Document:

Exhibit
10 ZZ

 

OMNIBUS STOCK PLAN

 

RESTRICTED STOCK UNIT AWARD
AGREEMENT

 

 

                AGREEMENT, made effective as of March 29, 2006 by and
between Mercantile Bankshares Corporation, a Maryland corporation (“Company”),
and Edward J. Kelly (“Award Recipient”):

 

                WHEREAS, the Company maintains the Mercantile Bankshares
Corporation 1999 Omnibus Stock Plan (“Omnibus Stock Plan”) under which the
Company’s Compensation Committee (“Committee”) of the Board of Directors (“Board”)
may, among other things, award restricted stock units (referred to under the
Omnibus Stock Plan as Phantom Stock Units), each of which represents the right
to receive one share of the Company’s Common Stock of $2.00 par value (“Common
Stock”) to such members of the Company’s management team as the Committee may
determine, subject to such terms, conditions, or restrictions as the Committee
may deem appropriate; and

 

                WHEREAS, pursuant to the Omnibus Stock Plan, the Committee,
with the approval of the Board, has granted to the Award Recipient a restricted
stock unit award subject to this Agreement setting forth the terms and
conditions applicable to such award in accordance with Article 6 of the Omnibus
Stock Plan; and

 

                WHEREAS, the Award Recipient desires to accept said award in
accordance with the terms and provisions of the Omnibus Stock Plan and this
Agreement.

 

                NOW,  THEREFORE, in
consideration of the premises and mutual covenants and agreements contained
herein, the Company and Award Recipient agree as follows:

 

1.             AWARD
OF RESTRICTED STOCK UNITS:

 

                Under the terms of
the Omnibus Stock Plan, the Committee has granted to the Award Recipient a
restricted stock unit award made on March 29, 2006 (“Award Date”), of 104,630
restricted stock units (“Award Units”) subject to the terms, conditions, and
restrictions set forth in this Agreement.

 

2.             AWARD
RESTRICTIONS:

 

                The Award Units
shall be subject to forfeiture until such units vest in accordance with the
provisions set forth below.  Subject to
Sections 3 and 4 of this Agreement, the Award Units shall become vested in four
installments at the end of four periods of time (each, a “restriction period”),
if the Award Recipient shall have been continuously employed by the Company or
any of its affiliates throughout the applicable restriction 

 

 

 

period.  The number of Award Units
that may become vested in each installment, and the applicable restriction
periods, are set forth below:

 

 

	
  Number of Award

  	
   

  	
  Restriction

  
	
  Units Vesting

  	
   

  	
  Period Ending

  
	
   

  	
   

  	
   

  
	
  26,157.5

  	
   

  	
  March 29, 2007

  
	
  26,157.5

  	
   

  	
  March 29, 2008

  
	
  26,157.5

  	
   

  	
  March 29, 2009

  
	
  26,157.5

  	
   

  	
  March 29, 2010

  

 

 

3.             TERMINATION
OF EMPLOYMENT:

 

                (a)           If the Award Recipient’s employment
with the Company or any of its affiliates is terminated by reason of death or
total and permanent disability, then all Award Units which are then subject to
restriction shall be forfeited by the Award Recipient. The Committee shall have
absolute discretion to determine whether an Award Recipient’s termination of
employment is due to total and permanent disability.  The Committee may require the Award Recipient
to provide whatever evidence the Committee deems desirable to ascertain whether
the Award Recipient is totally and permanently disabled.

 

                (b)           If the Award Recipient’s employment with the Company
or any of its affiliates is terminated involuntarily without “good cause” as defined in his employment agreement with
the Company and Mercantile-Safe Deposit and Trust Company (or other affiliate
of the Company, as applicable), as amended from time to time, during the
restriction period, any Award Units which are then subject to restriction shall become fully
vested as of such date of termination of employment.

 

                (c)           If the Award Recipient’s employment
with the Company or any of its affiliates is terminated for any other reason
during the restriction period, no Award Units which are then subject to
restriction shall become vested and such Award Units shall be forfeited by the
Award Recipient.

 

 

4.             EARLY
VESTING  UPON CHANGE OF CONTROL:

 

                In the event of a sale of the Company, any Award Units
which are then
subject to restriction shall become fully vested as of such date. For purposes
of this Agreement a sale of the Company shall mean:

 

                (a)           The acquisition by any person, entity
or “group”, within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange
Act, (excluding for this purpose, the Company or its affiliates, and excluding
any acquisition of securities by any employee 

 

 

 

benefit plan of the Company or its affiliates)
of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 50% or more of either the then outstanding shares of common
stock of the Company or the combined voting power of the Company’s 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 Securities”), calculated on the date of the
transaction causing the foregoing 50% 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 Stockholder Protection Rights Agreement
of the Company then in effect; or

 

                (b)           Consummation of (1) 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
the Company immediately prior to such reorganization, merger, consolidation or
statutory share exchange do not, immediately thereafter, own more than 50% 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 (2) a liquidation or dissolution
of the Company or the sale of all or substantially all of the assets of the
Company to an entity other than an affiliate.

 

5.             RIGHTS OF AWARD RECIPIENT REGARDING AWARD UNITS:

 

                (a)           The Award Recipient shall not have
the rights of a stockholder with respect to any Award Units granted to the
Award Recipient until shares of Common Stock have been distributed to the Award
Recipient pursuant to Section 6, and the Award Recipient’s name has been
entered as a stockholder of record on the books of the Company with respect to
such distributed shares of Common Stock.

 

                (b)           The Award Units and all rights with
respect to shares of Common Stock issued thereunder may not be sold, assigned,
transferred, pledged or encumbered in any way prior to the issuance of such
shares to the Award Recipient, other than by will or other instrument taking
effect upon the Award Recipient’s death, or the laws of descent and distribution.

 

                (c)           As long as the Award Recipient holds Award Units granted
pursuant to this Agreement, the Company shall credit to the Award Recipient, on
each date that the Company pays a cash dividend to holders of Common Stock
generally, an additional number of Award Units (“Dividend Award Units”) determined
by dividing (1) the aggregate dollar value of the cash dividends that the Award
Recipient would have received during the period from the immediately preceding
dividend payment date through the current dividend payment date if the Award
Recipient were the owner of record throughout such period of a number of shares
of Common Stock equal to the number of whole Award Units and Dividend Award
Units previously credited to the Award Recipient under this Agreement as of
such current 

 

 

 

dividend payment date (but prior to the crediting of current Dividend Award
Units), by (2) the Fair Market Value (as defined in the Omnibus Stock Plan) of
one share of Common Stock as of such current dividend payment date.  Dividend Award Units may be credited in whole
or fractional units as applicable.  The
Dividend Award Units so credited shall be subject to the same terms and
conditions as the Award Units to which they relate.

 

6.         DISTRIBUTION OF SHARES:

 

                Upon the Award
Recipient’s separation from service (within the meaning of Section 409A of the Internal
Revenue Code of 1986, as amended (“Code”) with the Company and all affiliates,
all vested Award Units shall be converted into an equivalent number of shares
of Common Stock which shall be distributed to the Award Recipient (or to his
designated beneficiary or legal representative, as applicable, in the event of
his death) as soon as practicable; provided, however, that any fractional Award
Unit shall be distributed to the Award Recipient in cash.  Notwithstanding the foregoing, however, if
the Award Recipient is a “specified employee” within the meaning of Section
409A of the Code, distribution shall be not be made to him until six months
after his separation from Service with the Company and all affiliates.  Distribution shall be evidenced by the
issuance of a stock certificate and the entry of the Award Recipient’s name (or
in the name of his designated beneficiary or legal representative, as
applicable, in the event of his death) as a stockholder of record on the books
of the Company with respect to such distributed shares of Common Stock.  Upon receipt of such stock certificate, the holder shall
be free to hold or dispose of such certificate at will, subject to any
applicable securities laws or regulations governing transferability of shares
of the Company.

 

7.             WITHHOLDING
TAXES 

 

                The Company and
any affiliate shall have the right to deduct from any compensation or any other
payment of any kind (including withholding the issuance of shares of Common
Stock) due the Award Recipient the amount of any federal, state or local taxes
required by law to be withheld as a result of the distribution of Common Stock
hereunder; provided, however, that the value of the shares of Common Stock
withheld may not exceed the statutory minimum withholding amount required by
law.  In lieu of such deduction, the
Company may require the Award Recipient to make a cash payment to the Company
or an affiliate equal to the amount required to be withheld.  If the Award Recipient does not make such
payment when requested, the Company may refuse to issue any Common Stock
certificate under this Agreement until arrangements satisfactory to the
Committee for such payment have been made.

 

8.             IMPACT
ON OTHER BENEFITS:

 

                The value of the
Common Stock issued hereunder shall not be includable as compensation or
earnings for purposes of any other benefit plan offered by the Company unless
specifically provided in such plan.

 

9.             ADMINISTRATION:

 

 

 

                The Committee or
the Board shall have full authority and discretion (subject only to the express
provisions of the Omnibus Stock Plan) to decide all matters relating to the
administration, interpretation and implementation of the Omnibus Stock Plan and
this Agreement.  Subject to Section 10
hereof, all such Committee determinations shall be final, conclusive, and binding
upon the Company, the Award Recipient, and any and all interested parties.

 

10.          CLAIM
PROCEDURE:

 

                (a)           If any claim for compensation is
wholly or partially denied, the Committee shall, within 90 days after receipt
of a written claim, notify the Award Recipient of such denial (unless the
Administrator determines that special circumstances require an extension of
time for processing the claim).  Such
notice of denial shall be in writing and shall contain (1) the specific reason
or reasons for denial of the claim, (2) reference to the specific provisions of
this Agreement and/or the Omnibus Stock Plan upon which the denial is based,
(3) a description of any additional material or information necessary to
perfect the claim and an explanation of why such material or information is
necessary, and (4) an explanation of the claim review procedure, as specified
under the provisions of this Section 10.

 

                (b)           In the event that a claim for
compensation by the Award Recipient is denied, the Award Recipient may (1) file
with the Committee a written request that the Committee conduct a full and fair
review of the denial of the claim for compensation, and (2) review any
documents pertinent to such request. 
Such request shall be delivered to the Committee within 60 days after
the receipt by the Award Recipient of the written notice of denial of the
claim.  Such review shall (i) provide the
Award Recipient with the opportunity to submit written comments, documents,
records and other information relating to the claim for compensation, (ii)
provide the Award Recipient, upon request and free of charge, reasonable access
to, and copies of, all documents, records and other information relevant to the
claim for compensation, and (iii) take into account all comments, documents,
records or other information submitted by the Award Recipient relating to the
claim for compensation, without regard to whether such information was
submitted or considered in the initial determination of compensation.

 

                (c)           The Committee shall deliver to the
Award Recipient a written decision on any claim filed hereunder within 60 days
after the receipt of the aforesaid request for review (unless the Committee
determines that special circumstances require an extension of time for
processing the claim).  Such decision
shall (1) include specific reasons for the decision, (2) contain specific
references to the pertinent provisions of this Agreement and/or the Omnibus
Stock Plan upon which the decision is based, (3) contain a statement that the
Award Recipient is entitled to receive, upon request and free of charge,
reasonable access to, and copies of, all documents, records and other
information relevant to the Award Recipient’s claim for compensation,  and (4) contain a statement describing the
rights of the Award Recipient to bring suit under the Employee Retirement
Income Security Act of 1974, as amended.

 

 

 

                (d)           Notwithstanding the foregoing, the
Board may determine to act in the Committee’s place under this Section 10.

 

11.          RIGHT
TO CONTINUED EMPLOYMENT:

 

                Nothing in the
Omnibus Stock Plan or this Agreement shall be construed as a contract of
employment between the Company or any affiliate and the Award Recipient, or as
a contractual right of the Award Recipient to continue in the employ of the
Company or any affiliate.

 

12.          UNFUNDED
OBLIGATION:

 

                The obligation
of the Company to make payments with respect to Award Units granted hereunder
shall be interpreted solely as an unfunded contractual obligation to make such
payments in the manner and under the conditions prescribed under this
Agreement.  Assets, if any, set aside
with respect to amounts payable under this Agreement shall be subject to the
claims of the Company’s general creditors, and no person other than the Company
shall, by virtue of the provisions of the Omnibus Plan or this Agreement, have
any interest in such assets.  Neither the
Award Recipient nor any other person shall have any interest in any particular
assets of the Company by reason of the right to receive a benefit under this
Agreement, and the Award Recipient or any such other person shall have only the
rights of a general unsecured creditor of the Company with respect to any rights
under the Omnibus Plan or this Agreement.

 

13.          AMENDMENTS:

 

                This Agreement
contains the entire agreement between the parties with respect to the subject
matter contained herein and may not be modified, except as provided in the
Omnibus Stock Plan or in a written document signed by each of the parties
hereto.

 

14.          FORCE
AND EFFECT:

 

                This Agreement is
intended to conform in all respects with, and is subject to all applicable
provisions of, the Omnibus Stock Plan (including, without limitation, the
antidilution and other provisions of Article 7), which is incorporated herein
by reference.  Inconsistencies between
the Agreement and the Omnibus Stock Plan shall be resolved in accordance with
the terms of the Omnibus Stock Plan.  In
the event of any ambiguity in the Agreement or any matters as to which the
Agreement is silent, the Omnibus Stock Plan shall govern.

 

15.          PREVAILING
LAWS:

 

                Except to the
extent preempted by federal law, this Agreement shall be construed and enforced
in accordance with and governed by the laws of the State of Maryland, without
regard to the conflict of laws principles thereof.

 

 

 

16.          SUCCESSORS:

 

                This Agreement shall be binding upon and
inure to the benefit of the Company, its successors and assigns, and the Award
Recipient and his heirs, personal representatives and assigns.

 

17.          COMPLIANCE
WITH SECTION 409A:

 

                Anything contained herein to the contrary
notwithstanding, it is intended that this Agreement comply in all respects with
Section 409A of the Code, and this Agreement shall be interpreted and
administered in such manner as to comply with such provisions.  This Agreement may be amended, retroactively
if necessary, to conform this Agreement to the requirements of Section 409A of
the Code.

 

                IN WITNESS WHEREOF, the Company has caused this Agreement to
be executed by its duly authorized officer, and the Award Recipient has
hereunto set his hand and seal, as of the 29th day of March, 2006.

 

 

	
  ATTEST:

  	
   

  	
  Mercantile Bankshares Corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
  John L. Unger, Secretary

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  WITNESS:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Edward J. Kelly, III.Exhibit
10 AAA

 

OMNIBUS STOCK PLAN

2006 LONG-TERM INCENTIVE
PROGRAM

 

RESTRICTED STOCK UNIT AWARD
AGREEMENT

 

 

                AGREEMENT, made effective as of March 29, 2006 by and
between Mercantile Bankshares Corporation, a Maryland corporation (“Company”), and                                        (“Award
Recipient”):

 

                WHEREAS, the Compensation Committee (“Committee”) of the
Board of Directors (“Board”) approved the 2006 Long-Term Incentive Program (“LTIP”),
the objectives of which are to (i) create a meaningful
long-term wealth creation component to the compensation structure for senior
management of the Company and its affiliates to be used in concert with salary,
annual cash bonus and option awards, (ii) create an incentive for those who
will be the key motivators of operating income improvement at the Company, and
(iii) align the interests of senior management with the interests of Company
shareholders by tying payments under the LTIP to the achievement of specific
performance goals; and

 

                WHEREAS, the Company maintains the Mercantile Bankshares
Corporation 1999 Omnibus Stock Plan (“Omnibus Stock Plan”) under which the Committee
may, among other things, award restricted stock units (referred to under the
Omnibus Stock Plan as Phantom Stock Units), each of which represents the right
to receive one share of the Company’s Common Stock of $2.00 par value (“Common
Stock”) to such members of the Company’s management team as the Committee may
determine, subject to such terms, conditions (including performance conditions),
or restrictions as the Committee may deem appropriate; and

 

                WHEREAS, pursuant to the LTIP and the Omnibus Stock Plan,
the Committee, with the approval of the Board, has granted to the Award
Recipient a restricted stock unit award subject to this Agreement setting forth
the terms and conditions applicable to such award in accordance with Article 6
of the Omnibus Stock Plan; and

 

                WHEREAS, the Award Recipient desires to accept said award in
accordance with the terms and provisions of the Omnibus Stock Plan and this
Agreement.

 

                NOW,  THEREFORE, in
consideration of the premises and mutual covenants and agreements contained
herein, the Company and Award Recipient agree as follows:

 

1.             AWARD
OF RESTRICTED STOCK UNITS:

 

                Under the terms of
the Omnibus Stock Plan, the Committee has granted to the Award Recipient a
restricted stock unit award made on March 29, 2006 (“Award Date”),

 

 

 

of                      
restricted stock units (“Performance Award Units”) subject to the terms,
conditions, and restrictions set forth in this Agreement.  The Performance Award Units granted represent
the maximum number of shares of Common Stock (not including accrued dividends)
which may be issued hereunder if the Award Recipient receives a 150% payout
pursuant to Section 2.

 

2.             PERFORMANCE
AWARDS:

 

                (a)           Performance Period.  The period over
which the performance goals set forth herein must be met is the period from
January 1, 2006 to December 31, 2008 (“Performance Period”).

 

                (b)           Target Award, Performance
Goals and Payout Percentage. 
A target award level (“Target Award Units”) has been established for the
Award Recipient by the Committee, expressed as a specified number of  Performance Award Units. The award to a
Participant for the Performance Period shall be based on a percentage (“Performance
Payout Percentage”) of the Target Award Units determined under a performance
grid established by the Committee. The performance grid is constructed to
reflect the improvement (not compounded) in the pre-tax operating income of the
Company on a consolidated basis (“Pre-Tax Operating Income”) with respect to
the 2008 fiscal year as compared to the 2005 fiscal year, calculated on a pure
GAAP basis, with no adjustments for acquisitions or other extraordinary events.  Subject to meeting the requirements herein,
the actual award to the Award Recipient for the Performance Period shall
consist of Performance Award Units equal to the number of Target Award Units
multiplied by the Performance Payout Percentage for the Performance Period
determined by the Committee under the performance grid. The Target Award Units
for the Award Recipient, the Performance Payout Percentage and the performance
grid are attached hereto as Appendix A.

 

                (c)           Determination of Earned
Award.  At the end of the
Performance Period, the Committee shall determine whether and to what extent
the pre-established performance goals have been met and shall calculate the
number of Performance Share Units that the Award Recipient has earned.  Any Performance Share Units (and accrued
dividends, as described in Section 5) which have not been  earned by the Award Recipient shall be
forfeited.  Such results shall be
certified in writing by the Committee prior to any Common Stock being issued
hereunder.

 

                (d)           Continued Employment:  The Award Recipient must remain in the
continued employment of the Company or its affiliates from the beginning of the
Performance Period through the end of the Performance Period to qualify for an
award hereunder for the Performance Period. Notwithstanding the foregoing, if a
Participant does not remain in continued employment during the Performance
Period solely because of normal retirement, death or total disability (as
defined in MBC’s long-term disability plan), the Participant (or his or her
estate, in the event of his or her death) shall nevertheless be entitled to
receive an award hereunder at the end of the Performance Period on the same
basis as if he or she had remained in continued employment during the
Performance Period, subject 

 

 

 

to whether and to what extent the
pre-established performance goals have been met. In no event shall the Award
Recipient be deemed to be vested in any Performance Award Units prior to the
end of the Performance Period and certification of the Committee as provided
above.

 

 

3.             ADDITIONAL
VESTING REQUIREMENTS:

 

                Notwithstanding
that the Award Recipient may have earned Performance Share Units pursuant to
Section 2, those units will continue to be subject to forfeiture until December
31, 2009.  The Award Recipient must
remain in the continued employment of the Company or its affiliates from the
end of the Performance Period through such date to qualify for an award
hereunder, unless such condition is waived for the Award Recipient in the sole
discretion of the Committee.  In no event
will the Award Recipient be entitled to receive any shares of Common Stock
issued hereunder if he or she is terminated for cause prior to the issuance of
such stock.

 

4.             EARLY
VESTING  UPON CHANGE OF CONTROL:

 

                In the event of a Sale of the Company, the target percentage
of growth in Pre-Tax Operating Income established for the Performance Period by
the Committee shall be deemed to have been achieved and 100% of the Target
Award Units for the Performance Period shall be payable to each Participant who
remained in the continued employment of the Company or its affiliates from the
beginning of the Performance Period through the date of such Sale; provided,
however, that if the Performance Period had ended prior to the Date of Sale, this
sentence shall not operate to increase the Performance Share Units earned by
the Award Recipient during the Performance Period.  The Performance Share Units thus credited to
the Award Recipient Participant be fully vested at the date of the Sale and
payable as provided in Section 6. For purposes of this Agreement, “Sale” shall
mean:

 

                (a)           Acquisition.  The acquisition by any person,
entity or “group”, within the meaning of Section 13(d)(3) or 14(d)(2) of the
Exchange Act, (excluding for this purpose, the Company or its affiliates, and excluding
any acquisition of securities by any employee benefit plan of the Company or
its affiliates) of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 50% or more of either the then
outstanding shares of common stock of the Company or the combined voting power
of the Company’s 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 Securities”), calculated on the
date of the transaction causing the foregoing 50% 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 Stockholder Protection Rights
Agreement of the Company then in effect; or

 

 

 

 

                (b)           Other Corporate Change.  Consummation of (1) 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 the Company
immediately prior to such reorganization, merger, consolidation or statutory
share exchange do not, immediately thereafter, own more than 50% 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 (2) a liquidation or dissolution of the Company or
the sale of all or substantially all of the assets of the Company to an entity
other than an affiliate.

 

5.             RIGHTS OF AWARD RECIPIENT REGARDING UNITS:

 

                (a)           No Rights of
Stockholder.  The Award
Recipient shall not have the rights of a stockholder with respect to any Performance
Share Units granted to the Award Recipient until shares of Common Stock have
been distributed to the Award Recipient pursuant to Section 6, and the Award
Recipient’s name has been entered as a stockholder of record on the books of
the Company with respect to such distributed shares of Common Stock.

 

                (b)           Non-Assignable.  The Performance Share Units and
all rights with respect to shares of Common Stock issued thereunder may not be
sold, assigned, transferred, pledged or encumbered in any way prior to the issuance
of such shares to the Award Recipient, other than by will or other instrument
taking effect upon the Award Recipient’s death, or the laws of descent and
distribution.

 

                (c)           Accumulation of
Dividends.  As long as the Award Recipient holds Performance
Share Units granted pursuant to this Agreement, the Company shall credit to the
Award Recipient, on each date that the Company pays a cash dividend to holders
of Common Stock generally, an additional number of Performance Share Units (“Dividend
Award Units”) determined by dividing (1) the aggregate dollar value of the cash
dividends that the Award Recipient would have received during the period from
the immediately preceding dividend payment date through the current dividend
payment date if the Award Recipient were the owner of record throughout such
period of a number of shares of Common Stock equal to the number of whole Performance
Share Units and Dividend Award Units previously credited to the Award Recipient
under this Agreement as of such current dividend payment date (but prior to the
crediting of current Dividend Award Units), by (2) the Fair Market Value (as
defined in the Omnibus Stock Plan) of one share of Common Stock as of such
current dividend payment date.  Dividend
Award Units may be credited in whole or fractional units as applicable.  The Dividend Award Units so credited shall be
subject to the same terms and conditions as the Performance Share Units to
which they relate.

 

6.         DISTRIBUTION OF SHARES:

 

                Upon vesting in
the Performance Award Units, but no later than two and one-half months
following the last day of the calendar year in which the vesting date occurs, all

 

 

 

vested Performance Award Units shall be
converted into an equivalent number of shares of Common Stock which shall be
distributed to the Award Recipient (or to his designated beneficiary or legal
representative, as applicable, in the event of his death) as soon as
practicable; provided, however, that any fractional Performance Award Unit
shall be distributed to the Award Recipient in cash.  Distribution shall be evidenced by the
issuance of a stock certificate and the entry of the Award Recipient’s name (or
in the name of his designated beneficiary or legal representative, as
applicable, in the event of his death) as a stockholder of record on the books
of the Company with respect to such distributed shares of Common Stock.  Upon receipt of such stock certificate, the
holder shall be free to hold or dispose of such certificate at will, subject to
any applicable securities laws or regulations governing transferability of
shares of the Company.

 

7.             WITHHOLDING TAXES 

 

                The
Company and any affiliate shall have the right to deduct from any compensation
or any other payment of any kind (including withholding the issuance of shares
of Common Stock) due the Award Recipient the amount of any federal, state or
local taxes required by law to be withheld as a result of the distribution of
Common Stock hereunder; provided, however, that the value of the shares of
Common Stock withheld may not exceed the statutory minimum withholding amount
required by law.  In lieu of such
deduction, the Company may require the Award Recipient to make a cash payment
to the Company or an affiliate equal to the amount required to be
withheld.  If the Award Recipient does
not make such payment when requested, the Company may refuse to issue any
Common Stock certificate under this Agreement until arrangements satisfactory
to the Committee for such payment have been made.

 

8.             IMPACT
ON OTHER BENEFITS:

 

                The value of the
Common Stock issued hereunder shall not be includable as compensation or
earnings for purposes of any other benefit plan offered by the Company unless
specifically provided in such plan.

 

9.             ADMINISTRATION:

 

                The Committee or
the Board shall have full authority and discretion (subject only to the express
provisions of the Omnibus Stock Plan) to decide all matters relating to the
administration, interpretation and implementation of the Omnibus Stock Plan and
this Agreement.  All such Committee
determinations shall be final, conclusive, and binding upon the Company, the
Award Recipient, and any and all interested parties.

 

10.          RIGHT
TO CONTINUED EMPLOYMENT:

 

                Nothing in the
Omnibus Stock Plan or this Agreement shall be construed as a contract of
employment between the Company or any affiliate and the Award Recipient, or as
a contractual right of the Award Recipient to continue in the employ of the
Company or any affiliate.

 

 

 

11.          UNFUNDED
OBLIGATION:

 

                The obligation
of the Company to make payments with respect to Performance Award Units granted
hereunder shall be interpreted solely as an unfunded contractual obligation to
make such payments in the manner and under the conditions prescribed under this
Agreement.  Assets, if any, set aside
with respect to amounts payable under this Agreement shall be subject to the
claims of the Company’s general creditors, and no person other than the Company
shall, by virtue of the provisions of the Omnibus Plan or this Agreement, have
any interest in such assets.  Neither the
Award Recipient nor any other person shall have any interest in any particular
assets of the Company by reason of the right to receive a benefit under this
Agreement, and the Award Recipient or any such other person shall have only the
rights of a general unsecured creditor of the Company with respect to any rights
under the Omnibus Stock Plan or this Agreement.

 

12.          AMENDMENTS:

 

                This Agreement
contains the entire agreement between the parties with respect to the subject
matter contained herein and may not be modified, except as provided in the
Omnibus Stock Plan or in a written document signed by each of the parties
hereto.

 

13.          FORCE
AND EFFECT:

 

                This Agreement is
intended to conform in all respects with, and is subject to all applicable
provisions of, the Omnibus Stock Plan (including, without limitation, the
antidilution and other provisions of Article 7), which is incorporated herein
by reference.  Inconsistencies between
the Agreement and the Omnibus Stock Plan shall be resolved in accordance with
the terms of the Omnibus Stock Plan.  In
the event of any ambiguity in the Agreement or any matters as to which the
Agreement is silent, the Omnibus Stock Plan shall govern.

 

14.          PREVAILING
LAWS:

 

                This Agreement
shall be construed and enforced in accordance with and governed by the laws of
the State of Maryland, without regard to the conflict of laws principles
thereof.

 

15.          SUCCESSORS:

 

                This Agreement shall be binding upon and
inure to the benefit of the Company, its successors and assigns, and the Award
Recipient and his heirs, personal representatives and assigns.

 

16.          EXEMPTION
FROM SECTION 409A:

 

 

 

                It is intended that this Agreement be
exempt from Section 409A of the Internal Revenue Code of 1986, as amended,
pursuant to the short-term deferral exception thereunder.  However, if it is determined that this
Agreement is subject to Section 409A of the Code, then it is intended that it  comply in all respects with Section 409A of
the Code, and this Agreement shall be interpreted and administered in such
manner as to comply with such provisions and may be amended, retroactively if
necessary, to conform to the requirements of Section 409A of the Code.

 

17.          COMPLIANCE
WITH SECTION 162(m):

 

                It is intended that the awards under this
Agreement comply in all respects with Section 162(m) of the Code, and this
Agreement shall be interpreted and administered in such manner as to comply
with such provisions.

 

                IN WITNESS WHEREOF, the Company has caused this Agreement to
be executed by its duly authorized officer, and the Award Recipient has
hereunto set his hand and seal, as of the 29th day of March, 2006.

 

 

	
  ATTEST:

  	
   

  	
  Mercantile Bankshares Corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
  John L. Unger, Secretary

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  WITNESS:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

 

 

 

 

APPENDIX
A

 

TARGET
AWARD UNITS, PERFORMANCE GRID AND PERFORMANCE PAYOUT PERCENTAGES

 

 

Target Award Units:                 

Maximum Award Units :                           
(150% of Target Award)

 

 

Performance Grid and Performance
Payout Percentages:

 

The performance metric shall be the
percentage improvement (not compounded) in Pre-Tax Operating Income (“PTOI”) of
Mercantile Bankshares Corporation between the base year (2005) and 2008 and
shall be calculated by subtracting the 2005 PTOI from the 2008 PTOI and
dividing the result by the 2005 PTOI.

 

PTOI shall be determined on a pure GAAP basis
without adjustments for acquisitions or other extraordinary events.

 

The following chart sets forth the
performance requirement calculation. 
Payout percentages shall be interpolated for percentage improvements
between benchmarks. 150% of Target Award is the maximum payout percentage.

 

	
  Benchmarks (Improvement
  in Pre-Tax Operating Income)

  	
   

  	
  Payout
  (As a Percentage of Target Award Units)

  
	
   

  	
   

  	
   

  
	
  0% improvement

  	
   

  	
  0% of Target Award

  
	
  15% improvement

  	
   

  	
  25% Target Award

  
	
  18% improvement

  	
   

  	
  50% Target Award

  
	
  22.5% improvement

  	
   

  	
  75% Target Award

  
	
  27% improvement

  	
   

  	
  100% Target Award

  
	
  33% improvement

  	
   

  	
  125% Target Award

  
	
  45% and above improvement

  	
   

  	
  150% Target Award

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00103-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00103-of-00352.parquet"}]]