<PAGE>

                                                                   Exhibit 10.47
                                                                   -------------



                       EMPLOYMENT CONTINUATION AGREEMENT
                       ---------------------------------


     THIS AGREEMENT between ALABAMA NATIONAL BANCORPORATION, a Delaware
corporation (the "Company"), and WILLIAM G. SANDERS (the "Executive"), is dated
as of this 21/st/ day of September, 2000.

                             W I T N E S S E T H :

     WHEREAS, the Company has employed the Executive in a key executive officer
position and has determined that the Executive holds a position which is of
critical importance to the Company;

     WHEREAS, the Company believes that, in the event it is confronted with a
situation that could result in a change in ownership or control of the Company,
continuity of management will be essential to its ability to evaluate and
respond to such situation in the best interests of stockholders;

     WHEREAS, the Company understands that any such situation will present
significant concerns for the Executive with respect to his financial and job
security;

     WHEREAS, the Company desires to assure itself of the Executive's services
during any period in which it is confronting such a situation and to provide the
Executive with certain financial assurances to enable the Executive to perform
the responsibilities of his position without undue distraction and to exercise
his judgment without bias due to his personal circumstances;

     WHEREAS, to achieve these objectives, the Company and the Executive desire
to enter into an agreement providing the Company and the Executive with certain
rights and obligations upon the occurrence of a Change of Control (as defined in
Section 2 below);

     NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is hereby agreed by and between the Company and the
Executive as follows:

     SECTION 1.   Operation of Agreement.
                  ----------------------

     (a) Effective Date.  The effective date of this Agreement shall be the date
         --------------
on which a Change of Control occurs (the "Change of Control Date"); provided,
however, that if the Executive is not employed by the Company on the Change of
Control Date, this Agreement shall be void and without effect.

     SECTION 2.   Definitions.
                  -----------

     (a)  Average Closing Price.  "Average Closing Price" shall mean the average
          ---------------------
of the daily closing prices for a share of the Company's common stock, for the
twenty (20) trading days preceding the Change of Control Date, on the Composite
Tape for the New York Stock Exchange -- Listed Stocks, or, if the common stock
is not listed on such Exchange, on the principal United States securities
exchange registered under the Securities Exchange Act of 1934, as amended, on
which the common stock is listed, or, if the common stock is not listed on any
such Exchange, the average of the daily closing bid quotations with respect to a
share of the common stock for such twenty (20) trading days on the National
Association of Securities Dealers, Inc. Automated Quotations Systems or any
system then in use.

     (b)  Award.  "Award" shall have the meaning ascribed to such term in the
          -----
Performance Share Plan.

     (c)  Award Period.  "Award Period" shall have the meaning ascribed to such
          ------------
term in the Performance Share Plan.
<PAGE>

     (d)  Beneficial Owner.  For purposes of this Agreement, "Beneficial Owner"
          ----------------
shall have the meaning ascribed to such term in Rule 13d-3 of the General Rules
and Regulations under the Securities Exchange Act of 1934, as amended (the
"Exchange Act").

     (e)  Change of Control.  For the purposes of this Agreement, a "Change of
          -----------------
Control" shall mean:

          (i)    any Person (other than those Persons in control of the Company
     as of the date of this Agreement, or other than a trustee or other
     fiduciary holding securities under an employee benefit plan of the Company,
     or a corporation owned directly or indirectly by the stockholders of the
     Company in substantially the same proportions as their ownership of stock
     of the Company) becomes the Beneficial Owner, directly or indirectly, of
     securities of the Company representing twenty percent (20%) or more of the
     combined voting power of the Company's then outstanding securities; or

          (ii)   upon the consummation of any merger, consolidation, or similar
     transaction or a purchase of securities pursuant to which (x) the members
     of the Board of Directors of the Company immediately prior to such
     transaction do not, immediately after the transaction, constitute a
     majority of the Board of Directors of the surviving entity or (y) the
     stockholders of the Company immediately preceding the transaction do not,
     immediately after the transaction, own at least 50% of the combined voting
     power of the outstanding securities of the surviving entity; or

          (iii)  a sale, lease, exchange or other transfer (in one transaction
     or a series of related transactions) of all or substantially all of the
     assets of the Company.

     (f)  Change of Control Price.  "Change of Control Price" shall have the
          -----------------------
meaning ascribed to such term in the Performance Share Plan.

     (g)  Performance Share. "Performance Share" shall have the meaning ascribed
          -----------------
to such term in the Performance Share Plan.

     (h)  Performance Share Plan.  "Performance Share Plan " means that certain
          ----------------------
Second Amendment and Restatement of the Alabama National BanCorporation
Performance Share Plan, effective as of April 20, 2000, as such Plan may be
amended from time to time.

     (i)  Person.  "Person" shall have the meaning ascribed to such term in
          ------
Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d)
thereof, including a "group" as defined in Section 13(d).

     (j)  Potential Change of Control.  For the purposes of this Agreement, a
          ---------------------------
Potential Change of Control shall be deemed to have occurred if:

          (i)    the Company enters into an agreement, the consummation of which
     would result in the occurrence of a Change of Control;

          (ii)    any Person publicly announces an intention to take or to
     consider taking actions which, if consummated, would constitute a Change of
     Control;

          (iii)   any Person (other than those Persons in control of the Company
     as of the date of this Agreement, or other than a trustee or other
     fiduciary holding securities under an employee benefit plan of the Company,
     or a corporation owned directly or indirectly by the stockholders of the
     Company in substantially the same proportions as their ownership of stock
     of the Company) hereafter becomes the Beneficial Owner, directly or
     indirectly, of securities of the Company representing greater than 10% of
     the combined voting power of the Company's then outstanding securities
     (determined by taking into account as though converted or exercised any
     securities convertible into voting securities or any options exercisable
     for voting securities, but only to the extent such convertible securities
     or options are beneficially owned or held by such Person);

                                      -2-
<PAGE>

          (iv)   any Person files soliciting materials intended to result in a
     change in the composition of the Board of Directors of the Company; or

          (v)    the Board of Directors of the Company adopts a resolution to
     the effect that, for purposes of this Agreement, a Potential Change of
     Control has occurred .

     SECTION 3.  Events upon Change of Control.
                 -----------------------------

     (a)    Employment Period. Subject to Section 6 of this Agreement, the
            -----------------
Company agrees to continue the Executive in its employ, and the Executive agrees
to remain in the employ of the Company, for the period (the "Employment Period")
commencing on the Change of Control Date and ending on the second anniversary of
the Change of Control Date.

     (b)    Vesting and Related Rights. Notwithstanding anything to the contrary
            --------------------------
in this Agreement, in any other agreement between the Executive and the Company
or in any Company plan or elsewhere:

            (i)  upon the Change of Control Date, all of the Executive's options
     to purchase common stock or other securities of the Company shall
     immediately become exercisable in full, and such options may thereafter be
     exercised, in whole or in part, until the expiration of the applicable
     option term; if the Executive dies within such period, any unexercised
     option held by the Executive shall thereafter be exercisable, in whole or
     in part, for the remainder of such period. All other terms and conditions
     with respect to such options, including the price, term and treatment upon
     termination of employment, shall continue to be governed by the applicable
     Company plan(s) and stock option agreement(s) between the Executive and the
     Company, as such may be amended from time to time; and

          (ii)   the Executive shall be deemed to have earned Performance Shares
     with respect to each of his Awards outstanding at the Change of Control
     Date.  The number of Performance Shares so earned shall be computed by
     determining  (based on the conditions set by the Compensation Committee of
     the Company's Board for payment of Awards for the subject Award Period) the
     number of Performance Shares that would have been paid if each subject
     Award Period had ended on the December 31st immediately preceding the
     Change of Control Date; provided that in no event shall the number of
     Performance  Shares earned be less than the aggregate number of Performance
     Shares at the target performance  level (as identified  in the applicable
     award letter) with respect to all such Awards.  Thus, in the event of a
     Change of Control, the minimum Performance Shares to be awarded shall be
     equal to the aggregate number of Performance Shares that would have been
     awarded at the end of the Award Period(s) if the target performance
     level(s) applicable thereto had been met.  Performance Share Awards granted
     in the year of the Change of Control  shall be earned at the same
     percentage as Awards granted in the year preceding the year of the Change
     of Control.  Each Performance Share so earned shall be canceled in exchange
     for an  immediate payment in cash of an amount equal to the Change of
     Control Price.  In addition, upon the cash payment provided for in the
     preceding sentence, the Company agrees to pay a cash bonus to the Executive
     in an amount equal to the aggregate amount of the federal and state income
     taxes that will be incurred by the Executive, based on the highest marginal
     income tax rates, as a result of (A) the cash payment provided for in the
     preceding sentence and (B) the cash bonus made pursuant to this sentence.

     SECTION 4.  Position and Duties.
                 -------------------

     (a)   No Reduction in Position.  During the Employment Period, the
           ------------------------
Executive's position (including titles), authority and responsibilities shall be
at least commensurate with those held, exercised and assigned immediately prior
to the public announcement of the transaction constituting the Change of
Control.  The Executive's services shall be performed at the location where the
Executive was employed immediately preceding the public announcement of the
transaction constituting the Change of Control.

     (b)   Business Time.  From and after the Change of Control Date, the
           -------------
Executive agrees to devote his full attention during normal business hours to
the business and affairs of the Company and to perform faithfully and

                                      -3-
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efficiently the responsibilities assigned to him hereunder, to the extent
necessary to discharge such responsibilities, except for periods of vacation,
sick leave and other leave to which he is entitled.  It is expressly understood
and agreed that the Executive's continuing service on any boards and committees
on which he is serving or with which he is otherwise associated immediately
preceding the Change of Control Date shall not be deemed to interfere with the
performance of the Executive's services to the Company.

     SECTION 5.   Compensation.
                  ------------

     (a)  Base Salary. During the Employment Period, the Executive shall
          -----------
receive a base salary at a monthly rate at least equal to the monthly salary
paid to the Executive by the Company immediately prior to the Change of Control
Date. The base salary shall be reviewed at least once each year after the Change
of Control Date, and may be increased (but not decreased) at any time and from
time to time by action of the Board of Directors or any committee thereof or any
individual having authority to take such action in accordance with the Company's
regular practices. The Executive's base salary, as it may be increased from time
to time, shall hereafter be referred to as "Base Salary". Neither the Base
Salary nor any increase in Base Salary after the Change of Control Date shall
serve to limit or reduce any other obligation of the Company hereunder.

     (b)  Annual Bonus and Incentive Compensation. During the Employment
          ---------------------------------------
Period, in addition to the Base Salary, for each fiscal year of the Company
ending during the Employment Period, the Executive shall be entitled to receive:

          (i)    an annual bonus which is at least equal to the greater of (A)
     the highest annual bonus, including without limitation any bonus provided
     under the Company's Annual Incentive Plan, that had been payable to the
     Executive in respect of either of the last two fiscal years ended
     immediately prior to the Change of Control Date or (B) the amount that
     would have been payable to the Executive as a target bonus for the year in
     which the Change of Control occurs under the Company's Annual Incentive
     Plan; and

          (ii)   long-term incentive compensation opportunities (including but
     not limited to Performance Share Awards) on terms and conditions no less
     favorable to the Executive than those applicable to the Executive prior to
     the Change of Control Date.

Any amount payable hereunder as an annual bonus shall be paid as soon as
practicable following the year for which the amount is payable, unless
electively deferred by the Executive pursuant to any deferral programs or
arrangements that the Company may make available to the Executive.

     (c)  Benefit Plans.  During the Employment Period, the Executive (and, to
          -------------
the extent applicable, his dependents) shall be entitled to participate in or be
covered under all pension, retirement, deferred compensation, savings, medical,
dental, health, disability, group life, accidental death and travel accident
insurance plans at a level that is commensurate with the Executive's
participation in such plans immediately prior to the Change of Control Date, or,
if more favorable to the Executive, at the level made available to the Executive
or other similarly situated officers at any time thereafter.  The Executive
shall also be entitled to receive such perquisites as were generally provided to
the Executive in accordance with the Company's policies and practices
immediately prior to the Change of Control Date.

     (d)  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 policies and procedures of the Company as
in effect immediately prior to the Change of Control Date.  Notwithstanding the
foregoing, the Company may apply the policies and procedures in effect after the
Change of Control Date to the Executive, if such policies and procedures are
more favorable to the Executive than those in effect immediately prior to the
Change of Control Date.

     (e)  Indemnification.  During and after the Employment Period, the Company
          ---------------
shall indemnify the Executive and hold the Executive harmless from and against
any claim, loss or cause of action arising from or out of the Executive's
performance as an officer, director or employee of the Company or any of its
subsidiaries or in any other

                                      -4-
<PAGE>

capacity, including any fiduciary capacity, in which the Executive serves at the
request of the Company to the maximum extent permitted by applicable law and the
Company's Certificate of Incorporation and By-Laws (the "Governing Documents");
provided, however, that in no event shall the protection afforded to the
Executive hereunder be less than that afforded under the Governing Documents as
in effect immediately prior to the Change of Control Date.

     SECTION 6.   Termination.
                  -----------

     (a)   Death, Disability or Retirement.  This Agreement shall terminate
           -------------------------------
automatically upon the Executive's death, termination due to "Disability" (as
defined below) or voluntary retirement under any of the Company's retirement
plans as in effect from time to time.  For purposes of this Agreement,
Disability shall mean the Executive's inability to perform the duties of his
position, as determined in accordance with the policies and procedures
applicable with respect to the Company's long-term disability plan, as in effect
immediately prior to the Change of Control Date.

     (b)   Voluntary Termination.  Notwithstanding anything in this Agreement to
           ---------------------
the contrary, following a Change of Control the Executive may, upon not less
than 10 days' written notice to the Company, voluntarily terminate his
employment for any reason (including early retirement under the terms of any of
the Company's retirement plans as in effect from time to time); provided,
however, that any termination by the Executive pursuant to Section 6(d) on
account of Good Reason (as defined therein) shall not be treated as a voluntary
termination under this Section 6(b).

     (c)   Cause. The Company may terminate the Executive's employment for
           -----
Cause. For purposes of this Agreement, "Cause" means:

           (i)    the Executive's conviction or plea of nolo contendere to a
           felony;

           (ii)   an act or acts of extreme dishonesty or gross misconduct on
     the Executive's part which result or are intended to result in material
     damage to the Company's business or reputation; or

           (iii)  repeated material violations by the Executive of his
     obligations under Section 4 of this Agreement, which violations are
     demonstrably willful and deliberate on the Executive's part and which
     result in material damage to the Company's business or reputation.

     (d)  Good Reason.  Following the occurrence of a Change of Control, the
          -----------
Executive may terminate his employment for Good Reason.  For purposes of this
Agreement, "Good Reason" means the occurrence of any of the following, without
the express written consent of the Executive, after the occurrence of a Change
of Control:

           (i)    (A) the assignment to the Executive of any duties inconsistent
     in any material adverse respect with the Executive's position, authority or
     responsibilities as contemplated by Section 4 of this Agreement, or (B) any
     other material adverse change in such position, including titles, authority
     or responsibilities;

           (ii)   any failure by the Company to comply with any of the
     provisions of Section 5 of this Agreement, other than an insubstantial or
     inadvertent failure remedied by the Company promptly after receipt of
     notice thereof given by the Executive;

           (iii)  the Company's requiring the Executive to be based, or to
     perform a substantial potion of his duties with the Company, at any office
     or location  more than 20 miles from that location at which he performed
     his services specified under the provisions of Section 4 immediately prior
     to the Change of Control Date, except for travel reasonably required in the
     performance of the Executive's responsibilities; or

           (iv)   any failure by the Company to obtain the assumption and
     agreement to perform this Agreement by a successor as contemplated by
     Section 11(b).

                                      -5-
<PAGE>

     In no event shall the mere occurrence of a Change of Control, absent any
further impact on the Executive, be deemed to constitute Good Reason.

     (e)  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(e).  For purposes of
this Agreement, a "Notice of Termination" means a written notice given, in the
case of a termination for Cause, within 10 business days of the Company's having
actual knowledge of the events giving rise to such termination, and in the case
of a termination for Good Reason, within 180 days of the Executive's having
actual knowledge of the events giving rise to such termination, and which (i)
indicates the specific termination provision in this Agreement relied upon, (ii)
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 termination date is other than the date of receipt
of such notice, specifies the termination date of this Agreement (which date
shall be not more than 15 days after the giving of such notice).  The failure by
the Executive to set forth in the Notice of Termination any fact or circumstance
which contributes to a showing of Good Reason shall not waive any right of the
Executive hereunder or preclude the Executive from asserting such fact or
circumstance in enforcing his rights hereunder.

     (f)  Date of Termination. For the purpose of this Agreement, the term "Date
          -------------------
of Termination" means (i) in the case of a termination for which a Notice of
Termination is required, the date of receipt of such Notice of Termination or,
if later, the date specified therein, as the case may be, and (ii) in all other
cases, the actual date on which the Executive's employment terminates during the
Employment Period.

     SECTION 7.   Obligations of the Company upon Termination.
                  --------------------------------------------

     (a)   Death or Disability.  If the Executive's employment is terminated
           -------------------
during the Employment Period by reason of the Executive's death or Disability,
this Agreement shall terminate without further obligations to the Executive or
the Executive's legal representatives under this Agreement other than those
obligations accrued hereunder at the Date of Termination, and the Company shall
pay to the Executive (or his beneficiary or estate):

           (i)   the Executive's full Base Salary through the Date of
     Termination (the "Earned Salary"),

           (ii)  any vested amounts or benefits owing to the Executive under the
     Company's otherwise applicable employee benefit plans and programs,
     including any compensation previously deferred by the Executive (together
     with any accrued earnings thereon) and not yet paid by the Company and any
     accrued vacation pay not yet paid by the Company (the "Accrued
     Obligations"), and

           (iii) any other benefits payable due to the Executive's death or
     Disability under the Company's plans, policies or programs (the "Additional
     Benefits").

Any Earned Salary shall be paid in cash in a single lump sum as soon as
practicable, but in no event more than 10 business days (or at such earlier date
required by law), following the Date of Termination.  Accrued Obligations and
Additional Benefits shall be paid in accordance with the terms of the applicable
plan, program or arrangement.

     (b)   Cause and Voluntary Termination. If, during the Employment Period,
the Executive's employment shall be terminated for Cause or voluntarily
terminated by the Executive (other than on account of Good Reason following a
Change of Control) in accordance with Section 6(b), the Company shall pay the
Executive (i) the Earned Salary in cash in a single lump sum as soon as
practicable, but in no event more than 10 days, following the Date of
Termination, and (ii) the Accrued Obligations in accordance with the terms of
the applicable plan, program or arrangement.

     (c)   Termination by the Executive for Good reason and Termination by the
           -------------------------------------------------------------------
Company other than for Cause.
----------------------------

           (i)   Lump Sum Payments. If (X) the Company terminates the
     Executive's employment other than for Cause during the Employment Period or
     (Y) the Executive terminates his employment for Good

                                      -6-
<PAGE>

     Reason at any time during the Employment P Period, then the Company shall
     pay to the Executive the following amounts:

                (A)  the Executive's Earned Salary;

                (B)  a cash amount (the "Severance Amount") equal to three (3)
          times the sum of (1) the Executive's annual Base Salary; (2) the
          greater of (X) the average of the bonus amount payable (including any
          amounts payable under the Annual Incentive Plan) to the Executive for
          the three fiscal years of the Company immediately preceding the Change
          of Control Date or (Y) the average of the bonus amount payable
          (including any amount payable under the Annual Incentive Plan) to the
          Executive for the three fiscal years of the Company ending immediately
          prior to the Date of Termination; and (3) an amount determined by
          multiplying (i) the aggregate number of Performance Shares, as
          designated in the award letter issued in the calendar year in which
          the Change of Control occurs, to be awarded to the Executive at the
          target performance level, and (ii) the Average Closing Price; and

                (C)  the Accrued Obligations.

     The Earned Salary and Severance Amount shall be paid in cash in a single
     lump sum as soon as practicable, but in no event more than 10 business days
     (or at such earlier date required by law), following the Date of
     Termination.  Accrued Obligations shall be paid in accordance with the
     terms of the applicable plan, program or arrangement.

          (ii)  Supplemental Retirement Benefit.  In the event the Executive is
                -------------------------------
     entitled to receive the Severance Amount described in Section 7(c)(i), the
     Executive (and, to the extent applicable, his dependents) shall be entitled
     to receive a supplemental retirement benefit payable pursuant to a deferred
     annuity contract issued by a solvent insurer mutually acceptable to the
     Company and the Executive and purchased by the Company and delivered to the
     Executive within 60 days after the Date of Termination.  Such annuity
     contract shall provide for monthly payments on and after the Executive's
     65th birthday and 100% survivor benefits to the Executive's spouse for such
     individual's lifetime in the event of the Executive's death prior to or
     after age 65.  The monthly benefits to be provided by the annuity shall be
     determined as follows:

                (A)  three years shall be added to Executive's credited service
          as determined at Date of Termination under the terms of the NBC
          Pension Plan (the "Pension Plan") as in effect immediately prior to
          the Change of Control Date (subject to any applicable maximum on
          credited service);

                (B)  using such adjusted credited service, a new monthly benefit
          for life commencing at age 65 shall be determined as of the Date of
          Termination under the terms of the Pension Plan;

                (C)  from such monthly benefit as calculated in (B) above shall
          be subtracted the monthly vested deferred benefit of Executive due to
          be paid on and after attainment of age 65, if any, pursuant to the
          terms of all defined benefit pension plans, active or frozen, in which
          Executive is a participant at his Date of Termination if such plans
          are sponsored by the Company, its successors or affiliates thereof;
          and

                (D)  in accordance with the terms of the Pension Plan, the
          difference described in (C) next above shall be converted from a
          monthly lifetime benefit after age 65 to the actuarial equivalent
          monthly benefit on and after attainment of age 65 which provides the
          100% survivorship feature first above described in this Section
          7(c)(ii).

     For purposes of making the foregoing determinations, at the request of
     Executive in the Notice of Termination given by Executive or in writing
     within 3 days of Executive's receipt of Notice of Termination, but in
     either event at Company expense, the independent pension consultants most
     recently used by Company in connection with its qualified pension plan
     prior to the Change of Control Date shall be engaged and shall

                                      -7-
<PAGE>

     certify the benefits due Executive under this Section 7(c)(ii) in writing
     within 30 days after the Date of Termination. If the amount to be offset
     under subparagraph (C) above shall not be determined by the end of a period
     of 30 days after the Date of Termination, no such offset shall be
     permitted.


          (iii)  Continuation of Benefits.  In the event the Executive is
                 ------------------------
     entitled to receive the Severance Amount described in Section 7(c)(i), the
     Executive (and, to the extent applicable, his dependents) shall be
     entitled, after the Date of Termination until the earlier of (1) the second
     anniversary of the Date of Termination (the "End Date") or (2) the date the
     Executive becomes eligible for comparable benefits under a similar plan,
     policy or program of a subsequent employer, to continue participation in
     all of the Company's employee welfare benefit plans including, without
     limitation, the Company's hospital, medical, accident, disability and life
     insurance plans (the "Benefit Plans") as were generally provided to the
     Executive in accordance with the Company's policies and practices
     immediately prior to the Change of Control Date.  To the extent any such
     benefits cannot be provided under the terms of the applicable plan, policy
     or program, the Company shall provide a comparable benefit under another
     plan or from the Company's general assets.  The Executive's participation
     in the Benefit Plans will be on the same terms and conditions that would
     have applied had the Executive continued to be employed by the Company
     through the End Date.

     (d)  Discharge of the Company's Obligations.  Except as expressly provided
          --------------------------------------
in the last sentence of this Section 7(d), the amounts payable to the Executive
pursuant to this Section 7 (whether or not reduced pursuant to Section 7(e))
following termination of his employment shall be in full and complete
satisfaction of the Executive's rights under this Agreement and any other claims
he may have in respect of his employment by the Company or any of its
subsidiaries.  Such amounts shall constitute liquidated damages with respect to
any and all such rights and claims and, upon the Executive's receipt of such
amounts, the Company shall be released and discharged from any and all liability
to the Executive in connection with this Agreement or otherwise in connection
with the Executive's employment with the Company and its subsidiaries.  Nothing
in this Section 7(d) shall be construed to release the Company from its
commitment to indemnify the Executive and hold the Executive harmless from and
against any claim, loss or cause of action arising from or out of the
Executive's performance as an officer, director or employee of the Company or
any of its subsidiaries or in any other capacity, including any fiduciary
capacity, in which the Executive served at the request of the Company to the
maximum extent permitted by applicable law and the Governing Documents.

     (e)  Certain Further Payments by the Company.
          ---------------------------------------

          (i)    In the event that any amount or benefit paid or distributed to
     the Executive pursuant to this Agreement, taken together with any amounts
     or benefits otherwise paid or distributed to the Executive by the Company
     or any affiliated company including, without limitation, any distribution
     or payment made pursuant to the terms of the Company's compensation plans
     or arrangements (collectively, the "Covered Payments"), are or become
     subject to the tax (the "Excise Tax") imposed under Section 4999 of the
     Internal Revenue Code of 1986, as amended (the "Code"), or any similar tax
     that may hereafter be imposed, the Company shall pay to the Executive at
     the time specified in Section 7(e)(v) below an additional amount (the "Tax
     Reimbursement Payment") such that the net amount retained by the Executive
     with respect to such Covered Payments, after deduction of any Excise Tax on
     the Covered Payments and any Federal, state and local income or employment
     tax and Excise Tax on the Tax Reimbursement Payment provided for by this
     Section 7(e), but before deduction for any Federal, state or local income
     or employment tax withholding on such Covered Payments, shall be equal to
     the amount of the Covered Payments.

          (ii)   For purposes of determining whether any of the Covered Payments
     will be subject to the Excise Tax and the amount of such Excise Tax, (A)
     such Covered Payments will be treated as "parachute payments" within the
     meaning of Section 280G of the Code, and all "parachute payments" in excess
     of the "base amount" (as defined under Section 280G(b)(3) of the Code)
     shall be treated as subject to the Excise Tax, unless, and except to the
     extent that, in the good faith judgment of the Company's independent
     certified public accountants appointed prior to the Change of Control Date
     or tax counsel selected by such Accountants (the "Accountants"), the
     Company has a reasonable basis to conclude that such Covered Payments (in
     whole or in part) either do not constitute "parachute payments" or
     represent reasonable compensation for personal

                                      -8-
<PAGE>

     services actually rendered (within the meaning of Section 280G(b)(4)(B) of
     the Code) in excess of the "base amount," or such "parachute payments" are
     otherwise not subject to such Excise Tax, and (B) the value of any non-cash
     benefits or any deferred payment or benefit shall be determined by the
     Accountants in accordance with the principles of Section 280G of the Code.

          (iii)  For purposes of determining the amount of the Tax Reimbursement
     Payment, the Executive shall be deemed to pay:

                 (A)  Federal income taxes at the highest applicable marginal
          rate of Federal income taxation for the calendar year in which the Tax
          Reimbursement Payment is to be made, and

                 (B)  any applicable state and local income taxes at the highest
          applicable marginal rate of taxation for the calendar year in which
          the Tax Reimbursement Payment is to be made, net of the maximum
          reduction in Federal income taxes which could be obtained from the
          deduction of such state or local taxes if paid in such year.

          (iv)   In the event that the Excise Tax is subsequently determined by
     the Accountants or pursuant to any proceeding or negotiations with the
     Internal Revenue Service to be less than the amount taken into account
     hereunder in calculating the Tax Reimbursement Payment made, the Executive
     shall repay to the Company, at the time that the amount of such reduction
     in the Excise Tax is finally determined, the portion of such prior Tax
     Reimbursement Payment that would not have been paid if such Excise Tax had
     been applied in initially calculating such Tax Reimbursement Payment, plus
     interest on the amount of such repayment at the rate provided in Section
     1274(b)(2)(B) of the Code.  Notwithstanding the foregoing, in the event any
     portion of the Tax Reimbursement Payment to be refunded to the Company has
     been paid to any Federal, state or local tax authority, repayment thereof
     shall not be required until actual refund or credit of such portion has
     been made to the Executive, and interest payable to the Company shall not
     exceed interest received or credited to the Executive by such tax authority
     for the period it held such portion.  The Executive and the Company shall
     mutually agree upon the course of action to be pursued (and the method of
     allocating the expenses thereof) if the Executive's good faith claim for
     refund or credit is denied.

     In the event that the Excise Tax is later determined by the Accountants or
     pursuant to any proceeding or negotiations with the Internal Revenue
     Service to exceed the amount taken into account hereunder at the time the
     Tax Reimbursement Payment is made (including, but not limited to, by reason
     of any payment the existence or amount of which cannot be determined at the
     time of the Tax Reimbursement Payment), the Company shall make an
     additional Tax Reimbursement Payment in respect of such excess (plus any
     interest or penalty payable with respect to such excess) at the time that
     the amount of such excess is finally determined.

          (v)    The Tax Reimbursement Payment (or portion thereof) provided for
     in Section 7(e)(i) above shall be paid to the Executive not later than 10
     business days following the payment of the Covered Payments; provided,
     however, that if the amount of such Tax Reimbursement Payment (or portion
     thereof) cannot be finally determined on or before the date on which
     payment is due, the Company shall pay to the Executive by such date an
     amount estimated in good faith by the Accountants to be the minimum amount
     of such Tax Reimbursement Payment and shall pay the remainder of such Tax
     Reimbursement Payment (together with interest at the rate provided in
     Section 1274(b)(2)(B) of the Code) as soon as the amount thereof can be
     determined, but in no event later than 45 calendar days after payment of
     the related Covered Payment. In the event that the amount of the estimated
     Tax Reimbursement Payment exceeds the amount subsequently determined to
     have been due, such excess shall constitute a loan by the Company to the
     Executive, payable on the fifth business day after written demand by the
     Company for payment (together with interest at the rate provided in Section
     1274(b)(2)(B) of the Code).

     SECTION 8.  Non-Exclusivity of Rights. Except as expressly provided herein,
                 -------------------------
nothing in this Agreement shall prevent or limit the Executive's continuing or
future participation in any benefit, bonus, incentive or other plan or program
provided by the Company or any of its affiliated companies and for which the
Executive may

                                      -9-
<PAGE>

qualify, nor shall anything herein limit or otherwise prejudice such rights as
the Executive may have under any other agreements 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 or program of the Company or any
of its affiliated companies at or subsequent to the Date of Termination shall be
payable in accordance with such plan or program.

     SECTION 9.  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 circumstances, including, without
limitation, any set-off, counterclaim, recoupment, defense or other right which
the Company may have against the Executive or others whether by reason of the
subsequent employment of the Executive or otherwise.

     SECTION 10. Legal Fees and Expenses.  If the Executive asserts any claim
                 -----------------------
in any contest (whether initiated by the Executive or by the Company) as to the
validity, enforceability or interpretation of any provision of this Agreement,
the Company shall pay the Executive's legal expenses (or cause such expenses to
be paid) including, without limitation, his reasonable attorney's fees, on a
quarterly basis, upon presentation of proof of such expenses; provided, however,
that the Executive shall reimburse the Company for such amounts, plus simple
interest thereon at the 90-day United States Treasury Bill rate as in effect
from time to time, compounded annually, if the Executive shall not prevail, in
whole or in part, as to any material issue as to the validity, enforceability or
interpretation of any provision of this Agreement.

     SECTION 11. 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.

     (b)   This Agreement shall inure to the benefit of and be binding upon the
Company and its successors. The Company shall require any successor to all or
substantially all of the business and/or assets of the Company, whether direct
or indirect, by purchase, merger, consolidation, acquisition of stock or
otherwise, by an agreement in form and substance satisfactory to the Executive,
expressly to assume and agree to perform this Agreement in the same manner and
to the same extent as the Company would be required to perform if no such
succession had taken place.

     SECTION 12. Miscellaneous.
                 -------------

     (a)   Applicable Law. This Agreement shall be governed by and construed and
           --------------
conferred in accordance with the laws of the State of Delaware (and, as
applicable, Title 9 of the U.S. Code) applied without reference to principles of
conflict of laws.

     (b)   Arbitration. Any dispute or controversy arising under or in
           -----------
 connection with this Agreement shall be resolved by binding arbitration. The
 arbitration shall be held at a site selected by the arbitrators and except to
 the extent inconsistent with this Agreement, shall be conducted in accordance
 with the Expedited Employment Arbitration Rules of the American Arbitration
 Association then in effect at the time of the arbitration, and otherwise in
 accordance with principles which would be applied by a court of law or equity.
 The arbitrator shall be acceptable to both the Company and the Executive. If
 the parties cannot agree on an acceptable arbitrator, the dispute shall be
 heard by a panel of three arbitrators, one appointed by each of the parties and
 the third appointed by the other two arbitrators.

     (c)   Amendments. This Agreement may be amended or modified by the Board of
           ----------
Directors at any time prior to a Change in Control; provided, however, that
subsequent to the occurrence of a Potential Change in Control, 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.
Notwithstanding the foregoing sentence, in the event that subsequent to the
occurrence of a Potential Change in Control (i) the Board of Directors makes a
good faith determination that the events giving rise to a Potential Change in
Control will not result in the occurrence of a Change in Control or (ii) an
actual Change in Control has not occurred after the first anniversary of the
occurrence of a Potential Change in Control (or any Potential Change in Control
events occurring after the initial Potential Change in Control), the foregoing
limitation on the amendment or modification of this Agreement shall cease to
apply unless

                                      -10-
<PAGE>

and until it thereafter again becomes effective by reason of the occurrence of
another Potential Change in Control or any actual Change in Control.

     (d)   Notices.  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 Executive:  at the home address of the Executive noted on the
     records of the Company

     If to the Company:  Alabama National BanCorporation
                              1927 First Avenue North
                              Birmingham, Alabama 35203
                              Attn.:  Chairman of the Board of Directors

                         With a copy to:

                              Mark L. Drew
                              Maynard, Cooper & Gale, P.C.
                              1901 Sixth Avenue North
                              2400 AmSouth/Harbert Plaza
                              Birmingham, Alabama  35203

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.

     (e)   Entire Agreement.  Upon the Change of Control Date, unless otherwise
           ----------------
provided herein, this Agreement shall constitute the entire agreement between
the parties hereto with respect to the matters referred to herein. There are no
promises, representations, inducements or statements between the parties other
than those that are expressly contained herein.  In the event any provision of
this Agreement is invalid or unenforceable, the validity and enforceability of
the remaining provisions hereof shall not be affected.  The Executive
acknowledges that he is entering into this Agreement of his own free will and
accord, and with no duress, that he has read this Agreement and that he
understands it and its legal consequences.


     IN WITNESS WHEREOF, the Executive has hereunto set his hand and the Company
has caused this Agreement to be executed in its name on its behalf, and its
corporate seal to be hereunto affixed and attested by its Secretary, all as of
the day and year first above written.

                                          ALABAMA NATIONAL BANCORPORATION


                                          By: /s/ John H. Holcomb, III
                                              ------------------------
                                          Name:  John H. Holcomb, III
                                                 --------------------
                                          Title:  Chairman and CEO
                                                  ----------------

                                          EXECUTIVE


                                          Signature: /s/ William G. Sanders
                                                     ----------------------
                                          Name: William G. Sanders
                                                ------------------
                                          Title: Executive Vice President
                                                 ------------------------

                                      -11-