<PAGE>

                                                                    Exhibit 10-m


                              EMPLOYMENT AGREEMENT
                              --------------------


     AGREEMENT by and between AmSouth Bancorporation, a Delaware corporation
(the "Company") and C. Dowd Ritter (the "Executive") dated as of the 4th day of
October, 1999.

     The Company 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 the Executive. Therefore, in order to accomplish this objective,
the Board of Directors of the Company has caused the Company to enter into this
Agreement.


     NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

     1.  Effective Date.  The "Effective Date" shall mean the date hereof, and
         --------------
the Executive's Employment Agreement dated December 18, 1997 (the "Prior
Agreement"), is hereby superseded and is void, except as provided in Section
3(b)(i) below.

     2.  Employment Period.  The Company hereby agrees to employ the Executive,
         -----------------
and the Executive hereby agrees to enter into the employ of the Company subject
to the terms and conditions of this Agreement, for the period commencing on the
Effective Date and ending on the fifth anniversary thereof (the "Employment
Period"); provided, however, that commencing on the date one year after the date
hereof, and on each annual anniversary of such date (such date and each annual
anniversary thereof shall be hereinafter referred to as the "Renewal Date"),
unless previously terminated, the Employment Period shall be automatically
extended so as to terminate on the earlier of (x) five years from such Renewal
Date and (y) the Executive's 62nd birthday, unless at least 60 days prior to the
Renewal Date the Company shall give notice to the Executive that the Employment
Period shall not be so extended.

     3.  Terms of Employment.  (a)  Position and Duties.  (i)  (A) During the
         -------------------        -------------------
Employment Period, the Executive shall serve as Chief Executive Officer and
President of the Company with such authority, duties and responsibilities as are
commensurate with such position and as may be consistent with such position and
(B) the Executive's services shall be performed in Birmingham, Alabama.  Upon
the earlier of (x) January 2, 2001, or (y) Dennis C. Bottorff ceasing to be
Chairman of the Company, the Executive shall be elected Chairman of the
Company's Board of Directors for the remainder of the Employment Period.  The
Executive shall serve on the Company's Board of Directors during the entire
Employment Period.

     (ii) During the Employment Period, and excluding any periods of vacation
and sick leave to which the Executive is entitled, the Executive agrees to
devote substantially all of his attention and time during normal business hours
to the business and affairs of the Company and,
<PAGE>

to the extent necessary to discharge the responsibilities assigned to the
Executive hereunder, to use the 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 the Executive to (A) serve on
corporate, civic or charitable boards or committees, (B) deliver lectures,
fulfill speaking engagements or teach at educational institutions and (C) manage
personal investments, so long as such activities do not significantly interfere
with the performance of the 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 the 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 thereafter be deemed not to interfere with the performance
of the Executive's responsibilities to the Company.

     (b)  Compensation.
          ------------

          (i)   Base Salary.  Effective October 16, 1999, and during the
                -----------
Employment Period, the Executive shall receive an annual base salary ("Annual
Base Salary") of no less than $900,000. From the Effective Date through October
15, 1999, the Executive's Annual Base Salary shall be the same as was in effect
immediately prior to the Effective Date. The Annual Base Salary shall be
reviewed no less frequently than annually, and, if increased, the term "Annual
Base Salary" shall refer to such increased amount.

          (ii)  Annual Bonus.  During the Employment Period, the Executive shall
                ------------
be eligible to receive an annual cash bonus under the Company's Executive
Incentive Plan or any successor thereto ("Annual Bonus") based on performance
criteria determined by the Compensation Committee of the Company's Board of
Directors that provides the Executive with a target bonus of 100% of his Annual
Base Salary and with an opportunity to earn up to 200% of his Annual Base
Salary.

          (iii) Incentive Awards.  On the Effective Date, the Company shall
                ----------------
grant the Executive 100,000 shares of restricted stock of the Company (the
"Restricted Stock") pursuant to the terms of the Company's stock incentive plan.
The Executive shall be granted stock options to acquire 400,000 shares of the
Company's common stock (the "Stock Options") with a strike price equal to the
fair market value of the stock subject thereto on the date of grant, as provided
in the Company's stock incentive plan.

     The Restricted Stock and Stock Options will vest according to the following
schedule:

                                Restricted Stock
                                ----------------

                33,333                  Third anniversary hereof
                33,333                  Fourth anniversary hereof
                33,334                  Fifth anniversary hereof

                                      -2-
<PAGE>

                                 Stock Options
                                 -------------

                133,333                 Third anniversary hereof
                133,333                 Fourth anniversary hereof
                133,334                 Fifth anniversary hereof


          (iv)  Retirement Benefits.  So long as the Executive continues to
                -------------------
serve as the chief executive officer of the Company until at least his 55th
birthday, he shall accrue an increasing total annual retirement benefit assuming
retirement at age 62 as set forth in the chart below (the "Total Retirement
Benefit").  "Final Average Pay" means the average of the sum of his highest
Annual Base Salary and Annual Bonuses for three of the five years prior to his
retirement.

<TABLE>
<CAPTION>

Age at Which                Accrual Factor for          Early Payment           Total Retirement
Retirement Benefits          Replacement % of          Reduction Factor              Benefit
Begin                       Final Average Pay
                                 Assuming
                           Retirement at Age 62
--------------------------------------------------------------------------------------------------
<S>                      <C>                       <C>                       <C>
55 years old                  53%                       79%                  41.87% of Final
                                                                             Average Pay
--------------------------------------------------------------------------------------------------
56 years old                  54%                       82%                  44.28% of Final
                                                                             Average Pay
--------------------------------------------------------------------------------------------------
57 years old                  55%                       85%                  46.75% of Final
                                                                             Average Pay
--------------------------------------------------------------------------------------------------
58 years old                  56%                       88%                  49.28% of Final
                                                                             Average Pay
--------------------------------------------------------------------------------------------------
59 years old                  57%                       91%                  51.87% of Final
                                                                             Average Pay
--------------------------------------------------------------------------------------------------
60 years old                  58%                       94%                  54.52% of Final
                                                                             Average Pay
--------------------------------------------------------------------------------------------------
61 years old                  59%                       97%                  57.23% of Final
                                                                             Average Pay
--------------------------------------------------------------------------------------------------
62 years old                  60%                      100%                  60% of Final
                                                                             Average Pay
--------------------------------------------------------------------------------------------------
</TABLE>

                                      -3-
<PAGE>

The Total Retirement Benefit shall equal the total of the amounts payable to the
Executive under  the Company's qualified and non-qualified defined benefit
pension plans (the "Pension Plans") plus the additional amount necessary in
order to achieve the percentages of Final Average Pay specified above.  The fact
that the Executive is receiving the portion of the Total Retirement Benefit
called for by this agreement shall not reduce or otherwise affect his existing
participation in the Pension Plans.  Upon the Executive's death, his current
spouse, should she survive the Executive, shall be paid, for life, an annual
benefit of 50% of the Total Retirement Benefit which would otherwise be payable
to the Executive.

          (v)    Other Employee Benefit Plans.  During the Employment Period,
                 ----------------------------
except as otherwise expressly provided herein, the Executive shall be entitled
to participate in all employee benefit, welfare and other plans, practices,
policies and programs generally applicable to senior executives of the Company
on a basis no less favorable than his participation immediately prior to the
Effective Date as set forth in the Prior Agreement provided that upon the
Executive's termination of employment for any reason, the Company shall continue
to provide him and his current spouse with medical and dental benefits for the
remainder of their lives on a basis no less favorable than those benefits were
provided to them immediately prior to such termination.

          (vi)   Expenses.  During the Employment Period, the Executive shall
                 --------
be entitled to receive prompt reimbursement for all reasonable expenses incurred
by the Executive in accordance with the Company's policies.

          (vii)  Vacation.  During the Employment Period, the Executive shall
                 --------
be entitled to paid vacation in accordance with the plans, policies, programs
and practices of the Company and its affiliated companies as in effect with
respect to the senior executives of the Company.

          (viii) The Company shall provide the Executive with a Supplemental
Life Insurance Policy which will replace the group term life insurance beyond
$50,000 provided by the Company and will take into account the maximum coverage
amounts allowed under the group term policy.  This Supplemental Life Insurance
will be provided in the form of a survivorship policy which will be funded on
the basis of a split dollar endorsement method.  The Company will meet its
obligation to pay its portion of premiums and meet all other commitments to the
Executive under the policy.

     4.   Termination of Employment.  (a)  Death or Disability.  The Executive's
          -------------------------        -------------------
employment shall terminate automatically upon the Executive's death during the
Employment Period. If the Company determines in good faith that the Disability
of the Executive has occurred during the Employment Period (pursuant to the
definition of Disability set forth below), it may give

                                      -4-
<PAGE>

to the Executive written notice in accordance with Section 12(b) of this
Agreement of its intention to terminate the Executive's employment. In such
event, the Executive's employment with the Company shall terminate effective on
the 30th day after receipt of such notice by the Executive (the "Disability
Effective Date"), provided that, within the 30 days after such receipt, the
Executive shall not have returned to full-time performance of the Executive's
duties. For purposes of this Agreement, "Disability" shall mean the absence of
the Executive from the Executive's duties with the Company on a full-time basis
for 180 consecutive business days as a result of incapacity due to mental or
physical illness which is determined to be total and permanent by a physician
selected by the Company or its insurers and acceptable to the Executive or the
Executive's legal representative.

          (b) Cause.  The Company may terminate the Executive's employment
              -----
during the Employment Period for Cause.  For purposes of this Agreement, "Cause"
shall mean:

              (i)  the continued failure of the Executive to perform
substantially the Executive's duties with the Company or one of its affiliates
(other than any such failure resulting from incapacity due to physical or mental
illness), after a written demand for substantial performance is delivered to the
Executive by the Board which specifically identifies the manner in which the
Board believes that the Executive has not substantially performed the
Executive's duties, or

              (ii)  the willful engaging by the Executive in illegal conduct or
gross misconduct which is materially and demonstrably injurious to the Company,
or

              (iii) conviction of a felony or guilty or nolo contendere plea by
the Executive with respect thereto.

For purposes of this provision, no act or failure to act, on the part of the
Executive, shall be considered "willful" unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that the
Executive'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 based upon the advice of counsel for the Company shall
be conclusively presumed to be done, or omitted to be done, by the Executive in
good faith and in the best interests of the Company.  The cessation of
employment of the Executive shall not be deemed to be for Cause unless and until
there shall have been delivered to the Executive a copy of a resolution duly
adopted by the affirmative vote of not less than two-thirds of the entire
membership of the Board at a meeting of the Board called and held for such
purpose (after reasonable notice is provided to the Executive and the Executive
is given an opportunity, together with counsel, to be heard before the Board),
finding that, in the good faith opinion of the Board, the Executive is guilty of
the conduct described in subparagraph (i) or (ii) above, and specifying the
particulars thereof in detail.

          (c) Good Reason.  The Executive's employment may be terminated by the
              -----------
Executive for Good Reason.  For purposes of this Agreement, "Good Reason" shall
mean in the absence of a written consent of the Executive a material breach by
the Company of a material term

                                      -5-
<PAGE>

of this Agreement, after the Company has been given notice thereof and a
reasonable opportunity to cure such breach.

          (d) Notice of Termination.  Any termination by the Company for Cause,
              ---------------------
or by the Executive for Good Reason, shall be communicated by Notice of
Termination to the other party hereto given in accordance with Section 12(b) of
this Agreement.  For purposes of this Agreement, a "Notice of Termination" means
a written notice which (i) indicates the specific termination provision in this
Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination of
the Executive's employment under the provision so indicated and (iii) if the
Date of Termination (as defined below) is other than the date of receipt of such
notice, specifies the termination date (which date shall be not more  than
thirty days after the giving of such notice).  The failure by the Executive or
the Company to set forth in the Notice of Termination any fact or circumstance
which contributes to a showing of Good Reason or Cause shall not waive any right
of the Executive or the Company, respectively, hereunder or preclude the
Executive or the Company, respectively, from asserting such fact or circumstance
in enforcing the Executive's or the Company's rights hereunder.

          (e) Date of Termination.  "Date of Termination" means (i) if the
              -------------------
Executive's employment is terminated by the Company for Cause, or by the
Executive for Good Reason, the date of receipt of the Notice of Termination or
any later date specified therein within 30 days of such notice, as the case may
be, (ii) if the Executive's employment is terminated by the Company other than
for Cause or Disability, the Date of Termination shall be the date on which the
Company notifies the Executive of such termination and (iii) if the Executive's
employment is terminated by reason of death or Disability, the Date of
Termination shall be the date of death of the Executive or the Disability
Effective Date, as the case may be.

          5.   Obligations of the Company upon Termination.  (a) Good Reason;
               -------------------------------------------       ------------
Other Than for Cause, Death or Disability.  If, during the Employment Period,
-----------------------------------------
the Company shall terminate the Executive's employment other than for Cause or
Disability or the Executive shall terminate employment for Good Reason:

               (i)  the Company shall pay to the Executive in a lump sum in cash
within 30 days after the Date of Termination the aggregate of the following
amounts:

               A.  the sum of (1) the Executive's Annual Base Salary through the
          Date of Termination to the extent not theretofore paid, (2) the
          product of (x) the highest annual bonus paid to the Executive for any
          of the three years prior to the Date of Termination (the "Recent
          Annual Bonus") and (y) a fraction, the numerator of which is the
          number of days that have elapsed in the fiscal year in which the Date
          of Termination occurs as of the Date of Termination, and the
          denominator of which is 365, and (3) any compensation previously
          deferred by the Executive (together with any accrued interest or
          earnings thereon) and any accrued vacation pay, in each case

                                      -6-
<PAGE>

          to the extent not theretofore paid (the sum of the amounts described
          in clauses (1), (2) and (3) shall be hereinafter referred to as the
          "Accrued Obligations"); and

               B.  the amount equal to the product of (1) three and (2) the sum
          of (x) the Executive's Annual Base Salary, (y) the Recent Annual Bonus
          and (z) the value determined by an executive compensation consulting
          firm with a national reputation to be a competitive annual long term
          incentive grant (defined as a size-adjusted, 50th percentile grant as
          of the date of determination as compared to the Company's peer group);
          and

               C.   An amount equal to the Total Retirement Benefit Value less
          the Pension Plan Benefit Value, where:

               "Total Retirement Value" equals the lump sum actuarial
               equivalent, utilizing actuarial assumptions no less favorable to
               the Executive than those in effect under the Company's qualified
               defined benefit pension plan immediately prior to the Effective
               Date (the "Lump Sum Value"), of the Total Retirement Benefit
               provided under subsection 3(b)(iv) hereof, assuming (x) that the
               Executive is three years older than his actual age on the Date of
               Termination, (y) there shall be no deduction for early payment
               and (z) that for purposes of determining "Final Average Pay"
               under the benefit calculation the Executive's actual pay history
               as of the Date of Termination shall be used.  By way of
               illustration, if the Executive were age 58 on the Date of
               Termination, then the Total Retirement Benefit Value would be the
               Lump Sum Value of an annual retirement benefit equal to 59% of
               the Executive's actual Final Average Pay as of the Date of
               Termination.

               "Pension Plan Benefit Value" equals the Lump Sum Value on the
               Date of Termination of the Executive's benefit under the
               Company's qualified defined benefit pension plan.

          The payment provided under this subsection 5(a)(i)(C) shall be made in
          lieu of, and shall completely supersede and replace the Total
          Retirement Benefit otherwise payable under subsection 3(b)(iv) hereof,
          other than the portion thereof payable under the Company's qualified
          defined benefit pension plan.

               D. An amount equal to the aggregate benefits accrued by the
          Executive as of the effective date of termination under the terms of
          the Supplemental Thrift Plan.  The payment provided under this
          Subsection 5(a)(i)(D) shall be made in lieu

                                      -7-
<PAGE>

          of, and shall completely supersede and replace, the Executive's
          benefits payable under the AmSouth Bancorporation Supplemental Thrift
          Plan.

              (ii)  the Restricted Stock and the Stock Options and any other
stock-based incentives awarded to the Executive shall vest immediately;

              (iii) The amount of the Executive's annual club dues bonus in
the year of termination, multiplied by three;

              (vi)  For a thirty-six-month period following the date of the
termination or until the Executive shall have obtained employment, comparable to
his position with the Company on the date of termination, whichever is earlier,
out-placement services, the scope and provider of which shall be selected by the
Executive in the Executive's sole discretion, shall be provided at the expense
of the Company, but not to exceed a reasonable cost;

              (v)   the Company shall transfer (or cause to be transferred) to
the Executive title to the Executive's Company car, without cost to the
Executive, and shall pay to the Executive a lump sum cash payment in an amount
necessary to fully gross-up the income tax effect of said transfer; and

              (vi)  to the extent not theretofore paid or provided, the Company
shall timely pay or provide to the Executive any other amounts or benefits
required to be paid or provided or which the Executive is eligible to receive
under any plan, program, policy or practice or contract or agreement of the
Company and its affiliated companies through the Date of Termination (such other
amounts and benefits shall be hereinafter referred to as the "Other Benefits").

          (b) Death.  If the Executive's employment is terminated by reason of
              -----
the Executive's death during the Employment  Period, this Agreement shall
terminate without further obligations to the Executive's legal representatives
under this Agreement, other than for payment of Accrued Obligations and the
timely payment or provision of Other Benefits.  In addition, the Restricted
Stock and Stock Options shall vest immediately.  Accrued Obligations shall be
paid to the Executive's estate or beneficiary, as applicable, in a lump sum in
cash within 30 days of the Date of Termination.  With respect to the provision
of Other Benefits, the term Other Benefits as utilized in this Section 5(b)
shall include death benefits as in effect on the date of the Executive's death
with respect to senior executives of the Company and their beneficiaries.

          (c) Disability.  If the Executive's employment is terminated by reason
              ----------
of the Executive's Disability during the Employment Period, this Agreement shall
terminate without further obligations to the Executive, other than for payment
of Accrued Obligations and the timely payment or provision of Other Benefits.
In addition, the Restricted Stock and Stock Options shall vest immediately.
Accrued Obligations shall be paid to the Executive in a lump sum in cash within
30 days of the Date of Termination.  With respect to the provision of Other
Benefits, the term Other Benefits as utilized in this  Section 5(c) shall
include, and the Executive shall be entitled after the

                                      -8-
<PAGE>

Disability Effective Date to receive, disability and other benefits as in effect
at any time thereafter generally with respect to senior executives of the
Company.

          (d) Cause; Other than for Good Reason.  If the Executive's employment
              ---------------------------------
shall be terminated for Cause or the Executive terminates his employment without
Good Reason during the Employment Period, this Agreement shall terminate without
further obligations to the Executive other than the obligation to pay to the
Executive (w) his Annual Base Salary through the Date of Termination, (x)
payment of the Retirement Benefit, and (y) Other Benefits, in each case to the
extent theretofore unpaid.

          6.   Non-exclusivity of Rights.  Except as specifically provided,
               -------------------------
nothing in this Agreement shall prevent or limit the Executive's continuing or
future participation in any plan, program, policy or practice provided by the
Company or any of its affiliated companies and for which the Executive may
qualify, nor, subject to Section 12(f), shall anything herein limit or otherwise
affect such rights as the Executive may have under any contract or agreement
with the Company or any of its affiliated companies.  Amounts which are vested
benefits or which the Executive 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 affiliated companies at or subsequent to the Date of Termination
shall be payable in accordance with such plan, policy, practice or program or
contract or agreement except as explicitly modified by this Agreement.

          7.   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 set-off, counterclaim, recoupment,
defense or other claim, right or action which the Company may have against the
Executive or others.  In no event shall the Executive be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable
to the Executive under any of the provisions of this Agreement and, such amounts
shall not be reduced whether or not the Executive obtains other employment.  The
Company agrees to pay as incurred, to the full extent permitted by law, all
legal fees and expenses which the Executive may reasonably incur as a result of
any contest (regardless of the outcome thereof) by the Company, the Executive or
others of the validity or  enforceability of, or liability under, any provision
of this Agreement or any guarantee of performance thereof (including as a result
of any contest by the Executive about the amount of any payment pursuant to this
Agreement), plus in each case interest on any delayed payment at the applicable
Federal rate provided for in Section 7872(f)(2)(A) of the Internal Revenue Code
of 1986, as amended (the "Code").

          8.   Certain Additional Payments by the Company.
               ------------------------------------------

          (a)  Anything in this Agreement to the contrary notwithstanding and
except as set forth below, in the event it shall be determined that any payment
or distribution by the Company to or for the benefit of the Executive (whether
paid or payable or distributed or distributable pursuant to the terms of this
Agreement or otherwise, but determined without regard to any additional payments
required under this Section 8) (a "Payment") would be subject to the excise tax
imposed

                                      -9-
<PAGE>

by Section 4999 of the Code or any interest or penalties are incurred by the
Executive 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 Executive shall be entitled to receive an additional
payment (a "Gross-Up Payment") in an amount such that after payment by the
Executive of all taxes (including any interest or penalties imposed with respect
to such taxes), including, without limitation, any income taxes (and any
interest and penalties imposed with respect thereto) and Excise Tax imposed upon
the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment
equal to the Excise Tax imposed upon the Payments. Notwithstanding the foregoing
provisions of this Section 8(a), if it shall be determined that the Executive is
entitled to a Gross-Up Payment, but that the Payments do not exceed 110% of the
greatest amount (the "Reduced Amount") that could be paid to the Executive such
that the receipt of Payments would not give rise to any Excise Tax, then no
Gross-Up Payment shall be made to the Executive and the Payments, in the
aggregate, shall be reduced to the Reduced Amount.

          (b)  Subject to the provisions of Section 8(c), all determinations
required to be made under this Section 8, including whether and when a Gross-Up
Payment is required and the amount of such Gross-Up Payment and the assumptions
to be utilized in arriving at such determination, shall be made by the Company's
independent certified public accounting firm or such other certified public
accounting firm reasonably acceptable to the Company as may be designated by the
Executive (the "Accounting Firm") which shall provide detailed supporting
calculations both to the Company and the Executive within 15 business days of
the receipt of  notice from the Executive that there has been a Payment, or such
earlier time as is requested by the Company.  All fees and expenses of the
Accounting Firm shall be borne solely by the Company.  Any Gross-Up Payment, as
determined pursuant to this Section 8, shall be paid by the Company to the
Executive within five days of the receipt of the Accounting Firm's
determination.  Any determination by the Accounting Firm shall be binding upon
the Company and the Executive.  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 Gross-Up Payments which
will not have been made by the Company should have been made ("Underpayment"),
consistent with the calculations required to be made hereunder.  In the event
that the Company exhausts its remedies pursuant to Section 8(c) and the
Executive thereafter is required to make a payment of any Excise Tax, 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 Executive.

          (c)  The Executive shall notify the Company in writing of any claim by
the Internal Revenue Service that, if successful, would require the payment by
the Company of the Gross-Up Payment.  Such notification shall be given as soon
as practicable but no later than ten business days after the Executive is
informed in writing of such claim and shall apprise the Company of the nature of
such claim and the date on which such claim is requested to be paid.  The
Executive shall not pay such claim prior to the expiration of the 30-day period
following the date on which he gives such notice to the Company (or such shorter
period ending on the date that any payment of taxes with respect to such claim
is due).  If the Company notifies the Executive in writing prior to the
expiration of such period that it desires to contest such claim, the Executive
shall:

                                      -10-
<PAGE>

               (i)   give the Company any information reasonably requested by
the Company relating to such claim,

               (ii)  take such action in connection with contesting such claim
as the Company shall reasonably request in writing from time to time, including,
without limitation, accepting legal representation with respect to such claim by
an attorney reasonably selected by the Company,

               (iii) cooperate with the Company in good faith in order
effectively to contest such claim, and

               (iv)  permit the Company to participate in any proceedings
relating to such claim;

provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Executive harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses.  Without limitation on the foregoing provisions
of this Section 8(c), the Company shall control all proceedings taken in
connection with such contest and, at its sole option, may pursue or forgo any
and all administrative appeals, proceedings, hearings and conferences with the
taxing authority in respect of such claim and may, at its sole option, either
direct the Executive to pay the tax claimed and sue for a refund or contest the
claim in any permissible manner, and the Executive agrees to prosecute such
contest to a determination before any administrative tribunal, in a court of
initial jurisdiction and in one or more appellate courts, as the Company shall
determine; provided, however, that if the Company directs the Executive to pay
such claim and sue for a refund, the Company shall advance the amount of such
payment to the Executive, on an interest-free basis and shall indemnify and hold
the Executive harmless, on an after-tax basis, from any Excise Tax or income tax
(including interest or penalties with respect thereto) imposed with respect to
such advance or with respect to any imputed income with respect to such advance;
and further provided that any extension of the statute of limitations relating
to payment of taxes for the taxable year of the Executive with respect to which
such contested amount is claimed to be due is limited solely to such contested
amount.  Furthermore, the Company's control of the contest shall be limited to
issues with respect to which a Gross-Up Payment would be payable hereunder and
the Executive shall be entitled to settle or contest, as the case may be, any
other issue raised by the Internal Revenue Service or any other taxing
authority.

          (d)  If, after the receipt by the Executive of an amount advanced by
the Company pursuant to Section 8(c), the Executive becomes entitled to receive
any refund with respect to such claim, the Executive shall (subject to the
Company's complying with the requirements of Section 8(c)) promptly pay to the
Company the amount of such refund (together with any interest paid or credited
thereon after taxes applicable thereto).  If, after the receipt by the Executive
of an amount advanced by the Company pursuant to Section 8(c), a  determination
is made that the

                                      -11-
<PAGE>

Executive shall not be entitled to any refund with respect to such claim and
the Company does not notify the Executive in writing of its intent to contest
such denial of refund prior to the expiration of 30 days after such
determination, then such advance shall be forgiven and shall not be required to
be repaid and the amount of such advance shall offset, to the extent thereof,
the amount of Gross-Up Payment required to be paid.

          9.  Confidential Information; Noncompetition.  (a)  The Executive
              ----------------------------------------
shall hold in a fiduciary capacity for the benefit of the Company all secret or
confidential information, knowledge or data relating to the Company or any of
its affiliated companies, and their respective businesses, which shall have been
obtained by the Executive during the Executive's employment by the Company or
any of its affiliated companies and which shall not be or become public
knowledge (other than by acts by the Executive or representatives of the
Executive in violation of this Agreement).  After termination of the Executive's
employment with the Company, the Executive shall not, without the prior written
consent of the Company or as may otherwise be required by law or legal process,
communicate or divulge any such information, knowledge or data to anyone other
than the Company and those designated by it.

          (b) Without the prior written consent of the Company, during the
Employment Period, and for twenty-four (24) months following the expiration of
this Agreement, the Executive shall not, as an employee or an officer, engage
directly or indirectly in any business or enterprise which is "in competition"
with the Company or its successors or assigns.  For purposes of this Agreement,
a business or enterprise will be deemed to be "in competition" if it is a
banking institution, the headquarters of which is within one hundred (100) miles
from the location of the Executive's  principal job location or office at the
time of termination of employment.  However, the Executive shall be allowed to
purchase and hold for investment less than three percent (3%) of the shares of
any corporation whose shares are regularly traded on a national securities
exchange or in the over-the-counter market.

          (c) In the event of a breach or threatened breach of this Section 9,
the Executive agrees that the Company shall be entitled to injunctive relief in
a court of appropriate jurisdiction to remedy any such breach or threatened
breach, the Executive acknowledges that damages would be inadequate and
insufficient.

          (d) Any termination of the Executive's employment or of this Agreement
shall have no effect on the continuing operation of this Section 9.  In no event
shall an asserted violation of the provisions of this Section 9 constitute a
basis for deferring or withholding any amounts otherwise payable to the
Executive under this Agreement.

          10.  Successors.  (a)  This Agreement is personal to the Executive and
               ----------
without the prior written consent of the Company shall not be assignable by the
Executive otherwise than by will or the laws of descent and distribution.  This
Agreement shall inure to the benefit of and be enforceable by the Executive's
legal representatives.

                                      -12-
<PAGE>

          (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.  Dispute Resolution.  The Executive shall have the right and
               ------------------
option to elect to have any good faith dispute or controversy arising under or
in connection with this agreement settled by litigation or by arbitration.  If
arbitration is selected, such proceeding shall be conducted before a panel of
three (3) arbitrators sitting in a location selected by the Executive within
fifty (50) miles from the location of his principal place of employment, in
accordance with the rules of the American Arbitration Association then in
effect.  Judgment may be entered on the award of the arbitrators in any court
having competent jurisdiction.  All expenses of such litigation or arbitration,
including the reasonable fees and expenses of the legal representative for the
Executive, and necessary costs and disbursements incurred as a result of such
dispute or legal proceeding, and any prejudgment interest, shall be borne by the
Company.

          12.  Miscellaneous.  (a)  This Agreement shall be governed by and
               -------------
construed in accordance with the laws of the State of Delaware, 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.

          (b) Any notices, requests, demands, or other communications provided
for by this Agreement shall be sufficient if in writing and if sent by
registered or certified mail to the Executive at the last address he has filed
in writing with the Company or, in the case of the Company, to the General
Counsel of the Company, at the Company's principal offices.  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 Executive'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 Executive or the Company

                                      -13-
<PAGE>

may have hereunder, including, without limitation, the right of the Executive to
terminate employment for Good Reason of this Agreement, shall not be deemed to
be a waiver of such provision or right or any other provision or right of this
Agreement.

          (f) From and after the Effective Date this Agreement shall supersede
any other employment, severance or change of control agreement between the
parties with respect to the subject matter hereof including the Prior Agreement,
except as expressly provided herein.

     IN WITNESS WHEREOF, the Executive has hereunto set the Executive'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.


                                    -----------------------------------
                                    C. DOWD RITTER


                                    AMSOUTH BANCORPORATION


                                    By --------------------------------


                                      -14-