October 16, 2007 Form of Change in Control Severance Agreement Offered to Executive Officers]
Exhibit
10.7(a5)
[October
16,
2007 Form of Change in Control
Severance
Agreement Offered to Executive Officers]
_______________________________
«Date»
«Name»
«Company_Business_Line»
«Address»
Dear
«Name»:
First
Horizon
National Corporation, a Tennessee corporation (including any successor thereto,
the "Company"), considers the establishment and maintenance of a sound and
vital
management to be essential to protecting and enhancing the best interests of
the
Company and its shareholders. In this connection, the Company
recognizes that, as is the case with many publicly held corporations, the
possibility of a change in control may arise and that such possibility, and
the
uncertainty and questions which it may raise among management, may result in
the
departure or distraction of management personnel to the detriment of the Company
and its shareholders. Accordingly, the Board of Directors of the
Company (the "Board") has determined that appropriate steps should be taken
to
reinforce and encourage the continued attention and dedication of members of
the
Company's management to their assigned duties without distraction in
circumstances arising from the possibility of a change in control of the
Company. In particular, the Board believes it important, should the
Company or its shareholders receive a proposal for transfer of control of the
Company, that you be able, if requested, to assess and advise the Board whether
such proposal would be in the best interests of the Company and its shareholders
and to take such other action regarding such proposal as the Board might
determine to be appropriate, without being influenced by the uncertainties
of
your own situation.
In
order to
induce you to remain in the employ of the Company, this letter agreement, which
has been approved by the Board, sets forth certain benefits which the Company
agrees will be provided to you in the event of a "change in control" of the
Company under the circumstances described below.
1. Agreement to Provide Services; Right to
Terminate.
(i) Except
as otherwise provided in paragraph (ii) below, the Company or you may terminate
your employment at any time, subject to the Company's providing the benefits
hereinafter specified in accordance with the terms hereof.
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(ii) In
the event a tender offer or exchange offer is made by a Person (as hereinafter
defined) for more than 20 percent (20%) of the combined voting power of the
Company's outstanding securities ordinarily having the right to vote at
elections of directors, including shares of the common capital stock of First
Horizon National Corporation, par value $0.625 per share (the "Company Voting
Securities"), you agree that you will not leave the employ of the Company (other
than as a result of Disability, Retirement, or upon an event which would
constitute Good Reason if such event occurred after a change in control of
the
Company, as such terms are hereinafter defined) and will render the services
contemplated in the recitals to this Agreement until such tender offer or
exchange offer has been abandoned or terminated or a change in control of the
Company, as defined in Section 3 hereof, has occurred; provided,
however, that such obligation shall not extend for a period exceeding
one
hundred and eighty (180) days from the initial event resulting in the obligation
under this paragraph (ii). For purposes of this Agreement, the term "Person"
shall mean and include any individual, corporation, partnership, group,
association or other "person", as such term is defined in Section 3(a)(9) of
the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and as used
in
Section 13(d) or Section 14(d) of the Exchange Act, other than the Company,
an
entity in which the Company directly or indirectly beneficially owns more than
50% of the voting securities or interests (a "Subsidiary"), or any employee
stock ownership or other employee benefit plan or trust sponsored by the Company
or a Subsidiary.
2. Term of Agreement. This
Agreement shall commence on the date hereof and shall continue in effect until
you or the Company shall have given three (3) years prior written notice of
termination of this Agreement; provided, that, notwithstanding the
delivery of any such notice, this Agreement shall continue in effect for a
period of thirty-six (36) months after a change in control of the Company,
as
defined in Section 3 hereof, if such change in control shall have occurred
during the term of this Agreement. Notwithstanding anything in this
Section 2 to the contrary, this Agreement shall terminate if you or the Company
terminate your employment prior to a change in control of the Company, unless
you reasonably demonstrate that such termination of employment was at the
request of a third party who has taken steps reasonably calculated to effect
a
change in control or otherwise arose in connection with or in anticipation
of a
change in control, in which case your employment shall for all purposes of
this
Agreement be deemed to have been terminated by you for Good Reason immediately
following a change in control of the Company.
3. Change in Control. For
purposes of this Agreement, a "change in control" means the occurrence of any
one of the following events:
(i) individuals
who, on January 21, 1997, constitute the Board (the "Incumbent Directors")
cease for any reason to constitute at least a majority of the Board, provided
that any person becoming a director subsequent to January 21, 1997, whose
election or nomination for election was approved by a vote of at least
three-fourths (3/4) of the Incumbent Directors then on the Board (either by
a
specific vote or by approval of the proxy statement of the Company in which
such
person is named as a nominee for director, without written objection to such
nomination) shall be an Incumbent Director; provided, however,
that no individual elected or nominated as a director of the Company initially
as a result of an actual or threatened election contest with respect to
directors or as a result of any other actual or threatened solicitation of
proxies or consents by or on behalf of any person other than the Board shall
be
deemed to be an Incumbent Director;
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(ii) any
Person is or becomes a "beneficial owner" (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of the Company
representing 20% or more of the combined voting power of the Company Voting
Securities; provided, however, that the event described in this
paragraph (ii) shall not be deemed to be a change in control by virtue of
any of the following acquisitions: (A) by any underwriter temporarily
holding securities pursuant to an offering of such securities, or
(B) pursuant to a Non-Qualifying Transaction (as defined in paragraph
(iii));
(iii) the
consummation of a merger, consolidation, share exchange or similar form of
corporate transaction involving the Company or any of its Subsidiaries that
requires the approval of the Company's stockholders, whether for such
transaction or the issuance of securities in the transaction (a "Business
Combination"), unless immediately following such Business
Combination: (A) more than 60% of the total voting power of
(x) the corporation resulting from such Business Combination (the
"Surviving Corporation"), or (y) if applicable, the ultimate parent
corporation that directly or indirectly has beneficial ownership of 100% of
the
voting securities eligible to elect directors of the Surviving Corporation
(the
"Parent Corporation"), is represented by Company Voting Securities that were
outstanding immediately prior to the consummation of such Business Combination
(or, if applicable, is represented by shares into which such Company Voting
Securities were converted pursuant to such Business Combination), and such
voting power among the holders thereof is in substantially the same proportion
as the voting power of such Company Voting Securities among the holders thereof
immediately prior to the Business Combination, (B) no person (other than
any employee benefit plan sponsored or maintained by the Surviving Corporation
or the Parent Corporation), is or becomes the beneficial owner, directly or
indirectly, of 20% or more of the total voting power of the outstanding voting
securities eligible to elect directors of the Parent Corporation (or, if there
is no Parent Corporation, the Surviving Corporation) and (C) at least
two-thirds (2/3) of the members of the board of directors of the Parent
Corporation (or, if there is no Parent Corporation, the Surviving Corporation)
were Incumbent Directors at the time of the Board's approval of the execution
of
the initial agreement providing for such Business Combination (any Business
Combination which satisfies all of the criteria specified in (A), (B) and (C)
above shall be deemed to be a "Non-Qualifying Transaction"); or
(iv) the
stockholders of the Company approve a plan of complete liquidation or
dissolution of the Company or a sale of all or substantially all of the
Company's assets.
Notwithstanding
the foregoing, a change in control of the Company shall not be deemed to occur
solely because any person acquires beneficial ownership of more than 20% of
the
Company Voting Securities as a result of the acquisition of Company Voting
Securities by the Company which reduces the number of Company Voting Securities
outstanding; provided, that if after such acquisition by the Company such
person becomes the beneficial owner of additional Company Voting Securities
that
increases the percentage of outstanding Company Voting Securities beneficially
owned by such person, a change in control of the Company shall then
occur.
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4. Termination Following Change in Control. If
any of the events described in Section 3 hereof constituting a change in control
of the Company shall have occurred, you shall be entitled to the benefits
provided in Section 5 upon your termination of employment within thirty-six
(36)
months following such change in control; provided, however, that you shall
be
entitled to the benefits provided in Section 5(ix) whether or not your
employment has been terminated. For purposes of this Agreement,
"Disability," "Retirement," "Cause" and "Good Reason" have the meanings set
forth below in this Section 4.
(i) Disability. Termination
by the Company of your employment based on "Disability" shall mean termination
because of your "disability" under the Company's Long Term Disability Plan,
or
any successor or substitute plan or plans of the Company, in effect immediately
prior to the change in control of the Company.
(ii) Retirement. Termination
by you or by the Company of your employment based on "Retirement" shall mean
termination as a result of your mandatory retirement in accordance with the
Company's retirement policy generally applicable to similarly situated officers,
as in effect immediately prior to the change in control of the Company, or
in
accordance with any retirement arrangement established with your written
consent.
(iii) Cause. Termination
by the Company of your employment for "Cause" shall mean termination upon (a)
the willful and continued failure by you to perform substantially your duties
with the Company (other than any such failure resulting from your incapacity
due
to physical or mental illness) after a written demand for substantial
performance is delivered to you by the Chairman of the Board, Chief Executive
Officer or President of the Company which specifically identifies the manner
in
which such person believes that you have not substantially performed your duties
or have failed to follow the policies and procedures of the Company, which
failure to perform causes material and demonstrable economic harm to the Company
or its Affiliates, (b) the willful engaging by you in illegal conduct which
is
materially and demonstrably injurious to the Company, (c) the conviction of,
or
a plea of guilty or nolocontendere to, a felony, (d) the failure
by you to cooperate with all government authorities on matters pertaining to
any
investigation, litigation or administrative proceeding concerning the Company,
(e) the willful and material breach by you of Section 6 of this Agreement or
the
Company’s written code of business conduct and ethics (however, to the extent
the breach is curable, the Company must give you notice and a reasonable
opportunity to cure), (f) your becoming subject to the prohibitions of Section
19(a)(1) of the Federal Deposit Insurance Act or Section 21C(f) of the Exchange
Act or (g) the failure by you to comply with the terms of this Agreement,
including but not limited to Section 6. For purposes of this
paragraph (iii), no act, or failure to act, on your part shall be considered
"willful" unless done, or omitted to be done, by you in bad faith and without
reasonable belief that your action or omission was in, or not opposed to, the
best interests of the Company or its Affiliates. 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 or upon the
instructions of the Chief Executive Officer or other senior executive officer
of
the Company shall be conclusively presumed to be done, or omitted to be done,
by
you in good faith and in the best interests of the Company and its
Affiliates. For purposes of this Agreement, "Affiliate" means any
person directly or indirectly controlling, controlled by, or under common
control with the Company. It is also expressly understood that your
attention to matters or your engagement in activities not directly related
to
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the
business
of the Company shall not provide a basis for termination for Cause so
long as
the Board has approved your engagement in such activities prior to or
following
a change in control. Notwithstanding the foregoing, in the case of clause
(a), (b), (d), (e) or (g) of this paragraph (iii), you shall not be deemed
to
have been terminated for Cause unless and until there shall have been
delivered
to you a copy of a resolution duly adopted by the affirmative vote of
not less
than three-fourths (3/4) of the entire membership of the Board (excluding
you if
you are a Board member) at a meeting of the Board called and held for
such
purpose (after reasonable notice to you and an opportunity for you, together
with your counsel, to be heard before the Board), finding that in the
good faith
opinion of the Board you were guilty of the conduct set forth above in
such
clause of this paragraph (iii) and specifying the particulars thereof
in
detail. The Company must notify you of any event constituting Cause within
ninety (90) days following the Company's knowledge of its existence or
such
event shall not constitute Cause under this Agreement. The Company may
place you on paid leave for up to 30 consecutive days while it is determining
whether there is a basis to terminate your employment for Cause. This
leave will not constitute Good Reason.
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(iv) Good Reason. Termination
of your employment by you for "Good Reason" shall mean termination based upon
the occurrence after a change in control of the Company of any of the following
events, without your written consent specifically acknowledging that any such
event shall not give rise to Good Reason under this Agreement:
(A) a
material adverse change in your authority, duties or responsibilities with
the
Company as in effect immediately prior to the change in control, including,
without limitation, the assignment to you of any duties or responsibilities
which are inconsistent with such status, title(s), or position(s) as in effect
immediately prior to the change in control, or any removal of you from, or
any
failure to reappoint or reelect you to, such position(s) (except in connection
with the termination of your employment for Cause, Disability or Retirement
or
as a result of your death or by you other than for Good Reason);
(B) a
material reduction by the Company in your aggregate base salary or annual target
bonus opportunity (including any material adverse change in the formula for
such
annual bonus target) as in effect immediately prior to the change in control
or
as the same may be increased from time to time thereafter;
(C) the
failure by the Company to provide you with Plans that provide you with
equivalent benefits in the aggregate to the Plans as in effect immediately
prior
to the change in control (at substantially equivalent cost with respect to
welfare benefit plans), in each case which would materially adversely affect
you;
(D) the
Company's requiring you to be based at an office that is greater than 25 miles
from where your office is located immediately prior to the change in
control;
(E) the
failure by the Company to obtain from any Successor (as hereinafter defined)
the
assent to this Agreement contemplated by Section 7 hereof; or
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(F) any
purported termination by the Company of your employment which is not effected
pursuant to a Notice of Termination satisfying the requirements of paragraph
(v)
below (and, if applicable, paragraph (iii) above); and for purposes of this
Agreement, no such purported termination shall be effective.
An
isolated
and inadvertent action taken in good faith and which is remedied by the Company
within thirty (30) days after receipt of written notice thereof given by you
describing in reasonable detail the Good Reason event that has occurred (which
notice in any event must be provided within ninety (90) days of you obtaining
knowledge of such event) shall not constitute Good Reason. For
purposes of this Agreement, "Plan" shall mean any compensation plan such as
an
incentive, stock option, restricted stock, pension restoration or deferred
compensation plan or any employee benefit plan such as a thrift, pension, profit
sharing, medical, disability, accident, life insurance plan or a relocation
plan
or policy or any other plan, program or policy of the Company intended to
benefit employees, including, without limitation, any Plans established after
the date hereof.
(v) Notice of Termination. Any
purported termination by the Company or by you following a change in control
shall be communicated by written Notice of Termination to the other party
hereto. For purposes of this Agreement, a "Notice of Termination"
shall mean a notice which shall indicate the specific termination provision
in
this Agreement relied upon.
(vi) Date of Termination. "Date
of Termination" means (A) the effective date on which your employment by the
Company terminates as specified in a prior written notice by the Company or
you,
as the case may be, to the other, delivered pursuant to Section 11 or (B) if
your employment by the Company terminates by reason of death, the date of your
death. In the case of termination by the Company of your employment
for Cause, if you have not previously expressly agreed in writing to the
termination, then within thirty (30) days after receipt by you of the Notice
of
Termination with respect thereto, you may notify the Company that a dispute
exists concerning the termination, in which event the Date of Termination shall
be the date set by mutual written agreement of the parties. During
the pendency of any such dispute, the Company will continue to pay you your
full
compensation in effect just prior to the time the Notice of Termination is
given
and until the dispute is resolved.
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5.
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Compensation Upon Termination or During
Disability; Other Agreements.
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(i) In
the event that during the thirty-six (36) month period following a change in
control of the Company you fail to perform your duties as a result of incapacity
due to physical or mental illness, you shall continue to receive your base
salary at the rate then in effect and any benefits or awards under any Plans
shall continue to accrue during such period, to the extent not inconsistent
with
such Plans, until your employment is terminated pursuant to and in accordance
with paragraphs 4(i) and 4(vi) hereof. Thereafter, if your employment
is terminated for Disability within thirty-six (36) months after a change in
control of the Company, your benefits shall be determined in accordance with
the
Plans, and you shall receive benefits under the Company's disability policies
at
the greater of the rate immediately prior to the change in control or your
Date
of Termination.
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(ii) If,
within thirty-six (36) months after a change in control of the Company, your
employment by the Company shall be terminated by the Company for Cause or by
you
(other than for Good Reason or Retirement), the Company shall pay you your
base
salary (subject to any deferral elections) through the Date of Termination
at
the rate in effect just prior to the time a Notice of Termination is given
plus
any bonus amounts which have become earned or payable, but which have not yet
been paid to you. Thereupon the Company shall have no further
obligations to you under this Agreement. Following your termination
of employment, your accrued benefits under the Company's Plans shall be paid
pursuant to the terms of such Plans.
(iii) If,
within thirty-six (36) months after a change in control of the Company, your
employment by the Company shall be terminated on account of Disability, death
or
Retirement, the Company shall pay you your base salary (subject to any deferral
elections) through the Date of Termination at the rate in effect just prior
to
the time a Notice of Termination is given plus any bonus amounts which have
become earned or payable, but which have not yet been paid to you, and a portion
of your annual bonus for the fiscal year in which your Date of Termination
occurs in an amount at least equal to (A) the product of (1) your bonus amount
(as defined below), and (2) a fraction, the numerator of which is the number
of
days in the fiscal year in which the Date of Termination occurs through the
Date
of Termination, and the denominator of which is three hundred sixty-five (365),
reduced by (B) any amounts paid from the Company's annual incentive plan for
the
fiscal year in which your Date of Termination occurs. Thereupon, the
Company shall have no further obligations to you under this
Agreement. Following your termination of employment, your accrued
benefits under the Company's Plans shall be paid pursuant to the terms of such
Plans; provided, however, that in the event of termination of
employment on account of your death within thirty-six (36) months after a change
in control of the Company, life insurance benefits paid pursuant to the
Company's welfare benefit plans shall be based on the terms of such plans in
effect on the date of death, or if more favorable to you, the terms of such
plans in effect immediately prior to the change in control.
(iv) If,
within thirty-six (36) months after a change in control of the Company, your
employment by the Company shall be terminated (a) by the Company other than
for
Cause, Disability or Retirement or (b) by you for Good Reason, then the Company
shall pay to you, no later than the sixtieth day following the Date of
Termination, without regard to any contrary provisions of any Plan, a lump
sum
cash amount equal to the sum of the following amounts:
(A) your
base salary (subject to any deferral elections) through the Date of Termination
at the rate in effect just prior to the time a Notice of Termination is given
(not taking into account any reductions constituting Good Reason) plus any
bonus
amounts which have become earned or payable, but which have not yet been paid
to
you, plus the value of your accrued but unused vacation days;
(B) a
portion of your annual bonus for the fiscal year in which your Date of
Termination occurs in an amount at least equal to (1) the product of (x) your
bonus amount (as defined below), and (y) a fraction, the numerator of which
is
the number of days in the fiscal year in which the Date of Termination occurs
through the Date of Termination, and the denominator of which is three hundred
sixty-five (365), reduced by (2) any amounts paid from the Company's annual
incentive plan for the fiscal year in which your Date of Termination occurs;
and
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(C) an
amount equal to three (3) times the sum of (1) your highest annual rate of
base
salary from the Company (or if applicable any Subsidiary or Parent (as defined
in Section 16)) during the 12-month period immediately prior to your Date of
Termination, and (2) your bonus amount.
For
purposes
of this Agreement, the term "base salary" shall include any amounts deducted
with respect to you or for your account pursuant to Sections 125 and 401(k)
of the Internal Revenue Code of 1986, as amended, (the "Code") or any other
deferred compensation plan or program. For purposes of this
Agreement, the term "bonus amount" means the average of the annual bonuses
received under the Management Incentive Plan, as amended, or any successor
or
substitute plan (“MIP”) for the five full fiscal years immediately prior to your
Date of Termination after excluding the highest and lowest of such full-year
annual bonuses; provided, however, that, (1) if you have received at least
three
but fewer than five full-year bonuses under the MIP, the term “bonus amount”
will be the average of your three most recent full-year annual bonuses that
you
received under the MIP without giving effect to the preceding exclusions, (2)
if
you have received fewer than three full-year bonuses under the MIP, the term
“bonus amount” will be the average of any full-year annual bonuses
you received under the MIP and, for this purpose only, 100% of your target
bonus
under the MIP in effect immediately prior to your Date of Termination will
be
treated as having been received by you in addition to any actual full-year
bonuses, and (3) if any full-year bonus referred to above was determined using
a
formula based on a percentage of your business unit pre-tax income or other
similar measure of business unit operating results, such bonus for purposes
of
this calculation shall not exceed the greater of 100% of your annual base salary
in effect immediately prior to your Date of Termination or 100% of your annual
base salary in effect immediately prior to the change in control.
(v) If,
within thirty-six (36) months after a change in control of the Company, your
employment by the Company shall be terminated (a) by the Company other than
for
Cause, Disability or Retirement or (b) by you for Good Reason, then the Company
shall maintain in full force and effect, for the continued benefit of you and
your spouse and dependents for a period terminating on the earliest of (a)
eighteen (18) months the Date of Termination, (b) the commencement date of
equivalent benefits from a new employer or (c) your normal retirement date
under
the terms of the First Horizon National Corporation Pension Plan, as amended
(or
any successor or substitute plan or plans of the Company), the medical, dental
and life insurance benefits provided to you and your spouse and dependents
in
which you were entitled to participate immediately prior to the Date of
Termination (or, if more favorable to you, the benefits provided under such
plans, on a plan by plan basis, in which you were entitled to participate
immediately prior to the change in control), provided that your continued
participation is possible under the general terms and provisions of such plans
(and any applicable funding media) and you continue to pay an amount equal
to
your contribution as in effect prior to the change in control or your Date
of
Termination, as applicable to the benefit provided under such plans for such
participation. If, at the end of eighteen (18) months after the
Termination Date, you have not reached your normal retirement date and you
have
not previously received or are not then receiving equivalent benefits from
a new
employer, the Company shall arrange, at its sole cost and expense, to enable
you
to convert your and your spouse's and dependents' coverage under such plans
to
individual policies or programs upon the same terms as employees of the Company
may apply for such conversions. Following your termination of
employment, your accrued benefits under the Company's Plans shall be paid
pursuant to the terms of such Plans.
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(vi) If,
within thirty-six (36) months after a change in control of the Company, your
employment by the Company shall be terminated (a) by the Company other than
for
Cause, Disability, death or Retirement or (b) by you for Good Reason, disability
or retirement all stock options, shares of restricted stock or other stock-based
awards, in each case granted following January 1, 2007 pursuant to any
stock-based incentive plan of the Company, that are then outstanding and
unvested in accordance with the terms and conditions of the grant or award
shall
become fully vested upon the Date of Termination (and, in the case of
stock-options and similar awards, remain exercisable for the greater of (I)
the
period remaining for exercise provided by the terms of each applicable award
or
its related plan or (II) 90 days after the Date of Termination or, if earlier,
until they would have expired but for your termination. If your employment
by
the Company shall be terminated on account of Retirement, your stock options
and
similar awards will remain exercisable for thirty-six (36) months after the
Date
of Termination or, if earlier, until they would have expired but for your
termination).
(vii) Except
as specifically provided in paragraph (v) above, the amount of any payment
provided for in this Section 5 shall not be reduced, offset or subject to
recovery by the Company by reason of any compensation earned by you as the
result of employment by another employer after the Date of Termination, or
otherwise.
(viii) If,
within thirty-six (36) months after a change in control of the Company, your
employment by the Company shall be terminated (a) by the Company other than
for
Cause, Disability or Retirement or (b) by you for Good Reason, then the Company
shall provide you with reasonable outplacement services for the period through
the last day of the second calendar year following the calendar year during
which your termination of employment occurred.
(ix) Anything
in this Agreement to the contrary notwithstanding, in the event it shall be
determined that any payment, award, benefit or distribution (or any acceleration
of any payment, award, benefit or distribution) by the Company (or any of its
Affiliates) or any entity which effectuates a change in control (or any of
its
affiliated entities) to you or for your benefit (whether pursuant to the terms
of this Agreement or otherwise, but determined without regard to any additional
payments required under this Section 5(ix)) (the "Payments") would be subject
to
the excise tax imposed by Section 4999 of the Code, or any interest or penalties
are incurred by you 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 Company shall pay to you (within thirty days
from
such determination) an additional payment or payments (collectively, a "Gross-Up
Payment") in an amount such that after payment by you of all taxes (including
any Excise Tax) imposed upon the Gross-Up Payment, you retain an amount of
the
Gross-Up Payment equal to the sum of (x) the Excise Tax imposed upon the
Payments and (y) the product of any deductions disallowed because of the
inclusion of the Gross-up Payment in your adjusted gross income and the highest
applicable marginal rate of federal income taxation for the
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9
calendar
year
in which the Gross-up Payment is to be made. For purposes of determining
the amount of the Gross-up Payment, you shall be deemed to (i) pay federal
income taxes at the highest marginal rates of federal income taxation for
the
calendar year in which the Gross-up Payment is to be made, (ii) pay applicable
state and local income taxes at the highest marginal rate of taxation for
the
calendar year in which the Gross-up Payment is to be made, net of the maximum
reduction in federal income taxes which could be obtained from deduction
of such
state and local taxes and (iii) have otherwise allowable deductions for
federal
income tax purposes at least equal to the Gross-up Payment. The receipt of
a Gross-Up Payment shall in no event be conditioned upon your termination
of
employment or your receipt of any other benefits under this Agreement.
Notwithstanding the foregoing provisions of this Section 5(ix), if it shall
be
determined that you are entitled to a Gross-Up Payment, but that the Payments
would not be subject to the Excise Tax if the Payments were reduced by
an amount
that is less than the greater of (A) 5% of the portion of the Payments
that
would be treated as parachute payments under Section 280G of the Code and
(B)
$50,000, then the amounts payable to you under this Agreement shall be
reduced
(but not below zero) to the maximum amount that could be paid to you without
giving rise to the Excise Tax (the Safe Harbor Cap), and no Gross-Up Payment
shall be made to you. The reduction of the amounts payable hereunder, if
applicable, shall be made by reducing first the payments under Section
5(iv)(C),
unless an alternative method of reduction is elected by you. For purposes
of reducing the Payments to the Safe Harbor Cap, only amounts payable under
this
Agreement (and no other Payments) shall be reduced. If the reduction of
the amounts payable hereunder would not result in a reduction of the Payments
to
the Safe Harbor Cap, no amounts payable under this Agreement shall be reduced
pursuant to this provision.
Subject
to
the foregoing provisions of this Section 5(ix), all determinations required
to
be made under this Section 5, including whether and when a Gross-Up Payment
or
reduction to the Safe Harbor Cap is required, the amount of such Gross-Up
Payment or reduction to the Safe Harbor Cap and the assumptions to be utilized
in arriving at such determinations, shall be made by the public accounting
firm
that is retained by the Company as of the date immediately prior to the change
in control (the "Accounting Firm") which shall provide detailed supporting
calculations both to the Company and you within fifteen (15) business days
of
the receipt of notice from the Company or you that there has been a Payment,
or
such earlier time as is requested by the Company (collectively, the
"Determination"). In the event that the Accounting Firm is serving as
accountant or auditor for the individual, entity or group effecting the change
in control, the Company shall appoint another nationally recognized public
accounting firm to make the determinations required hereunder (which accounting
firm shall then be referred to as the Accounting Firm hereunder). All
fees and expenses of the Accounting Firm shall be borne solely by the Company
and the Company shall enter into any agreement requested by the Accounting
Firm
in connection with the performance of the services hereunder. The
Gross-up Payment under this Section 5(ix) with respect to any Payments
shall be made no later than thirty (30) days following such
Payment. If the Accounting Firm determines that no Excise Tax is
payable by you, it shall furnish you with a written opinion to such effect,
and
to the effect that failure to report the Excise Tax, if any, on your applicable
federal income tax return will not result in the imposition of a negligence
or
similar penalty. The Determination by the Accounting Firm shall be
binding upon the Company and you.
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As
a result
of the uncertainty in the application of Section 4999 of the Code at the time
of
the Determination, it is possible that a Gross-Up Payment which will not have
been made by the Company should have been made ("Underpayment") or a Gross-Up
Payment is made by the Company which should not have been made ("Overpayment"),
consistent with the calculations required to be made hereunder. In
the event that you thereafter are required to make payment of any Excise Tax
or
additional Excise Tax, the Accounting Firm shall determine the amount of the
Underpayment that has occurred and any such Underpayment (together with interest
at the rate provided in Section 1274(b)(2)(B) of the Code) shall be promptly
paid by the Company to you or for your benefit (but in any event no later than
by the end of your taxable year next following your taxable year in which the
Underpayment of Excise Tax is remitted). In the event the amount of
the Gross-up Payment exceeds the amount necessary to reimburse you for your
Excise Tax, the Accounting Firm shall determine the amount of the Overpayment
that has been made and any such Overpayment (together with interest at the
rate
provided in Section 1274(b)(2) of the Code) shall be promptly paid by you (but
only to the extent you have received a refund if the applicable Excise Tax
has
been paid to the Internal Revenue Service) to or for the benefit of the
Company. You shall cooperate, to the extent your expenses are
reimbursed by the Company, with any reasonable requests by the Company in
connection with any contests or disputes with the Internal Revenue Service
in
connection with the Excise Tax.
(x) To
the extent you would otherwise be entitled to any payment during the six months
beginning on termination of your employment that would be subject to the
additional tax under Section 409A, (i) the payment will not be made to you
and
instead will be made to a trust in compliance with Revenue Procedure 92-64
(the
"Rabbi Trust") and (ii) the payment, together with earnings on it, will be
paid
to you on the earlier of the six-month anniversary of your date of termination
or your death or disability if you are a specified employee (within the meaning
of Section 409A of the Code (“Section 409A”) and as determined pursuant to
procedures established by the Company). Similarly, to the extent you
would otherwise be entitled to any benefit (other than a payment) during the
six
months beginning on termination of your employment that would be subject to
the
Section 409A additional tax, the benefit will be delayed and will begin being
provided (together, if applicable, with an adjustment to compensate you for
the
delay) on the earlier of the six-month anniversary of your date of termination
or your death or disability (within the meaning of Section 409A) if you are
a
specified employee.
The
Company will bear all costs related to the establishment and operation of the
Rabbi Trust. It is understood that the Rabbi Trust may also be used
for similar arrangements with other executives of the Company.
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6.
|
Obligations
Following Termination of
Employment.
|
(i) During
your employment with the Company, and for a one year period after
your employment terminates for any reason, your shall not, in any
manner, directly or indirectly (without the prior written consent of the
Company) Solicit anyone who is then an employee of the Company (or who was
an
employee of the Company within the prior 12 months) to resign from the Company
or to apply for or accept employment with any other business or
enterprise. For this purpose, “Solicit” means any direct or indirect
communication of any kind, regardless of who initiates it, that in any way
invites, advises, encourages or requests any person to take or refrain from
taking any action.
11
(ii) During
the term of this Agreement and following termination of your employment for
any
reason, you shall not, in any manner, directly or indirectly make or publish
any
statement (orally or in writing) that would libel, slander, disparage,
denigrate, ridicule or criticize the Company, any of its affiliates or any
of
their employees, officers or directors.
(iii) You
agree that you will cooperate (i) with the Company in the defense of any legal
claim involving any matter that arose during your employment with the Company,
and (ii) with all government authorities on matters pertaining to any
investigation, litigation or administrative proceeding concerning the Company.
The Company will reimburse you for any reasonable travel and out of pocket
expenses incurred by you in providing such cooperation.
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7.
|
Successors; Binding Agreement.
|
(i) The
Company will seek, by written request at least five (5) business days prior
to
the time a Person becomes a Successor (as hereinafter defined), to have such
Person, by agreement in form and substance satisfactory to you, assent to the
fulfillment of the Company's obligations under this
Agreement. Failure of such Person to furnish such assent by the later
of (A) three (3) business days prior to the time such Person becomes a Successor
or (B) two (2) business days after such Person receives a written request to
so
assent shall constitute Good Reason for termination by you of your employment
if
a change in control of the Company occurs or has occurred. For
purposes of this Agreement, "Successor" shall mean any Person that succeeds
to,
or has the practical ability to control (either immediately or with the passage
of time), the Company's business directly, by merger or consolidation, or
indirectly, by purchase of the Company's voting securities or
otherwise.
(ii) This
Agreement shall inure to the benefit of and be enforceable by your personal
or
legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If you should die following your
termination of employment while any amount would still be payable to you
hereunder if you had continued to live, all such amounts, unless otherwise
provided herein, shall be paid in accordance with the terms of this Agreement
to
your devisee, legatee or other designee or, if there be no such designee, to
your estate.
(iii) For
purposes of this Agreement, the "Company" shall include any corporation or
other
entity which is the surviving or continuing entity in respect of any merger,
consolidation or form of business combination in which the Company ceases to
exist.
8. Fees and Expenses; Mitigation. (i) The
Company shall reimburse you, on a current basis upon receipt of reasonable
written evidence of such fees and expenses, for all legal fees and related
expenses incurred by you in connection with this Agreement (including claims
under the First Horizon National Corporation Directors and Executives Deferred
Compensation Plan, or any successor plan or plans thereto) following a change
in
control of the Company, including, without limitation, (a) all such fees
and expenses, if any, incurred in contesting or disputing any termination of
your employment or incurred by you in seeking advice with respect to the matters
set forth in Section 5(ix) hereof or (b) your seeking to obtain or enforce
any
right or benefit provided by this Agreement, in each case, regardless of whether
or not your claim is upheld by a court of competent jurisdiction; provided,
however, you shall be required to repay any such amounts to the Company to
the
extent that a court issues a final and non-appealable order setting forth the
determination that the position taken by you was frivolous or advanced by you
in
bad faith. The amount of reimbursement for fees and expenses for which you
may
be reimbursed during a calendar year shall not affect the amount of fees and
expenses for which you are eligible for reimbursement in any other calendar
year. Your right to reimbursement for fees and expenses is not
subject to liquidation or exchange for another benefit.
12
(ii) You
shall not be required to mitigate the amount of any payment the Company becomes
obligated to make to you in connection with this Agreement, by seeking other
employment or otherwise.
9. Taxes. All
payments to be made to you under this Agreement will be subject to required
withholding of federal, state and local income and employment
taxes.
10. Survival. The
respective obligations of, and benefits afforded to, the Company and you as
provided in Sections 5, 7(ii), 8, 9, 14 and 15 of this Agreement shall survive
termination of this Agreement.
11. Notice. (i) For
the purposes of this Agreement, notices and all other communications provided
for in the Agreement shall be in writing and shall be deemed to have been duly
given when delivered or mailed by United States registered mail, return receipt
requested, postage prepaid and addressed, in the case of the Company, to the
address set forth on the first page of this Agreement or, in the case of the
undersigned employee, to the address set forth below his signature, provided
that all notices to the Company shall be directed to the attention of the
Chairman of the Board, Chief Executive Officer or President of the Company,
with
a copy to the Secretary of the Company, or to such other address as either
party
may have furnished to the other in writing in accordance herewith, except that
notice of change of address shall be effective only upon receipt.
(ii) A
written notice of your Date of Termination by the Company or you, as the case
may be, to the other, shall (i) indicate the specific termination provision
in
this Agreement relied upon, (ii) to the extent applicable, set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of your employment under the provision so indicated and (iii)
specify the termination date (which date shall be not less than fifteen (15)
(thirty (30), if termination is by the Company for Disability) nor more than
sixty (60) days after the giving of such notice). The failure by you
or the Company to set forth in such notice any fact or circumstance which
contributes to a showing of Good Reason or Cause shall not waive any right
you
or the Company have hereunder or preclude you or the Company from asserting
such
fact or circumstance in enforcing your or the Company's rights
hereunder.
13
12. Miscellaneous. No
provision of this Agreement may be modified, waived or discharged unless such
modification, waiver or discharge is agreed to in a writing signed by you and,
on behalf of the Company, by the Chairman of the Board, Chief Executive Officer
or President of the Company. No waiver by either party hereto at any
time of any breach by the other party hereto of, or of 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 expressly
set
forth in this Agreement. The validity, interpretation, construction
and performance of this Agreement shall be governed by the laws of the State
of
Tennessee.
13. Validity. The
invalidity or unenforceability of any provision 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.
14. Employee's Commitment. You
agree that subsequent to your period of employment with the Company, you will
not at any time communicate or disclose to any unauthorized person, without
the
written consent of the Company, any proprietary processes of the Company or
any
Affiliate or other confidential information concerning their business, affairs,
products, suppliers or customers which, if disclosed, would have a material
adverse effect upon the business or operations of the Company and its
Affiliates, taken as a whole; it being understood, however, that the obligations
under this Section 14 shall not apply to the extent that the aforesaid matters
(a) are disclosed in circumstances where you are legally required to do so
or
(b) become generally known to and available for use by the public otherwise
than
by your wrongful act or omission.
15. Related Agreements. To
the extent that any provision of any other agreement between the Company or
any
of its Subsidiaries and you shall limit, qualify or be inconsistent with any
provision of this Agreement, then for purposes of this Agreement, while the
same
shall remain in force, the provision of this Agreement shall control and such
provision of such other agreement shall be deemed to have been superseded,
and
to be of no force or effect, as if such other agreement had been formally
amended to the extent necessary to accomplish such purpose. Moreover,
the benefits provided under this Agreement shall offset any and all benefits
provided under any severance plan, program or similar arrangement (including
any
severance provisions of any employment agreement) of the Company and its
Subsidiaries.
The
Company will not take any action that would expose any payment or benefit to
you
under this Agreement or under any plan, arrangement or other agreement to the
additional tax of Section 409A, unless (i) the Company is obligated to
take the action under an agreement, plan or arrangement to which you are a
party, (ii) you request the action, (iii) the Company advises you in writing
that the action may result in the imposition of the additional tax and
(iv) you subsequently request the action in a writing that acknowledges you
will
be responsible for any effect of the action under Section 409A. The
Company will hold you harmless for any action it may take in violation of this
paragraph.
It
is our intention that the benefits and rights to which you could become entitled
in connection with termination of employment covered under this Agreement comply
with Section 409A. If you or the Company believes, at any time, that
any of such benefit or right does not comply, it will promptly advise the other
and will negotiate reasonably and in good faith to amend the terms of such
arrangement such that it complies (with the most limited possible economic
effect on you and on the Company).
14
16. Employment. Employment
with the Company for purposes of this Agreement shall include employment with
any of its Subsidiaries or with any entity which directly or indirectly
beneficially owns more than 50% of the voting securities of the Company
("Parent").
17. Counterparts. This
Agreement may be executed in several counterparts, each of which shall be deemed
to be an original but all of which together will constitute one and the same
instrument.
15
If
this
letter correctly sets forth our agreement on the subject matter hereof, kindly
signand return to the Company the enclosed copy of this letter which will then
constitute ouragreement on this subject.
Sincerely,
FIRST
HORIZON
NATIONAL CORPORATION
By
_______________________________________
Name: Xxxxxxx
X. Xxxxxxx
Title: Manager
– Total Rewards
Agreed
to
this __ day
of ,
200___.
_______________________________
(insert
full
name)
Home
Address:
_______________________________
_______________________________
_______________________________
Title:
_______________________________
_______________________________
16
