provided in this Agreement.               (iii) Expenses. During the Employment Period prior to the Date of Termination, theExecutive shall be entitled to receive prompt reimbursement for all reasonable expenses incurred bythe Executive in accordance with the policies, practices and procedures of the Company and itsaffiliated 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 Companyand 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 benefitsand 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 theDate of Termination, the Executive shall be entitled to indemnification with respect to theperformance of her duties hereunder, and directors’ and officers’ liability insurance, on the sameterms and conditions as generally available to other peer executives of the Company and itsaffiliated companies.               (vi) Sign-On Arrangements. In order to induce the Executive to accept employment withthe Company and to replace equity compensation which she will forfeit as a consequence, the Companywill make certain payments and grant retention awards to the Executive as set forth in *Appendix A*.     3. Termination of Employment. (a) Retirement, Death or Disability. TheExecutive’s employment shall terminate automatically upon the Executive’s death or Retirement (asdefined herein) during the Employment Period. For purposes of this Agreement, “Retirement” shallmean either (i) voluntary termination by the Executive of the Executive’s employment uponsatisfaction of the requirements for early retirement under the Company’s tax-qualified definedbenefit pension plan or (ii) voluntary termination by the Executive of the Executive’s employmentupon satisfaction of the requirements for normal retirement under the terms of the Company’stax-qualified pension plan. If the Company determines in good faith that Disability of theExecutive has occurred during the Employment Period (pursuant to the definition of Disability setforth below), it may give to the Executive written notice in accordance with this Agreement of itsintention to terminate the Executive’s employment. In such event, the Executive’s employment withthe Company shall terminate effective on the 30th day after receipt of such notice bythe Executive (the “Disability Effective Date”), provided that, within the 30 days after suchreceipt, the 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 employmentupon satisfaction of the requirements to receive benefits under the Company’s long-term disabilityplan.
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          (b) Cause. The Company may terminate the Executive’s employment during the EmploymentPeriod for Cause. For purposes of this Agreement, “Cause” shall mean:               (i) the continued and willful failure of the Executive to perform substantially theExecutive’s duties with the Company or one of its affiliates (other than any such failure resultingfrom incapacity due to physical or mental illness), after a written demand for substantialperformance is delivered to the Executive by the Company which specifically identifies the mannerin which the Company believes that the Executive has not substantially performed the Executive’sduties and a reasonable time for such substantial performance has elapsed since delivery of suchdemand, or               (ii) the willful engaging by the Executive in illegal conduct or gross misconduct which ismaterially injurious to the Company.For purposes of this provision, no act or failure to act, on the part of the Executive, shall beconsidered “willful” unless it is done, or omitted to be done, by the Executive in bad faith orwithout reasonable belief that the Executive’s action or omission was in the best interests of theCompany. Any act, or failure to act, based upon authority given pursuant to a resolution dulyadopted by the Board or upon the instructions of the Chairman of the Board or a senior executiveofficer of the Company or based upon the advice of counsel for the Company shall be conclusivelypresumed to be done, or omitted to be done, by the Executive in good faith and in the bestinterests of the Company. Following a Change in Control (as defined herein), the Company’stermination of the Executive’s employment shall not be deemed to be for Cause unless and untilthere shall have been delivered to the Executive a copy of a resolution duly adopted by theaffirmative vote of not less than three-fourths of the entire membership of the Board at a meetingof the Board called and held for such purpose (after reasonable notice is provided to the Executiveand 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 conductdescribed 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 forGood Reason. For purposes of this Agreement, “Good Reason” shall mean, in the absence of a writtenconsent 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 theExecutive’s role, as determined by a reduction in the Executive’s targeted Annual Bonus opportunity(but not a reduction in the Executive’s actual Annual Bonus payment), targeted stock-basedincentive compensation opportunity (but not a reduction in the Executive’s actual stock-basedincentive awards) or the Executive no longer being deemed to be an “executive officer” of theCompany as determined by the Board; provided, however, that none of (I) a change in the Executive’stitle, (II) a change in the hierarchy, (III) a change in the Executive’s responsibilities from lineto staff or vice versa, and (IV) placing the Executive on
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temporary leave pending an inquiry into whether the Executive has engaged in conduct thatcould constitute “Cause” under this Agreement, either individually or in the aggregate shall beconsidered 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 anisolated, insubstantial and inadvertent failure not occurring in bad faith and which is remedied bythe Company promptly after receipt of notice thereof given by the Executive;               (iii) any purported termination by the Company of the Executive’s employment otherwise thanas expressly permitted by this Agreement;               (iv) following a Change in Control, the relocation of the principal place of the Executive’semployment to a location that is more than 35 miles from such principal place of employmentimmediately prior to the date the proposed Change in Control is publicly announced, or theCompany’s requiring the Executive to travel on Company business to a substantially greater extentthan required immediately prior to the Change in Control;               (v) following a Change in Control, the Company’s requiring the Executive or all orsubstantially all of the employees of the Company who report directly to the Executive immediatelyprior to the date the proposed Change in Control is publicly announced to be based at any office orlocation other than such person’s office or location on such date;               (vi) any failure by the Company to comply with and satisfy Section 9(c) of this Agreement; or               (vii) following a Change in Control, assignment to the Executive of any duties inconsistentin any respect with the Executive’s position as in effect immediately prior to the publicannouncement of the proposed Change in Control (including status, offices, titles and reportingrequirements), authority, duties or responsibilities, or any other action by the Company whichresults in any diminution in such position, authority, duties or responsibilities.For purposes of this Section 3(c), any good faith determination of “Good Reason” made by theExecutive after a Change in Control shall be conclusive (including any such determination when theExecutive is then eligible for Retirement). In the event the Company challenges the Executive’sdetermination of Good Reason, the Company shall continue to make the payments and provide thebenefits to the Executive as set forth in Section 4(a). If it is finally determined pursuant tothe procedures set forth in this Agreement that the Executive’s termination was not for GoodReason, the Executive shall reimburse the Company the amounts to which it is finally determined tobe entitled.          (d) Notice of Termination. Any termination by the Company for Cause, or by theExecutive for Good Reason, shall be communicated by Notice of Termination to the otherparty hereto given in accordance with this Agreement. For purposes of this Agreement, a
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“Notice of Termination” means a written notice which (i) indicates the specific terminationprovision in this Agreement relied upon, (ii) to the extent applicable, sets forth in reasonabledetail the facts and circumstances claimed to provide a basis for termination of the Executive’semployment 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 shallbe not more than 30 days after the giving of such notice). The failure by the Executive or theCompany to set forth in the Notice of Termination any fact or circumstance which contributes to ashowing 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 suchfact or circumstance in enforcing the Executive’s or the Company’s rights hereunder. To beeffective, a Notice of Termination given by the Executive terminating employment with the Companyfor Good Reason must be received by the Company no later than 60 days from the event(s) giving riseto the Good Reason termination.          (e) Date of Termination. “Date of Termination” means (i) if the Executive’semployment is terminated by the Company for Cause, the date of receipt of the Notice ofTermination, unless the Company agrees to a later date no more than 30 days after such notice, asthe case may be, (ii) if the Executive’s employment is terminated by the Executive for Good Reasonor Retirement, the date of receipt of the Notice of Termination or any later date specified thereinwithin 30 days of such notice, as the case may be, (iii) if the Executive’s employment isterminated by the Company other than for Cause or Disability, the date on which the Companynotifies the Executive of such termination or any later date specified therein within 30 days ofsuch notice, as the case may be, (iv) if the Executive’s employment is terminated by reason ofdeath or Disability, the date of death of the Executive or the Disability Effective Date, as thecase may be, and (v) if the Executive’s employment is terminated by the Executive for other thanGood Reason, death, Disability or Retirement, the date that is 60 days after the date of receipt ofthe Notice of Termination by the Company, provided, however, the Company may elect to waive suchnotice or place the Executive on paid leave for all or any part of such 60-day period during whichthe Executive will be entitled to continue to receive the Annual Base Salary but shall not receiveany Annual Bonus or any other payment from the Company other than reimbursement for expenses ascontemplated in Section 2(b)(iii) and continued participation in the employee benefit plans ascontemplated in Section 2(b)(ii).          (f) Change in Control. For purpose of this Agreement, a “Change in Control” shallmean:               (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) of20% 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 votingsecurities of the Company entitled to vote generally in the election of directors (the “OutstandingCompany Voting Securities”); provided, however, that for purposes of this subsection (i), thefollowing acquisitions shall not constitute a
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Change in Control: (1) any acquisition directly from the Company, (2) any acquisition by theCompany, (3) any acquisition by any employee benefit plan (or related trust) sponsored ormaintained by the Company or any corporation controlled by the Company or (4) any acquisition byany corporation pursuant to a transaction which complies with clauses (A), (B) and (C) ofsubsection (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 anyindividual becoming a director subsequent to the date hereof whose election, or nomination forelection by the Company’s shareholders, was approved by a vote of at least a majority of thedirectors then comprising the Incumbent Board (either by a specific vote or by approval of theproxy statement of the Company in which such person is named as a nominee for director, withoutwritten objection to such nomination) shall be considered as though such individual were a memberof the Incumbent Board, but excluding, for this purpose, any such individual whose initialassumption of office occurs as a result of an actual or threatened election contest with respect tothe election or removal of directors or other actual or threatened solicitation of proxies orcontests by or on behalf of a Person other than the Board; or               (iii) Consummation of a reorganization, merger, share exchange or consolidation or sale orother disposition of all or substantially all of the assets of the Company (a “BusinessCombination”), in each case, unless, following such Business Combination, (A) all or substantiallyall of the individuals and entities who were the beneficial owners, respectively, of theOutstanding Company Common Stock and Outstanding Company Voting Securities immediately prior tosuch 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 outstandingvoting securities entitled to vote generally in the election of directors, as the case may be, ofthe corporation resulting from such Business Combination (including, without limitation, acorporation which as a result of such transaction owns the Company or all or substantially all ofthe Company’s assets either directly or through one or more subsidiaries) in substantially the sameproportions as their ownership, immediately prior to such Business Combination of the OutstandingCompany 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 outstandingshares of common stock of the corporation resulting from such Business Combination or the combinedvoting power of the then outstanding voting securities of such corporation except to the extentthat such ownership existed prior to the Business Combination and (C) at least a majority of themembers of the board of directors of the corporation resulting from such Business Combination weremembers of the Incumbent Board immediately prior to the time of the execution of the initialagreement, 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 ofthe Company.
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     4. Obligations of the Company upon Termination. (a) Good Reason; CompanyTermination other than for Cause, Death, Disability or Retirement. If, during the EmploymentPeriod, 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 theDate of Termination the aggregate of (A) the Executive’s Annual Base Salary through the Date ofTermination to the extent not theretofore paid, and (B) the product of (1) an Annual Bonus of anamount equal to the greater of (x) the highest annual cash incentive bonus paid by the Company tothe Executive for the three calendar years prior to the Date of Termination or (y) the Executive’sthen applicable “target” incentive bonus under the then applicable cash incentive compensation planprior to the Date of Termination (the greater of clauses (x) or (y) is defined as the “BaseBonus”), and (2) a fraction, the numerator of which is the number of days in the fiscal year inwhich the Date of Termination occurs through the Date of Termination, and the denominator of whichis 365, to the extent not theretofore paid (the “Pro Rata Bonus”), (C) any unpaid Annual Bonus forthe prior year, and (D) 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), and (D) shall be hereinafter referredto as the “Accrued Obligations”).For purposes of determining the Base Bonus hereunder, the Company shall exclude any special orone-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 two years after the Executive’s Date of Termination (the “CompensationContinuance Period”), the Company shall pay to the 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 Dateof Termination, (B) the Base Bonus, and (C) the amount equal to the highest matching contributionby the Company to the Executive’s account in the Company’s 401(k) plan for the three yearsimmediately 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 thebenefits referred to in Sections 4(a)(iii), (iv), (v), (vi) and (vii), shall be hereinafterreferred to as the “Compensation Continuance Benefits”). The Company shall make the CompensationContinuance Payments no more frequently than semi-monthly (and may make the CompensationContinuance Payments in accordance with the Company’s normal payroll policies and practices), andshall withhold from the Compensation Continuance Payments all applicable federal, state and localtaxes. Notwithstanding anything contained in this Agreement to the contrary, in the event a Changeof Control has occurred on or prior to the Date of Termination, the Company shall pay theCompensation Continuance Payments to the Executive in a lump sum in cash within 30 days after theDate of Termination.               (iii) during the Compensation Continuance Period, the Company shall continue medical, dentaland life insurance benefits to the Executive and/or the Executive’s
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family on a substantially equivalent basis to those which would have been provided to them inaccordance with the medical, dental and life insurance programs described in Section 2(b)(iv) ofthis Agreement if the Executive’s employment had not been terminated. At the end of theCompensation Continuance Period, if eligible to participate in the applicable programs described inSection 2(b)(iv) as a “retiree”, the Executive will be treated as a “retiree” under such programs.If the Date of Termination is after a Change in Control and the Executive is not eligible forretiree coverage after the Compensation Continuance Period, the Executive and/or the Executive’sfamily will receive medical coverage for the remainder of the Executive’s life through the Companyat its cost of providing this coverage. Notwithstanding the foregoing, in the event the Executivebecomes reemployed with another employer and becomes eligible to receive medical, dental and/orlife insurance benefits from such employer, the medical, dental and/or life insurance benefitsdescribed herein shall be secondary to such benefits during the period of the Executive’seligibility, but only to the extent that the Company reimburses the Executive for any increasedcost and provides any additional benefits necessary to give the Executive the benefits providedhereunder. 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, theExecutive shall be considered to have terminated employment with the Company on the Date ofTermination. Notwithstanding the foregoing, if the Company reasonably determines that providingcontinued coverage under one or more of its welfare benefit plans contemplated herein couldadversely affect the tax treatment of other participants covered under such plans, or wouldotherwise have adverse legal ramifications, the Company may, in its discretion, either (A) provideother 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 tothe 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 inaccordance with the Company’s stock compensation plans nor pursuant to the terms of the applicableawards, all unvested options to purchase shares of Company common stock and restricted stock awardswill continue to vest in accordance with the applicable terms of such stock option or restrictedstock grants as if the Executive’s employment with the Company had not been terminated. At the endof the Compensation Continuance Period, to the extent not otherwise vested in accordance with thepreceding sentence, all unvested stock options and restricted stock awards will vest.Notwithstanding the termination of the Executive’s employment with the Company, all stock optionsgranted to the Executive as of the date of this Agreement and during the Employment Period will beexercisable until the scheduled expiration date of such stock options; provided, however, in theevent any such stock options are designated as “incentive stock options” pursuant to section 422 ofthe Code (as defined herein), such stock options shall be treated as non-qualified stock optionsfor purposes of this sentence to the extent that they are exercised after the period specified insection 422(a)(2) of the Code (to the extent such provision applies);               (v) during the Compensation Continuance Period, the Executive shall be entitled to continueto participate in the Company’s fringe benefit and perquisite plans or
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programs in which the Executive participated immediately prior to the Date of Termination, ineach 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 provideto the Executive any other amounts or benefits required to be paid or provided or which theExecutive is eligible to receive under any plan, program, policy or practice or contract oragreement of the Company and its affiliated companies (excluding any severance plan, program,policy or practice) through the Date of Termination, including without limitation, payment of anyamounts previously deferred by the Executive in the Company’s deferred compensation plans inaccordance with the terms of such plans and the Executive’s elections thereunder (such otheramounts and benefits shall be hereinafter referred to as the “Other Benefits”); and               (vii) the Company will provide outplacement services to the Executive in accordance with theCompany’s policies generally applicable to involuntarily terminated employees.          (b) Death. If the Executive’s employment is terminated by reason of the Executive’sdeath during the Employment Period, this Agreement shall terminate without further obligations tothe Executive’s legal representatives under this Agreement, other than for payment of AccruedObligations, Other Benefits, and the payment of an amount equal to the Executive’s Annual BaseSalary. Accrued Obligations and cash payments pursuant to the preceding sentence shall be paid tothe Executive’s estate or beneficiary, as applicable, in a lump sum in cash within 30 days of theDate of Termination. With respect to the provision of Other Benefits, the term Other Benefits asutilized in this Section 4(b) shall include, without limitation, and the Executive’s estate and/orbeneficiaries shall be entitled to receive, death benefits then applicable to the Executive.          (c) Retirement. If the Executive’s employment is terminated by reason of theExecutive’s Retirement during the Employment Period, this Agreement shall terminate without furtherobligations to the Executive under this Agreement, other than for payment of Accrued Obligationsand Other Benefits. Accrued Obligations shall be paid to the Executive in a lump sum in cashwithin 30 days of the Date of Termination. With respect to the provision of Other Benefits, theterm Other Benefits as utilized in this Section 4(c) shall include, without limitation, and theExecutive shall be entitled to receive, all retirement benefits then applicable to the Executive.          (d) Disability. If the Executive’s employment is terminated by reason of theExecutive’s Disability during the Employment Period, this Agreement shall terminate without furtherobligations to the Executive, other than for payment of Accrued Obligations, Other Benefits, andthe payment of an amount equal to the Executive’s Annual Base Salary. Accrued Obligations and thecash payments pursuant to the preceding sentence shall be paid to the Executive in a lump sum incash 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,
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and the Executive shall be entitled after the Disability Effective Date to receive, disabilityand other benefits then applicable to the Executive.          (e) Cause; Other than for Good Reason. If the Executive’s employment shall beterminated by the Company for Cause or by the Executive without Good Reason (other than forRetirement) during the Employment Period, this Agreement shall terminate without furtherobligations of the Company to the Executive other than the obligation to pay to the Executive (x)her Annual Base Salary through the Date of Termination, (y) the amount of any compensationpreviously deferred by the Executive, and (z) Other Benefits, in each case only to the extent owingand theretofore unpaid.          (f) Delayed Payment Date. Notwithstanding any provision to the contrary in thisAgreement, if the Executive is deemed at the time to be a “key employee” within the meaning of thatterm under Section 416(i) of the Internal Revenue Code of 1986, as amended (the “Code”), and suchdelayed commencement is otherwise required in order to avoid a prohibited distribution underSection 409A(a)(2) of the Code, no payments or benefits to which the Executive otherwise becomesentitled under this Agreement shall be made or provided to the Executive prior to the earlier of(i) the expiration of the six (6)-month period measured from the date of the Executive’s“separation from service” (as such term is defined in Treasury Regulations issued under Section409A of the Code) or (ii) the date of the Executive’s death. Upon the expiration of the applicableCode Section 409A(a)(2) deferral period referred to in the preceding sentence, all payments andbenefits deferred pursuant to this Section 4(f) (whether they would have otherwise been payable ina single sum or in installments in the absence of such deferral) shall be paid or reimbursed to theExecutive in a lump sum, and any remaining payments and benefits due under this Agreement shall bepaid or provided in accordance with the normal payment dates specified for them herein.     5. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or limit theExecutive’s continuing or future participation in any plan, program, policy or practice provided bythe Company or any of its affiliated companies and for which the Executive may qualify (excludingany severance plan or program of the Company), nor shall anything herein limit or otherwise affectsuch rights as the Executive may have under any contract or agreement with the Company or any ofits affiliated companies. Amounts which are vested benefits or which the Executive is otherwiseentitled to receive under any plan, policy, practice or program of or any contract or agreementwith the Company or any of its affiliated companies at or subsequent to the Date of Terminationshall be payable in accordance with such plan, policy, practice or program or contract or agreementexcept as explicitly modified by this Agreement.     6. Full Settlement. Except as specifically provided in this Agreement, the Company’sobligation to make the payments provided for in this Agreement and otherwise to perform itsobligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense orother claim, right or action which the Company may have against the Executive or others. In noevent shall the Executive be obligated to seek other employment or take any other action by way ofmitigation of the amounts payable to the Executive under any of the provisions
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of this Agreement and, such amounts shall not be reduced whether or not the Executive obtainsother employment. The Executive acknowledges and agrees that subject to the payment by the Companyof the benefits provided in this Agreement to the Executive, in no event will the Company or itssubsidiaries or affiliates be liable to the Executive for damages under any claim of breach ofcontract as a result of the termination of the Executive’s employment. In the event of suchtermination, 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 andexpenses which the Executive may reasonably incur as a result of any contest by the Company, theExecutive or others of the validity or enforceability of, or liability under, any provision of thisAgreement or any guarantee of performance thereof (including as a result of any contest by theExecutive about the amount of any payment pursuant to this Agreement), plus in each case intereston any delayed payment at the applicable Federal rate provided for in Section 7872(f)(2)(A) of theCode. Notwithstanding the foregoing, if it is finally judicially determined that the Executivebrought any claims contemplated in the previous sentence in bad faith, the Executive shallreimburse the Company for such fees and expenses which are reasonably related to such bad faithclaim.     7. Covenants. (a) The Executive shall hold in a fiduciary capacity for the benefit ofthe Company all secret, non-public or confidential information, knowledge or data relating to theCompany or any of its affiliated companies, and their related businesses, which shall have beenobtained by the Executive during the Executive’s employment by the Company or any of its affiliatedcompanies (or predecessors thereto). After termination of the Executive’s employment with theCompany, the Executive shall not, without the prior written consent of the Company or as mayotherwise 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 theforegoing, the Executive will refrain from taking any action or making any statements, written ororal, which are intended to or which disparage the business, goodwill or reputation of the Companyor any of its affiliated companies, or their respective directors, officers, executives or otheremployees, or which could adversely affect the morale of employees of the Company or any of itsaffiliated companies.          (b) (i) While employed by the Company and for two years after the Date of Termination (whichmay include the Compensation Continuance Period), the Executive shall not, directly or indirectly,on behalf of the Executive or any other person, (A) solicit for employment by other than theCompany, (B) encourage to leave the employ of the Company, or (C) interfere with the Company’s orits affiliated companies’ relationship with, any person employed by the Company or its affiliatedcompanies.               (ii) While employed by the Company and for two years after the Date of Termination (which mayinclude the Compensation Continuance Period), subject to the provisions of Rule 5.6 of the NorthCarolina State Bar Code of Professional Responsibility, the Executive will not become a director,officer, employee or consultant engaging in activities similar to those performed by a seniorofficer for any business which is in competition with any line of business of the Company or itsaffiliates and in which the Executive participated in a
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direct capacity while she was employed by the Company or its affiliates (includingpredecessors thereof) at any time within the one year period preceding the Date of Termination andwhich has offices in any location in which the Executive had supervisory responsibility in thegeographic footprint of Wachovia Bank, National Association (or successors thereto, including butnot limited to, Alabama, Arizona, California, Connecticut, Delaware, Florida, Georgia, Maryland,Mississippi, Nevada, New Jersey, New York, North Carolina, Pennsylvania, South Carolina, Tennessee,Texas, Virginia, and Washington, D.C. plus any other state or states added during the EmploymentPeriod) during that one year period; provided that the parties acknowledge that the Executiveengaging in the private practice of law shall not constitute a violation of this Section 7(b)(ii).The Executive expressly acknowledges the reasonableness of such restrictions and such geographicarea. Further, during such period, the Executive will not acquire an equity or equity-likeinterest in such an organization for her own account, except that he may acquire equity interestsof not more than 5% of any such organization from time to time as an investment. Notwithstandinganything to the contrary contained herein, this Section 7(b)(ii) shall not apply if the Executiveterminates employment with the Company pursuant to Retirement or the Executive terminatesemployment with the Company for any reason following a Change in Control or the Company terminatesthe Executive’s employment for any reason following a Change in Control. Upon the Executive’srequest to the Company’s Chief Executive Officer, the Company will provide an advance opinion as towhether a proposed activity would violate the provisions of this Section 7(b)(ii).               (iii) During the Compensation Continuance Period, the Executive shall provide consultingservices to the Company at such time or times as the Company shall reasonably request, subject toappropriate notice and to reimbursement by the Company of all reasonable travel and other expensesincurred and paid by the Executive in accordance with the Company’s then-current policy for expensereimbursement. In the event the Executive shall engage in any employment permitted hereunderduring the Compensation Continuance Period for another employer or on a self-employed basis, theExecutive’s obligation to provide the consulting services hereunder shall be adjusted in accordancewith the requirements of such employment.          (c) In the event of a breach or threatened breach of this Section 7, the Executive agrees thatthe Company shall be entitled to injunctive relief in a court of appropriate jurisdiction to remedyany such breach or threatened breach and, prior to a Change in Control, the Company may terminatethe Compensation Continuance Period and the Compensation Continuance Benefits, if applicable, inits sole discretion. The Executive acknowledges that monetary damages would be inadequate andinsufficient remedy for a breach or threatened breach of Section 7. Following the occurrence of aChange in Control, in no event shall an asserted violation of the provisions of this Section 7constitute a basis for deferring or withholding any amounts otherwise payable to the Executiveunder this Agreement. If it is finally determined pursuant to the procedures set forth in thisAgreement that the Executive did not breach this Section 7, the Company shall reimburse theExecutive the amounts to which it is finally determined to be entitled.
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          (d) Any termination of the Executive’s employment or of this Agreement shall have no effect onthe continuing operation of this Section 7; provided, however, upon termination of this Agreementdue to the Company’s or the Executive’s failure to extend the term of this Agreement pursuant toSection 1(b), Section 7(b)(ii) shall no longer apply to the Executive if the Executive’s employmentshall 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 orthe Executive terminates employment with the Company for any reason following a Change in Controlor 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 orentity during the Employment Period or during the two years following the Date of Termination(which may include the Compensation Continuance Period), the Executive will provide suchprospective employer with written notice of the existence of this Agreement and the provisions ofSection 3(e) and this Section 7, with a copy of such notice delivered simultaneously to the Companyin accordance with Section 12(c). The foregoing provision shall not apply if the Companyterminates the Executive’s employment without Cause following a Change in Control, or if theExecutive terminates employment for Good Reason following a Change in Control.          (f) The Executive hereby covenants that her execution of this Agreement and performance of theobligations under this Agreement do not and will not conflict with, violate the terms of, orconstitute a default under, and will be in compliance with (i) any agreement or instrument to whichthe Executive is a party or by which the Executive is bound, or to which the Executive is subjectand (ii) any order, rule, law, regulation or other legal requirement applicable to the Executive.The Executive covenants that she is not a party to any employment agreement. In addition, shecovenants that she is not subject to any contractual post-termination employment restrictions otherthan a covenant not to solicit away Citigroup employees for a period of twelve months following hertermination of employment with Citigroup.     8. Certain Additional Payments by the Company. (a) Except as set forth below or inSection 11 of this Agreement, in the event it shall be determined that any payment or distributionby the Company to or for the benefit of the Executive following a Change in Control (whether paidor payable or distributed or distributable pursuant to the terms of the Agreement or otherwise, butdetermined 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 (suchexcise tax, together with any such interest and penalties, are hereinafter collectively referred toas 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 (includingany interest or penalties imposed with respect to such taxes), including, without limitation, anyincome taxes (and any interest and penalties imposed with respect thereto) and Excise Tax imposedupon the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal to theExcise Tax imposed upon the Payments.
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          (b) Subject to the provisions of Section 8(c), all determinations required to be made underthis Section 8, including whether and when a Gross-Up Payment is required and the amount of suchGross-Up Payment and the assumptions to be utilized in arriving at such determination, shall bemade by KPMG LLP or such other certified public accounting firm reasonably acceptable to theCompany (the “Accounting Firm”) which shall provide detailed supporting calculations both to theCompany and the Executive within 30 business days of the receipt of notice from the Company thatthere has been a Payment, or such earlier time as is requested by the Company. All fees andexpenses of the Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment, asdetermined pursuant to this Section 8, shall be paid by the Company to the Executive by the duedate for the payment of any Excise Tax, or, if earlier, 30 days after the receipt of the AccountingFirm’s determination. Any determination by the Accounting Firm shall be binding upon the Companyand the Executive. As a result of the uncertainty in the application of Section 4999 of the Codeat the time of the initial determination by the Accounting Firm hereunder, it is possible thatGross-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 eventthat the Company exhausts its remedies pursuant to Section 8(c) and the Executive thereafter isrequired to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of theUnderpayment that has occurred and any such Underpayment shall be promptly paid by the Company toor for the benefit of the Executive.          (c) The Executive shall notify the Company in writing of any claim by the Internal RevenueService 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 afterthe Executive is informed in writing of such claim and shall apprise the Company of the nature ofsuch claim and the date on which such claim is requested to be paid. The Executive shall not paysuch claim prior to the expiration of the 30-day period following the date on which it gives suchnotice to the Company (or such shorter period ending on the date that any payment of taxes withrespect to such claim is due). If the Company notifies the Executive in writing prior to theexpiration 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 suchclaim,               (ii) take such action in connection with contesting such claim as the Company shall reasonablyrequest in writing from time to time, including, without limitation, accepting legal representationwith 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               (iv) permit the Company to participate in any proceedings relating to such
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claim;provided, however, that the Company shall bear and pay directly all costs and expenses (includingadditional interest and penalties) incurred in connection with such contest and shall indemnify andhold the Executive harmless, on an after-tax basis, for any Excise Tax or income tax (includinginterest and penalties with respect thereto) imposed as a result of such representation and paymentof costs and expenses. Without limitation on the foregoing provisions of this Section 8(c), theCompany shall control all proceedings taken in connection with such contest and, at its soleoption, may pursue or forego any and all administrative appeals, proceedings, hearings andconferences with the taxing authority in respect of such claim and may, at its sole option, eitherdirect the Executive to pay the tax claimed and sue for a refund or contest the claim in anypermissible manner, and the Executive agrees to prosecute such contest to a determination beforeany administrative tribunal, in a court of initial jurisdiction and in one or more appellatecourts, as the Company shall determine; provided, however, that if the Company directs theExecutive to pay such claim and sue for a refund, the Company shall advance the amount of suchpayment to the Executive, on an interest-free basis and shall indemnify and hold the Executiveharmless, on an after-tax basis, from any Excise Tax or income tax (including interest or penaltieswith respect thereto) imposed with respect to such advance or with respect to any imputed incomewith respect to such advance; and further provided that any extension of the statute of limitationsrelating to payment of taxes for the taxable year of the Executive with respect to which suchcontested amount is claimed to be due is limited solely to such contested amount. Furthermore, theCompany’s control of the contest shall be limited to issues with respect to which a Gross-UpPayment would be payable hereunder and the Executive shall be entitled to settle or contest, as thecase 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), theExecutive 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 theCompany the amount of such refund (together with any interest paid or credited thereon after taxesapplicable thereto) upon receipt thereof. If, after the receipt by the Executive of an amountadvanced by the Company pursuant to Section 8(c), a determination is made that the Executive shallnot be entitled to any refund with respect to such claim and the Company does not notify theExecutive in writing of its intent to contest such denial or refund prior to the expiration of 30days after such determination, then such advance shall be forgiven and shall not be required to berepaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-UpPayment required to be paid.          (e) For purposes of this Section 8, any reference to the Executive shall be deemed to includethe Executive’s surviving spouse, estate and/or beneficiaries with respect to payments oradjustments provided by this Section 8.     9. Successors. (a) This Agreement is personal to the Executive and without the priorconsent of the Company shall not be assignable by the Executive otherwise than by will or
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the laws of descent and distribution.          (b) This Agreement shall inure to the benefit of and be binding upon the Company and itssuccessors 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 theCompany to assume expressly in writing and agree to perform this Agreement in the same manner andto the same extent that the Company would be required to perform it if no such succession had takenplace. As used in this Agreement, “Company” shall mean the Company as hereinbefore defined and anysuccessor to its business and/or assets as aforesaid which assumes and agrees to perform thisAgreement by operation of law, or otherwise.     10. Arbitration. Except with respect to the Company’s rights to injunctive relief formatters arising under Section 7 of this Agreement, any disputes or controversies arising under orin connection with this Agreement (including, without limitation, whether any such disputes orcontroversies have been brought in bad faith) shall be settled exclusively by arbitration inCharlotte, North Carolina in accordance with the commercial arbitration rules of the AmericanArbitration Association then in effect; provided, however, that the Company may invoke the AmericanArbitration Association’s Optional Rules for Emergency Measures of Protection. Judgment may beentered on the arbitrator’s award in any court having jurisdiction.     11. Limitation on Payments. Notwithstanding anything to the contrary contained inthis Agreement, including without limitation, Sections 4, 5, 6, 8 and 12(g), aggregate payments bythe Company to the Executive under this Agreement that constitute “Severance Benefits” within themeaning of the Wachovia Corporation Policy Regarding Shareholder Approval of Future SeveranceAgreements shall not exceed the sum of (a) the Executive’s Annual Base Salary plus (b) the highestannual bonus awarded to the Executive in any of the three full fiscal years immediately precedingthe Executive’s termination of employment, times 2.99, as determined in accordance with suchpolicy.     12. General Provisions. (a) Governing Law; Amendment; Modification. ThisAgreement shall be governed and construed in accordance with the laws of the State of NorthCarolina, without reference to principles of conflict of laws. This Agreement may not be modifiedor amended except by an instrument in writing signed by the parties hereto.          (b) Severability. If, for any reason, any provision of this Agreement is heldinvalid, such invalidity shall not affect any other provision of this Agreement not held soinvalid, and each such other provision shall to the full extent consistent with law continue infull force and effect. If any provision of this Agreement shall be held invalid in part, suchinvalidity shall in no way affect the rest of such provision not held so invalid and the rest ofsuch provision, together with all other provisions of this Agreement, shall to the full extentconsistent with law continue in full force and effect.
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          (c) Notices. All notices under this Agreement shall be in writing and shall be deemedeffective 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 orcertified mail — addressed, in the case of the Executive, to such Executive at her residentialaddress, and in the case of the 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 orfrom time to time to the other party. In lieu of notice by deposit in the U.S. mail, a party maygive notice by telegram or telex.          (d) Tax Withholding. The Company may withhold from any amounts payable under thisAgreement such Federal, state, local or foreign taxes as shall be required to be withheld pursuantto any applicable law or regulation.          (e) Strict Compliance. The Executive’s or the Company’s failure to insist upon strictcompliance with any provision of this Agreement or the failure to assert any right the Executive orthe Company may have hereunder, including, without limitation, the right of the Executive toterminate employment for Good Reason pursuant to Section 3(c) of this Agreement, shall not bedeemed 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 ofthis Agreement shall not operate or be construed as a waiver of any subsequent violation of anysuch provision.          (f) Entire Understanding. From and after the Effective Date this Agreement (includingAppendix A) shall supersede any other agreement between the parties with respect to the subjectmatter hereof.          (g) Conflicts with Plans. To the extent any plan, policy, practice or program of orcontract or agreement with the Company attempts to cap, restrict, limit or reduce payments to theExecutive hereunder, such caps, restrictions, limitations or reductions are expressly modified topermit the payments contemplated hereby and the parties intend that the terms of this Agreementshall be construed as having precedence over any such caps, restrictions, limitations orreductions.          (h) Release and Waiver of Claims. In consideration of any Compensation ContinuanceBenefits the Company provides to the Executive under this Agreement, the Executive upon terminationof employment with the Company shall execute a separate general release and waiver of claims infavor of the Company, its affiliates and personnel in a form acceptable to the Company. TheExecutive shall not be eligible for any Compensation Continuance Benefits until the Executive hasexecuted such release and waiver of claims.          (i) Creditor Status. No benefit or promise hereunder shall be secured by any specificassets of the Company. The Executive shall have only the rights of an unsecured general creditorof the Company in seeking satisfaction of such benefits or promises.
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          (j) No Assignment of Benefits. No right, benefit or interest hereunder shall besubject to assignment, encumbrance, charge, pledge, hypothecation or set off in respect of anyclaim, debt or obligation, or similar process.
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     IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its officersthereunto duly authorized, and the Executive has signed this Agreement under seal, all as of thedate and year first above written.   WACHOVIA CORPORATION ATTEST:                    [SEAL]     By: /s/ G. Kennedy Thompson /s/ Mark C. TreanorName: G. Kennedy Thompson Mark C. TreanorTitle: Chief Executive Officer      Secretary   /s/ Jane C. Sherburne