AMENDED AND RESTATED EMPLOYMENT AGREEMENT
Exhibit 10.8
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement”) by and between COMPASS
BANCSHARES, INC., a Delaware corporation (the “Company”), and ___
(the “Executive”), dated ___, 200_.
The Company and the Executive heretofore entered into an Employment Agreement dated
[___, as amended on ___and ___] (the “Prior
Agreement”) and the Company and the Executive believe that the Prior Agreement should be amended
and restated in its entirety and have agreed to enter into this Agreement, which shall supersede
and replace the Prior Agreement.
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 in Section 2) 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 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.
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 1(b)) on which a Change of Control 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 the Change of Control or (ii)
otherwise arose in connection with or anticipation of the 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 such date; 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”), 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 purpose 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 the following acquisitions shall
not constitute a Change of Control: (i) any acquisition directly from the Company (excluding an
acquisition by virtue of the exercise of a conversion privilege), (ii) any acquisition by the
Company or any entity controlled by the Company or under common control with 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, (iv) any acquisition by any corporation pursuant to a
reorganization, merger or consolidation, if, following such reorganization, merger or
consolidation, the conditions described in clauses (i), (ii) and (iii) of subsection (c) of this
Section 2 are satisfied; 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 either 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, statutory share exchange or consolidation or
similar corporate transaction involving the Company or any of its subsidiaries, a sale or other
disposition of all or substantially all of the assets of the Company, or the acquisition of assets
or stock of another entity by the Company or any of its subsidiaries (each, a “Business
Combination”), in each case, unless, following such Business Combination, (i) all or substantially
all of the individuals and entities that were the beneficial owners of the Outstanding Company
Common Stock and the Outstanding Company Voting Securities immediately prior to such Business
Combination beneficially own, directly or indirectly, more than 50% of 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 that, 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 the
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.
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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, in accordance with the
terms and provisions of this Agreement, for the period commencing on the Effective Date and ending
on the third anniversary of such date (the “Employment Period”). Nothing contained herein shall be
construed as conferring upon the Executive any right to continue to be employed by the Company
prior to the Effective Date, as defined in Section 1(a), unless this agreement is modified in
writing as provided for in Section 11(a).
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 90-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.
(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. To
the extent permitted by the Code of Conduct of the Company then applicable 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 were permitted by the Code of Conduct prior to the
Effective Date and 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 in equal installments on a bi-monthly basis, at
least equal to twenty-four times the highest bi-monthly base salary paid or payable, including by
reason of deferral, to the Executive by the Company or 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 at least annually and shall be
increased at any time and from time to time as shall be substantially consistent with increases in
base salary generally awarded in the ordinary course of business 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.
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(ii) Annual Bonus. In addition to Annual Base Salary, the Executive shall be awarded, for each
calendar year ending during the Employment Period, an annual bonus (the “Annual Bonus”) in cash at
least equal to the greater of (A) the annualized maximum target bonus payable to the Executive for
the year in which the Effective Date occurs, calculated as if all applicable performance measures
are satisfied, or (B) the average annualized (for any year with respect to which the Executive has
been employed by the Company for less than twelve full months) bonus paid or payable, including by
reason of any deferral, to the Executive by the Company and its affiliated companies in respect of
the three calendar years immediately preceding the calendar year in which the Effective Date occurs
(the “Recent Average Bonus”). Each such Annual Bonus shall be paid no later than the end of
February of the year next following the 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
90-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) Leave Programs. During the Employment Period, the Executive shall be eligible for
participation in and shall receive all benefits under leave programs provided by the Company and
its affiliated companies (including, without limitation, sick leave, short-term disability,
emergency leave, jury duty, military leave, and family and medical leave) to the extent applicable
generally to other peer executives of the Company and its affiliated companies, but in no event
shall such programs provide the Executive with benefits which are less favorable, in the aggregate,
than the most favorable of such programs in effect for the Executive at any time during the 90-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.
(v) 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,
salary continuance, 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
90-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.
(vi) Expenses. During the Employment Period, the Executive shall be entitled to receive prompt
reimbursement for all reasonable employment 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 90-day period immediately preceding the
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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) Fringe Benefits. During the Employment Period, the Executive shall be entitled to fringe
benefits 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 90-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.
(viii) 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 90-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.
(ix) Vacation. During the Employment Period, the Executive shall be entitled to paid vacation
and other vacation benefits 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 90-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 and has continued for a period of 180 consecutive days
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 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 that the absence of the Executive from the Executive’s duties with the
Company 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 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) commission of a felony or a
crime involving moral turpitude that is in either event materially and demonstrably injurious to
the Company, (ii) substantial dependence or addiction to any drug illegally taken or to alcohol
that is in either event materially and demonstrably injurious to the Company or (iii) willful
dereliction of duties or gross misconduct that is in either event materially and demonstrably
injurious to the Company. If the Company proposes a determination that the Executive be terminated
for Cause, then the Board of Directors of the Company (or the Board of the Directors of the
Company’s ultimate parent if such entity is in existence) shall give written notice (which notice
shall specify in detail the reasons for such proposed determination) of such proposed determination
to the Executive no less than thirty (30) days prior to such proposed determination. Such
determination may only be made by such Board and the Executive shall be permitted to respond and
defend himself before the Board with legal counsel. If the Executive is thereafter terminated but
the majority of the members of such Board do not find that the Company has
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grounds for a “Cause” termination within thirty (30) days after the Executive has had his hearing
before the Board, the Executive shall have the option of treating his employment as not having
terminated or as being terminated by the Executive for Good Reason.
(c) GOOD REASON; WINDOW PERIOD. The Executive’s employment may be terminated (i) during the
Employment Period by the Executive for Good Reason or (ii) during the Window Period by the
Executive without any reason. For purposes of this Agreement, the “Window Period” shall mean the
30-day period immediately following the first anniversary of the Effective Date. 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) 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), 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
that described in Section 4(a)(i)(B);
(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 10(c).
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
without any reason during the Window Period or for Good Reason, shall be communicated by Notice of
Termination to the other party hereto given in accordance with Section 11(b). 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 not be more than 15 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 hereunder or preclude the Executive or the Company 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 during the Window Period or 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
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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 OR DURING THE WINDOW PERIOD; OTHER THAN FOR CAUSE, DEATH OR DISABILITY. If,
during the Employment Period, the Company shall terminate the Executive’s employment other than for
Cause or Disability or the Executive shall terminate employment either for Good Reason or without
any reason during the Window Period:
(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 amount of any Annual Base Salary for services rendered previously earned
through the Date of Termination to the extent not theretofore paid, (2) a pro-rata bonus in an
amount equal to the product of (x) the Annual Bonus and (y) a fraction, the numerator of which is
the number of days in the calendar year that includes the Date of Termination through the date of
Termination and the denominator of which is 365, and (3) any accrued vacation pay, 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 are hereby agreed to constitute reasonable
compensation for services rendered); and
B. two hundred, ninety-nine percent (299%) of (x) the Executive’s Annual Base Salary as of the
Date of Termination and (y) the Executive’s Bonus Amount, determined in accordance with this
provision (the “Severance Amount”). The Executive’s “Bonus Amount” shall mean the greater of (1)
the highest annual bonus earned by the Executive for any of the three calendar years immediately
preceding the calendar year in which a Change of Control occurs or (2) the highest Annual Bonus
earned by the Executive for any calendar year ending after a Change of Control.
(ii) for the remainder of the Employment Period, or such longer period as any plan, program,
practice or policy may provide, 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)(v) if the Executive’s
employment had not been terminated in accordance with the most favorable plans, practices, programs
or policies of the Company and its affiliated companies as in effect and applicable generally to
other peer executives and their families during the 90-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 and
their families, provided, however, that if the Executive becomes reemployed with another employer
and is eligible to receive medical and 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 (such continuation of such benefits
for the applicable period herein set forth shall be hereinafter referred to as “Welfare Benefit
Continuation”). For purposes of determining eligibility of the Executive for retiree benefits
pursuant to such plans, practices, programs and policies, the Executive shall be considered to have
remained employed until the end of the Employment Period 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 and/or the Executive’s family any other amounts or benefits required to be paid or
provided or which the Executive and/or the Executive’s family is eligible to receive pursuant to
this
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Agreement and under any plan, program, policy or practice or contract or agreement of the Company
and its affiliated companies as in effect and applicable generally to other peer executives and
their families during the 90-day period immediately preceding the Effective Date or, if more
favorable to the Executive, as in effect generally thereafter with respect to other peer executives
of the Company and its affiliated companies and their families (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 (i) payment of Accrued
Obligations (which 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) and the timely payment or provision of the
Welfare Benefit Continuation and Other Benefits and (ii) payment to the Executive’s estate or
beneficiary, as applicable, in a lump sum in cash within 30 days of the Date of Termination of an
amount equal to the Severance Amount.
(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 (i) payment of Accrued Obligations (which shall be paid to the
Executive in a lump sum in cash within 30 days of the Date of Termination) and the timely payment
or provision of the Welfare Benefit Continuation and Other Benefits (excluding, in each case,
Disability Benefits (as defined below)) and (ii) payment to the Executive in a lump sum in cash
within 30 days of the Date of Termination of an amount equal to the greater of (A) the Severance
Amount and (B) the present value (determined as provided in Section 280G(d)(4) of the Code) of any
cash amount to be received by the Executive as a disability benefit pursuant to the terms of any
plan, policy or arrangement of the Company and its affiliated companies, but not including any
proceeds of disability insurance covering the Executive to the extent paid for directly or on a
contributory basis by the Executive (which shall be paid in any event as an Other Benefit) (the
benefits included in this clause (B) shall be hereinafter referred to as the “Disability
Benefits”).
(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 obligation to pay to the Executive the Annual Base Salary through the
Date of Termination and any accrued vacation pay, in each case to the extent not theretofore paid.
If the Executive terminates employment during the Employment Period, excluding a termination either
for Good Reason or without any reason during the Window Period, this Agreement shall terminate
without further obligations to the Executive, other than for the obligation to pay to the Executive
the Annual Base Salary through the Date of Termination and any accrued vacation pay, in each case
to the extent not theretofore paid, and the timely payment or provision of Other Benefits. In such
case, all such amounts due to Executive under this Section 6(d) 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. Except as provided in Sections 6(a)(ii), 6(b) and 6(c),
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 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
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Agreement; provided however, the payments and benefits provided to Executive pursuant to Section 6
of this Agreement shall be in lieu of any payments and benefits that Executive may be eligible to
receive under any severance plan maintained by the Company.
8. FULL SETTLEMENT; RESOLUTION OF DISPUTES.
(a) 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, except as provided in Section 8(b) of this Agreement. 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, except as
provided in Section 6(a)(ii), such amounts shall not be reduced whether or not the Executive
obtains other employment. The Company agrees to pay promptly 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 Code.
(b) If there shall be any dispute between the Company and the Executive (i) in the event of
any termination of the Executive’s employment by the Company, whether such termination was for
Cause, or (ii) in the event of any termination of employment by the Executive, whether Good Reason
existed, then, unless and until there is a final, nonappealable judgment by a court of competent
jurisdiction declaring that such termination was for Cause or that the determination by the
Executive of the existence of Good Reason was not made in good faith, the Company shall pay all
amounts, and provide all benefits, to the Executive and/or the Executive’s family or other
beneficiaries, as the case may be, that the Company would be required to pay or provide pursuant to
Section 6(a) as though such termination were by the Company without Cause or by the Executive with
Good Reason; provided, however, that the Company shall not be required to pay any disputed amounts
pursuant to this paragraph except upon receipt of an undertaking by or on behalf of the Executive
to repay all such amounts to which the Executive is ultimately adjudged by such court not to be
entitled.
9. CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY.
(a) Anything in this Agreement to the contrary notwithstanding, 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 if 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.
(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
9
a nationally recognized accounting firm selected by the Executive in the Executive’s sole
discretion (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. 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. If the Accounting Firm determines that
no Excise Tax is payable by the Executive, it will, at the same time as it makes that
determination, furnish the Company and the Executive with a written opinion that failure to report
the Excise Tax on the Executive’s applicable federal income tax return will not result in the
imposition of a negligence or similar penalty. 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, direct
the Executive to 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
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Company shall determine; provided, however, that the Company 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 contest; 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.
10. 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.
11. MISCELLANEOUS.
(a) This Agreement shall be governed by and construed in accordance with the laws of the State
of Delaware, 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. Notwithstanding the foregoing, the Company and
the Executive shall amend or modify this Agreement (and may do so retroactively) without any
further consideration if such amendment or modification is necessary to ensure compliance with
Section 409A of the Code or in order to avoid the application of any penalties that may be imposed
upon the Executive pursuant to the provisions of Section 409A of the Code; provided that such
amendment shall not result in the diminution in the value of payments or benefits due the Executive
under this Agreement.
(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: | ||||
| If to the Company: Compass Bancshares, Inc. | ||||
| 00 Xxxxx 00xx Xxxxxx | ||||
| Xxxxxxxxxx, Xxxxxxx 00000 | ||||
| Attention: D. Xxxx Xxxxx, Xx. |
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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
or local 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 hereof or any other 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), 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, prior to the Effective Date, may be terminated by either the
Executive or the Company at any time. Moreover, if prior to the Effective Date, the Executive’s
employment with the Company terminates, then the Executive shall have no further rights under this
Agreement.
(g) This Agreement is intended to comply with the requirements of Section 409A of the Code (to
the extent applicable) and the Company agrees to interpret, apply and administer this Agreement in
the least restrictive manner necessary to comply with such requirements and without resulting in
any diminution in the value of payments or benefits to the Executive. To the extent that any
payments to be provided to the Executive under this Agreement result in the deferral of
compensation under Section 409A of the Code, and if the Executive is a “Specified Employee” as
defined in Section 409A(a)(2)(B)(i) of the Code, then any such payments shall instead be
transferred to a rabbi trust (which shall be created by the Employer or its successor, on terms
reasonably acceptable to the Executive, as soon as administratively feasible following the
occurrence of an event giving rise to the Executive’s right to such payment) and such amounts
(together with earnings thereon in accordance with the terms of the trust agreement) shall be
transferred from the trust to the Executive upon the earlier of (i) six months and one day after
the Executive’s Date of Termination, or (ii) any other date permitted under Section 409A of the
Code. To the extent that any of the non-cash benefits provided to the Executive under this
Agreement, including but not limited to the benefits described in Sections 6(a)(ii) and (iii),
result in the deferral of compensation under Section 409A of the Code and if the Executive is a
“Specified Employee” as defined in Section 409A(a)(2)(B)(i) of the Code, then the Company or its
successor shall, instead of providing such benefits to the Executive as set forth hereinabove,
delay the proviso of such benefits until the earlier of (i) six months and one day after the
Executive’s separation from service, or (ii) such other date permitted under Section 409A of the
Code; provided, however, on such date the Employer shall be required to pay to the Executive in one
lump sum an amount equal to the Executive’s after-tax costs of the benefits for the period during
which the provision of the benefits was delayed as a result of the application of Code Section
409A.
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IN WITNESS WHEREOF, the Executive has hereunto set the 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.
| WITNESS: | EXECUTIVE: | |||||||
| ATTEST: | COMPASS BANCSHARES, INC. | |||||||
By
|
By: | |||||||
Its:
|
Title: | |||||||
13
