Contents:
Supplemental Compensation Agreement
Second Amendment to Supplemental Compensation Agreement


EXHIBIT 10

SUPPLEMENTAL COMPENSATION AGREEMENT

THIS AGREEMENT made this 25 day of January, 1995, by and between FIRST VIRGINIA BANKS, INC., a corporation duly organized and existing under the laws of the State of Virginia and hereinafter referred to as the "Corporation," which designation shall include its affiliates and subsidiaries, and BARRY J. FITZPATRICK of Fairfax County, Virginia, hereinafter referred to as the "Employee";

W I T N E S S E T H  THAT

WHEREAS, Employee has been employed by the Corporation for twenty-five (25) years and now is in the full-time employment of the Corporation as its Executive Vice President and, effective January 1, 1995, is its Chairman and Chief Executive Officer; and

WHEREAS, in consideration of such employment and the Employee's willingness to remain in the employment of the Corporation, the Corporation wishes to enter into this Supplemental Compensation Agreement; and

WHEREAS, the Management Compensation and Benefits Committee has approved this Agreement and the Board of Directors has ratified the action of the Management Compensation and Benefits Committee;

NOW THEREFORE, the parties hereto agree as follows: **1. (a) If the Employee resigns, retires, or leaves the Corporation for any reason after reaching the age of 62, he shall be entitled to receive annually for life an amount determined under paragraph 2 hereinbelow (hereinafter referred to as "Compensation"). If, however, a "change in control" of the Corporation occurs before the Employee reaches the age of 62 and the Employee resigns, retires, or leaves the Corporation for any reason after the change in control, he shall then be entitled to receive annually for life the Compensation. For the purposes of this Agreement, a "change in control" shall mean a change of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act of 1934, as amended (hereinafter called the Act) or similar reporting requirement; provided that, without limitation, a change in control shall be deemed to have occurred if any person (as that term is defined in Section 13(d) and 14(d) of the Act) other than the Corporation or any present Director or Officer of the Corporation is or becomes the beneficial owner (as that term is defined in Rule 13d-3 under the Act or similar rule), directly or indirectly, of securities representing twenty-five percent (25%) or more of the voting power of the Corporation's then outstanding securities or if during any two (2) consecutive years the individuals who constitute the Board of Directors of the Corporation at the beginning of such period should cease to constitute a majority of the Board, unless the election of each subsequent Director has been approved in advance by Directors representing at least two-thirds (2/3) of the Directors then in office who were Directors at the beginning of the two (2) year period. (b) If Employee becomes totally and permanently disabled such that he is and will be unable to perform his duties as Chairman and Chief Executive Officer of the Corporation or other assigned duties and responsibilities for the Corporation (as determined by a competent physician employed by the Corporation), or if he is "dismissed or requested to leave such employment without just cause", he shall then be entitled to receive annually for life the Compensation. For purposes of this Agreement "dismissed or requested to leave without just cause" shall mean terminated or asked to leave for a reason other than (a) fraud or gross negligence, (b) continual and substantial violation of a rule, regulation or policy of the Corporation after written notice from its Board of Directors, or (c) continual and substantial failure of Employee to perform his duties after written notice from the Corporation's Board of Directors.

2. (a) The Employee's Compensation shall be calculated by using a base equal to sixty percent (60%) of the sum of his annual base salary and cash bonus awarded by the Corporation's Management Compensation and Benefits Committee for a calendar year and approved by the Board of Directors, whether or not actually received in the year of the award, and any profit sharing payments actually received in that year from the Corporation's Profit Sharing Plan. All other payments, benefits received and other forms of value, whether or not deemed income by the Internal Revenue Service, shall be excluded from the base. In addition, if prior to earning any base salary or cash bonus, the Employee elects to defer receipt of such payment to a later calendar year, the amount deferred shall not be included in the base. Amounts deferred, and thus excluded from the base, include amounts deferred under any qualified or nonqualified deferred compensation plans, thrift plans and other plans offered by the Corporation. (b) The base amount for the total of five (5) years of his highest annual combined salary and cash bonuses shall be divided by five (5). Said years need not be the last years of employment, nor consecutive. Said years may include any year in which Employee has performed his duties for any part of said year, in which case Employee shall be deemed to have been employed for the full year. (c) The amount determined hereinabove shall be further reduced by the amount of any benefits Employee shall be entitled to receive during each such year under the First Virginia Pension Trust Plan and under any disability plan of the Corporation; further provided, however, that said amount shall not be further reduced by reason of any increase of the benefits under such Pension Plan after the date that the initial deduction for the Pension Plan benefits is made. The final result after all such deductions have been made shall be Employee's annual Compensation under this Agreement. Said annual Compensation shall be divided by twelve and one-twelfth shall be paid each month beginning with the first full month that Employee is entitled to payment under this Agreement. If the first full month of entitlement is other than January and/or if Employee's last month of entitlement is other than December, Employee's Annual Compensation for such year shall be prorated based on the number of months of entitlement for such years.

3. Upon Employee's death, Pamela Fitzpatrick (if she as his widow survives the Employee) shall be entitled to an annual amount for life equal to one-half (1/2) of the total annual payment then being made to the Employee hereunder, and likewise payable on a monthly basis until her death. This survivor benefit provided for Pamela Fitzpatrick shall not inure to the benefit of any other person.

4. It is further agreed that if said Employee dies while still holding the position of Chairman and Chief Executive Officer or other assigned position for the Corporation, the rights of Pamela Fitzpatrick (if she as his widow survives the Employee) shall be determined on the same basis as if said Employee's employment had ceased on the day before the day of his death.

5. (a) The signing of this Agreement by the Employee shall act: (i) To waive any rights he might otherwise have in the Long Term Disability Plan of the Corporation; and (ii) To permanently elect for such Employee the 50% Joint and Survivor Annuity Option under the First Virginia Pension Trust Plan, provided his present wife, Pamela Fitzpatrick, is living as his wife at the time Employee shall be entitled to receive said annual supplemental compensation; otherwise the form of "Life-Only" retirement benefit as provided by Section 3.01 of the Agreement and Declaration of Trust for the First Virginia Pension Trust Plan shall be deemed to have been elected. (b) For the purposes of this Agreement, it is recognized that the Employee's date of birth is February 21, 1940.

6. Employee shall remain available, provided he is physically and mentally capable of doing so, to provide such consulting and advisory services to the Board of Directors and management of the Corporation as they may reasonably request from time to time and which may relate to Employee's past service to the Corporation and to current or future matters. In making such requests for services, the Board and management shall take into consideration Employee's health, residence, and personal circumstances. The rendition of any such consulting and advisory services shall not be deemed to render Employee an active employee of the Corporation.

7. If the Employee resigns, retires, or leaves the Corporation before reaching the age of 62, under circumstances whereby no Compensation is due under this Agreement, the Corporation's Board of Directors acting solely in its discretion, which discretion may be exercised arbitrarily and shall not be subject to review as provided in paragraph 9 herein, shall determine if the Corporation may wish to seek from time to time the consulting and advisory services of the Employee and, if so, shall then determine the form and amount of compensation in an agreement to provide such services, which agreement may or may not contain the terms set forth in this Agreement.

8. If at any time it is determined upon satisfactory evidence that Employee or his widow while receiving payments hereunder (a) is engaged or has engaged in activities which compete with, or is employed in an executive, supervisory or administrative capacity or otherwise by a competitor of, the Corporation without its consent, or (b) has divulged confidential information obtained during the period of Employee's employment, or (c) is engaged or has engaged in any activity adverse to the interests of the Corporation, then Employee and Pamela Fitzpatrick shall forfeit all benefits to which he and she are or may be entitled under this Agreement. It is the intent of this Agreement to provide for a reasonable income to the Employee, and any interpretation hereunder adverse to the Employee shall not be enforceable unless supported by clear, unequivocal, and convincing evidence.

9. The Corporation's Board of Directors shall have final authority to rule on any circumstances or disputes involving this Agreement after due notice and specifications of violations hereunder have been given to the Employee or his wife, Pamela Fitzpatrick. Should Employee, or his wife, Pamela Fitzpatrick at any time before or after determination so request, the Board of Directors' decision may be reviewed by a panel of arbitrators, one appointed by the Board, one appointed by the Employee (or, if deceased, by Pamela Fitzpatrick) and the two appointing a third party. Such proceeding shall be governed by the Rules of the American Arbitration Association then in effect at the time of the undertaking, and the decision of such panel shall be nonappealable.

10. It is also agreed that neither the Employee nor his widow receiving payments hereunder shall have any right or power to anticipate, pledge, assign, sell, transfer, alienate, or encumber his or her interest or payments hereunder to the extent provided by the laws of the State of Virginia, now shall the Corporation or any payment hereunder by liable for or subject to the debts, liabilities, obligations, or claims or judgments against either or both of them.

11. That the Agreement shall inure to the benefit of and be binding upon the Corporation, its successors and assigns (including without limitation any corporation which might acquire all or substantially all of the corporations's assets and business or with which the Corporation may be consolidated or merged).

IN WITNESS WHEREOF, the parties hereto have put their signatures and seals as of the date set forth hereinabove.

ATTEST: FIRST VIRGINIA BANKS, INC.

Thomas P. Jennings
/s/ Thomas P. Jennings

Paul H. Geithner, Jr.
/s/ Paul H. Geithner, Jr. _________________________

By __________________________(Seal) 

WITNESS:

Shirley L. Ambrogi
/s/ Shirley L. Ambrogi

Barry J. Fitzpatrick
/s/ Barry J. Fitzpatrick _________________________ _____________________________(Seal)


** On September 27, 1995, the First Virginia Banks, Inc. Board of Directors amended (1) Paragraph 1(a) of Barry J. Fitzpatrick's Supplemental Compensation Agreement to include a uniform "change in control" definition. The new definition of "change in control" is as follows:

A change in control shall mean:

(a) The acquisition by any individual, entity or group (within the meaning of Section 13 (d) (3) or 14 (d) (2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) (a "Person") of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (i) the then outstanding shares of common stock of the Corporation (the "Outstanding Corporation Common Stock") or (ii) the combined voting power of the then outstanding voting securities of the Corporation entitled to vote generally in the election of directors (the "Outstanding Corporation Voting Securities"); provided, however, that for purposes of this subsection (a), the following acquisitions shall not constitute a Change of Control: (i) any acquisition directly from the Corporation, (ii) any acquisition by the Corporation, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Corporation or any company controlled by the Corporation or (iv) any acquisition by any company pursuant to a transaction which complies with clauses (i), (ii) and (iii) of subsection (c) of this Section ___; or

(b) Individuals who, as of the date hereof, constitute the Board (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Corporation's shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or

(c) Consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Corporation (a "Business Combination"), in each case, unless, following such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Corporation Common Stock and Outstanding Corporation Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Corporation or all or substantially all of the Corporation's assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Corporation Common Stock and Outstanding Corporation Voting Securities, as the case may be, (ii) no Person (excluding any corporation resulting from such Business Combination or any employee benefit plan (or related trust) of the Corporation or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 20% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination and (iii) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or

(d) Approval by the shareholders of the Corporation of a complete liquidation or dissolution of the Corporation.



EXHIBIT 10
SECOND AMENDMENT
to
SUPPLEMENTAL COMPENSATION AGREEMENT
between
FIRST VIRGINIA BANKS, INC.
and
BARRY J. FITZPATRICK

THIS AGREEMENT OF AMENDMENT, made this 17th day of December, 1996, and effective for all purposes as of this date, by and between FIRST VIRGINIA BANKS, INC. a Virginia corporation with principal offices located at One First Virginia Plaza, 6400 Arlington Boulevard, Falls Church, Virginia 22046, hereinafter referred to as the "Corporation," and BARRY J. FITZPATRICK hereinafter referred to as the "Employee,"

W I T N E S S E T H:

WHEREAS, the Corporation and the Employee entered into a Supplemental Compensation Agreement dated January 25, 1995, which agreement superseded any previous Supplemental Compensation Agreements; and

WHEREAS, said Supplemental Compensation Agreement may be amended by mutual consent of both the Corporation and the Employee, the First Amendment having been made as of September 27, 1995; and

WHEREAS, the Corporation and the Employee are agreed that said Supplemental Compensation Agreement be further amended;

NOW, THEREFORE, in consideration of the mutual covenants herein and the benefits to be derived herefrom, the Corporation and the Employee do hereby agree, each with the other, that said Supplemental Compensation Agreement be amended as follows:

1. Paragraph 1. (a) is amended by deleting in its entirety the paragraph as amended and inserting the following language:

If the Employee resigns, retires, or leaves the Corporation for any reason after reaching the age of 58, he shall be entitled to receive annually for life an amount determined under paragraph 2 hereinbelow (hereinafter referred to as "Compensation").

Section 1(b) is amended by deleting in its entirety the paragraph and inserting the following:

(b) If Employee becomes disabled while employed by the Corporation and is eligible (or would have been eligible if the Plan was in effect) to receive long term disability benefits under the Long Term Disability Plan for Employees of First Virginia Banks, Inc. (hereinafter referred to as the "LTD Plan"), then Employee shall be entitled to receive sixty percent of his "Earnings" as that term is defined under the LTD Plan in effect as of December 31, 1996 determined without regard to the maximum limitation under Section 4.4 of that Plan benefits (minus any benefit he receives from the LTD Plan or any successor plan if the LTD Plan isn't in effect until the earlier of (a) the date he is or would have been no longer eligible to receive long term disability benefits under the LTD Plan, or (b) the date he becomes entitled to receive Compensation pursuant to some provision of this Agreement. If Employee is "dismissed or requested to leave his employment without just cause", he shall then be entitled to receive annually for life the Compensation. For purposes of this Agreement, "dismissed or requested to leave without just cause" shall mean terminated or asked to leave for a reason other than (a) fraud or gross negligence, (b) continual and substantial violation of a rule, regulation or policy of the Corporation after written notice from its Board of Directors, or (c) continual and substantial failure of Employee to perform his duties after written notice from the Corporation's Board of Directors.

2. Paragraph 2 (c) is amended by deleting the following sentence:

Said annual Compensation shall be divided by twelve and one-twelfth shall be paid each month beginning with the first full month that Employee is entitled to payment under this Agreement.

and inserting in its place the following sentence:

Said annual Compensation shall be divided by twelve and one-twelfth shall be paid each month beginning with (x) the first full month after the occurrence of both the date that Employee is entitled to payment under this Agreement and the conclusion of the Employment Period as defined in a separate Employment Agreement between the Corporation and Employee dated as of December 17, 1996, if Employee is still an employee of the Corporation on the Effective Date as defined in said Employment Agreement; or (y) the first full month after Employee is entitled to payment under this Agreement, if such date occurs before the Effective Date as defined in said Employment Agreement.

Section 4 is amended by deleting in its entirety the paragraph and inserting the following:

It is further agreed that if said Employee dies while holding the position of Chairman and Chief Executive Officer or other assigned position for the Corporation, Pamela Fitzpatrick (if she as his widow survives the Employee) shall receive one-half (1/2) of his Compensation determined as of the date of his death regardless of whether Employee was or was not fully entitled to his Compensation as of that date.

Section 5 is amended by deleting 5(a)(i) in its entirety and incorporating 5(a)(ii) as part of 5(a) without that section being separately numbered.

3. Paragraph 7 is amended by deleting the phrase "age of 62" and inserting in its place the phrase "age of 58."

CONCLUSION

IN WITNESS WHEREOF, the Corporation has caused this Agreement of Amendment to be executed on its behalf by its proper officers hereunto duly authorized, and the Employee has duly executed this Agreement all on the date first written in this Agreement.

ATTEST: FIRST VIRGINIA BANKS, INC.

/s/ Barbara J. Chapman By: /s/ Thomas P. Jennings ---------------------- ---------------------- Thomas P. Jennings Senior Vice President, (Seal) General Counsel and Secretary

WITNESS: EMPLOYEE

/s/ Barbara J. Chapman /s/ Barry J. Fitzpatrick ---------------------- ------------------------ Barry J. Fitzpatrick EXHIBIT 10 EMPLOYMENT AGREEMENT

AGREEMENT by and between First Virginia Banks, Inc., a Virginia corporation (the "Company") and Barry J. Fitzpatrick (the "Executive"), dated as of the 31st day of December, 1996.

The Board of Directors of the Company (the "Board"), has determined that it is in the best interests of the Company and its shareholders to assure that the Company will have the continued dedication of the Executive, notwithstanding the possibility, threat or occurrence of a Change of Control (as defined below) of the Company. The Board believes it is imperative to diminish the inevitable distraction of the Executive by virtue of the personal uncertainties and risks created by a pending or threatened Change of Control and to encourage the Executive's full attention and dedication to the Company currently and in the event of any threatened or pending Change of Control, and to provide the Executive with compensation and benefits arrangements upon a Change of Control which ensure that the compensation and benefits expectations of the Executive will not be uncertain and that the compensation and benefits will be competitive with those of other corporations. Therefore, in order to accomplish these objectives, the Board has caused the Company to enter into this Agreement.

NOW, THEREFORE, in consideration of the above-stated premise and other good and valuable consideration, including the Executive's continued employment with the Company, the receipt and adequacy of which are hereby acknowledged, it is hereby agreed as follows:

1. Certain Definitions. (a) The "Effective Date" shall mean the first date during the Change of Control Period (as defined in Section 1(b)) on which a Change of Control (as defined in Section 2) occurs. Anything in this Agreement to the contrary notwithstanding, if a Change of Control occurs and if the Executive's employment with the Company is terminated prior to the date on which the Change of Control occurs, and if it is reasonably demonstrated by the Executive that such termination of employment (i) was at the request of a third party who has taken steps reasonably calculated to effect a Change of Control or (ii) otherwise arose in connection with or in anticipation of a Change of Control, then for all purposes of this Agreement the "Effective Date" shall mean the date immediately prior to the date of such termination of employment.

(b) The "Change of Control Period" shall mean the period commencing on the date hereof and ending on the third anniversary of the date hereof; provided, however, that commencing on the date one year after the date hereof, and on each annual anniversary of such date (such date and each annual anniversary thereof shall be hereinafter referred to as the "Renewal Date"), unless previously terminated, the Change of Control Period shall be automatically extended so as to terminate three years from such Renewal Date, unless at least 60 days prior to the Renewal Date the Company shall give notice to the Executive that the Change of Control Period shall not be so extended.

2. Change of Control. For the purposes of this Agreement, a "Change of Control" shall mean:

(a) The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) (a "Person") of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (i) the then outstanding shares of common stock of the Company (the "Outstanding Company Common Stock") or (ii) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the "Outstanding Company Voting Securities"); provided, however, that for purposes of this subsection (a), the following acquisitions shall not constitute a Change of Control: (i) any acquisition directly from the Company, (ii) any acquisition by the Company, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company or (iv) any acquisition by any corporation pursuant to a transaction which complies with clauses (i), (ii) and (iii) of subsection (c) of this Section 2; or

(b) Individuals who, as of the date hereof, constitute the Board (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company's shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or

(c) Consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company (a "Business Combination"), in each case, unless, following such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company's assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (ii) no Person (excluding any corporation resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 20% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination and (iii) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or

(d) Approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.

3. Employment Period. The Company hereby agrees to continue the Executive in its employ, and the Executive hereby agrees to remain in the employ of the Company subject to the terms and conditions of this Agreement, for the period commencing on the Effective Date and ending on the third anniversary of such date (the "Employment Period").

4. Terms of Employment. (a) Position and Duties. (i) During the Employment Period, (A) the Executive's position (including status, offices, titles and reporting requirements), authority, duties and responsibilities shall be at least commensurate in all material respects with the most significant of those held, exercised and assigned at any time during the 120-day period immediately preceding the Effective Date and (B) the Executive's services shall be performed at the location where the Executive was employed immediately preceding the Effective Date or any office or location less than 35 miles from such location.

(ii) During the Employment Period, and excluding any periods of vacation and sick leave to which the Executive is entitled, the Executive agrees to devote reasonable attention and time during normal business hours to the business and affairs of the Company and, to the extent necessary to discharge the responsibilities assigned to the Executive hereunder, to use the Executive's reasonable best efforts to perform faithfully and efficiently such responsibilities. During the Employment Period it shall not be a violation of this Agreement for the Executive to (A) serve on corporate, civic or charitable boards or committees, (B) deliver lectures, fulfill speaking engagements or teach at educational institutions and (C) manage personal investments, so long as such activities do not significantly interfere with the performance of the Executive's responsibilities as an employee of the Company in accordance with this Agreement. It is expressly understood and agreed that to the extent that any such activities have been conducted by the Executive prior to the Effective Date, the continued conduct of such activities (or the conduct of activities similar in nature and scope thereto) subsequent to the Effective Date shall not thereafter be deemed to interfere with the performance of the Executive's responsibilities to the Company.

(b) Compensation. (i) Base Salary. During the Employment Period, the Executive shall receive an annual base salary ("Annual Base Salary"), which shall be paid at a monthly rate, at least equal to twelve times the highest monthly base salary paid or payable, including any base salary which has been earned but deferred, to the Executive by the Company and its affiliated companies in respect of the twelve-month period immediately preceding the month in which the Effective Date occurs. During the Employment Period, the Annual Base Salary shall be reviewed no more than 12 months after the last salary increase awarded to the Executive prior to the Effective Date and thereafter at least annually. Effective on the date of each review, the Executive's Annual Base Salary shall be increased within the range of percentage increases in annual base salary as in effect generally at that time with respect to other peer executives of the Company and its affiliated companies. Any increase in Annual Base Salary shall not serve to limit or reduce any other obligation to the Executive under this Agreement. Annual Base Salary shall not be reduced after any such increase and the term Annual Base Salary as utilized in this Agreement shall refer to Annual Base Salary as so increased. As used in this Agreement, the term "affiliated companies" shall include any company controlled by, controlling or under common control with the Company.

(ii) Annual Bonus. In addition to Annual Base Salary, the Executive shall be awarded, for each fiscal year ending during the Employment Period, an annual bonus (the "Annual Bonus") in cash at least equal to the Executive's highest bonus under the Company's Employee Profit Sharing Plan and executive bonus practice, or any comparable bonus under any predecessor or successor plans and practices, for the last three full fiscal years prior to the Effective Date (annualized in the event that the Executive was not employed by the Company for the whole of such fiscal year) (the "Recent Annual Bonus"). Each such Annual Bonus shall be paid no later than the end of the third month of the fiscal year next following the fiscal year for which the Annual Bonus is awarded, unless the Executive shall elect to defer the receipt of such Annual Bonus.

(iii) Incentive, Savings and Retirement Plans. During the Employment Period, the Executive shall be entitled to participate in all incentive, savings and retirement plans, practices, policies and programs applicable generally to other peer executives of the Company and its affiliated companies, but in no event shall such plans, practices, policies and programs provide the Executive with incentive opportunities (measured with respect to both regular and special incentive opportunities, to the extent, if any, that such distinction is applicable), savings opportunities and retirement benefit opportunities, in each case, less favorable, in the aggregate, than the most favorable of those provided by the Company and its affiliated companies for the Executive under such plans, practices, policies and programs as in effect at any time during the 120-day period immediately preceding the Effective Date or if more favorable to the Executive, those provided generally at any time after the Effective Date to other peer executives of the Company and its affiliated companies.

(iv) Welfare Benefit Plans. During the Employment Period, the Executive and/or the Executive's family, as the case may be, shall be eligible for participation in and shall receive all benefits under welfare benefit plans, practices, policies and programs provided by the Company and its affiliated companies (including, without limitation, medical, prescription, dental, disability, employee life, group life, accidental death and travel accident insurance plans and programs) to the extent applicable generally to other peer executives of the Company and its affiliated companies, but in no event shall such plans, practices, policies and programs provide the Executive with benefits which are less favorable, in the aggregate, than the most favorable of such plans, practices, policies and programs in effect for the Executive at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive, those provided generally to other peer executives of the Company and its affiliated companies.

(v) Expenses. During the Employment Period, the Executive shall be entitled to receive prompt reimbursement for all reasonable expenses incurred by the Executive in accordance with the most favorable policies, practices and procedures of the Company and its affiliated companies in effect for the Executive at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive, as in effect generally at any time thereafter with respect to other peer executives of the Company and its affiliated companies. The Executive shall follow the Company's procedures for seeking reimbursement that are in effect at the time reimbursement is sought or, if none, the procedures of the Company in effect during the 120-day period immediately preceding the Effective Date.

(vi) Fringe Benefits. During the Employment Period, the Executive shall be entitled to fringe benefits, including, without limitation, tax and financial planning services, payment of club dues, and, if applicable, use of an automobile and payment of related expenses, in accordance with the most favorable plans, practices, programs and policies of the Company and its affiliated companies in effect for the Executive at any time during the 120- day period immediately preceding the Effective Date or, if more favorable to the Executive, as in effect generally at any time thereafter with respect to other peer executives of the Company and its affiliated companies.

(vii) Office and Support Staff. During the Employment Period, the Executive shall be entitled to an office or offices of a size and with furnishings and other appointments, and to exclusive personal secretarial and other assistance, at least equal to the most favorable of the foregoing provided to the Executive by the Company and its affiliated companies at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive, as provided generally at any time thereafter with respect to other peer executives of the Company and its affiliated companies.

(viii) Vacation. During the Employment Period, the Executive shall be entitled to paid vacation in accordance with the most favorable plans, policies, programs and practices of the Company and its affiliated companies as in effect for the Executive at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive, as in effect generally at any time thereafter with respect to other peer executives of the Company and its affiliated companies.

5. Termination of Employment. (a) Death or Disability. The Executive's employment shall terminate automatically upon the Executive's death during the Employment Period. If the Company determines in good faith that the Disability of the Executive has occurred during the Employment Period (pursuant to the definition of Disability set forth below), it may give to the Executive written notice in accordance with Section 12(b) of this Agreement of its intention to terminate the Executive's employment. In such event, the Executive's employment with the Company shall terminate effective on the 30th day after receipt of such notice by the Executive (the "Disability Effective Date"), provided that, within the 30 days after such receipt, the Executive shall not have returned to full-time performance of the Executive's duties. For purposes of this Agreement, "Disability" shall mean the absence of the Executive from the Executive's duties with the Company on a full-time basis for 180 consecutive business days as a result of incapacity due to mental or physical illness which is determined to be total and permanent by a physician selected by the Company or its insurers and acceptable to the Executive or the Executive's legal representative.

(b) Cause. The Company may terminate the Executive's employment during the Employment Period for Cause. For purposes of this Agreement, "Cause" shall mean:

(i) the willful and continued failure of the Executive to perform substantially the Executive's duties with the Company or one of its affiliates (other than any such failure resulting from incapacity due to physical or mental illness), after a written demand for substantial performance is delivered to the Executive by the Board or the Chief Executive Officer of the Company which specifically identifies the manner in which the Board or Chief Executive Officer believes that the Executive has not substantially performed the Executive's duties, or

(ii) the willful engaging by the Executive in illegal conduct or gross misconduct which is materially and demonstrably injurious to the Company.

For purposes of this provision, no act or failure to act, on the part of the Executive, shall be considered "willful" unless it is done, or omitted to be done, by the Executive in bad faith or without reasonable belief that the Executive's action or omission was in the best interests of the Company. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board or upon the instructions of the Chief Executive Officer or a senior officer of the Company or based upon the advice of counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by the Executive in good faith and in the best interests of the Company. The cessation of employment of the Executive shall not be deemed to be for Cause unless and until there shall have been delivered to the Executive a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters of the entire membership of the Board at a meeting of the Board called and held for such purpose (after reasonable notice is provided to the Executive and the Executive is given an opportunity, together with counsel, to be heard before the Board), finding that, in the good faith opinion of the Board, the Executive is guilty of the conduct described in subparagraph (i) or (ii) above, and specifying the particulars thereof in detail.

(c) Good Reason. The Executive's employment may be terminated by the Executive for Good Reason. For purposes of this Agreement, "Good Reason" shall mean:

(i) the assignment to the Executive of any duties inconsistent in any respect with the Executive's position (including status, offices, titles and reporting requirements), authority, duties or responsibilities as contemplated by Section 4(a) of this Agreement, or any other action by the Company which results in a diminution in such position, authority, duties or responsibilities, excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by the Executive;

(ii) any failure by the Company to comply with any of the provisions of Section 4(b) of this Agreement, other than an isolated, insubstantial and inadvertent failure not occurring in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by the Executive;

(iii) the Company's requiring the Executive to be based at any office or location other than as provided in Section 4(a)(i)(B) hereof or the Company's requiring the Executive to travel on Company business to a substantially greater extent than required immediately prior to the Effective Date;

(iv) any purported termination by the Company of the Executive's employment otherwise than as expressly permitted by this Agreement; or

(v) any failure by the Company to comply with and satisfy Section 11(c) of this Agreement.

(vi) Anything in this Agreement to the contrary notwithstanding, a termination by the Executive for any reason during the 30-day period immediately following the first anniversary of the Effective Date shall be deemed to be a termination for Good Reason for all purposes of this Agreement.

For purposes of this Section 5(c), any good faith determination of "Good Reason" made by the Executive shall be conclusive.

(d) Notice of Termination. Any termination by the Company for Cause, or by the Executive for Good Reason, shall be communicated by Notice of Termination to the other party hereto given in accordance with Section 12(b) of this Agreement. For purposes of this Agreement, a "Notice of Termination" means a written notice which (i) indicates the specific termination provision in this Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive's employment under the provision so indicated and (iii) if the Date of Termination (as defined below) is other than the date of receipt of such notice, specifies the termination date (which date shall be not more than thirty days after the giving of such notice). The failure by the Executive or the Company to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Good Reason or Cause shall not waive any right of the Executive or the Company, respectively, from asserting such fact or circumstance in enforcing the Executive's or the Company's rights hereunder.

(e) Date of Termination. "Date of Termination" means (i) if the Executive's employment is terminated by the Company for Cause, or by the Executive for Good Reason, the date of receipt of the Notice of Termination or any later date specified therein, as the case may be, (ii) if the Executive's employment is terminated by the Company other than for Cause or Disability, the Date of Termination shall be the date on which the Company notifies the Executive of such termination and (iii) if the Executive's employment is terminated by reason of death or Disability, the Date of Termination shall be the date of death of the Executive or the Disability Effective Date, as the case may be.

6. Obligations of the Company upon Termination. (a) Good Reason; Other Than for Cause, Death or Disability.

If, at any time commencing on the Effective Date and ending on the first anniversary of such date, the Company shall terminate the Executive's employment other than for Cause or Disability or the Executive shall terminate employment for Good Reason:

(i) the Company shall pay to the Executive in a lump sum in cash within 30 days after the Date of Termination the aggregate of the following amounts:

A. the sum of (1) the Executive's Annual Base Salary through the Date of Termination to the extent not theretofore paid, (2) the product of (x) the higher of (I) the Recent Annual Bonus and (II) the Annual Bonus paid or payable, including any bonus or portion thereof which has been earned but deferred (and annualized for any fiscal year consisting of less than twelve full months or during which the Executive was employed for less than twelve full months), for the most recently completed fiscal year during the Employment Period, if any (such higher amount being referred to as the "Highest Annual Bonus") and (y) a fraction, the numerator of which is the number of days in the current fiscal year through the Date of Termination, and the denominator of which is 365 and (3) any compensation previously deferred by the Executive (together with any accrued interest or earnings thereon) and any accrued vacation pay, in each case to the extent not theretofore paid (the sum of the amounts described in clauses (1), (2), and (3) shall be hereinafter referred to as the "Accrued Obligations"); and

B. the amount equal to the product of (1) 2.99 and (2) the sum of (x) Executive's Annual Base Salary and (y) the Executive's Highest Annual Bonus.

(ii) for three years after the Executive's Date of Termination, or such longer period as may be provided by the terms of the appropriate plan, program, practice or policy, the Company shall continue benefits to the Executive and/or the Executive's family at least equal to those which would have been provided to them in accordance with the plans, programs, practices and policies described in Section 4(b)(iv) of this Agreement if the Executive's employment had not been terminated or, if more favorable to the Executive, as in effect generally at any time thereafter with respect to other peer executives of the Company and its affiliated companies and their families, provided, however, that if the Executive becomes reemployed with another employer and is eligible to receive medical or other welfare benefits under another employer provided plan, the medical and other welfare benefits described herein shall be secondary to those provided under such other plan during such applicable period of eligibility. For purposes of determining eligibility (but not the time of commencement of benefits) of the Executive for retiree benefits pursuant to such plans, practices, programs and policies, the Executive shall be considered to have remained employed until three years after the Date of Termination and to have retired on the last day of such period; and

(iii) to the extent not theretofore paid or provided, the Company shall timely pay or provide to the Executive any other amounts or benefits required to be paid or provided or which the Executive is eligible to receive under any plan, program, policy or practice or contract or agreement of the Company and its affiliated companies (such other amounts and benefits shall be hereinafter referred to as the "Other Benefits").

If, at any time during the Employment Period other than the time commencing on the Effective Date and ending on the first anniversary of such date, the Company shall terminate the Executive's employment other than for Cause or Disability or the Executive shall terminate employment for Good Reason:

(i) the Company shall pay to the Executive in a lump sum in cash within 30 days after the Date of Termination the aggregate of the following amounts:

A. the sum of (1) the Executive's Annual Base Salary through the Date of Termination to the extent not theretofore paid, (2) the product of (x) the higher of (I) the Recent Annual Bonus and (II) the Annual Bonus paid or payable, including any bonus or portion thereof which has been earned but deferred (and annualized for any fiscal year consisting of less than twelve full months or during which the Executive was employed for less than twelve full months), for the most recently completed fiscal year during the Employment Period, if any (such higher amount being referred to as the "highest Annual Bonus") and (y) a fraction, the numerator of which is the number of days in the current fiscal year through the Date of Termination, and the denominator of which is 365 and (3) any compensation previously deferred by the Executive (together with any accrued interest or earnings thereon) and any accrued vacation pay, in each case to the extent not theretofore paid (the sum of the amounts described in clauses (1), (2), and (3) shall be hereinafter referred to as the "Accrued Obligations"); and

B. the amount equal to the product of (1) two and (2) the sum of (x) the Executive's Annual Base Salary and (y) the Executive's Highest Annual Bonus.

(ii) for three years after the Executive's Date of Termination, or such longer period as may be provided by the terms of the appropriate plan, program, practice or policy, the Company shall continue benefits to the Executive and/or the Executive's family at least equal to those which would have been provided to them in accordance with the plans, programs, practices and policies described in Section 4(b)(iv) of this Agreement if the Executive's employment had not been terminated or, if more favorable to the Executive, as in effect generally at any time thereafter with respect to other peer executives of the Company and its affiliated companies and their families, provided, however, that if the Executive becomes reemployed with another employer and is eligible to receive medical or other welfare benefits under another employer provided plan, the medical and other welfare benefits described herein shall be secondary to those provided under such other plan during such applicable period of eligibility. For purposes of determining eligibility (but not the time of commencement of benefits) of the Executive for retiree benefits pursuant to such plans, practices, programs and policies, the Executive shall be considered to have remained employed until three years after the Date of Termination and to have retired on the last day of such period; and

(iii) to the extent not theretofore paid or provided, the Company shall timely pay or provide to the Executive any other amounts or benefits required to be paid or provided or which the Executive is eligible to receive under any plan, program, policy or practice or contract or agreement of the Company and its affiliated companies (such other amounts and benefits shall be hereinafter referred to as the "Other Benefits").

(b) Death. If the Executive's employment is terminated by reason of the Executive's death during the Employment Period, this Agreement shall terminate without further obligations to the Executive's legal representatives under this Agreement, other than for payment of Accrued Obligations and the timely payment or provision of Other Benefits. Accrued Obligations shall be paid to the Executive's estate or beneficiary, as applicable, in a lump sum in cash within 30 days of the Date of Termination. With respect to the provision of Other Benefits, the term Other Benefits as utilized in this Section 6(b) shall include, without limitation, and the Executive's estate and/or beneficiaries shall be entitled to receive, benefits at least equal to the most favorable benefits provided by the Company and affiliated companies to the estates and beneficiaries of peer executives of the Company and such affiliated companies under such plans, programs, practices and policies relating to death benefits, if any, as in effect with respect to other peer executives and their beneficiaries at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive's estate and/or the Executive's beneficiaries, as in effect on the date of the Executive's death with respect to other peer executives of the Company and its affiliated companies and their beneficiaries.

(c) Disability. If the Executive's employment is terminated by reason of the Executive's Disability during the Employment Period, this Agreement shall terminate without further obligations to the Executive, other than for payment of Accrued Obligations and the timely payment or provision of Other Benefits. Accrued Obligations shall be paid to the Executive in a lump sum in cash within 30 days of the Date of Termination. With respect to the provision of Other Benefits, the term Other Benefits as utilized in this Section 6(c) shall include, and the Executive shall be entitled after the Disability Effective Date to receive, disability and other benefits at least equal to the most favorable of those generally provided by the Company and its affiliated companies to disabled executives and/or their families in accordance with such plans, programs, practices and policies relating to disability, if any, as in effect generally with respect to other peer executives and their families at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive and/or the Executive's family, as in effect at any time thereafter generally with respect to other peer executives of the Company and its affiliated companies and their families.

(d) Cause; Other than for Good Reason. If the Executive's employment shall be terminated for Cause during the Employment Period, this Agreement shall terminate without further obligations to the Executive other than the obligations to pay to the Executive (x) his Annual Base Salary through the Date of Termination, (y) the amount of any compensation previously deferred by the Executive, and (z) Other Benefits, in each case to the extent theretofore unpaid. If the Executive voluntarily terminates employment during the Employment Period, excluding a termination for Good Reason, this Agreement shall terminate without further obligations to the Executive, other than for Accrued Obligations and the timely payment or provision of Other Benefits. In such case, all Accrued Obligations shall be paid to the Executive in a lump sum in cash within 30 days of the Date of Termination.

7. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or limit the Executive's continuing or future participation in any plan, program, policy or practice provided by the Company or any of its affiliated companies and for which the Executive may qualify, nor, subject to Section 12(f), shall anything herein limit or otherwise affect such rights as the Executive may have under any contract or agreement with the Company or any of its affiliated companies. Amounts which are vested benefits or which the Executive is otherwise entitled to receive under any plan, policy, practice or program of or any contract or agreement with the Company or any of its affiliated companies at or subsequent to the Date of Termination shall be payable in accordance with such plan, policy, practice or program or contract or agreement except as explicitly modified by this Agreement.

8. Full Settlement. The Company's obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Company may have against the Executive or others. In no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement and such amounts shall not be reduced whether or not the Executive obtains other employment. The Company agrees to pay as incurred, to the full extent permitted by law, all legal fees and expenses which the Executive may reasonably incur as a result of any contest (regardless of the outcome thereof) by the Company, the Executive or others of the validity or enforceability of, or liability under, any provision of this Agreement or any guarantee of performance thereof (including as a result of any contest by the Executive about the amount of any payment pursuant to this Agreement), plus in each case interest on any delayed payment at the applicable Federal rate provided for in Section 7872(f) (2)(A) of the Internal Revenue Code of 1986, as amended (the "Code").

9. Certain Additional Payments by the Company.

(a) Anything in this Agreement to the contrary notwithstanding and except as set forth below, in the event it shall be determined that any payment or distribution by the Company 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, but determined without regard to any additional payments required under this Section 9) (a "Payment") would be subject to the excise tax imposed by Section 4999 of 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, are hereinafter collectively referred to as the "Excise Tax"), then 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 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. Notwithstanding the foregoing provisions of this Section 9(a), if it shall be determined that the Executive is entitled to a Gross-Up Payment, but that the Executive, after taking into account the Payments and the Gross-Up Payment, would not receive a net after-tax benefit of at least $10,000 (taking into account both income taxes and any Excise Tax) as compared to the net after-tax proceeds to the Executive resulting from an elimination of the Gross-Up Payment and a reduction of the Payments, in the aggregate, to an amount (the "Reduced Amount") such that the receipt of Payments would not give rise to any Excise Tax, then no Gross-Up Payment shall be made to the Executive and the Payments, in the aggregate, shall be reduced to the Reduced Amount.

(b) Subject to the provisions of Section 9(c), all determinations required to be made under this Section 9, 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 Ernst & Young LLP (the "Accounting Firm"), which shall provide detailed supporting calculations both to the Company and the Executive within 15 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 Company. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change of Control, 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 Company. Any Gross-Up Payment, as determined pursuant to this Section 9, shall be paid by the Company to the Executive within five days of the receipt of the Accounting Firm's determination. Any determination by the Accounting Firm shall be binding upon the Company 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 Company should have been made ("Underpayment"), consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant to Section 9(c) 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 Company to or for the benefit of the Executive.

(c) The Executive shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company 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 Company 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 Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If the Company notifies the Executive in writing prior to the expiration of such period that it desires to contest such claim, the Executive shall:

(i) give the Company any information reasonably requested by the Company relating to such claim,

(ii) take such action in connection with contesting such claim as the Company 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 Company,

(iii) cooperate with the Company in good faith in order effectively to contest such claim, and

(iv) permit the Company to participate in any proceedings relating to such claim;

provided, however, that the Company 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 9(c), the Company shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forgo 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 Company shall determine; provided, however, that if the Company directs the Executive to pay such claim and sue for a refund, the Company 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 further provided that any extension of the statute of limitations relating to payment of taxes for the taxable year of the Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company'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.

(d) If, after the receipt by the Executive of an amount advanced by the Company pursuant to Section 9(c), the Executive becomes entitled to receive any refund with respect to such claim, the Executive shall (subject to the Company's complying with the requirements of Section 9(c)) promptly pay to the Company 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 the Company pursuant to Section 9(c), a determination is made that the Executive shall not be entitled to any refund with respect to such claim and the Company does not notify the Executive in writing of its intent to contest such denial of refund prior to the 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.

10. Confidential Information. The Executive shall hold in a fiduciary capacity for the benefit of the Company all secret or confidential information, knowledge or data relating to the Company or any of its affiliated companies, and their respective businesses, which shall have been obtained by the Executive during the Executive's employment by the Company or any of its affiliated companies and which shall not be or become public knowledge (other than by acts by the Executive or representatives of the Executive in violation of this Agreement). After termination of the Executive's employment with the Company, the Executive shall not, without the prior written consent of the Company or as may otherwise be required by law or legal process, communicate or divulge any such information, knowledge or data to anyone other than the Company and those designated by it. After termination of the Executive's employment with the Company, the Executive shall return to the Company all of Company's files, documents and papers, whether in hard copy or on computer tape or disc, in the Executive's possession. In no event shall an asserted violation of the provisions of this Section 10 constitute a basis for deferring or withholding any amounts otherwise payable to the Executive under this Agreement.

11. Successors. (a) This Agreement is personal to the Executive and without the prior written consent of the Company shall not be assignable by the Executive otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by the Executive's legal representatives.

(b) This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns.

(c) The Company 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 Company to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. As used in this Agreement, "Company" shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law, or otherwise.

12. Miscellaneous. (a) This Agreement shall be governed by and construed in accordance with the laws of the State Commonwealth of Virginia, without reference to principles of conflict of laws. The captions of this Agreement are not part of the provisions hereof and shall have no force or effect. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respective successors and legal representatives.

(b) All notices and other communications hereunder shall be in writing and shall be given by hand delivery to the other party or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:

If to the Executive:

Barry J. Fitzpatrick
10003 Park Royal Drive
Great Falls, Virginia 22066

If to the Company:

First Virginia Banks, Inc.
6400 Arlington Boulevard
Falls Church, Virginia 22042-2336

Attention: General Counsel

or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notice and communications shall be effective when actually received by the addressee.

(c) The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement.

(d) The Company may withhold from any amounts payable under this Agreement such Federal, state, local or foreign taxes as shall be required to be withheld pursuant to any applicable law or regulation.

(e) The Executive's or the Company's failure to insist upon strict compliance with any provision of this Agreement or the failure to assert any right the Executive or the Company may have hereunder, including, without limitation, the right of the Executive to terminate employment for Good Reason pursuant to Section 5(c)(i)-(v) of this Agreement, shall not be deemed to be a waiver of such provision or right or any other provision or right of this Agreement.

(f) The Executive and the Company acknowledge that, except as may otherwise be provided under any other written agreement between the Executive and the Company, the employment of the Executive by the Company is "at will" and, subject to Section 1(a) hereof, prior to the Effective Date, the Executive's employment and/or this Agreement may be terminated by either the Executive or the Company at any time prior to the Effective Date, in which case the Executive shall have no further rights under this Agreement. This Agreement shall not supersede and shall be in addition to that certain Supplemental Compensation Agreement by and between the Company and the Executive dated January 25, 1995, as it may be amended from time to time.

IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand and seal and, pursuant to the authorization from its Board of Directors, the Company has caused these presents to be executed and sealed in its name on its behalf, all as of the day and year first above written.

EXECUTIVE

/s/ Barry J. Fitzpatrick
------------------------- (SEAL)
Barry J. Fitzpatrick

Attest: FIRST VIRGINIA BANKS, INC.

/s/ Barbara J. Chapman
----------------------
Barbara J. Chapman

By: /s/ Thomas P. Jennings
----------------------
Thomas P. Jennings
Senior Vice President, General Counsel and Secretary