EXHIBIT 99.1
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
AGREEMENT by and between Regions Financial Corporation, a Delaware
corporation (the "Company") and Xxxx X. Xxxxxxxxxxx, Xx. ("Executive"), dated as
of May 1, 2006 amending and restating the employment agreement first entered
into on September 1, 2001 and amended on March 1, 2005.
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 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 Executive by virtue of the personal uncertainties and risks
created by a pending or threatened Change of Control and to encourage
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 Executive
with compensation and benefits arrangements upon a Change of Control which
ensure that the compensation and benefits expectations of Executive will be
satisfied and which are competitive with those of other corporations. Therefore,
in order to accomplish these objectives, the Board has caused the Company to
enter into this Agreement.
The Company and Executive now amend the Agreement to comply with Section
409A of the Internal Revenue Code (the "Code"). In order to comply with Section
409A and to take advantage of transition rules in the Treasury Regulations under
Section 409A, this amendment and restatement is effective January 1, 2005,
notwithstanding the fact that it is executed in 2006. The Company and Executive
agree that, in the event of ambiguity, this Agreement is to be interpreted to
comply with Section 409A (or alternatively, to take advantage of any applicable
exemption, exception, transition rule or mitigation, or any definition which
excludes a payment from being deferred compensation). Further, strictly for
purposes of clarity, the Company and Executive acknowledge that a Change of
Control (as defined in the Agreement prior to this amendment and restatement)
occurred on July 1, 2004 with the merger of the Company and Union Planters
Corporation (the "UPC Merger").
Notwithstanding anything to the contrary herein, the sole purpose of the
Agreement is to amend and restate the employment agreement first entered into by
the Company and Executive on September 1, 2001 as amended. The Agreement does
not affect the rights of Executive under any other agreements, plans or
arrangements between the Company and Executive including, but not limited to,
stock option agreements, restricted stock agreements, deferred compensation
plans, and compensation and bonus arrangements.
NOW, THEREFORE, 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 l(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 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 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 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. "Effective Date" shall
include, without limitation, July 1, 2004, the date of the UPC Merger.
(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 Executive that the Change of Control Period shall not be so extended.
(c) The "409A Date" shall mean the date that is six months after the
date of Separation from Service.
(d) "Date of Termination" shall mean (i) if Executive's employment is
terminated other than by reason of death or Disability, the date of receipt of
the Notice of Termination or any later date specified therein, as the case may
be, or (ii) if Executive's employment is terminated by reason of death or
Disability, the Date of Termination shall be the date of death of Executive or
the Disability Effective Date, as the case may be.
(e) "Separation from Service" shall have the meaning given to it in
Section 409A(2)(A)(i) of the Code and the regulations promulgated thereunder, as
such regulations may be changed from time to time.
(f) "Specified Employee" shall have the meaning given to it in Section
409A(2)(B)(i) of the Code and the regulations promulgated thereunder, as such
regulations may be changed from time to time, with an identification date of
December 31.
(g) The "UPC Merger" shall mean the Merger of the Company with Union
Planters Corporation, which became effective on July 1, 2004.
2. Change of Control. For the purposes of this Agreement, a "Change of
Control" shall mean the UPC Merger and any subsequent occurrence of any of the
following events:
(a) An acquisition (other than directly from the Company) of any
voting securities of the Company (the "Voting Securities") by any "Person" (as
the term person is used for the purposes of Section 13(d) or 14(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) immediately
after which such Person has Beneficial Ownership (within the meaning of Rule
l3d-3 promulgated under the Exchange Act) of fifty percent (50%) or more of the
combined voting power of the Company's then-outstanding Voting Securities;
provided, however, in determining whether or not a Change of Control has
occurred, Voting Securities which are acquired in a "Non-Control Acquisition"
(as hereinafter defined) shall not constitute an acquisition which would
constitute a Change of Control. A "Non-Control Acquisition" shall mean an
acquisition by (i) any employee benefit plan (or related trust) sponsored or
maintained by the
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Company or any affiliate of the Company, (ii) by the Company, or (iii) any
Person in connection with a Non-Control Transaction (as hereinafter defined);
(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) The consummation of:
(i) A merger, consolidation or reorganization with or into the
Company in which securities of the Company are issued, unless such merger,
consolidation or reorganization is a "Non-Control Transaction". A "Non-Control
Transaction" is a merger, consolidation or reorganization with or into the
Company or in which securities of the Company are issued where:
A. the shareholders of the Company immediately before such
merger, consolidation, or reorganization, own, directly or indirectly, at least
fifty-one percent (51%) of the combined voting power of the outstanding voting
securities of the corporation resulting form such merger, consolidation or
reorganization (the "Surviving Corporation") in substantially the same
proportion as their ownership of the Voting Securities immediately before such
merger, consolidation or reorganization,
B. the individuals who were members of the Incumbent Board
immediately prior to the execution of the agreement providing for such merger,
consolidation or reorganization constitute at least a majority of the members of
the board of directors of the Surviving Corporation or a corporation owning
directly or indirectly fifty-one percent (51%) or more of the Voting Securities
of the Surviving Corporation, and
C. no person other than (i) the Company, (ii) any subsidiary
of the Company, or (iii) any employee benefit plan (or any trust forming a part
thereof) maintained by the Company immediately prior to such merger,
consolidation, or reorganization owns fifty percent (50%) or more of the
combined voting power of the Surviving Corporation's then-outstanding voting
securities; or
(ii) A complete liquidation or dissolution of the Company; or
(iii) The sale or other disposition of all or substantially all
of the assets of the Company to any Person.
Notwithstanding the foregoing, a Change of Control shall not be deemed to
occur solely because any Person (the "Subject Person") acquired Beneficial
Ownership of more than the permitted amount of the outstanding Voting Securities
as a result of the acquisition of Voting Securities by the Company which, by
reducing the number of Voting Securities outstanding, increases the proportional
number of shares Beneficially Owned by the Subject Person, provided
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that if a Change of Control would occur (but for the operation of this sentence)
and after such acquisition of Voting Securities by the Company, the Subject
Person becomes the Beneficial Owner of any additional Voting Securities, then a
Change of Control shall occur.
3. Employment Period. The Company hereby agrees to continue Executive in
its employ, and 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) 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)
Executive's services shall be performed at the location where 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 Executive is entitled, 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 Executive hereunder, to use 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 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
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 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 Executive's
responsibilities to the Company.
(b) Compensation.
(i) Base Salary. During the Employment Period, Executive shall
receive an annual base salary ("Annual Base Salary") at a rate at least equal to
the rate of base salary in effect on the date of this Agreement or, if greater,
on the Effective Date, paid or payable (including any base salary which has been
earned but deferred) to Executive by the Company and its affiliated companies.
During the Employment Period, the Annual Base Salary shall be reviewed no more
than 12 months after the last salary increase awarded to Executive prior to the
Effective Date and thereafter at least annually. Any increase in Annual Base
Salary shall not serve to limit or reduce any other obligation to Executive
under this Agreement. Annual Base Salary shall not be reduced after any such
increase and the term Annual Base Salary as used 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.
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(ii) Annual Bonus. In addition to Annual Base Salary, 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 Executive's highest
bonus under the Company's Management Incentive Bonus Plan, or any comparable
bonus under any predecessor or successor plans, for the last three full fiscal
years prior to the Effective Date (annualized in the event that 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 Executive shall elect to defer the receipt of
such Annual Bonus.
(iii) Incentive, Savings and Retirement Plans. During the
Employment Period, 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
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
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 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,
Executive and/or Executive's eligible dependents, 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 Executive with
benefits which are less favorable, in the aggregate, than the most favorable of
such plans, practices, policies and programs in effect for Executive at any time
during the 120-day period immediately preceding the Effective Date or, if more
favorable to Executive, those provided generally at any time after the Effective
Date to other peer executives of the Company and its affiliated companies.
(v) Expenses. During the Employment Period, Executive shall be
entitled to receive prompt reimbursement for all reasonable expenses incurred by
Executive in accordance with the most favorable policies, practices and
procedures of the Company and its affiliated companies in effect for Executive
at any time during the 120-day period immediately preceding the Effective Date
or, if more favorable to Executive, as in effect generally at any time
thereafter with respect to other peer executives of the Company and its
affiliated companies.
(vi) Fringe Benefits. During the Employment Period, 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 Executive at any time during the 120-day
period immediately
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preceding the Effective Date or, if more favorable to 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,
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 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
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, 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 Executive at any time during the 120-day period immediately preceding the
Effective Date or, if more favorable to 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. Executive's employment shall terminate
automatically upon Executive's death during the Employment Period. If the
Company determines in good faith that the Disability of Executive has occurred
during the Employment Period (pursuant to the definition of Disability set forth
below), it may give to Executive written notice in accordance with Section 13(b)
of this Agreement of its intention to terminate Executive's employment. In such
event, Executive's employment with the Company shall terminate effective on the
30th day after receipt of such notice by Executive (the "Disability Effective
Date"), provided that, within the 30 days after such receipt, Executive shall
not have returned to full-time performance of Executive's duties. For purposes
of this Agreement, "Disability" shall mean the absence of Executive from
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 Executive or Executive's legal representative.
(b) Cause. The Company may terminate Executive's employment during the
Employment Period for Cause. For purposes of this Agreement, "Cause" shall mean:
(i) the willful and continued failure of Executive to perform
substantially Executive's reasonably assigned duties with the Company or one of
its affiliates (other than any such failure resulting from incapacity due to
physical or mental illness or from the assignment to Executive of duties that
would constitute Good Reason under Section 5(c)(i), and specifically excluding
any failure by Executive, after reasonable efforts, to meet performance
expectations), which failure continues for a period of at least 30 days after a
written demand for substantial performance, signed by a duly authorized officer
of the Company, has been delivered to Executive which specifically identifies
the manner in which Executive has failed to substantially performed his duties;
provided, however, that no failure to perform by Executive after a Notice of
Termination is given to the Company by Executive shall constitute Cause for
purposes of this Agreement, or
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(ii) the willful engaging by 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
Executive, shall be considered "willful" unless it is done, or omitted to be
done, by Executive in bad faith or without reasonable belief that 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 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 Executive in good faith and in the best interests of
the Company. The cessation of employment of Executive shall not be deemed to be
for Cause unless and until there shall have been delivered to 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
Executive and Executive is given an opportunity, together with counsel, to be
heard before the Board), finding that, in the good faith opinion of the Board,
Executive is guilty of the conduct described in subparagraph (i) or (ii) above,
and specifying the particulars thereof in detail.
(c) Good Reason. Executive's employment may be terminated by Executive
for Good Reason. For purposes of this Agreement, "Good Reason" shall mean:
(i) the assignment to Executive of any duties inconsistent in any
respect with 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 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
Executive;
(iii) the Company's requiring 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 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 Executive's
employment otherwise than as expressly permitted by this Agreement;
(v) any failure by the Company to comply with and satisfy Section
12(c) of this Agreement;
(vi) any other material breach by the Company of any provision of
this Agreement; or
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(vii) a termination of employment by Executive for any reason
during the 30-day period immediately following the first anniversary of the
Change of Control; provided, however, that with respect to the UPC Merger, such
termination must occur during the period beginning on July 1, 2005 and ending on
December 31, 2006.
Good Reason shall not include Executive's death or Disability. Executive's
continued employment shall not constitute consent to, or a waiver of rights with
respect to, any circumstance constituting Good Reason hereunder. For purposes of
this Section 5(c), any good faith determination of "Good Reason" made by
Executive shall be conclusive.
(d) Notice of Termination. Any termination by the Company or Executive
shall be communicated by Notice of Termination to the other party hereto given
in accordance with Section 13(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 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. If a dispute exists concerning the provisions of this Agreement that apply
to Executive's termination of employment, the parties shall pursue the
resolution of such dispute with reasonable diligence. Within five (5) days of
such a resolution, any party owing any payments pursuant to the provisions of
this Agreement shall make all such payments together with interest accrued
thereon at the rate provided in Section 1274(b)(2)(B) of the Code. The failure
by 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 Executive or the Company, respectively, hereunder or preclude
Executive or the Company, respectively, from asserting such fact or circumstance
in enforcing Executive's or the Company's rights hereunder.
6. Obligations of the Company upon Termination.
(a) Termination by Executive for Good Reason; Termination by the
Company Other Than for Cause or Disability. If, during the Employment Period,
the Company shall terminate Executive's employment other than for Cause or
Disability, or Executive shall terminate employment for Good Reason:
(i) The Company shall pay to 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) 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 or (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 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, (3)
any accrued vacation pay to the extent not theretofore paid, and (4) unless
Executive has elected a different payout date in a prior deferral election, any
compensation previously deferred by Executive (together with any accrued
interest or earnings thereon) to the
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extent not theretofore paid (the sum of the amounts described in clauses (1),
(2), (3) and (4) shall be hereinafter referred to as the "Accrued Obligations");
and
B. the amount equal to the product of (1) three and (2) the
sum of (x) Executive's Annual Base Salary and (y) the Highest Annual Bonus.
(ii) For three years after the 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 Executive and/or
Executive's eligible dependents 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 Executive's employment had
not been terminated or, if more favorable to 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
Executive becomes re-employed 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 Executive for retiree benefits pursuant to such plans, practices,
programs and policies, 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. Notwithstanding the above, the following shall apply to the
provision of the medical, dental and prescription drug benefits under Section
4(b)(iv). Such benefits shall be paid upon a Separation from Service. However,
if Executive is a Specified Employee, the following provisions shall apply. To
the extent such benefits are provided under a plan to which the "continuation
coverage" provisions of Section 601, et seq., of the Employee Retirement Income
Security Act of 1974, as amended, and Section 4980B of the Code ("COBRA") apply,
Executive shall elect COBRA continuation coverage and shall pay COBRA premium
payments as they come due from the Date of Termination to the 409A Date.
Executive will be reimbursed by the Company for all such COBRA premium payments
within 30 days after the 409A Date. To the extent such benefits are not provided
under a plan or arrangement to which COBRA applies, Executive shall pay to the
Company the value of such benefits and shall be reimbursed for such payments
within 30 days after the 409A Date.
(iii) For the 18-month period beginning on the Date of
Termination, the Company shall, at its sole expense as incurred, provide
Executive with outplacement services the scope and provider of which shall be
selected by Executive in his sole discretion.
(iv) To the extent not theretofore paid or provided, the Company
shall timely pay or provide to Executive any other amounts or benefits required
to be paid or provided or which 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 Executive's employment is terminated by reason of
Executive's death during the Employment Period, this Agreement shall terminate
without further obligations to 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 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
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used in this Section 6(b) shall include without limitation, and 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 Executive's
estate and/or Executive's beneficiaries, as in effect on the date of Executive's
death.
(c) Disability. If Executive's employment is terminated by reason of
Executive's Disability during the Employment Period, this Agreement shall
terminate without further obligations to Executive, other than for payment of
Accrued Obligations and the timely payment or provision of Other Benefits.
Accrued Obligations shall be paid to 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 used in this Section 6(c) shall include,
and 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
Executive and/or Executive's family, as in effect at the Date of Termination.
(d) Cause; Other than for Good Reason. If Executive's employment shall
be terminated for Cause during the Employment Period, this Agreement shall
terminate without further obligations to Executive other than the obligation to
pay to Executive (x) his Annual Base Salary through the Date of Termination, (y)
the amount of any compensation previously deferred by Executive, and (z) Other
Benefits, in each case to the extent theretofore unpaid. If Executive
voluntarily terminates employment during the Employment Period, excluding a
termination for Good Reason, this Agreement shall terminate without further
obligations to 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 Executive in a lump sum in cash within 30 days of the Date of
Termination.
(e) Expiration of Employment Period. If Executive's employment shall
be terminated due to the normal expiration of the Employment Period, this
Agreement shall terminate without further obligations to Executive, other than
for payment of Accrued Obligations and the timely payment or provision of Other
Benefits.
(f) Modifications to comply with Code Section 409A. Effective January
1, 2005, the portion of the Accrued Obligations listed in Section 6(a)(i)(A)(2)
and the amounts under Section 6(a)(i)(B), if payable under Subsections 6(a), (c)
or (d) above, shall not be payable within 30 days of the Date of Termination,
but rather shall be payable within 30 days after Separation from Service (or, if
Executive is a Specified Employee, within 30 days after the 409A Date).
Effective January 1, 2005, the portion of the Accrued Obligations listed in
Section 6(a)(i)(A)(4), if payable under Subsections 6(a), (c) or (d) above,
shall not be payable within 30 days of the Date of Termination, but rather shall
be payable in accordance with the terms of the applicable plans or agreements
giving rise to the obligations, provided however that if such plans or
agreements do not specify a time and manner of payment, then such obligations
shall be paid in a lump sum in cash within 30 days after Separation from Service
(or, if Executive is a Specified Employee, within 30 days after the 409A Date).
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7. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or
limit 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 Executive may qualify, nor, subject to Section 13(f), shall
anything herein limit or otherwise affect such rights as Executive may have
under any contract or agreement with the Company or any of its affiliated
companies. Amounts which are vested benefits or which 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; No Mitigation. 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
Executive or others. In no event shall Executive be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable
to Executive under any of the provisions of this Agreement and such amounts
shall not be reduced whether or not Executive obtains other employment.
9. Costs of Enforcement. The Company agrees to pay as incurred, to the full
extent permitted by law, all legal fees and expenses which Executive may
reasonably incur as a result of any contest (regardless of the outcome thereof)
by the Company, 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 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 Code. Executive shall also be entitled to be paid all
reasonable legal fees and expenses, if any, incurred in connection with any tax
audit or proceeding to the extent attributable to the application of Section
4999 of the Code to any payment or benefit hereunder. Such payments shall be
made within five (5) business days after delivery of Executive's respective
written requests for payment accompanied with such evidence of fees and expenses
incurred as the Company reasonably may require.
10. 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 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 10) (a "Payment") would be subject to the excise tax
imposed by Section 4999 of the Code or any interest or penalties are incurred by
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 Executive shall be entitled to receive an additional payment
(a "Gross-Up Payment") in an amount such that after payment by 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,
Executive retains an amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payments.
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(b) Subject to the provisions of Section 10(c), all determinations
required to be made under this Section 10, including whether and when a Gross-Up
Payment is required and the amount of such Gross-Up Payment and the assumptions
to be used in arriving at such determination, shall be made by Ernst & Young LLP
or such other certified public accounting firm as may be designated by Executive
(the "Accounting Firm") which shall provide detailed supporting calculations
both to the Company and Executive within 15 business days of the receipt of
notice from 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, 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 10, shall-be paid by the Company to
Executive within five days of the receipt of the Accounting Firm's
determination. Notwithstanding the above, in no event will any Gross-Up Payment
be made before Separation from Service (or, if Executive is a Specified
Employee, the 409A Date). Any determination by the Accounting Firm shall be
binding upon the Company and 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 10(c) and 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
Executive.
(c) 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 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. 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 sending on
the date that any payment of taxes with respect to such claim is due).
If the Company notifies Executive in writing prior to the expiration of such
period that it desires to contest such claim, 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
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(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 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 of the
foregoing provisions of this Section 10(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 Executive to pay the tax claimed and xxx for a refund
or contest the claim in any permissible manner, and 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
Executive to pay such claim and xxx for a refund, the Company shall advance the
amount of such payment to Executive, on an interest-free basis and shall
indemnify and hold 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 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 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 Executive of an amount advanced by the
Company pursuant to Section 10(c), Executive becomes entitled to receive any
refund with respect to such claim, Executive shall (subject to the Company's
complying with the requirements of Section 10(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 Executive of an amount
advanced by the Company pursuant to Section 10(c), a determination is made that-
Executive shall not be entitled to any refund with respect to such claim and the
Company does not notify 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.
11. Confidential Information. 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 Executive during
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 Executive
or representatives of Executive in violation of this Agreement). After
termination of Executive's employment with the Company, 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. In no event
shall an asserted violation of the provisions of this Section 11 constitute a
basis for deferring or withholding any amounts otherwise payable to Executive
under this Agreement.
12. Successors.
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(a) This Agreement is personal to Executive and without the prior
written consent of the Company shall not be assignable by Executive otherwise
than by will or the laws of descent and distribution. This Agreement shall inure
to the benefit of and be enforceable by 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.
13. Miscellaneous.
(a) This Agreement shall be governed by and construed in accordance
with the laws of the State of Alabama, 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 Executive: [address omitted]
If to the Company: Regions Financial Corporation
P. O. Xxx 00000
Xxxxxxxxxx, Xxxxxxx 00000
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) 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 Executive or the Company may have
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hereunder, including, without limitation, the right of 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) Executive and the Company acknowledge that, except as may
otherwise be provided under any other written agreement between Executive and
the Company, the employment of Executive by the Company is "at will" and,
subject to Section 1(a) hereof, Executive's employment and/or this Agreement may
be terminated by either Executive or the Company at any time prior to the
Effective Date, in which case Executive shall have no further rights under this
Agreement. From and after the Effective Date this Agreement shall supersede any
other agreement between the parties with respect to the subject matter hereof.
IN WITNESS WHEREOF, Executive has hereunto set Executive's hand and,
pursuant to the authorization from its Board of Directors, the Company has
caused these presents to be executed in its name on its behalf, all as of the
day and year first above written.
/s/ Xxxx X. Xxxxxxxxxxx, Xx.
----------------------------------------
XXXX X. XXXXXXXXXXX, XX.
REGIONS FINANCIAL CORPORATION
By: /s/ Xxxxx Xxxxxx
------------------------------------
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