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EXHIBIT 10.1
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into
this ___ day of ___________, 1998 by and between Regions Financial Corporation,
a Delaware corporation (hereinafter, "Regions"), and Xxxxxxx Xxxxx (hereinafter,
"Executive"), to be effective as of the Effective Date, as defined in Section 1.
BACKGROUND
Executive is the Chairman, President, and Chief Executive Officer of
First Commercial Corporation, an Arkansas corporation ("First Commercial").
Pursuant to an Agreement and Plan of Merger, dated as of February 8, 1998 (the
"Merger Agreement"), First Commercial will be acquired by Regions (the
"Merger").
Regions desires to retain Executive from and after the Merger as an
officer of Regions or its affiliates, and Executive is willing to serve as such,
all in accordance with the terms and conditions of this Agreement.
Executive and First Commercial are parties to that certain Agreement,
dated as of December 23, 1996, which provides certain benefits to Executive in
the event of his termination of employment following a change of control of
First Commercial (the "Prior Agreement"). The Prior Agreement will be superseded
in its entirety by this Agreement.
NOW THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements set forth herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1. Effective Date. The effective date of this Agreement (the "Effective
Date") will be the date on which the effective time of the Merger occurs.
2. Employment. As of the Effective Date, Executive will be employed in
the capacity of Regional President of Regions' operations in Arkansas, Texas,
Oklahoma and the Memphis area of Tennessee, and will serve as a member of
Regions' Executive Council. Executive's responsibilities under this Agreement
shall be in accordance with the policies and objectives established by the Board
of Directors of Regions (the "Board") and Executive will report directly to the
Chief Executive Officer of Regions.
3. Employment Period. This Agreement will begin on the Effective Date
and, unless earlier terminated in accordance with Section 6 hereof, will expire
on the third anniversary of the Effective Date (the "Employment Period").
4. Extent of Service. During the Employment Period, and excluding any
periods of vacation and sick leave to which Executive is entitled, Executive
agrees to devote reasonable attention and time during normal business hours to
the business and affairs of Regions and, to
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the extent necessary to discharge the responsibilities assigned to Executive
hereunder, to use Executive's reasonable best efforts to perform faithfully and
efficiently such responsibilities. During the Employment Period it will not be a
violation of this Agreement for Executive to (i) serve on corporate, civic or
charitable boards or committees, and (ii) manage personal investments, so long
as such activities do not significantly interfere with the performance of
Executive's responsibilities as an employee of Regions in accordance with this
Agreement.
5. Compensation and Benefits.
(a) Base Salary. During the Employment Period, Regions will pay
to Executive a base salary in the amount of $435,000 per year ("Base Salary"),
less normal withholdings, payable in equal monthly or more frequent installments
as are customary under Regions' payroll practices from time to time. The Base
Salary will be increased as of January 1 of each calendar year during the term
of this Agreement by a percentage at least equal to the average percentage
increase in annual base salary paid to Regions' top three executive officers
(other than Executive and Xxxx X. Xxxxx, Xx.), calculated for each year on a
compounded basis.
(b) Incentive, Savings and Retirement Plans. During the
Employment Period, Executive will be entitled to participate in all executive
incentive compensation and bonus programs (including stock option, performance
share and restricted stock grants), and savings and retirement plans (except the
Regions Profit Sharing Plan during 1999), practices, policies and programs,
applicable generally to senior executive officers of Regions holding comparable
positions ("Peer Executives"), and on the same basis as Peer Executives. Without
limiting the foregoing, the following shall apply:
(i) during the Employment Period, Executive will be
entitled to an annual bonus of not less than $340,000, provided, however, that
for 1999 the annual bonus shall be not less than $400,900;
(ii) effective as of the Effective Date, Executive shall be
granted under the Regions 1991 Long-Term Incentive Plan, as amended (the
"Incentive Plan"), a restricted stock award (having terms and conditions that
are no less favorable than those applicable to grants made to Peer Executives)
covering a number of shares of Regions common stock (rounded to the nearest
whole number of shares), having a fair market value on the Effective Date of
$2,750,000 (the "Restricted Stock"), which shares will vest in equal
installments on the first, second and third anniversaries of the Effective Date,
or upon a Change of Control of Regions (as defined in the Incentive Plan) or the
death or Disability of Executive, if earlier;
(iii) on the Effective Date, Executive shall be granted under
the Incentive Plan options to acquire 35,000 shares of Regions common \ stock
(the "Options"), which Options will have a per-share exercise price equal to the
fair market value of Regions common stock on the date of grant, a term of ten
years and terms and conditions that are no less favorable than those applicable
to grants made to Peer Executives. The Options will vest and become exercisable
in full on the first anniversary of the Effective Date or, if a Change of
Control of Regions (as defined in the Incentive Plan) shall have occurred before
the first
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anniversary of the Effective Date or, in the event of Executive's death or
Disability before such date, the Options will vest and become exercisable in
full on the date of such Change of Control or death or Disability; and
(iv) during the Employment Period, Executive will be granted
under the Incentive Plan performance share awards in amounts and having terms
that are comparable to performance shares awards to Peer Executives.
(c) Welfare Benefit Plans. During the Employment Period,
Executive and/or Executive's family, as the case may be, will be eligible for
participation in and will receive all benefits under welfare benefit plans,
practices, policies and programs provided by Regions and its affiliated
companies (including, without limitation, medical, prescription, dental,
disability, employee life, group life, accidental death and travel accident
insurance plans and programs) ("Regions Welfare Plans") to the extent applicable
generally to Peer Executives.
(d) Expenses. During the Employment Period, Executive will be
entitled to receive prompt reimbursement for all reasonable expenses incurred by
Executive in accordance with the policies, practices and procedures of Regions
and its affiliated companies to the extent applicable generally to Peer
Executives.
(e) Fringe Benefits. During the Employment Period, Executive will
be entitled to fringe benefits in accordance with the plans, practices, programs
and policies of Regions and its affiliated companies in effect for Peer
Executives.
(f) Vacation. During the Employment Period, Executive will be
entitled to paid vacation in accordance with the plans, policies, programs and
practices of Regions and its affiliated companies as in effect generally with
respect to Peer Executives.
(g) Change of Control Agreement. If, on or after the Effective
Date, Regions has or enters into an agreement (or agreements) with one or more
members of Region's Executive Council that provides for the payment of severance
benefits in the event of a termination of employment in connection with a
"change of control" of Regions, Regions shall, at the election of Executive,
enter into a substantially identical agreement with Executive (the "Change of
Control Agreement"); provided, however, that (a) severance benefits provided to
Executive under any such Change of Control Agreement shall be reduced by any
severance benefits paid under this Agreement, and (b) no Gross-Up Payment under
the provisions of Section 8 hereof shall be made with respect to the benefits
provided under any such agreement.
(h) Past Service Credit. Executive shall be given full credit for
Executive's years of service with First Commercial for all purposes (other than
for benefit accrual purposes) under the plans, programs, policies, agreements
and practices covering Executive pursuant to this Section 5 to the extent of
Executive's service credit under comparable programs, policies, agreements and
practices of First Commercial. Regions shall cause the Regions Welfare Plans to
(i) waive, with respect to Executive, any waiting period and
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restrictions and limitations for preexisting conditions or insurability, and
(ii) credit Executive with any deductible, co-payment, co-insurance, or maximum
out-of-pocket payments made by Executive under First Commercial's welfare plans
so as to reduce the amount of any deductible, co-payment, co-insurance or
maximum out-of-pocket payments payable by Executive under the Regions Welfare
Plans.
6. Termination of Employment.
(a) Death or Disability. Executive's employment will terminate
automatically upon Executive's death during the Employment Period. If Regions
determines in good faith that the Disability of Executive has occurred during
the Employment Period (pursuant to the definition of Disability set forth
below), it may give to Executive written notice in accordance with Section 12(d)
of this Agreement of its intention to terminate Executive's employment. In such
event, Executive's employment will terminate effective on the 30th day after
receipt by Executive of such written notice (the "Disability Effective Date"),
provided that, within the 30 days after such receipt, Executive shall not have
returned to full-time performance of Executive's duties. For purposes of this
Agreement, "Disability" means the existence of any physical or mental condition
of Executive that results in his receipt of long-term disability benefits under
Regions' long term disability plan.
(b) Termination for Cause. Regions may terminate Executive's
employment during the Employment Period for Cause. For purposes of this
Agreement, "Cause" means:
(i) the willful and continued failure of Executive to
substantially perform Executive's duties with Regions (other than any such
failure resulting from incapacity due to physical or mental illness), after a
written demand for substantial performance is delivered to Executive by the
Board that specifically identifies the manner in which the Board believes that
Executive has not substantially performed Executive's duties;
(ii) the willful engaging by Executive in illegal conduct
or gross misconduct that is materially and demonstrably injurious to Regions;
(iii) personal dishonesty or breach of fiduciary duty to
Regions that in either case results or was intended to result in personal
profit\ to Executive at the expense of Regions; or
(iv) willful violation of any law, rule or regulation
(other than traffic violations, misdemeanors or similar offenses) or
cease-and-desist order, court order, judgment or supervisory agreement, which
violation is materially and demonstrably injurious to Regions.
For purposes of the preceding clauses, no act or failure to act, on
the part of Executive, shall be considered "willful" unless it is done, or
omitted to be done, by Executive in bad faith and without reasonable belief that
Executive's action or omission was in the best interests of Regions. Any act, or
failure to act, based upon prior approval given by the Board or upon the
instructions or with the approval of Executive's superior or based upon the
advice
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of counsel for Regions, shall be conclusively presumed to be done, or omitted to
be done, by Executive in good faith and in the best interests of Regions. The
cessation of employment of Executive shall not be deemed to be for Cause unless
and until there shall have been delivered to Executive, as part of the Notice of
Termination, a copy of a resolution duly adopted by the affirmative vote of not
less than a majority of the entire membership of the Board at a meeting of the
Board called and held for the purpose of considering such termination (after
reasonable notice is provided to Executive and Executive is given an
opportunity, together with counsel, to be heard before the Board) finding that,
in the good faith opinion of the Board, Executive is guilty of the conduct
described in clause (i), (ii), (iii), or (iv) above, and specifying the
particulars there of in detail.
(c) Termination for Good Reason. Executive's employment may be
terminated by Executive for Good Reason. For purposes of this Agreement, "Good
Reason" means the occurrence during the Employment Period of any of the
following events:
(i) the assignment to Executive, without his written
consent, of any duties inconsistent in any material respect with Executive's
position, authority, duties or responsibilities on the Effective Date or any
other action by Regions that results in a diminution in any material respect in
such position, authority, duties or responsibilities, excluding for this purpose
an isolated and inadvertent action not taken in bad faith that is remedied by
Regions promptly after receipt of notice thereof given by Executive;
(ii) a reduction by Regions in Executive's annual Base
Salary at the rate in effect on the Effective Date or as the same may be
increased from time to time;
(iii) Region's requiring Executive to be based at any
office or location that is more than fifty (50) miles from Executive's office
or location on the Effective Date;
(iv) the failure by Regions (a) to continue in effect any
compensation plan in which Executive participates as of the Effective Date that
is material to Executive's total compensation, unless an equitable arrangement
(embodied in an ongoing substitute or alternative plan) has been made with
respect to such plan, or (b) to continue Executive's participation therein (or
in such substitute or alternative plan) on a basis not materially less
favorable, both in terms of the amount of benefits provided and the level of
Executive's participation relative to other participants;
(v) the failure by Regions to continue to provide
Executive with benefits substantially similar to those enjoyed by Executive
under any of Regions' pension, life insurance, medical, health and accident,
disability or other welfare plans in which Executive was participating on the
Effective Date;
(vi) the failure by Regions to pay to Executive any
deferred compensation when due under any deferred compensation plan or agreement
applicable to Executive; or
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(vii) the failure by Regions to honor all the terms and
provisions of this Agreement, excluding for this purpose an isolated,
insubstantial and inadvertent action not taken in bad faith and which is
remedied by Regions promptly after receipt of notice thereof given by Executive.
(d) Notice of Termination. Any termination of Executive's
employment for Cause, or by Executive for Good Reason, shall be communicated by
Notice of Termination to the other party hereto given in accordance with Section
12(d) of this Agreement. For purposes of this Agreement, a "Notice of
Termination" means a written notice that (i) indicates the specific termination
provision in this Agreement relied upon, (ii) to the extent applicable, sets
forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of Executive's employment under the provision so
indicated, and (iii) specifies the termination date (which date shall be not
less than 60 days after the giving of such notice). If a dispute exists
concerning the provisions of this Agreement that apply to Executive's
termination of employment, the parties shall pursue the resolution of such
dispute with reasonable diligence. Within five (5) days of such a resolution,
any party owing any payments pursuant to the provisions of this Agreement shall
make all such payments together with interest accrued thereon at the rate
provided in Section 1274(b)(2)(B) of the Internal Revenue Code of 1986, as
amended (the "Code"). Termination of Executive's employment shall occur on the
specified Date of Termination even if there is a dispute between the parties
relating to the provisions of this Agreement that apply to such termination. The
failure by Executive or Regions to set forth in the Notice of Termination any
fact or circumstance that contributes to a showing of Good Reason or Cause will
not waive any right of Executive or Regions, respectively, hereunder or preclude
Executive or Regions, respectively, from asserting such fact or circumstance in
enforcing Executive's or Regions' rights hereunder.
(e) Date of Termination. "Date of Termination" means (i) if
Executive's employment is terminated by Regions other than by reason of death or
Disability, the date specified in the Notice of Termination, or (ii) if
Executive's employment is terminated by reason of death or Disability, the Date
of Termination will be the date of death or the Disability Effective Date, as
the case may be.
7. Obligations of Regions upon Termination.
(a) Termination During First Year of Employment Period. If, prior
to the first anniversary of the Effective Date, Executive's employment is
terminated by Regions without Cause or by Executive with or without Good Reason
(and in either case, other than by reason of Executive's death or Disability),
then in consideration of Executive's services rendered prior to such
termination:
(i) Lump-Sum Severance Payment. In lieu of any further
salary payments to Executive for periods subsequent to the Date of Termination,
Regions shall pay to Executive a lump sum severance payment, in cash, without
discount, equal to three (3) times the sum of (A) Executive's annual Base Salary
at the rate in effect immediately prior to the Date of Termination (not taking
into account any reduction in Base Salary that would
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constitute "Good Reason"), and (B) Executive's Average Bonus as defined below.
For purposes of this Agreement, Executive's "Average Bonus" means the average of
Executive's annual bonuses paid prior to the Effective Date and/or hereunder for
the two fiscal years during which Executive has been employed by Regions or
First Commercial immediately preceding the fiscal year in which the Date of
Termination occurs;
(ii) Vesting of Options. Any and all options to purchase
common stock of Regions then held by Executive will, to the extent not already
vested, become vested and exercisable in full as of the Date of Termination, and
any provision contained in the agreement(s) under which such options were
granted that is inconsistent with such acceleration is hereby modified to the
extent necessary to provide for such acceleration; provided, however, that no
such accelerated vesting shall apply to options that were not converted from
First Commercial options in connection with the Merger if, prior to the first
anniversary of the Effective Date, Executive is terminated for Cause or
Executive voluntarily terminates employment hereunder without Good Reason;
(iii) Vesting of Restricted Stock. Any and all
restrictions applicable to awards of restricted stock of Regions then held by
Executive shall lapse upon the Date of Termination, and any provision contained
in the agreement(s) under which such restricted stock awards were granted that
is inconsistent with such acceleration is hereby modified to the extent
necessary to provide for such acceleration of vesting; provided, however, that
such accelerated lapse of restrictions shall not apply if, prior to the first
anniversary of the Effective Date, Executive is terminated for Cause or
Executive voluntarily terminates employment hereunder without Good Reason;
(iv) Continued Benefits. For a thirty-six (36) month period
(or, if less, the number of months from the Date of Termination until the date
Executive will reach age sixty-five (65)) after the Date of Termination (the
"Benefits Period"), Regions shall provide Executive with group term life
insurance, health insurance, accident and long-term disability insurance
benefits (collectively, "Welfare Benefits") substantially similar in all
respects to those that Executive was receiving immediately prior to the Date of
Termination (not taking into account any reduction in such Welfare Benefits that
would constitute "Good Reason"). During the Benefits Period, Executive will be
entitled to elect to change his level of coverage and/or his choice of coverage
options (such as Executive only or family medical coverage) with respect to the
Welfare Benefits to be provided by Regions to Executive to the same extent that
actively employed senior executives of Regions are permitted to make such
changes; provided, however, that in the event of any such changes Executive
shall pay the amount of any cost increase that would actually be paid by an
actively employed senior executive of Regions by reason of making the same
changes in his level of coverage or coverage options;
(v) Retirement Benefits. In addition to the retirement
benefits to which Executive is entitled under the First Commercial Corporation
Retirement Plan and any successor plans thereto (the "FCC Pension Plan") and the
First Commercial Corporation Supplemental Executive Retirement Plan for
Executive (the "FCC Supplemental Plan"),
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Regions shall pay Executive a lump sum amount, in cash, equal to the actuarial
equivalent of the excess of (x) the total retirement pension (determined as a
straight life annuity commencing at the earliest age at which Executive may
commence retirement and become entitled to an unreduced pension under the FCC
Pension Plan ("normal retirement age") or, if later, the first day of the first
month after the Date of Termination) that Executive would have accrued under the
terms of the FCC Pension Plan and the FCC Supplemental Plan, determined as if
Executive were fully vested thereunder and had accumulated (after the Date of
Termination) thirty-six (36) additional months (or such lesser number of months
until Executive will attain age sixty-five (65)) of service credit thereunder at
Executive's annual Base Salary in effect at the Date of Termination, and (y) the
retirement pension (determined as a straight life annuity commencing at normal
retirement age) that Executive had accrued pursuant to the provisions of the FCC
Pension Plan and the FCC Supplemental Plan as of the Date of Termination. For
purposes of this Section 7(a)(v), (A) "actuarial equivalent" shall be determined
using the same methods and assumptions utilized under the FCC Pension Plan
immediately prior to the Effective Date; and (B) the lump-sum payment provided
for by the foregoing provisions of this Section 7(a)(v) shall be calculated, for
purposes of this Section 7(a)(v), as if the FCC Pension Plan and the FCC
Supplemental Plan continued in effect during the thirty-six (36) month period
referred to in the preceding sentence under the same terms as in effect
immediately prior to the Effective Date notwithstanding any amendment or
termination of such plans on or after the Effective Date; and
(v) Other Benefits. To the extent not theretofore paid or
provided, Regions shall timely pay or provide to Executive any other amounts or
benefits required to be paid or provided or that Executive is eligible to
receive under any plan, program, policy or practice or contract or agreement of
Regions and its affiliated companies (such other amounts and benefits will be
hereinafter referred to as the "Other Benefits").
(b) Termination During Second or Third Year of Employment Period.
(i) Good Reason; Other than for Cause. If, on or after the
first anniversary of the Effective Date and during the Employment Period,
Executive's employment is terminated by Regions without Cause or by Executive
for Good Reason, then in consideration of Executive's services rendered prior to
such termination, (A) Executive will be entitled to each of the benefits
described in Section 7(a) above, (B) any and all options to purchase common
stock of Regions then held by Executive will, to the extent not already vested,
become vested and exercisable in full as of the Date of Termination, and any
provision contained in the agreement(s) under which such options were granted
that is inconsistent with such acceleration is hereby modified to the extent
necessary to provide for such acceleration, and (C) any and all restrictions
applicable to awards of restricted stock of Regions then held by Executive will
lapse upon the Date of Termination, and any provision contained in the
agreement(s) under which such restricted stock awards were granted that is
inconsistent with such acceleration is hereby modified to the extent necessary
to provide for such acceleration of vesting.
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(ii) Voluntary Resignation other than for Good Reason. If,
during the two-year period immediately following the first anniversary of the
Effective Date, Executive's employment is terminated by Executive other than for
Good Reason, then in consideration of Executive's services rendered prior to
such termination, Regions shall pay to Executive a lump sum severance payment,
in cash, without discount, equal to the sum of (A) the product of (w) the number
of days remaining in the Employment Period from and after the Date of
Termination (the "Remaining Employment Period"), and (x) Executive's Base Salary
at the rate in effect immediately prior to the Date of Termination divided by
365; plus (B) the product of (y) the number of days in the Remaining Employment
Period, and (z) Executive's Average Annual Bonus divided by 365.
(c) Death. If Executive's employment is terminated by reason of
Executive's death during the Employment Period, this Agreement will terminate
without further obligations to Executive's legal representatives under this
Agreement, other than for payment of the sum of (i) Accrued Compensation (as
defined below), the vesting of stock options and restricted stock, and the
timely payment or provision of Other Benefits, including without limitation any
death benefits to which Executive is then entitled. For purposes of the
Agreement, "Accrued Compensation" means all amounts of compensation for services
rendered by Executive to Regions or any affiliate that have been earned or
accrued through the Date of Termination but that have not been paid as of the
Date of Termination, including (i) Base Salary, (ii) reimbursement (in
accordance with Regions' expense reimbursement policy) for reasonable and
necessary business expenses incurred by Executive on behalf of Regions during
the period ending on the Date of Termination, (iii) vacation pay, and (iv)
bonuses and incentive compensation. Accrued Compensation shall be paid to
Executive in a lump sum in cash within 30 days of the Date of Termination or in
accordance with any deferral election theretofore elected by Executive.
(d) Disability. If Executive's employment is terminated by reason
of Executive's Disability during the Employment Period, this Agreement will
terminate without further obligations to Executive, other than for payment of
Accrued Compensation, the vesting of stock options and restricted stock, and the
timely payment or provision of Other Benefits, including without limitation any
disability benefits to which Executive is then entitled. Accrued Compensation
shall be paid to Executive in a lump sum in cash within 30 days of the Date of
Termination or in accordance with any deferral election theretofore elected by
Executive.
(e) Cause. If Executive's employment is terminated for Cause
during the Employment Period, this Agreement will terminate without further
obligations to Executive, other than for payment of Accrued Compensation and the
timely payment or provision of Other Benefits. In such case, all Accrued
Compensation shall be paid to Executive in a lump sum in cash within 30 days of
the Date of Termination or in accordance with any deferral election theretofore
elected by Executive.
8. Certain Additional Payments by Regions. In the event that, (i)
Executive becomes entitled to severance benefits or any other benefits or
payments in connection with the
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Merger, whether pursuant to the terms of this Agreement or otherwise
(collectively, the "Total Benefits") and (ii) any of the Total Benefits will be
subject to the excise tax imposed pursuant to Section 4999 of the Internal
Revenue Code ("Excise Tax"), Regions shall pay to Executive an additional amount
(the "Gross-Up Payment") such that the net amount retained by Executive, after
deduction of any Excise Tax on the Total Benefits and any federal, state and
local income taxes, Excise Tax, and FICA and Medicare withholding taxes upon the
payment provided for by this Section, will be equal to the Total Benefits. For
purposes of determining whether any of the Total Benefits will be subject to the
Excise Tax and the amount of such Excise Tax, the amount of the Total Benefits
that will be treated as subject to the Excise Tax shall be equal to the amount
of the Total Benefits reduced by the amount of such Total Benefits that, in the
opinion of tax counsel selected by Regions ("Tax Counsel") and reasonably
acceptable to Executive are not excess parachute payments (within the meaning of
Section 280G(b)(1) of the Internal Revenue Code) with respect to the Merger.
Notwithstanding anything herein, if and to the extent that the severance
benefits or any other payments and benefits paid or provided pursuant to this
Agreement (including but not limited to the accelerated vesting of options and
shares of restricted stock as provided for hereunder) are treated as being in
connection with a change of control, such payment and benefits shall be treated
as being paid or provided in connection with the Merger and not with any
subsequent change of control of Regions.
For purposes of this Section, Executive will be deemed to pay federal
income taxes at the highest marginal rate of federal income taxation in the
calendar year in which the Excise Tax is (or would be) payable and state and
local income taxes at the highest marginal rate of taxation in the state and
locality of Executive's residence on the Date of Termination, net of the
reduction in federal income taxes that could be obtained from deduction of such
state and local taxes (calculated by assuming that any reduction under Section
68 of the Internal Revenue Code in the amount of itemized deductions allowable
to Executive applies first to reduce the amount of such state and local income
taxes that would otherwise be deductible by Executive). Except as otherwise
provided herein, all determinations required to be made under this Section shall
be made by Tax Counsel.
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
Executive's employment, Executive shall repay to Regions, at the time the amount
of such reduction in Excise Tax is fully determined, the portion of the Gross-Up
Payment attributable to such reduction (plus that portion of the Gross-Up
Payment attributable to the Excise Tax, federal, state and local income taxes
and FICA and Medicare withholding taxes imposed on the Gross-Up Payment being
repaid by Executive to the extent that such repayment results in a reduction in
Excise Tax, FICA and Medicare withholding taxes and/or a federal, state or local
income tax deduction) plus interest on the amount of such repayment at the rate
provided in Section 1274(b)(2)(B) of the Internal Revenue 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 Executive'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), Regions shall make an additional Gross-Up
Payment to Executive in respect of such excess (plus any interest,
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penalties or additions payable by Executive with respect to such excess) at the
time that the amount of such excess is finally determined.
9. Non-exclusivity of Rights. Nothing in this Agreement shall prevent
or limit Executive's continuing or future participation in any plan, program,
policy or practice provided by Regions or any of its affiliated companies and
for which Executive may qualify, nor, subject to Section 12(j), shall anything
herein limit or otherwise affect such rights as Executive may have under any
contract or agreement with Regions or any of its affiliated companies. Amounts
that are vested benefits or that Executive is otherwise entitled to receive
under any plan, policy, practice or program of or any contract or agreement with
Regions or any of its affiliated companies at or subsequent to the Date of
Termination will be payable in accordance with such plan, policy, practice or
program or contract or agreement except as explicitly modified by this
Agreement.
10. Full Settlement; Certain Legal Expenses.
(a) Regions' 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 that Regions may have against Executive or others. In no event shall
Executive be obligated to seek other employment or take any other action by way
of mitigation of the amounts payable to Executive under any of the provisions of
this Agreement and such amounts shall not be reduced whether or not Executive
obtains other employment.
(b) Regions shall pay to Executive all reasonable legal fees and
expenses incurred by Executive as a result of a termination that entitles
Executive to any payments under this Agreement including all such fees and
expenses, if any, incurred in contesting or disputing any Notice of Termination
given hereunder 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 to any payment or benefit provided hereunder. Such payments shall be made
within five (5) business days after delivery of Executive's respective written
requests for payment accompanied with such evidence of fees and expenses
incurred as Regions reasonably may require.
11. Assignment and Successors.
(a) Executive. This Agreement is personal to Executive and
without the prior written consent of Regions shall not be assignable by
Executive otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by Executive's legal
representatives.
(b) Regions. This Agreement shall inure to the benefit of and be
binding upon Regions and its successors and assigns.
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(c) Assumption by Successors. Regions 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 Regions to assume
expressly and agree to perform this Agreement in the same manner and to the same
extent that Regions would be required to perform it if no such succession had
taken place. As used in this Agreement, "Regions" means Regions as herein before
defined and any successor to its business and/or assets as aforesaid which
assumes and agrees to perform this Agreement by operation of law or otherwise.
12. Miscellaneous.
(a) Governing Law. Except to the extent preempted by federal law
and without reference to principles of conflict of laws, the laws of the State
of Arkansas will govern this Agreement in all respects, whether as to its
validity, construction, capacity, performance or otherwise.
(b) Captions. The captions in this Agreement are not part of the
provisions hereof and shall have no force or effect.
(c) Amendments and Modifications. 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, which
writing makes specific reference to this Agreement.
(d) Notices. 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 Regions: Regions Financial Corporation
000 X. 00xx Xxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: General Counsel
If to Executive: Xxxxxxx Xxxxx
--------------------------
--------------------------
--------------------------
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications will be effective when
actually received by the addressee.
(e) Other Agents. Nothing in this Agreement is to be interpreted
as limiting Regions from employing other personnel on such terms and conditions
as may be satisfactory to it.
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(f) Severability. If any provision or covenant, or any part
thereof, of this Agreement should be held by any court to be invalid, illegal or
unenforceable, either in whole or in part, such invalidity, illegality or
unenforceability shall not affect the validity, legality or enforceability of
the remaining provisions or covenants, or any part thereof, of this Agreement,
all of which will remain in full force and effect.
(g) Withholding. Regions 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.
(h) Waiver. Failure of either party to insist, in one or more
instances, on performance by the other in strict accordance with the terms and
conditions of this Agreement shall not be deemed a waiver or relinquishment of
any right granted in this Agreement or of the future performance of any such
term or condition or of any other term or condition of this Agreement, unless
such waiver is contained in a writing signed by the party making the waiver.
(i) Reduction of Benefits By Legally Required Benefits.
Notwithstanding any other provision of this Agreement to the contrary, if
Regions is obligated by law to pay severance pay, a termination indemnity,
notice pay, or the like, or if Regions is obligated by law to provide advance
notice of separation ("Notice Period"), then any severance benefits hereunder
shall be reduced by the amount of any such severance pay, termination indemnity,
notice pay or the like, as applicable, and by the amount of any pay received
with respect to any Notice Period.
(j) Timing of Payments. The payments provided for in Sections 7
and 8 shall be made within 30 days after the Date of Termination, provided,
however, that if the amounts of such payments cannot be finally determined on or
before such date, Regions shall pay to Executive on such day an estimate, as
determined in good faith by Regions, of the minimum amount of such payments and
shall pay the remainder of such payments (together with interest at the rate
provided in Section 1274(b)(2)(B)of the Code from the Date of Termination to the
payment of such remainder) as soon as the amount thereof can be determined but
in no event later than the 45th day after the Date of Termination. In the event
that the amount of the estimated payments exceeds the amount subsequently
determined to have been due, such excess shall constitute a loan by Regions to
Executive, payable on the fifth (5th) business day after demand by Regions
(together with interest at the rate provided in Section 1274(b)(2)(B) of the
Code from the Date of Termination to the repayment of such excess).
(k) Entire Agreement; Termination of Prior Agreement. Except as
provided herein, this Agreement contains the entire agreement between Regions
and Executive with respect to the subject matter hereof (other than the Regions
Change of Control Agreement) and it supersedes and invalidates any previous
employment or severance agreements or contracts between them, including, without
limitation, the Prior Agreement. No representations, inducements, promises or
agreements, oral or otherwise, that are not
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embodied herein shall be of any force or effect. In the event that the Effective
Date does not occur, the Prior Agreement shall continue in full force and
effect.
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Employment Agreement as of the date first above written.
REGIONS FINANCIAL CORPORATION
By:
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Title:
----------------------------
EXECUTIVE:
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Xxxxxxx Xxxxx
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