Exhibit 10.1
EXECUTION COPY
EMPLOYMENT AGREEMENT
AGREEMENT by and between Regions Financial Corporation, a Delaware
corporation (the "COMPANY") and Xxxxxxx X. Xxxxx (the "EXECUTIVE") dated as of
the 24th day of May 2006 and effective as of the Effective Date (as defined
below).
The Company 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. Therefore, in order to accomplish this objective,
the Board of Directors of the Company has caused the Company to enter into this
Agreement.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. EFFECTIVE DATE. The "EFFECTIVE DATE" shall mean the date on which
the Effective Time (as defined in the Agreement and Plan of Merger (the "MERGER
AGREEMENT") entered into as of May 24, 2006, by and between AmSouth
Bancorporation and the Company) occurs. As of the Effective Date, the
Executive's Amended and Restated Employment Agreement with the Company dated as
of June 29, 2005, as it may be further amended (the "PRIOR AGREEMENT") shall be
superseded in its entirety. If the Effective Time does not occur, this Agreement
shall be void AB INITIO and of no force and effect.
2. EMPLOYMENT PERIOD. The Company hereby agrees to continue to employ
the Executive, and the Executive hereby agrees to continue to be employed by the
Company subject to the terms and conditions of this Agreement, for the period
commencing on the Effective Date and ending on the fourth anniversary thereof
(the "EMPLOYMENT PERIOD").
3. TERMS OF EMPLOYMENT. (a) POSITION AND DUTIES. (i) During the
Employment Period, (A) the Executive shall serve as Chairman of the Company with
such authority, duties and responsibilities as are commensurate with such
position and as may be consistent with such position, (B) the legal and
financial services departments of the Company and its subsidiaries shall report
directly to the Executive and (C) the Executive's services shall be performed in
such location as may be determined by the Executive as soon as practicable
following the Effective Date (the "APPLICABLE LOCATION"). The Executive shall
serve on the Company's Board of Directors during the entire Employment Period.
(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 substantially all of his attention and time during normal business
hours to the business and affairs of the Company and, to the extent necessary to
discharge the responsibilities assigned to the Executive hereunder, to use the
Executive's reasonable best efforts to perform faithfully and efficiently such
responsibilities. During the Employment Period it shall not be a violation of
this Agreement for the Executive to (A) serve on corporate, civic or charitable
boards or committees, (B) deliver lectures, fulfill speaking engagements or
teach at educational institutions and (C) manage personal investments, so long
as such activities do not significantly interfere with the performance of the
Executive's responsibilities as an employee of the Company in accordance with
this Agreement. It is expressly understood and agreed that to the extent that
any such activities have been conducted by the Executive prior to the Effective
Date, the continued
conduct of such activities (or the conduct of activities similar in nature and
scope thereto) subsequent to the Effective Date shall thereafter be deemed not
to interfere with the performance of the Executive's responsibilities to the
Company.
(iii) During the Employment Period, the Executive shall be
provided with appropriate office space and dedicated secretarial services and
other administrative support in each of the Company's corporate headquarters in
Birmingham, Alabama and the Applicable Location and, following the Effective
Date, the Executive shall be permitted to retain all furnishings and furniture
from his office at the Company as of immediately prior to the Effective Time.
All expenses associated with the Executive's relocation to Applicable Location
shall be covered by the Company in accordance with the Company's corporate
executive relocation policy. During the Employment Period, the Company shall
provide the Executive with use of the corporate aircraft for business and
personal use, for safety, security and logistical purposes, consistent with the
policies and terms applicable to the Company's Chief Executive Officer, as in
effect from time to time, including, any such use to and from the Executive's
residence or, if different, the Applicable Location and the corporate
headquarters for business meetings and all other purposes.
(b) COMPENSATION.
(i) BASE SALARY. During the Employment Period, the Executive
shall receive an annual base salary ("ANNUAL BASE SALARY") of no less than 75
percent of the annual base salary provided to the Company's Chief Executive
Officer. The Annual Base Salary shall be reviewed no less frequently than
annually, and, if increased, the term "Annual Base Salary" shall refer to such
increased amount.
(ii) ANNUAL BONUS. During the Employment Period, the Executive
shall be eligible to receive an annual cash bonus under the Company's Executive
Incentive Plan or any successor thereto ("ANNUAL BONUS") based on performance
criteria determined by the Compensation Committee of the Company's Board of
Directors, PROVIDED that in no event shall the Executive's Annual Bonus be less
than 75 percent of the annual bonus provided to the Chief Executive Officer.
(iii) INCENTIVE AWARDS. During the Employment Period, the
Executive shall receive long-term incentive compensation awards under the
Company's long-term incentive compensation plans on terms and conditions no less
favorable than those provided to the Chief Executive Officer and with a value no
less than 75 percent of the value of the long-term incentive compensation
provided to the Chief Executive Officer, PROVIDED that, notwithstanding any
provision of any applicable plan or award agreement to the contrary, all
long-term incentive compensation awards provided to the Executive during the
Employment Period shall vest no later than immediately prior to the fourth
anniversary of the Effective Date.
(iv) OTHER EMPLOYEE BENEFIT PLANS. During the Employment Period,
except as otherwise expressly provided herein, the Executive shall be entitled
to participate in all employee benefit, welfare, perquisite and other plans,
practices, policies and programs generally applicable to the Chief Executive
Officer and all other senior executives of the Company on a basis no less
favorable than the Chief Executive Officer; PROVIDED, HOWEVER, that nothing in
this
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Agreement shall entitle the Executive to participate in any tax-qualified or
non-qualified retirement, pension or supplemental pension plan (other than the
plans the Executive participates in immediately prior to the Effective Date and
any tax-qualified defined contribution plan of the Company) and; PROVIDED,
FURTHER, that upon the Executive's termination of employment for any reason, the
Company shall continue to provide him and his current spouse with medical and
dental benefits for the remainder of each of their lives on a basis no less
favorable than those benefits were provided to them immediately prior to such
termination (the "MEDICAL BENEFITS"). In addition, the Company shall continue to
maintain the Deferred Compensation Plan for Executives in accordance with its
terms (including any rates of return on amounts deferred thereunder) as in
effect as of the date hereof (other than any amendments thereto that may be
necessary to comply with Section 409A of the Code) and, as of the Date of
Termination, the Executive shall be paid any balance thereunder in accordance
with his elections (the "DEFERRED COMPENSATION BENEFITS"). Without limiting the
generality of the foregoing, the Company agrees to pay for or reimburse the
Executive for expenses, including dues, for clubs of which the Executive is a
member, the facilities of which the Executive shall use from time to time in
holding various company functions or entertaining company employees, customers
or guests.
(v) EXPENSES. During the Employment Period, the Executive shall
be entitled to receive prompt reimbursement for all reasonable expenses incurred
by the Executive in accordance with the Company's policies.
(vi) VACATION. During the Employment Period, the Executive shall
be entitled to paid vacation in accordance with the plans, policies, programs
and practices of the Company and its affiliated companies as in effect with
respect to the senior executives of the Company.
(vii) ADDITIONAL BENEFIT. As of the first business day following
February 28, 2007, the Executive shall be paid a lump sum cash payment equal to
the sum of (A) the amount set forth under Section 1.2(c) of the Prior Agreement
and (B) in full satisfaction of any obligations to the Executive under the
Executive's Supplemental Executive Retirement Agreement dated as of February 23,
1995, as previously amended April 17, 1997, August 31, 1999 and January 22, 2004
(the "SERP"), the "maximum present value" (within the meaning of Section 2.10(i)
of the SERP, subject to the limitation on such amount as set forth in Section
2.10 of the SERP) payable to the Executive under the SERP determined in
accordance with the terms of the SERP. In addition, as of the first business day
following February 28, 2007, the Executive's deferred stock account under the
Stock Option Deferral Plan shall be distributed to the Executive otherwise in
accordance with its terms. Furthermore, as of the Effective Time, (1) all stock
options, restricted stock, restricted stock units and other equity-based
compensation awards outstanding as of the Effective Date and held by the
Executive shall vest in full, be fully exercisable and, as is consistent with
the terms of such options as of the date hereof, remain fully exercisable for
the remainder of their full term and (2) the Company shall contribute to the
Trust Adopted in Connection with the Split Dollar Agreement dated as of May 25,
2001 pursuant to the Trust Agreement made July 26, 2001 by and between Union
Planters Corporation, Union Planters Bank, N.A., as Trustee, and the Executive
(the "TRUST AGREEMENT") a lump sum cash payment in the amount required by
Section 1(a)(2) of the Trust Agreement.
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4. TERMINATION OF EMPLOYMENT. (a) DEATH OR DISABILITY. The Executive's
employment shall terminate automatically upon the Executive's death during the
Employment Period. If the Company determines in good faith that the Disability
of the Executive has occurred during the Employment Period (pursuant to the
definition of Disability set forth below), it may give to the Executive written
notice in accordance with Section 12(b) of this Agreement of its intention to
terminate the Executive's employment. In such event, the Executive's employment
with the Company shall terminate effective on the 30th day after receipt of such
notice by the Executive (the "DISABILITY EFFECTIVE DATE"), provided that, within
the 30 days after such receipt, the Executive shall not have returned to
full-time performance of the Executive's duties. For purposes of this Agreement,
"DISABILITY" shall mean the absence of the Executive from the Executive's duties
with the Company on a full-time basis for 180 consecutive business days as a
result of incapacity due to mental or physical illness which is determined to be
total and permanent by a physician selected by the Company or its insurers and
acceptable to the Executive or the Executive's legal representative.
(b) CAUSE. The Company may terminate the Executive's employment during
the Employment Period for Cause. For purposes of this Agreement, "CAUSE" shall
mean:
(i) the continued failure of the Executive to perform
substantially the Executive's duties with the Company or one of its affiliates
(other than any such failure resulting from incapacity due to physical or mental
illness), after a written demand for substantial performance is delivered to the
Executive by the Board which specifically identifies the manner in which the
Board believes that the Executive has not substantially performed the
Executive's duties, or
(ii) the willful engaging by the Executive in illegal conduct or
gross misconduct which is materially and demonstrably injurious to the Company,
or
(iii) conviction of a felony or guilty or nolo contendere plea by
the Executive with respect thereto.
For purposes of this provision, no act or failure to act, on the part of the
Executive, shall be considered "willful" unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that the
Executive's action or omission was in the best interests of the Company. Any
act, or failure to act, based upon authority given pursuant to a resolution duly
adopted by the Board or based upon the advice of counsel for the Company shall
be conclusively presumed to be done, or omitted to be done, by the Executive in
good faith and in the best interests of the Company. The cessation of employment
of the Executive shall not be deemed to be for Cause unless and until there
shall have been delivered to the Executive a copy of a resolution duly adopted
by the affirmative vote of not less than two-thirds of the entire membership of
the Board at a meeting of the Board called and held for such purpose (after
reasonable notice is provided to the Executive and the Executive is given an
opportunity, together with counsel, to be heard before the Board), finding that,
in the good faith opinion of the Board, the Executive is guilty of the conduct
described in subparagraph (i) or (ii) above, and specifying the particulars
thereof in detail.
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(c) GOOD REASON. The Executive's employment may be terminated by the
Executive for Good Reason. For purposes of this Agreement, "GOOD REASON" shall
mean (i) in the absence of a written consent of the Executive a material breach
by the Company of a material term of this Agreement, after the Company has been
given notice thereof and a reasonable opportunity to cure such breach, (ii) the
Executive's good faith determination that the circumstances at the Company are
such that the Executive can no longer perform his duties or responsibilities at
the Company or (iii) reduction in the amount of coverage provided by the
Company's officer and director liability insurance or a change in the terms and
conditions of such insurance where such change is a potential material detriment
or the failure by the Company to indemnify the Executive to the maximum extent
permitted by law (including but not limited to failure to advance or pay
litigation expenses).
(d) NOTICE OF TERMINATION. Any termination by the Company for Cause,
or by the Executive for Good Reason, shall be communicated by Notice of
Termination to the other party hereto given in accordance with Section 12(b) of
this Agreement. For purposes of this Agreement, a "NOTICE OF TERMINATION" means
a written notice which (i) indicates the specific termination provision in this
Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination of
the Executive's employment under the provision so indicated and (iii) if the
Date of Termination (as defined below) is other than the date of receipt of such
notice, specifies the termination date (which date shall be not more than thirty
days after the giving of such notice). The failure by the Executive or the
Company to set forth in the Notice of Termination any fact or circumstance which
contributes to a showing of Good Reason or Cause shall not waive any right of
the Executive or the Company, respectively, hereunder or preclude the Executive
or the Company, respectively, from asserting such fact or circumstance in
enforcing the Executive's or the Company's rights hereunder.
(e) DATE OF TERMINATION. "DATE OF TERMINATION" means (i) if the
Executive's employment is terminated by the Company for Cause, or by the
Executive for Good Reason, the date of receipt of the Notice of Termination or
any later date specified therein within 30 days of such notice, as the case may
be, (ii) if the Executive's employment is terminated by the Company other than
for Cause or Disability, the Date of Termination shall be the date on which the
Company notifies the Executive of such termination and (iii) if the Executive's
employment is terminated by reason of death or Disability, the Date of
Termination shall be the date of death of the Executive or the Disability
Effective Date, as the case may be.
5. OBLIGATIONS OF THE COMPANY UPON TERMINATION. (a) GOOD REASON; 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 for Good Reason:
(i) the Company shall pay to the Executive in a lump sum in cash
within 30 days after the Date of Termination the aggregate of the following
amounts:
A. the sum of (1) the Executive's Annual Base Salary through the
Date of Termination to the extent not theretofore paid, (2) the
product of (x) the average Annual Bonus paid or payable, including any
bonus or portion thereof
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that has been earned but deferred, to the Executive as Chairman, but
if no Annual Bonus has been paid or is payable to the Executive as
Chairman, the annual bonus paid or payable, including any bonus or
portion thereof that has been earned but deferred, for the most
recently completed fiscal year prior to the Effective Time (the
"RECENT ANNUAL BONUS") and (y) a fraction, the numerator of which is
the number of days that have elapsed in the fiscal year in which the
Date of Termination occurs as of 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
B. the amount equal to the product of (1) the number of days from
the Date of Termination until the fourth anniversary of the Effective
Date divided by 365 and (2) the sum of (x) the Executive's Annual Base
Salary and (y) the Recent Annual Bonus; and
(ii) All stock options, restricted stock, restricted stock units
and other equity-based compensation awards outstanding as of the Date of
Termination and held by the Executive shall vest in full, be fully exercisable
and remain fully exercisable for the remainder of their full term (the "EQUITY
BENEFITS"); and
(iii) The Medical Benefits; and
(iv) The Company shall continue officer and director liability
insurance under substantially the same terms and conditions s are in effect
immediately prior to termination at no cost to the Executive until the statute
of limitations expires on claims arising prior to termination of the Agreement
and shall continue indemnification and advancement of litigation expenses to the
maximum extent and for the maximum period permitted by law; and
(v) to the extent not theretofore paid or provided, the Company
shall timely pay or provide to the Executive any other amounts or benefits
required to be paid or provided or which the Executive is eligible to receive
under any plan, program, policy or practice or contract or agreement of the
Company and its affiliated companies through the Date of Termination including
without limitation the Deferred Compensation Benefits and any benefits under
Section 3(b)(vii) to the extent not paid or provided (such other amounts and
benefits shall be hereinafter referred to as the "OTHER BENEFITS").
Notwithstanding the foregoing provisions of this Section 5(a), to the extent
required in order to comply with Section 409A of the Internal Revenue Code of
1986, as amended (the "CODE"), cash amounts and the Medical Benefits that would
otherwise be payable or provided under this Section 5(a) during the six-month
period immediately following the Date of Termination shall instead be paid or
provided, with interest on any delayed payment at the applicable federal rate
provided for in Section 7872(f)(2)(A) of the Code ("INTEREST"), on the first
business day after the date that is six months following the Executive's
"separation from service" within the meaning of Section 409A of the Code;
provided, however, that, with respect to the Medical Benefits, the Company shall
take such action as is necessary to ensure that there is not a lapse in
coverage.
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(b) DEATH. If the Executive's employment is terminated by reason of
the Executive's death during the Employment Period, this Agreement shall
terminate without further obligations to the Executive's legal representatives
under this Agreement, other than for payment of Accrued Obligations and the
timely payment or provision of the Equity Benefits, the Medical Benefits and the
Other Benefits. Accrued Obligations shall be paid to the Executive's estate or
beneficiary, as applicable, in a lump sum in cash within 30 days of the Date of
Termination. With respect to the provision of Other Benefits, the term Other
Benefits as utilized in this Section 5(b) shall include death benefits as in
effect on the date of the Executive's death with respect to senior executives of
the Company and their beneficiaries.
(c) DISABILITY. If the Executive's employment is terminated by reason
of the Executive's Disability during the Employment Period, this Agreement shall
terminate without further obligations to the Executive, other than for payment
of Accrued Obligations and the timely payment or provision of the Equity
Benefits, the Medical Benefits and the Other Benefits. Accrued Obligations shall
be paid to the Executive in a lump sum in cash within 30 days of the Date of
Termination, PROVIDED, that to the extent required in order to comply with
Section 409A of the Code, amounts and benefits to be paid or provided under this
sentence of Section 5(c) shall be paid, with Interest, or provided to the
Executive on the first business day after the date that is six months following
the Executive's "separation from service" within the meaning of Section 409A of
the Code. With respect to the provision of Other Benefits, the term Other
Benefits as utilized in this Section 5(c) shall include, and the Executive shall
be entitled after the Disability Effective Date to receive, disability and other
benefits as in effect at any time thereafter generally with respect to senior
executives of the Company.
(d) CAUSE; OTHER THAN FOR GOOD REASON. If the Executive's employment
shall be terminated for Cause or the Executive terminates his employment without
Good Reason during the Employment Period, this Agreement shall terminate without
further obligations to the Executive other than the obligation to pay to the
Executive (x) his Annual Base Salary through the Date of Termination to the
extent theretofore unpaid, (y) the Other Benefits to the extent theretofore
unpaid and (z) the Medical Benefits.
6. NON-EXCLUSIVITY OF RIGHTS. Except as specifically provided, nothing
in this Agreement shall prevent or limit the Executive's continuing or future
participation in any plan, program, policy or practice provided by the Company
or any of its affiliated companies and for which the Executive may qualify, nor,
subject to Section 12(f), shall anything herein limit or otherwise affect such
rights as the Executive may have under any contract or agreement with the
Company or any of its affiliated companies. Amounts which are vested benefits or
which the Executive is otherwise entitled to receive under any plan, policy,
practice or program of or any contract or agreement with the Company or any of
its affiliated companies at or subsequent to the Date of Termination shall be
payable in accordance with such plan, policy, practice or program or contract or
agreement except as explicitly modified by this Agreement.
7. FULL SETTLEMENT. The Company's obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action which the Company may have against the
Executive or others. In no event shall the Executive be obligated to seek other
employment or take any other action by way of mitigation of the amounts
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payable to the Executive under any of the provisions of this Agreement and, such
amounts shall not be reduced whether or not the Executive obtains other
employment. The Company agrees to pay as incurred, to the full extent permitted
by law, all legal fees and expenses which the Executive may reasonably incur as
a result of any contest (regardless of the outcome thereof) by the Company, the
Executive or others of the validity or enforceability of, or liability under,
any provision of this Agreement or any guarantee of performance thereof
(including as a result of any contest by the Executive about the amount of any
payment pursuant to this Agreement), plus in each case interest on any delayed
payment at the applicable Federal rate provided for in Section 7872(f)(2)(A) of
the Code.
8. CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY.
(a) Anything in this Agreement to the contrary notwithstanding and
except as set forth below, in the event it shall be determined that any payment
or distribution by the Company to or for the benefit of the Executive (whether
paid or payable or distributed or distributable pursuant to the terms of this
Agreement or otherwise, but determined without regard to any additional payments
required under this Section 8) (a "PAYMENT") would be subject to the excise tax
imposed by Section 4999 of the Code or any interest or penalties are incurred by
the Executive with respect to such excise tax (such excise tax, together with
any such interest and penalties, are hereinafter collectively referred to as the
"EXCISE TAX"), then the Executive shall be entitled to receive an additional
payment (a "GROSS-UP PAYMENT") in an amount such that after payment by the
Executive of all taxes (including any interest or penalties imposed with respect
to such taxes), including, without limitation, any income taxes (and any
interest and penalties imposed with respect thereto) and Excise Tax imposed upon
the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment
equal to the Excise Tax imposed upon the Payments. Notwithstanding the foregoing
provisions of this Section 8(a) if it shall be determined that the Executive is
entitled to a Gross-Up Payment, but that the Payments do not exceed 110% of the
greatest amount (the "REDUCED AMOUNT") that could be paid to the Executive such
that the receipt of Payments would not give rise to any Excise Tax, then no
Gross-Up Payment shall be made to the Executive and the Payments, in the
aggregate, shall be reduced to the Reduced Amount.
(b) Subject to the provisions of Section 8(c), all determinations
required to be made under this Section 8, 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 the Company's
independent certified public accounting firm or such other certified public
accounting firm reasonably acceptable to the Company as may be designated by the
Executive (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 8, shall be paid by the Company to the
Executive within five days of the receipt of the Accounting Firm's
determination. Any determination by the Accounting Firm shall be binding upon
the Company and the Executive. As a result of the uncertainty in the application
of Section 4999 of the Code at the time of the initial determination by the
Accounting Firm hereunder, it is possible that Gross-Up Payments which will not
have been made by the Company should have been made
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("UNDERPAYMENT"), consistent with the calculations required to be made
hereunder. In the event that the Company exhausts its remedies pursuant to
Section 8(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 he 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 8(c), the Company shall control all proceedings taken in connection
with such contest and, at its sole option, may pursue or forgo any and all
administrative appeals, proceedings, hearings and conferences with the taxing
authority in respect of such claim and may, at its sole option, either direct
the Executive to pay the tax claimed and xxx for a refund or contest the claim
in any permissible manner, and the Executive agrees to prosecute such contest to
a determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Company shall
determine; PROVIDED, HOWEVER, that if the Company directs the Executive to pay
such claim and xxx for a refund, the Company shall pay the amount of such
payment to the Executive and shall indemnify and hold the Executive harmless, on
an after-tax basis, from any Excise Tax or income tax (including interest or
penalties with respect thereto) imposed with respect to such payment; and
further provided that
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any extension of the statute of limitations relating to payment of taxes for the
taxable year of the Executive with respect to which such contested amount is
claimed to be due is limited solely to such contested amount. Furthermore, the
Company's control of the contest shall be limited to issues with respect to
which a Gross-Up Payment would be payable hereunder and the Executive shall be
entitled to settle or contest, as the case may be, any other issue raised by the
Internal Revenue Service or any other taxing authority.
(d) If, after the receipt by the Executive of an amount paid by the
Company pursuant to Section 8(c), the Executive becomes entitled to receive any
refund with respect to such claim, the Executive shall (subject to the Company's
complying with the requirements of Section 8(c)) promptly pay to the Company the
amount of such refund (together with any interest paid or credited thereon after
taxes applicable thereto). If, after the receipt by the Executive of an amount
paid by the Company pursuant to Section 8(c), a determination is made that the
Executive shall not be entitled to any refund with respect to such claim and the
Company does not notify the Executive in writing of its intent to contest such
denial of refund prior to the expiration of 30 days after such determination,
then such payment shall not be required to be repaid and the amount of such
payment shall offset, to the extent thereof, the amount of Gross-Up Payment
required to be paid.
9. CONFIDENTIAL INFORMATION; NONCOMPETITION. (a) The Executive shall
hold in a fiduciary capacity for the benefit of the Company all secret or
confidential information, knowledge or data relating to the Company or any of
its affiliated companies, and their respective businesses, which shall have been
obtained by the Executive during the Executive's employment by the Company or
any of its affiliated companies and which shall not be or become public
knowledge (other than by acts by the Executive or representatives of the
Executive in violation of this Agreement). After termination of the Executive's
employment with the Company, the Executive shall not, without the prior written
consent of the Company or as may otherwise be required by law or legal process,
communicate or divulge any such information, knowledge or data to anyone other
than the Company and those designated by it.
(b) Without the prior written consent of the Company, during the
Employment Period, and for twenty-four (24) months following the expiration of
this Agreement, the Executive shall not, as an employee or an officer, engage
directly or indirectly in any business or enterprise which is "in competition"
with the Company or its successors or assigns. For purposes of this Agreement, a
business or enterprise will be deemed to be "in competition" if it is a banking
institution, the headquarters of which is within one hundred (100) miles from
Birmingham, Alabama. However, the Executive shall be allowed to purchase and
hold for investment less than three percent (3%) of the shares of any
corporation whose shares are regularly traded on a national securities exchange
or in the over-the-counter market.
(c) In the event of a breach or threatened breach of this Section 9,
the Executive agrees that the Company shall be entitled to injunctive relief in
a court of appropriate jurisdiction to remedy any such breach or threatened
breach, the Executive acknowledges that damages would be inadequate and
insufficient.
(d) Any termination of the Executive's employment or of this Agreement
shall have no effect on the continuing operation of this Section 9. In no event
shall an asserted
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violation of the provisions of this Section 9 constitute a basis for deferring
or withholding any amounts otherwise payable to the Executive under this
Agreement.
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. 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.
11. DISPUTE RESOLUTION. The Executive shall have the right and option
to elect to have any good faith dispute or controversy arising under or in
connection with this agreement settled by litigation or by arbitration. If
arbitration is selected, such proceeding shall be conducted before a panel of
three (3) arbitrators sitting in a location selected by the Executive within
fifty (50) miles from the location of his principal place of employment, in
accordance with the rules of the American Arbitration Association then in
effect. Judgment may be entered on the award of the arbitrators in any court
having competent jurisdiction. All expenses of such litigation or arbitration,
including the reasonable fees and expenses of the legal representative for the
Executive, and necessary costs and disbursements incurred as a result of such
dispute or legal proceeding, and any prejudgment interest, shall be borne by the
Company.
12. 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.
(b) Any notices, requests, demands, or other communications provided
for by this Agreement shall be sufficient if in writing and if sent by
registered or certified mail to the Executive at the last address he has filed
in writing with the Company or, in the case of the Company, to the General
Counsel of the Company, at the Company's principal offices. 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.
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(e) The Executive's or the Company's failure to insist upon strict
compliance with any provision of this Agreement or the failure to assert any
right the Executive or the Company may have hereunder, including, without
limitation, the right of the Executive to terminate employment for Good Reason
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) From and after the Effective Date this Agreement shall supersede
any other employment, severance or change of control agreement between the
parties with respect to the subject matter hereof including the Prior Agreement,
except as expressly provided herein.
(g) If any compensation or benefits provided by this Agreement may
result in the application of Section 409A of the Code, the Company shall, in
consultation with the Executive, modify the Agreement in the least restrictive
manner necessary in order to exclude such compensation from the definition of
"deferred compensation" within the meaning of such Section 409A or in order to
comply with the provisions of Section 409A, other applicable provision(s) of the
Code and/or any rules, regulations or other regulatory guidance issued under
such statutory provisions and without any diminution in the value of the
payments or benefits to the Executive and, in the case of the Medical Benefits,
without any lapse in coverage.
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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.
/s/ Xxxxxxx X. Xxxxx
-----------------------------
Xxxxxxx X. Xxxxx
REGIONS FINANCIAL CORPORATION
By: /s/ R. Xxxx Deer
--------------------------
Name: R. Xxxx Deer
Title: Executive Vice President and
General Counsel
