8-KLeadership ChangesExhibits & Filings

FIFTH THIRD BANCORP 8-K Report, Executive Changes (Feb 7, 2014)

Filed February 7, 2014For Securities:FITBFITBOFITBPFITB-PIFITB-PMFITB-PAFITBIFITB-PK

Summary

Fifth Third Bancorp (FITB) filed an 8-K on February 7, 2014, reporting on amendments and new agreements related to executive compensation and retention. The most significant information for investors pertains to changes in change-in-control agreements for two key executives: Tayfun Tuzun, Executive Vice President and Chief Financial Officer, and Frank R. Forrest, Executive Vice President & Chief Credit and Risk Officer. These amendments and new agreements are designed to provide enhanced severance and benefits in the event of a change in control combined with a termination of employment, as well as to strengthen non-competition clauses. For Mr. Tuzun, his non-competition period was extended to three years, and his severance benefits in specific scenarios were increased to 2.99 times base salary plus target annual cash incentive, with a corresponding extension of insurance benefits to three years. Mr. Forrest's new agreement includes a two-year non-competition period and severance benefits of two times base salary plus target annual cash incentive, with two years of insurance benefits, along with certain retirement benefits.

Key Highlights

  • 1Fifth Third Bancorp amended the change-in-control agreement for CFO Tayfun Tuzun, effective February 3, 2014.
  • 2Mr. Tuzun's non-competition agreement was extended from 1 year to 3 years.
  • 3In specific change-in-control and termination scenarios, Mr. Tuzun's severance benefits were increased to 2.99 times his base salary plus target annual cash incentive.
  • 4Mr. Tuzun's post-termination insurance benefits in such scenarios were extended from 1 year to 3 years.
  • 5A new change-in-control agreement was entered into with Frank R. Forrest, EVP & Chief Credit and Risk Officer, effective February 3, 2014.
  • 6Mr. Forrest's agreement includes a 2-year non-competition period.
  • 7In specific change-in-control and termination scenarios, Mr. Forrest's severance benefits will be 2.0 times his base salary plus target annual cash incentive, with 2 years of insurance benefits.

Frequently Asked Questions

The primary purpose of these amendments and the new agreement is to strengthen executive retention and align executive interests with those of the company and its shareholders, particularly in scenarios involving a change in control. The changes provide enhanced financial security for key executives if their employment is terminated under specific circumstances following a change in control, while also extending non-competition periods to protect the company's interests.

Mr. Tuzun's severance benefits in the event of both a change in control and termination of employment under certain circumstances have been significantly increased. They will now be 2.99 times his base salary plus target annual cash incentive compensation, up from 1.0 times his base salary plus target annual cash incentive compensation under the previous agreement. Additionally, the period for which insurance benefits are paid has been extended from 1 year to 3 years.

Mr. Forrest's new agreement includes a 2-year non-competition clause. In the event of both a change in control and termination of employment under certain circumstances, he is entitled to severance benefits equal to 2.0 times his base salary plus target annual cash incentive compensation, and insurance benefits will be paid for a period of 2 years. The agreement also specifies certain retirement benefits.

The amendments and new agreements were partly in recognition of Mr. Tuzun's additional duties and responsibilities undertaken since his prior agreement. For both executives, these agreements are standard practice for senior management to provide stability and ensure focus on company objectives, especially during periods of potential corporate transition or strategic review.