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EXHIBIT (10)
SPECIAL RETIREMENT AGREEMENT
THIS AGREEMENT is made and entered as of August 15, 2000 (the "Agreement"), by
and between FIRST UNION CORPORATION (the "Corporation") and EDWARD E.
CRUTCHFIELD (the "Executive");
W I T N E S S E T H:
WHEREAS, the Executive has been the Chief Executive Officer of the Corporation
from April 1984 to April 2000, the second longest tenure among the chief
executive officers of the ten largest financial holding companies in the nation;
and
WHEREAS, under the Executive's leadership and vision, the Corporation has
evolved from a small financial institution with commercial banking operations
only in North Carolina to the sixth largest bank holding company in the United
States with operations in 41 states and 29 foreign countries; and
WHEREAS, the Executive desires to retire as an employee of the Corporation as of
September 1, 2000, and the Board of Directors of the Corporation desires the
Executive to remain as non-employee Chairman of the Board of Directors; and
WHEREAS, the Board of Directors of the Corporation, in recognition of and in
appreciation for the Executive's outstanding leadership and contributions to the
Corporation in the course of his distinguished and illustrious career with the
Corporation, desires to confer upon the Executive the special retirement
benefits herein set forth, which benefits are in addition to, and not in lieu
of, any of the Executive's retirement benefits, including, without limitation,
benefits pursuant to any employment agreement between the Corporation and the
Executive, and any of the Corporation's pension and supplemental pension plans,
deferred compensation plans, split dollar arrangements under the Corporation's
Estate Preservation Program, stock incentive compensation plans or welfare
benefit plans;
NOW, THEREFORE, in consideration of the premises and for other good and valuable
consideration, the receipt and adequacy of which being hereby acknowledged, the
parties hereto hereby agree as follows:
1. Special Retirement Benefit. Following the date of the Executive's retirement
as an employee of the Corporation (the "Retirement Date"), the Executive shall
be entitled to receive a cash payment of $1,800,000.00 per year (the "Special
Retirement Benefit"), for the remainder of the Executive's life. In addition, in
the event the Executive shall become deceased prior to the end of the fifteenth
anniversary of the Retirement Date (the "Retirement Benefit Period"), the
Corporation shall pay a lump sum representing the net present value (as of the
date of the Executive's death discounted at the Pension Benefit Guarantee
Corporation discount rate then in effect for the Corporation's qualified pension
plan) of the Special Retirement Benefit payments for the remainder of the
Retirement Benefit Period (the "Beneficiary Payment") to the beneficiary as
designated in writing from time to time by the Executive. In the event the
Executive does not designate a beneficiary in writing, the Beneficiary Payment
shall be made to the Executive's estate. The Special Retirement Benefit shall be
paid to the Executive on the Retirement Date and each anniversary thereof. At
the Executive's election, the Corporation shall
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place the "Lump Sum Actuarial Equivalent" (as defined below) of the aggregate
Special Retirement Benefit in a "rabbi trust" for the benefit of the Executive
and/or his beneficiary. Payments to the Executive and/or his beneficiary from
such "rabbi trust" shall be consistent with the terms of this Agreement.
The "Lump Sum Actuarial Equivalent" means a single payment which is
actuarially equivalent to the annuity benefit of the Special Retirement Benefit
due to the Executive under Section 1 of this Agreement computed using the most
recent Pension Benefit Guarantee Corporation discount rate in effect for the
Corporation's qualified pension plan and the mortality assumptions utilized in
the most recent actuarial valuation for the Corporation's qualified pension
plan.
2. Corporate Aircraft. Following the Retirement Date, the Executive shall be
entitled to use the Corporation's private aircraft: (i) up to 120 hours per year
for the period beginning on the Retirement Date and ending on the day
immediately preceding the tenth anniversary of the Retirement Date; (ii) up to
60 hours per year for the period beginning on tenth anniversary of the
Retirement Date and ending on the day immediately preceding the twentieth
anniversary of the Retirement Date; and (iii) thereafter up to 30 hours per year
for the remainder of the Executive's life. In connection with the foregoing, and
subject to applicable law, there shall be no restrictions on the number of
passengers on the corporate aircraft as long as the Executive is a passenger on
such aircraft.
3. Services Furnished. Following the Retirement Date, the Corporation shall
furnish the Executive with office space, a personal secretary, office supplies,
stenographic assistance and such other facilities and services related thereto
that are commensurate with his current position as Chairman of the Board of
Directors of the Corporation. The Corporation shall furnish the Executive the
items in this Section 3 for the remainder of the Executive's life. The
Executive's personal secretary hereunder shall be an employee of the Corporation
(or a wholly-owned subsidiary thereof).
4. Automobile. Following the Retirement Date, the Corporation shall transfer
title to the Executive of the automobile currently used by the Executive.
5. Supplemental Medical Benefits. Following the Retirement Date, the Corporation
shall reimburse the Executive for any medical expenses incurred by the Executive
for the remainder of his life which medical expenses are not otherwise paid by
the Corporation's welfare benefit plans in which the Executive participates.
6. Other Benefits. The Executive is a participant in certain stock incentive
plans maintained by the Corporation. This Agreement shall not change the terms
of such plans or the benefits earned by or due to the Executive thereunder. The
benefits earned by or due to the Executive in accordance with the terms of such
plans shall be paid or provided by the Corporation or such plans (as the case
may be) when due (whether such due date is on, before or after the Retirement
Date), and full payments and provision of benefits shall discharge fully all
obligations of the Corporation and such plans with respect to the Executive's
benefits under such plans. Notwithstanding the foregoing, each of the
Executive's outstanding options to purchase shares of the Corporation's common
stock shall become exercisable, if not already exercisable, on the Retirement
Date and shall continue to be exercisable until the expiration date of such
stock option, which date is set forth in the terms of the grant of such stock
option.
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7. Certain Taxes. All taxes incurred by the Executive for the items contained in
Sections 2, 3, and 4 in this Agreement shall be paid by the Corporation on a
grossed-up basis. The Corporation shall be entitled to withhold from the
benefits and payments described herein all income and employment taxes required
to be withheld by applicable law.
8. Amendment; Termination. No amendment, modification or termination of this
Agreement may be made without the Executive's prior written consent.
9. Governing Law. This Agreement shall be construed in accordance with and
governed by the laws of the State of North Carolina.
10. Other Agreements. This Agreement shall have no effect on (i) the Employment
Agreement, dated as of August 1, 1985 (as amended), between the Corporation and
the Executive, and (ii) the Special Restricted Stock Award Agreement, dated as
of April 15, 1997, between the Corporation and the Executive, and such
agreements shall remain in full force and effect.
11. Successors.
(A) Corporation's Successors. The Corporation will require any
successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Corporation to expressly assume and agree to perform this Agreement in the same
manner and to the same extent that the Corporation would be required to perform
it if no such succession had taken place. Failure of the Corporation to obtain
such assumption and agreement prior to the effectiveness of any such succession
shall be a breach of this Agreement which shall entitle the Executive to
monetary and/or equitable damages, as the case may be. As used in this
Agreement, "Corporation" shall mean the Corporation as hereinbefore defined and
any successor to its business and/or assets as aforesaid which executes and
delivers the agreement provided for in this Section 11(A) or which otherwise
becomes bound by all the terms and provisions of this Agreement by operation of
law.
(B) The Executive's Successors. This Agreement and all rights of the
Executive hereunder shall inure to the benefit of and be enforceable by the
Executive's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If the Executive should
become deceased while any amounts would still be payable to him hereunder if he
had continued to live, all such amounts unless otherwise provided herein shall
be paid in accordance with the terms of this Agreement to the Executive's
beneficiary as designated in writing to the Corporation or, if there be no such
designee, to the Executive's estate.
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IN WITNESS WHEREOF, this Agreement has been duly executed by the parties hereto
as of the day and year first above written.
FIRST UNION CORPORATION
By: /s/ Don R. Johnson
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Name: Don R. Johnson
Title: Executive Vice President
/s/ Edward E. Crutchfield
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Edward E. Crutchfield
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