**Exhibit 10.VV**
**EXECUTIVE SEVERANCE AGREEMENT**
          **AGREEMENT**by and between Mercantile Bankshares Corporation (“Mercshares”),Mercantile-Safe Deposit & Trust Company (“Merc-Safe”) (collectively the“Company”), and John J. Pileggi (the “Executive”), effective on the 1st day ofFebruary, 2002.
          **WHEREAS:**The Executive has agreed to serve as Executive Vice President,Wealth Management Institutional Sales, of Merc-Safe; and
          **WHEREAS:**The Board of Directors of Mercshares (the “Board”), acting uponthe recommendation of its Compensation Committee, has determined that it is inthe best interests of Mercshares and its shareholders to assure that theCompany will have the continued dedication of the Executive as a key executiveof Merc-Safe, notwithstanding the possibility, threat or occurrence of a Changeof Control (as defined below) of Mercshares. The Board believes it isnecessary to diminish the inevitable distraction of the Executive by virtue ofthe personal uncertainties and risks created by a pending or threatened Changeof Control, to encourage the Executive’s full attention and dedication to theCompany currently and in the event of any threatened or pending Change ofControl (including determinations as to the best interests of Mercshares andits shareholders should the possibility of a Change of Control of Mercsharesarise), and to provide the Executive with compensation arrangements upon aChange of Control which provide the Executive with individual financialsecurity and which are competitive with those of other corporations and, inorder to accomplish these objectives, the Board has caused Mercshares to enterinto this Agreement. The Board of Directors of Merc-Safe has made similardeterminations and has caused Merc-Safe to enter into this Agreement.
**NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS**:
**1.** **Certain Definitions.**
               (a) “Cause” shall mean (i) an act or acts of personal dishonesty taken bythe Executive and intended to result in substantial personal enrichment of theExecutive at the
 

 

expense of the Company, (ii) repeated material violations by the Executive ofhis duties to the Company (as in effect immediately prior to the EffectiveDate) which are demonstrably willful and deliberate on the Executive’s part andwhich are not remedied in a reasonable period of time after receipt of writtennotice from the Company, or (iii) the conviction of the Executive of a felony.
               (b) “Change of Control” shall mean:
                    (i) The acquisition (other than from Mercshares) by any person, entity or“group”, within the meaning of Section 13(d)(3) or 14(d)(2) of the SecuritiesExchange Act of 1934 as in effect on the date hereof (the “Exchange Act”),(excluding, for this purpose, Mercshares or its subsidiaries, and excluding anyacquisition of securities by any employee benefit plan of Mercshares or itssubsidiaries which shall have occurred prior to any other event constituting aChange of Control hereunder) of beneficial ownership (within the meaning ofRule 13d-3 promulgated under the Exchange Act as in effect on the date hereof)of 20% or more of either the then outstanding shares of common stock ofMercshares or the combined voting power of Mercshares’ then outstanding votingsecurities entitled to vote generally in the election of directors (such commonstock or then outstanding voting securities being referred to herein as “VotingSecurities”), calculated on the date of the transaction causing the foregoing20% test to be met, without regard to any limitation upon the voting rights ofany acquiring person under Maryland statutes and without regard to thepotential exercisability of rights, not exercised on such date, pursuant to anyShareholder Protection Rights Agreement of Mercshares then in effect; or
                    (ii) Individuals who, as of the date hereof, constitute the Board (as ofthe date hereof the “Incumbent Board”) cease for any reason to constitute atleast 75% of the members of the Board, provided that any person becoming adirector subsequent to the date hereof whose election, or nomination forelection by the shareholders of Mercshares, is approved by a vote of at least amajority of the directors then comprising the Incumbent Board (other than anelection or nomination of an individual whose initial assumption of office isin connection
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with an actual or threatened election contest relating to the election of theDirectors of Mercshares or other actual or threatened solicitation of proxiesby or on behalf of persons other than the Board) shall be, for purposes of thisAgreement, considered as though such person were a member of the IncumbentBoard; or
                    (iii) Approval by the stockholders of Mercshares of (A) a reorganization,merger, consolidation or statutory share exchange, in each case, with respectto which persons who are the holders of the outstanding Voting Securities ofMercshares immediately prior to such reorganization, merger, consolidation orstatutory share exchange do not, immediately thereafter, own more than 75% ofthe combined voting power entitled to vote generally in the election ofdirectors of the entity resulting from such reorganization, merger,consolidation or statutory share exchange, or (B) a liquidation or dissolutionof Mercshares or the sale of all or substantially all of the assets ofMercshares.
               (c) “Change of Control Period” shall mean the period commencing on thedate hereof and ending on the third anniversary of such date; provided,however, that commencing on the date one year after the date hereof, and oneach annual anniversary of such date (such date and each annual anniversarythereof hereinafter referred to as the “Renewal Date”), the Change of ControlPeriod shall be extended automatically so as to terminate on the thirdanniversary of such Renewal Date, unless at least 60 days prior to the RenewalDate the Company shall give notice that the Change of Control Period shall notbe so extended, but no such notice shall be given by the Company which wouldcause the Change of Control Period to expire during the term of any employmentagreement between the Company and the Executive.
               (d) “Date of Termination” shall mean for purposes of this Agreement thedate of receipt of the Notice of Termination or any later date specifiedtherein, as the case may be; provided, however, that if the Executive’semployment is terminated by the Company other than for Cause or Disability, theDate of Termination shall be the date on which the Company notifies theExecutive of such termination.
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               (e) “Effective Date” shall mean the first date during the “Change ofControl Period” on which a Change of Control occurs provided that the Executiveis employed by the Company on such date. Anything in this Agreement to thecontrary notwithstanding, if the Executive’s employment with the Company hasterminated for any reason prior to the first date on which a Change of Controloccurs, this Agreement shall be null and void as of the date of suchtermination of employment; provided, however, that if it is reasonablydemonstrated that such termination (i) was at the request of a third party whohas taken steps reasonably calculated to effect a Change of Control, or (ii)otherwise arose in connection with or anticipation of a Change of Control, thenfor all purposes of this Agreement the “Effective Date” shall mean the dateimmediately prior to the date of such termination.
               (f) “Good Reason” shall mean any of the following actions which iseffected by the Company without the consent of the Executive:
                    (i) The assignment to the Executive of any duties inconsistent in anyrespect with the Executive’s position immediately prior to the Effective Date(including status, offices, titles and reporting requirements, authority,duties or responsibilities) or any other action by the Company that results ina diminution in such position or in the nature and quality of Executive’soffice facilities, secretarial and support assistance, excluding for thispurpose an isolated, insubstantial and inadvertent action that is not taken inbad faith and that is remedied by the Company promptly after receipt of noticethereof given by the Executive;
                    (ii) Any reduction in Executive’s compensation or benefits from the levelsof compensation and benefits in effect immediately prior to the Effective Date(whether or not such reduction would be permitted under any employmentagreement), including but not limited to salary, bonuses (under an annualincentive compensation plan or otherwise), expense allowance, vacation time orother vacation benefits, excusal from performance of duties under Companypolicies or agreements (by reason of illness, disability or other factors),continuance of all Executive benefits and benefit plans and preservation ofExecutive’s levels of participation and benefits thereunder (including anyagreement between the Company and
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Executive, incentive compensation plan, deferred compensation arrangement,pension or other retirement or profit-sharing plan, thrift and medicalreimbursement plan, health insurance or other health or disability plan, lifeinsurance plan, omnibus stock plan, stock option plan, stock purchase plan,stock appreciation right plan, or any other Executive benefit plan or provisionfor fringe benefits in effect immediately prior to the Effective Date), otherthan an isolated, insubstantial or inadvertent failure to provide compensationor benefits that is remedied by the Company promptly after receipt of noticethereof given by the Executive;
                    (iii) The Company’s requiring the Executive to be based at any office orlocation other than the Company’s principal offices within the City ofBaltimore, except for travel reasonably required in the performance of theExecutive’s responsibilities;
                    (iv) Any purported termination by the Company of the Executive’semployment otherwise than as expressly contemplated hereunder in the case ofCause, or death pursuant to Section 2(a) of this Agreement, or Disabilitypursuant to Section 2(b) of this Agreement; or
                    (v) Any failure by the Company to comply with and satisfy Section 6(c) ofthis Agreement.
          For purposes of this Agreement, any good faith determination of “GoodReason” made by the Executive shall be conclusive.
               (g) “Notice of Termination” shall mean a written notice (from theExecutive to the Company, or from the Company to the Executive, as the case maybe) that (i) indicates the specific basis for termination of employment, (ii)sets forth in reasonable detail the facts and circumstances claimed to providethe basis for termination of the Executive’s employment, and (iii) if the Dateof Termination is other than the date of receipt of such notice, specifies thetermination date (which date shall be not more than 15 days after the giving ofsuch notice). The failure by the Executive to set forth in a Notice ofTermination any fact or circumstance that contributes to a showing of GoodReason shall not waive any right of the
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Executive hereunder or preclude the Executive from asserting such fact orcircumstance in enforcing his rights hereunder.
          **2. Obligations of the Company upon Termination.**
               (a) Death. If the Executive’s employment is terminated by reason of theExecutive’s death prior to the delivery (i) by the Executive to the Company ofa Notice of Termination for Good Reason or (ii) by the Company to the Executiveof any notification of termination of the Executive’s employment other than forCause or Disability, then this Agreement shall terminate without furtherobligations to the Executive’s legal representatives under this Agreement.
               (b) Disability. If the Executive’s employment is terminated by reason ofthe Executive’s Disability, this Agreement shall terminate without furtherobligations to the Executive under this Agreement. For purposes of thisAgreement, “Disability” shall mean termination of the Executive’s employment onaccount of disability as determined under any governing agreement between theExecutive and the Company or, if there is no such agreement or such agreementdoes not provide a definition of “disability,” then “Disability” shall meandisability as defined under the Company’s long-term disability insurance plan.
               (c) Cause; Other Than for Good Reason. If the Executive’s employmentshall be properly terminated for Cause or if the Executive terminatesemployment other than for Good Reason, this Agreement shall terminate withoutfurther obligations to the Executive under this Agreement.
               (d) Good Reason; Other Than for Cause or Disability. If, at any timeduring the period beginning with the Effective Date and ending on the thirdanniversary of such date, the Company shall terminate the Executive’semployment other than for Cause, Disability or death, or if the Executive shallterminate his employment with the Company for Good Reason, the Company shallpay to the Executive in a lump sum in cash within 30 days after the Date ofTermination a severance payment, the value of which is three times theExecutive’s base amount of compensation (as defined in Section 280G(b)(3) ofthe Internal Revenue Code of 1986 (the
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“Code”)) including, but not limited to, such items as salary, bonus, fringebenefits, and deferred compensation, less one dollar ($1.00), subject, however,to Section 3(b) of this agreement.
          **3. Non-Exclusivity of Rights.**
               (a) Nothing in this Agreement shall prevent or limit the Executive’scontinuing or future participation in any benefit, bonus, incentive or otherplans, programs, policies or practices, including those of the types identifiedin Section 1(f)(ii) hereof, provided by the Company or any subsidiaries ofMercshares and for which the Executive may qualify, nor shall anything hereinlimit or otherwise affect such rights as the Executive may have under anyemployment agreement, stock option or other agreements with the Company or anysubsidiaries of Mercshares. Amounts which are vested benefits or which theExecutive is otherwise entitled to receive under any plan, policy, practice orprogram of the Company or any subsidiary of Mercshares at or subsequent to theDate of Termination shall be payable in accordance with such plan, policy,practice or program.
               (b) If any benefit in the form of continued or additional salary or bonus,or both, following termination of employment, is provided for the Executiveunder any employment agreement with the Company (“Alternate Base Benefit”), theaggregate amount thereof shall be computed upon the Date of Termination, andthe cash payment to the Executive under Section 2(d) of this Agreement shall bethe greater of the Alternate Base Benefit or the amount set forth in saidSection 2(d), and such payment shall satisfy the Company’s obligation withrespect to the Alternate Base Benefit.
          **4. Full Settlement.**
               (a) The Company’s obligation to make the payments provided for in thisAgreement and otherwise to perform its obligations hereunder shall not beaffected by any set-off, counterclaim, recoupment, defense or other claim,right or action that the Company may have against the Executive or others. Inno event shall the Executive be obligated to seek other employment or take anyother action by way of mitigation of the amounts payable to the Executive underany of the provisions of this Agreement. The Company agrees to pay, to the
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full extent permitted by law, all legal fees and expenses that theExecutive may reasonably incur as a result of any contest (regardless of theoutcome thereof) by the Company or others of the validity or enforceability of,or liability under, any provision of this Agreement or any guarantee ofperformance thereof (including as a result of any contest by the Executiveabout the amount of any payment pursuant to Section 5 of this Agreement), plusin each case, interest at the applicable Federal rate provided for in Section7872(f)(2) of the Code.
               (b) If there shall be any dispute between the Company and the Executive(i) in the event of any termination of the Executive’s employment by theCompany, whether such termination was for Cause, or (ii) in the event of anytermination of employment by the Executive, whether Good Reason existed, then,unless and until there is a final, nonappealable judgment by a court ofcompetent jurisdiction declaring that such termination was for Cause or thatthe determination by the Executive of the existence of Good Reason was not madein good faith, the Company shall pay all amounts, and provide all benefits tothe Executive that the Company would be required to pay or provide pursuant tothis Agreement as though such termination were by the Company without Cause, orby the Executive with Good Reason; provided, however, that the Company shallnot be required to pay any disputed amount pursuant to this paragraph exceptupon receipt of an undertaking by or on behalf of the Executive to repay allsuch amounts to which the Executive is ultimately adjudged by such court not tobe entitled.
          **5. Certain Tax Matters.**
               (a) Anything in this Agreement to the contrary notwithstanding, in theevent it shall be determined that any payment or distribution by the Company toor for the benefit of the Executive (whether paid or payable or distributed ordistributable pursuant to the terms of this Agreement or otherwise, butdetermined without regard to any additional payments required under thisSection 5) (a“Payment”) would be subject to the excise tax imposed by Section4999 of the Code or any interest or penalties are incurred by the Executivewith respect to such excise tax (such excise tax, together with any suchinterest and penalties, are hereinafter collectively referred to as the “ExciseTax”), payment (a “Gross-Up Payment”) shall be made to
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the Executive in an amount such that after payment by the Executive of alltaxes (including any interest or penalties imposed with respect to such taxes),including, without limitation, any income taxes (and any interest and penaltiesimposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment,the Executive retains an amount of the Gross-Up Payment equal to the Excise Taximposed upon the Payments.
               (b) Subject to the provisions of Section 5(c), all determinations requiredto be made under this Section 5 including whether and when a Gross-Up Paymentis required and the amount of such Gross-Up Payment and the assumptions to beutilized in arriving at such determination, shall be made byPricewaterhouseCoopers, LLP, or such other firm as shall be serving asindependent public accountants for Mercshares immediately prior to theEffective Date (the “Accounting Firm”) which shall provide detailed supportingcalculations both to the Company and the Executive within 15 business days ofthe receipt of notice from the Executive that there has been a Payment, or suchearlier time as is requested by the Company. In the event that the AccountingFirm is serving as accountant or auditor for the individual, entity or groupeffecting the Change of Control, the Executive may appoint another nationallyrecognized accounting firm to make the determinations required hereunder (whichaccounting firm shall then be referred to as the Accounting Firm hereunder).All fees and expenses of the Accounting Firm shall be borne solely by theCompany. Any Gross-Up Payment, as determined pursuant to this Section 5, shallbe paid by the Company to the Executive within five days of the receipt of theAccounting Firm’s determination. If the Accounting Firm determines that noExcise Tax is payable by the Executive, it shall furnish the Executive with awritten opinion that failure to report the Excise Tax on the Executive’sapplicable federal income tax return would not result in the imposition of anegligence or similar penalty. Any determination by the Accounting Firm shallbe binding upon the Company and the Executive. As a result of the uncertaintyin the application of Section 4999 of the Code at the time of the initialdetermination by the Accounting Firm hereunder, it is possible that Gross-UpPayments which will not have been made by the Company should have been made(“Underpayment”), consistent with the calculations required to
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be made hereunder. In the event that the Company exhausts its remediespursuant to Section 5(c) and the Executive thereafter is required to make apayment of any Excise Tax, the Accounting Firm shall determine the amount ofthe Underpayment that has occurred and any such Underpayment shall be promptlypaid by the Company to or for the benefit of the Executive.
               (c) The Executive shall notify the Company in writing of any claim by theInternal Revenue Service that, if successful, would require the payment by theCompany of the Gross-Up Payment. Such notification shall be given as soon aspracticable but no later than ten business days after the Executive is informedin writing of such claim and shall apprise the Company of the nature of suchclaim and the date on which such claim is requested to be paid. The Executiveshall not pay such claim prior to the expiration of the 30-day period followingthe date on which it gives such notice to the Company (or such shorter periodending on the date that any payment of taxes with respect to such claim isdue). If the Company notifies the Executive in writing prior to the expirationof such period that it desires to contest such claim, the Executive shall:
                    (i) give the Company any information reasonably requested by the Companyrelating to such claim,
                    (ii) take such action in connection with contesting such claim as theCompany shall reasonably request in writing from time to time, including,without limitation, accepting legal representation with respect to such claimby an attorney reasonably selected by the Company,
                    (iii) cooperate with the Company in good faith in order effectively tocontest such claim, and
                    (iv) permit the Company to participate in any proceedings relating to suchclaim;
provided, however, that the Company shall bear and pay directly all costs andexpenses (including additional interest and penalties) incurred in connectionwith such contest and shall
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indemnify and hold the Executive harmless, on an after-tax basis, for anyExcise Tax or income tax (including interest and penalties with respectthereto) imposed as a result of such representation and payment of costs andexpenses. Without limitation on the foregoing provisions of this Section 5(c),the Company shall control all proceedings taken in connection with such contestand, at its sole option, may pursue or forgo any and all administrativeappeals, proceedings, hearings and conferences with the taxing authority inrespect of such claim and may, at its sole option, either direct the Executiveto 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 adetermination before any administrative tribunal, in a court of initialjurisdiction and in one or more appellate courts, as the Company shalldetermine; provided, however, that if the Company directs the Executive to paysuch 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 andhold the Exeuctive harmless, on an after-tax basis, from any Excise Tax orincome tax (including interest or penalties with respect thereto) imposed withrespect to such advance or with respect to any imputed income with respect tosuch advance; and further provided that any extension of the statute oflimitations relating to payment of taxes for the taxable year of the Executivewith respect to which such contested amount is claimed to be due is limitedsolely to such contested amount. Furthermore, the Company’s control of thecontest shall be limited to issues with respect to which a Gross-Up Paymentwould be payable hereunder and the Executive shall be entitled to settle orcontest, as the case may be, any other issue raised by the Internal RevenueService or any other taxing authority.
               (d) If, after the receipt by the Executive of an amount advanced by theCompany pursuant to Section 5(c), the Executive becomes entitled to receive anyrefund with respect to such claim, the Executive shall (subject to theCompany’s complying with the requirements of Section 5(c)) promptly pay to theCompany the amount of such refund (together with any interest paid or creditedthereon after taxes applicable thereto). If, after the receipt by theExecutive of an amount advanced by the Company pursuant to Section 5(c), adetermination
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is made that the Executive shall not be entitled to any refund with respect tosuch claim and the Company does not notify the Executive in writing of itsintent to contest such denial of refund prior to the expiration of 30 daysafter such determination, then such advance shall be forgiven and shall not berequired to be repaid and the amount of such advance shall offset, to theextent thereof, the amount of Gross-Up Payment required to be paid.
          **6. Successors.**
               (a) This Agreement is personal to the Executive and without the priorwritten consent of the Company shall not be assignable by the Executiveotherwise than by will or the laws of descent and distribution. This Agreementshall inure to the benefit of and be enforceable by the Executive’s legalrepresentatives.
               (b) This Agreement shall inure to the benefit of and be binding upon theCompany and its successors and assigns.
               (c) The Company shall require any successor (whether direct or indirect,by purchase, merger, consolidation, share exchange or otherwise) to all orsubstantially all of the business and/or assets of the Company to assumeexpressly and agree to perform this Agreement in the same manner and to thesame extent that the Company would be required to perform it if no suchsuccession had taken place. As used in this Agreement, “Company” shall meanthe Company as hereinbefore defined and any successor to its business and/orassets as aforesaid which assumes and agrees to perform this Agreement byoperation of law or otherwise.
          **7. Miscellaneous.**
               (a) This Agreement shall be governed by and construed in accordance withthe laws of the State of Maryland, without reference to principles of conflictof laws. The captions of this Agreement are not part of the provisions hereofand shall have no force or effect. This Agreement may not be amended ormodified otherwise than by a written agreement executed by the parties heretoor their respective successors and legal representatives.
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               (b) All notices and other communications hereunder shall be in writing andshall be given by hand delivery to the other party or by registered orcertified mail, return receipt requested, postage prepaid, addressed asfollows:     If to the Executive:     John J. Pileggi  Mercantile Bankshares Corporation  2 Hopkins Plaza  Baltimore, Maryland 21201     If to the Company:     Mercantile Bankshares Corporation  2 Hopkins Plaza  Baltimore, Maryland 21201  Attention: Corporate Secretary
or to such other address as either party shall have furnished to the other inwriting in accordance herewith. Notice and communications shall be effectivewhen actually received by the addressee.
               (c) The invalidity or unenforceability of any provision of this Agreementshall not affect the validity or enforceability of any other provision of thisAgreement.
               (d) Any act, omission, right, obligation or activity of Mercshares orMerc-Safe shall be deemed an act, omission, right, obligation or activity ofthe Company hereunder, and each of Mercshares and Merc-Safe is jointly andseverally liable under this Agreement. The unenforceability or invalidity ofthis Agreement with respect to either such party shall not affect theenforceability or validity of this Agreement with respect to the other suchparty.
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               (e) The Company may withhold from any amounts payable under this Agreementsuch Federal, state or local taxes as shall be required to be withheld pursuantto any applicable law or regulation.
               (f) The Executive’s failure to insist upon strict compliance with anyprovision hereof shall not be deemed to be a waiver of such provision or anyother provision thereof.
               (g) This Agreement contains the entire understanding of the Company andthe Executive with respect to the subject matter hereof, preserving, however,the rights and obligations of any party under any employment agreement or otheragreements or benefit plans. Notwithstanding any contrary provision of anyother agreement, following any termination of Executive occurring after theEffective Date, whether for Cause, Good Reason or any other reason, Executiveshall be free to engage in any activity competitive with any activity of theCompany or any affiliate of the Company, through employment by or ownership ofsecurities of any other entity or otherwise. Upon and following the EffectiveDate, the definition of “Cause” in Section 1(a) of this Agreement shallsupercede and replace any definition of “cause” or “good cause” for terminationof employment in any employment agreement between the Executive and theCompany.
          **IN WITNESS WHEREOF,**the Executive has hereunto set his hand and, pursuantto the authorization from their respective Board of Directors, each ofMercshares and Merc-Safe has caused these presents to be executed in its nameand on its behalf, all as of the day and year first above written.
**WITNESS:**   /s/ /s/ John J. Pileggi  **John J. Pileggi**
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     **ATTEST:** **MERCANTILE BANKSHARES** **CORPORATION**        /s/ Alan D. Yarbro**ALAN D. YARBRO** By:   /s/ Edward J. Kelly, III**EDWARD J. KELLY, III**Secretary  President and Chief  Executive Officer     **ATTEST:** **MERCANTILE-SAFE DEPOSIT** **& TRUST COMPANY**        /s/ Alan D. Yarbro By:   /s/ Edward J. Kelly, III**ALAN D. YARBRO**  **EDWARD J. KELLY, III**Secretary  Chairman and Chief Executive Officer
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