EXHIBIT 10(s)
EMPLOYMENT AGREEMENT
--------------------
THIS EMPLOYMENT AGREEMENT ("Agreement") is executed as of February 6,
2000, by and between BRANCH BANKING AND TRUST COMPANY ("Employer"), a bank
organized under the laws of the State of North Carolina having its principal
office at Winston-Salem, North Carolina, and X. XXXXXX XXXXXXXX (the
"Employee");
WITNESSETH THAT:
WHEREAS, Employee has been Chairman and Chief Executive Officer of One
Valley Bancorp, Inc. ("One Valley"), and by Agreement and Plan of Reorganization
dated February 6, 2000 (the "Merger Agreement"), One Valley has agreed to be
merged into BB&T Corporation ("BB&T"), a North Carolina corporation (the
"Merger"), and Employer is a wholly owned subsidiary of BB&T;
WHEREAS, the parties have agreed to enter into this Employment
Agreement to provide for the employment of Employee by Employer following the
Merger, and to be effective at the Effective Time of the Merger (the "Effective
Time") and to be conditional upon consummation thereof;
WHEREAS, Employer considers the availability of Employee's services to
be important to the management and conduct of Employer's business and desires to
secure the continued availability of Employee's services; and
WHEREAS, Employee is willing to make his services available to
Employer on the terms and subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, the parties hereto agree as follows:
1. Employment Conditional upon consummation of the Merger, at the
----------
Effective Time and continuing until the second anniversary thereof (the "Initial
Employment Period"), Employee shall be employed as Chairman and Chief Executive
Officer of Employer's West Virginia operations and as Executive Vice President
of Employer. Employee shall perform such duties as are customarily performed by
one holding the foregoing positions, and shall additionally render such other
services and duties as may be reasonably assigned to him from time to time by
the Chief Executive Officer of BB&T (the "CEO"), consistent with his status and
positions. If Employee shall continue such employment through the Initial
Employment Period, then commencing on the second anniversary of the Effective
Time and continuing until the fifth anniversary of the Effective Time (the
"Final Employment Period"), Employee shall be employed as Chairman of the West
Virginia
Board of Advisors of Employer. As such, Employee shall have such duties and
responsibilities as are commensurate with such position, including promoting the
products and services of Employer to the customer base of One Valley and its
subsidiaries, maintaining relationships and soliciting business with such former
customers, general customer and employee relations, public relations, assisting
in strategic planning, and such other services and duties consistent with the
foregoing as may be reasonably assigned to him from time to time by the CEO.
Employee's principal place of business shall be Charleston, West Virginia.
Notwithstanding the foregoing, upon at least sixty days' notice to Employer,
Employee shall be permitted to elect for the Final Employment Period to begin on
a date after the first year of the Term, from which date the Base Salary and
Bonus shall be reduced to amounts payable for the Final Employment Period as
provided in Section 3(a) and (b). Employee hereby accepts and agrees to the
above-described employment, subject to the general supervision and pursuant to
the orders, advice and direction of the CEO. In addition to the foregoing,
Employee shall be elected to the Board of Directors and Executive Committee of
BB&T as provided in Section 5.19 of the Merger Agreement.
2. Term of Employment. The term of this Agreement (the "Term") shall
------------------
commence at the Effective Time and shall terminate on the day next preceding the
fifth anniversary of the Effective Time. Any termination of Employee's
employment following the expiration of the five-year Term shall be deemed to be
a "retirement" for purposes of all benefit and compensation plans (including
option plans), except to the extent otherwise provided in any such plan.
3. Compensation.
------------
a. For all services rendered by Employee to Employer under this
Agreement, Employer shall pay to Employee an annual base salary ("Base Salary")
of (i) during the Initial Employment Period, no less than $510,000, and (ii)
during the Final Employment Period, no less than $300,000. Base Salary amounts
shall be payable in accordance with the payroll practices of Employer applicable
to officers.
b. During the Term, Employee shall participate in the BB&T
Amended and Restated Short Term Incentive Plan ("BB&T Incentive Plan"). During
the Initial Employment Period the amount earned under the BB&T Incentive Plan
shall be no less than $300,000 per year, and during the Final Employment Period
the amount earned under the BB&T Incentive Plan shall be no less than $100,000
per year (each such payment is referred to herein as a "Bonus"). The amount
earned by Employee under the BB&T Incentive Plan for each twelve-month period
shall be accrued ratably, and the amount accrued for each calendar year shall be
payable by Employer to Employee at the time BB&T would normally make payments to
participants under the BB&T Incentive Plan for such calendar year, and in
accordance with the terms of the BB&T Incentive Plan.
c. Employee shall be granted options under the BB&T Amended and
Restated 1995 Omnibus Stock Incentive Plan or any BB&T plan successor thereto
(the "BB&T Option Plan") for each calendar year during the Term, which options
each year shall have a value (determined by BB&T in the same manner as
determined for other executives receiving options under the BB&T Option Plan) of
42% of Employee's Base Salary in effect at the time of the grant. All such stock
options shall be granted pursuant to a stock option agreement substantially in
the
form of Annex A attached hereto, as modified by provisions of this Agreement.
d. Except as otherwise specifically provided herein, for as
long as Employee is employed by Employer, Employee also shall be entitled to
receive, on the same basis as other similarly situated officers of Employer,
employee pension and welfare benefits, perquisites and group employee benefits
such as sick leave, vacation, group disability and health, life, and accident
insurance and similar indirect compensation which Employer may from time to time
extend to its similarly situated officers; provided, that Employee's
participation in each such plan shall not commence until a date selected with
respect to each by Employer not later than January 1 following the effective
time of the merger of the last of the One Valley Subsidiaries (as defined in the
Merger Agreement) which is a bank into BB&T or one of its subsidiaries. Employee
shall also be entitled to receive a supplemental retirement benefit that is at
least equal to the benefit provided under the One Valley SERP as in effect
immediately prior to the Effective Time ("SERP Benefit") without regard to any
termination of the One Valley SERP prior to or after the Effective Time. With
respect to any One Valley plan which Employer determines, in its sole
discretion, provides benefits of the same type or class as a corresponding BB&T
plan, Employer shall continue such One Valley plan in effect for the benefit of
Employee until he shall become eligible to become a participant in the
corresponding BB&T plan. Employee shall be eligible to elect to defer
compensation payable hereunder in accordance with the terms of the BB&T deferred
compensation plan.
e. All amounts payable hereunder shall be subject to such
deductions and withholdings as shall be required by law.
f. In addition to the above amounts, Employer shall pay to
Employee the following special amounts conditional upon completion of the
following tasks:
(i) $425,000 conditional upon consummation of the Merger,
payable within five business days following the Effective Time;
(ii) $575,000, conditional upon substantial completion of
the conversion of the M&I Data Services systems of One Valley to the
computer systems of Employer, payable no later than the close of the
calendar quarter in which such conversion is completed;
(iii) $575,000, conditional upon the earlier of (x)
substantial completion of integration of One Valley's West Virginia
support, administrative and back office functions, including any such
functions relocated by BB&T from other areas, with the corresponding
BB&T functions, which integration is to be accomplished within six
months following the conversion described in (ii) above, payable no
later than the close of the calendar quarter in which such integration
is completed; and (y) 90 days following the merger of One Valley's
banks located in West Virginia with a BB&T entity, payable no later
than the close of the calendar quarter in which the 90th day falls;
and
(iv) $225,000, conditional upon the earlier of (x)
substantial
completion of a plan to create and enhance BB&T's brand identity
within One Valley's market area and commencement of implementation of
such plan, including but not limited to implementing programs for BB&T
Advisory Boards in West Virginia to increase BB&T's name recognition
and to market BB&T's services, which tasks shall be completed within
twelve months following the conversion described in (ii) above,
payable no later than the close of the calendar quarter in which such
tasks are completed, and (y) 180 days following the merger of One
Valley's banks located in Virginia with a BB&T entity, payable no
later than the close of the calendar quarter in which the 180th day
falls.
The CEO shall have the sole discretion to determine whether the
conditions stated in paragraphs (ii), (iii) and (iv) have been satisfied. Such
conditions shall be presumed to have been satisfied within 12 months of the
Effective Time in respect of paragraph (ii), within 18 months of the Effective
Time in respect of paragraph (iii), and within 24 months in respect of paragraph
(iv), unless there shall have been delivered to Employee a statement executed by
the CEO declaring that such condition or conditions have not been satisfied and
stating the basis for such conclusion. If Employee objects to such declaration,
the provisions of Section 9 shall apply.
If, prior to the date for payment of any one or more of the above amounts,
Employee's employment shall be terminated for any reason except (A) by Employer
under circumstances described in Section 6(c), or (B) by Employee for Good
Reason as defined in Section 6(e), Employee shall not be entitled to receive the
above payments with respect to the uncompleted tasks. Payments pursuant to this
Section 3(f) shall be made as provided in this Section 3(f), and the times of
such payments shall not be affected by any other provision herein. Payments
pursuant to this Section 3(f) shall be deemed to be compensation for income tax
purposes, but shall not be deemed to be compensation or otherwise taken into
account for purposes of determining benefits or contributions in behalf of
Employee under any retirement plan or program of Employer or any other plan,
program or arrangement of Employer (including without limitation for purposes of
determination the SERP Benefit), and shall not be taken into account in
determining Termination Compensation of Employee as defined in Section 6(c) or
otherwise in this Agreement.
4. Covenants of Employee.
---------------------
a. To the extent and subject to the limitations provided
in the following subsections of this Section 4 (whichever may be applicable),
upon termination of Employee's employment, Employee will not directly or
indirectly, either as a principal, agent, employee, employer, stockholder (other
than as a less than 5% stockholder of a public entity), co-partner or in any
other individual or representative capacity whatsoever: (i) engage in a
Competitive Business anywhere in the States of West Virginia and Virginia; or
(ii) solicit, or assist any other person in so soliciting, any depositors or
customers of Employer, BB&T or their Affiliates to make deposits in, borrow
money from, or become customers of any other financial institution conducting a
Competitive Business; or (iii) induce any employees to terminate their
employment with Employer, BB&T or their Affiliates. As used in this Agreement,
the term "Competitive Business" means the banking and financial services
business, which includes consumer savings, commercial banking and the insurance
and trust businesses, or the savings and loan or mortgage banking business, or
the
investment advisory or sales businesses or any other business in which any of
Employer, BB&T or their Affiliates is engaged at the time of termination of
Employee's employment; the term "Affiliate" means a Person that directly or
indirectly through one or more intermediaries, controls, or is controlled by, or
is under common control with, another Person; and the term "Person" means any
person, partnership, corporation, company, group or other entity.
b. If Employee voluntarily terminates employment with Employer
at any time during the Term other than for Good Reason, Employee will be subject
to the provisions of Section 4(a) until the second anniversary of Employee's
termination.
c. If Employee's employment is terminated by Employer for Just
Cause (as defined in Section 6(b)) or as a result of a Disability Notice (as
defined in Section 5) during the Term, Employee will be subject to the
provisions of Section 4(a) until the second anniversary of Employee's
termination.
d. If Employee's employment is terminated at any time during
the Term by Employer for reasons other than Just Cause (as defined in Section
6(b)) or other than as a result of a Disability Notice (as defined in Section
5), or if Employee terminates his employment for Good Reason (as defined in
Section 6(e)), Employee will be subject to the provisions of Section 4(a) until
the date as of which Employee ceases to receive Termination Compensation as
provided in Section 6(c) (excluding, for this purpose, SERP Benefit payments).
e. During the Term of Employee's employment hereunder and
thereafter, and except as required by any court, supervisory authority or
administrative agency or as may be otherwise required by applicable law,
Employee shall not, without the written consent of the Board of Directors of
Employer or a person authorized thereby, disclose to any person (other than his
personal attorney, or an employee of Employer or an Affiliate, or a person to
whom disclosure is reasonably necessary or appropriate in connection with the
performance by Employee of his duties as an employee of Employer), any
confidential information obtained by him while in the employ of Employer, unless
such information has become a matter of public knowledge at the time of such
disclosure.
f. The covenants contained in this Section 4 shall be construed
and interpreted in any judicial proceeding to permit their enforcement to the
maximum extent permitted by law. Employee agrees that the restraints imposed
herein are necessary for the reasonable and proper protection of Employer and
its Affiliates, and that each and every one of the restraints is reasonable in
respect to activities restricted, length of time and geographic area. Employee
acknowledges that strict enforcement of the terms of Section 4 will cause no
hardship to either Employee or his family. This Section 4 is made ancillary to
the sale of a business and shall be interpreted accordingly. Employee further
acknowledges that damages at law would not be a measurable or adequate remedy
for breach of the covenants contained in this Section 4 and, accordingly,
Employee agrees to submit to the equitable jurisdiction of any court of
competent jurisdiction in connection with any action to enjoin Employee from
violating any such covenants.
5. Disability. If, by reason of physical or mental disability
----------
during the period of
his employment hereunder, Employee is unable to carry out the essential
functions of his employment hereunder for six consecutive months, his services
hereunder may be terminated by action of the Board of Directors of Employer upon
one month's notice (the "Disability Notice") to be effective at any time after
the period of six continuous months of disability and while such disability
continues. If, prior to the effective time of the Disability Notice, Employee
shall recover from such disability and return to the full-time active discharge
of his duties, then the Disability Notice shall be of no further force and
effect and Employee's employment shall continue as if the same had been
uninterrupted. If Employee shall not so recover from his disability and return
to his duties, then his services shall terminate at the effective time of the
Disability Notice with the same force and effect as if that date had been the
end of the Term originally provided for hereunder. Prior to the effective time
of the Disability Notice, Employee shall continue to earn all compensation
(including bonuses and incentive compensation, if any) to which Employee would
have been entitled as if he had not been disabled, such compensation to be paid
at the time, in the amounts, and in the manner provided in Section 3(a),
inclusive of any compensation received pursuant to any applicable disability
insurance plan of Employer. Following the effective time of the Disability
Notice, Employee shall receive any Base Salary or Bonus earned as of the
effective date of the Disability Notice and payments of the Termination
Compensation (as defined in Section 6(c)) plus the SERP Benefit, which
Termination Compensation and SERP Benefit payments shall be offset in a manner
deemed equitable by BB&T by compensation that Employee receives under any
applicable disability insurance plan. In addition, as of the effective time of
the Disability Notice, all options shall vest and become immediately exercisable
consistent with the terms of the BB&T Option Plan. In the event a dispute arises
between Employee and Employer concerning Employee's physical or mental ability
to continue or return to the performance of his duties as aforesaid, Employee
shall submit to examination by a competent physician mutually agreeable to the
parties, and the physician's opinion as to Employee's capability to so perform
will be final and binding.
6. Termination.
-----------
a. If Employee shall die during the period of his
employment hereunder, this Agreement and the employment relationship hereunder
will automatically terminate on the date of death, which date shall be the last
day of the Term. In the event of death, Employee's estate shall be entitled to
receive an amount equal the amount the Employee would receive on termination for
Disability as set forth in Section 5 of this Agreement, plus any other benefits
Employee's estate is eligible to receive under any other employee benefit plans,
programs, policies or arrangements maintained by Employer. In addition, all
options shall vest and become immediately exercisable consistent with the terms
of the BB&T Option Plan.
b. Employer shall have the right to terminate Employee's
employment under this Agreement at any time for Just Cause, which termination
shall be effective immediately. Termination for "Just Cause" means (i) the
willful and continued failure of Employee to perform substantially his duties
with Employer (other than any such failure resulting from Employee's incapacity
due to physical or mental illness or any such failure subsequent to Employee
being delivered a notice of termination without Just Cause by Employer or
delivering a notice of termination for Good Reason to Employer) after a written
demand for substantial performance is delivered to Employee by the Board of
Directors of BB&T which specifically identifies the manner
in which the Board believes that Employee has not substantially performed
Employee's duties, (ii) the willful engaging by Employee in illegal conduct or
gross misconduct which is demonstrably and materially injurious to Employer or
its Affiliates or (iii) Employee's conviction of a felony or misdemeanor
involving moral turpitude. For purposes of this paragraph, no act or failure to
act by Employee shall be considered "willful" unless done or omitted to be done
by him not in good faith and without reasonable belief that his action or
omission was in the best interest of Employer or its Affiliates. The CEO shall
determine if Employee is terminated for Just Cause and shall advise Employee of
the basis for such determination. If Employee objects to such determination, the
provisions of Section 9 shall apply. In the event Employee's employment under
this Agreement is terminated for Just Cause, or if Employee shall voluntarily
terminate his employment hereunder (other than for Good Reason), Employee shall
have no right to render services or to receive compensation or other benefits
under this Agreement for any period after such termination.
c. Employer may terminate Employee's employment without "Just
Cause" at any time upon written notice to Employee, and Employee may terminate
for Good Reason at any time upon written notice to Employer, and any such
termination shall be effective immediately. In the event of a termination
pursuant to this subparagraph (c) prior to the close of the Initial Employment
Period, Employee will receive (i) Base Salary and Bonus earned and unpaid as of
the date of termination, (ii) annualized cash compensation of $810,000 for the
period beginning with the date of termination and ending with the close of the
Initial Employment Period and annualized cash compensation of $400,000 for the
Final Employment Period, and (iii) the SERP Benefit commencing as provided in
the SERP. In the event of a termination pursuant to this subparagraph (c) during
the Final Employment Period, Employee will receive (i) Base Salary and Bonus
earned and unpaid as of the date of termination, (ii) annual compensation of
$400,000 beginning with the date of termination and ending with the close of the
Term, and (iii) the SERP Benefit as provided in the SERP. All of the foregoing
payments, to the extent applicable, shall be referred to herein as Termination
Compensation. Termination Compensation shall be payable at the times the amounts
would have been paid if Employee had continued in employment until the end of
the Term. In addition to the foregoing payments of Termination Compensation,
until the end of the Final Employment Period (i) Employee will receive any
payments specified in Section 3(f) having a payment date following the
termination of employment, (ii) Employer and BB&T shall use their best efforts
to accelerate vesting of any nonvested benefits of Employee under any employee
stock-based or other benefit plan or arrangement to the extent permitted by the
terms of such plan or arrangement, and (iii) Employee shall continue to
participate in the same group hospitalization plan, health care plan, dental
care plan, life or other insurance or death benefit plan, retirement plan, and
any other present or future similar group employee benefit plan or program for
which officers of Employer generally are eligible, on the same terms as were in
effect prior to Employee's termination, either under Employer's plans or
comparable coverage, for all periods Employee receives Termination Compensation.
Notwithstanding anything in this Agreement to the contrary, if Employee breaches
Section 4(a) of this Agreement during the period that he is receiving
Termination Compensation or prior to receiving all of the payments described in
Section 3(f), Employee will not be entitled to receive any further Termination
Compensation (other than SERP Benefits) pursuant to this Section 6(c) or such
unpaid payments.
d. In the event Employee's employment is terminated pursuant to
Section 5 or Section 6(c), and Employee has attained age fifty-five with ten
years of service with Employer (or any of its affiliates), predecessor or
successor of Employer, Employee shall be eligible to receive retiree medical
benefits from Employer at the conclusion of any other benefit coverage set forth
in this Agreement. The retiree medical benefits (including contributions
required from Employee to receive such benefits) to be provided to Employee (and
Employee's eligible dependents) by Employer shall be no less favorable than the
benefits (and cost to Employee) under the retiree medical program to be provided
to Employee as in effect immediately prior to Employee's date of termination,
and shall be provided to Employee (and Employee's eligible dependents)
notwithstanding any amendment to, or termination of, Employer's retiree medical
program.
e. For purposes of this Agreement, "Good Reason" shall mean the
occurrence of any of the following events without Employee's express written
consent:
(i) the assignment to Employee of duties or responsibilities
(including reporting responsibilities) inconsistent with the title,
position and status of the offices and positions of Employee pursuant
to Section 1 of this Agreement (including any adverse diminution of
such duties or responsibilities);
(ii) any failure by Employer to comply with any of the
provisions of Section 3 of this Agreement, other than an isolated,
insubstantial and inadvertent failure not occurring in bad faith and
which is remedied by Employer promptly after receipt of notice thereof
given by Employee;
(iii) any relocation of Employee more than 30 miles from the
location specified in Section 1 of this Agreement or the breach by
Employer of any material provision of this Agreement;
(iv) any purported termination of the employment of Employee by
Employer which is not effected in accordance with this Agreement;
(v) the failure of Employer to obtain assumption of this
Agreement by successor as contemplated in Section 10(f) of this
Agreement; or
(vi) Employee's termination of employment for any reason (other
than Just Cause) during the thirty-day period immediately following
the occurrence of a Change in Control.
For purposes of this Section 6(e), the determination of "Good Reason" shall be
made by the CEO, and the CEO shall advise Employee of the basis for such
determination. If Employee shall object to such determination, the provisions of
Section 9 shall apply.
A "Change of Control" shall be deemed to have occurred if (i) any
person or group of persons (as defined in Section 13(d) and 14(d) of the
Securities Exchange Act of 1934) together with its affiliates, excluding
Employee benefit plans of Employer or BB&T, is or becomes, directly or
indirectly, the "beneficial owner" (as defined in Rule 13d-3 promulgated under
the Securities
Exchange Act of 1934) of securities of Employer or BB&T representing 20% or more
of the combined voting power of Employer's or BB&T's then outstanding
securities; or (ii) as a result of a tender offer or exchange offer for the
purchase of securities of Employer or BB&T (other than such an offer by BB&T for
its own securities), or as a result of a proxy contest, merger, consolidation or
sale of assets, or as a result of any combination of the foregoing, individuals
who at the beginning of any two-year period constitute BB&T's Board of
Directors, plus new directors whose election or nomination for election by
BB&T's shareholders is approved by a vote of at least two-thirds of the
directors still in office who were directors at the beginning of such two-year
period, cease for any reason during such two-year period to constitute at least
two-thirds of the members of such Board of Directors; or (iii) the shareholders
of BB&T approve a merger or consolidation of BB&T with any other corporation or
entity regardless of which entity is the survivor, other than a merger or
consolidation which would result in the voting securities of BB&T outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or being converted into voting securities of the surviving entity)
at least 40% of the combined voting power of the voting securities of BB&T or
such surviving entity outstanding immediately after such merger or
consolidation; or (iv) the shareholders of BB&T approve a plan of complete
liquidation or winding-up of BB&T or an agreement for the sale or disposition by
BB&T of all or substantially all of BB&T's assets; or (v) any event which BB&T's
Board of Directors determines constitutes a Change of Control.
f. In receiving any payments pursuant to this Section 6,
Employee shall not be obligated to seek other employment or take any other
action by way of mitigation of the amounts payable to Employee hereunder, and
such amounts shall not be reduced or terminated whether or not Employee obtains
other employment.
7. Other Employment.
----------------
During the Term, and excluding any periods of vacation and sick
leave to which Employee is entitled, Employee agrees to devote substantially all
of his attention and time during normal business hours to the business and
affairs of Employer and, to the extent necessary to discharge the
responsibilities assigned to Employee hereunder, to use Employee's reasonable
best efforts to perform faithfully and efficiently such responsibilities. During
the Term it shall not be a violation of this Agreement for Employee, in
accordance with Employer's policies, to (i) serve, with prior approval of the
CEO, on corporate, civic or charitable boards or committees, (ii) deliver
lectures, fulfilling speaking engagements or teach on a limited basis at
educational institutions and (iii) manage Employee's personal investments, so
long as such activities described in clauses (i), (ii) and (iii) do not
significantly interfere with the performance of Employee's responsibilities as
an employee of Employer in accordance with this Agreement. It is expressly
understood and agreed that to the extent that any such activities have been
conducted by Employee prior to the Effective Time in accordance with One
Valley's policies, the continued conduct of such activities (or the conduct of
activities similar in nature and scope thereto) subsequent to the Effective Time
shall not thereafter be deemed to interfere with the performance of Employee's
responsibilities to Employer. Employee shall not, during the period of his
employment hereunder, become interested directly or indirectly in any manner, as
partner, officer, director, stockholder, advisor, employee or in any other
capacity in any other Competitive Business; provided, however, that nothing
herein contained (including without limitation the provisions of Section 4(a))
shall be deemed to prevent or limit the
right of Employee to invest in a business substantially similar to Employer's
business if such investment is limited to less than five percent of the capital
stock or other securities of any corporation or similar organization whose stock
or securities are publicly owned or are regularly traded on any public exchange.
8. Certain Additional Payments by Employer.
---------------------------------------
(a) Anything in this Agreement to the contrary notwithstanding,
in the event it shall be determined that any payment, award, benefit or
distribution (or any acceleration of any payment, award, benefit or
distribution) by Employer (or any of its affiliated entities) or any entity
which effectuates a Change in Control (or any of its affiliated entities) to or
for the benefit of Employee (whether pursuant to the terms of this Agreement or
otherwise, but determined without regard to any additional payments required
under this Section 8) (the "Payments") would be subject to the excise tax
imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the
"Code"), or any interest or penalties are incurred by Employee with respect to
such excise tax (such excise tax, together with any such interest and penalties,
are hereinafter collectively referred to as the "Excise Tax"), then Employer
shall pay to Employee (or to the Internal Revenue Service on behalf of Employee)
an additional payment (a "Gross-Up Payment") in an amount such that after
payment by Employee of all taxes (including any Excise Tax) imposed upon the
Gross-Up Payment, Employee retains an amount of the Gross-Up Payment equal to
the sum of (x) the Excise Tax imposed upon the Payments and (y) the product of
any deductions disallowed because of the inclusion of the Gross-Up Payment in
Employee's adjusted gross income and the highest applicable marginal rate of
federal income taxation for the calendar year in which the Gross-Up Payment is
to be made. For purposes of determining the amount of the Gross-Up Payment,
Employee shall be deemed to (i) pay federal income taxes at the highest marginal
rates of federal income taxation for the calendar year in which the Gross-Up
Payment is to be made, (ii) pay applicable state and local income taxes at the
highest marginal rate of taxation for the calendar year in which the Gross-Up
Payment is to be made, net of the maximum reduction in federal income taxes
which could be obtained from deduction of such state and local taxes and (iii)
have otherwise allowable deductions for federal income tax purposes at least
equal to the Gross-Up Payment. Notwithstanding the foregoing provisions of this
Section 8(a), if it shall be determined that Employee is entitled to a Gross-Up
Payment, but that the Payments would not be subject to the Excise Tax if the
Payments were reduced by an amount that is less than 10% of the portion of the
Payments that would be treated as "parachute payments" under Section 280G of the
Code, then the amounts payable to Employee under this Agreement shall be reduced
(but not below zero) to the maximum amount that could be paid to Employee
without giving rise to the Excise Tax (the "Safe Harbor Cap"), and no Gross-Up
Payment shall be made to Employee. The reduction of the amounts payable
hereunder, if applicable, shall be made as elected by Employee. For purposes of
reducing the Payments to the Safe Harbor Cap, only amounts payable under this
Agreement (and no other Payments) shall be reduced. If the reduction of the
amounts payable hereunder would not result in a reduction of the Payments to the
Safe Harbor Cap, no amounts payable under this Agreement shall be reduced
pursuant to this provision.
(b) Subject to the provisions of Section 8(a), all
determinations required to be made under this Section 8, including whether and
when a Gross-Up Payment is required, the amount
of such Gross-Up Payment, the reduction of the Payments to the Safe Harbor Cap
and the assumptions to be utilized in arriving at such determinations, shall be
made by the public accounting firm that is retained by Employer (as of the date
immediately prior to the Change in Control, if applicable) (the "Accounting
Firm") which shall provide detailed supporting calculations both to Employer and
Employee within fifteen business days of the receipt of notice from Employer or
Employee that there has been a Payment, or such earlier time as is requested by
Employer (collectively, the "Determination"). In the event that the Accounting
Firm is serving as accountant or auditor for the individual, entity or group
effecting the Change in Control (or if the Accounting Firm fails to make the
Determination), Employee may appoint another nationally recognized public
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 Employer and Employer
shall enter into any agreement requested by the Accounting Firm in connection
with the performance of the services hereunder. The Gross-Up Payment under this
Section 8 with respect to any Payments shall be made no later than thirty days
following such Payment. If the Accounting Firm determines that no Excise Tax is
payable by Employee, or if the Accounting Firm determines that the Payments
shall be reduced to the Safe Harbor Cap, and if Employer concurs in such
determination, such determination shall be binding upon Employer and Employee
and Employee shall file his applicable tax returns consistent with such
determination (except that, if Employee's tax advisor shall advise Employee that
filing in such manner would or could likely constitute criminal fraud, Employee
shall not be obligated to file any such return on such basis). The Determination
by the Accounting Firm shall be binding upon Employer and Employee. As a result
of the uncertainty in the application of Section 4999 of the Code at the time of
the Determination, it is possible that Gross-Up Payments which will not have
been made by Employer should have been made ("Underpayment"), or that Gross-Up
Payments which are made by Employer should not have been made ("Overpayment").
In the event that Employee is required to make payment of any Excise Tax or
additional Excise Tax following an Underpayment, the Accounting Firm shall
determine the amount of the Underpayment that has occurred and any such
Underpayment (together with interest at the rate provided in Section
1274(b)(2)(B) of the Code) shall be promptly paid by Employer to or for the
benefit of Employee. In the event that Employee becomes entitled to receive a
refund of any Excise Tax or additional Excise Tax following an Overpayment, the
Accounting Firm shall determine the amount of the Overpayment that has occurred
and any such Overpayment (together with interest at the rate provided in Section
1274(b)(2)(B) of the Code) shall be promptly refunded by Employee to or for the
benefit of Employer. Employee shall cooperate, to the extent his out-of-pocket
expenses are reimbursed by Employer, with any reasonable requests by Employer in
connection with any contests or disputes with the Internal Revenue Service in
connection with the Excise Tax.
9. Reimbursement of Expenses.
-------------------------
If any contest or dispute shall arise under this Agreement
involving termination of Employee's employment with Employer or involving the
failure or refusal to perform fully in accordance with the terms hereof,
Employer shall reimburse Employee, on a current basis, for all legal fees and
expenses, if any, reasonably incurred by Employee in connection with such
contest or dispute (regardless of the result thereof), together with interest in
an amount equal to the "prime rate" as set forth in The Wall Street Journal from
time to time in effect, but in no event higher than
the maximum legal rate permissible under applicable law, such interest to accrue
from the date Employer receives Employee's statement for such fees and expenses
through the date of payment thereof.
10. Miscellaneous.
-------------
a. This Agreement shall be governed by and construed in
accordance with the laws of the State of North Carolina without regard to
conflicts of law principles thereof.
b. This Agreement constitutes the entire Agreement between
Employee and Employer with respect to the subject matter hereof and, as of the
Effective Time, shall supersede in their entirety any and all prior oral or
written agreements, understandings or arrangements between Employee and
Employer, One Valley or any of their respective Affiliates relating to the terms
of Employee's employment, including without limitation the Change in Control
Severance Agreement entered into by Employee and One Valley dated October 16,
1996. All such agreements, understandings and arrangements are terminated and
are of no force and effect as of the Effective Time. Employee hereby expressly
disclaims any rights under any prior agreements, understandings and
arrangements. This Agreement may not be amended or terminated except by an
agreement in writing signed by both parties.
c. This Agreement may be executed in one or more
counterparts, all of which, taken together, shall constitute one and the same
instrument.
d. Any notice or other communication required or permitted
under this Agreement shall be effective only if it is in writing and delivered
in person or by nationally recognized overnight courier service or deposited in
the mails, postage prepaid, return receipt requested, addressed as follows:
To Employer or BB&T:
BB&T Corporation
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx-Xxxxx, XX 00000
Attention: Chief Operating Officer
To Employee:
X. Xxxxxx Xxxxxxxx
Xxxxx 0 Xxx 000-X
Xxxxxxxxxx, XX 00000
Notices given in person or by overnight courier service shall be deemed given
when delivered in person or when delivered to the courier addressed to the
address required by this Section 10(d), and notices given by mail shall be
deemed given three days after deposit in the mails. Any party hereto
may designate by written notice to the other party in accordance herewith any
other address to which notices addressed to him shall be sent.
e. The provisions of this Agreement shall be deemed
severable, and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof. It is
understood and agreed that no failure or delay by Employer, BB&T or Employee in
exercising any right, power or privilege under this Agreement shall operate as a
waiver thereof, nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege hereunder.
f. This Agreement may not be assigned by Employee without
the written consent of Employer. This Agreement shall be binding on any
successors or assigns of either party hereto.
g. For purposes of this Agreement, employment of Employee
by any Affiliate of BB&T shall be deemed to be employment by Employer hereunder,
and a transfer of employment of Employee from one such Affiliate to another
shall not be deemed to be a termination of employment of Employee by Employer or
a cessation of the Term, it being the intention of the parties hereto that
employment of Employee by any Affiliate of BB&T shall be treated as employment
by Employer and that the provisions of this Agreement shall continue to be fully
applicable following any such transfer. References herein to the "Employer"
shall mean any such Affiliate which employs Employee. BB&T, by its signature
below, guarantees the obligations herein of Employer.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date and year first above written.
BRANCH BANKING AND TRUST COMPANY
By: /s/ Xxxx X. Xxxxxxx
------------------------------------------
Name: Xxxx X. Xxxxxxx
----------------------------------------
Title: Chairman and Chief Executive Officer
---------------------------------------
EMPLOYEE:
/s/ X. Xxxxxx Xxxxxxxx
-----------------------------------
X. Xxxxxx Xxxxxxxx
