EXHIBIT 99.4
FORM OF
CHANGE OF CONTROL AGREEMENT
AGREEMENT by and between Regions Financial Corporation, a Delaware
corporation (the "Company"), and __________________ (the "Employee"), SSN
____________, dated as of the ____ day of __________, 20___.
WHEREAS, The Board of Directors of the Company (the "Board") recognizes the
possibility of the sale of the Company or that a Change of Control (as
hereinafter defined) could occur, which could result in significant distraction
of the Company's key personnel because of the uncertainties inherent in such a
situation; and
WHEREAS, the Board has determined that it is essential and in the best
interest of the Company and its stockholders to be able to retain the services
of the Employee notwithstanding the possibility of a sale or other Change of
Control and to ensure the Employee's continued dedication and efforts in such an
event without undue concern for the Employee's personal financial and employment
security;
NOW, THEREFORE, in consideration of the respective agreements of the
parties set forth herein, it is hereby agreed as follows:
1. Certain Definitions.
(a) "Accrued Compensation" shall mean all amounts of compensation for
services rendered to the Company or any other Affiliate that have been
earned or accrued through the Termination Date but that have not been paid
as of the Termination Date, including (i) base salary, (ii) reimbursement
(in accordance with the Company's expense reimbursement policy) for
reasonable and necessary business expenses incurred by the Employee on
behalf of the Company during the period ending on the Termination Date,
(iii) vacation pay and (iv) bonuses and incentive compensation: provided,
however, that Accrued Compensation shall not include any amounts described
in clause (i) or clause (iv) that have been deferred pursuant any salary
reduction or deferred compensation elections made by the Employee.
(b) "Affiliate" shall mean any entity directly or indirectly,
controlled by, controlling or under common control with the Company or any
corporation or other entity acquiring, directly or indirectly, all or
substantially all the assets and business of the Company, whether by
operation of law or otherwise.
(c) "Base Amount" shall mean the Employee's annual base salary at the
rate in effect at the date hereof or, if greater, at any time thereafter,
determined without regard to any salary reduction or deferred compensation
elections made by the Employee.
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(d) "Bonus Amount" shall mean the highest bonus or bonuses paid or
payable under the Company's Management Incentive Bonus Plan in respect of
any of the three (3) full fiscal years ended prior to the Termination Date
or, if greater, the three (3) full fiscal years ended prior to the Change
of Control.
(e) "Cause" shall mean:
(i) the willful and continued failure of the Employee to perform
substantially the Employee's reasonably assigned duties with the
Company or one of its Affiliates (other than any such failure
resulting from incapacity due to physical or mental illness or from
the assignment to the Employee of duties with the Company or one of
its Affiliates that would constitute Good Reason), which failure
continued for a period of at least thirty (30) days after a written
demand for substantial performance, signed by a duly authorized
officer of the Company, has been delivered to the Employee specifying
the manner in which the Employee has failed substantially to perform,
or
(ii) the willful engaging by the Employee in illegal conduct or
gross misconduct which is materially and demonstrably injurious to the
Company; provided, however, that no termination of the Employees
employment shall be for Cause as set forth in this Section 1(e)(ii)
until (A) there shall have been delivered to the Employee a copy of a
written notice, signed by a duly authorized officer of the Company,
setting forth that the Employee was guilty of the conduct described in
this Section 1(e)(ii) and specifying the particulars thereof in
detail, and (B) the Employee shall have been provided an opportunity
to be heard in person by the Board.
For purposes of this provision, no act or failure to act, on the part
of the Employee, shall be considered "willful" unless it is done, or
omitted to be done, by the Employee in bad faith or without reasonable
belief that the Employee's action or omission was in the best interests of
the Company. Any act, or failure to act, based upon authority given
pursuant to a resolution duly adopted by the Board or upon the instructions
of a senior officer of the Company or based upon the advice of counsel for
the Company shall be conclusively presumed to be done, or omitted to be
done, by the Employee in good faith and in the best interests of the
Company. Notwithstanding anything set forth in this Agreement to the
contrary, no failure to perform by the Employee after a Notice of
Termination is given to the Company by the Employee shall constitute Cause
for the purposes of this Agreement.
(f) "Change of Control" shall mean:
(i) an acquisition (other than directly from the Company) of any
voting securities of the Company (the "Voting Securities") by any
"Person" (as the term
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person is used for the purposes of Section 13(d) or 14(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")
immediately after which such Person has beneficial ownership (within
the meaning of Rule l3d-3 promulgated under the Exchange Act) of 50%
or more of the combined voting power of the Company's then-outstanding
Voting Securities; provided, however, in determining whether or not a
Change of Control has occurred, Voting Securities which are acquired
in a "Non-Control Acquisition" (as hereinafter defined) shall not
constitute an acquisition which would constitute a Change of Control.
A "Non-Control Acquisition" shall mean (A) an acquisition by (A) any
employee benefit plan (or related trust) sponsored or maintained by
the Company or any Affiliate of the Company, (B) by the Company or (C)
any Person in connection with a Non-Control Transaction (as heriafter
defined).
(ii) individuals who, as of the date hereof, constitute the Board
(the "Incumbent Board") cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual becoming
a director subsequent to the date hereof whose election, or nomination
for election by the Company's shareholders, was approved by a vote of
at least a majority of the directors then comprising the Incumbent
Board shall be considered as though such individual were a member of
the Incumbent Board, but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a result of an
actual or threatened election contest with respect to the election or
removal of directors or other actual or threatened solicitation of
proxies or consents by or on behalf of a Person other than the Board;
or
(iii) The consummation of:
(A) A merger, consolidation or reorganization with or into the
Company in which securities of the Company are issued, unless such
merger, consolidation or reorganization is a "Non-Control
Transaction". A "Non-Control Transaction" is a merger, consolidation
or reorganization with or into the Company or in which securities of
the Company are issued where:
(I) the stockholders of the Company immediately before such
merger, consolidation, or reorganization, own, directly or
indirectly, at least fifty-one percent (51%) of the combined
voting power of the outstanding voting securities of the
corporation resulting from such merger, consolidation or
reorganization (the "Surviving Corporation") in substantially the
same proportion as their ownership of the Voting Securities
immediately before such merger, consolidation or reorganization,
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(II) the individuals who were members of the Board
immediately prior to the execution of the agreement providing for
such merger, consolidation or reorganization constitute at least
a majority of the members of the board of directors of the
Surviving Corporation or a corporation owning directly or
indirectly fifty-one percent (51%) or more of the Voting
Securities of the Surviving Corporation, and
(III) no person other than (i) the Company, (ii) any
subsidiary, (iii) any employee benefit plan (or any trust forming
a part thereof) maintained immediately prior to such merger,
consolidation, or reorganization by the Company owns fifty
percent (50%) or more of the combined voting power of the
Surviving Corporation's then-outstanding voting securities;
(B) A complete liquidation or dissolution of the Company; or
(C) The sale or other disposition of all or substantially all of
the assets of the Company to any Person.
Notwithstanding the foregoing, a Change of Control shall not be deemed
to occur solely because any Person (the "Subject Person") acquired
Beneficial Ownership of more than the permitted amount of the outstanding
Voting Securities as a result of the acquisition of Voting Securities by
the Company which, by reducing the number of Voting Securities outstanding,
increases the proportional number of shares Beneficially Owned by the
Subject Person, provided that if a Change of Control would occur (but for
the operation of this sentence) and after such acquisition of Voting
Securities by the Company, the Subject Person becomes the Beneficial Owner
of any additional Voting Securities, then a Change of Control shall occur.
(g) "Company" shall mean Regions Financial Corporation, its successors
and assigns.
(h) "Disability" shall mean that the Employee has become eligible to
participate in the Company's long-term disability plan.
(i) "Effective Date shall mean the first date on which a Change of
Control occurs.
(j) "Good Reason" shall mean:
(i) the occurrence, after a Change of Control of any of the
following events or conditions:
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(A) a change in the Employee's status, title, position or
responsibilities (including reporting responsibilities) which, in
the Employee's reasonable judgement, represents a materially
adverse change from his status, title, position or
responsibilities as in effect immediately prior thereto; the
assignment to the Employee of any duties or responsibilities
which, in the Employee's reasonable judgement, are materially
inconsistent with his status, title, position, responsibilities;
or any removal of the Employee from or failure to reappoint or
reelect him to any such offices or positions, except in
connection with the termination of employment of the Employee for
Disability, Cause, as a result of the Employee's death or by the
Employee other than for Good Reason;
(B) a reduction in aggregate of the Employee's annual base
salary and bonus below the aggregate of the Base Amount and the
Bonus Amount;
(C) the required relocation of the Employee's principal
employment location to a location more than thirty-five (35)
miles from the Employee's principal employment location
immediately prior to the Change of Control;
(D) the failure by the Company to pay to the Employee any
portion of the Employee's current compensation or to pay to the
Employee any portion of an installment of deferred compensation
under any deferred compensation program of the Company in which
the Employee participated, within seven (7) days of the date such
compensation is due;
(E) the failure by the Company to (I) continue in effect
(without reduction in benefit level, and/or award opportunities)
any material compensation or employee benefit plan in which the
Employee was participating prior to the Change of Control, unless
a substitute or replacement plan has been implemented which
provides substantially the same compensation or benefits to the
Employee or (II) provide the Employee with compensation and
benefits, in the aggregate, at least equal (in terms of benefit
levels and/or award opportunities) to those provided for under
each compensation or other employee benefit plan, program and
practice in which the Employee was participating immediately
prior to the Change of Control;
(F) any purported termination of the Employee's employment
by the Company which is not effected pursuant to a Notice of
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Termination satisfying the terms set forth in the definition of
Notice of Termination (and, if applicable, the terms set forth in
the definition of Cause); or
(G) a termination of employment by the Employee for any
reason during the 30-day period immediately following the first
anniversary of the Change of Control.
(ii) Any event described in subsection (j)(A) through (F) above
which occurs within six months prior to a Change of Control and which
the Employee reasonably demonstrates was at the request of a third
party or otherwise arose in connection with or in anticipation of a
Change of Control which has been threatened or proposed and which
actually occurs, shall constitute Good Reason for the purposes of this
Agreement notwithstanding that it occurred prior to a Change of
Control
(k) "Notice of Termination" shall mean written notice, following a
Change of Control, of termination of the Employee's employment signed by
the Employee if to the Company or by a duly authorized officer of the
Company if to the Employee, which indicates the specific termination
provision in this Agreement, if any, relied upon and which sets forth in
reasonable detail the facts and circumstances claimed to provide the basis
for termination of the Employee's employment under the provision so
indicated.
(l) "Termination Date" shall mean (i) in the case of the Employee's
death, the date of the Employee's death, (ii) if the Employee's employment
is terminated for Disability, thirty (30) days after Notice of Termination
is given (provided that the Employee shall not have returned to the
performance of the Employee's duties on a full-time basis during such
thirty (30) day period and (iii) if the Employee's employment is terminated
for any other reason, the date specified in the Notice of Termination
(which, in the case of a termination for Cause shall not be less than
thirty (30) days, and in the case of a termination for Good Reason shall
not be more than sixty (60) days, from the date such Notice of Termination
is given); provided however, that if within thirty (30) days after any
Notice of Termination is given the party receiving such Notice of
Termination in good faith notifies the other party that a dispute exists
concerning the basis for the termination, the Termination Date shall be the
date on which the dispute is finally determined, either by mutual written
agreement of the parties, or by the final judgement, order or decree of a
court of competent jurisdiction (the time for appeal therefrom having
expired and no appeal having been taken). Notwithstanding the pendency of
any such dispute, the Company shall continue to pay the Employee the Base
Amount and continue the Employee as a participant in all compensation,
incentive, bonus, pension, profit sharing, medical, hospitalization,
dental, life insurance and disability benefit plans in which the Employee
was participating when the Notice of Termination was given, until the
dispute is finally resolved in accordance with this
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Section whether or not the dispute is resolved in the favor of the Company,
and the Employee shall not be obligated to repay to the Company any amounts
paid or benefits provided pursuant to this sentence.
2. Term of Agreement. This Agreement shall commence as of the date hereof,
and shall continue in effect for a two (2) year term unless extended as
hereinafter provided. On each monthly anniversary date of this Agreement, the
term of this Agreement shall automatically be extended for one additional month
unless prior to any such monthly anniversary date, the Company shall give
written notice to the Employee to fix the term of this Agreement to a definite
two (2) year term from the date of such notice. Upon receipt of such notice by
the Employee, no further automatic extensions shall occur. Notwithstanding the
foregoing, the term of this Agreement shall not be extended beyond the first
month during which the Employee attains age sixty-five (65). If the Employee
voluntarily terminates the Employee's employment with the Company and with its
Affiliates prior to a Change of Control, then this Agreement shall automatically
terminate.
3. Termination of Employment. If the Employee's employment with the Company
and with its Affiliates shall be terminated within twenty-four (24) months
following a Change of Control, the Employee shall be entitled to the following
compensation and benefits:
(a) If the Employee's employment with the Company and with its
Affiliates shall be terminated (i) by the Company for Cause or Disability,
(ii) by reason of the Employee's death, or (iii) by the Employee other than
for Good Reason, the Company shall pay to the Employee the Employee's
Accrued Compensation. The Employee's entitlement to any other compensation
or benefits shall be determined in accordance with the Company's employee
benefit plans and other applicable programs and practices then in effect.
(b) If the Employee's employment with the Company and with its
Affiliates shall be terminated for any reason other than as specified in
Section 3(a) above, the Company shall pay to the Employee the aggregate of
the Employee's Accrued Compensation plus an amount equal to two times the
sum of the Employee's Base Amount and Bonus Amount as severance pay and in
lieu of any further compensation for periods subsequent to the Termination
Date.
(c) The amounts provided for in Sections 3(a) and 3(b) shall be paid
in a single lump sum cash payment within thirty (30) days after the
Employee's Termination Date.
(d) The severance pay and benefits provided for in this Section 3
shall be in lieu of any other severance pay to which the Employee shall be
entitled under the Company's Severance Pay Plan or any other plan,
agreement, or arrangement of the Company or any Affiliate.
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4. Excise Tax Limitation.
(a) Anything in this Agreement to the contrary notwithstanding, in the
event it shall be determined that any benefit, payment or distribution by
the Company to or for the benefit of the Employee (whether payable or
distributable pursuant to the terms of this Agreement or otherwise) (a
"Payment") would, if paid, be subject to the excise tax (the "Excise Tax")
imposed by Section 4999 of the Internal Revenue Code of 1986 (the "Code"),
then the Payment shall be reduced to the extent necessary of avoid the
imposition of the Excise Tax. The Employee may select the Payments to be
limited or reduced.
(b) All determinations required to be made under this Section 4,
including whether an Excise Tax would otherwise be imposed and the
assumptions to be utilized in arriving at such determination, shall be made
by Ernst & Young LLP or such other certified public accounting firm as may
be designated by the Employee (the "Accounting Firm") which shall provide
detailed supporting calculations both to the Company and the Employee
within 15 business days of the receipt of Notice of Termination from the
Employee, or such earlier time as is requested by the Company. In the event
that the Accounting Firm is serving as accountant or auditor for the
individual, entity or group effecting the Change of Control, the Employee
may appoint another nationally recognized 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. Any determination by
the Accounting Firm shall be binding upon the Company and the Employee. As
a result of the uncertainty in the application of Section 4999 of the Code
at the time of the initial determination by the Accounting Firm hereunder,
it is possible that Payments hereunder will have been unnecessarily limited
by this Section 4 ("Underpayment"), consistent with the calculations
required to be made hereunder. The Accounting Firm shall determine the
amount of the Underpayment that has occurred and any such Underpayment
shall be promptly paid by the Company to or for the benefit of the
Employee.
5. Nonexclusivity of Rights. Nothing in this Agreement shall prevent or
limit the Employee's continuing or future participation in any plan, program,
policy or practice provided by the Company or any of its Affiliates and for
which the Employee may qualify, nor, subject to Section 3(d), shall anything
herein limit or otherwise affect such rights as the Employee may have under any
contract or agreement with the Company or any of its Affiliates companies.
Amounts which are vested benefits or which the Employee is otherwise entitled to
receive under any plan, policy, practice or program of or any contract or
agreement with the Company or any of its Affiliates at or subsequent to the
Termination Date shall be payable in accordance with such plan, policy, practice
or program or contract or agreement except as explicitly modified by this
Agreement.
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6. Full Settlement. The Company's obligation to make the payments provided
for in this Agreement and otherwise to perform its obligations hereunder shall
not be affected by any setoff, counterclaim, recoupment, defense or other claim,
right or action which the Company may have against the Employee or others. In no
event shall the Employee be obligated to seek other employment or take any other
action by way of mitigation of the amounts payable to the Employee under any of
the provisions of this Agreement and such amounts shall not be reduced whether
or not the Employee obtains other employment.
7. Fees and Expenses. The Company agrees to pay as incurred, to the full
extent permitted by law, all legal fees and expenses which the Employee may
reasonably incur as a result of any contest (regardless of the outcome thereof)
by the Company, the Employee or others of the validity or enforceability of, or
liability under, any provision of this Agreement or any guarantee thereof
(including as a result of any contest by the Employee about the amount of any
payment pursuant to this Agreement).
8. Successors.
(a) This Agreement is personal to the Employee and without the prior
written consent of the Company shall not be assignable by the Employee
otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the
Employee's legal representatives.
(b) This Agreement shall inure to the benefit of and be binding upon
the Company and its successors and assigns.
(c) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to the
same extent that the Company would be required to perform it if no such
succession had taken place. As used in this Agreement, "Company" shall mean
the company as hereinbefore defined and any successor to its business
and/or assets as aforesaid which assumes and agrees to perform this
Agreement by operation of law, or otherwise.
11. Miscellaneous.
(a) This Agreement shall be governed by and construed in accordance
with the laws of the State of Alabama, without reference to principles of
conflict of laws. The captions of this Agreement are not part of the
provisions hereof and shall have no force or effect. This Agreement may not
be amended or modified otherwise than by a written agreement executed by
the parties hereto or their respective successors and legal
representatives.
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(b) All notices and other communications hereunder shall be in writing
and shall be given by hand delivery to the other party or by registered or
certified mail, return receipt requested, postage prepaid, addressed as
follows:
If to the Employee: ___________________________
___________________________
___________________________
If to the Company: Regions Financial Corporation
P. O. Xxx 00000
Xxxxxxxxxx, Xxxxxxx 00000
Attention: General Counsel
or to such other address as either party shall have furnished to the other
in writing in accordance herewith. Notice and communications shall be
effective when actually received by the addressee.
(c) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.
(d) The Company may withhold from any amounts payable under this
Agreement such Federal, state, local or foreign taxes as shall be required
to be withheld pursuant to any applicable law or regulation.
(e) The Employee's or the Company's failure to insist upon strict
compliance with any provision of this Agreement or the failure to assert
any right the Employee or the Company may have hereunder, including,
without limitation, the right of the Employee to terminate employment for
Good Reason, shall not be deemed to be a waiver of such provision or right
or any other provision or right of this Agreement.
(f) The Employee and the Company acknowledge that, except as may
otherwise be provided under any other written agreement between the
Employee and the Company, the employment of the Employee by the Company is
"at will" and, subject to Section 1(j)(ii) hereof, prior the Effective
Date, the Employee's employment may be terminated by either the Employee or
the Company at any time, in which case the Employee shall have no further
rights under this Agreement.
(g) This agreement sets forth the entire agreement of the parties
hereto and supersedes all prior agreements, understandings and covenants
(except as otherwise provided herein) with respect to the subject matter
hereof. This agreement may be amended or canceled only by mutual agreement
of the parties and only in writing.
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IN WITNESS WHEREOF, the Employee has hereunto set the Employee's hand and,
pursuant to the authorization from its Board of Directors, the Company has
caused these presents to be executed in its name on its behalf, all as of the
day and year first above written.
Employee
REGIONS FINANCIAL CORPORATION
By:
-------------------------
Its: Authorized Officer
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