FIRST HORIZON CORPORATION ITEM 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers
(e) Adoption of Executive Change in Control Severance Plan
On
Prior ExecutiveCIC Program
For many years,
The Board has determined to discontinue the prior CIC program. Individual CIC agreements will no longer be offered to executives. Instead, executives selected by the Compensation Committee of the Board will be invited to participate in the new CIC Plan. Legacy CIC Agreements currently in place generally will remain in place, and effectively will be "grandfathered." The prior CIC program will end over time, through attrition.
CIC Plan Overview
Like the executive CIC program, the new CIC Plan is designed to allow
The key benefit is a cash severance payment equal to a CIC Multiple multiplied by the sum of the participant's annual salary plus his or her Bonus Amount. The CIC Plan offers three Tiers of participation, each with its own CIC Multiple: the Tier 1 Multiple is 2.5; Tier 2 is 2.0; and Tier 3 is 1.5.
Cash severance is payable if a CIC event occurs and the executive's employment
terminates within 24 months after the CIC event either (i) by
Cash severance payments may be reduced to avoid a federal excise tax if the reduced (un-taxed) benefits are greater than the un-reduced (taxed) benefits. The CIC Plan has no Tax Gross-up Feature.
The CIC Plan provides for continued healthcare and life insurance benefits for
an 18-month period as allowed by tax laws. Non-disparagement, cooperation, and
non-solicitation covenants by each participant are incorporated into the CIC
Plan. The CIC Plan does not guarantee employment for any term or period.
A copy of the CIC Plan is filed with this Report as Exhibit 10.1.
Participation
Management and certain highly compensated non-management associates of
Key Definitions
The CIC Plan contains numerous defined terms; refer to Exhibit 10.1, Section 11. Three definitions are copied here for convenience:
"Change in Control" means the occurrence of any one of (and shall be deemed to have occurred on the date of the earliest to occur of) the following events:
(i) individuals who, on
Directors") cease for any reason to constitute at least a majority of the
Board, provided that any person becoming a director subsequent to that
date, 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;
(ii) any "Person" (for purposes of this definition only, as defined under
Section 3(a)(9) of the Exchange Act as used in Section 13(d) or Section
14(d) of the Exchange Act) 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's then outstanding 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 the Company or any Subsidiary, (B) by an Associate
stock ownership or Associate benefit plan or trust sponsored or maintained
by the Company or any Subsidiary, (C) by any underwriter temporarily
holding securities pursuant to an offering of such securities, or (D)
pursuant to a Non-Qualifying Transaction (as defined in paragraph (iii)
hereof);
(iii) 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 shareholders, 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 Associate 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 a majority 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
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Business Combination which satisfies all of the criteria specified in (A),
(B) and (C) above shall be deemed to be a "Non-Qualifying Transaction");
(iv) consummation of a sale of all or substantially all of the Company's assets;
or
(v) the shareholders of the Company approve a plan of complete liquidation or
dissolution of the Company.
Computations required by paragraph (iii) shall be made on and as of the date of
shareholder approval and shall be based on reasonable assumptions that will
result in the lowest percentage obtainable. Notwithstanding the foregoing, a
Change in Control of the Company shall not be deemed to have occurred solely
because any Person acquires beneficial ownership of more than twenty percent
(20%) of the
"Cause" means:
(i) a Participant's conviction of, or plea of guilty or nolo contendere (or
similar plea) to, (A) a misdemeanor charge involving fraud, false
statements or misleading omissions, wrongful taking, embezzlement,
bribery, forgery, counterfeiting, or extortion, (B) a felony charge, or
(C) an equivalent charge to those in clauses (A) and (B) in jurisdictions
which do not use those designations;
(ii) a Participant's engagement in any conduct which constitutes, or which
results in, employment or service disqualification, disbarment, or
prohibition under applicable law or regulations (including under banking,
financial industry, or securities laws or regulations);
(iii) a Participant's knowing violation of any securities or commodities laws,
any rules or regulations issued pursuant to such laws, or the rules and
regulations of any securities or commodities exchange or association of
which the Company or any of its Subsidiaries or affiliates is a member;
(iv) a Participant's substantial failure to perform his or her duties to the
Company or its Subsidiaries;
(v) a Participant's knowing and substantial breach of any contract or
agreement with the Company or its Subsidiaries;
(vi) a Participant's knowing violation of any policy of the Company or its
Subsidiaries concerning hedging, trading, or confidential or proprietary
information, or a Participant's knowing and substantial violation of any
other policy of the Company or of any of its Subsidiaries as in effect
from time to time;
(vii) a Participant's knowing and substantial unauthorized use, taking,
mis-appropriation, conversion, or disclosure of tangible or intangible
property, including information, of the Company, any of its Subsidiaries,
or of any Associate, director, customer, or client of the Company or any
of its Subsidiaries;
(viii) a Participant's deliberate engagement in any act or deliberate making of
any statement which substantially impairs, impugns, denigrates,
disparages, or negatively reflects upon the name, reputation, or business
interests of the Company or any of its Subsidiaries, or upon the name,
reputation, or business interests of any Associate, director, customer,
or client of the Company or any of its Subsidiaries; or
(ix) a Participant's deliberate engagement in any conduct substantially
detrimental to the Company or its Subsidiaries.
The determination as to whether Cause has occurred in any given instance shall be made in the sole discretion of the Board or, if so directed by the Board, by the Committee. The Board or Committee, as the case may be, shall also have the authority in its sole discretion to waive the consequences under the Plan of the existence or occurrence of any of the events, acts, or omissions constituting Cause.
"Good Reason" means, with respect to any Participant, any of the following:
(i) an adverse change in the Participant's status, title or position with the
Company as in effect immediately prior to the Change in Control, including,
without limitation, any adverse change in the Participant's status, title or
position as a result of a diminution in the Participant's duties or
responsibilities, or the
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assignment to the Participant of any duties or responsibilities which are
inconsistent with such status, title, or position as in effect immediately
prior to the Change in Control, or any removal of the Participant from, or
. . .
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
The following exhibits are filed herewith:
Exhibit # Description 10.1 Executive Change in Control Severance Plan 104 Cover Page Interactive Data File, formatted in Inline XBRL
All summaries and descriptions of documents, and of amendments thereto, set forth above are qualified in their entirety by the documents themselves, whether filed as an exhibit hereto or filed as an exhibit to a later report.
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