AMENDED AND RESTATED AGREEMENT
AMENDED and RESTATED AGREEMENT, dated as of August 1, 1985,
by and between FIRST UNION CORPORATION, a North Carolina
corporation (hereinafter referred to as "Employer") and EDWARD E.
CRUTCHFIELD, JR., an individual (hereinafter referred to as
IN CONSIDERATION OF the mutual covenants herein contained,
and other good and valuable consideration, the parties hereto
agree as follows:
(a) Employer hereby agrees to employ Employee, and Employee
agrees to serve as an employee of Employer and as an employee of
one or more of its subsidiaries, during the Period of Employment,
as defined in Section 2, in such executive capacity as is set
forth herein. During the Period of Employment, Employee also
agrees to serve as a Director on the Board of Directors of
Employer, as well as a member of any committee of the Board of
Directors of the Employer to which Employee may be elected or
appointed. Effective as of the date hereof, Employee shall serve
as Chairman of the Board of Directors and Chief Executive Officer
(b) If at any time during the Period of Employment, the
Board of Directors of Employer fails, without Employee's consent,
to elect or re-elect Employee to the offices specified in
paragraph (a) of this Section, or removes Employee from such
offices, or if at any time during the Period of Employment,
Employee shall fail to be vested by the Board of Directors of
Employer with the power and authority of such offices or Employee
shall lose any significant duties or responsibilities attending
such offices, Employee shall have the right by written notice to
Employer to terminate his services hereunder, effective as of the
last day of the month of receipt of such notice, in which event
the Period of Employment, as hereinafter defined, shall so
terminate on such last day of the month; such termination under
such circumstances shall be deemed pursuant to paragraph (a) of
Section 6 hereof as a termination by Employer other than for
Cause with all of the consequences which flow from such
2. Period of Employment.
The "Period of Employment" shall be the period commencing
August 1, 1985 and ending on December 31, 1990 and the period of
any extensions thereof in accordance with the further provisions
of this Section. The Period of Employment shall be extended
automatically without further action by either party as of
January 1, 1987 and each succeeding January 1, for the one-year
period beginning on January 1, 1991 and each succeeding January 1
thereafter, unless either party shall have served written notice
in accordance with the provisions of Section 9 hereof upon the
other party prior to November 1, 1986 or prior to December 31 of
any succeeding year during the Period of Employment, as the case
may be, of its or his intention that the Period of Employment
under this Agreement shall terminate ten days after such notice
3. Duties During the Period of Employment.
Employee shall devote his full business time, attention and
best efforts to the affairs of Employer and its subsidiaries
during the Period of Employment; provided, however, that Employee
may engage in other activities, such as activities involving
charitable, educational, religious and similar types of
organizations, speaking engagements, membership on the board of
directors of other organizations, and similar type activities to
the extent that such other activities do not prohibit the
performance of his duties under this Agreement, or inhibit or
conflict in any material way with the business of Employer and
4. Current Cash Compensation.
(a) Base Annual Salary.
Employer will pay to Employee during the Period of
Employment a base annual salary payable in substantially equal
semi-monthly installments, at an annual rate at least equal to
the aggregate annual base salary payable to Employee by Employer
and any of its affiliated or subsidiary companies as of August 1,
1985, during each calendar year, or portion thereof, of the
Period of Employment; provided, however, it is agreed between the
parties that the Employer shall review annually, and in light of
such review may, in the discretion of the Board of Directors of
Employer and in accordance with Employer's compensation
procedures and guidelines, increase such base annual salary
taking into account Employee's then responsibilities, increase in
the cost of living, increases in compensation of other executives
of Employer and its subsidiaries, increases in salaries of
executives of other corporations, performance by Employee and
Employer, or other pertinent factors.
During the Period of Employment, Employer, in its sole
discretion, will award Employee an annual bonus based on his
performance and other factors; provided, however, that while not
being legally required to pay any bonus Employer agrees to take
into account, in determining the amount of the annual bonus, the
factors described in paragraph (a) of this Section. The bonus in
respect of any calendar year shall be paid on or before March 31
of the succeeding calendar year. An award made to Employee under
Employer's Management Incentive Plan shall be considered to be a
bonus for purposes of this paragraph.
5. Other Employee Benefits.
(a) Vacation and Sick Leave.
Employee shall be entitled to reasonable paid annual
vacation periods and to reasonable sick leave.
(b) Regular Reimbursed Business Expenses.
Employer shall reimburse Employee for all expenses and
disbursements reasonably incurred by Employee in the performance
of his duties during the Period of Employment and such other
facilities or services as Employer and Employee may, from time to
time, agree are reimbursable.
(c) Employee's Benefit Plans or Arrangements.
In addition to the cash compensation provided for in Section
4 hereof, Employee, subject to meeting eligibility provisions and
to the provisions of this Agreement, shall be entitled to
participate in all employee benefit plans of Employer, as in
effect on August 1, 1985 or as they may be modified or added to
by the Employer from time to time, including, without limitation,
plans providing retirement benefits, medical insurance, life
insurance, disability insurance, and accidental death or
(d) Employer's Executive Compensation Plans.
In addition to the cash compensation provided for in Section
4 hereof and the employee benefits of Employer provided for in
paragraph (c) of this Section, Employee, subject to meeting
eligibility provisions and to the provisions of this Agreement,
shall be entitled to participate in all executive compensation
plans of Employer, as in effect on August 1, 1985 or as they may
be modified or added to by the Employer from time to time,
including, without limitation, management incentive plans,
deferred compensation plans, supplemental retirement plans and
stock option plans.
(e) Permanent Disability.
If, during the Period of Employment, Employee shall become
permanently disabled, Employer shall pay Employee (i) that amount
payable to Employee under any long-term disability plan and
supplements thereto maintained by Employer providing for
disability benefits, and (ii) an annual amount equal to 15% of
the average of Employee's base annual salary (pursuant to
paragraph (a) of Section 4) and bonus (pursuant to paragraph (b)
of Section 4) during the three calendar years immediately
preceding the date Employee becomes disabled. Amounts payable to
Employee pursuant to this paragraph shall be paid in
substantially equal monthly installments.
For the purposes of this paragraph (e) and this Agreement,
"permanently disabled" shall have the same meaning, be
adjudicated, and impact or affect other Employer benefit plans as
provided in such long-term disability plan maintained by Employer
which provides disability benefits to employees.
(a) Termination by Employer Other Than for Cause;
Certain Voluntary Termination.
If Employer should terminate the Period of Employment for
other than Cause, as herein defined, or if Employee should
voluntarily terminate the Period of Employment pursuant to
paragraph (b) of Section 1, Employer shall forthwith pay to
Employee an amount equal to the sum of (a) the result of
multiplying (i) the base annual salary payable to Employee
pursuant to paragraph (a) of Section 4 as of the date of
termination of the Period of Employment by (ii) the number of
years (and fractions thereof) then remaining in the Period of
Employment and (b) the result of multiplying (i) the average of
the bonus payable to Employee pursuant to paragraph (b) of
Section 4 or otherwise during the three calendar years
immediately preceding the date of termination of the Period of
Employment by (ii) the numbers of years (and fractions thereof)
then remaining in the Period of Employment.
"Cause" shall mean willful misconduct in following the
legitimate directions of the Board of Directors of Employer;
conviction of a felony or conviction for dishonesty; excessive
absenteeism not related to illness, sick leave or vacations, but
only after notice from the Board of Directors followed by a
repetition of such excessive absenteeism; or continuous conflicts
of interest after notice in writing from the Board of Directors.
(b) Termination by Employer for Cause.
If Employer should terminate the Period of Employment for
Cause, as herein defined, Employee will be entitled to be paid
the base annual salary otherwise payable to Employee under
paragraph (a) of Section 4 through the end of the month in which
the Period of Employment is terminated.
(c) Termination by Employee.
If during the Period of Employment, Employee shall terminate
his employment other than in accordance with Paragraph (b) of
Section 1, he will be entitled to be paid 66-2/3% the base annual
salary otherwise payable to Employee under paragraph (a) of
Section 4 for a period of two years following the termination of
the Period of Employment. Such payments shall cease if Employee
engages in competition with Employer as specified in paragraph
(a) of Section 7, whether or not with the written consent of the
Board of Directors of Employer.
7. Non-Competition and Non-Disclosure.
(a) Without the consent in writing of the Board of
Directors of Employer, upon termination of the Period of
Employment for any reason whatsoever, Employee will not, for a
period of two years thereafter, become an officer, employee,
agent, partner, director or substantial stockholder of any
commercial bank, savings bank or savings and loan association or
holding company thereof operating a bank or savings and loan
association in any of the states of North Carolina, Florida,
Georgia, Alabama, Tennessee, Mississippi, Louisiana, South
Carolina, Maryland or Virginia.
(b) Employee shall not, at any time during or following the
Period of Employment, disclose, use, transfer or sell, except in
the course of employment with Employer, any confidential
information or proprietary data of Employer and its subsidiaries
so long as such information or proprietary data remains
confidential and has not been disclosed or is not otherwise in
the public domain, except as required by law or pursuant to legal
8. Governing Law.
This Agreement is governed by and is to be construed and
enforced in accordance with the laws of the State of North
Carolina. If under such law, any portion of this Agreement is at
any time deemed to be in conflict with any applicable statute,
rule, regulation or ordinance, such portion shall be deemed to be
modified or altered to conform thereto or, if that is not
possible, to be omitted from this Agreement; and the invalidity
of any such portion shall not affect the force, effect and
validity of the remaining portion hereof.
All notices under this Agreement shall be in writing and
shall be deemed effective when delivered in person (in the
Employer's case, to its Secretary) or twenty-four (24) hours
after deposit thereof in the U.S. mails, postage prepaid, for
delivery as registered or certified mail -- addressed, in the
case of Employee, to him at his residential address, and in the
case of Employer, to its corporate headquarters, attention of the
Secretary, or to such other address as Employee or Employer may
designate in writing at any time or from time to time to the
other party. In lieu of notice by deposit in the U.S. mail, a
party may give notice by telegram or telex.
This Agreement constitutes the entire understanding between
Employer and Employee relating to employment of Employee by
Employer and its subsidiaries and supersedes and cancels all
prior written and oral agreements and understandings with respect
to the subject matter of this Agreement. This Agreement may be
amended but only by a subsequent written agreement of the
parties. This Agreement shall be binding upon and shall inure to
the benefit of Employee, his heirs, executors, administrators and
beneficiaries, and shall be binding upon and inure to the benefit
of Employer and its successors.
11. Gross Up Payment.
(a) In the event that any payments under this Agreement, in
combination with payments from any other plans or arrangements
maintained by Employer, constitute "excess parachute payments"
under Section 280G of the Internal Revenue Code (the "Code"), and
as such are subject to excise tax under Section 4999 of the Code,
Employer shall pay to Employee an additional amount (the "Gross
Up Payment"). The Gross Up Payment shall be equal to the amount
needed to ensure that the net payments retained by Employee equal
the payments due under this Agreement before taking into account
any Gross Up Payment. The net payments retained by Employee
shall be equal to the total payments made under this Agreement
reduced by the amount of any excise tax under Section 4999 of the
Code and any federal, state and local income tax on the Gross Up
Payment. An example of the foregoing is set forth on Exhibit A
(b) For purposes of determining whether any of the payments
under this Agreement will be subject to the excise tax and the
amount of such excise tax, (i) any other payments or benefits
received or to be received by Employee in connection with a
change in control of Employer or the termination of employment of
Employee (whether pursuant to the terms of this Agreement or any
other plan, arrangement or agreement with Employer, any person
whose actions result in a change of control of Employer or any
person affiliated with Employer or such person) (which, together
with the payments under this Agreement, shall constitute the
"Total Payments") shall be treated as "parachute payments" under
Section 280(b)(2) of the Code, and all excess parachute payments
shall be treated as subject to the excise tax, unless in the
opinion of tax counsel selected by Employer's independent
auditors such other payments or benefits (in whole or in part) do
not constitute parachute payments, or such excess parachute
payments (in whole or in part) represent reasonable compensation
for services actually rendered under Section 280G(b)(4) of the
Code in excess of the "base amount" under Section 280G(b)(3) of
the Code or are otherwise not subject to the excise tax, (ii) the
amount of the Total Payments which shall be treated as subject to
the excise tax shall be equal to the lesser of (A) the total
amount of the Total Payments or (B) the amount of excess
parachute payments (after applying clause (i), above), and (iii)
the value of any non-cash benefit or any deferred payment or
benefit shall be determined by Employer's independent auditors in
accordance with the principles of Section 280(G)(d)(3) and (4) of
(c) For purposes of determining the amount of the Gross Up
Payment, Employee shall be deemed to pay federal income taxes at
the highest marginal rate of federal income taxation for the
calendar year in which the Gross Up Payment is to be made.
Employee shall also be deemed to pay state and local income taxes
at the highest marginal rate of taxation imposed by Employee's
state of residence (or by any other state which may impose taxes
on such payments) 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 income taxes. In computing the highest marginal rate of
federal income taxation, adjustments shall be made to the highest
marginal rate of tax imposed by Section 1 of the Code to account
for the effect of Section 68 of the Code. The marginal rate of
federal income taxation shall also be adjusted to account for
Employee's portion of any FICA taxes imposed on any Gross Up
Payment by Section 3101 of the Code.
(d) In the event that the excise tax to be paid as a result
of payments pursuant to this Agreement is subsequently determined
to be less than the amount taken into account at the time the
Gross Up Payment is made, Employee shall repay Employer at the
time that the amount of such reduction in excise tax is finally
determined, the portion of the Gross Up Payment attributable to
such reduction, plus interest on the amount of such repayment at
the applicable federal rate under Section 1274 of the Code from
the date of payment of the Gross Up Payment to the date of
repayment. The amount of reduction of the Gross Up Payment shall
take into account any subsequent reduction in excise taxes
resulting from this payment.
(e) In the event that the excise tax is determined to exceed
the amount taken into account hereunder at the time the Gross Up
Payment is made, Employer shall make an additional Gross Up
Payment in respect of such excess, plus interest on such
additional Gross Up Payment at the applicable federal rate under
Section 1274 of the Code from the date of the Gross Up Payment to
the date of payment of the additional Gross Up Payment, at the
time such additional excise tax is finally determined. The
amount of the additional Gross Up Payment shall take into account
any increase in excise taxes resulting from this payment.
(f) The Gross Up Payment provided above shall be paid not
later than the thirtieth (30th) day following payment of any
amounts pursuant to this Agreement.
(g) As a condition to making the payment set forth above,
Employer shall have the right to challenge, on Employee's behalf,
any excise tax assessment relating to payments made pursuant to
this Agreement. All expenses incurred as a result of any
challenge initiated by Employer shall be born by Employer.
12. Legal Expenses.
Employer shall pay all legal fees and expenses which
Employee may incur as a result of Employer contesting the
validity or enforceability of this Agreement and Employee shall
be entitled to receive interest thereon for the period of any
delay in payment from the date such payment was due at the rate
determined by adding two hundred basis points to the one-year
constant maturity Treasury index.
IN WITNESS WHEREOF, the parties hereto have executed this
Amendment to Agreement, under seal, as of the day and year first
FIRST UNION CORPORATION
/s/ Kent S. Hathaway /s/ Robert T. Atwood
____________________________ By: _______________________________
Senior Vice President Executive Vice President
Title: _____________________ Title: ____________________________
/s/ Edward E. Crutchfield, Jr.
Edward E. Crutchfield, Jr.