**Exhibit10.UU**

 

**MERCANTILEBANKSHARES CORPORATION**

 

**2004RESTRICTED STOCK PROGRAM**

 

**Article 1:  Introduction**

 

On March 3 2004, theCompensation Committee (the “**Committee**”) ofthe Board of Directors of Mercantile Bankshares Corporation (“**MBC**”), pursuant to Section 3.2 of the Mercantile BanksharesCorporation 1999 Omnibus Stock Plan (the “**Stock Plan**”),approved and adopted this Mercantile Bankshares Corporation 2004 RestrictedStock Program (“**Incentive Program**”). Awards ofRestricted Stock hereunder are conditioned upon and subject to the prior (a)approval by MBC stockholders of the Stock Plan, as amended, and (b)certification in writing by the Committee that the performance goals and otherrequirements set forth herein have been met. The awards of Restricted Stock hereunder are intended to qualify asqualified performance-based compensation under Section 162(m) of the InternalRevenue Code of 1986, as amended **(“Code”**) andthe Treasury Regulations thereunder.  TheIncentive Program shall be interpreted and administered in compliance with suchprovisions.  Capitalized terms under thisIncentive Program shall have the same meaning as under the Stock Plan unlessdefined differently herein.

 

**Article 2.  Administration.**

 

The Incentive Programshall be administered by the Committee as provided in Article 3 of the StockPlan.  The Committee consists solely oftwo (2) or more “outside directors” within the meaning of Code Section 162(m)and “nonemployee directors” as defined for purposes of Rule 16b-3 of theSecurities Exchange Act of 1934 (the “**Exchange Act**”).

 

**Article 3.  Participants**

 

Participants under theIncentive Program shall mean those executives of MBC or its Affiliates listedon Appendix A hereto.  Participation inthe Incentive Plan neither guarantees nor precludes participation in otherincentive and/or equity compensation plans of MBC or its Affiliates for 2004 orother years.

 

**Article 4.  Performance Period.**

 

(a)                                  **Definition: **Theperiod over which the performance goals set forth below must be met is the periodfrom January 1, 2004 to December 31, 2005 (the “**PerformancePeriod**”).

 

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

 

(i)                                     Theacquisition by any person, entity or “group”, within the meaning of Section13(d)(3) or 14(d)(2) of the Exchange Act (excluding for this purpose, MBC orits Affiliates, and excluding any acquisition of securities by any employeebenefit plan of MBC or its Affiliates), of beneficial ownership (within themeaning of Rule 13d-3 promulgated under the Exchange Act) of fifty percent(50%) or more of either the then outstanding shares of common stock of MBC orthe combined voting power of MBC’s then outstanding voting securities entitledto vote generally in the election of directors (such common stock or thenoutstanding voting securities being referred to herein as “**VotingSecurities**”), calculated on the date of the transaction causing theforegoing fifty percent (50%) test to be met, without regard to any limitationupon the voting rights of any acquiring person under Maryland statutes andwithout regard to the potential exercisability of rights, not exercised on suchdate, pursuant to any Stockholder Protection Rights Agreement of MBC then ineffect; or

 

(ii)                                  Approvalby the stockholders of MBC of (A) a reorganization, merger, consolidation orstatutory share exchange, in each case, with respect to which persons who arethe holders of the outstanding Voting Securities of MBC immediately prior tosuch reorganization, merger, consolidation or statutory share exchange do not,immediately thereafter, own more than fifty percent (50%) of the combinedvoting power entitled to vote generally in the election of directors of the entityresulting from such reorganization, merger, consolidation or statutory shareexchange, or (B) a liquidation or dissolution of MBC or the sale of all orsubstantially all of the assets of MBC to an entity other than an Affiliate.

 

**Article 5.  Incentive Awards.**

 

(a)                                  **Amount.**  The awardpayable to each Participant hereunder, subject to the conditions herein, shallbe shares of Restricted Stock in an amount whose Value (as defined below), asof the last day of the Performance Period, equals one hundred percent (100%) ofthe Participant’s annual base salary (not total base salary during thePerformance Period) as of the date of adoption and approval of this IncentiveProgram by the Committee.  “**Value**” of the Restricted Stock shall mean the Fair MarketValue as defined in the Stock Plan or, in the case of a Sale of MBC, theaverage weighted closing price of the shares for the thirty- (30) day tradingperiod immediately preceding the closing date of the transaction.

 

(b)                                 **Issuance of Shares**. Such shares of Restricted Stock shall be awarded and issued withinninety (90) days of the end of the Performance Period, provided the Stock Plan,as amended, is approved by MBC stockholders and the Committee certifies inwriting after the end of the Performance Period and prior to such award andissuance of

 

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the Restricted Stock thatthe performance goals and other requirements herein have been met.  No fractional shares shall be issued underthis Incentive Program.

 

(c)                                  **Adjustments. **TheCommittee may not increase the amount of any award hereunder that would beissued and payable upon attainment of the performance goals herein but maywithin its discretion reduce or eliminate any such award.

 

**Article 6.  Performance and Employment Requirements**

 

The following must becertified in writing as met by the Committee as of the end of the PerformancePeriod before the award and issuance of Restricted Stock hereunder to aParticipant:

 

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

 

(i)                                     “**Total Stockholder Return**” means dividends paid on MBC CommonStock based on each record date during the Performance Period plus appreciationof MBC common stock as measured by the excess, if any, of the Ending StockPrice over the Beginning Stock Price.  Inthe event of stock splits or other recapitalizations involving MBC (exceptingstock repurchases or issuances of new stock for acquisitions), the Committeeshall make such adjustment as it deems appropriate to maintain comparabilitybetween the Beginning Stock Price and Ending Stock Price.

 

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

 

(iii)                               “**Ending Stock Price**” means:

 

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

 

(B) ifthe Performance Period ends on the date of the Sale of MBC, the averageweighted closing price of MBC common stock for the thirty (30)-day tradingperiod immediately preceding the Closing date of the transaction.

 

(b)                                 **Continued Employment**: The Participant must remain in the continued employment of MBC or itsAffiliates from the beginning of the Performance Period through the last day ofthe Performance Period. Notwithstanding the foregoing, if a Participant doesnot remain in continued employment during the Performance period

 

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solely because of deathor total disability (as defined in MBC’s long-term disability plan), theParticipant (or his estate, in the event of his death) shall nevertheless beentitled to receive an award hereunder at the end of the Performance period onthe same basis as if he had remained in continued employment during thePerformance Period, so long as the performance goal described in Article 6 hasbeen attained.

 

**Article7.  Holding Period.**

 

Restricted Stock issuedunder this Incentive Program may not be sold or otherwise disposed of by theParticipant for one year from the issuance of the shares. During therestriction period, cash dividends will not be paid to the Participant, butwill be accumulated as credits, to be converted to and paid as additionalshares at the end of the restriction period. The Committee may impose suchconditions as it determines in order to enforce such restriction includingwithout limitation providing for the holding of the shares of Restricted Stockin escrow or providing for an appropriate legend on such share certificates.

 

**Article 8.  Tax Withholding**

 

MBC or any Affiliateshall have the right to deduct from any compensation or any other payment ofany kind (including withholding the issuance of shares of MBC common stock) duethe Participant the amount of any federal, state or local taxes required by lawto be withheld as a result of the award, issuance or vesting of the Restricted Stockhereunder.  In lieu of such deduction,MBC may require the Participant to make a cash payment to MBC or an Affiliateequal to the amount required to be withheld. If the Participant does not make such payment when requested, MBC mayrefuse to issue any MBC common stock certificate hereunder until arrangementssatisfactory to the Committee for such payment have been made.

 

**Article 9.  Miscellaneous**

 

(a)                                  **Employment**.  Nothingin the Incentive Program shall confer upon any Participant the right to remain inthe employ of MBC or its Affiliates or shall interfere or restrict in any waythe rights of the Participant’s employer to discharge or change the terms ofemployment of any Participant at any time for any reason whatsoever, with orwithout cause.

 

(b)                                 **Other Plans**.  Theadoption of the Incentive Program shall not affect any other equity or othercompensation or incentive plan in effect for MBC or any Affiliate, and theIncentive Program shall not preclude the Committee or MBC’s Board of Directorsfrom establishing any other forms of incentive compensation.

 

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**APPENDIXA**

 

LIST OFPARTICIPANTS UNDER

THE MERCANTILEBANKSHARES CORPORATION2004 RESTRICTED STOCK PROGRAM.

 

1.                                       EdwardJ. Kelly, III

2.                                       AlexanderMason

3.                                       MichaelReid

4.                                       PeterFloeckher

5.                                       JohnUnger

6.                                       TerryTroupe

7.                                       MichaelPaese

 

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