EXHIBIT 10
AGREEMENT
THIS AGREEMENT is made this 26th day of November, 1996 by and between
FIRST VIRGINIA BANKS, INC., a Virginia bank holding corporation, (hereinafter
"First Virginia"), and JAMES R. WHEELING, (hereinafter "Wheeling").
WHEREAS, Wheeling is President and Chief Executive Officer of Premier
Bankshares Corporation (hereinafter "Premier");
WHEREAS, Premier has entered into an Agreement with Wheeling dated
September 22, 1993 (hereinafter, the "Change-in-Control Agreement")
concerning, among other things, Wheeling's status in the event that Premier
shall be merged with another institution or entity;
WHEREAS, Premier has entered into an Agreement and Plan of
Reorganization with First Virginia whereby Premier shall be merged into First
Virginia; and
WHEREAS, First Virginia and Wheeling wish to establish a new set of
terms which will govern Wheeling's employment relationship with First Virginia
and/or one or more of its subsidiaries or affiliates beginning on the
Effective Date of the Merger of Premier into First Virginia, which shall be
contingent on the consummation of the Merger and shall then be in lieu of and
supersede the Change-in-Control Agreement between Premier and Wheeling dated
September 22, 1993;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
promises set forth hereinbelow, the adequacy of which is hereby acknowledged,
First Virginia and Wheeling do hereby agree as follows:
1. On the Effective Date of the Merger of Premier with First Virginia,
First Virginia shall cause Wheeling to be employed by its wholly owned
subsidiary, First Virginia Bank-Southwest, as President and Chief
Administrative Officer at a base annual salary of $154,000.00. Subject to the
terms of this Agreement, First Virginia shall cause First Virginia
Bank-Southwest to so employ Wheeling for a minimum period of three years from
the Effective Date of the Merger.
For a minimum period of three years, provided Wheeling continues to be
employed by First Virginia Bank-Southwest, First Virginia shall cause First
Virginia Bank-Southwest to pay Wheeling at least a minimum base salary of
$154,000.00 and to assume Premier's split dollar insurance obligations with
respect to Wheeling's present split dollar insurance. The base salary shall be
paid in accordance with First Virginia Bank-Southwest's payroll policies and
procedures. As an officer of First Virginia Bank-Southwest, Wheeling will be
able to participate in First Virginia's Short Term and Long Term Disability
Plans in accordance with the terms and conditions of those Plans commencing at
the Effective Date of the Merger. On or before the Effective Date of the
Merger, First Virginia also shall cause Wheeling to become a director of that
Bank, subject to the same terms, duties, responsibilities and conditions as
other directors of that Bank. Consistent with First Virginia's policies and
procedures and to the same extent that other similarly situated executives at
First Virginia are entitled to such benefits, Wheeling will be provided with
an automobile, will be reimbursed for relocation expenses if he is relocated
and will be reimbursed for country club dues and, if his employer requires
that he move his club membership or if he is relocated, an initiation fee.
Wheeling shall be relocated to Roanoke, Virginia within one year of the date
that Premier Bank-South, N.A. converts all of its system processing to First
Virginia's data processing system following its merger with First Virginia
Bank-Southwest.
2. During a thirty-day period beginning exactly one year after the
Effective Date of the Merger of Premier with First Virginia, and provided
Wheeling still is employed with First Virginia Bank-Southwest, Wheeling shall
have the option of resigning from his position at First Virginia
Bank-Southwest. If, during the thirty-day period, or any time prior thereto,
First Virginia receives written notice from Wheeling of his intent to resign
during that thirty-day period, First Virginia shall pay Wheeling within ten
days after the payment amount has been determined (but no later than thirty
days after his resignation) the highest amount possible, but in no event in
excess of $410,000, which would not subject such payment to excess parachute
treatment under Section 280G of the Internal Revenue Code ("hereinafter
referred to as the "Severance Amount"); provided, however, that the Severance
Amount shall be $410,000 if the net amount available to Wheeling after such
payment, and after accounting for income and excise taxes on such payment,
exceeds the net amount available to Wheeling, after accounting for income
taxes, if the payment were reduced below $410,000 to the highest amount that
would not be subject to excess parachute treatment under Section 280G. For
purposes herein, income taxes shall be determined at the highest marginal
rates in effect at the time of payment, and calculations of the payment amount
and after-tax net amounts shall be made by a public accounting firm mutually
agreeable to Wheeling and First Virginia.
3. During the three-year period beginning with the Effective Date of
the Merger of Premier with First Virginia, Wheeling shall not be discharged
except for cause as defined herein below. If, during the first year of such
period, Wheeling is (a) discharged other than for cause, (b) dies while an
employee, or (c) resigns from his employment because (i) he is demoted from
his position as President and Chief Administrative Officer of First Virginia
Bank-Southwest other than for cause, (ii) his salary is reduced below
$154,000.00 other than for cause, or (iii) First Virginia causes him to be
moved to: (A) a location other than Roanoke, Virginia or (B) some location
other than Roanoke not mutually agreed to by Wheeling and First Virginia, or
(C) any location other than where Wheeling currently resides at any time prior
to July, 1997, (such a resignation due to the reasons stated in paragraph
3(c)(iii)(A), 3(c)(iii)(B) and 3(c)(iii)(C) above is hereinafter referred to a
"Covered Termination"), then First Virginia shall pay to Wheeling (or, in the
case of his death, to his estate or other beneficiary designated in writing by
Wheeling and agreeable to First Virginia) an amount equal to the sum of (a)
$410,000 and (b) one twelfth of $154,000 times the number of whole and partial
months that remain from the date of such discharge, death or resignation to
the end of the first year.
If, during the second and third years of the three year period,
Wheeling is (x) discharged for some reason other than for cause, (y) dies
while an employee, or (z) resigns and his resignation is a Covered
Termination, then First Virginia shall pay to Wheeling (or, in the case of
death, to his estate or other beneficiary designated in writing by Wheeling
and agreeable to First Virginia) an amount equal to one-twenty-fourth (1/24)
of $410,000 times the unexpired number of whole and partial months that remain
from the date of such discharge, death or resignation to the end of the
three-year period; provided, however, that such amount shall be reduced to an
amount which would not subject such payment to excess parachute treatment
under Section 280G of the Internal Revenue Code unless the net amount of the
unreduced payment available to Wheeling, after accounting for income and
excise taxes on the unreduced payment, would exceed the net amount of the
reduced payment available to Wheeling after accounting for income taxes on the
reduced payment. For purposes hereof, income taxes shall be determined at the
highest marginal rates in effect at the time of payment, and calculations of
the payment amount and after-tax net amounts shall be made by a public
accounting firm mutually agreeable to Wheeling and First Virginia.
Any payment pursuant to this paragraph shall be made within ten days
after the payment amount has been determined but, in no event, later than
thirty days after his discharge, death or resignation.
"Cause," as used hereinabove, shall mean any of the following:
(i) fraud or gross misconduct;
(ii) a further violation of a rule, regulation, policy, code of
conduct or directive of First Virginia or his employer after having received
notice, consultation or reasonable warning about a prior violation thereof;
(iii) continued negligence in the performance of assigned duties
after having received notice, consultation or reasonable warning about a prior
occurrence of such negligence, which duties shall include but not be limited
to those duties set forth hereinbelow.
4. Among Wheeling's duties are loyalty and devotion of his best efforts
full time to the performance of his duties for his employer, giving proper
time and attention to furthering First Virginia's business. This duty shall
include not directly or indirectly engaging in any business which would
detract from Wheeling's ability to apply his best efforts to the performance
of his duties and not usurping any business opportunities of First Virginia.
5. Wheeling recognizes and acknowledges that in the course of
Wheeling's employment, it will be necessary for Wheeling to acquire
information that could include information concerning sales, products,
customers, prospective customers, computer programs, system documentation,
hardware and software products, manuals, processes, methods and other
confidential or proprietary information relating to First Virginia's affairs.
Wheeling acknowledges that the confidential information is the property of
First Virginia and its subsidiaries and affiliates and that the use,
misappropriation or disclosure of such information would constitute a breach
of trust and could cause irreparable harm to First Virginia. Wheeling also
acknowledges that it is essential for the proper protection of the business of
First Virginia that Wheeling be restrained from soliciting or inducing any
employees of First Virginia or its subsidiaries and affiliates from leaving
their employment and from hiring or attempting to hire any such employee. For
the three-year period beginning with the Effective Date of the Merger of
Premier and First Virginia, Wheeling covenants and agrees not to engage in
such a breach of trust or engage in any practice which could cause such harm
to First Virginia and its subsidiaries and affiliates. Upon the termination of
Wheeling's employment with First Virginia Bank-Southwest or any other
subsidiary or affiliate of First Virginia for any reason, Wheeling shall
promptly deliver to First Virginia all correspondence, manuals, letters,
notes, reports, programs, proposals and any other documents concerning the
customers, products or processes used by First Virginia and its subsidiaries
and affiliates.
6. For the three-year period beginning with the Effective Date of the
Merger of Premier and First Virginia, whether or not employed by First
Virginia or a subsidiary or affiliate of First Virginia, Wheeling shall not
compete in Southwestern Virginia (as that region is defined below) with First
Virginia or any of First Virginia's subsidiaries or affiliates, or be employed
by any financial institution, corporation, firm, or organization in
Southwestern Virginia which competes with First Virginia or any of its
subsidiaries or affiliates or directly or indirectly solicit loans,
commitments for loans, deposits, trust services, insurance services, or any
other type of business engaged in by Premier or First Virginia (or any of
their subsidiaries or affiliates) to or with any person, firm or corporation
with whom First Virginia or Premier (or any of their subsidiaries) conducted
any type of business on or after February 15, 1996. For purposes of this
paragraph 6, Southwestern Virginia shall include the following counties of
Virginia plus the cities located within those county boundaries: Roanoke,
Giles, Franklin, Montgomery, Henry, Patrick, Floyd, Pulaski, Bland, Wythe,
Carroll, Grayson, Smyth, Tazewell, Buchanan, Russell, Washington, Scott,
Dickenson, Wise and Lee.
7. Wheeling acknowledges that the remedies at law for Wheeling's breach
of this Agreement will be inadequate and that First Virginia shall be entitled
to injunctive relief against Wheeling in the event of any such breach in
addition to any other remedy or damages available. Wheeling acknowledges that
the restrictions contained in this Agreement are reasonable. If, however, a
court of competent jurisdiction shall hold any restriction to be unreasonable
as to time, geographic area, activities or otherwise, such restrictions shall
be deemed to be reduced to the extent necessary to make them reasonable, in
the opinion of such court.
8. If the Merger between Premier and First Virginia is consummated,
Wheeling covenants and represents that he will not attempt to enforce or seek
benefits from Wheeling's Change-in-Control Agreement with Premier dated
September 22, 1993.
9. This Agreement shall terminate if, for any reason, the Merger
between Premier and First Virginia is never consummated and the Agreement and
Plan of Reorganization is terminated.
10. At the request of either party, any controversy or claim arising
out of or relating to this Agreement, or the breach thereof, shall be settled
by arbitration administered by the American Arbitration Association under its
National Rules for the Resolution of Employment Disputes, and judgment upon
the award rendered by the arbitrator(s) may be entered in any court having
jurisdiction thereof. Notwithstanding the above, if the arbitrator(s) find
that First Virginia has violated paragraph 3 herein, the arbitrator(s) shall
award Wheeling no more and no less than the amount to which Wheeling would be
entitled if, as of the date Wheeling is no longer employed by First Virginia
or a subsidiary thereof, Wheeling had been discharged other than for cause.
11. This Agreement shall be governed by and in accordance with the laws
of the Commonwealth of Virginia and may be amended with the mutual consent of
the parties hereto. In the event of any breach of this Agreement by Wheeling,
First Virginia or any subsidiary of First Virginia may institute and prosecute
proceedings in any court of competent jurisdiction either in law or in equity
to obtain damages for any breach of this Agreement or to enforce the specific
performance thereof by Wheeling.
WITNESS the following signatures and seals as of the date and year
first above written.
ATTEST: FIRST VIRGINIA BANKS, INC.
/s/ Christopher M. Cole By: /s/ Barry J. Fitzpatrick (SEAL)
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CHRISTOPHER M. COLE BARRY J. FITZPATRICK
Vice President and Chairman, President and Chief
Assistant Secretary Executive Officer
WITNESS:
/s/ Janice Lutz /s/ James R. Wheeling (SEAL)
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JAMES R. WHEELING