Document:

Exhibit 10.1

 

AMENDED
AND RESTATED EXECUTIVE

EMPLOYMENT AGREEMENT

 

THIS
EXECUTIVE EMPLOYMENT AGREEMENT, effective as of the 14th
day of June, 2005, by and between Mercantile Bankshares Corporation (“Mercshares”)
and Mercantile-Safe Deposit and Trust Company (“Merc-Safe”), both corporations
of the State of Maryland, Two Hopkins Plaza, Baltimore, Maryland 21201,
hereinafter collectively referred to as “Employer,” and Jay M. Wilson,
hereinafter referred to as “Executive.”

 

WHEREAS, Employer is
engaged in the banking, trust and investment management business, and Executive
has special skills and talents in that business;

 

WHEREAS, Employer has
employed Executive on the terms provided herein, and Executive, in turn, has
accepted full-time employment with Employer according to such terms; and

 

WHEREAS, this Amended and
Restated Executive Employment Agreement shall supersede the   Executive Employment Agreement dated as of January 6,
2005.

 

NOW, THEREFORE, in
consideration of the mutual covenants hereinafter contained, the parties do
hereby agree as follows:

 

1.                                       Offices of Executive.  Executive will serve as Vice Chairman of
Mercshares, and Chairman and CEO of Investment and Wealth Management of
Mercshares and Merc-Safe.  This office
may be changed during the term of this Agreement by mutual consent of the
parties.  Mercshares, as the sole
stockholder of Merc-Safe, agrees to elect Executive as a Director of Merc-Safe
and will continue him as a Director of Merc-Safe throughout the period of his
employment under this Agreement. 
Mercshares will present Executive to the Nominating and Corporate
Governance Committee of its Board as a potential candidate for Board
membership.

 

2.                                       Term.  The term of this Agreement shall begin on January 1,
2005, and shall terminate on January 1, 2008; provided that the
termination date shall be extended (but not beyond Executive’s retirement date)
for one additional year on January 1, 2008 and on January 1 of each
succeeding year, unless either Employer or Executive on or before the immediately
preceding September 30 declines such an extension by written notice to the
other party.

 

3.                                       Compensation.  Executive shall be paid a base annual salary
as determined by the Board of Directors of Mercshares from time to time, at a
rate of not

 

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less than $750,000 per calendar year, subject to withholding for
appropriate items.  In no year shall his
base salary be less than in the preceding year. 
Executive shall be eligible for a bonus of up to 100% of his base
salary. Such bonus shall be determined in part under the Employer’s Annual
Incentive Compensation Plan (“AICP”) and in part in as determined by the
Employer’s Compensation Committee.

 

4.                                       Other Benefits.  Executive shall be entitled to participate
in, and to receive benefits under, any long-term incentive plan, deferred
compensation plan, qualified retirement plan, profit sharing plan, savings
plan, equity option plan, group life, disability, sickness, accident and health
programs, or any other benefit plan or arrangement made available by Employer
to its executives generally, subject to and on a basis consistent with the
terms, conditions and overall administration of each such plan or
arrangement.  In addition, Executive
shall be entitled to participate in a supplemental executive retirement plan,
and to certain benefits under an Executive Severance Agreement among Executive,
Mercshares and Merc-Safe dated as of January 6, 2005 (as such plan and agreement may be amended
from time to time).

 

5.                                       Expenses.  Employer shall reimburse Executive for all
reasonable expenses incurred by Executive in connection with the business of
the Employer, including expenses for entertainment (and any club memberships
approved by the chief executive officer of Mercshares), travel and similar
items, and will provide Executive, without charge, with the use of an
automobile for business purposes, in accordance with Employer policy.  Executive shall submit to Employer
substantiation for reimbursable expenses.

 

6.                                       Vacation.  Executive shall be entitled to a minimum of
four weeks vacation each year.

 

7.                                       Scope of Employment.  Executive shall perform the duties of Vice
Chairman of Mercshares and Chairman and CEO of Investment and Wealth Management
of Mercshares and Merc-Safe and associated services for affiliates as defined
by Employer.  The duties will include the
executive leadership of the Investment and Wealth Management Division of
Merc-Safe, or any designated successor division.  Executive agrees to serve with undivided
loyalty to Employer and to devote all of his working time and efforts in
performance of such duties, except for attention to personal investments,
participation in family business enterprises, outside directorships, and public
service commitments, provided that none of the foregoing shall unreasonably
interfere with his principal employment. 
Employer shall provide Executive with suitable office, secretarial and
other support assistance appropriate to his position.  Executive shall report directly to Edward J. Kelly, III, or
his successor.

 

8.                                       Early
Termination.

 

(a)                                  Resignation.  Executive may voluntarily resign his
employment under this Agreement without Good Reason (as defined in Section 8(e))
at any time.

 

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(b)                                 Termination
by Employer for Good Cause.  Employer may
terminate Executive’s employment at any time during the term of this Agreement
for Good Cause .  For purposes of this Agreement, “Good
Cause” shall be limited to proven or admitted fraud or material illegal
acts by Executive or a breach of, any of Executive’s covenants of undivided loyalty to and the
performance of duties for Employer, as set forth in Section 7 of this
Agreement.

 

(c)                                  Termination
by Employer Without Good Cause.  Subject
to the provisions hereof, Employer may terminate Executive’s employment under
this Agreement before the end of the Employment Term, without Good Cause, upon
60 days’ prior written notice.

 

(d)                                 Removal from Offices Due to
Disability.  If Executive becomes “Disabled” (as defined below), Employer may remove Executive from am
some or any of his offices; provided that Employer shall restore Executive to
any such office if he shall become able to perform the duties of any such
office at any time within the three hundred sixty- five (365) days next
following his removal from any such office. 
For purposes of this
Agreement, Executive will be deemed to be “Disabled”
or to have a “Disability” if Executive is
determined to be totally and permanently disabled under Employer’s Long-term Disability
Insurance Plan in which he participates or if Executive is unable to substantially perform the customary
duties and responsibilities of Executive’s employment for a period of at least
180 consecutive days by reason of a physical or mental incapacity.

 

(e)                                  Termination
by Executive for Good Reason.  Executive
may resign for “Good Reason”
if, without Executive’s prior written consent, Employer:

 

(i)                                     assigns
Executive any duties inconsistent in any respect with the Executive’s position
as described herein (including status, offices, titles and reporting
requirements, authority, duties or responsibilities) or any other action by
Employer that results in a diminution in such position or in the nature and
quality of Executive’s office facilities, secretarial and support assistance,
excluding for this purpose an isolated, insubstantial and inadvertent action
that is not taken in bad faith and that is remedied by the Employer promptly
after receipt of notice thereof given by the Executive;

 

(ii)                                  reduces
Executive’s base salary or benefits from the levels of compensation and
benefits in effect in the immediately preceding year, including but not limited
to salary, expense allowance, vacation time or other vacation benefits, excusal
from performance of duties under Employer policies or agreements (by reason of
illness, disability or other factors), continuance of all Executive benefits
and benefit plans and preservation of Executive’s levels of participation and
benefits thereunder (including any agreement between the Employer and
Executive, deferred compensation arrangement, pension or other retirement or
profit-sharing plan, thrift and medical reimbursement plan, health insurance or
other health or disability plan, life insurance plan, omnibus stock plan, stock
option plan, stock purchase plan, stock appreciation right plan or any other

 

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Executive benefit plan or
provision for fringe benefits in effect in the immediately preceding year)
other than an isolated, insubstantial or inadvertent failure to provide
compensation or benefits that is remedied by the Employer promptly after
receipt of notice thereof given by the Executive; provided, however, that a
reduction in level of annual bonus shall not be deemed to be included within
the scope of this paragraph;

 

(iii)                               requires
the Executive to be based at any office or location other than the Employer’s
principal offices within the City of Baltimore, except for travel reasonably
required in the performance of the Executive’s responsibilities; or

 

(iv)                              purports
to terminate the Executive’s employment otherwise than as expressly
contemplated in this Section 8 in the case of Good Cause, death or
Disability.

 

Before resigning for Good Reason, Executive must
specify in writing to Company the nature of the act or omission that Executive
deems to constitute Good Reason and, if the situation can be cured, give
Company at least 30 days after receipt of such notice to correct the situation
(and thus prevent Executive’s resignation for Good Reason).

 

(f)                                    Death.  If Executive dies during the term of this
Agreement, this Agreement will terminate as of the date of Executive’s death,
and Executive’s estate will be entitled to the benefits described in Section 9(c) of
this Agreement.

 

9.                                       Payments
on Termination of Employment.

 

(a)                                  Termination
by Employer for Good Cause or Executive’s Resignation Without Good Reason.  If Employer terminates Executive’s employment
for Good Cause or Executive resigns without Good Reason, Employer will promptly
pay to Executive: (i) the unpaid amount, if any, of Executive’s base
salary through the date of termination or resignation, (ii) the unpaid
amount, if any, of Executive’s previously earned and unpaid incentive bonus for
the calendar year preceding the year of termination, (iii) the amount of
any substantiated but previously unreimbursed business expenses incurred
through the date of termination or resignation, and (iv) the additional
vested benefits, if any, to which Executive is entitled under the terms of any
Employer employee pension or welfare benefit plan in which Executive was a
participant, in accordance with the conditions and payment schedules set forth
in such plan(s) (the amounts specified in clauses (i) through (iv),
collectively, “Accrued Compensation”).

 

(b)                                 Termination
by Employer Without Good Cause or by Executive for Good Reason.  If Employer terminates Executive’s
employment without Good Cause or Executive resigns for Good Reason, Executive will be
entitled to receive the following payments and benefits:

 

(i)                                     any
Accrued Compensation;

 

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(ii)                                  continued
payment of Base Salary (without giving effect to any reduction in Base Salary
that constitutes Good Reason) for the remainder of the term of this Agreement;

 

(iii)                               a
bonus for the year of termination equal to the highest bonus for the
immediately preceding three years, which amount shall be paid in a lump sum
within ten days of the date of termination;

 

(iv)                              full
and immediate vesting of any stock options, restricted stock, stock
appreciation rights, deferred compensation or other restricted benefits; and

 

(v)                                 continuing
group health and group life insurance coverage for Executive and, where
applicable, Executive’s spouse and eligible dependents, at the same benefit
levels in effect from time to time with respect to active senior executives of
Employer (“Benefit Continuation Coverage”),
for the remainder of the term of this Agreement.  If and to the extent such Benefit
Continuation Coverage is not permitted by the applicable plan or by applicable
law, Executive will instead be entitled to cash payments sufficient to
reimburse Executive and/or Executive’s spouse and eligible dependents, on an
after-tax basis, for a proportionate amount of the reasonable cost of
comparable individual or other replacement coverage through the end of the term
of this Agreement.

 

(c)                                  Termination
Due to Death.  In the event of the
termination of Executive’s employment due to death, Executive (or Executive’s
estate or other legally-designated beneficiary) will be entitled to receive the
following payments and benefits:

 

(i)                                     any
Accrued Compensation; and

 

(ii)                                  a
pro rated incentive bonus for the year of termination, determined by
multiplying (A) the highest incentive bonus earned within the preceding
three years, by (B) a fraction, the numerator of which is the number of
days from the beginning of the calendar year through the date of termination,
and the denominator of which is 365, which amount shall be paid in a lump sum
within ten days of the date of termination.

 

(d)                                 Termination
Due to Disability.  In the event of the
removal of Executive from one or more offices due to Disability during the term
of this Agreement, Executive (or Executive’s estate or other legally-designated
beneficiary) will be entitled to receive the following payments and benefits:

 

(i)                                     any
Accrued Compensation for the period of time prior to the Disability;

 

(ii)                                  a
pro rated incentive bonus for the year in which Executive was removed from such
office or offices, determined by multiplying (A) the highest incentive
bonus earned within the preceding three years, by (B) a fraction, the
numerator

 

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of which is the number of
days from the beginning of the calendar year through the date of the
Disability, and the denominator of which is 365, which amount shall be paid in
a lump sum within ten days of the date of termination; and

 

(iii)                               any
payments payable pursuant to Employers Disability Insurance Plan for periods covered under such
plan.

 

(e)                                  Termination
Due to Expiration of the Employment Term. 
In the event of the termination of Executive’s employment due to
expiration of this Agreement, Executive will be entitled to receive the
following payments and benefits:

 

(i)                                     any
Accrued Compensation; and

 

(ii)                                  a
pro rated incentive bonus for the year of termination, determined by
multiplying (A) the target annual incentive bonus for the year, or if no
target annual incentive bonus was established for the year, the highest
incentive bonus earned within the preceding three years, by (B) a
fraction, the numerator of which is the number of days from the beginning of
the calendar year through the date of termination, and the denominator of which
is 365, which amount shall be paid in a lump sum at the same time as such bonus
would otherwise have been paid for such year.

 

10.                                 Non-Competition.  Executive agrees that upon termination of his
employment with Employer, he shall not engage in competitive activities in the
State of Maryland or in contiguous states, or the District of Columbia, or in
any other state in which any offices are maintained by Mercshares, Merc-Safe or
affiliated entities, as an employee of, consultant to, or in any other
comparable capacity with, any other banking institution, bank holding company,
financial holding company, for a period of two years following such
termination.  Executive agrees that
Employer shall be entitled to injunctive relief, in lieu of or in addition to
damages, for a violation by Executive of the provisions of this Section 9.

 

11.                                 Successors.  This Agreement shall be binding upon and
inure to the benefit of all successors of Employer, whether by merger,
consolidation, reorganization, share exchange, transfer of assets or otherwise.  This Agreement shall not be otherwise
assignable by Employer except with the prior written consent of Executive.  Executive shall not assign his rights or
duties under this Agreement, except (a) as provided in Section 1 of
this Agreement, and (b) as provided under any employee or executive
benefit plan with Employer relating to Executive.

 

12.                                 Notices.  All notices called for under this Agreement
shall be in writing addressed to Employer at Two Hopkins Plaza, Baltimore,
Maryland 21201, Attention:  Corporate
Secretary, and to Executive at Two Hopkins Plaza, Baltimore, Maryland 21201, or
to such other address as either party may designate to the other in writing
from time to time.  Any such notice shall
be effective when received or two (2) business days after mailing, postage
prepaid, by first class, certified or registered mail, return receipt
requested.

 

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13.                                 Entire Agreement.  This Agreement represents the entire
agreement between the parties, and all prior representations, agreements and
understandings between the parties as to its subject matter are of no further
force or validity.

 

14.                                 Amendments.  Any amendments to this Agreement must be in
writing signed by both parties hereto.

 

15.                                 Governing
Law.  This Agreement shall be
governed by and construed in accordance with the laws of the State of Maryland,
without reference to principles of conflict of laws.

 

16.                                 Headings.  The headings used in this Agreement are
solely for convenience and are not to be used in the construction or
interpretation hereof.

 

17.                                 Severability.  In the event that one or more of the
provisions of this Agreement are found to be unenforceable or illegal, the
remaining provisions of the Agreement shall remain in full force and effect.

 

IN WITNESS WHEREOF, the parties
have executed this Amended and Restated Executive Employment Agreement, as of
the day and year first above written.

 

 

WITNESS:

 

 

	
   

  	
   

  	
  (SEAL)

  
	
   

  	
  JAY M.
  WILSON

  

 

7

 

	
  ATTEST:

  	
  MERCANTILE-SAFE
  DEPOSIT

  
	
   

  	
   AND TRUST COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  (SEAL)

  
	
  JOHN L.
  UNGER

  	
   

  	
   

  	
  EDWARD
  J. KELLY, III

  	
   

  
	
  Secretary

  	
   

  	
   

  	
  Chairman and Chief
  Executive Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ATTEST:

  	
   

  	
  MERCANTILE
  BANKSHARES

  
	
   

  	
   

  	
   CORPORATION

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  (SEAL)

  
	
  JOHN L.
  UNGER

  	
   

  	
   

  	
  EDWARD
  J. KELLY, III

  	
   

  
	
  Secretary

  	
   

  	
  Chairman, President and

  Chief Executive Officer

  	
   

  

 

8Exhibit 10.2

 

AMENDED
AND RESTATED EXECUTIVE SEVERANCE

AGREEMENT

 

AGREEMENT
by and between Mercantile Bankshares Corporation (“Mercshares”),
Mercantile-Safe Deposit & Trust Company (“Merc-Safe”) (collectively
the  “Company”), and Jay M. Wilson (the “Executive”),
effective as of the 14th day of June, 2005.

 

WHEREAS:  The Executive has agreed to serve as Vice
Chairman of Mercshares, Chairman and CEO of Investment and Wealth Management of
Mercshares and Merc-Safe;

 

WHEREAS:  The Board of Directors of Mercshares (the “Board”),
acting upon the recommendation of its Compensation Committee, has determined
that it is in the best interests of Mercshares and its shareholders to assure
that the Company will have the continued dedication of the Executive as a key
executive of Mercshares and Merc-Safe, notwithstanding the possibility, threat
or occurrence of a Change of Control (as defined below) of Mercshares.  The Board believes it is necessary to
diminish the inevitable distraction of the Executive by virtue of the personal
uncertainties and risks created by a pending or threatened Change of Control,
to encourage the Executive’s full attention and dedication to the Company
currently and in the event of any threatened or pending Change of Control
(including determinations as to the best interests of Mercshares and its
shareholders should the possibility of a Change of Control of Mercshares
arise). The Board intends to accomplish these purposes by providing the
Executive with the compensation arrangements provided for herein in the event
that Executive is terminated following (or in certain circumstances, prior to
or in connection with) the occurrence of a Change of Control, it being the
clear understanding and intent of the parties that in no

 

1

 

event shall any compensation be paid hereunder unless a Change of
Control has occurred. In order to accomplish these objectives, the Board has
caused Mercshares to enter into this Agreement. 
The Board of Directors of Merc-Safe has made similar determinations and
has caused Merc-Safe to enter into this Agreement; and

 

WHEREAS, this Amended and
Restated Executive Severance Agreement shall supersede the   Executive Severance Agreement dated as of January 6,
2005.

 

NOW,
THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

 

1.                                      Certain
Definitions.

 

(a)                                  “Cause”
shall mean (i) an act or acts of personal dishonesty taken by the
Executive and intended to result in substantial personal enrichment of the
Executive at the expense of the Company, (ii) repeated material violations
by the Executive of his duties to the Company (as in effect immediately prior
to the Effective Date) which are demonstrably willful and deliberate on the
Executive’s part and which are not remedied in a reasonable period of time after
receipt of written notice from the Company, or (iii) the conviction of the
Executive of a felony.

 

(b)                                 “Change
of Control” shall mean:

 

(i)                                     The
acquisition (other than from Mercshares) by any person, entity or “group”,
within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934 as in effect on the date hereof (the “Exchange
Act”), (excluding, for this purpose, Mercshares or its subsidiaries, and
excluding any acquisition of securities by any employee benefit plan of
Mercshares or its subsidiaries which shall have occurred prior to any other
event constituting a Change of Control hereunder) of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act
as in effect on the date hereof) of 20% or more of either the then outstanding
shares of common stock of Mercshares or the combined voting power of Mercshares’
then outstanding voting securities entitled to vote generally in the election
of directors (such common stock or then outstanding voting securities being
referred to herein as “Voting

 

2

 

Securities”), calculated on the date of the transaction causing the
foregoing 20% test to be met, without regard to any limitation upon the voting
rights of any acquiring person under Maryland statutes and without regard to
the potential exercisability of rights, not exercised on such date, pursuant to
any Shareholder Protection Rights Agreement of Mercshares then in effect; or

 

(ii)                                  Individuals
who, as of the date hereof, constitute the Board (as of the date hereof the “Incumbent
Board”) cease for any reason to constitute at least 75% of the members of the
Board, provided that any person becoming a director subsequent to the date
hereof whose election, or nomination for election by the shareholders of
Mercshares, is approved by a vote of at least a majority of the directors then
comprising the Incumbent Board (other than an election or nomination of an
individual whose initial assumption of office is in connection with an actual
or threatened election contest relating to the election of the Directors of
Mercshares or other actual or threatened solicitation of proxies by or on
behalf of persons other than the Board) shall be, for purposes of this
Agreement, considered as though such person were a member of the Incumbent
Board; or

 

 (iii)                            Approval
by the stockholders of Mercshares of (A) a reorganization, merger,
consolidation or statutory share exchange, in each case, with respect to which
persons who are the holders of the outstanding Voting Securities of Mercshares
immediately prior to such reorganization, merger, consolidation or statutory
share exchange do not, immediately thereafter, own more than 75% of the
combined voting power entitled to vote generally in the election of directors
of the entity resulting from such reorganization, merger, consolidation or
statutory share exchange, or (B) a liquidation or dissolution of
Mercshares or the sale of all or substantially all of the assets of Mercshares;
provided, however, that such approval shall not be deemed to
constitute a Change of Control unless and until such reorganization, merger,
consolidation, share exchange, liquidation or dissolution is consummated or
becomes effective, as applicable.

 

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(c)                                  “Change
of Control Period” shall mean the period commencing on the date hereof and
ending on the third anniversary of such date; provided, however,
that commencing on the date one year after the date hereof, and on each annual
anniversary of such date (such date and each annual anniversary thereof
hereinafter referred to as the “Renewal Date”), the Change of Control Period
shall be extended automatically so as to terminate on the third anniversary of
such Renewal Date, unless at least 60 days prior to the Renewal Date the
Company shall give notice that the Change of Control Period shall not be so
extended, but no such notice shall be given by the Company which would cause
the Change of Control Period to expire during the term of any employment
agreement between the Company and the Executive.

 

(d)                                 “Date
of Termination” shall mean for purposes of this Agreement the date of
receipt of the Notice of Termination or any later date specified therein, as
the case may be; provided, however, that if the Executive’s
employment is terminated by the Company other than for Cause or Disability, the
Date of Termination shall be the date on which the Company notifies the
Executive of such termination.

 

(e)                                  “Effective
Date” shall mean the first date during the “Change of Control Period” on
which a Change of Control occurs provided that the Executive is employed by the
Company on such date.  Anything in this
Agreement to the contrary notwithstanding, if the Executive’s employment with
the Company has terminated for any reason prior to the first date on which a
Change of Control occurs, this Agreement shall be null and void as of the date
of such termination of employment; provided, however, that if a
Change of Control occurs within six months following the date of such
termination, and it is reasonably demonstrated that such termination (i) was
at the request of the third party who had, at the time of such termination,
taken steps reasonably calculated to effect the Change of Control, or (ii) 
arose as a result of the Company’s bad faith effort to avoid its obligations
hereunder, then for all purposes of this

 

4

 

Agreement the “Effective Date” shall mean the date immediately prior to
the date of such termination.

 

(f)                                    “Good
Reason” shall mean any of the following actions which is effected by the
Company without the consent of the Executive:

 

(i)                                     The
assignment to the Executive of any duties inconsistent in any respect with the
Executive’s position immediately prior to the Effective Date (including status,
offices, titles and reporting requirements, authority, duties or
responsibilities) or any other action by the Company that results in a
diminution in such position or in the nature and quality of Executive’s office
facilities, secretarial and support assistance, excluding for this purpose an
isolated, insubstantial and inadvertent action that is not taken in bad faith
and that is remedied by the Company promptly after receipt of notice thereof
given by the Executive;

 

(ii)                                  Any
reduction in Executive’s compensation or benefits from the levels of
compensation and benefits in effect immediately prior to the Effective Date
(whether or not such reduction would be permitted under any employment
agreement), including but not limited to salary, bonuses (under an annual
incentive compensation plan or otherwise), expense allowance, vacation time or
other vacation benefits, excusal from performance of duties under Company
policies or agreements (by reason of illness, disability or other factors),
continuance of all Executive benefits and benefit plans and preservation of
Executive’s levels of participation and benefits thereunder (including any
agreement between the Company and Executive, incentive compensation plan, deferred
compensation arrangement, pension or other retirement or profit-sharing plan,
thrift and medical reimbursement plan, health insurance or other health or
disability plan, life insurance plan, omnibus stock plan, stock option plan,
stock purchase plan, stock appreciation right plan, or any other Executive
benefit plan or provision for fringe benefits in effect immediately prior to
the Effective Date), other than an isolated, insubstantial or inadvertent
failure to provide compensation or benefits that is

 

5

 

remedied by the Company promptly after receipt of notice thereof given
by the Executive;

 

(iii)                               The
Company’s requiring the Executive to be based at any office or location other
than the Company’s principal offices within the City of Baltimore, except for
travel reasonably required in the performance of the Executive’s
responsibilities;

 

(iv)                              Any
purported termination by the Company of the Executive’s employment otherwise
than as expressly contemplated hereunder in the case of Cause, or death
pursuant to Section 2(a) of this Agreement, or Disability pursuant to
Section 2(b) of this Agreement; or

 

(v)                                 Any
failure by the Company to comply with and satisfy Section 6(c) of
this Agreement.

 

For purposes of this
Agreement, any good faith determination of “Good Reason” made by the Executive
shall be conclusive.

 

(g)                                 “Notice
of Termination” shall mean a written notice (from the Executive to the
Company, or from the Company to the Executive, as the case may be) that (i) indicates
the specific basis for termination of employment, (ii) sets forth in
reasonable detail the facts and circumstances claimed to provide the basis for
termination of the Executive’s employment, and (iii) if the Date of
Termination is other than the date of receipt of such notice, specifies the
termination date (which date shall be not more than 15 days after the giving of
such notice).  The failure by the
Executive to set forth in a Notice of Termination any fact or circumstance that
contributes to a showing of Good Reason shall not waive any right of the
Executive hereunder or preclude the Executive from asserting such fact or
circumstance in enforcing his rights hereunder.

 

2.                                      Obligations
of the Company upon Termination.

 

(a)                                  Death.  If the Executive’s employment is terminated
by reason of the Executive’s death prior to the delivery (i) by the
Executive to the Company

 

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of a Notice of Termination for Good Reason or (ii) by the Company
to the Executive of any notification of termination of the Executive’s
employment other than for Cause or Disability, then this Agreement shall
terminate without further obligations to the Executive’s legal representatives
under this Agreement.

 

(b)                                 Disability.  If the Executive’s employment is terminated
by reason of the Executive’s Disability, this Agreement shall terminate without
further obligations to the Executive under this Agreement.  For purposes of this Agreement, “Disability”
shall mean termination of the Executive’s employment on account of disability
as determined under any governing agreement between the Executive and the
Company or, if there is no such agreement or such agreement does not provide a
definition of “disability,” then “Disability” shall mean disability as defined
under the Company’s long-term disability insurance plan.

 

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

 

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

 

7

 

3.                                      Non-Exclusivity
of Rights.

 

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

 

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

 

4.                                      Full
Settlement.

 

(a)                                  The
Company’s obligation to make the payments provided for in this Agreement and
otherwise to perform its obligations hereunder shall not be affected by any
set-off, counterclaim, recoupment, defense or other claim, right or action that
the Company may have against the Executive or others.  In no event shall the Executive be obligated
to seek other employment or take any other action by way of mitigation of the
amounts payable to the Executive under any of the provisions of this
Agreement.  The Company agrees to pay, to
the full extent permitted by law, all legal

 

8

 

fees and expenses that the Executive may reasonably incur as a result
of any contest (regardless of the outcome thereof) by the Company or others of
the validity or enforceability of, or liability under, any provision of this
Agreement or any guarantee of performance thereof (including as a result of any
contest by the Executive about the amount of any payment pursuant to Section 5
of this Agreement), plus in each case, interest at the applicable Federal rate
provided for in Section 7872(f)(2) of the Code.

 

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

 

5.                                      Certain
Tax Matters.

 

(a)                                  Anything
in this Agreement to the contrary notwithstanding, in the event it shall be
determined that any payment or distribution by the Company to or for the
benefit of the Executive (whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise, but
determined without regard to any additional payments required under this Section 5)
(a “Payment”) would be subject to any tax imposed by Section 4999 or Section 409A
of the Code or any interest or penalties are incurred by the Executive with
respect to such tax

 

9

 

(such tax, together with any such interest and penalties, are
hereinafter collectively referred to as the “Excise Tax”), payment (a “Gross-Up
Payment”) shall be made to the Executive in an amount such that after payment
by the Executive of all taxes (including any interest or penalties imposed with
respect to such taxes), including, without limitation, any income taxes (and
any interest and penalties imposed with respect thereto) and Excise Tax imposed
upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up
Payment equal to the Excise Tax imposed upon the Payments.

 

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

 

10

 

binding upon the Company and the Executive.  As a result of the uncertainty in the
application of Section 4999 and/or Section 409A of the Code at the
time of the initial determination by the Accounting Firm hereunder, it is
possible that Gross-Up Payments which will not have been made by the Company
should have been made (“Underpayment”), consistent with the calculations
required to be made hereunder.  In the
event that the Company exhausts its remedies pursuant to Section 5(c) and
the Executive thereafter is required to make a payment of any Excise Tax, the
Accounting Firm shall determine the amount of the Underpayment that has
occurred and any such Underpayment shall be promptly paid by the Company to or
for the benefit of the Executive.

 

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

 

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

 

(ii)                                  take
such action in connection with contesting such claim as the Company shall
reasonably request in writing from time to time, including, without limitation,
accepting legal representation with respect to such claim by an attorney
reasonably selected by the Company,

 

11

 

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

 

(iv)                              permit
the Company to participate in any proceedings relating to such claim; provided,
however, that the Company shall bear and pay directly all costs and expenses
(including additional interest and penalties) incurred in connection with such
contest and shall indemnify and hold the Executive harmless, on an after-tax
basis, for any Excise Tax or income tax (including interest and penalties with
respect thereto) imposed as a result of such representation and payment of
costs and expenses.  Without limitation
on the foregoing provisions of this Section 5(c), the Company shall
control all proceedings taken in connection with such contest and, at its sole option,
may pursue or forgo any and all administrative appeals, proceedings, hearings
and conferences with the taxing authority in respect of such claim and may, at
its sole option, either direct the Executive to pay the tax claimed and sue for
a refund or contest the claim in any permissible manner, and the Executive
agrees to prosecute such contest to a determination before any administrative
tribunal, in a court of initial jurisdiction and in one or more appellate
courts, as the Company shall determine; provided, however, that if the Company
directs the Executive to pay such claim and sue for a refund, the Company shall
advance the amount of such payment to the Executive, on an interest-free basis
and shall indemnify and hold the Executive harmless, on an after-tax basis,
from any Excise Tax or income tax (including interest or penalties with respect
thereto) imposed with respect to such advance or with respect to any imputed
income with respect to such advance; and further provided that any extension of
the statute of limitations relating to payment of taxes for the taxable year of
the Executive with respect to which such contested amount is claimed to be due
is limited solely to such contested amount. 
Furthermore, the Company’s control of the contest shall be limited to
issues with respect to which a Gross-Up Payment would be payable hereunder and
the

 

12

 

Executive shall be entitled to settle or contest, as the case may be,
any other issue raised by the Internal Revenue Service or any other taxing
authority.

 

(d)                                 If,
after the receipt by the Executive of an amount advanced by the Company
pursuant to Section 5(c), the Executive becomes entitled to receive any
refund with respect to such claim, the Executive shall (subject to the Company’s
complying with the requirements of Section 5(c)) promptly pay to the
Company the amount of such refund (together with any interest paid or credited
thereon after taxes applicable thereto). 
If, after the receipt by the Executive of an amount advanced by the
Company pursuant to Section 5(c), a determination is made that the
Executive shall not be entitled to any refund with respect to such claim and
the Company does not notify the Executive in writing of its intent to contest such
denial of refund prior to the expiration of 30 days after such determination,
then such advance shall be forgiven and shall not be required to be repaid and
the amount of such advance shall offset, to the extent thereof, the amount of
Gross-Up Payment required to be paid.

 

6.                                      Successors.

 

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

 

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

 

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

 

13

 

successor to its business and/or assets as aforesaid which assumes and
agrees to perform this Agreement by operation of law or otherwise.

 

7.                                      Miscellaneous.

 

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

 

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

 

If to the
Executive:

 

Jay M. Wilson

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 in writing in accordance
herewith.  Notice and communications
shall be effective when actually received by the addressee.

 

14

 

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

 

(d)                                 Any
act, omission, right, obligation or activity of Mercshares or Merc-Safe shall
be deemed an act, omission, right, obligation or activity of the Company
hereunder, and each of Mercshares and Merc-Safe is jointly and severally liable
under this Agreement.  The
unenforceability or invalidity of this Agreement with respect to either such
party shall not affect the enforceability or validity of this Agreement with
respect to the other such party.

 

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

 

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

 

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

 

15

 

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

 

WITNESS:

 

 

	
   

  	
   

  	
   

  	
   

  
	
   

  	
  JAY M. WILSON

  

 

16

 

	
  ATTEST:

  	
  MERCANTILE BANKSHARES

  
	
   

  	
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   JOHN L. UNGER

  	
   

  	
   

  	
  EDWARD J.
  KELLY, III

  	
   

  
	
  Secretary

  	
   

  	
   

  	
  Chairman,
  President and

  
	
   

  	
   

  	
   

  	
  Chief
  Executive Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ATTEST:

  	
   

  	
  MERCANTILE-SAFE DEPOSIT

  
	
   

  	
   

  	
   & TRUST COMPANY

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   JOHN L. UNGER

  	
   

  	
   

  	
  EDWARD J.
  KELLY, III

  
	
  Secretary

  	
   

  	
  Chairman
  and Chief

  
	
   

  	
   

  	
  Executive
  Officer

  
						

 

17

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