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Exhibit 99.1
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
AGREEMENT by and between Regions Financial Corporation, a
Delaware
corporation (the "Company") and Richard D. Horsley ("Executive"),
dated October
18, 2006 (the "Effective Date"), amending and restating the
employment agreement
first entered into on September 1, 2001 and amended on March 1,
2005 and
December 20, 2005.
The
Board of Directors of the Company (the "Board"), has determined
that it
is in the best interests of the Company and its shareholders to
assure that the
Company will have the continued dedication of Executive through the
end of 2006,
notwithstanding the anticipated merger of the Company with
AmSouth
Bancorporation. The Company also wishes to recognize that Executive
had a right
to terminate with Good Reason under prior agreements and his long
and valuable
service to the Company. Therefore, in order to accomplish these
objectives, the
Board has caused the Company to enter into this Agreement.
The
Company and Executive now also amend the Agreement to comply
with
Section 409A of the Internal Revenue Code (the "Code"). In order to
comply with
Section 409A and to take advantage of transition rules in the
Treasury
Regulations under Section 409A, this amendment and restatement is
effective
January 1, 2005, notwithstanding the fact that it is executed in
2006. The
Company and Executive agree that, in the event of ambiguity, this
Agreement is
to be interpreted to comply with Section 409A (or alternatively, to
take
advantage of any applicable exemption, exception, transition rule
or mitigation,
or any definition which excludes a payment from being deferred
compensation).
Further, strictly for purposes of clarity, the Company and
Executive acknowledge
that a Change of Control (as defined in the Agreement prior to this
amendment
and restatement) occurred on July 1, 2004 with the merger of the
Company and
Union Planters Corporation.
Notwithstanding anything to the contrary herein, the sole purpose
of the
Agreement is to amend and restate the employment agreement first
entered into by
the Company and Executive on September 1, 2001 as amended, and
including the
Career Award Agreement executed as of December 20, 2005 between the
Company and
Executive. Except as specifically provided herein, the Agreement
does not affect
the rights of Executive under any other agreements, plans or
arrangements
between the Company and Executive including, but not limited to,
deferred
compensation plans, and compensation and bonus arrangements.
NOW,
THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1.
Certain Definitions.
(a) The "409A Date" shall mean the date that is six months after
the
date of Separation from Service.
(b) "Date of Termination" shall mean (i) if Executive's employment
is
terminated other than by reason of death, the date of receipt of
the Notice of
Termination or any later date
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specified therein, as the case may be, or (ii) if Executive's
employment is
terminated by reason of death, the Date of Termination shall be the
date of
death.
(c) "Separation from Service" shall have the meaning given to it
in
Section 409A(a)(2)(A)(i) of the Code and the regulations
promulgated thereunder,
as such regulations may be changed from time to time.
(d) "Specified Employee" shall have the meaning given to it in
Section
409A(a)(2)(B)(i) of the Code and the regulations promulgated
thereunder, as such
regulations may be changed from time to time, with an
identification date of
December 31.
2.
Modifications and Clarifications to Other Plans and Agreements.
(a) Modification to SERP. Executive's benefit under the Regions
Financial Corporation Supplemental Executive Retirement Plan, as
amended
("SERP"), shall be determined by including, in the calculation of
"average
monthly compensation," 100% of bonuses paid or payable within the
averaging
period. For this purpose, bonuses shall include any portion of a
bonus that is
or was deferred, at Executive's election, into a qualified 401(k)
plan or into a
non-qualified plan of deferred compensation.
(b) Amendment of Options. All of Executive's stock options
outstanding
on the Effective Date, whether vested or unvested, if not
previously exercised,
are hereby amended in the following two respects: (i) each option
will remain
exercisable for the remainder of its original term, unless
Executive is
terminated for Cause or resigns without Good Reason prior to
December 31, 2006,
and (ii) the per-share exercise price of each such option is hereby
increased,
if applicable, to the Fair Market Value (as defined in the stock
option plan
under which such option was granted) as of October 18, 2006, the
date on which
the Compensation Committee of the Company's Board of Directors
approved the
amendment to the options.
(c) Restricted Stock. Company granted to Executive 62,268 shares
of
restricted stock pursuant to a Career Award Agreement effective
December 20,
2005, and at various other times Company granted to Executive a
total of 64,195
other shares of restricted stock (for a total of 126,463
shares).
Notwithstanding such prior agreements, such shares, if not
previously vested,
will vest, and the restrictions lapse, on the earlier of December
31, 2006 or
the termination of Executive's employment due to death, termination
by the
Company without Cause, or termination by Executive for Good Reason.
Such shares,
if not previously vested, shall be forfeited upon the termination
of Executive
by the Company for Cause prior to December 31, 2006, or termination
by Executive
without Good Reason before December 31, 2006.
(d) Performance Shares. On December 20, 2005 the Company approved
a
grant to Executive of 18,485 performance restricted shares of
Company stock,
with actual issuance of restricted shares to be determined based on
Company
financial performance for 2006 and 2007. In the event Company
financial
performance for 2006 and/or 2007 is sufficient under such grant to
result in the
issuance of restricted shares, such shares shall be issued to
Executive but such
shares shall be issued as vested unrestricted shares,
notwithstanding the fact
that Executive is no longer employed by Company on such date of
issuance.
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(e) Bonus. Executive's annual bonus for 2006 shall be payable
notwithstanding the fact that he is no longer employed by Company
on the payment
date.
(f) Medical Benefits. All medical, dental and prescription drug
benefits shall be continued for three years upon Executive's
termination of
employment on or after December 31, 2006, or in the event of
Executive's
termination for Good Reason or termination by the Company other
than for Cause,
such benefits shall be continued until December 31, 2009. In the
event of
Executive's death before December 31, 2009, Executive's spouse
shall have the
right to continue such benefits for herself on the same basis as if
Executive
were still alive. Such benefits shall be provided upon Separation
from Service.
However, if Executive is a Specified Employee, the following
provisions shall
apply until the 409A Date. To the extent such benefits are provided
under a plan
to which the "continuation coverage" provisions of Section 601, et
seq., of the
Employee Retirement Income Security Act of 1974, as amended, and
Section 4980B
of the Code ("COBRA") apply, Executive shall elect COBRA
continuation coverage
and shall pay COBRA premium payments as they come due from the Date
of
Termination to the 409A Date. Executive will be reimbursed by the
Company for
all such COBRA premium payments within 30 days after the 409A Date.
To the
extent such benefits are not provided under a plan or arrangement
to which COBRA
applies, Executive shall pay to the Company the value of such
benefits and shall
be reimbursed for such payments within 30 days after the 409A
Date.
(g) Within 30 days after the execution of this Agreement, the
Company
shall pay to Executive an amount equal to the increase (if any) in
the exercise
price of each option amended under subsection 2(b) above.
3.
Employment Period. The Company hereby agrees to continue Executive
in
its employ, and Executive hereby agrees to remain in the employ of
the Company
subject to the terms and conditions of this Agreement, for the
period through
and including December 31, 2006.
4.
Terms of Employment.
(a) Position and Duties.
(i) During the Employment Period, (A) Executive's position
(including status, offices, titles and reporting requirements),
authority,
duties and responsibilities shall be commensurate with those held,
exercised and
assigned on the Effective Date, but taking into account his
intention to retire
on December 31, 2006, and allowing for a transition of such
authority, duties
and responsibilities to other individuals in an orderly manner
before December
31, 2006, and (B) Executive's services shall be performed at the
location where
Executive was employed immediately preceding the Effective Date or
any office or
location less than 35 miles from such location.
(ii) 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 the Company and, to 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 shall not be a
violation of
this Agreement for Executive to (A) serve on corporate, civic or
charitable
boards or committees, (B) deliver lectures, fulfill speaking
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engagements or teach at educational institutions and (C) manage
personal
investments, so long as such activities do not significantly
interfere with the
performance of Executive's responsibilities as an employee of the
Company in
accordance with this Agreement. It is expressly understood and
agreed that to
the extent that any such activities have been conducted by
Executive prior to
the Effective Date, the continued conduct of such activities (or
the conduct of
activities similar in nature and scope thereto) subsequent to the
Effective Date
shall not thereafter be deemed to interfere with the performance of
Executive's
responsibilities to the Company.
(b) Compensation.
(i) Base Salary. During the Employment Period, Executive shall
receive an annual base salary ("Annual Base Salary") at a rate at
least equal to
the rate of base salary in effect on the Effective Date, paid or
payable
(including any base salary which has been earned but deferred) to
Executive by
the Company and its affiliated companies.
(ii) Annual Bonus. In addition to Annual Base Salary, Executive
shall be awarded, for each fiscal year ending during the Employment
Period, an
annual bonus (the "Annual Bonus") in cash at least equal to
Executive's highest
bonus under the Company's Management Incentive Bonus Plan, or any
comparable
bonus under any predecessor or successor plans, for the last three
full fiscal
years prior to the Effective Date (annualized in the event that
Executive was
not employed by the Company for the whole of such fiscal year) (the
"Recent
Annual Bonus"). Each such Annual Bonus shall be paid no later than
the end of
the third month of the fiscal year next following the fiscal year
for which the
Annual Bonus is awarded, unless Executive shall elect to defer the
receipt of
such Annual Bonus.
(iii) Incentive, Savings and Retirement Plans. During the
Employment Period, Executive shall be entitled to participate in
all incentive,
savings and retirement plans, practices, policies and programs
applicable
generally to other peer executives of the Company and its
affiliated companies,
but in no event shall such plans, practices, policies and programs
provide
Executive with incentive opportunities (measured with respect to
both regular
and special incentive opportunities, to the extent, if any, that
such
distinction is applicable), savings opportunities and retirement
benefit
opportunities, in each case, less favorable, in the aggregate, than
the most
favorable of those provided by the Company and its affiliated
companies for
Executive under such plans, practices, policies and programs as in
effect
immediately preceding the Effective Date.
(iv) Welfare Benefit Plans. During the Employment Period,
Executive and/or Executive's eligible dependents, as the case may
be, shall be
eligible for participation in and shall receive all benefits under
welfare
benefit plans, practices, policies and programs provided by the
Company and its
affiliated companies (including, without limitation, medical,
prescription,
dental, disability, employee life, group life, accidental death and
travel
accident insurance plans and programs) to the extent applicable
generally to
other peer executives of the Company and its affiliated companies,
but in no
event shall such plans, practices, policies and programs provide
Executive with
benefits which are less favorable, in the aggregate, than such
plans, practices,
policies and programs in effect for Executive immediately preceding
the
Effective Date.
(v) Expenses. During the Employment Period, Executive shall be
entitled to receive prompt reimbursement for all reasonable
expenses incurred by
Executive in accordance
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with the policies, practices and procedures of the Company and its
affiliated
companies in effect for Executive immediately preceding the
Effective Date.
(vi) Fringe Benefits. During the Employment Period, Executive
shall be entitled to fringe benefits, including, without
limitation, tax and
financial planning services, payment of club dues, and, if
applicable, use of an
automobile and payment of related expenses, in accordance with the
plans,
practices, programs and policies of the Company and its affiliated
companies in
effect for Executive immediately preceding the Effective Date.
(vii) Office and Support Staff. During the Employment Period,
Executive shall be entitled to an office or offices of a size and
with
furnishings and other appointments, and to exclusive personal
secretarial and
other assistance, commensurate with the foregoing provided to
Executive by the
Company and its affiliated companies immediately preceding the
Effective Date.
Notwithstanding the above, if Executive's office is moved to a
different
location at Executive's request, Executive's entitlement to office,
furnishings,
appointments and secretarial services and other assistance shall be
based on the
resources that can reasonably be made available at such other
location.
(viii) Vacation. During the Employment Period, Executive shall
be
entitled to paid vacation in accordance with the most favorable
plans, policies,
programs and practices of the Company and its affiliated companies
as in effect
for Executive immediately preceding the Effective Date.
5.
Termination of Employment.
(a) Death. Executive's employment shall terminate automatically
upon
Executive's death during the Employment Period.
(b) Cause. The Company may terminate Executive's employment during
the
Employment Period for Cause. For purposes of this Agreement,
"Cause" shall mean:
(i) the willful and continued failure of Executive to perform
substantially Executive'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 Executive of
duties that
would constitute Good Reason under Section 5(c)(i), and
specifically excluding
any failure by Executive, after reasonable efforts, to meet
performance
expectations), which failure continues for a period of at least
