EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT, made as of the 23rd day of April, 1999, by
and between WACHOVIA CORPORATION (the "Corporation") and <<Name>> (the
"Executive");
R E C I T A L S :
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The Corporation desires to secure the services of the Executive in its
behalf or in behalf of one or more of its subsidiaries for which the Executive
may render services hereunder from time to time, in accordance with the terms
and conditions set forth herein. In addition, the Corporation desires to provide
the Executive with an incentive to remain in the service of the Corporation or
one or more of its subsidiaries by granting to the Executive compensation
security as set forth herein should her employment be terminated by the
Corporation without cause during the term of this Agreement.
NOW, THEREFORE, the Corporation and the Executive hereby mutually
agree as follows:
1. Employment. The Executive shall devote her working time exclusively
to the performance of such services for the Corporation or one or more of
its subsidiaries as may be assigned to her by the Corporation from time to
time, and shall perform such services faithfully and to the best of her
ability. Such services shall be rendered in a senior management or
executive capacity and shall be of a type for which the Executive is suited
by background and training. References herein to services rendered for the
Corporation and compensation and benefits payable or provided by the
Corporation shall include services rendered for and compensation and
benefits payable or provided by any subsidiary of the Corporation.
2. Term of Agreement. The term of this Agreement shall commence on the
date hereof and shall continue in effect until December 31, 2001; provided,
however, that commencing on the first anniversary of this Agreement, and
each anniversary thereafter, the term of this Agreement shall automatically
be extended for one additional year unless at least 90 days prior to any
such anniversary date either party shall notify the other in writing that
it does not wish to extend the term of this Agreement beyond the then
applicable expiration date. In no event, however, may the term of this
Agreement extend beyond the Executive's sixtieth birthday. References
herein to the "term" of this Agreement shall mean the original term plus
any continuation as provided in this Section 2. The "term" shall not be
deemed to refer to the Compensation Period described in Section 4.
3. Termination of Employment by the Corporation. The Corporation may
terminate the employment of the Executive at any time for any reason;
provided, that except as set forth in Sections 6 and 7, the Corporation
will provide
the Executive with Compensation Continuance to the extent described in
Section 4 if the Executive's employment is involuntarily terminated. The
Executive's employment shall be deemed to be involuntarily terminated if
she is terminated by the Corporation for any reason other than for "cause"
as defined in Section 6, or if she voluntarily terminates employment within
six months after: (a) her base salary is reduced below its level in effect
on the date hereof without the Executive's consent, or (b) the Corporation
amends the Senior Executive Retirement Agreement between the Corporation
and the Executive dated April 24, 1998 (the "Retirement Agreement") without
the Executive's consent, and such amendment reduces benefits to which the
Executive would have been entitled had such amendment not been made, or (c)
the duties assigned to the Executive are not of the status and type
described in Section 1 and the Executive has not consented thereto. The
Executive shall be deemed to have consented to any reduction described in
(a) or (b), or assignment described in (c), unless she shall object thereto
in writing within thirty days after she receives notice thereof.
4. Compensation Continuance. If the Executive's employment hereunder
is involuntarily terminated as described in Section 3, she will be entitled
to receive the cash compensation and benefits described in (a), (b) and (c)
below (herein, "Compensation Continuance") for the period beginning with
the date of such involuntary termination and ending with the earlier of
(i) the third anniversary of the date of such termination, or (ii) the
Normal Retirement Date of the Executive as defined in the Retirement
Agreement (such period is referred to herein as the "Compensation Period").
The duration of the Compensation Period shall not be affected by the fact
that the term of this Agreement otherwise would end before such Period
expires. The cash compensation and benefits are as follows:
(a) Cash Compensation. The amount of cash compensation to be
received monthly during the Compensation Period shall equal
one-twelfth of the sum of (i) the Executive's highest annual rate of
salary from the Corporation in effect during the 12-month period prior
to her involuntary termination, plus (ii) an amount equal to the
average of the incentive compensation paid to the Executive by the
Corporation, if any, for the three consecutive calendar years next
preceding the year of such termination; provided, that the incentive
compensation to be recognized for this purpose shall be approved by
the Management Resources and Compensation Committee, plus (iii) the
average of any annual contributions by the Corporation (excluding
participant contributions) in behalf of the Executive under the
Retirement Savings and Profit-Sharing Plan of Wachovia Corporation and
the Wachovia Corporation Executive Deferred Compensation Plan for the
three consecutive calendar years preceding the year of such
termination. Each monthly payment of such cash compensation
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shall have deducted therefrom all payroll taxes and withholdings
required by law.
(b) Employee Benefits. During the Compensation Period the
Executive shall be carried on the payroll of the Corporation, and
shall be deemed to be continuing in the employment of the Corporation
for the purpose of applying and administering employee benefit plans
of the Corporation (other than any tax-qualified retirement plans) and
individual contracts between the Corporation and the Executive
providing supplemental or equalization payments or benefits with
respect to the Executive. The Executive shall participate in any
changes during the Compensation Period in benefit plans or programs
applicable generally to employees of the Corporation, or to a class
of employees which includes senior executives of the Corporation, but
shall not have any right or option to participate in any such plan or
program in which she was not a participant immediately prior to her
involuntary termination of employment. Any individual contract between
the Corporation and the Executive in effect at the time of her
involuntary termination of employment may be terminated or amended by
the Corporation to the extent permitted by the terms of such contract;
provided, that during the Compensation Period the Corporation shall
not, without the written consent of the Executive or except to the
extent required by law, make any amendment to or terminate any one or
more of the following individual contracts or plans as applied to the
Executive: (i) the Retirement Agreement; and (ii) the Wachovia
Corporation Executive Deferred Compensation Plan. The Corporation
shall have no obligation to the Executive to make any change or
improvement in any such contract during the Compensation Period even
if the Corporation shall make changes or improvements during such
period in similar contracts, if any, with other senior executives of
the Corporation.
(c) Acceleration of Stock Options and Restricted Awards.
Immediately upon termination of the Executive's employment, all
options previously granted to the Executive and outstanding on the
date of termination to acquire shares of common stock of the
Corporation shall become fully vested and exercisable (or subject to
surrender) in full and all restricted awards shall be deemed to be
earned in full; provided, that restricted awards based upon
performance criteria or a combination of performance criteria and
continued service shall be deemed to be earned in accordance with the
terms, conditions and procedures of the plan or plans pursuant to
which any such restricted awards were granted.
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In the event that the Executive shall engage in full-time employment
permitted hereunder for another employer or on a self-employed basis during
the Compensation Period, her employment with the Corporation shall be
deemed to have terminated for purposes of Section 4(b) as of the date she
begins such full-time employment, but the payments in Section 4(a) shall
continue for the remainder of the Compensation Period and the rights under
Section 4(c) shall be applicable, in each case subject to the provisions of
Section 7.
5. Voluntary Termination of Employment by the Executive. The Executive
reserves the right to terminate her employment voluntarily at any time for
any reason following at least six months' notice to the Corporation. If
such notice shall be given, this Agreement shall terminate as of the
effective date of termination as set forth in such notice (or the date six
months from the date of receipt by the Corporation of such notice, if no
effective date shall be set forth therein), unless sooner terminated as
provided in Section 3, 6 or 8. The Executive shall not be entitled to any
form of Compensation Continuance as a result of such voluntary termination.
6. Termination for Cause. This Agreement shall immediately be
terminated and neither party shall have any obligation hereunder (including
but not limited to any obligation on the part of the Corporation to provide
Compensation Continuance) if the Executive's employment is terminated for
"cause." Termination for cause shall occur when termination results from
the Executive's (a) criminal dishonesty, (b) refusal to perform her duties
hereunder on substantially a full-time basis, (c) refusal to act in
accordance with any specific substantive instructions of the Chief
Executive Officer or the Board of Directors of the Corporation, or (d)
engaging in conduct which could be materially damaging to the Corporation
without a reasonable good faith belief that such conduct was in the best
interests of the Corporation. The determination of whether a termination is
for cause shall be made by the Management Resources and Compensation
Committee of the Board of Directors of the Corporation (the "Committee"),
and such determination shall be final and conclusive on the Executive and
all other persons affected thereby.
7. Executive's Obligations; Early Termination of Compensation Period.
(a) During the Compensation Period, the Executive shall provide
consulting services to the Corporation at such time or times as the
Corporation shall reasonably request, subject to appropriate notice
and to reimbursement by the Corporation of all reasonable travel and
other expenses incurred and paid by the Executive. In the event the
Executive shall engage in full-time employment permitted hereunder
during the Compensation Period for another employer or on a
self-employed basis, her obligation to
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provide the consulting services hereunder shall be limited by the
requirements of such employment.
(b) The Executive shall not disclose to any other person any
material information or trade secrets concerning the Corporation or
any of its subsidiaries at any time during or after the Compensation
Period. The Executive will at all times refrain from taking any action
or making any statements, written or oral, which are intended to and
do disparage the business, goodwill or reputation of the Corporation
or any of its subsidiaries, or their respective directors, officers,
executives or other employees, or which could adversely affect the
morale of employees of the Corporation or any subsidiaries.
(c) The Executive shall not, without the Corporation's written
consent, engage in competitive employment at any time during the
Compensation Period. The Executive shall be deemed to engage in
competitive employment if she shall render services as an employee,
officer, director, consultant or otherwise, for any employer which
conducts a principal business or enterprise that competes directly
with the Corporation or affiliate of the Corporation.
(d) In the event that the Executive shall refuse to provide
consulting services in accordance with paragraph (a), or shall
materially violate the terms and conditions of paragraph (b) or (c),
the Corporation may, at its election, terminate the Compensation
Period and Compensation Continuance to the Executive. The Corporation
may also initiate any form of legal action it may deem appropriate
seeking damages or injunctive relief with respect to any material
violations of paragraph (a), (b) or (c).
(e) The Committee shall be responsible for determining whether
the Executive shall have violated this Section 7, and all such
determinations shall be final and conclusive. Upon the request of the
Executive, the Committee will provide an advance opinion as to whether
a proposed activity would violate the provisions of paragraph (c).
8. Death and Disability. In the event that, during the term of this
Agreement or during the Compensation Period, the Executive shall die or
shall become entitled to benefits under the Corporation's Long-Term
Disability Plan, this Agreement shall thereupon terminate and neither the
Executive nor any other person shall have any further rights or benefits
hereunder (including any rights to Compensation Continuance).
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9. Other Severance Benefits. Except as otherwise provided in this
Agreement, the Executive shall not be entitled to any form of severance
benefits, including benefits otherwise payable under any of the
Corporation's regular severance plans or policies, irrespective of the
circumstances of her termination of employment. The Executive agrees that
the payments and benefit provided hereunder, subject to the terms and
conditions hereof, shall be in full satisfaction of any rights which she
might otherwise have or claim by operation of law, by implied contract or
otherwise, except for rights which she may have under employee benefit
plans of the Corporation or individual written contracts with the
Corporation.
10. Change of Control.
(a) Notwithstanding any other provision of this Agreement, the
Executive will be entitled to receive the Compensation Continuance
described in Section 4 in the event the Executive voluntarily terminates
his employment during the period beginning on the date of a Change of
Control (as defined in Section 10(b) herein) and ending on the third
anniversary of such date.
(b) For the purposes herein, a "Change of Control" shall be
deemed to have occurred on the earliest of the following dates:
(i) The date any entity or person shall have become the
beneficial owner of, or shall have obtained voting control over,
twenty-five percent or more of the outstanding Common Stock of
the Corporation;
(ii) The date the shareholders of the Corporation approve a
definitive agreement (A) to merge or consolidate the Corporation
with or into another corporation, in which the Corporation is not
the continuing or surviving corporation or pursuant to which any
shares of Common Stock of the Corporation would be converted into
cash, securities or other property of another corporation, other
than a merger of the Corporation in which holders of Common Stock
immediately prior to the merger have the same proportionate
ownership of Common Stock of the surviving corporation immediately
after the merger as immediately before, or (B) to sell or otherwise
dispose of substantially all the assets of the Corporation; or
(iii) The date there shall have been a change in a majority
of the Board of Directors of the Corporation within a twelve month
period unless the nomination for election by the Corporation's
shareholders of each new director was approved by the vote of
two-thirds of the directors then still in office who were in office at
the beginning of the twelve month period.
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For the purposes herein, the term "person" shall mean any individual,
corporation, partnership, group, association or other person, as such term
is defined in Section 13(d)(3) or Section 14(d)(2) of the Exchange Act,
other than the Corporation, a subsidiary of the Corporation or any employee
benefit plan(s) sponsored or maintained by the Corporation or any
subsidiary thereof, and the term "beneficial owner" shall have the
meaning given the term in Rule 13d-3 under the Exchange Act.
(c) (i) In the event it shall be determined that any payment,
benefit or distribution (or combination thereof) by the Corporation or
one or more trusts established by the Corporation for the benefit of
its employees, 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) (a "Payment") would be subject to the excise
tax imposed by Section 4999 of the Internal Revenue Code of 1996, as
amended (the "Code"), or any interest or penalties are incurred by the
Executive with respect to such excise tax (such excise tax, together
with any such interest and penalties, hereinafter collectively
referred to as the "Excise Tax"), the Executive shall be entitled to
receive an additional payment (a "Gross-Up Payment") 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 the 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.
(ii) Subject to the provisions of Section 10(c)(iii), all
determinations required to be made under this Section 10, 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 a nationally recognized certified
public accounting firm designated by the Executive (the "Accounting
Firm") which shall provide detailed supporting calculations both to
the Corporation and the Executive within fifteen 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 Corporation. In the event
that the Accounting Firm is serving as accountant or auditor for an
individual, entity or group effecting the change in ownership or
effective control (within the meaning of Section 280G of the Code),
the Executive shall 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
Corporation. Any Gross-Up Payment, as determined pursuant to this
Section 10, shall be paid by the Corporation to the Executive within
five days after the receipt of the Accounting Firm's
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determination. If the Accounting Firm determines that no Excise Tax is
payable by the Executive, it shall so indicate to the Executive in
writing. Any determination by the Accounting Firm shall be binding
upon the Corporation and the Executive. As a result of the uncertainty
in the application of Section 4999 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
Corporation should have been made ("Underpayment"), consistent with
the calculations required to be made hereunder. In the event that the
Corporation exhausts its remedies pursuant to Section 10(c)(iii) 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 Corporation to or for the benefit of the
Executive.
(iii) The Executive shall notify the Corporation in writing
of any claim by the Internal Revenue Service that, if successful,
would require the payment by the Corporation 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 Corporation 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
Corporation (or such shorter period ending on the date that any
payment of taxes with respect to such claim is due). If the
Corporation notifies the Executive in writing prior to the expiration
of such period that it desires to contest such claim, the Executive
shall:
(A) give the Corporation any information reasonably
requested by the Corporation relating to such claim;
(B) take such action in connection with contesting such
claim as the Corporation 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
Corporation;
(C) cooperate with the Corporation in good faith in
order to effectively contest such claim; and
(D) permit the Corporation to participate in any
proceedings relating to such claim;
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provided, however, that the Corporation 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 10(c)(iii), the Corporation shall control
all proceedings taken in connection with such contest and, at its sole
option, may pursue or forego 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 Corporation shall determine; provided, however, that if the
Corporation directs the Executive to pay such claim and sue for a
refund, the Corporation 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 provided, further, that if
the Executive is required to extend the statute of limitations to
enable the Corporation to contest such claim, the Executive may limit
this extension solely to such contested amount. The Corporation's
control of the contest shall be limited to issues with respect to
which a Gross-Up Payment would be payable hereunder and the 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.
(iv) If, after the receipt by the Executive of an amount advanced
by the Corporation pursuant to Section 10(c)(iii), the Executive
becomes entitled to receive any refund with respect to such claim, the
Executive shall (subject to the Corporation's complying with the
requirements of Section 10(c)(iii)) promptly pay to the Corporation
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 Company pursuant to Section
10(c)(iii), a determination is made that the Executive shall not be
entitled to any refund with respect to such claim and the Corporation
does not notify the Executive in writing of its intent to contest such
denial of refund prior to the
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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.
11. Waiver of Claims. In consideration of the obligations of the
Corporation hereunder, the Executive unconditionally releases the Corporation,
its directors, officers, employees and shareholders, from any and all claims,
liabilities and obligations of any nature pertaining to termination of the
Executive's employment by the Corporation, including but not limited to (a) any
claims under federal, state or local laws prohibiting discrimination, including
without limitation the Age Discrimination in Employment Act of 1967, as amended,
or (b) any claims growing out of any alleged legal restrictions on the
Corporation's right to terminate the Executive's employment, such as any alleged
contract of employment or termination contrary to public policy. The Executive
acknowledges that she has been advised to consult with an attorney prior to
signing this Agreement, that she has had no less than twenty-one days to
consider this Agreement prior to the execution hereof, and that she may revoke
this Agreement at any time within seven days following the execution hereof.
12. Notices. All notices hereunder shall be in writing and deemed properly
given if delivered by hand and receipted or if mailed by registered mail, return
receipt requested. Notices to the Corporation shall be directed to the Secretary
of the Corporation with a copy directed to the Chief Executive Officer. Notices
to the Executive shall be directed to her last known address.
13. Miscellaneous.
(a) The waiver, whether express or implied, by either party of a
violation of any of the provisions of this Agreement shall not operate or
be construed as a waiver of any subsequent violation of any such provision.
(b) No right, benefit or interest hereunder shall be subject to
assignment, encumbrance, charge, pledge, hypothecation or set off in
respect of any claim, debt or obligation, or similar process.
(c) This Agreement may not be amended, modified or canceled except by
written agreement of the parties.
(d) In the event that any provision or portion of this Agreement shall
be determined to be invalid or unenforceable for any reason, the remaining
provisions of this Agreement shall remain in full force and effect to the
fullest extent permitted by law.
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(e) This Agreement shall be binding upon and inure to the benefit of the
Executive and the Corporation, and their respective heirs, successors and
assigns.
(f) No benefit or promise hereunder shall be secured by any specific
assets of the Corporation. The executive shall have only the rights of an
unsecured general creditor of the Corporation in seeking satisfaction of such
benefits or promises.
(g) This Agreement shall be governed by the construed in accordance with
the laws of the State of North Carolina.
(h) This Agreement sets forth the entire agreement and understanding of
the parties hereto with respect to the matters covered hereby, and amends and
supersedes any predecessor Employment Agreement between the parties hereto.
IN WITNESS WHEREOF, this Agreement has been executed by or in behalf of the
parties hereto as of the date first above written.
WACHOVIA CORPORATION
By:
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Chief Executive Officer
Attest:
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Secretary
[Corporate Seal]
(Seal)
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<<Name>>
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