EMPLOYMENT AGREEMENT
by and between
NATIONSBANK CORPORATION
and
XXXXXXX X. XXXXXX
EMPLOYMENT AGREEMENT
AGREEMENT, dated as of October 10, 1997, by and between Xxxxxxx X.
Xxxxxx (the "Employee") and NationsBank Corporation, a North Carolina
corporation (the "Corporation").
The Employee is currently employed by Xxxxxxx Xxxxx, Inc., a Florida
corporation ("Xxxxxxx"), as Chief Financial Officer and is a party to an
employment agreement with Xxxxxxx (the "Prior Agreement") dated as of July 1,
1996. Pursuant to the Agreement and Plan of Merger, dated as of August 29, 1997
(the "Merger Agreement"), by and between the Corporation and Xxxxxxx, Xxxxxxx
will merge (the "Merger") with and into the Corporation (or a wholly-owned
subsidiary of the Corporation) as of the "Effective Time" (as defined in the
Merger Agreement).
The Board of Directors of the Corporation (the "Board") recognizes that
the Employee will contribute significantly to the growth and success of the
Corporation following the Effective Time. The Board desires to provide for the
continued employment of the Employee and to encourage the attention and
dedication to the Corporation of the Employee as a member of the Corporation's
management, in the best interests of the Corporation and its shareholders. The
Employee is willing to commit himself to serve the Corporation on the terms and
conditions herein provided.
In order to effect the foregoing, the Corporation and the Employee wish
to enter into an employment agreement on the terms and conditions set forth
below. This Agreement shall become effective only at the Effective Time. If the
Effective Time does not occur, this Agreement shall be of no force and effect.
Accordingly, in consideration of the premises and the respective
covenants and agreements of the parties herein contained, and intending to be
legally bound hereby, the parties hereto agree as follows:
1. Employment; Term. The Corporation hereby agrees to employ the
Employee, and the Employee hereby accepts such employment, on the terms and
conditions hereinafter set forth. The period of employment of the Employee by
the Corporation hereunder (the "Employment Period") shall commence on the date
(the "Effective Date") on which the Effective Time occurs and shall end on the
Employee's Date of Termination (as defined in Section 8(b) hereof). The term of
this Agreement (the "Term") shall begin on the Effective Date and shall end on
the third anniversary thereof.
2. Prior Agreement. As of the Effective Date, the Prior Agreement is
hereby amended and superseded in its entirety by the terms and provisions of
this Agreement.
3. Position and Duties. As of the Effective Date, the Employee shall
serve as Executive Vice President of the Corporation in which capacity the
Employee shall perform the usual and customary duties of the office in which the
Employee shall serve.
4. Place of Performance. In connection with the Employee's employment
by the Corporation, the Employee's principal business address shall be at
Xxxxxxx'x current principal executive offices in Jacksonville, Florida or in
such other place as the Employee and the Corporation may agree.
5. Compensation and Related Matters.
(a) Base Salary. During the Employment Period, the Corporation
shall pay the Employee an annual base salary ("Base Salary") of $400,000,
payable in approximately equal installments in accordance with the Corporation's
customary payroll practices. The Base Salary may be increased during the
Employment Period, and if so increased, it shall not be decreased. The salary
payments (including any increased salary payments) hereunder shall not in any
way limit or reduce any other obligation of the Corporation hereunder, and no
other compensation, benefit or payment hereunder shall in any way limit or
reduce the obligation of the Corporation to pay the Employee's salary hereunder.
(b) Bonuses. During the Employment Period, the Employee shall
receive annual bonuses (each, an "Annual Bonus"), each of which shall equal no
less than $400,000. The Annual Bonus shall be paid at a time and in a manner
consistent with the Corporation's customary practice.
(c) Equity-Based Compensation. The Corporation shall grant to
the Employee (i) as of the Effective Date, 50,000 restricted shares of common
stock of the Corporation and (ii) as of the Effective Date and as of the first
anniversary of the Effective Date (provided the Employment Period is continuing
on such anniversary date), an option to purchase 30,000 shares (subject to
equitable adjustment in the event of a stock split or similar event as provided
in the Corporation's Key Employee Stock Plan) of common stock of the
Corporation, all pursuant to the Corporation's Key Employee Stock Plan. Subject
to the provisions hereof, (x) the restrictions with respect to one-third of the
shares subject to the grant described in (i) of the preceding sentence shall
lapse on each anniversary of the Effective Date, (y) the options described in
clause (ii) of the preceding sentence shall become exercisable in three equal
annual installments commencing with the date of grant, provided that any such
options not yet exercisable on the last day of the Term shall become exercisable
on such day, and (z) all previously awarded and outstanding options described in
clause (ii) of the preceding sentence shall remain exercisable for the
three-year period commencing with the date of the Employee's termination of
employment or until the original expiration date of such options, if earlier.
(d) Expenses. The Corporation shall promptly reimburse the
Employee for all reasonable business expenses incurred during the Employment
Period by the Employee in performing services hereunder, including all expenses
of travel and living expenses while away from home on business or at the request
of and in the service of the Corporation, provided that such expenses are
incurred and accounted for in accordance with the policies and procedures
established by the Corporation.
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(e) Other Benefits.
(i) Subject to the provisions of clause (ii) below,
during the Employment Period, the Employee shall be entitled
to participate in all of the employee benefit plans and
arrangements made available by the Corporation to similarly
situated employees, subject to and on a basis consistent with
the terms, conditions and overall administration of such plans
and arrangements, and shall be entitled to all perquisites and
special benefits provided to similarly situated employees of
the Corporation. Credit shall be given to the Employee for the
Employee's service with Xxxxxxx, as if such service had been
performed for the Corporation, for all relevant purposes under
all such Corporation plans and arrangements.
(ii) As of the Effective Date the Employee shall be
designated a participant in the NationsBank Corporation and
Designated Subsidiaries Supplemental Executive Retirement Plan
("SERP I") which shall provide the Employee with a target
annual retirement benefit equal to sixty percent (60%) of the
Employee's final five-year average earnings, offset by the
Employee's annual retirement benefits from the Corporation's
tax-qualified defined benefit plan, the Corporation's ERISA
restoration plan, Xxxxxxx'x tax-qualified defined benefit
plan, the Supplemental Executive Retirement Plan of Xxxxxxx
Xxxxx, Inc. and its Affiliates (the "Xxxxxxx SERP"), any plan
maintained by any previous employer of the Employee (which
previous employer plan offset will be calculated in accordance
with Section 3.1(b)(1)(B) of the Xxxxxxx SERP as in effect on
the date hereof) and social security. The Employee shall be
credited with the Employee's service with, and compensation
from, Xxxxxxx prior to the Effective Date for purposes of
determining the Employee's SERP I target benefit. In no event
shall the annual retirement benefit payable to the Employee
from SERP I after the offsets listed above (the "Net SERP I
Benefit") be less than $250,000, and the Employee shall be
eligible to commence the Employee's Net SERP I Benefit on the
fifth (5th) anniversary of the Effective Date. Upon the
Employee's death, the Employee's beneficiary shall be entitled
to receive until such beneficiary's death an annual benefit
equal to seventy-five percent (75%) of the Employee's Net SERP
I Benefit. Notwithstanding the foregoing provisions of this
clause, the Employee shall be entitled to receive the lump sum
value of the Employee's Net SERP I Benefit within thirty (30)
days following the Employee's Date of Termination (as defined
in Section 8(b) below) calculated using a discount rate of
five percent (5%) and the 1983 Group Annuity Mortality Table
and assuming a three year age difference between the Employee
and the Employee's spouse. Any such election to receive a lump
sum benefit may be made by the Employee's delivery of a
written election to the Corporation on, or at any time after,
the Effective Date. Such election may be made by the Employee
without the consent of the Corporation or any administrative
committee under SERP I, and no financial penalty or other
reduction in the lump sum value calculated above shall be
imposed as the result of such lump sum election. In the event
the Employee elects a lump sum payment of the Employee's Net
SERP I Benefit and dies prior
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to receiving such payment, the lump sum value of the
Employee's Net SERP I Benefit (calculated as if the Employee
had terminated employment on the date prior to his death)
shall be paid to the Employee's estate or other designated
beneficiary. See Section 14(d) for special provisions related
to an income tax gross-up related to the Employee's Net SERP I
Benefit.
(f) Vacation. The Employee shall be entitled to (i) the number
of vacation days in each calendar year, (ii) compensation in respect of earned
but unused vacation days, and (iii) all paid holidays, in each case as the same
may be provided by the Corporation to its similarly situated employees.
(g) Services Furnished. During the Employment Period, the
Corporation shall furnish the Employee with office space, stenographic
assistance and such other facilities and services as are provided to the
Employee by Xxxxxxx as of the date hereof.
6. Offices. Subject to Sections 3 and 4, the Employee agrees to serve
without additional compensation, if elected or appointed thereto, as a director
of any of the Corporation's subsidiaries and as a member of any committees of
the board of directors of any such corporations, and in one or more executive
positions of any of the Corporation's subsidiaries, provided that the Employee
is indemnified for serving in any and all such capacities on a basis no less
favorable than is currently or may be provided to any other director of the
Corporation, any of its subsidiaries, or in connection with any such executive
position, as the case may be.
7. Termination. The Employment Period shall end in the event of a
termination of the Employee's employment in accordance with any of the
provisions of this Section 7, and the Term shall end in the event of a
termination of Employee's employment in accordance with the provisions of
subsection (c) of this Section 7, in each case, on the Employee's Date of
Termination (as defined in Section 8(b) below).
(a) Death. The Employee's employment hereunder shall terminate
upon the Employee's death.
(b) Disability. If, as a result of the Employee's incapacity
due to physical or mental illness, the Employee shall have been absent from the
full-time performance of the Employee's duties hereunder for the entire period
of six consecutive months, and within thirty (30) days after written Notice of
Termination (as defined in Section 8) is given shall not have returned to the
performance of the Employee's duties hereunder on a full-time basis, the
Corporation may terminate the Employee's employment hereunder for "Disability."
(c) Cause. The Corporation may terminate the Employee's
employment hereunder for Cause. For purposes of this Agreement, the Corporation
shall have "Cause" to terminate the Employee's employment hereunder upon the
occurrence of any of the following events:
(i) the conviction of the Employee for the commission
of a felony involving dishonesty with respect to the
Corporation; or
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(ii) gross and willful misconduct by the Employee
that is demonstrably and materially injurious to the
Corporation or its subsidiaries, whether monetarily or
otherwise.
Cause shall not exist unless and until the Corporation has delivered to the
Employee a copy of a resolution duly adopted by the affirmative vote of not less
than two-thirds (2/3) of the entire membership of the Board at a meeting of the
Board called and held for such purpose (after reasonable notice to the Employee
and an opportunity for the Employee, together with the Employee's counsel, to be
heard before the Board), finding that in the good faith opinion of the Board,
the Employee was guilty of the conduct set forth in this Section 7(c) and
specifying the particulars thereof in detail. For purposes of this Section 7(c),
no act or failure to act on the Employee's part shall be considered "willful"
unless done or failed to be done by the Employee in bad faith and without
reasonable belief that the Employee's action or omission was in the best
interest of the Corporation.
(d) Good Reason. The Employee may terminate the Employee's
employment hereunder for "Good Reason." The Employee shall be deemed to have
terminated the Employee's employment for Good Reason if the Employee's
employment is terminated for any reason other than for death, Disability or
Cause.
8. Termination Procedure.
(a) Notice of Termination. Any termination of the Employee's
employment by the Corporation or by the Employee (other than termination
pursuant to Section 7(a) hereof) shall be communicated by written Notice of
Termination to the other party hereto in accordance with Section 13. For
purposes of this Agreement, a "Notice of Termination" shall mean a notice that
shall indicate the specific termination provision in this Agreement relied upon
and shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of the Employee's employment under the provision
so indicated.
(b) Date of Termination. "Date of Termination" shall mean (i)
if the Employee's employment is terminated pursuant to Section 7(a) above, the
date of the Employee's death, (ii) if the Employee's employment is terminated
pursuant to Section 7(b) above, thirty (30) days after Notice of Termination is
given (provided that the Employee shall not have returned to the performance of
the Employee's duties on a full-time basis during such thirty (30) day period),
(iii) if the Employee's employment is terminated pursuant to Section 7(c) above,
the date specified in the Notice of Termination, and (iv) if the Employee's
employment is terminated pursuant to Section 7(d) above, the date on which a
Notice of Termination is given or any later date (within 30 days) set forth in
such Notice of Termination; provided, however, that, if within thirty (30) days
after any Notice of Termination is given the party receiving such Notice of
Termination notifies the other party that a dispute exists concerning the
termination, the Date of Termination shall be the date on which the dispute is
finally determined, either by mutual written agreement of the parties, by a
binding and final arbitration award or by a final judgment, order or decree of a
court of competent jurisdiction (the time for appeal therefrom having expired
and no appeal having been perfected).
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(c) Compensation During Dispute. If a purported termination
occurs during the Term, and such termination is disputed in accordance with
subsection (b) of this Section 8, the Corporation shall continue to pay the
Employee the full compensation in effect when the notice giving rise to the
dispute was given (including, but not limited to, salary) and continue the
Employee as a participant in all compensation, benefit and insurance plans in
which the Employee was participating when the notice giving rise to the dispute
was given, until the Date of Termination, determined in accordance with
subsection (b) of this Section 8. Amounts paid under this Section 8(c) are in
addition to all other amounts due under this Agreement and shall not be offset
against or reduce any other amounts due under this Agreement.
9. Compensation upon Termination or During Disability.
(a) Disability; Death. During any period that the Employee
fails to perform the Employee's duties hereunder as a result of incapacity due
to physical or mental illness ("Disability Period"), the Employee shall continue
to receive the Employee's Base Salary at the rate in effect at the beginning of
such period as well as all other payments and benefits set forth in Section 5
hereof, reduced by any payments made to the Employee during the disability
period under the disability benefit plans of the Corporation then in effect or
under the Social Security disability insurance program ("Disability Payments").
Subsequent to the termination of the Employee's employment pursuant to Section
7(b), or in the event the Employee's employment is terminated by reason of the
Employee's death, the Corporation shall pay to the Employee, the Employee's
legal representative or the Employee's successors (as described in Section
12(b)) the payments and benefits set forth in subsection (b) of this Section 9
for a period of one (1) year or, if less, for the period ending on the last day
of the Term.
(b) By the Corporation without Cause or by the Employee for
Good Reason. If during the Term the Employee's employment is terminated by the
Corporation other than for Cause or Disability or if the Employee terminates the
Employee's employment for Good Reason, then:
(i) the Corporation shall pay the Employee the
Employee's Base Salary through the Date of Termination at the
rate in effect at the time Notice of Termination is given; any
bonus payable hereunder in respect of a year which ended prior
to the Date of Termination and which had not yet been paid;
and an amount equal to the minimum bonus referred to in
Section 5(b) hereof, multiplied by a fraction the numerator of
which shall be the number of days from the beginning of the
applicable year to and including the Date of Termination and
the denominator of which shall be 365;
(ii) in lieu of any further salary or bonus payments
to the Employee for periods subsequent to the Date of
Termination, the Corporation shall pay as liquidated damages
to the Employee an aggregate amount equal to the product of
(A) the number of years (including fractions thereof)
remaining in the Term as of the Date of Termination (but no
more than one (1) year in the case of the Employee's death or
Disability as provided in Section 9(a) above) and (B) the
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sum of (1) the Employee's Base Salary rate in effect as of the
Date of Termination, and (2) the minimum annual bonus referred
to in Section 5(b) hereof, such amount to be paid in a cash
lump sum within five (5) days following the Date of
Termination;
(iii) all equity based awards described in Section
5(c) hereof shall become fully vested and exercisable, as
applicable, and all options described in Section 5(c) that are
then outstanding shall remain exercisable for the three-year
period commencing with the Date of Termination; and
(iv) the Corporation shall continue to provide to the
Employee the benefits described in Section 5(e)(i) hereof for
the remainder of the Term. Welfare and other insurance
benefits otherwise receivable by the Employee pursuant to this
Section 9(b)(iv) shall be reduced to the extent comparable
benefits are actually received by the Employee from a
subsequent employer during the period during which the
Corporation is required to provide such benefits, and the
Employee shall report any such benefits actually received to
the Corporation.
(c) By Corporation for Cause. If the Employee's employment
shall be terminated by the Corporation for Cause, then the Corporation shall pay
the Employee the Employee's Base Salary (at the rate in effect at the time
Notice of Termination is given) through the Date of Termination.
(d) Compensation Plans. Following any termination of the
Employee's employment, the Corporation shall pay the Employee all unpaid
amounts, if any, to which the Employee is entitled as of the Date of Termination
under any compensation plan or program of the Corporation, including but not
limited to any deferred compensation plan or program, at the time such payments
are due in accordance with and subject to the provisions of such plans or
programs.
(e) Mitigation. Except as is specifically provided in
subsection (b)(iv) of this Section 9, the Employee shall not be required to
mitigate the amount of any payment provided herein by seeking other employment
or otherwise, nor shall the amount of any payment or benefit provided hereunder
be reduced by any compensation earned by the Employee as the result of
employment by another employer, by retirement benefits, by offset against any
amount claimed to be owed by the Employee to the Corporation, or otherwise.
10. Confidential Information; Non-Competition.
(a) Confidential Information. The Employee shall hold in a
fiduciary capacity for the benefit of the Corporation all trade secrets,
confidential information, and knowledge or data relating to the Corporation and
its businesses, which shall have been obtained by the Employee's employment by
the Corporation and which shall not have been or hereafter become public
knowledge (other than by acts by the Employee or representatives of the Employee
in violation of this Agreement). The Employee shall not, without the prior
written consent of the
7
Corporation or as may otherwise be required by law or legal process, communicate
or divulge any such trade secrets, information, knowledge or data to anyone
other than the Corporation and those designated by the Corporation. Any
termination of the Employee's employment or of this Agreement shall have no
effect on the continuing operation of this Section 10(a). The Employee agrees to
return all confidential information, including all photocopies, extracts and
summaries thereof, and any such information stored electronically on tapes,
computer disks or in any other manner to the Corporation at any time upon
request by the Corporation and upon the termination of the Employee's employment
hereunder for any reason.
(b) Non-Competition. During the Employment Period and for a
period of two (2) years thereafter, the Employee shall not engage in
Competition, as defined below, with the Corporation in any locality or region of
the United States in which the Corporation had operations at the time of, or
within six (6) months prior to, the termination of the Employee's employment
hereunder; provided, that it shall not be a violation of this Section 10(b) for
the Employee to become the registered or beneficial owner of up to five percent
(5%) of any class of the capital stock of a competing corporation registered
under the Securities Exchange Act of 1934, as amended, provided that the
Employee does not actively participate in the business of such corporation until
such time as this covenant expires.
For purposes of this Agreement, Competition by the Employee
shall mean the Employee's engaging in, or otherwise directly or indirectly being
employed by or acting as a consultant (for the purposes of this Section 10, the
Employee shall be a "consultant" if the Employee works forty (40) or more hours
for any one such entity in any ninety-day period) or lender to, or being a
director, officer, employee, principal, agent, stockholder (other than as
specifically provided for herein), member, owner or partner of any company or
business operation specified below:
(i) any company which is, or is a direct or indirect
subsidiary of, one of the twenty-five largest bank holding
companies headquartered in the United States (as measured by
asset size) or any of the ten largest investment banking
companies headquartered in the United States (as measured by
capital);
(ii) any business operation of any company in the
financial services industry if such business operation is then
in substantial and direct competition with a principal
business operation of the Corporation in which the Corporation
was engaged as of the Date of Termination and if the financial
services company has total revenues of $100 million or more
annually and a majority of such revenues are derived from
customers and/or operations in the State of Florida; provided,
however, that no business operation of the Corporation shall
constitute a principal business operation of the Corporation
for purposes of this clause (ii) unless the revenues, profits
or assets of the Corporation attributable to such business
operation amount to at least 10% of the total revenues,
profits or assets of the Corporation; or
(iii) any business operation which directly engages
in the business of automobile leasing, automobile lending,
mortgage banking or home equity
8
lending or the origination, purchase, sale or servicing of
residential mortgage loans or home equity loan products
("Consumer Finance Activities"); provided, however, that the
foregoing shall in no way limit the Employee's activities with
respect to any entity or business which engages in Consumer
Finance Activities if the Employee's activities are unrelated
to the Consumer Finance Activities of such entity or business.
11. Indemnification; Legal Fees. The Corporation shall indemnify the
Employee to the fullest extent permitted by the laws of the Corporation's state
of incorporation in effect at that time, or certificate of incorporation and
by-laws of the Corporation, whichever affords the greater protection to the
Employee. The Employee will be entitled to any insurance policies the
Corporation may elect to maintain generally for the benefit of its officers and
directors against all costs, charges and expenses incurred in connection with
any action, suit or proceeding to which the Employee may be made a party by
reason of being a director or officer of the Corporation. The Corporation shall
reimburse the Employee for any legal fees and expenses incurred by the Employee
(including but not limited to the legal fees and expenses incurred pursuant to
Section 16 hereof) in contesting or disputing any termination of the Employee's
employment or in seeking to obtain or enforce any right or benefit provided by
this Agreement (or in connection with any tax audit or proceeding to the extent
attributable to the application of section 4999 of the Internal Revenue Code of
1996, as amended (the "Code"), to any payment or benefit provided hereunder)
other than for any such expenses, costs, liabilities or legal fees incurred as a
result of the Employee's bad faith. Such payments shall be made within five (5)
days after the Employee's request for payment accompanied with such evidence of
fees and expenses incurred as the Corporation reasonably may require. Any
termination of the Employee's employment or of this Agreement shall have no
effect on the continuing operation of this Section 11.
12. Successors; Binding Agreement.
(a) Corporation's Successors. The Corporation 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
Corporation to expressly assume and agree to perform this Agreement in the same
manner and to the same extent that the Corporation would be required to perform
it if no such succession had taken place. Failure of the Corporation to obtain
such assumption and agreement prior to the effectiveness of any such succession
shall be a breach of this Agreement and shall entitle the Employee to
compensation from the Corporation in the same amount and on the same terms as
the Employee would be entitled to hereunder if the Employee terminated the
Employee's employment for Good Reason, except that for purposes of implementing
the foregoing, the date on which any such succession becomes effective shall be
deemed the Date of Termination. As used in this Agreement, "Corporation" shall
mean the Corporation as hereinbefore defined and any successor to its business
and/or assets as aforesaid which executes and delivers the agreement provided
for in this Section 12 or which otherwise becomes bound by all the terms and
provisions of this Agreement by operation of law.
(b) The Employee's Successors. This Agreement and all rights
of the Employee hereunder shall inure to the benefit of and be enforceable by
the Employee's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees
9
and Legatees. If the Employee should die while any amounts would still be
payable to the Employee hereunder if the Employee had continued to live, all
such amounts unless otherwise provided herein shall be paid in accordance with
the terms of this Agreement to the Employee's devisee, legatee, or other
designee or, if there be no such designee, to the Employee's estate.
13. Notice. For the purposes of this Agreement, notices, demands and
all other communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given when delivered or (unless otherwise
specified) mailed by United States certified or registered mail, return receipt
requested, postage prepaid, addressed as follows:
If to the Employee: Xxxxxxx X. Xxxxxx
000 Xxxxxxxxxxx Xxxx
Xxxxx Xxxxx Xxxxx, XX 00000
If to the Corporation: NationsBank Corporation
NationsBank Corporate Center
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: General Counsel
or to such other address as any party may have furnished to the others in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
14. Additional Payment.
(a) If any of the payments provided for in this Agreement (the
"Contract Payments") or any portion of the Total Payments (as defined below)
will be subject to the tax (the "Excise Tax") imposed by section 4999 of the
Code, the Corporation shall pay to the Employee, no later than the fifth day
following the earlier of the date on which such payment is made and the Date of
Termination, an additional amount (the "Gross-Up Payment") such that the net
amount retained by the Employee, after deduction of any Excise Tax on the
Contract Payments and such other Total Payments and any federal and state and
local income, employment and other taxes and Excise Tax upon the payment
provided for by this subsection, shall be equal to the Contract Payments and
such other Total Payments.
(b) For purposes of determining whether any payments will be
subject to the Excise Tax and the amount of such Excise Tax, (i) any payments or
benefits received or to be received by the Employee in connection with an event
described in section 280(G)(b)(2)(A)(i) of the Code (hereinafter, a "change in
control"), or the Employee's termination of employment pursuant to the terms of
any plan, arrangement or agreement with Xxxxxxx, the Corporation, its
successors, any person whose actions result in a change in control or any person
affiliated with the Corporation or such person (together with the Contract
Payments, the "Total Payments"), shall be treated as "parachute payments" within
the meaning of section 28OG(b)(2) of the Code except to the extent that, in the
opinion of tax counsel selected by the Corporation's independent auditors and
acceptable to the Employee, the Total Payments do not constitute parachute
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payments, (ii) all "excess parachute payments" within the meaning of section
28OG(b)(1) shall be treated as subject to the Excise Tax except to the extent
that, in the opinion of such tax counsel, such excess parachute payments
represent reasonable compensation for services actually rendered within the
meaning of section 280G(b)(4)(B) of the Code in excess of the base amount within
the meaning of section 28OG(b)(3) of the Code, or are otherwise not subject to
the Excise Tax, and (iii) the value of any noncash benefits or any deferred
payment or benefit shall be determined by the Corporation's independent auditors
in accordance with the principles of sections 280G(d)(3) and (4) of the Code.
For purposes of determining the amount of the Gross-Up Payment, the Employee
shall be deemed to pay federal income taxes at the highest marginal rate of
federal income taxation in the calendar year in which the Gross-Up Payment is to
be made and state and local income taxes at the highest marginal rate of
taxation in the state and locality of the Employee's residence on the Date of
Termination, net of the maximum reduction in federal income taxes which could be
obtained from deduction of such state and local taxes.
(c) In the event that the Excise Tax is subsequently
determined to be less than the amount taken into account hereunder at the time
of termination of the Employee's employment, the Employee shall repay to the
Corporation at the time that the amount of such reduction in Excise Tax is
finally determined, the portion of the Gross-Up Payment attributable to such
reduction (plus the portion of the Gross-Up Payment attributable to the Excise
Tax and federal and state and local income tax imposed on the Gross-Up Payment
being repaid by the Employee if such repayment results in a reduction in Excise
Tax and/or a federal and state and local income tax deduction) plus interest on
the amount of such repayment at the rate provided in section 1274(b)(2)(B) of
the Code. In the event that the Excise Tax is determined to exceed the amount
taken into account hereunder at the time of the termination of the Employee's
employment (including by reason of any payment the existence or amount of which
cannot be determined at the time of the Gross-Up Payment), the Corporation shall
make an additional gross-up payment in respect of such excess (plus any interest
payable with respect to such excess) at the time that the amount of such excess
is finally determined.
(d) Notwithstanding any provision of this Agreement to the
contrary, in addition to the payment of the Employee's Net SERP I Benefit as
provided in Section 5(e)(ii), the Corporation shall pay the Employee from time
to time additional amounts such that after all applicable federal and state and
local income, employment and other taxes on the Employee's Net SERP I Benefit
and on the additional amount payable under this Section 14(d), the Employee has
received the Employee's entire Net SERP I Benefit on an after-tax basis. Any
additional amount due under this Section 14(d) shall be due and payable to the
Employee at the time the income, employment or other tax is assessed against the
Employee's Net SERP I Benefit whether or not the Employee's Net SERP I Benefit
is then payable. The federal and state and local income tax rates for purposes
of calculating the additional amount hereunder shall be determined in accordance
with the last sentence of Section 14(b).
15. Amendment or Modification; Waiver. No provisions of this Agreement
may be modified, waived or discharged unless such waiver, modification or
discharge is agreed to in writing signed by the Employee and such officer of the
Corporation as may be specifically designated by the Board or its compensation
committee. No waiver by either party hereto at any
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time of any breach by the other party hereto of, or compliance with, any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time. No agreements or representations,
oral or otherwise, express or implied, with respect to the subject matter hereof
have been made by either party which are not set forth expressly in this
Agreement.
16. Arbitration. Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration,
conducted before a panel of three arbitrators in Jacksonville, Florida, in
accordance with the rules of the American Arbitration Association then in effect
or of such similar organization as the parties hereto may mutually agree.
Judgment may be entered on the arbitrator's award in any court having
jurisdiction. The expense of such arbitration shall be borne by the Corporation.
17. Governing Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
Florida without regard to its conflicts of law principles.
18. Miscellaneous. All references to sections of any statute shall be
deemed also to refer to any successor provisions to such sections. The
obligations of the parties under Sections 9, 10 and 11 hereof shall survive the
expiration of the Term. The compensation and benefits payable to the Employee
under Section 9 of this Agreement shall be in lieu of any other severance
benefits to which the Employee may otherwise be entitled upon the Employee's
termination of employment under any severance plan, program, policy or
arrangement of the Corporation.
19. Severability. The invalidity or unenforceability of any provision
or provisions of this Agreement shall not affect the validity or enforceability
of any other provision of this Agreement, which shall remain in full force and
effect throughout the Term.
20. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
21. Entire Agreement. This Agreement sets forth the entire agreement of
the parties hereto in respect of the subject matter contained herein and, as of
the Effective Date, supersedes all prior agreements, promises, covenants,
arrangements communications, representations or warranties, whether oral or
written, by any officer, employee or representative of any party hereto.
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IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first above written.
NATIONSBANK CORPORATION
By:/s/ Xxxxx X. Xxxxx, Xx.
----------------------------
Xxxxx X. Xxxxx, Xx., Vice Chairman
and Chief Financial Officer
/s/ Xxxxxxx X. Xxxxxx
------------------------------
Xxxxxxx X. Xxxxxx
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