EXHIBIT 10.3
AMENDMENT AND RESTATEMENT OF
EXECUTIVE SUPPLEMENTAL INCOME AGREEMENT
This Agreement, effective as of October 1, 2002 (The "Effective Date"),
is made by and between The Peoples Bank, a state-chartered commercial bank with
its principal office located in Biloxi, Mississippi (hereinafter referred to as
the "Company"), and Xxxxxx X. Xxxxxxx (hereinafter referred to as the
"Executive"). This Agreement hereby amends and restates, in its entirety, a
prior agreement, with an initial effective date of January 1, 1988 (hereinafter
the "Prior Agreement"), made by and between the Company and the Executive.
INTRODUCTION
The Company and the Executive entered into the Prior Agreement in order
to provide certain benefits to the Executive as an officer of the Company upon
the Executive's retirement.
The Company and the Executive, by this current Agreement, desire to
amend and desire to restate the Prior Agreement, in its entirety, to include and
reflect the terms set forth herein and to incorporate the benefit accumulated to
date by the Executive under Prior Agreement.
Therefore, in order to encourage the Executive to remain an employee of
the Company, the Company is willing to provide salary continuation benefits to
the Executive. The Company will pay the benefits from its general assets.
AGREEMENT
The Executive and the Company agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Definitions. Whenever used in this Agreement, the following
words and phrases shall have the meanings specified:
1.1.1 "Change of Control" means:
(a) a change in the ownership of the capital stock of the
Company or Peoples Financial Corporation (the "Holding Company"),
whereby a corporation, person or group acting in concert (a "Person")
as described in Section 14(d)(2) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), holds or acquires, directly or
indirectly, beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of a number of shares of capital
stock of the Company or Holding Company which constitutes fifty percent
(50%) or more of the combined voting power of the Company's or Holding
Company's outstanding capital stock then entitled to vote generally in
the election of directors; or
(b) the persons who were members of the Board of
Directors of the Company or Holding Company immediately prior to a
tender offer, exchange offer, contested election or any combination of
the foregoing, cease to constitute a majority of such Board of
Directors; or
(c) the adoption by the Board of Directors of the Company
or of the Holding Company of a merger, consolidation or reorganization
plan involving the Company or Holding Company in which the Company or
the Holding Company is not the surviving entity, or a sale of all or
substantially all of the assets of the Company or Holding Company. For
purposes of this Agreement, a sale of all or substantially all of the
assets of the Company or Holding Company shall be deemed to occur if
any Person acquires (or during the 12-month period ending on the date
of the most recent acquisition by such Person, has acquired) gross
assets of the Company or Holding Company that have an aggregate fair
market value equal to fifty percent (50%) of the fair market value of
all of the respective gross assets of the Company or Holding Company
immediately prior to such acquisition or acquisitions; or
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(d) a tender offer or exchange offer is made by any
Person which, if successfully completed, would result in such Person
beneficially owning (within the meaning of Rule 13d-3 promulgated under
the Exchange Act) either fifty percent (50%) or more of the Company's
or Holding Company's outstanding shares of Common Stock or shares of
capital stock having fifty percent (50%) or more the combined voting
power of the Company's or Holding Company's then outstanding capital
stock (other than an offer made by the Company or the Holding Company),
and sufficient shares are acquired under the offer to cause such person
to own fifty percent (50%) or more of the voting power; or
(e) any other transactions or series of related
transactions occurring which have substantially the same effect as the
transactions specified in any of the preceding clauses of this
Subsection (1.1.1).
1.1.1.1 "Permitted Transfers" means that a
Shareholder, as hereinafter defined in Subsection 1.1.10 may
make the following transfers and such transfers shall be
deemed not to be a Change of Control under Subsection 1.1.1:
(a) To any trust, company, or
partnership created solely for the
benefit of any Shareholder or any
spouse of or any lineal descendant
of any Shareholder;
(b) To any individual or entity by bona
fide gift;
(c) To any spouse or former spouse of
any Shareholder pursuant to the
terms of a decree of divorce;
(d) To any officer or employee of the
Company pursuant to any incentive
stock option plan established by
the Shareholder;
(e) To any family member of any
Shareholder;
(f) After receipt of any necessary
regulatory approvals, to any
company or partnership, including,
but not limited to, a family
limited partnership, a majority of
the stock or interests of which
company or partnership are owned by
any of the Shareholder; or
(g) To any existing Shareholder as of
the Effective Date.
1.1.2 "Code" means the Internal Revenue Code of 1986, as
amended. References to a Code section shall be deemed to be to that section as
it now exists and to any successor provision.
1.1.3 "Disability" means the Executive's suffering a
sickness, accident or injury which has been determined by the carrier of any
individual or group long-term disability insurance policy carried by the Company
covering the Executive, or, if no such long-term disability policy exists, then
as determined by the Social Security Administration, to be a disability
rendering the Executive totally and permanently disabled. The Executive must
submit proof to the Company of the carrier's or Social Security Administration's
determination upon the request of the Company.
1.1.4 "Discount Rate" means eight percent (8%).
1.1.5 "Early Retirement Date" means the date the
Executive: (i) attains at least age fifty-five (55); (ii) attains at least his
fifteen (15) year anniversary of employment at the Company; and, (iii) has
participated in the Prior Agreement, including this amendment and restatement of
the Prior Agreement, for five (5) years.
1.1.6 "Executive Benefit Accrual" means the amount accrued
as a liability to the Executive by the Company by virtue of the terms of the
Prior Agreement through the Effective Date and by virtue of the terms of this
Agreement under Generally Accepted Accounting Principles (GAAP).
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1.1.7 "Normal Retirement Date" means the date the Executive
attains age sixty-five (65).
1.1.8 "Plan Year" means each twelve (12) consecutive month
period commencing on the Effective Date. For example, the twelve month period
commencing on the date the Company and the Executive execute this Agreement
shall constitute then first Plan Year. The twelve month period following the
first Plan Year shall constitute the second Plan Year and so on.
1.1.9 "Salary" means the base annual amount, without bonus
or other benefits, paid to the Executive by the Company as of the earlier to
occur of: (i) Termination of Employment; or, (ii) the Company' termination of
the Agreement under Section 7.3.
1.1.10 "Shareholder" means the existing owners of all issued
and outstanding stock of the Company or Holding Company as of the date this
Agreement is signed.
1.1.11 "Termination of Employment" or "Terminates
Employment" means the Executive's ceasing to be employed by the Company for any
reason whatsoever, voluntary or involuntary, other than by reason of an approved
leave of absence.
ARTICLE 2
LIFETIME BENEFITS
2.1 Normal Retirement Benefit. If Termination of Employment occurs
on or after the Normal Retirement Date, the Company shall pay to the Executive
the benefit described in this Section 2.1.
2.1.1 Amount of Benefit. The benefit under this Section 2.1
is sixty-seven percent (67%) of the Executive's Salary.
2.1.2 Payment of Benefit. The Company shall pay the annual
benefit determined under subsection 2.1.1 for a period of fifteen (15)
years, payable monthly (one-twelfth [1/12th] of the annual benefit)
beginning on the last day of the month commencing with the month
following Termination of Employment. The monthly payments under this
subsection 2.1.2 shall total one hundred eighty (180) substantially
equal payments over a period of one hundred eighty (180) months.
2.2 Early Retirement Benefit. If Termination of Employment occurs
on or after the Early Retirement Date and prior to the Normal Retirement Date,
the Company shall pay to the Executive the benefit described in this Section 2.2
in lieu of any other benefit under this Agreement.
2.2.1 Amount of Benefit. The benefit under this Section 2.2
is the annual benefit set forth in subsection 2.1.1 reduced by one-half
of a percent (0.5%) for each month or partial month between Termination
of Employment and the Normal Retirement Date. By way of example, assume
the Executive elects to retire at age 59 1/2, which is 66 months prior
to the Normal Retirement Date. Assume further the annual benefit under
subsection 2.1.1 equals thirty percent (30%) of Salary. Based on these
assumptions the percentage of Salary payable under this subsection
2.2.1 would equal 30% times 67% (100% minus the product of 66 times
0.5%). The resulting annual benefit under this subsection 2.2.1, based
on the assumptions in this example, would equal 20.10% (30% multiplied
by 67%) of Salary.
2.2.2 Payment of Benefit. The Company shall pay the annual
benefit determined under subsection 2.2.1 for a period of fifteen (15)
years, payable monthly (one-twelfth [1/12th] of the annual benefit)
beginning on the last day of the month commencing with the month
following Termination of Employment. The monthly payments under this
subsection 2.2.2 shall total one hundred eighty (180) substantially
equal payments over a period of one hundred eighty (180) months.
2.3 Termination of Employment Prior to the Early Retirement Date
or Prior to the Normal Retirement Date. Subject to the provisions of Section
2.5, if Termination of Employment occurs, for reasons other than death or
Disability, before either the Early Retirement Date or prior to the Normal
Retirement Date, the Company shall
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pay to the Executive the benefit described in this Section 2.3.
2.3.1 Amount of Benefit. The benefit under this Section 2.3
is the Executive Benefit Accrual as of Termination of Employment.
2.3.2 Payment of Benefit. The Company shall pay to the
Executive the benefit set forth in subsection 2.3.1, in lieu of any
other benefit under this Agreement, in a single lump-sum within sixty
(60) days of Termination of Employment.
2.4 Disability Benefit. If Termination of Employment due to a
Disability occurs prior to the Normal Retirement Date, the Company shall pay to
the Executive the benefit described in this Section 2.4.
2.4.1 Amount of Benefit. Subject to the provisions of
Section 2.6 and Section 5.3, the annual benefit under this Section 2.4
is the annual benefit set forth in subsection 2.1.1.
2.4.2 Payment of Benefit. The Company shall pay the annual
benefit determined under subsection 2.4.1, in lieu of any other benefit
under this Agreement, for a period of fifteen (15) years, payable
monthly (one-twelfth [1/12th] of the annual benefit) beginning on the
last day of the month commencing with the month following the
Executive's Normal Retirement Date. The monthly payments under this
subsection 2.4.2 shall total one hundred eighty (180) substantially
equal payments over a period of one hundred eighty (180) months.
2.4.3 Death During Disability. In the event the Executive
dies subsequent to Termination of Employment due to Disability and
prior to receiving any payment under this Agreement, the Company shall
pay the Executive's designated beneficiary the annual benefit set forth
in subsection 3.1.1 and in the manner set forth in Section 3.1.2 in
lieu of any other benefit under this Agreement.
2.5 Change of Control Benefit. Upon a Change of Control prior to
Termination of Employment, the Company, subject to the provisions of Section 2.6
and Section 5.3, shall pay to the Executive the benefit described in this
Section 2.5 in lieu of any other benefit under this Agreement.
2.5.1 Amount of Benefit. The benefit under this Section 2.5
is the present value of the payments under Section 2.1, assuming, for
purposes of determining present value under this subsection 2.5.1 only,
that the Executive was entitled to benefit payments under Section 2.1
at Termination of Employment. In determining this present value the
Company shall utilize the Discount Rate.
2.5.2 Payment of Benefit. The Company shall pay to the
Executive the benefit set forth in subsection 2.5.1, in lieu of any
other benefit under this Agreement, in a single lump-sum within sixty
(60) days of Termination of Employment.
2.6 Excess Parachute Payment. Notwithstanding any provision of
this Agreement to the contrary, the Company shall not pay any benefit under this
Agreement to the extent the benefit would be a non-deductible parachute payment
under Section 280G of the Code.
ARTICLE 3
DEATH BENEFITS
3.1. Death During Active Service. The Company shall pay to the
Executive's beneficiary the benefit described in this Section 3.1 if the
Executive dies: (i) while employed by the Company; or, (ii) after Termination of
Employment due to Disability prior to the Normal Retirement Date.
3.1.1. Amount of Benefit. The annual benefit under this
Section 3.1 is the annual benefit set forth in Section 2.1.1.
3.1.2. Payment of Benefit. The Company shall pay the annual
benefit determined under
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subsection 3.1.1, in lieu of any other benefit under this Agreement,
for a period of fifteen (15) years, payable monthly (one-twelfth
[1/12th] of the annual benefit) beginning on the last day of the month
commencing with the month following the Executive's death. The monthly
payments under this subsection 3.1.2 shall total one hundred eighty
(180) substantially equal payments over a period of one hundred eighty
(180) months.
3.2. Death During Benefit Period. If the Executive dies after
benefit payments have commenced under section of this Agreement, but before
receiving all such payments, the Company shall pay the remaining benefits to the
Executive's beneficiary at the same time and in the same amounts that would have
been paid to the Executive had the Executive survived. If the Executive's
designated beneficiary dies after benefit payments have commenced under this
Agreement but before receiving all such payments, the Company shall pay the
present value of the remaining benefits due under this Agreement, utilizing the
a discount rate of seven and one-half percent (7.5%) to determine the present
value of the remaining payments, to the estate of the Executive's designated
beneficiary in a single lump sum within sixty (60) days of the death of the
Executive's designated beneficiary.
ARTICLE 4
BENEFICIARIES
4.1 Beneficiary Designations. The Executive shall designate a
beneficiary by filing with the Company a written designation of beneficiary on a
form substantially similar to the form attached as Exhibit A. The Executive may
revoke or modify the designation at any time by filing a new designation.
However, designations will only be effective if signed by the Executive and
accepted by the Company during the Executive's lifetime. The Executive's
beneficiary designation shall be deemed automatically revoked if the beneficiary
predeceases the Executive, or if the Executive names a spouse as beneficiary and
the marriage is subsequently dissolved. If the Executive dies without a valid
beneficiary designation, all payments shall be made to the Executive's surviving
spouse, if any, and if none, to the Executive's surviving children and the
descendants of any deceased child by right of representation, and if no children
or descendants survive, to the Executive's estate.
4.2 Facility of Payment. If a benefit is payable to a minor, to a
person declared incompetent, or to a person incapable of handling the
disposition of his or her property, the Company may pay such benefit to the
guardian, legal representative or person having the care or custody of such
minor, incompetent person or incapable person, or to a custodian selected by the
Company under the Mississippi Uniform Transfers to Minors Act for the benefit of
such minor. The Company may require proof of incompetency, minority or
guardianship as it may deem appropriate prior to distribution of the benefit.
Such distribution shall completely discharge the Company from all liability with
respect to such benefit.
ARTICLE 5
GENERAL LIMITATIONS
Notwithstanding any provision of this Agreement to the contrary, the
Company shall not pay any benefit under this Agreement if any of the following
occur:
5.1 Termination for Cause. If the Company terminates the
Executive's employment for any of the following reasons:
5.1.1 Conviction in a court of competent jurisdiction of a
felony; or
5.1.2 Fraud, dishonesty, or embezzlement. Also, any willful
violation of any law or willful violation of a significant Company
policy committed in connection with the Executive's employment, with
either resulting in an adverse effect on the Company.
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5.2 Suicide. No benefits shall be payable if the Executive commits
suicide within two (2) years after the date of this Agreement, or if the
Executive has made any material misstatement of fact on any application for life
insurance purchased by the Company.
5.3 Golden Parachute Payment. Notwithstanding any provision of
this Agreement to the contrary, the Company shall not be required to pay any
benefit under this Agreement if, upon the advice of counsel, the Company
determines that the payment of such benefit would be prohibited by 12 C.F.R.
Part 359 or any successor regulations regarding employee compensation
promulgated by any regulatory agency having jurisdiction over the Company or its
affiliates or to the extent the benefit would be a non-deductible excess
parachute payment under Section 280G of the Code. To the extent possible, such
benefit payment shall be proportionately reduced to allow payment within the
fullest extent permissible under applicable law.
ARTICLE 6
CLAIMS AND REVIEW PROCEDURES
6.1 Claims Procedure. Any individual ("Claimant") who has not
received benefits under the Plan that he or she believes should be paid shall
make a claim for such benefits as follows:
6.1.1 Initiation - Written Claim. The Claimant initiates a
claim by submitting to the Company a written claim for the benefits.
6.1.2 Timing of Company Response. The Company shall respond
to such Claimant within 90 days after receiving the claim. If the
Company determines that special circumstances require additional time
for processing the claim, the Company can extend the response period by
an additional 90 days by notifying the Claimant in writing, prior to
the end of the initial 90-day period, that an additional period is
required. The notice of extension must set forth the special
circumstances and the date by which the Company expects to render its
decision.
6.1.3 Notice of Decision. If the Company denies part or all
of the claim, the Company shall notify the Claimant in writing of such
denial. The Company shall write the notification in a manner calculated
to be understood by the Claimant. The notification shall set forth:
(a) The specific reasons for the denial,
(b) A reference to the specific provisions of
the Plan on which the denial is based,
(c) A description of any additional information
or material necessary for the Claimant to perfect the claim
and an explanation of why it is needed,
(d) An explanation of the Plan's review
procedures and the time limits applicable to such procedures,
and
(e) A statement of the Claimant's right to bring
a civil action under ERISA Section 502(a) following an adverse
benefit determination on review.
6.2 Review Procedure. If the Company denies part or all of the
claim, the Claimant shall have the opportunity for a full and fair review by the
Company of the denial, as follows:
6.2.1 Initiation - Written Request. To initiate the review,
the Claimant, within 60 days after receiving the Company's notice of
denial, must file with the Company a written request for review.
6.2.2 Additional Submissions - Information Access. The
Claimant shall then have the opportunity to submit written comments,
documents, records and other information relating to the claim. The
Company shall also provide the Claimant, upon request and free of
charge, reasonable access to, and copies of, all documents, records and
other information relevant (as defined in applicable ERISA regulations)
to the Claimant's claim for benefits.
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6.2.3 Considerations on Review. In considering the review,
the Company shall take into account all materials and information the
Claimant submits relating to the claim, without regard to whether such
information was submitted or considered in the initial benefit
determination.
6.2.4 Timing of Company Response. The Company shall respond
in writing to such Claimant within 60 days after receiving the request
for review. If the Company determines that special circumstances
require additional time for processing the claim, the Company can
extend the response period by an additional 60 days by notifying the
Claimant in writing, prior to the end of the initial 60-day period,
that an additional period is required. The notice of extension must set
forth the special circumstances and the date by which the Company
expects to render its decision.
6.2.5 Notice of Decision. The Company shall notify the
Claimant in writing of its decision on review. The Company shall write
the notification in a manner calculated to be understood by the
Claimant. The notification shall set forth:
(a) The specific reasons for the denial,
(b) A reference to the specific provisions of
the Plan on which the denial is based,
(c) A statement that the Claimant is entitled to
receive, upon request and free of charge, reasonable access
to, and copies of, all documents, records and other
information relevant (as defined in applicable ERISA
regulations) to the Claimant's claim for benefits, and
(d) A statement of the Claimant's right to bring
a civil action under ERISA Section 502(a).
ARTICLE 7
AMENDMENTS AND TERMINATION
7.1 Amendment or Termination of Agreement. This Agreement may be
amended or terminated only by at a written agreement signed by the Company and
the Executive.
7.2 Termination by Operation of Law. Notwithstanding the previous
paragraph in this Article 7, the Company may amend or terminate this Agreement
at any time if, pursuant to legislative, judicial or regulatory action,
continuation of the Agreement would (i) cause benefits to be taxable to the
Executive prior to actual receipt, or (ii) result in significant financial
penalties or other significantly detrimental ramifications to the Company (other
than the financial impact of paying the benefits). In the event of a termination
of the Agreement under this Section 7.2, the Company shall pay to the Executive
a single lump-sum payment equaling one hundred percent (100%) of the Executive
Benefit Accrual one hundred eighty (180) days from termination of the Agreement.
7.3 Termination by Company. The Company may terminate this
Agreement at any time. In the event the Company terminates this Agreement, for
reasons other than those set forth in Section 7.1 or Section 7.2, the Company,
subject to Section 2.6 and Section 5.3, shall pay the Executive the benefit
provided in subsection Section 2.5, assuming, for purposes of this Section 7.3
only, that upon Termination of the Agreement by the Company under this Section
7.3 Termination of Employment occurred, even if the Executive continues
employment with the Company after Termination of the Agreement under this
Section 7.3.
ARTICLE 8
MISCELLANEOUS
8.1 Binding Effect. This Agreement shall bind the Executive and
the Company, and their beneficiaries, survivors, executors, administrators and
permitted transferees.
8.2 No Guaranty of Employment. This Agreement is not an employment
policy or contract. It does not give the Executive the right to remain an
employee of the Company, nor does it interfere with the Company's
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right to discharge the Executive. It also does not require the Executive to
remain an employee nor interfere with the Executive's right to terminate
employment at any time.
8.3 Non-Transferability. Benefits under this Agreement cannot be
sold, transferred, assigned, pledged, attached or encumbered in any manner,
except in accordance with Article 4 with respect to designation of
beneficiaries.
8.4 Tax Withholding. The Company shall withhold any taxes that are
required to be withheld from the benefits provided under this Agreement.
8.5 Applicable Law. The Agreement and all rights hereunder shall
be governed by the laws of the State of Mississippi, except to the extent
preempted by the laws of the United States of America.
8.6 Unfunded Arrangement. The Executive and beneficiary are
general unsecured creditors of the Company for the payment of benefits under
this Agreement. The benefits represent the mere promise by the Company to pay
such benefits. The rights to benefits are not subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance,
attachment, or garnishment by creditors. Any insurance on the Executive's life
is a general asset of the Company to which the Executive and beneficiary have no
preferred or secured claim.
8.7 Severability. Without limitation of any other section
contained herein, in case any one or more provisions contained in this Agreement
shall for any reason be held to be invalid, illegal or unenforceable in any
other respect, such invalidity, illegality or unenforceability shall not affect
the other provisions of this Agreement. In the event any one or more of the
provisions found in the Agreement shall be held to be invalid, illegal or
unenforceable by any governmental regulatory agency or court of competent
jurisdiction, this Agreement shall be construed as if such invalid, illegal or
unenforceable provision had never been a part of this Agreement and such
provision shall be deemed substituted by such other provisions as will most
nearly accomplish the intent of the parties to the extent permitted by
applicable law.
8.8 Administration. The Company shall have powers which are
necessary to administer this Agreement, including but not limited to:
(a) Interpreting the provisions of the Agreement;
(b) Establishing and revising the method of accounting
for the Agreement;
(c) Maintaining a record of benefit payments; and
(d) Establishing rules and prescribing any forms
necessary or desirable to administer the Agreement.
8.9 Named Fiduciary. The Company shall be the named fiduciary and
plan administrator under this Agreement. It may delegate to others certain
aspects of the management and operational responsibilities including the
employment of advisors and the delegation of ministerial duties to qualified
individuals.
8.10 Full Obligation. Notwithstanding any provision to the
contrary, when the Company has paid either a Lifetime Benefit or a Death Benefit
as appropriate under any section of the Agreement, the Company has completed its
obligation to the Executive.
IN WITNESS WHEREOF, the Executive and a duly authorized Company officer
have signed this Agreement as of the date indicated below.
COMPANY: EXECUTIVE:
THE PEOPLES BANK
By: _________________________________ __________________________________
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XXXXXX X. XXXXXXX
Its: _________________________________
Date: _________________ Date: _________________
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EXHIBIT A
BENEFICIARY DESIGNATION
I, _____________________________, designate the following as beneficiary of any
death benefits payable under the Amendment and Restatement of Executive
Supplemental Income Agreement between myself and The Peoples Bank:
Primary Beneficiary
Name Relationship
Address
Contingent Beneficiary
Name Relationship
Address
NOTE: TO NAME A TRUST AS BENEFICIARY, PLEASE PROVIDE THE NAME OF THE TRUSTEE AND
THE EXACT DATE OF THE TRUST AGREEMENT.
I understand that I may change these beneficiary designations by filing a new
written designation with the Company. I further understand that the designations
will be automatically revoked if the beneficiary predeceases me, or, if I have
named my spouse as beneficiary, in the event of the dissolution of our marriage.
Date
Accepted by the Company this _____ day of _____________, 20___
By:
Title:
10
AMENDMENT AND RESTATEMENT OF
EXECUTIVE SUPPLEMENTAL INCOME AGREEMENT
This Agreement, effective as of October 1, 2002 (The "Effective Date"),
is made by and between The Peoples Bank, a state-chartered commercial bank with
its principal office located in Biloxi, Mississippi (hereinafter referred to as
the "Company"), and Xxx X. Xxxxxxxxx, Xx. (hereinafter referred to as the
"Executive"). This Agreement hereby amends and restates, in its entirety, a
prior agreement, with an initial effective date of January 1, 1988 (hereinafter
the "Prior Agreement"), made by and between the Company and the Executive.
INTRODUCTION
The Company and the Executive entered into the Prior Agreement in order
to provide certain benefits to the Executive as an officer of the Company upon
the Executive's retirement.
The Company and the Executive, by this current Agreement, desire to
amend and desire to restate the Prior Agreement, in its entirety, to include and
reflect the terms set forth herein and to incorporate the benefit accumulated to
date by the Executive under Prior Agreement.
Therefore, in order to encourage the Executive to remain an employee of
the Company, the Company is willing to provide salary continuation benefits to
the Executive. The Company will pay the benefits from its general assets.
AGREEMENT
The Executive and the Company agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Definitions. Whenever used in this Agreement, the following
words and phrases shall have the meanings specified:
1.1.1 "Change of Control" means:
(a) a change in the ownership of the capital stock of the
Company or Peoples Financial Corporation (the "Holding Company"),
whereby a corporation, person or group acting in concert (a "Person")
as described in Section 14(d)(2) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), holds or acquires, directly or
indirectly, beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of a number of shares of capital
stock of the Company or Holding Company which constitutes fifty percent
(50%) or more of the combined voting power of the Company's or Holding
Company's outstanding capital stock then entitled to vote generally in
the election of directors; or
(b) the persons who were members of the Board of
Directors of the Company or Holding Company immediately prior to a
tender offer, exchange offer, contested election or any combination of
the foregoing, cease to constitute a majority of such Board of
Directors; or
(c) the adoption by the Board of Directors of the Company
or of the Holding Company of a merger, consolidation or reorganization
plan involving the Company or Holding Company in which the Company or
the Holding Company is not the surviving entity, or a sale of all or
substantially all of the assets of the Company or Holding Company. For
purposes of this Agreement, a sale of all or substantially all of the
assets of the Company or Holding Company shall be deemed to occur if
any Person acquires (or during the 12-month period ending on the date
of the most recent acquisition by such Person, has acquired) gross
assets of the Company or Holding Company that have an aggregate fair
market value equal to fifty percent (50%) of the fair market value of
all of the respective gross assets of the Company or Holding Company
immediately prior to such acquisition or acquisitions; or
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(d) a tender offer or exchange offer is made by any
Person which, if successfully completed, would result in such Person
beneficially owning (within the meaning of Rule 13d-3 promulgated under
the Exchange Act) either fifty percent (50%) or more of the Company's
or Holding Company's outstanding shares of Common Stock or shares of
capital stock having fifty percent (50%) or more the combined voting
power of the Company's or Holding Company's then outstanding capital
stock (other than an offer made by the Company or the Holding Company),
and sufficient shares are acquired under the offer to cause such person
to own fifty percent (50%) or more of the voting power; or
(e) any other transactions or series of related
transactions occurring which have substantially the same effect as the
transactions specified in any of the preceding clauses of this
Subsection (1.1.1).
1.1.1.1 "Permitted Transfers" means that a
Shareholder, as hereinafter defined in Subsection 1.1.10 may
make the following transfers and such transfers shall be
deemed not to be a Change of Control under Subsection 1.1.1:
(a) To any trust, company, or
partnership created solely for the
benefit of any Shareholder or any
spouse of or any lineal descendant
of any Shareholder;
(b) To any individual or entity by bona
fide gift;
(c) To any spouse or former spouse of
any Shareholder pursuant to the
terms of a decree of divorce;
(d) To any officer or employee of the
Company pursuant to any incentive
stock option plan established by
the Shareholder;
(e) To any family member of any
Shareholder;
(f) After receipt of any necessary
regulatory approvals, to any
company or partnership, including,
but not limited to, a family
limited partnership, a majority of
the stock or interests of which
company or partnership are owned by
any of the Shareholder; or
(g) To any existing Shareholder as of
the Effective Date.
1.1.2 "Code" means the Internal Revenue Code of 1986, as amended.
References to a Code section shall be deemed to be to that section as it now
exists and to any successor provision.
1.1.3 "Disability" means the Executive's suffering a sickness,
accident or injury which has been determined by the carrier of any individual or
group long-term disability insurance policy carried by the Company covering the
Executive, or, if no such long-term disability policy exists, then as determined
by the Social Security Administration, to be a disability rendering the
Executive totally and permanently disabled. The Executive must submit proof to
the Company of the carrier's or Social Security Administration's determination
upon the request of the Company.
1.1.4 "Discount Rate" means eight percent (8%).
1.1.5 "Early Retirement Date" means the date the Executive: (i)
attains at least age fifty-five (55); (ii) attains at least his fifteen (15)
year anniversary of employment at the Company; and, (iii) has participated in
the Prior Agreement, including this amendment and restatement of the Prior
Agreement, for five (5) years.
1.1.6 "Executive Benefit Accrual" means the amount accrued as a
liability to the Executive by the Company by virtue of the terms of the Prior
Agreement through the Effective Date and by virtue of the terms of this
Agreement under Generally Accepted Accounting Principles (GAAP).
2
1.1.7 "Normal Retirement Date" means the date the Executive attains
age sixty-five (65).
1.1.8 "Plan Year" means each twelve (12) consecutive month period
commencing on the Effective Date. For example, the twelve month period
commencing on the date the Company and the Executive execute this Agreement
shall constitute then first Plan Year. The twelve month period following the
first Plan Year shall constitute the second Plan Year and so on.
1.1.9 "Salary" means the base annual amount, without bonus or other
benefits, paid to the Executive by the Company as of the earlier to occur of:
(i) Termination of Employment; or, (ii) the Company' termination of the
Agreement under Section 7.3.
1.1.10 "Shareholder" means the existing owners of all issued and
outstanding stock of the Company or Holding Company as of the date this
Agreement is signed.
1.1.11 "Termination of Employment" or "Terminates Employment" means
the Executive's ceasing to be employed by the Company for any reason whatsoever,
voluntary or involuntary, other than by reason of an approved leave of absence.
ARTICLE 2
LIFETIME BENEFITS
2.1 Normal Retirement Benefit. If Termination of Employment occurs
on or after the Normal Retirement Date, the Company shall pay to the Executive
the benefit described in this Section 2.1.
2.1.1 Amount of Benefit. The benefit under this Section 2.1
is fifty-eight percent (58%) of the Executive's Salary.
2.1.2 Payment of Benefit. The Company shall pay the annual
benefit determined under subsection 2.1.1 for a period of fifteen (15)
years, payable monthly (one-twelfth [1/12th] of the annual benefit)
beginning on the last day of the month commencing with the month
following Termination of Employment. The monthly payments under this
subsection 2.1.2 shall total one hundred eighty (180) substantially
equal payments over a period of one hundred eighty (180) months.
2.2 Early Retirement Benefit. If Termination of Employment occurs
on or after the Early Retirement Date and prior to the Normal Retirement Date,
the Company shall pay to the Executive the benefit described in this Section 2.2
in lieu of any other benefit under this Agreement.
2.2.1 Amount of Benefit. The benefit under this Section 2.2
is the annual benefit set forth in subsection 2.1.1 reduced by one-half
of a percent (0.5%) for each month or partial month between Termination
of Employment and the Normal Retirement Date. By way of example, assume
the Executive elects to retire at age 59 -1/2, which is 66 months prior
to the Normal Retirement Date. Assume further the annual benefit under
subsection 2.1.1 equals thirty percent (30%) of Salary. Based on these
assumptions the percentage of Salary payable under this subsection
2.2.1 would equal 30% times 67% (100% minus the product of 66 times
0.5%). The resulting annual benefit under this subsection 2.2.1, based
on the assumptions in this example, would equal 20.10% (30% multiplied
by 67%) of Salary.
2.2.2 Payment of Benefit. The Company shall pay the annual
benefit determined under subsection 2.2.1 for a period of fifteen (15)
years, payable monthly (one-twelfth [1/12th] of the annual benefit)
beginning on the last day of the month commencing with the month
following Termination of Employment. The monthly payments under this
subsection 2.2.2 shall total one hundred eighty (180) substantially
equal payments over a period of one hundred eighty (180) months.
2.3 Termination of Employment Prior to the Early Retirement Date
or Prior to the Normal Retirement Date. Subject to the provisions of Section
2.5, if Termination of Employment occurs, for reasons other than death or
Disability, before either the Early Retirement Date or prior to the Normal
Retirement Date, the Company shall
3
pay to the Executive the benefit described in this Section 2.3.
2.3.1 Amount of Benefit. The benefit under this Section 2.3
is the Executive Benefit Accrual as of Termination of Employment.
2.3.2 Payment of Benefit. The Company shall pay to the
Executive the benefit set forth in subsection 2.3.1, in lieu of any
other benefit under this Agreement, in a single lump-sum within sixty
(60) days of Termination of Employment.
2.4 Disability Benefit. If Termination of Employment due to a
Disability occurs prior to the Normal Retirement Date, the Company shall pay to
the Executive the benefit described in this Section 2.4.
2.4.1 Amount of Benefit. Subject to the provisions of
Section 2.6 and Section 5.3, the annual benefit under this Section 2.4
is the annual benefit set forth in subsection 2.1.1.
2.4.2 Payment of Benefit. The Company shall pay the annual
benefit determined under subsection 2.4.1, in lieu of any other benefit
under this Agreement, for a period of fifteen (15) years, payable
monthly (one-twelfth [1/12th] of the annual benefit) beginning on the
last day of the month commencing with the month following the
Executive's Normal Retirement Date. The monthly payments under this
subsection 2.4.2 shall total one hundred eighty (180) substantially
equal payments over a period of one hundred eighty (180) months.
2.4.3 Death During Disability. In the event the Executive
dies subsequent to Termination of Employment due to Disability and
prior to receiving any payment under this Agreement, the Company shall
pay the Executive's designated beneficiary the annual benefit set forth
in subsection 3.1.1 and in the manner set forth in Section 3.1.2 in
lieu of any other benefit under this Agreement.
2.5 Change of Control Benefit. Upon a Change of Control prior to
Termination of Employment, the Company, subject to the provisions of Section 2.6
and Section 5.3, shall pay to the Executive the benefit described in this
Section 2.5 in lieu of any other benefit under this Agreement.
2.5.1 Amount of Benefit. The benefit under this Section 2.5
is the present value of the payments under Section 2.1, assuming, for
purposes of determining present value under this subsection 2.5.1 only,
that the Executive was entitled to benefit payments under Section 2.1
at Termination of Employment. In determining this present value the
Company shall utilize the Discount Rate.
2.5.2 Payment of Benefit. The Company shall pay to the
Executive the benefit set forth in subsection 2.5.1, in lieu of any
other benefit under this Agreement, in a single lump-sum within sixty
(60) days of Termination of Employment.
2.6 Excess Parachute Payment. Notwithstanding any provision of
this Agreement to the contrary, the Company shall not pay any benefit under this
Agreement to the extent the benefit would be a non-deductible parachute payment
under Section 280G of the Code.
ARTICLE 3
DEATH BENEFITS
3.1. Death During Active Service. The Company shall pay to the
Executive's beneficiary the benefit described in this Section 3.1 if the
Executive dies: (i) while employed by the Company; or, (ii) after Termination of
Employment due to Disability prior to the Normal Retirement Date.
3.1.1. Amount of Benefit. The annual benefit under this
Section 3.1 is the annual benefit set forth in Section 2.1.1.
3.1.2. Payment of Benefit. The Company shall pay the annual
benefit determined under
4
subsection 3.1.1, in lieu of any other benefit under this Agreement,
for a period of fifteen (15) years, payable monthly (one-twelfth
[1/12th] of the annual benefit) beginning on the last day of the month
commencing with the month following the Executive's death. The monthly
payments under this subsection 3.1.2 shall total one hundred eighty
(180) substantially equal payments over a period of one hundred eighty
(180) months.
3.2. Death During Benefit Period. If the Executive dies after
benefit payments have commenced under section of this Agreement, but before
receiving all such payments, the Company shall pay the remaining benefits to the
Executive's beneficiary at the same time and in the same amounts that would have
been paid to the Executive had the Executive survived. If the Executive's
designated beneficiary dies after benefit payments have commenced under this
Agreement but before receiving all such payments, the Company shall pay the
present value of the remaining benefits due under this Agreement, utilizing the
a discount rate of seven and one-half percent (7.5%) to determine the present
value of the remaining payments, to the estate of the Executive's designated
beneficiary in a single lump sum within sixty (60) days of the death of the
Executive's designated beneficiary.
ARTICLE 4
BENEFICIARIES
4.1 Beneficiary Designations. The Executive shall designate a
beneficiary by filing with the Company a written designation of beneficiary on a
form substantially similar to the form attached as Exhibit A. The Executive may
revoke or modify the designation at any time by filing a new designation.
However, designations will only be effective if signed by the Executive and
accepted by the Company during the Executive's lifetime. The Executive's
beneficiary designation shall be deemed automatically revoked if the beneficiary
predeceases the Executive, or if the Executive names a spouse as beneficiary and
the marriage is subsequently dissolved. If the Executive dies without a valid
beneficiary designation, all payments shall be made to the Executive's surviving
spouse, if any, and if none, to the Executive's surviving children and the
descendants of any deceased child by right of representation, and if no children
or descendants survive, to the Executive's estate.
4.2 Facility of Payment. If a benefit is payable to a minor, to a
person declared incompetent, or to a person incapable of handling the
disposition of his or her property, the Company may pay such benefit to the
guardian, legal representative or person having the care or custody of such
minor, incompetent person or incapable person, or to a custodian selected by the
Company under the Mississippi Uniform Transfers to Minors Act for the benefit of
such minor. The Company may require proof of incompetency, minority or
guardianship as it may deem appropriate prior to distribution of the benefit.
Such distribution shall completely discharge the Company from all liability with
respect to such benefit.
ARTICLE 5
GENERAL LIMITATIONS
Notwithstanding any provision of this Agreement to the contrary, the
Company shall not pay any benefit under this Agreement if any of the following
occur:
5.1 Termination for Cause. If the Company terminates the
Executive's employment for any of the following reasons:
5.1.1 Conviction in a court of competent jurisdiction of a
felony; or
5.1.2 Fraud, dishonesty, or embezzlement. Also, any willful
violation of any law or willful violation of a significant Company
policy committed in connection with the Executive's employment, with
either resulting in an adverse effect on the Company.
5
5.2 Suicide. No benefits shall be payable if the Executive commits
suicide within two (2) years after the date of this Agreement, or if the
Executive has made any material misstatement of fact on any application for life
insurance purchased by the Company.
5.3 Golden Parachute Payment. Notwithstanding any provision of
this Agreement to the contrary, the Company shall not be required to pay any
benefit under this Agreement if, upon the advice of counsel, the Company
determines that the payment of such benefit would be prohibited by 12 C.F.R.
Part 359 or any successor regulations regarding employee compensation
promulgated by any regulatory agency having jurisdiction over the Company or its
affiliates or to the extent the benefit would be a non-deductible excess
parachute payment under Section 280G of the Code. To the extent possible, such
benefit payment shall be proportionately reduced to allow payment within the
fullest extent permissible under applicable law.
ARTICLE 6
CLAIMS AND REVIEW PROCEDURES
6.1 Claims Procedure. Any individual ("Claimant") who has not
received benefits under the Plan that he or she believes should be paid shall
make a claim for such benefits as follows:
6.1.1 Initiation - Written Claim. The Claimant initiates a
claim by submitting to the Company a written claim for the benefits.
6.1.2 Timing of Company Response. The Company shall respond
to such Claimant within 90 days after receiving the claim. If the
Company determines that special circumstances require additional time
for processing the claim, the Company can extend the response period by
an additional 90 days by notifying the Claimant in writing, prior to
the end of the initial 90-day period, that an additional period is
required. The notice of extension must set forth the special
circumstances and the date by which the Company expects to render its
decision.
6.1.3 Notice of Decision. If the Company denies part or all
of the claim, the Company shall notify the Claimant in writing of such
denial. The Company shall write the notification in a manner calculated
to be understood by the Claimant. The notification shall set forth:
(a) The specific reasons for the denial,
(b) A reference to the specific provisions of
the Plan on which the denial is based,
(c) A description of any additional information
or material necessary for the Claimant to perfect the claim
and an explanation of why it is needed,
(d) An explanation of the Plan's review
procedures and the time limits applicable to such procedures,
and
(e) A statement of the Claimant's right to bring
a civil action under ERISA Section 502(a) following an adverse
benefit determination on review.
6.2 Review Procedure. If the Company denies part or all of the
claim, the Claimant shall have the opportunity for a full and fair review by the
Company of the denial, as follows:
6.2.1 Initiation - Written Request. To initiate the review,
the Claimant, within 60 days after receiving the Company's notice of
denial, must file with the Company a written request for review.
6.2.2 Additional Submissions - Information Access. The
Claimant shall then have the opportunity to submit written comments,
documents, records and other information relating to the claim. The
Company shall also provide the Claimant, upon request and free of
charge, reasonable access to, and copies of, all documents, records and
other information relevant (as defined in applicable ERISA regulations)
to the Claimant's claim for benefits.
6
6.2.3 Considerations on Review. In considering the review,
the Company shall take into account all materials and information the
Claimant submits relating to the claim, without regard to whether such
information was submitted or considered in the initial benefit
determination.
6.2.4 Timing of Company Response. The Company shall respond
in writing to such Claimant within 60 days after receiving the request
for review. If the Company determines that special circumstances
require additional time for processing the claim, the Company can
extend the response period by an additional 60 days by notifying the
Claimant in writing, prior to the end of the initial 60-day period,
that an additional period is required. The notice of extension must set
forth the special circumstances and the date by which the Company
expects to render its decision.
6.2.5 Notice of Decision. The Company shall notify the
Claimant in writing of its decision on review. The Company shall write
the notification in a manner calculated to be understood by the
Claimant. The notification shall set forth:
(a) The specific reasons for the denial,
(b) A reference to the specific provisions of
the Plan on which the denial is based,
(c) A statement that the Claimant is entitled to
receive, upon request and free of charge, reasonable access
to, and copies of, all documents, records and other
information relevant (as defined in applicable ERISA
regulations) to the Claimant's claim for benefits, and
(d) A statement of the Claimant's right to bring
a civil action under ERISA Section 502(a).
ARTICLE 7
AMENDMENTS AND TERMINATION
7.1 Amendment or Termination of Agreement. This Agreement may be
amended or terminated only by at a written agreement signed by the Company and
the Executive.
7.2 Termination by Operation of Law. Notwithstanding the previous
paragraph in this Article 7, the Company may amend or terminate this Agreement
at any time if, pursuant to legislative, judicial or regulatory action,
continuation of the Agreement would (i) cause benefits to be taxable to the
Executive prior to actual receipt, or (ii) result in significant financial
penalties or other significantly detrimental ramifications to the Company (other
than the financial impact of paying the benefits). In the event of a termination
of the Agreement under this Section 7.2, the Company shall pay to the Executive
a single lump-sum payment equaling one hundred percent (100%) of the Executive
Benefit Accrual one hundred eighty (180) days from termination of the Agreement.
7.3 Termination by Company. The Company may terminate this
Agreement at any time. In the event the Company terminates this Agreement, for
reasons other than those set forth in Section 7.1 or Section 7.2, the Company,
subject to Section 2.6 and Section 5.3, shall pay the Executive the benefit
provided in subsection Section 2.5, assuming, for purposes of this Section 7.3
only, that upon Termination of the Agreement by the Company under this Section
7.3 Termination of Employment occurred, even if the Executive continues
employment with the Company after Termination of the Agreement under this
Section 7.3.
ARTICLE 8
MISCELLANEOUS
8.1 Binding Effect. This Agreement shall bind the Executive and
the Company, and their beneficiaries, survivors, executors, administrators and
permitted transferees.
8.2 No Guaranty of Employment. This Agreement is not an employment
policy or contract. It does not give the Executive the right to remain an
employee of the Company, nor does it interfere with the Company's
7
right to discharge the Executive. It also does not require the Executive to
remain an employee nor interfere with the Executive's right to terminate
employment at any time.
8.3 Non-Transferability. Benefits under this Agreement cannot be
sold, transferred, assigned, pledged, attached or encumbered in any manner,
except in accordance with Article 4 with respect to designation of
beneficiaries.
8.4 Tax Withholding. The Company shall withhold any taxes that are
required to be withheld from the benefits provided under this Agreement.
8.5 Applicable Law. The Agreement and all rights hereunder shall
be governed by the laws of the State of Mississippi, except to the extent
preempted by the laws of the United States of America.
8.6 Unfunded Arrangement. The Executive and beneficiary are
general unsecured creditors of the Company for the payment of benefits under
this Agreement. The benefits represent the mere promise by the Company to pay
such benefits. The rights to benefits are not subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance,
attachment, or garnishment by creditors. Any insurance on the Executive's life
is a general asset of the Company to which the Executive and beneficiary have no
preferred or secured claim.
8.7 Severability. Without limitation of any other section
contained herein, in case any one or more provisions contained in this Agreement
shall for any reason be held to be invalid, illegal or unenforceable in any
other respect, such invalidity, illegality or unenforceability shall not affect
the other provisions of this Agreement. In the event any one or more of the
provisions found in the Agreement shall be held to be invalid, illegal or
unenforceable by any governmental regulatory agency or court of competent
jurisdiction, this Agreement shall be construed as if such invalid, illegal or
unenforceable provision had never been a part of this Agreement and such
provision shall be deemed substituted by such other provisions as will most
nearly accomplish the intent of the parties to the extent permitted by
applicable law.
8.8 Administration. The Company shall have powers which are
necessary to administer this Agreement, including but not limited to:
(a) Interpreting the provisions of the Agreement;
(b) Establishing and revising the method of accounting
for the Agreement;
(c) Maintaining a record of benefit payments; and
(d) Establishing rules and prescribing any forms
necessary or desirable to administer the Agreement.
8.9 Named Fiduciary. The Company shall be the named fiduciary and
plan administrator under this Agreement. It may delegate to others certain
aspects of the management and operational responsibilities including the
employment of advisors and the delegation of ministerial duties to qualified
individuals.
8.10 Full Obligation. Notwithstanding any provision to the
contrary, when the Company has paid either a Lifetime Benefit or a Death Benefit
as appropriate under any section of the Agreement, the Company has completed its
obligation to the Executive.
IN WITNESS WHEREOF, the Executive and a duly authorized Company officer
have signed this Agreement as of the date indicated below.
COMPANY: EXECUTIVE:
THE PEOPLES BANK
By: _________________________________ ___________________________________
8
XXX X. XXXXXXXXX, XX.
Its: _________________________________
Date: _________________ Date: __________________
9
EXHIBIT A
BENEFICIARY DESIGNATION
I, _____________________________, designate the following as beneficiary of any
death benefits payable under the Amendment and Restatement of Executive
Supplemental Income Agreement between myself and The Peoples Bank:
Primary Beneficiary
Name Relationship
Address
Contingent Beneficiary
Name Relationship
Address
NOTE: TO NAME A TRUST AS BENEFICIARY, PLEASE PROVIDE THE NAME OF THE TRUSTEE AND
THE EXACT DATE OF THE TRUST AGREEMENT.
I understand that I may change these beneficiary designations by filing a new
written designation with the Company. I further understand that the designations
will be automatically revoked if the beneficiary predeceases me, or, if I have
named my spouse as beneficiary, in the event of the dissolution of our marriage.
Date
Accepted by the Company this _____ day of _____________, 20___
By:
Title:
10
AMENDMENT AND RESTATEMENT OF
EXECUTIVE SUPPLEMENTAL INCOME AGREEMENT
This Agreement, effective as of October 1, 2002 (The "Effective Date"),
is made by and between The Peoples Bank, a state-chartered commercial bank with
its principal office located in Biloxi, Mississippi (hereinafter referred to as
the "Company"), and Xxxxxxxxx X. Xxxxxx (hereinafter referred to as the
"Executive"). This Agreement hereby amends and restates, in its entirety, a
prior agreement, with an initial effective date of January 1, 1988 (hereinafter
the "Prior Agreement"), made by and between the Company and the Executive.
INTRODUCTION
The Company and the Executive entered into the Prior Agreement in order
to provide certain benefits to the Executive as an officer of the Company upon
the Executive's retirement.
The Company and the Executive, by this current Agreement, desire to
amend and desire to restate the Prior Agreement, in its entirety, to include and
reflect the terms set forth herein and to incorporate the benefit accumulated to
date by the Executive under Prior Agreement.
Therefore, in order to encourage the Executive to remain an employee of
the Company, the Company is willing to provide salary continuation benefits to
the Executive. The Company will pay the benefits from its general assets.
AGREEMENT
The Executive and the Company agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Definitions. Whenever used in this Agreement, the following
words and phrases shall have the meanings specified:
1.1.1 "Change of Control" means:
(a) a change in the ownership of the capital stock of the
Company or Peoples Financial Corporation (the "Holding Company"),
whereby a corporation, person or group acting in concert (a "Person")
as described in Section 14(d)(2) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), holds or acquires, directly or
indirectly, beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of a number of shares of capital
stock of the Company or Holding Company which constitutes fifty percent
(50%) or more of the combined voting power of the Company's or Holding
Company's outstanding capital stock then entitled to vote generally in
the election of directors; or
(b) the persons who were members of the Board of
Directors of the Company or Holding Company immediately prior to a
tender offer, exchange offer, contested election or any combination of
the foregoing, cease to constitute a majority of such Board of
Directors; or
(c) the adoption by the Board of Directors of the Company
or of the Holding Company of a merger, consolidation or reorganization
plan involving the Company or Holding Company in which the Company or
the Holding Company is not the surviving entity, or a sale of all or
substantially all of the assets of the Company or Holding Company. For
purposes of this Agreement, a sale of all or substantially all of the
assets of the Company or Holding Company shall be deemed to occur if
any Person acquires (or during the 12-month period ending on the date
of the most recent acquisition by such Person, has acquired) gross
assets of the Company or Holding Company that have an aggregate fair
market value equal to fifty percent (50%) of the fair market value of
all of the respective gross assets of the Company or Holding Company
immediately prior to such acquisition or acquisitions; or
1
(d) a tender offer or exchange offer is made by any
Person which, if successfully completed, would result in such Person
beneficially owning (within the meaning of Rule 13d-3 promulgated under
the Exchange Act) either fifty percent (50%) or more of the Company's
or Holding Company's outstanding shares of Common Stock or shares of
capital stock having fifty percent (50%) or more the combined voting
power of the Company's or Holding Company's then outstanding capital
stock (other than an offer made by the Company or the Holding Company),
and sufficient shares are acquired under the offer to cause such person
to own fifty percent (50%) or more of the voting power; or
(e) any other transactions or series of related
transactions occurring which have substantially the same effect as the
transactions specified in any of the preceding clauses of this
Subsection (1.1.1).
1.1.1.1 "Permitted Transfers" means that a
Shareholder, as hereinafter defined in Subsection 1.1.10 may
make the following transfers and such transfers shall be
deemed not to be a Change of Control under Subsection 1.1.1:
(a) To any trust, company, or
partnership created solely for the
benefit of any Shareholder or any
spouse of or any lineal descendant
of any Shareholder;
(b) To any individual or entity by bona
fide gift;
(c) To any spouse or former spouse of
any Shareholder pursuant to the
terms of a decree of divorce;
(d) To any officer or employee of the
Company pursuant to any incentive
stock option plan established by
the Shareholder;
(e) To any family member of any
Shareholder;
(f) After receipt of any necessary
regulatory approvals, to any
company or partnership, including,
but not limited to, a family
limited partnership, a majority of
the stock or interests of which
company or partnership are owned by
any of the Shareholder; or
(g) To any existing Shareholder as of
the Effective Date.
1.1.2 "Code" means the Internal Revenue Code of 1986, as amended.
References to a Code section shall be deemed to be to that section as it now
exists and to any successor provision.
1.1.3 "Disability" means the Executive's suffering a sickness,
accident or injury which has been determined by the carrier of any individual or
group long-term disability insurance policy carried by the Company covering the
Executive, or, if no such long-term disability policy exists, then as determined
by the Social Security Administration, to be a disability rendering the
Executive totally and permanently disabled. The Executive must submit proof to
the Company of the carrier's or Social Security Administration's determination
upon the request of the Company.
1.1.4 "Discount Rate" means eight percent (8%).
1.1.5 "Early Retirement Date" means the date the Executive: (i)
attains at least age fifty-five (55); (ii) attains at least her fifteen (15)
year anniversary of employment at the Company; and, (iii) has participated in
the Prior Agreement, including this amendment and restatement of the Prior
Agreement, for five (5) years.
1.1.6 "Executive Benefit Accrual" means the amount accrued as a
liability to the Executive by the Company by virtue of the terms of the Prior
Agreement through the Effective Date and by virtue of the terms of this
Agreement under Generally Accepted Accounting Principles (GAAP).
2
1.1.7 "Normal Retirement Date" means the date the Executive attains
age sixty-five (65).
1.1.8 "Plan Year" means each twelve (12) consecutive month period
commencing on the Effective Date. For example, the twelve month period
commencing on the date the Company and the Executive execute this Agreement
shall constitute then first Plan Year. The twelve month period following the
first Plan Year shall constitute the second Plan Year and so on.
1.1.9 "Salary" means the base annual amount, without bonus or other
benefits, paid to the Executive by the Company as of the earlier to occur of:
(i) Termination of Employment; or, (ii) the Company' termination of the
Agreement under Section 7.3.
1.1.10 "Shareholder" means the existing owners of all issued and
outstanding stock of the Company or Holding Company as of the date this
Agreement is signed.
1.1.11 "Termination of Employment" or "Terminates Employment" means
the Executive's ceasing to be employed by the Company for any reason whatsoever,
voluntary or involuntary, other than by reason of an approved leave of absence.
ARTICLE 2
LIFETIME BENEFITS
2.1 Normal Retirement Benefit. If Termination of Employment occurs
on or after the Normal Retirement Date, the Company shall pay to the Executive
the benefit described in this Section 2.1.
2.1.1 Amount of Benefit. The benefit under this Section 2.1
is fifty percent (50%) of the Executive's Salary.
2.1.2 Payment of Benefit. The Company shall pay the annual
benefit determined under subsection 2.1.1 for a period of fifteen (15)
years, payable monthly (one-twelfth [1/12th] of the annual benefit)
beginning on the last day of the month commencing with the month
following Termination of Employment. The monthly payments under this
subsection 2.1.2 shall total one hundred eighty (180) substantially
equal payments over a period of one hundred eighty (180) months.
2.2 Early Retirement Benefit. If Termination of Employment occurs
on or after the Early Retirement Date and prior to the Normal Retirement Date,
the Company shall pay to the Executive the benefit described in this Section 2.2
in lieu of any other benefit under this Agreement.
2.2.1 Amount of Benefit. The benefit under this Section 2.2
is the annual benefit set forth in subsection 2.1.1 reduced by one-half
of a percent (0.5%) for each month or partial month between Termination
of Employment and the Normal Retirement Date. By way of example, assume
the Executive elects to retire at age 59 -1/2, which is 66 months prior
to the Normal Retirement Date. Assume further the annual benefit under
subsection 2.1.1 equals thirty percent (30%) of Salary. Based on these
assumptions the percentage of Salary payable under this subsection
2.2.1 would equal 30% times 67% (100% minus the product of 66 times
0.5%). The resulting annual benefit under this subsection 2.2.1, based
on the assumptions in this example, would equal 20.10% (30% multiplied
by 67%) of Salary.
2.2.2 Payment of Benefit. The Company shall pay the annual
benefit determined under subsection 2.2.1 for a period of fifteen (15)
years, payable monthly (one-twelfth [1/12th] of the annual benefit)
beginning on the last day of the month commencing with the month
following Termination of Employment. The monthly payments under this
subsection 2.2.2 shall total one hundred eighty (180) substantially
equal payments over a period of one hundred eighty (180) months.
2.3 Termination of Employment Prior to the Early Retirement Date
or Prior to the Normal Retirement Date. Subject to the provisions of Section
2.5, if Termination of Employment occurs, for reasons other than death or
Disability, before either the Early Retirement Date or prior to the Normal
Retirement Date, the Company shall
3
pay to the Executive the benefit described in this Section 2.3.
2.3.1 Amount of Benefit. The benefit under this Section 2.3
is the Executive Benefit Accrual as of Termination of Employment.
2.3.2 Payment of Benefit. The Company shall pay to the
Executive the benefit set forth in subsection 2.3.1, in lieu of any
other benefit under this Agreement, in a single lump-sum within sixty
(60) days of Termination of Employment.
2.4 Disability Benefit. If Termination of Employment due to a
Disability occurs prior to the Normal Retirement Date, the Company shall pay to
the Executive the benefit described in this Section 2.4.
2.4.1 Amount of Benefit. Subject to the provisions of
Section 2.6 and Section 5.3, the annual benefit under this Section 2.4
is the annual benefit set forth in subsection 2.1.1.
2.4.2 Payment of Benefit. The Company shall pay the annual
benefit determined under subsection 2.4.1, in lieu of any other benefit
under this Agreement, for a period of fifteen (15) years, payable
monthly (one-twelfth [1/12th] of the annual benefit) beginning on the
last day of the month commencing with the month following the
Executive's Normal Retirement Date. The monthly payments under this
subsection 2.4.2 shall total one hundred eighty (180) substantially
equal payments over a period of one hundred eighty (180) months.
2.4.3 Death During Disability. In the event the Executive
dies subsequent to Termination of Employment due to Disability and
prior to receiving any payment under this Agreement, the Company shall
pay the Executive's designated beneficiary the annual benefit set forth
in subsection 3.1.1 and in the manner set forth in Section 3.1.2 in
lieu of any other benefit under this Agreement.
2.5 Change of Control Benefit. Upon a Change of Control prior to
Termination of Employment, the Company, subject to the provisions of Section 2.6
and Section 5.3, shall pay to the Executive the benefit described in this
Section 2.5 in lieu of any other benefit under this Agreement.
2.5.1 Amount of Benefit. The benefit under this Section 2.5
is the present value of the payments under Section 2.1, assuming, for
purposes of determining present value under this subsection 2.5.1 only,
that the Executive was entitled to benefit payments under Section 2.1
at Termination of Employment. In determining this present value the
Company shall utilize the Discount Rate.
2.5.2 Payment of Benefit. The Company shall pay to the
Executive the benefit set forth in subsection 2.5.1, in lieu of any
other benefit under this Agreement, in a single lump-sum within sixty
(60) days of Termination of Employment.
2.6 Excess Parachute Payment. Notwithstanding any provision of
this Agreement to the contrary, the Company shall not pay any benefit under this
Agreement to the extent the benefit would be a non-deductible parachute payment
under Section 280G of the Code.
ARTICLE 3
DEATH BENEFITS
3.1. Death During Active Service. The Company shall pay to the
Executive's beneficiary the benefit described in this Section 3.1 if the
Executive dies: (i) while employed by the Company; or, (ii) after Termination of
Employment due to Disability prior to the Normal Retirement Date.
3.1.1. Amount of Benefit. The annual benefit under this
Section 3.1 is the annual benefit set forth in Section 2.1.1.
3.1.2. Payment of Benefit. The Company shall pay the annual
benefit determined under
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subsection 3.1.1, in lieu of any other benefit under this Agreement,
for a period of fifteen (15) years, payable monthly (one-twelfth
[1/12th] of the annual benefit) beginning on the last day of the month
commencing with the month following the Executive's death. The monthly
payments under this subsection 3.1.2 shall total one hundred eighty
(180) substantially equal payments over a period of one hundred eighty
(180) months.
3.2. Death During Benefit Period. If the Executive dies after
benefit payments have commenced under section of this Agreement, but before
receiving all such payments, the Company shall pay the remaining benefits to the
Executive's beneficiary at the same time and in the same amounts that would have
been paid to the Executive had the Executive survived. If the Executive's
designated beneficiary dies after benefit payments have commenced under this
Agreement but before receiving all such payments, the Company shall pay the
present value of the remaining benefits due under this Agreement, utilizing the
a discount rate of seven and one-half percent (7.5%) to determine the present
value of the remaining payments, to the estate of the Executive's designated
beneficiary in a single lump sum within sixty (60) days of the death of the
Executive's designated beneficiary.
ARTICLE 4
BENEFICIARIES
4.1 Beneficiary Designations. The Executive shall designate a
beneficiary by filing with the Company a written designation of beneficiary on a
form substantially similar to the form attached as Exhibit A. The Executive may
revoke or modify the designation at any time by filing a new designation.
However, designations will only be effective if signed by the Executive and
accepted by the Company during the Executive's lifetime. The Executive's
beneficiary designation shall be deemed automatically revoked if the beneficiary
predeceases the Executive, or if the Executive names a spouse as beneficiary and
the marriage is subsequently dissolved. If the Executive dies without a valid
beneficiary designation, all payments shall be made to the Executive's surviving
spouse, if any, and if none, to the Executive's surviving children and the
descendants of any deceased child by right of representation, and if no children
or descendants survive, to the Executive's estate.
4.2 Facility of Payment. If a benefit is payable to a minor, to a
person declared incompetent, or to a person incapable of handling the
disposition of his or her property, the Company may pay such benefit to the
guardian, legal representative or person having the care or custody of such
minor, incompetent person or incapable person, or to a custodian selected by the
Company under the Mississippi Uniform Transfers to Minors Act for the benefit of
such minor. The Company may require proof of incompetency, minority or
guardianship as it may deem appropriate prior to distribution of the benefit.
Such distribution shall completely discharge the Company from all liability with
respect to such benefit.
ARTICLE 5
GENERAL LIMITATIONS
Notwithstanding any provision of this Agreement to the contrary, the
Company shall not pay any benefit under this Agreement if any of the following
occur:
5.1 Termination for Cause. If the Company terminates the
Executive's employment for any of the following reasons:
5.1.1 Conviction in a court of competent jurisdiction of a
felony; or
5.1.2 Fraud, dishonesty, or embezzlement. Also, any willful
violation of any law or willful violation of a significant Company
policy committed in connection with the Executive's employment, with
either resulting in an adverse effect on the Company.
5
5.2 Suicide. No benefits shall be payable if the Executive commits
suicide within two (2) years after the date of this Agreement, or if the
Executive has made any material misstatement of fact on any application for life
insurance purchased by the Company.
5.3 Golden Parachute Payment. Notwithstanding any provision of
this Agreement to the contrary, the Company shall not be required to pay any
benefit under this Agreement if, upon the advice of counsel, the Company
determines that the payment of such benefit would be prohibited by 12 C.F.R.
Part 359 or any successor regulations regarding employee compensation
promulgated by any regulatory agency having jurisdiction over the Company or its
affiliates or to the extent the benefit would be a non-deductible excess
parachute payment under Section 280G of the Code. To the extent possible, such
benefit payment shall be proportionately reduced to allow payment within the
fullest extent permissible under applicable law.
ARTICLE 6
CLAIMS AND REVIEW PROCEDURES
6.1 Claims Procedure. Any individual ("Claimant") who has not
received benefits under the Plan that he or she believes should be paid shall
make a claim for such benefits as follows:
6.1.1 Initiation - Written Claim. The Claimant initiates a
claim by submitting to the Company a written claim for the benefits.
6.1.2 Timing of Company Response. The Company shall respond
to such Claimant within 90 days after receiving the claim. If the
Company determines that special circumstances require additional time
for processing the claim, the Company can extend the response period by
an additional 90 days by notifying the Claimant in writing, prior to
the end of the initial 90-day period, that an additional period is
required. The notice of extension must set forth the special
circumstances and the date by which the Company expects to render its
decision.
6.1.3 Notice of Decision. If the Company denies part or all
of the claim, the Company shall notify the Claimant in writing of such
denial. The Company shall write the notification in a manner calculated
to be understood by the Claimant. The notification shall set forth:
(a) The specific reasons for the denial,
(b) A reference to the specific provisions of
the Plan on which the denial is based,
(c) A description of any additional information
or material necessary for the Claimant to perfect the claim
and an explanation of why it is needed,
(d) An explanation of the Plan's review
procedures and the time limits applicable to such procedures,
and
(e) A statement of the Claimant's right to bring
a civil action under ERISA Section 502(a) following an adverse
benefit determination on review.
6.2 Review Procedure. If the Company denies part or all of the
claim, the Claimant shall have the opportunity for a full and fair review by the
Company of the denial, as follows:
6.2.1 Initiation - Written Request. To initiate the review,
the Claimant, within 60 days after receiving the Company's notice of
denial, must file with the Company a written request for review.
6.2.2 Additional Submissions - Information Access. The
Claimant shall then have the opportunity to submit written comments,
documents, records and other information relating to the claim. The
Company shall also provide the Claimant, upon request and free of
charge, reasonable access to, and copies of, all documents, records and
other information relevant (as defined in applicable ERISA regulations)
to the Claimant's claim for benefits.
6
6.2.3 Considerations on Review. In considering the review,
the Company shall take into account all materials and information the
Claimant submits relating to the claim, without regard to whether such
information was submitted or considered in the initial benefit
determination.
6.2.4 Timing of Company Response. The Company shall respond
in writing to such Claimant within 60 days after receiving the request
for review. If the Company determines that special circumstances
require additional time for processing the claim, the Company can
extend the response period by an additional 60 days by notifying the
Claimant in writing, prior to the end of the initial 60-day period,
that an additional period is required. The notice of extension must set
forth the special circumstances and the date by which the Company
expects to render its decision.
6.2.5 Notice of Decision. The Company shall notify the
Claimant in writing of its decision on review. The Company shall write
the notification in a manner calculated to be understood by the
Claimant. The notification shall set forth:
(a) The specific reasons for the denial,
(b) A reference to the specific provisions of
the Plan on which the denial is based,
(c) A statement that the Claimant is entitled to
receive, upon request and free of charge, reasonable access
to, and copies of, all documents, records and other
information relevant (as defined in applicable ERISA
regulations) to the Claimant's claim for benefits, and
(d) A statement of the Claimant's right to bring
a civil action under ERISA Section 502(a).
ARTICLE 7
AMENDMENTS AND TERMINATION
7.1 Amendment or Termination of Agreement. This Agreement may be
amended or terminated only by at a written agreement signed by the Company and
the Executive.
7.2 Termination by Operation of Law. Notwithstanding the previous
paragraph in this Article 7, the Company may amend or terminate this Agreement
at any time if, pursuant to legislative, judicial or regulatory action,
continuation of the Agreement would (i) cause benefits to be taxable to the
Executive prior to actual receipt, or (ii) result in significant financial
penalties or other significantly detrimental ramifications to the Company (other
than the financial impact of paying the benefits). In the event of a termination
of the Agreement under this Section 7.2, the Company shall pay to the Executive
a single lump-sum payment equaling one hundred percent (100%) of the Executive
Benefit Accrual one hundred eighty (180) days from termination of the Agreement.
7.3 Termination by Company. The Company may terminate this
Agreement at any time. In the event the Company terminates this Agreement, for
reasons other than those set forth in Section 7.1 or Section 7.2, the Company,
subject to Section 2.6 and Section 5.3, shall pay the Executive the benefit
provided in subsection Section 2.5, assuming, for purposes of this Section 7.3
only, that upon Termination of the Agreement by the Company under this Section
7.3 Termination of Employment occurred, even if the Executive continues
employment with the Company after Termination of the Agreement under this
Section 7.3.
ARTICLE 8
MISCELLANEOUS
8.1 Binding Effect. This Agreement shall bind the Executive and
the Company, and their beneficiaries, survivors, executors, administrators and
permitted transferees.
8.2 No Guaranty of Employment. This Agreement is not an employment
policy or contract. It does not give the Executive the right to remain an
employee of the Company, nor does it interfere with the Company's
7
right to discharge the Executive. It also does not require the Executive to
remain an employee nor interfere with the Executive's right to terminate
employment at any time.
8.3 Non-Transferability. Benefits under this Agreement cannot be
sold, transferred, assigned, pledged, attached or encumbered in any manner,
except in accordance with Article 4 with respect to designation of
beneficiaries.
8.4 Tax Withholding. The Company shall withhold any taxes that are
required to be withheld from the benefits provided under this Agreement.
8.5 Applicable Law. The Agreement and all rights hereunder shall
be governed by the laws of the State of Mississippi, except to the extent
preempted by the laws of the United States of America.
8.6 Unfunded Arrangement. The Executive and beneficiary are
general unsecured creditors of the Company for the payment of benefits under
this Agreement. The benefits represent the mere promise by the Company to pay
such benefits. The rights to benefits are not subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance,
attachment, or garnishment by creditors. Any insurance on the Executive's life
is a general asset of the Company to which the Executive and beneficiary have no
preferred or secured claim.
8.7 Severability. Without limitation of any other section
contained herein, in case any one or more provisions contained in this Agreement
shall for any reason be held to be invalid, illegal or unenforceable in any
other respect, such invalidity, illegality or unenforceability shall not affect
the other provisions of this Agreement. In the event any one or more of the
provisions found in the Agreement shall be held to be invalid, illegal or
unenforceable by any governmental regulatory agency or court of competent
jurisdiction, this Agreement shall be construed as if such invalid, illegal or
unenforceable provision had never been a part of this Agreement and such
provision shall be deemed substituted by such other provisions as will most
nearly accomplish the intent of the parties to the extent permitted by
applicable law.
8.8 Administration. The Company shall have powers which are
necessary to administer this Agreement, including but not limited to:
(a) Interpreting the provisions of the Agreement;
(b) Establishing and revising the method of accounting
for the Agreement;
(c) Maintaining a record of benefit payments; and
(d) Establishing rules and prescribing any forms
necessary or desirable to administer the Agreement.
8.9 Named Fiduciary. The Company shall be the named fiduciary and
plan administrator under this Agreement. It may delegate to others certain
aspects of the management and operational responsibilities including the
employment of advisors and the delegation of ministerial duties to qualified
individuals.
8.10 Full Obligation. Notwithstanding any provision to the
contrary, when the Company has paid either a Lifetime Benefit or a Death Benefit
as appropriate under any section of the Agreement, the Company has completed its
obligation to the Executive.
IN WITNESS WHEREOF, the Executive and a duly authorized Company officer
have signed this Agreement as of the date indicated below.
COMPANY: EXECUTIVE:
THE PEOPLES BANK
By: _________________________________ ____________________________________
8
XXXXXXXXX X. XXXXXX
Its: _________________________________
Date: _________________ Date: ______________________
9
EXHIBIT A
BENEFICIARY DESIGNATION
I, _____________________________, designate the following as beneficiary of any
death benefits payable under the Amendment and Restatement of Executive
Supplemental Income Agreement between myself and The Peoples Bank:
Primary Beneficiary
Name Relationship
Address
Contingent Beneficiary
Name Relationship
Address
NOTE: TO NAME A TRUST AS BENEFICIARY, PLEASE PROVIDE THE NAME OF THE TRUSTEE AND
THE EXACT DATE OF THE TRUST AGREEMENT.
I understand that I may change these beneficiary designations by filing a new
written designation with the Company. I further understand that the designations
will be automatically revoked if the beneficiary predeceases me, or, if I have
named my spouse as beneficiary, in the event of the dissolution of our marriage.
Date
Accepted by the Company this _____ day of _____________, 20___
By:
Title:
10
AMENDMENT AND RESTATEMENT OF
EXECUTIVE SUPPLEMENTAL INCOME AGREEMENT
This Agreement, effective as of October 1, 2002 (The "Effective Date"),
is made by and between The Peoples Bank, a state-chartered commercial bank with
its principal office located in Biloxi, Mississippi (hereinafter referred to as
the "Company"), and Xxxxx X. Xxxx (hereinafter referred to as the "Executive").
This Agreement hereby amends and restates, in its entirety, a prior agreement,
with an initial effective date of January 1, 1992 (hereinafter the "Prior
Agreement"), made by and between the Company and the Executive.
INTRODUCTION
The Company and the Executive entered into the Prior Agreement in order
to provide certain benefits to the Executive as an officer of the Company upon
the Executive's retirement.
The Company and the Executive, by this current Agreement, desire to
amend and desire to restate the Prior Agreement, in its entirety, to include and
reflect the terms set forth herein and to incorporate the benefit accumulated to
date by the Executive under Prior Agreement.
Therefore, in order to encourage the Executive to remain an employee of
the Company, the Company is willing to provide salary continuation benefits to
the Executive. The Company will pay the benefits from its general assets.
AGREEMENT
The Executive and the Company agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Definitions. Whenever used in this Agreement, the following
words and phrases shall have the meanings specified:
1.1.1 "Change of Control" means:
(a) a change in the ownership of the capital stock of the
Company or Peoples Financial Corporation (the "Holding Company"),
whereby a corporation, person or group acting in concert (a "Person")
as described in Section 14(d)(2) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), holds or acquires, directly or
indirectly, beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of a number of shares of capital
stock of the Company or Holding Company which constitutes fifty percent
(50%) or more of the combined voting power of the Company's or Holding
Company's outstanding capital stock then entitled to vote generally in
the election of directors; or
(b) the persons who were members of the Board of
Directors of the Company or Holding Company immediately prior to a
tender offer, exchange offer, contested election or any combination of
the foregoing, cease to constitute a majority of such Board of
Directors; or
(c) the adoption by the Board of Directors of the Company
or of the Holding Company of a merger, consolidation or reorganization
plan involving the Company or Holding Company in which the Company or
the Holding Company is not the surviving entity, or a sale of all or
substantially all of the assets of the Company or Holding Company. For
purposes of this Agreement, a sale of all or substantially all of the
assets of the Company or Holding Company shall be deemed to occur if
any Person acquires (or during the 12-month period ending on the date
of the most recent acquisition by such Person, has acquired) gross
assets of the Company or Holding Company that have an aggregate fair
market value equal to fifty percent (50%) of the fair market value of
all of the respective gross assets of the Company or Holding Company
immediately prior to such acquisition or acquisitions; or
1
(d) a tender offer or exchange offer is made by any
Person which, if successfully completed, would result in such Person
beneficially owning (within the meaning of Rule 13d-3 promulgated under
the Exchange Act) either fifty percent (50%) or more of the Company's
or Holding Company's outstanding shares of Common Stock or shares of
capital stock having fifty percent (50%) or more the combined voting
power of the Company's or Holding Company's then outstanding capital
stock (other than an offer made by the Company or the Holding Company),
and sufficient shares are acquired under the offer to cause such person
to own fifty percent (50%) or more of the voting power; or
(e) any other transactions or series of related
transactions occurring which have substantially the same effect as the
transactions specified in any of the preceding clauses of this
Subsection (1.1.1).
1.1.1.1 "Permitted Transfers" means that a
Shareholder, as hereinafter defined in Subsection 1.1.10 may
make the following transfers and such transfers shall be
deemed not to be a Change of Control under Subsection 1.1.1:
(a) To any trust, company, or
partnership created solely for the
benefit of any Shareholder or any
spouse of or any lineal descendant
of any Shareholder;
(b) To any individual or entity by bona
fide gift;
(c) To any spouse or former spouse of
any Shareholder pursuant to the
terms of a decree of divorce;
(d) To any officer or employee of the
Company pursuant to any incentive
stock option plan established by
the Shareholder;
(e) To any family member of any
Shareholder;
(f) After receipt of any necessary
regulatory approvals, to any
company or partnership, including,
but not limited to, a family
limited partnership, a majority of
the stock or interests of which
company or partnership are owned by
any of the Shareholder; or
(g) To any existing Shareholder as of
the Effective Date.
1.1.2 "Code" means the Internal Revenue Code of 1986, as amended.
References to a Code section shall be deemed to be to that section as it now
exists and to any successor provision.
1.1.3 "Disability" means the Executive's suffering a sickness,
accident or injury which has been determined by the carrier of any individual or
group long-term disability insurance policy carried by the Company covering the
Executive, or, if no such long-term disability policy exists, then as determined
by the Social Security Administration, to be a disability rendering the
Executive totally and permanently disabled. The Executive must submit proof to
the Company of the carrier's or Social Security Administration's determination
upon the request of the Company.
1.1.4 "Discount Rate" means eight percent (8%).
1.1.5 "Early Retirement Date" means the date the Executive: (i)
attains at least age fifty-five (55); (ii) attains at least her fifteen (15)
year anniversary of employment at the Company; and, (iii) has participated in
the Prior Agreement, including this amendment and restatement of the Prior
Agreement, for five (5) years.
1.1.6 "Executive Benefit Accrual" means the amount accrued as a
liability to the Executive by the Company by virtue of the terms of the Prior
Agreement through the Effective Date and by virtue of the terms of this
Agreement under Generally Accepted Accounting Principles (GAAP).
2
1.1.7 "Normal Retirement Date" means the date the Executive attains
age sixty-five (65).
1.1.8 "Plan Year" means each twelve (12) consecutive month period
commencing on the Effective Date. For example, the twelve month period
commencing on the date the Company and the Executive execute this Agreement
shall constitute then first Plan Year. The twelve month period following the
first Plan Year shall constitute the second Plan Year and so on.
1.1.9 "Salary" means the base annual amount, without bonus or other
benefits, paid to the Executive by the Company as of the earlier to occur of:
(i) Termination of Employment; or, (ii) the Company' termination of the
Agreement under Section 7.3.
1.1.10 "Shareholder" means the existing owners of all issued and
outstanding stock of the Company or Holding Company as of the date this
Agreement is signed.
1.1.11 "Termination of Employment" or "Terminates Employment" means
the Executive's ceasing to be employed by the Company for any reason whatsoever,
voluntary or involuntary, other than by reason of an approved leave of absence.
ARTICLE 2
LIFETIME BENEFITS
2.1 Normal Retirement Benefit. If Termination of Employment occurs
on or after the Normal Retirement Date, the Company shall pay to the Executive
the benefit described in this Section 2.1.
2.1.1 Amount of Benefit. The benefit under this Section 2.1
is fifty percent (50%) of the Executive's Salary.
2.1.2 Payment of Benefit. The Company shall pay the annual
benefit determined under subsection 2.1.1 for a period of fifteen (15)
years, payable monthly (one-twelfth [1/12th] of the annual benefit)
beginning on the last day of the month commencing with the month
following Termination of Employment. The monthly payments under this
subsection 2.1.2 shall total one hundred eighty (180) substantially
equal payments over a period of one hundred eighty (180) months.
2.2 Early Retirement Benefit. If Termination of Employment occurs
on or after the Early Retirement Date and prior to the Normal Retirement Date,
the Company shall pay to the Executive the benefit described in this Section 2.2
in lieu of any other benefit under this Agreement.
2.2.1 Amount of Benefit. The benefit under this Section 2.2
is the annual benefit set forth in subsection 2.1.1 reduced by one-half
of a percent (0.5%) for each month or partial month between Termination
of Employment and the Normal Retirement Date. By way of example, assume
the Executive elects to retire at age 59 -1/2, which is 66 months prior
to the Normal Retirement Date. Assume further the annual benefit under
subsection 2.1.1 equals thirty percent (30%) of Salary. Based on these
assumptions the percentage of Salary payable under this subsection
2.2.1 would equal 30% times 67% (100% minus the product of 66 times
0.5%). The resulting annual benefit under this subsection 2.2.1, based
on the assumptions in this example, would equal 20.10% (30% multiplied
by 67%) of Salary.
2.2.2 Payment of Benefit. The Company shall pay the annual
benefit determined under subsection 2.2.1 for a period of fifteen (15)
years, payable monthly (one-twelfth [1/12th] of the annual benefit)
beginning on the last day of the month commencing with the month
following Termination of Employment. The monthly payments under this
subsection 2.2.2 shall total one hundred eighty (180) substantially
equal payments over a period of one hundred eighty (180) months.
2.3 Termination of Employment Prior to the Early Retirement Date
or Prior to the Normal Retirement Date. Subject to the provisions of Section
2.5, if Termination of Employment occurs, for reasons other than death or
Disability, before either the Early Retirement Date or prior to the Normal
Retirement Date, the Company shall
3
pay to the Executive the benefit described in this Section 2.3.
2.3.1 Amount of Benefit. The benefit under this Section 2.3
is the Executive Benefit Accrual as of Termination of Employment.
2.3.2 Payment of Benefit. The Company shall pay to the
Executive the benefit set forth in subsection 2.3.1, in lieu of any
other benefit under this Agreement, in a single lump-sum within sixty
(60) days of Termination of Employment.
2.4 Disability Benefit. If Termination of Employment due to a
Disability occurs prior to the Normal Retirement Date, the Company shall pay to
the Executive the benefit described in this Section 2.4.
2.4.1 Amount of Benefit. Subject to the provisions of
Section 2.6 and Section 5.3, the annual benefit under this Section 2.4
is the annual benefit set forth in subsection 2.1.1.
2.4.2 Payment of Benefit. The Company shall pay the annual
benefit determined under subsection 2.4.1, in lieu of any other benefit
under this Agreement, for a period of fifteen (15) years, payable
monthly (one-twelfth [1/12th] of the annual benefit) beginning on the
last day of the month commencing with the month following the
Executive's Normal Retirement Date. The monthly payments under this
subsection 2.4.2 shall total one hundred eighty (180) substantially
equal payments over a period of one hundred eighty (180) months.
2.4.3 Death During Disability. In the event the Executive
dies subsequent to Termination of Employment due to Disability and
prior to receiving any payment under this Agreement, the Company shall
pay the Executive's designated beneficiary the annual benefit set forth
in subsection 3.1.1 and in the manner set forth in Section 3.1.2 in
lieu of any other benefit under this Agreement.
2.5 Change of Control Benefit. Upon a Change of Control prior to
Termination of Employment, the Company, subject to the provisions of Section 2.6
and Section 5.3, shall pay to the Executive the benefit described in this
Section 2.5 in lieu of any other benefit under this Agreement.
2.5.1 Amount of Benefit. The benefit under this Section 2.5
is the present value of the payments under Section 2.1, assuming, for
purposes of determining present value under this subsection 2.5.1 only,
that the Executive was entitled to benefit payments under Section 2.1
at Termination of Employment. In determining this present value the
Company shall utilize the Discount Rate.
2.5.2 Payment of Benefit. The Company shall pay to the
Executive the benefit set forth in subsection 2.5.1, in lieu of any
other benefit under this Agreement, in a single lump-sum within sixty
(60) days of Termination of Employment.
2.6 Excess Parachute Payment. Notwithstanding any provision of
this Agreement to the contrary, the Company shall not pay any benefit under this
Agreement to the extent the benefit would be a non-deductible parachute payment
under Section 280G of the Code.
ARTICLE 3
DEATH BENEFITS
3.1. Death During Active Service. The Company shall pay to the
Executive's beneficiary the benefit described in this Section 3.1 if the
Executive dies: (i) while employed by the Company; or, (ii) after Termination of
Employment due to Disability prior to the Normal Retirement Date.
3.1.1. Amount of Benefit. The annual benefit under this
Section 3.1 is the annual benefit set forth in Section 2.1.1.
3.1.2. Payment of Benefit. The Company shall pay the annual
benefit determined under
4
subsection 3.1.1, in lieu of any other benefit under this Agreement,
for a period of fifteen (15) years, payable monthly (one-twelfth
[1/12th] of the annual benefit) beginning on the last day of the month
commencing with the month following the Executive's death. The monthly
payments under this subsection 3.1.2 shall total one hundred eighty
(180) substantially equal payments over a period of one hundred eighty
(180) months.
3.2. Death During Benefit Period. If the Executive dies after
benefit payments have commenced under section of this Agreement, but before
receiving all such payments, the Company shall pay the remaining benefits to the
Executive's beneficiary at the same time and in the same amounts that would have
been paid to the Executive had the Executive survived. If the Executive's
designated beneficiary dies after benefit payments have commenced under this
Agreement but before receiving all such payments, the Company shall pay the
present value of the remaining benefits due under this Agreement, utilizing the
a discount rate of seven and one-half percent (7.5%) to determine the present
value of the remaining payments, to the estate of the Executive's designated
beneficiary in a single lump sum within sixty (60) days of the death of the
Executive's designated beneficiary.
ARTICLE 4
BENEFICIARIES
4.1 Beneficiary Designations. The Executive shall designate a
beneficiary by filing with the Company a written designation of beneficiary on a
form substantially similar to the form attached as Exhibit A. The Executive may
revoke or modify the designation at any time by filing a new designation.
However, designations will only be effective if signed by the Executive and
accepted by the Company during the Executive's lifetime. The Executive's
beneficiary designation shall be deemed automatically revoked if the beneficiary
predeceases the Executive, or if the Executive names a spouse as beneficiary and
the marriage is subsequently dissolved. If the Executive dies without a valid
beneficiary designation, all payments shall be made to the Executive's surviving
spouse, if any, and if none, to the Executive's surviving children and the
descendants of any deceased child by right of representation, and if no children
or descendants survive, to the Executive's estate.
4.2 Facility of Payment. If a benefit is payable to a minor, to a
person declared incompetent, or to a person incapable of handling the
disposition of his or her property, the Company may pay such benefit to the
guardian, legal representative or person having the care or custody of such
minor, incompetent person or incapable person, or to a custodian selected by the
Company under the Mississippi Uniform Transfers to Minors Act for the benefit of
such minor. The Company may require proof of incompetency, minority or
guardianship as it may deem appropriate prior to distribution of the benefit.
Such distribution shall completely discharge the Company from all liability with
respect to such benefit.
ARTICLE 5
GENERAL LIMITATIONS
Notwithstanding any provision of this Agreement to the contrary, the
Company shall not pay any benefit under this Agreement if any of the following
occur:
5.1 Termination for Cause. If the Company terminates the
Executive's employment for any of the following reasons:
5.1.1 Conviction in a court of competent jurisdiction of a
felony; or
5.1.2 Fraud, dishonesty, or embezzlement. Also, any willful
violation of any law or willful violation of a significant Company
policy committed in connection with the Executive's employment, with
either resulting in an adverse effect on the Company.
5
5.2 Suicide. No benefits shall be payable if the Executive commits
suicide within two (2) years after the date of this Agreement, or if the
Executive has made any material misstatement of fact on any application for life
insurance purchased by the Company.
5.3 Golden Parachute Payment. Notwithstanding any provision of
this Agreement to the contrary, the Company shall not be required to pay any
benefit under this Agreement if, upon the advice of counsel, the Company
determines that the payment of such benefit would be prohibited by 12 C.F.R.
Part 359 or any successor regulations regarding employee compensation
promulgated by any regulatory agency having jurisdiction over the Company or its
affiliates or to the extent the benefit would be a non-deductible excess
parachute payment under Section 280G of the Code. To the extent possible, such
benefit payment shall be proportionately reduced to allow payment within the
fullest extent permissible under applicable law.
ARTICLE 6
CLAIMS AND REVIEW PROCEDURES
6.1 Claims Procedure. Any individual ("Claimant") who has not
received benefits under the Plan that he or she believes should be paid shall
make a claim for such benefits as follows:
6.1.1 Initiation - Written Claim. The Claimant initiates a
claim by submitting to the Company a written claim for the benefits.
6.1.2 Timing of Company Response. The Company shall respond
to such Claimant within 90 days after receiving the claim. If the
Company determines that special circumstances require additional time
for processing the claim, the Company can extend the response period by
an additional 90 days by notifying the Claimant in writing, prior to
the end of the initial 90-day period, that an additional period is
required. The notice of extension must set forth the special
circumstances and the date by which the Company expects to render its
decision.
6.1.3 Notice of Decision. If the Company denies part or all
of the claim, the Company shall notify the Claimant in writing of such
denial. The Company shall write the notification in a manner calculated
to be understood by the Claimant. The notification shall set forth:
(a) The specific reasons for the denial,
(b) A reference to the specific provisions of
the Plan on which the denial is based,
(c) A description of any additional information
or material necessary for the Claimant to perfect the claim
and an explanation of why it is needed,
(d) An explanation of the Plan's review
procedures and the time limits applicable to such procedures,
and
(e) A statement of the Claimant's right to bring
a civil action under ERISA Section 502(a) following an adverse
benefit determination on review.
6.2 Review Procedure. If the Company denies part or all of the
claim, the Claimant shall have the opportunity for a full and fair review by the
Company of the denial, as follows:
6.2.1 Initiation - Written Request. To initiate the review,
the Claimant, within 60 days after receiving the Company's notice of
denial, must file with the Company a written request for review.
6.2.2 Additional Submissions - Information Access. The
Claimant shall then have the opportunity to submit written comments,
documents, records and other information relating to the claim. The
Company shall also provide the Claimant, upon request and free of
charge, reasonable access to, and copies of, all documents, records and
other information relevant (as defined in applicable ERISA regulations)
to the Claimant's claim for benefits.
6
6.2.3 Considerations on Review. In considering the review,
the Company shall take into account all materials and information the
Claimant submits relating to the claim, without regard to whether such
information was submitted or considered in the initial benefit
determination.
6.2.4 Timing of Company Response. The Company shall respond
in writing to such Claimant within 60 days after receiving the request
for review. If the Company determines that special circumstances
require additional time for processing the claim, the Company can
extend the response period by an additional 60 days by notifying the
Claimant in writing, prior to the end of the initial 60-day period,
that an additional period is required. The notice of extension must set
forth the special circumstances and the date by which the Company
expects to render its decision.
6.2.5 Notice of Decision. The Company shall notify the
Claimant in writing of its decision on review. The Company shall write
the notification in a manner calculated to be understood by the
Claimant. The notification shall set forth:
(a) The specific reasons for the denial,
(b) A reference to the specific provisions of
the Plan on which the denial is based,
(c) A statement that the Claimant is entitled to
receive, upon request and free of charge, reasonable access
to, and copies of, all documents, records and other
information relevant (as defined in applicable ERISA
regulations) to the Claimant's claim for benefits, and
(d) A statement of the Claimant's right to bring
a civil action under ERISA Section 502(a).
ARTICLE 7
AMENDMENTS AND TERMINATION
7.1 Amendment or Termination of Agreement. This Agreement may be
amended or terminated only by at a written agreement signed by the Company and
the Executive.
7.2 Termination by Operation of Law. Notwithstanding the previous
paragraph in this Article 7, the Company may amend or terminate this Agreement
at any time if, pursuant to legislative, judicial or regulatory action,
continuation of the Agreement would (i) cause benefits to be taxable to the
Executive prior to actual receipt, or (ii) result in significant financial
penalties or other significantly detrimental ramifications to the Company (other
than the financial impact of paying the benefits). In the event of a termination
of the Agreement under this Section 7.2, the Company shall pay to the Executive
a single lump-sum payment equaling one hundred percent (100%) of the Executive
Benefit Accrual one hundred eighty (180) days from termination of the Agreement.
7.3 Termination by Company. The Company may terminate this
Agreement at any time. In the event the Company terminates this Agreement, for
reasons other than those set forth in Section 7.1 or Section 7.2, the Company,
subject to Section 2.6 and Section 5.3, shall pay the Executive the benefit
provided in subsection Section 2.5, assuming, for purposes of this Section 7.3
only, that upon Termination of the Agreement by the Company under this Section
7.3 Termination of Employment occurred, even if the Executive continues
employment with the Company after Termination of the Agreement under this
Section 7.3.
ARTICLE 8
MISCELLANEOUS
8.1 Binding Effect. This Agreement shall bind the Executive and
the Company, and their beneficiaries, survivors, executors, administrators and
permitted transferees.
8.2 No Guaranty of Employment. This Agreement is not an employment
policy or contract. It does not give the Executive the right to remain an
employee of the Company, nor does it interfere with the Company's
7
right to discharge the Executive. It also does not require the Executive to
remain an employee nor interfere with the Executive's right to terminate
employment at any time.
8.3 Non-Transferability. Benefits under this Agreement cannot be
sold, transferred, assigned, pledged, attached or encumbered in any manner,
except in accordance with Article 4 with respect to designation of
beneficiaries.
8.4 Tax Withholding. The Company shall withhold any taxes that are
required to be withheld from the benefits provided under this Agreement.
8.5 Applicable Law. The Agreement and all rights hereunder shall
be governed by the laws of the State of Mississippi, except to the extent
preempted by the laws of the United States of America.
8.6 Unfunded Arrangement. The Executive and beneficiary are
general unsecured creditors of the Company for the payment of benefits under
this Agreement. The benefits represent the mere promise by the Company to pay
such benefits. The rights to benefits are not subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance,
attachment, or garnishment by creditors. Any insurance on the Executive's life
is a general asset of the Company to which the Executive and beneficiary have no
preferred or secured claim.
8.7 Severability. Without limitation of any other section
contained herein, in case any one or more provisions contained in this Agreement
shall for any reason be held to be invalid, illegal or unenforceable in any
other respect, such invalidity, illegality or unenforceability shall not affect
the other provisions of this Agreement. In the event any one or more of the
provisions found in the Agreement shall be held to be invalid, illegal or
unenforceable by any governmental regulatory agency or court of competent
jurisdiction, this Agreement shall be construed as if such invalid, illegal or
unenforceable provision had never been a part of this Agreement and such
provision shall be deemed substituted by such other provisions as will most
nearly accomplish the intent of the parties to the extent permitted by
applicable law.
8.8 Administration. The Company shall have powers which are
necessary to administer this Agreement, including but not limited to:
(a) Interpreting the provisions of the Agreement;
(b) Establishing and revising the method of accounting
for the Agreement;
(c) Maintaining a record of benefit payments; and
(d) Establishing rules and prescribing any forms
necessary or desirable to administer the Agreement.
8.9 Named Fiduciary. The Company shall be the named fiduciary and
plan administrator under this Agreement. It may delegate to others certain
aspects of the management and operational responsibilities including the
employment of advisors and the delegation of ministerial duties to qualified
individuals.
8.10 Full Obligation. Notwithstanding any provision to the
contrary, when the Company has paid either a Lifetime Benefit or a Death Benefit
as appropriate under any section of the Agreement, the Company has completed its
obligation to the Executive.
IN WITNESS WHEREOF, the Executive and a duly authorized Company officer
have signed this Agreement as of the date indicated below.
COMPANY: EXECUTIVE:
THE PEOPLES BANK
By: _________________________________ __________________________________
8
XXXXX X. XXXX
Its: _________________________________
Date: _________________ Date: _________________
9
EXHIBIT A
BENEFICIARY DESIGNATION
I, _____________________________, designate the following as beneficiary of any
death benefits payable under the Amendment and Restatement of Executive
Supplemental Income Agreement between myself and The Peoples Bank:
Primary Beneficiary
Name Relationship
Address
Contingent Beneficiary
Name Relationship
Address
NOTE: TO NAME A TRUST AS BENEFICIARY, PLEASE PROVIDE THE NAME OF THE TRUSTEE AND
THE EXACT DATE OF THE TRUST AGREEMENT.
I understand that I may change these beneficiary designations by filing a new
written designation with the Company. I further understand that the designations
will be automatically revoked if the beneficiary predeceases me, or, if I have
named my spouse as beneficiary, in the event of the dissolution of our marriage.
Date
Accepted by the Company this _____ day of _____________, 20___
By:
Title:
10
AMENDMENT AND RESTATEMENT OF
EXECUTIVE SUPPLEMENTAL INCOME AGREEMENT
This Agreement, effective as of October 1, 2002 (The "Effective Date"),
is made by and between The Peoples Bank, a state-chartered commercial bank with
its principal office located in Biloxi, Mississippi (hereinafter referred to as
the "Company"), and M.O. Xxxxxxxx, III (hereinafter referred to as the
"Executive"). This Agreement hereby amends and restates, in its entirety, a
prior agreement, with an initial effective date of January 1, 1988 (hereinafter
the "Prior Agreement"), made by and between the Company and the Executive.
INTRODUCTION
The Company and the Executive entered into the Prior Agreement in order
to provide certain benefits to the Executive as an officer of the Company upon
the Executive's retirement.
The Company and the Executive, by this current Agreement, desire to
amend and desire to restate the Prior Agreement, in its entirety, to include and
reflect the terms set forth herein and to incorporate the benefit accumulated to
date by the Executive under Prior Agreement.
Therefore, in order to encourage the Executive to remain an employee of
the Company, the Company is willing to provide salary continuation benefits to
the Executive. The Company will pay the benefits from its general assets.
AGREEMENT
The Executive and the Company agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Definitions. Whenever used in this Agreement, the following
words and phrases shall have the meanings specified:
1.1.1 "Change of Control" means:
(a) a change in the ownership of the capital stock of the
Company or Peoples Financial Corporation (the "Holding Company"),
whereby a corporation, person or group acting in concert (a "Person")
as described in Section 14(d)(2) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), holds or acquires, directly or
indirectly, beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of a number of shares of capital
stock of the Company or Holding Company which constitutes fifty percent
(50%) or more of the combined voting power of the Company's or Holding
Company's outstanding capital stock then entitled to vote generally in
the election of directors; or
(b) the persons who were members of the Board of
Directors of the Company or Holding Company immediately prior to a
tender offer, exchange offer, contested election or any combination of
the foregoing, cease to constitute a majority of such Board of
Directors; or
(c) the adoption by the Board of Directors of the Company
or of the Holding Company of a merger, consolidation or reorganization
plan involving the Company or Holding Company in which the Company or
the Holding Company is not the surviving entity, or a sale of all or
substantially all of the assets of the Company or Holding Company. For
purposes of this Agreement, a sale of all or substantially all of the
assets of the Company or Holding Company shall be deemed to occur if
any Person acquires (or during the 12-month period ending on the date
of the most recent acquisition by such Person, has acquired) gross
assets of the Company or Holding Company that have an aggregate fair
market value equal to fifty percent (50%) of the fair market value of
all of the respective gross assets of the Company or Holding Company
immediately prior to such acquisition or acquisitions; or
1
(d) a tender offer or exchange offer is made by any
Person which, if successfully completed, would result in such Person
beneficially owning (within the meaning of Rule 13d-3 promulgated under
the Exchange Act) either fifty percent (50%) or more of the Company's
or Holding Company's outstanding shares of Common Stock or shares of
capital stock having fifty percent (50%) or more the combined voting
power of the Company's or Holding Company's then outstanding capital
stock (other than an offer made by the Company or the Holding Company),
and sufficient shares are acquired under the offer to cause such person
to own fifty percent (50%) or more of the voting power; or
(e) any other transactions or series of related
transactions occurring which have substantially the same effect as the
transactions specified in any of the preceding clauses of this
Subsection (1.1.1).
1.1.1.1 "Permitted Transfers" means that a
Shareholder, as hereinafter defined in Subsection 1.1.10 may
make the following transfers and such transfers shall be
deemed not to be a Change of Control under Subsection 1.1.1:
(a) To any trust, company, or
partnership created solely for the
benefit of any Shareholder or any
spouse of or any lineal descendant
of any Shareholder;
(b) To any individual or entity by bona
fide gift;
(c) To any spouse or former spouse of
any Shareholder pursuant to the
terms of a decree of divorce;
(d) To any officer or employee of the
Company pursuant to any incentive
stock option plan established by the
Shareholder;
(e) To any family member of any
Shareholder;
(f) After receipt of any necessary
regulatory approvals, to any company
or partnership, including, but not
limited to, a family limited
partnership, a majority of the stock
or interests of which company or
partnership are owned by any of the
Shareholder; or
(g) To any existing Shareholder as of
the Effective Date.
1.1.2 "Code" means the Internal Revenue Code of 1986, as amended.
References to a Code section shall be deemed to be to that section as it now
exists and to any successor provision.
1.1.3 "Disability" means the Executive's suffering a sickness,
accident or injury which has been determined by the carrier of any individual or
group long-term disability insurance policy carried by the Company covering the
Executive, or, if no such long-term disability policy exists, then as determined
by the Social Security Administration, to be a disability rendering the
Executive totally and permanently disabled. The Executive must submit proof to
the Company of the carrier's or Social Security Administration's determination
upon the request of the Company.
1.1.4 "Discount Rate" means eight percent (8%).
1.1.5 "Early Retirement Date" means the date the Executive: (i)
attains at least age fifty-five (55); (ii) attains at least his fifteen (15)
year anniversary of employment at the Company; and, (iii) has participated in
the Prior Agreement, including this amendment and restatement of the Prior
Agreement, for five (5) years.
1.1.6 "Executive Benefit Accrual" means the amount accrued as a
liability to the Executive by the Company by virtue of the terms of the Prior
Agreement through the Effective Date and by virtue of the terms of this
Agreement under Generally Accepted Accounting Principles (GAAP).
2
1.1.7 "Normal Retirement Date" means the date the Executive attains
age sixty-five (65).
1.1.8 "Plan Year" means each twelve (12) consecutive month period
commencing on the Effective Date. For example, the twelve month period
commencing on the date the Company and the Executive execute this Agreement
shall constitute then first Plan Year. The twelve month period following the
first Plan Year shall constitute the second Plan Year and so on.
1.1.9 "Salary" means the base annual amount, without bonus or other
benefits, paid to the Executive by the Company as of the earlier to occur of:
(i) Termination of Employment; or, (ii) the Company' termination of the
Agreement under Section 7.3.
1.1.10 "Shareholder" means the existing owners of all issued and
outstanding stock of the Company or Holding Company as of the date this
Agreement is signed.
1.1.11 "Termination of Employment" or "Terminates Employment" means
the Executive's ceasing to be employed by the Company for any reason whatsoever,
voluntary or involuntary, other than by reason of an approved leave of absence.
ARTICLE 2
LIFETIME BENEFITS
2.1 Normal Retirement Benefit. If Termination of Employment occurs
on or after the Normal Retirement Date, the Company shall pay to the Executive
the benefit described in this Section 2.1.
2.1.1 Amount of Benefit. The benefit under this Section 2.1
is fifty percent (50%) of the Executive's Salary.
2.1.2 Payment of Benefit. The Company shall pay the annual
benefit determined under subsection 2.1.1 for a period of fifteen (15)
years, payable monthly (one-twelfth [1/12th] of the annual benefit)
beginning on the last day of the month commencing with the month
following Termination of Employment. The monthly payments under this
subsection 2.1.2 shall total one hundred eighty (180) substantially
equal payments over a period of one hundred eighty (180) months.
2.2 Early Retirement Benefit. If Termination of Employment occurs
on or after the Early Retirement Date and prior to the Normal Retirement Date,
the Company shall pay to the Executive the benefit described in this Section 2.2
in lieu of any other benefit under this Agreement.
2.2.1 Amount of Benefit. The benefit under this Section 2.2
is the annual benefit set forth in subsection 2.1.1 reduced by one-half
of a percent (0.5%) for each month or partial month between Termination
of Employment and the Normal Retirement Date. By way of example, assume
the Executive elects to retire at age 59 -1/2, which is 66 months prior
to the Normal Retirement Date. Assume further the annual benefit under
subsection 2.1.1 equals thirty percent (30%) of Salary. Based on these
assumptions the percentage of Salary payable under this subsection
2.2.1 would equal 30% times 67% (100% minus the product of 66 times
0.5%). The resulting annual benefit under this subsection 2.2.1, based
on the assumptions in this example, would equal 20.10% (30% multiplied
by 67%) of Salary.
2.2.2 Payment of Benefit. The Company shall pay the annual
benefit determined under subsection 2.2.1 for a period of fifteen (15)
years, payable monthly (one-twelfth [1/12th] of the annual benefit)
beginning on the last day of the month commencing with the month
following Termination of Employment. The monthly payments under this
subsection 2.2.2 shall total one hundred eighty (180) substantially
equal payments over a period of one hundred eighty (180) months.
2.3 Termination of Employment Prior to the Early Retirement Date
or Prior to the Normal Retirement Date. Subject to the provisions of Section
2.5, if Termination of Employment occurs, for reasons other than death or
Disability, before either the Early Retirement Date or prior to the Normal
Retirement Date, the Company shall
3
pay to the Executive the benefit described in this Section 2.3.
2.3.1 Amount of Benefit. The benefit under this Section 2.3
is the Executive Benefit Accrual as of Termination of Employment.
2.3.2 Payment of Benefit. The Company shall pay to the
Executive the benefit set forth in subsection 2.3.1, in lieu of any
other benefit under this Agreement, in a single lump-sum within sixty
(60) days of Termination of Employment.
2.4 Disability Benefit. If Termination of Employment due to a
Disability occurs prior to the Normal Retirement Date, the Company shall pay to
the Executive the benefit described in this Section 2.4.
2.4.1 Amount of Benefit. Subject to the provisions of
Section 2.6 and Section 5.3, the annual benefit under this Section 2.4
is the annual benefit set forth in subsection 2.1.1.
2.4.2 Payment of Benefit. The Company shall pay the annual
benefit determined under subsection 2.4.1, in lieu of any other benefit
under this Agreement, for a period of fifteen (15) years, payable
monthly (one-twelfth [1/12th] of the annual benefit) beginning on the
last day of the month commencing with the month following the
Executive's Normal Retirement Date. The monthly payments under this
subsection 2.4.2 shall total one hundred eighty (180) substantially
equal payments over a period of one hundred eighty (180) months.
2.4.3 Death During Disability. In the event the Executive
dies subsequent to Termination of Employment due to Disability and
prior to receiving any payment under this Agreement, the Company shall
pay the Executive's designated beneficiary the annual benefit set forth
in subsection 3.1.1 and in the manner set forth in Section 3.1.2 in
lieu of any other benefit under this Agreement.
2.5 Change of Control Benefit. Upon a Change of Control prior to
Termination of Employment, the Company, subject to the provisions of Section 2.6
and Section 5.3, shall pay to the Executive the benefit described in this
Section 2.5 in lieu of any other benefit under this Agreement.
2.5.1 Amount of Benefit. The benefit under this Section 2.5
is the present value of the payments under Section 2.1, assuming, for
purposes of determining present value under this subsection 2.5.1 only,
that the Executive was entitled to benefit payments under Section 2.1
at Termination of Employment. In determining this present value the
Company shall utilize the Discount Rate.
2.5.2 Payment of Benefit. The Company shall pay to the
Executive the benefit set forth in subsection 2.5.1, in lieu of any
other benefit under this Agreement, in a single lump-sum within sixty
(60) days of Termination of Employment.
2.6 Excess Parachute Payment. Notwithstanding any provision of
this Agreement to the contrary, the Company shall not pay any benefit under this
Agreement to the extent the benefit would be a non-deductible parachute payment
under Section 280G of the Code.
ARTICLE 3
DEATH BENEFITS
3.1. Death During Active Service. The Company shall pay to the
Executive's beneficiary the benefit described in this Section 3.1 if the
Executive dies: (i) while employed by the Company; or, (ii) after Termination of
Employment due to Disability prior to the Normal Retirement Date.
3.1.1. Amount of Benefit. The annual benefit under this
Section 3.1 is the annual benefit set forth in Section 2.1.1.
3.1.2. Payment of Benefit. The Company shall pay the annual
benefit determined under
4
subsection 3.1.1, in lieu of any other benefit under this Agreement,
for a period of fifteen (15) years, payable monthly (one-twelfth
[1/12th] of the annual benefit) beginning on the last day of the month
commencing with the month following the Executive's death. The monthly
payments under this subsection 3.1.2 shall total one hundred eighty
(180) substantially equal payments over a period of one hundred eighty
(180) months.
3.1. Death During Benefit Period. If the Executive dies after
benefit payments have commenced under section of this Agreement, but before
receiving all such payments, the Company shall pay the remaining benefits to the
Executive's beneficiary at the same time and in the same amounts that would have
been paid to the Executive had the Executive survived. If the Executive's
designated beneficiary dies after benefit payments have commenced under this
Agreement but before receiving all such payments, the Company shall pay the
present value of the remaining benefits due under this Agreement, utilizing the
a discount rate of seven and one-half percent (7.5%) to determine the present
value of the remaining payments, to the estate of the Executive's designated
beneficiary in a single lump sum within sixty (60) days of the death of the
Executive's designated beneficiary.
ARTICLE 4
BENEFICIARIES
4.1 Beneficiary Designations. The Executive shall designate a
beneficiary by filing with the Company a written designation of beneficiary on a
form substantially similar to the form attached as Exhibit A. The Executive may
revoke or modify the designation at any time by filing a new designation.
However, designations will only be effective if signed by the Executive and
accepted by the Company during the Executive's lifetime. The Executive's
beneficiary designation shall be deemed automatically revoked if the beneficiary
predeceases the Executive, or if the Executive names a spouse as beneficiary and
the marriage is subsequently dissolved. If the Executive dies without a valid
beneficiary designation, all payments shall be made to the Executive's surviving
spouse, if any, and if none, to the Executive's surviving children and the
descendants of any deceased child by right of representation, and if no children
or descendants survive, to the Executive's estate.
4.2 Facility of Payment. If a benefit is payable to a minor, to a
person declared incompetent, or to a person incapable of handling the
disposition of his or her property, the Company may pay such benefit to the
guardian, legal representative or person having the care or custody of such
minor, incompetent person or incapable person, or to a custodian selected by the
Company under the Mississippi Uniform Transfers to Minors Act for the benefit of
such minor. The Company may require proof of incompetency, minority or
guardianship as it may deem appropriate prior to distribution of the benefit.
Such distribution shall completely discharge the Company from all liability with
respect to such benefit.
ARTICLE 5
GENERAL LIMITATIONS
Notwithstanding any provision of this Agreement to the contrary, the
Company shall not pay any benefit under this Agreement if any of the following
occur:
5.1 Termination for Cause. If the Company terminates the
Executive's employment for any of the following reasons:
5.1.1 Conviction in a court of competent jurisdiction of a
felony; or
5.1.2 Fraud, dishonesty, or embezzlement. Also, any willful
violation of any law or willful violation of a significant Company
policy committed in connection with the Executive's employment, with
either resulting in an adverse effect on the Company.
5
5.2 Suicide. No benefits shall be payable if the Executive commits
suicide within two (2) years after the date of this Agreement, or if the
Executive has made any material misstatement of fact on any application for life
insurance purchased by the Company.
5.3 Golden Parachute Payment. Notwithstanding any provision of
this Agreement to the contrary, the Company shall not be required to pay any
benefit under this Agreement if, upon the advice of counsel, the Company
determines that the payment of such benefit would be prohibited by 12 C.F.R.
Part 359 or any successor regulations regarding employee compensation
promulgated by any regulatory agency having jurisdiction over the Company or its
affiliates or to the extent the benefit would be a non-deductible excess
parachute payment under Section 280G of the Code. To the extent possible, such
benefit payment shall be proportionately reduced to allow payment within the
fullest extent permissible under applicable law.
ARTICLE 6
CLAIMS AND REVIEW PROCEDURES
6.1 Claims Procedure. Any individual ("Claimant") who has not
received benefits under the Plan that he or she believes should be paid shall
make a claim for such benefits as follows:
6.1.1 Initiation - Written Claim. The Claimant initiates a
claim by submitting to the Company a written claim for the benefits.
6.1.2 Timing of Company Response. The Company shall respond
to such Claimant within 90 days after receiving the claim. If the
Company determines that special circumstances require additional time
for processing the claim, the Company can extend the response period by
an additional 90 days by notifying the Claimant in writing, prior to
the end of the initial 90-day period, that an additional period is
required. The notice of extension must set forth the special
circumstances and the date by which the Company expects to render its
decision.
6.1.3 Notice of Decision. If the Company denies part or all
of the claim, the Company shall notify the Claimant in writing of such
denial. The Company shall write the notification in a manner calculated
to be understood by the Claimant. The notification shall set forth:
(a) The specific reasons for the denial,
(b) A reference to the specific provisions of
the Plan on which the denial is based,
(c) A description of any additional information
or material necessary for the Claimant to perfect the claim
and an explanation of why it is needed,
(d) An explanation of the Plan's review
procedures and the time limits applicable to such procedures,
and
(e) A statement of the Claimant's right to bring
a civil action under ERISA Section 502(a) following an adverse
benefit determination on review.
6.2 Review Procedure. If the Company denies part or all of the
claim, the Claimant shall have the opportunity for a full and fair review by the
Company of the denial, as follows:
6.2.1 Initiation - Written Request. To initiate the review,
the Claimant, within 60 days after receiving the Company's notice of
denial, must file with the Company a written request for review.
6.2.2 Additional Submissions - Information Access. The
Claimant shall then have the opportunity to submit written comments,
documents, records and other information relating to the claim. The
Company shall also provide the Claimant, upon request and free of
charge, reasonable access to, and copies of, all documents, records and
other information relevant (as defined in applicable ERISA regulations)
to the Claimant's claim for benefits.
6
6.2.3 Considerations on Review. In considering the review,
the Company shall take into account all materials and information the
Claimant submits relating to the claim, without regard to whether such
information was submitted or considered in the initial benefit
determination.
6.2.4 Timing of Company Response. The Company shall respond
in writing to such Claimant within 60 days after receiving the request
for review. If the Company determines that special circumstances
require additional time for processing the claim, the Company can
extend the response period by an additional 60 days by notifying the
Claimant in writing, prior to the end of the initial 60-day period,
that an additional period is required. The notice of extension must set
forth the special circumstances and the date by which the Company
expects to render its decision.
6.2.5 Notice of Decision. The Company shall notify the
Claimant in writing of its decision on review. The Company shall write
the notification in a manner calculated to be understood by the
Claimant. The notification shall set forth:
(a) The specific reasons for the denial,
(b) A reference to the specific provisions of
the Plan on which the denial is based,
(c) A statement that the Claimant is entitled to
receive, upon request and free of charge, reasonable access
to, and copies of, all documents, records and other
information relevant (as defined in applicable ERISA
regulations) to the Claimant's claim for benefits, and
(d) A statement of the Claimant's right to bring
a civil action under ERISA Section 502(a).
ARTICLE 7
AMENDMENTS AND TERMINATION
7.1 Amendment or Termination of Agreement. This Agreement may be
amended or terminated only by at a written agreement signed by the Company and
the Executive.
7.2 Termination by Operation of Law. Notwithstanding the previous
paragraph in this Article 7, the Company may amend or terminate this Agreement
at any time if, pursuant to legislative, judicial or regulatory action,
continuation of the Agreement would (i) cause benefits to be taxable to the
Executive prior to actual receipt, or (ii) result in significant financial
penalties or other significantly detrimental ramifications to the Company (other
than the financial impact of paying the benefits). In the event of a termination
of the Agreement under this Section 7.2, the Company shall pay to the Executive
a single lump-sum payment equaling one hundred percent (100%) of the Executive
Benefit Accrual one hundred eighty (180) days from termination of the Agreement.
7.3 Termination by Company. The Company may terminate this
Agreement at any time. In the event the Company terminates this Agreement, for
reasons other than those set forth in Section 7.1 or Section 7.2, the Company,
subject to Section 2.6 and Section 5.3, shall pay the Executive the benefit
provided in subsection Section 2.5, assuming, for purposes of this Section 7.3
only, that upon Termination of the Agreement by the Company under this Section
7.3 Termination of Employment occurred, even if the Executive continues
employment with the Company after Termination of the Agreement under this
Section 7.3.
ARTICLE 8
MISCELLANEOUS
8.1 Binding Effect. This Agreement shall bind the Executive and
the Company, and their beneficiaries, survivors, executors, administrators and
permitted transferees.
8.2 No Guaranty of Employment. This Agreement is not an employment
policy or contract. It does not give the Executive the right to remain an
employee of the Company, nor does it interfere with the Company's
7
right to discharge the Executive. It also does not require the Executive to
remain an employee nor interfere with the Executive's right to terminate
employment at any time.
8.3 Non-Transferability. Benefits under this Agreement cannot be
sold, transferred, assigned, pledged, attached or encumbered in any manner,
except in accordance with Article 4 with respect to designation of
beneficiaries.
8.4 Tax Withholding. The Company shall withhold any taxes that are
required to be withheld from the benefits provided under this Agreement.
8.5 Applicable Law. The Agreement and all rights hereunder shall
be governed by the laws of the State of Mississippi, except to the extent
preempted by the laws of the United States of America.
8.6 Unfunded Arrangement. The Executive and beneficiary are
general unsecured creditors of the Company for the payment of benefits under
this Agreement. The benefits represent the mere promise by the Company to pay
such benefits. The rights to benefits are not subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance,
attachment, or garnishment by creditors. Any insurance on the Executive's life
is a general asset of the Company to which the Executive and beneficiary have no
preferred or secured claim.
8.7 Severability. Without limitation of any other section
contained herein, in case any one or more provisions contained in this Agreement
shall for any reason be held to be invalid, illegal or unenforceable in any
other respect, such invalidity, illegality or unenforceability shall not affect
the other provisions of this Agreement. In the event any one or more of the
provisions found in the Agreement shall be held to be invalid, illegal or
unenforceable by any governmental regulatory agency or court of competent
jurisdiction, this Agreement shall be construed as if such invalid, illegal or
unenforceable provision had never been a part of this Agreement and such
provision shall be deemed substituted by such other provisions as will most
nearly accomplish the intent of the parties to the extent permitted by
applicable law.
8.8 Administration. The Company shall have powers which are
necessary to administer this Agreement, including but not limited to:
(a) Interpreting the provisions of the Agreement;
(b) Establishing and revising the method of accounting for
the Agreement;
(c) Maintaining a record of benefit payments; and
(d) Establishing rules and prescribing any forms necessary
or desirable to administer the Agreement.
8.9 Named Fiduciary. The Company shall be the named fiduciary and
plan administrator under this Agreement. It may delegate to others certain
aspects of the management and operational responsibilities including the
employment of advisors and the delegation of ministerial duties to qualified
individuals.
8.10 Full Obligation. Notwithstanding any provision to the
contrary, when the Company has paid either a Lifetime Benefit or a Death Benefit
as appropriate under any section of the Agreement, the Company has completed its
obligation to the Executive.
IN WITNESS WHEREOF, the Executive and a duly authorized Company officer
have signed this Agreement as of the date indicated below.
COMPANY: EXECUTIVE:
THE PEOPLES BANK
By: _________________________________ __________________________________
8
M.O. XXXXXXXX, III
Its: _________________________________
Date: _________________ Date: _________________
9
EXHIBIT A
BENEFICIARY DESIGNATION
I, _____________________________, designate the following as beneficiary of any
death benefits payable under the Amendment and Restatement of Executive
Supplemental Income Agreement between myself and The Peoples Bank:
Primary Beneficiary
Name Relationship
Address
Contingent Beneficiary
Name Relationship
Address
NOTE: TO NAME A TRUST AS BENEFICIARY, PLEASE PROVIDE THE NAME OF THE TRUSTEE AND
THE EXACT DATE OF THE TRUST AGREEMENT.
I understand that I may change these beneficiary designations by filing a new
written designation with the Company. I further understand that the designations
will be automatically revoked if the beneficiary predeceases me, or, if I have
named my spouse as beneficiary, in the event of the dissolution of our marriage.
Date
Accepted by the Company this _____ day of _____________, 20___
By:
Title:
10
AMENDMENT AND RESTATEMENT OF
EXECUTIVE SUPPLEMENTAL INCOME AGREEMENT
This Agreement, effective as of October 1, 2002 (The "Effective Date"),
is made by and between The Peoples Bank, a state-chartered commercial bank with
its principal office located in Biloxi, Mississippi (hereinafter referred to as
the "Company"), and Xxxxxx X. Xxxxx (hereinafter referred to as the
"Executive"). This Agreement hereby amends and restates, in its entirety, a
prior agreement, with an initial effective date of January 1, 1988 (hereinafter
the "Prior Agreement"), made by and between the Company and the Executive.
INTRODUCTION
The Company and the Executive entered into the Prior Agreement in order
to provide certain benefits to the Executive as an officer of the Company upon
the Executive's retirement.
The Company and the Executive, by this current Agreement, desire to
amend and desire to restate the Prior Agreement, in its entirety, to include and
reflect the terms set forth herein and to incorporate the benefit accumulated to
date by the Executive under Prior Agreement.
Therefore, in order to encourage the Executive to remain an employee of
the Company, the Company is willing to provide salary continuation benefits to
the Executive. The Company will pay the benefits from its general assets.
AGREEMENT
The Executive and the Company agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Definitions. Whenever used in this Agreement, the following
words and phrases shall have the meanings specified:
1.1.1 "Change of Control" means:
(a) a change in the ownership of the capital stock of the
Company or Peoples Financial Corporation (the "Holding Company"),
whereby a corporation, person or group acting in concert (a "Person")
as described in Section 14(d)(2) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), holds or acquires, directly or
indirectly, beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of a number of shares of capital
stock of the Company or Holding Company which constitutes fifty percent
(50%) or more of the combined voting power of the Company's or Holding
Company's outstanding capital stock then entitled to vote generally in
the election of directors; or
(b) the persons who were members of the Board of
Directors of the Company or Holding Company immediately prior to a
tender offer, exchange offer, contested election or any combination of
the foregoing, cease to constitute a majority of such Board of
Directors; or
(c) the adoption by the Board of Directors of the Company
or of the Holding Company of a merger, consolidation or reorganization
plan involving the Company or Holding Company in which the Company or
the Holding Company is not the surviving entity, or a sale of all or
substantially all of the assets of the Company or Holding Company. For
purposes of this Agreement, a sale of all or substantially all of the
assets of the Company or Holding Company shall be deemed to occur if
any Person acquires (or during the 12-month period ending on the date
of the most recent acquisition by such Person, has acquired) gross
assets of the Company or Holding Company that have an aggregate fair
market value equal to fifty percent (50%) of the fair market value of
all of the respective gross assets of the Company or Holding Company
immediately prior to such acquisition or acquisitions; or
1
(d) a tender offer or exchange offer is made by any
Person which, if successfully completed, would result in such Person
beneficially owning (within the meaning of Rule 13d-3 promulgated under
the Exchange Act) either fifty percent (50%) or more of the Company's
or Holding Company's outstanding shares of Common Stock or shares of
capital stock having fifty percent (50%) or more the combined voting
power of the Company's or Holding Company's then outstanding capital
stock (other than an offer made by the Company or the Holding Company),
and sufficient shares are acquired under the offer to cause such person
to own fifty percent (50%) or more of the voting power; or
(e) any other transactions or series of related
transactions occurring which have substantially the same effect as the
transactions specified in any of the preceding clauses of this
Subsection (1.1.1).
1.1.1.1 "Permitted Transfers" means that a
Shareholder, as hereinafter defined in Subsection 1.1.10 may
make the following transfers and such transfers shall be
deemed not to be a Change of Control under Subsection 1.1.1:
(a) To any trust, company, or
partnership created solely for the
benefit of any Shareholder or any
spouse of or any lineal descendant
of any Shareholder;
(b) To any individual or entity by bona
fide gift;
(c) To any spouse or former spouse of
any Shareholder pursuant to the
terms of a decree of divorce;
(d) To any officer or employee of the
Company pursuant to any incentive
stock option plan established by
the Shareholder;
(e) To any family member of any
Shareholder;
(f) After receipt of any necessary
regulatory approvals, to any
company or partnership, including,
but not limited to, a family
limited partnership, a majority of
the stock or interests of which
company or partnership are owned by
any of the Shareholder; or
(g) To any existing Shareholder as of
the Effective Date.
1.1.2 "Code" means the Internal Revenue Code of 1986, as amended.
References to a Code section shall be deemed to be to that section as it now
exists and to any successor provision.
1.1.3 "Disability" means the Executive's suffering a sickness,
accident or injury which has been determined by the carrier of any individual or
group long-term disability insurance policy carried by the Company covering the
Executive, or, if no such long-term disability policy exists, then as determined
by the Social Security Administration, to be a disability rendering the
Executive totally and permanently disabled. The Executive must submit proof to
the Company of the carrier's or Social Security Administration's determination
upon the request of the Company.
1.1.4 "Discount Rate" means eight percent (8%).
1.1.5 "Early Retirement Date" means the date the Executive: (i)
attains at least age fifty-five (55); (ii) attains at least his fifteen (15)
year anniversary of employment at the Company; and, (iii) has participated in
the Prior Agreement, including this amendment and restatement of the Prior
Agreement, for five (5) years.
1.1.6 "Executive Benefit Accrual" means the amount accrued as a
liability to the Executive by the Company by virtue of the terms of the Prior
Agreement through the Effective Date and by virtue of the terms of this
Agreement under Generally Accepted Accounting Principles (GAAP).
2
1.1.7 "Normal Retirement Date" means the date the Executive attains
age sixty-five (65).
1.1.8 "Plan Year" means each twelve (12) consecutive month period
commencing on the Effective Date. For example, the twelve month period
commencing on the date the Company and the Executive execute this Agreement
shall constitute then first Plan Year. The twelve month period following the
first Plan Year shall constitute the second Plan Year and so on.
1.1.9 "Salary" means the base annual amount, without bonus or other
benefits, paid to the Executive by the Company as of the earlier to occur of:
(i) Termination of Employment; or, (ii) the Company' termination of the
Agreement under Section 7.3.
1.1.10 "Shareholder" means the existing owners of all issued and
outstanding stock of the Company or Holding Company as of the date this
Agreement is signed.
1.1.11 "Termination of Employment" or "Terminates Employment" means
the Executive's ceasing to be employed by the Company for any reason whatsoever,
voluntary or involuntary, other than by reason of an approved leave of absence.
ARTICLE 2
LIFETIME BENEFITS
2.1 Normal Retirement Benefit. If Termination of Employment occurs
on or after the Normal Retirement Date, the Company shall pay to the Executive
the benefit described in this Section 2.1.
2.1.1 Amount of Benefit. The benefit under this Section 2.1
is fifty percent (50%) of the Executive's Salary.
2.1.2 Payment of Benefit. The Company shall pay the annual
benefit determined under subsection 2.1.1 for a period of fifteen (15)
years, payable monthly (one-twelfth [1/12th] of the annual benefit)
beginning on the last day of the month commencing with the month
following Termination of Employment. The monthly payments under this
subsection 2.1.2 shall total one hundred eighty (180) substantially
equal payments over a period of one hundred eighty (180) months.
2.2 Early Retirement Benefit. If Termination of
Employment occurs on or after the Early Retirement Date and prior to
the Normal Retirement Date, the Company shall pay to the Executive the
benefit described in this Section 2.2 in lieu of any other benefit
under this Agreement.
2.2.1 Amount of Benefit. The benefit under this
Section 2.2 is the annual benefit set forth in subsection
2.1.1 reduced by one-half of a percent (0.5%) for each month
or partial month between Termination of Employment and the
Normal Retirement Date. By way of example, assume the
Executive elects to retire at age 59 -1/2, which is 66 months
prior to the Normal Retirement Date. Assume further the annual
benefit under subsection 2.1.1 equals thirty percent (30%) of
Salary. Based on these assumptions the percentage of Salary
payable under this subsection 2.2.1 would equal 30% times 67%
(100% minus the product of 66 times 0.5%). The resulting
annual benefit under this subsection 2.2.1, based on the
assumptions in this example, would equal 20.10% (30%
multiplied by 67%) of Salary.
2.2.2 Payment of Benefit. The Company shall pay
the annual benefit determined under subsection 2.2.1 for a
period of fifteen (15) years, payable monthly (one-twelfth
[1/12th] of the annual benefit) beginning on the last day of
the month commencing with the month following Termination of
Employment. The monthly payments under this subsection 2.2.2
shall total one hundred eighty (180) substantially equal
payments over a period of one hundred eighty (180) months.
2.3 Termination of Employment Prior to the Early
Retirement Date or Prior to the Normal Retirement Date. Subject to the
provisions of Section 2.5, if Termination of Employment occurs, for
reasons other than death or Disability, before either the Early
Retirement Date or prior to the Normal Retirement Date, the Company
shall
3
pay to the Executive the benefit described in this Section 2.3.
2.3.1 Amount of Benefit. The benefit under this
Section 2.3 is the Executive Benefit Accrual as of Termination
of Employment.
2.3.2 Payment of Benefit. The Company shall pay to
the Executive the benefit set forth in subsection 2.3.1, in
lieu of any other benefit under this Agreement, in a single
lump-sum within sixty (60) days of Termination of Employment.
2.4 Disability Benefit. If Termination of Employment due
to a Disability occurs prior to the Normal Retirement Date, the Company
shall pay to the Executive the benefit described in this Section 2.4.
2.4.1 Amount of Benefit. Subject to the provisions
of Section 2.6 and Section 5.3, the annual benefit under this
Section 2.4 is the annual benefit set forth in subsection
2.1.1.
2.4.2 Payment of Benefit. The Company shall pay
the annual benefit determined under subsection 2.4.1, in lieu
of any other benefit under this Agreement, for a period of
fifteen (15) years, payable monthly (one-twelfth [1/12th] of
the annual benefit) beginning on the last day of the month
commencing with the month following the Executive's Normal
Retirement Date. The monthly payments under this subsection
2.4.2 shall total one hundred eighty (180) substantially equal
payments over a period of one hundred eighty (180) months.
2.4.3 Death During Disability. In the event the
Executive dies subsequent to Termination of Employment due to
Disability and prior to receiving any payment under this
Agreement, the Company shall pay the Executive's designated
beneficiary the annual benefit set forth in subsection 3.1.1
and in the manner set forth in Section 3.1.2 in lieu of any
other benefit under this Agreement.
2.5 Change of Control Benefit. Upon a Change of Control
prior to Termination of Employment, the Company, subject to the
provisions of Section 2.6 and Section 5.3, shall pay to the Executive
the benefit described in this Section 2.5 in lieu of any other benefit
under this Agreement.
2.5.1 Amount of Benefit. The benefit under this
Section 2.5 is the present value of the payments under Section
2.1, assuming, for purposes of determining present value under
this subsection 2.5.1 only, that the Executive was entitled to
benefit payments under Section 2.1 at Termination of
Employment. In determining this present value the Company
shall utilize the Discount Rate.
2.5.2 Payment of Benefit. The Company shall pay to
the Executive the benefit set forth in subsection 2.5.1, in
lieu of any other benefit under this Agreement, in a single
lump-sum within sixty (60) days of Termination of Employment.
2.6 Excess Parachute Payment. Notwithstanding any
provision of this Agreement to the contrary, the Company shall not pay
any benefit under this Agreement to the extent the benefit would be a
non-deductible parachute payment under Section 280G of the Code.
ARTICLE 3
DEATH BENEFITS
3.1. Death During Active Service. The Company shall pay to
the Executive's beneficiary the benefit described in this Section 3.1
if the Executive dies: (i) while employed by the Company; or, (ii)
after Termination of Employment due to Disability prior to the Normal
Retirement Date.
3.1.1. Amount of Benefit. The annual benefit under
this Section 3.1 is the annual benefit set forth in Section
2.1.1.
3.1.2. Payment of Benefit. The Company shall pay
the annual benefit determined under
4
subsection 3.1.1, in lieu of any other benefit under this
Agreement, for a period of fifteen (15) years, payable monthly
(one-twelfth [1/12th] of the annual benefit) beginning on the
last day of the month commencing with the month following the
Executive's death. The monthly payments under this subsection
3.1.2 shall total one hundred eighty (180) substantially equal
payments over a period of one hundred eighty (180) months.
3.1. Death During Benefit Period. If the Executive dies
after benefit payments have commenced under section of this Agreement,
but before receiving all such payments, the Company shall pay the
remaining benefits to the Executive's beneficiary at the same time and
in the same amounts that would have been paid to the Executive had the
Executive survived. If the Executive's designated beneficiary dies
after benefit payments have commenced under this Agreement but before
receiving all such payments, the Company shall pay the present value of
the remaining benefits due under this Agreement, utilizing the a
discount rate of seven and one-half percent (7.5%) to determine the
present value of the remaining payments, to the estate of the
Executive's designated beneficiary in a single lump sum within sixty
(60) days of the death of the Executive's designated beneficiary.
ARTICLE 4
BENEFICIARIES
4.1 Beneficiary Designations. The Executive shall
designate a beneficiary by filing with the Company a written
designation of beneficiary on a form substantially similar to the form
attached as Exhibit A. The Executive may revoke or modify the
designation at any time by filing a new designation. However,
designations will only be effective if signed by the Executive and
accepted by the Company during the Executive's lifetime. The
Executive's beneficiary designation shall be deemed automatically
revoked if the beneficiary predeceases the Executive, or if the
Executive names a spouse as beneficiary and the marriage is
subsequently dissolved. If the Executive dies without a valid
beneficiary designation, all payments shall be made to the Executive's
surviving spouse, if any, and if none, to the Executive's surviving
children and the descendants of any deceased child by right of
representation, and if no children or descendants survive, to the
Executive's estate.
4.2 Facility of Payment. If a benefit is payable to a
minor, to a person declared incompetent, or to a person incapable of
handling the disposition of his or her property, the Company may pay
such benefit to the guardian, legal representative or person having the
care or custody of such minor, incompetent person or incapable person,
or to a custodian selected by the Company under the Mississippi Uniform
Transfers to Minors Act for the benefit of such minor. The Company may
require proof of incompetency, minority or guardianship as it may deem
appropriate prior to distribution of the benefit. Such distribution
shall completely discharge the Company from all liability with respect
to such benefit.
ARTICLE 5
GENERAL LIMITATIONS
Notwithstanding any provision of this Agreement to the
contrary, the Company shall not pay any benefit under this Agreement if
any of the following occur:
5.1 Termination for Cause. If the Company terminates the
Executive's employment for any of the following reasons:
5.1.1 Conviction in a court of competent
jurisdiction of a felony; or
5.1.2 Fraud, dishonesty, or embezzlement. Also,
any willful violation of any law or willful violation of a
significant Company policy committed in connection with the
Executive's employment, with either resulting in an adverse
effect on the Company.
5
5.2 Suicide. No benefits shall be payable if the
Executive commits suicide within two (2) years after the date of this
Agreement, or if the Executive has made any material misstatement of
fact on any application for life insurance purchased by the Company.
5.3 Golden Parachute Payment. Notwithstanding any
provision of this Agreement to the contrary, the Company shall not be
required to pay any benefit under this Agreement if, upon the advice of
counsel, the Company determines that the payment of such benefit would
be prohibited by 12 C.F.R. Part 359 or any successor regulations
regarding employee compensation promulgated by any regulatory agency
having jurisdiction over the Company or its affiliates or to the extent
the benefit would be a non-deductible excess parachute payment under
Section 280G of the Code. To the extent possible, such benefit payment
shall be proportionately reduced to allow payment within the fullest
extent permissible under applicable law.
ARTICLE 6
CLAIMS AND REVIEW PROCEDURES
6.1 Claims Procedure. Any individual ("Claimant") who has
not received benefits under the Plan that he or she believes should be
paid shall make a claim for such benefits as follows:
6.1.1 Initiation - Written Claim. The Claimant
initiates a claim by submitting to the Company a written claim
for the benefits.
6.1.2 Timing of Company Response. The Company
shall respond to such Claimant within 90 days after receiving
the claim. If the Company determines that special
circumstances require additional time for processing the
claim, the Company can extend the response period by an
additional 90 days by notifying the Claimant in writing, prior
to the end of the initial 90-day period, that an additional
period is required. The notice of extension must set forth the
special circumstances and the date by which the Company
expects to render its decision.
6.1.3 Notice of Decision. If the Company denies
part or all of the claim, the Company shall notify the
Claimant in writing of such denial. The Company shall write
the notification in a manner calculated to be understood by
the Claimant. The notification shall set forth:
(a) The specific reasons for the
denial,
(b) A reference to the specific
provisions of the Plan on which the denial is based,
(c) A description of any additional
information or material necessary for the Claimant to
perfect the claim and an explanation of why it is
needed,
(d) An explanation of the Plan's review
procedures and the time limits applicable to such
procedures, and
(e) A statement of the Claimant's right
to bring a civil action under ERISA Section 502(a)
following an adverse benefit determination on review.
6.2 Review Procedure. If the Company denies part or all
of the claim, the Claimant shall have the opportunity for a full and
fair review by the Company of the denial, as follows:
6.2.1 Initiation - Written Request. To initiate
the review, the Claimant, within 60 days after receiving the
Company's notice of denial, must file with the Company a
written request for review.
6.2.2 Additional Submissions - Information Access.
The Claimant shall then have the opportunity to submit written
comments, documents, records and other information relating to
the claim. The Company shall also provide the Claimant, upon
request and free of charge, reasonable access to, and copies
of, all documents, records and other information relevant (as
defined in applicable ERISA regulations) to the Claimant's
claim for benefits.
6
6.2.3 Considerations on Review. In considering the
review, the Company shall take into account all materials and
information the Claimant submits relating to the claim,
without regard to whether such information was submitted or
considered in the initial benefit determination.
6.2.4 Timing of Company Response. The Company
shall respond in writing to such Claimant within 60 days after
receiving the request for review. If the Company determines
that special circumstances require additional time for
processing the claim, the Company can extend the response
period by an additional 60 days by notifying the Claimant in
writing, prior to the end of the initial 60-day period, that
an additional period is required. The notice of extension must
set forth the special circumstances and the date by which the
Company expects to render its decision.
6.2.5 Notice of Decision. The Company shall notify
the Claimant in writing of its decision on review. The Company
shall write the notification in a manner calculated to be
understood by the Claimant. The notification shall set forth:
(a) The specific reasons for the
denial,
(b) A reference to the specific
provisions of the Plan on which the denial is based,
(c) A statement that the Claimant is
entitled to receive, upon request and free of charge,
reasonable access to, and copies of, all documents,
records and other information relevant (as defined in
applicable ERISA regulations) to the Claimant's claim
for benefits, and
(d) A statement of the Claimant's right
to bring a civil action under ERISA Section 502(a).
ARTICLE 7
AMENDMENTS AND TERMINATION
7.1 Amendment or Termination of Agreement. This Agreement
may be amended or terminated only by at a written agreement signed by
the Company and the Executive.
7.2 Termination by Operation of Law. Notwithstanding the
previous paragraph in this Article 7, the Company may amend or
terminate this Agreement at any time if, pursuant to legislative,
judicial or regulatory action, continuation of the Agreement would (i)
cause benefits to be taxable to the Executive prior to actual receipt,
or (ii) result in significant financial penalties or other
significantly detrimental ramifications to the Company (other than the
financial impact of paying the benefits). In the event of a termination
of the Agreement under this Section 7.2, the Company shall pay to the
Executive a single lump-sum payment equaling one hundred percent (100%)
of the Executive Benefit Accrual one hundred eighty (180) days from
termination of the Agreement.
7.3 Termination by Company. The Company may terminate
this Agreement at any time. In the event the Company terminates this
Agreement, for reasons other than those set forth in Section 7.1 or
Section 7.2, the Company, subject to Section 2.6 and Section 5.3, shall
pay the Executive the benefit provided in subsection Section 2.5,
assuming, for purposes of this Section 7.3 only, that upon Termination
of the Agreement by the Company under this Section 7.3 Termination of
Employment occurred, even if the Executive continues employment with
the Company after Termination of the Agreement under this Section 7.3.
ARTICLE 8
MISCELLANEOUS
8.1 Binding Effect. This Agreement shall bind the
Executive and the Company, and their beneficiaries, survivors,
executors, administrators and permitted transferees.
8.2 No Guaranty of Employment. This Agreement is not an
employment policy or contract. It does not give the Executive the right
to remain an employee of the Company, nor does it interfere with the
Company's
7
right to discharge the Executive. It also does not require the
Executive to remain an employee nor interfere with the Executive's
right to terminate employment at any time.
8.3 Non-Transferability. Benefits under this Agreement
cannot be sold, transferred, assigned, pledged, attached or encumbered
in any manner, except in accordance with Article 4 with respect to
designation of beneficiaries.
8.4 Tax Withholding. The Company shall withhold any taxes
that are required to be withheld from the benefits provided under this
Agreement.
8.5 Applicable Law. The Agreement and all rights
hereunder shall be governed by the laws of the State of Mississippi,
except to the extent preempted by the laws of the United States of
America.
8.6 Unfunded Arrangement. The Executive and beneficiary
are general unsecured creditors of the Company for the payment of
benefits under this Agreement. The benefits represent the mere promise
by the Company to pay such benefits. The rights to benefits are not
subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, attachment, or garnishment by
creditors. Any insurance on the Executive's life is a general asset of
the Company to which the Executive and beneficiary have no preferred or
secured claim.
8.7 Severability. Without limitation of any other section
contained herein, in case any one or more provisions contained in this
Agreement shall for any reason be held to be invalid, illegal or
unenforceable in any other respect, such invalidity, illegality or
unenforceability shall not affect the other provisions of this
Agreement. In the event any one or more of the provisions found in the
Agreement shall be held to be invalid, illegal or unenforceable by any
governmental regulatory agency or court of competent jurisdiction, this
Agreement shall be construed as if such invalid, illegal or
unenforceable provision had never been a part of this Agreement and
such provision shall be deemed substituted by such other provisions as
will most nearly accomplish the intent of the parties to the extent
permitted by applicable law.
8.8 Administration. The Company shall have powers which
are necessary to administer this Agreement, including but not limited
to:
(a) Interpreting the provisions of the
Agreement;
(b) Establishing and revising the method of
accounting for the Agreement;
(c) Maintaining a record of benefit payments;
and
(d) Establishing rules and prescribing any forms
necessary or desirable to administer the
Agreement.
8.9 Named Fiduciary. The Company shall be the named
fiduciary and plan administrator under this Agreement. It may delegate
to others certain aspects of the management and operational
responsibilities including the employment of advisors and the
delegation of ministerial duties to qualified individuals.
8.10 Full Obligation. Notwithstanding any provision to the
contrary, when the Company has paid either a Lifetime Benefit or a
Death Benefit as appropriate under any section of the Agreement, the
Company has completed its obligation to the Executive.
IN WITNESS WHEREOF, the Executive and a duly authorized
Company officer have signed this Agreement as of the date indicated
below.
COMPANY: EXECUTIVE:
THE PEOPLES BANK
By: _________________________________ __________________________________
8
XXXXXX X. XXXXX
Its: _________________________________
Date: _________________ Date: _________________
9
EXHIBIT A
BENEFICIARY DESIGNATION
I, _____________________________, designate the following as beneficiary of any
death benefits payable under the Amendment and Restatement of Executive
Supplemental Income Agreement between myself and The Peoples Bank:
Primary Beneficiary
Name Relationship
Address
Contingent Beneficiary
Name Relationship
Address
NOTE: TO NAME A TRUST AS BENEFICIARY, PLEASE PROVIDE THE NAME OF THE TRUSTEE AND
THE EXACT DATE OF THE TRUST AGREEMENT.
I understand that I may change these beneficiary designations by filing a new
written designation with the Company. I further understand that the designations
will be automatically revoked if the beneficiary predeceases me, or, if I have
named my spouse as beneficiary, in the event of the dissolution of our marriage.
Date
Accepted by the Company this _____ day of _____________, 20___
By:
Title:
10
AMENDMENT AND RESTATEMENT OF
EXECUTIVE SUPPLEMENTAL INCOME AGREEMENT
This Agreement, effective as of October 1, 2002 (The "Effective Date"),
is made by and between The Peoples Bank, a state-chartered commercial bank with
its principal office located in Biloxi, Mississippi (hereinafter referred to as
the "Company"), and Xxxxxx X. Xxxxxx (hereinafter referred to as the
"Executive"). This Agreement hereby amends and restates, in its entirety, a
prior agreement, with an initial effective date of January 1, 1988 (hereinafter
the "Prior Agreement"), made by and between the Company and the Executive.
INTRODUCTION
The Company and the Executive entered into the Prior Agreement in order
to provide certain benefits to the Executive as an officer of the Company upon
the Executive's retirement.
The Company and the Executive, by this current Agreement, desire to
amend and desire to restate the Prior Agreement, in its entirety, to include and
reflect the terms set forth herein and to incorporate the benefit accumulated to
date by the Executive under Prior Agreement.
Therefore, in order to encourage the Executive to remain an employee of
the Company, the Company is willing to provide salary continuation benefits to
the Executive. The Company will pay the benefits from its general assets.
AGREEMENT
The Executive and the Company agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Definitions. Whenever used in this Agreement, the following
words and phrases shall have the meanings specified:
1.1.1 "Change of Control" means:
(a) a change in the ownership of the capital stock of the
Company or Peoples Financial Corporation (the "Holding Company"),
whereby a corporation, person or group acting in concert (a "Person")
as described in Section 14(d)(2) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), holds or acquires, directly or
indirectly, beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of a number of shares of capital
stock of the Company or Holding Company which constitutes fifty percent
(50%) or more of the combined voting power of the Company's or Holding
Company's outstanding capital stock then entitled to vote generally in
the election of directors; or
(b) the persons who were members of the Board of
Directors of the Company or Holding Company immediately prior to a
tender offer, exchange offer, contested election or any combination of
the foregoing, cease to constitute a majority of such Board of
Directors; or
(c) the adoption by the Board of Directors of the Company
or of the Holding Company of a merger, consolidation or reorganization
plan involving the Company or Holding Company in which the Company or
the Holding Company is not the surviving entity, or a sale of all or
substantially all of the assets of the Company or Holding Company. For
purposes of this Agreement, a sale of all or substantially all of the
assets of the Company or Holding Company shall be deemed to occur if
any Person acquires (or during the 12-month period ending on the date
of the most recent acquisition by such Person, has acquired) gross
assets of the Company or Holding Company that have an aggregate fair
market value equal to fifty percent (50%) of the fair market value of
all of the respective gross assets of the Company or Holding Company
immediately prior to such acquisition or acquisitions; or
1
(d) a tender offer or exchange offer is made by any
Person which, if successfully completed, would result in such Person
beneficially owning (within the meaning of Rule 13d-3 promulgated under
the Exchange Act) either fifty percent (50%) or more of the Company's
or Holding Company's outstanding shares of Common Stock or shares of
capital stock having fifty percent (50%) or more the combined voting
power of the Company's or Holding Company's then outstanding capital
stock (other than an offer made by the Company or the Holding Company),
and sufficient shares are acquired under the offer to cause such person
to own fifty percent (50%) or more of the voting power; or
(e) any other transactions or series of related
transactions occurring which have substantially the same effect as the
transactions specified in any of the preceding clauses of this
Subsection (1.1.1).
1.1.1.1 "Permitted Transfers" means that a
Shareholder, as hereinafter defined in Subsection 1.1.10 may
make the following transfers and such transfers shall be
deemed not to be a Change of Control under Subsection 1.1.1:
(a) To any trust, company, or
partnership created solely for the
benefit of any Shareholder or any
spouse of or any lineal descendant
of any Shareholder;
(b) To any individual or entity by bona
fide gift;
(c) To any spouse or former spouse of
any Shareholder pursuant to the
terms of a decree of divorce;
(d) To any officer or employee of the
Company pursuant to any incentive
stock option plan established by the
Shareholder;
(e) To any family member of any
Shareholder;
(f) After receipt of any necessary
regulatory approvals, to any company
or partnership, including, but not
limited to, a family limited
partnership, a majority of the stock
or interests of which company or
partnership are owned by any of the
Shareholder; or
(g) To any existing Shareholder as of
the Effective Date.
1.1.2 "Code" means the Internal Revenue Code of 1986, as amended.
References to a Code section shall be deemed to be to that section as it now
exists and to any successor provision.
1.1.3 "Disability" means the Executive's suffering a sickness,
accident or injury which has been determined by the carrier of any individual or
group long-term disability insurance policy carried by the Company covering the
Executive, or, if no such long-term disability policy exists, then as determined
by the Social Security Administration, to be a disability rendering the
Executive totally and permanently disabled. The Executive must submit proof to
the Company of the carrier's or Social Security Administration's determination
upon the request of the Company.
1.1.4 "Discount Rate" means eight percent (8%).
1.1.5 "Early Retirement Date" means the date the Executive: (i)
attains at least age fifty-five (55); (ii) attains at least his fifteen (15)
year anniversary of employment at the Company; and, (iii) has participated in
the Prior Agreement, including this amendment and restatement of the Prior
Agreement, for five (5) years.
1.1.6 "Executive Benefit Accrual" means the amount accrued as a
liability to the Executive by the Company by virtue of the terms of the Prior
Agreement through the Effective Date and by virtue of the terms of this
Agreement under Generally Accepted Accounting Principles (GAAP).
2
1.1.7 "Normal Retirement Date" means the date the Executive attains
age sixty-five (65).
1.1.8 "Plan Year" means each twelve (12) consecutive month period
commencing on the Effective Date. For example, the twelve month period
commencing on the date the Company and the Executive execute this Agreement
shall constitute then first Plan Year. The twelve month period following the
first Plan Year shall constitute the second Plan Year and so on.
1.1.9 "Salary" means the base annual amount, without bonus or other
benefits, paid to the Executive by the Company as of the earlier to occur of:
(i) Termination of Employment; or, (ii) the Company' termination of the
Agreement under Section 7.3.
1.1.10 "Shareholder" means the existing owners of all issued and
outstanding stock of the Company or Holding Company as of the date this
Agreement is signed.
1.1.11 "Termination of Employment" or "Terminates Employment" means
the Executive's ceasing to be employed by the Company for any reason whatsoever,
voluntary or involuntary, other than by reason of an approved leave of absence.
ARTICLE 2
LIFETIME BENEFITS
2.1 Normal Retirement Benefit. If Termination of Employment occurs
on or after the Normal Retirement Date, the Company shall pay to the Executive
the benefit described in this Section 2.1.
2.1.1 Amount of Benefit. The benefit under this Section 2.1
is fifty percent (50%) of the Executive's Salary.
2.1.2 Payment of Benefit. The Company shall pay the annual
benefit determined under subsection 2.1.1 for a period of fifteen (15)
years, payable monthly (one-twelfth [1/12th] of the annual benefit)
beginning on the last day of the month commencing with the month
following Termination of Employment. The monthly payments under this
subsection 2.1.2 shall total one hundred eighty (180) substantially
equal payments over a period of one hundred eighty (180) months.
2.2 Early Retirement Benefit. If Termination of Employment occurs
on or after the Early Retirement Date and prior to the Normal Retirement Date,
the Company shall pay to the Executive the benefit described in this Section 2.2
in lieu of any other benefit under this Agreement.
2.2.1 Amount of Benefit. The benefit under this Section 2.2
is the annual benefit set forth in subsection 2.1.1 reduced by one-half
of a percent (0.5%) for each month or partial month between Termination
of Employment and the Normal Retirement Date. By way of example, assume
the Executive elects to retire at age 59 1/2, which is 66 months prior
to the Normal Retirement Date. Assume further the annual benefit under
subsection 2.1.1 equals thirty percent (30%) of Salary. Based on these
assumptions the percentage of Salary payable under this subsection
2.2.1 would equal 30% times 67% (100% minus the product of 66 times
0.5%). The resulting annual benefit under this subsection 2.2.1, based
on the assumptions in this example, would equal 20.10% (30% multiplied
by 67%) of Salary.
2.2.2 Payment of Benefit. The Company shall pay the annual
benefit determined under subsection 2.2.1 for a period of fifteen (15)
years, payable monthly (one-twelfth [1/12th] of the annual benefit)
beginning on the last day of the month commencing with the month
following Termination of Employment. The monthly payments under this
subsection 2.2.2 shall total one hundred eighty (180) substantially
equal payments over a period of one hundred eighty (180) months.
2.3 Termination of Employment Prior to the Early Retirement Date
or Prior to the Normal Retirement Date. Subject to the provisions of Section
2.5, if Termination of Employment occurs, for reasons other than death or
Disability, before either the Early Retirement Date or prior to the Normal
Retirement Date, the Company shall
3
pay to the Executive the benefit described in this Section 2.3.
2.3.1 Amount of Benefit. The benefit under this Section 2.3
is the Executive Benefit Accrual as of Termination of Employment.
2.3.2 Payment of Benefit. The Company shall pay to the
Executive the benefit set forth in subsection 2.3.1, in lieu of any
other benefit under this Agreement, in a single lump-sum within sixty
(60) days of Termination of Employment.
2.4 Disability Benefit. If Termination of Employment due to a
Disability occurs prior to the Normal Retirement Date, the Company shall pay to
the Executive the benefit described in this Section 2.4.
2.4.1 Amount of Benefit. Subject to the provisions of
Section 2.6 and Section 5.3, the annual benefit under this Section 2.4
is the annual benefit set forth in subsection 2.1.1.
2.4.2 Payment of Benefit. The Company shall pay the annual
benefit determined under subsection 2.4.1, in lieu of any other benefit
under this Agreement, for a period of fifteen (15) years, payable
monthly (one-twelfth [1/12th] of the annual benefit) beginning on the
last day of the month commencing with the month following the
Executive's Normal Retirement Date. The monthly payments under this
subsection 2.4.2 shall total one hundred eighty (180) substantially
equal payments over a period of one hundred eighty (180) months.
2.4.3 Death During Disability. In the event the Executive
dies subsequent to Termination of Employment due to Disability and
prior to receiving any payment under this Agreement, the Company shall
pay the Executive's designated beneficiary the annual benefit set forth
in subsection 3.1.1 and in the manner set forth in Section 3.1.2 in
lieu of any other benefit under this Agreement.
2.5 Change of Control Benefit. Upon a Change of Control prior to
Termination of Employment, the Company, subject to the provisions of Section 2.6
and Section 5.3, shall pay to the Executive the benefit described in this
Section 2.5 in lieu of any other benefit under this Agreement.
2.5.1 Amount of Benefit. The benefit under this Section 2.5
is the present value of the payments under Section 2.1, assuming, for
purposes of determining present value under this subsection 2.5.1 only,
that the Executive was entitled to benefit payments under Section 2.1
at Termination of Employment. In determining this present value the
Company shall utilize the Discount Rate.
2.5.2 Payment of Benefit. The Company shall pay to the
Executive the benefit set forth in subsection 2.5.1, in lieu of any
other benefit under this Agreement, in a single lump-sum within sixty
(60) days of Termination of Employment.
2.6 Excess Parachute Payment. Notwithstanding any provision of
this Agreement to the contrary, the Company shall not pay any benefit under this
Agreement to the extent the benefit would be a non-deductible parachute payment
under Section 280G of the Code.
ARTICLE 3
DEATH BENEFITS
3.1. Death During Active Service. The Company shall pay to the
Executive's beneficiary the benefit described in this Section 3.1 if the
Executive dies: (i) while employed by the Company; or, (ii) after Termination of
Employment due to Disability prior to the Normal Retirement Date.
3.1.1. Amount of Benefit. The annual benefit under this
Section 3.1 is the annual benefit set forth in Section 2.1.1.
3.1.2. Payment of Benefit. The Company shall pay the annual
benefit determined under
4
subsection 3.1.1, in lieu of any other benefit under this Agreement,
for a period of fifteen (15) years, payable monthly (one-twelfth
[1/12th] of the annual benefit) beginning on the last day of the month
commencing with the month following the Executive's death. The monthly
payments under this subsection 3.1.2 shall total one hundred eighty
(180) substantially equal payments over a period of one hundred eighty
(180) months.
3.2. Death During Benefit Period. If the Executive dies after
benefit payments have commenced under section of this Agreement, but before
receiving all such payments, the Company shall pay the remaining benefits to the
Executive's beneficiary at the same time and in the same amounts that would have
been paid to the Executive had the Executive survived. If the Executive's
designated beneficiary dies after benefit payments have commenced under this
Agreement but before receiving all such payments, the Company shall pay the
present value of the remaining benefits due under this Agreement, utilizing the
a discount rate of seven and one-half percent (7.5%) to determine the present
value of the remaining payments, to the estate of the Executive's designated
beneficiary in a single lump sum within sixty (60) days of the death of the
Executive's designated beneficiary.
ARTICLE 4
BENEFICIARIES
4.1 Beneficiary Designations. The Executive shall designate a
beneficiary by filing with the Company a written designation of beneficiary on a
form substantially similar to the form attached as Exhibit A. The Executive may
revoke or modify the designation at any time by filing a new designation.
However, designations will only be effective if signed by the Executive and
accepted by the Company during the Executive's lifetime. The Executive's
beneficiary designation shall be deemed automatically revoked if the beneficiary
predeceases the Executive, or if the Executive names a spouse as beneficiary and
the marriage is subsequently dissolved. If the Executive dies without a valid
beneficiary designation, all payments shall be made to the Executive's surviving
spouse, if any, and if none, to the Executive's surviving children and the
descendants of any deceased child by right of representation, and if no children
or descendants survive, to the Executive's estate.
4.2 Facility of Payment. If a benefit is payable to a minor, to a
person declared incompetent, or to a person incapable of handling the
disposition of his or her property, the Company may pay such benefit to the
guardian, legal representative or person having the care or custody of such
minor, incompetent person or incapable person, or to a custodian selected by the
Company under the Mississippi Uniform Transfers to Minors Act for the benefit of
such minor. The Company may require proof of incompetency, minority or
guardianship as it may deem appropriate prior to distribution of the benefit.
Such distribution shall completely discharge the Company from all liability with
respect to such benefit.
ARTICLE 5
GENERAL LIMITATIONS
Notwithstanding any provision of this Agreement to the contrary, the
Company shall not pay any benefit under this Agreement if any of the following
occur:
5.1 Termination for Cause. If the Company terminates the
Executive's employment for any of the following reasons:
5.1.1 Conviction in a court of competent jurisdiction of a
felony; or
5.1.2 Fraud, dishonesty, or embezzlement. Also, any willful
violation of any law or willful violation of a significant Company
policy committed in connection with the Executive's employment, with
either resulting in an adverse effect on the Company.
5
5.2 Suicide. No benefits shall be payable if the Executive commits
suicide within two (2) years after the date of this Agreement, or if the
Executive has made any material misstatement of fact on any application for life
insurance purchased by the Company.
5.3 Golden Parachute Payment. Notwithstanding any provision of
this Agreement to the contrary, the Company shall not be required to pay any
benefit under this Agreement if, upon the advice of counsel, the Company
determines that the payment of such benefit would be prohibited by 12 C.F.R.
Part 359 or any successor regulations regarding employee compensation
promulgated by any regulatory agency having jurisdiction over the Company or its
affiliates or to the extent the benefit would be a non-deductible excess
parachute payment under Section 280G of the Code. To the extent possible, such
benefit payment shall be proportionately reduced to allow payment within the
fullest extent permissible under applicable law.
ARTICLE 6
CLAIMS AND REVIEW PROCEDURES
6.1 Claims Procedure. Any individual ("Claimant") who has not
received benefits under the Plan that he or she believes should be paid shall
make a claim for such benefits as follows:
6.1.1 Initiation - Written Claim. The Claimant initiates a
claim by submitting to the Company a written claim for the benefits.
6.1.2 Timing of Company Response. The Company shall respond
to such Claimant within 90 days after receiving the claim. If the
Company determines that special circumstances require additional time
for processing the claim, the Company can extend the response period by
an additional 90 days by notifying the Claimant in writing, prior to
the end of the initial 90-day period, that an additional period is
required. The notice of extension must set forth the special
circumstances and the date by which the Company expects to render its
decision.
6.1.3 Notice of Decision. If the Company denies part or all
of the claim, the Company shall notify the Claimant in writing of such
denial. The Company shall write the notification in a manner calculated
to be understood by the Claimant. The notification shall set forth:
(a) The specific reasons for the denial,
(b) A reference to the specific provisions of
the Plan on which the denial is based,
(c) A description of any additional information
or material necessary for the Claimant to perfect the claim
and an explanation of why it is needed,
(d) An explanation of the Plan's review
procedures and the time limits applicable to such procedures,
and
(e) A statement of the Claimant's right to bring
a civil action under ERISA Section 502(a) following an adverse
benefit determination on review.
6.2 Review Procedure. If the Company denies part or all of the
claim, the Claimant shall have the opportunity for a full and fair review by the
Company of the denial, as follows:
6.2.1 Initiation - Written Request. To initiate the review,
the Claimant, within 60 days after receiving the Company's notice of
denial, must file with the Company a written request for review.
6.2.2 Additional Submissions - Information Access. The
Claimant shall then have the opportunity to submit written comments,
documents, records and other information relating to the claim. The
Company shall also provide the Claimant, upon request and free of
charge, reasonable access to, and copies of, all documents, records and
other information relevant (as defined in applicable ERISA regulations)
to the Claimant's claim for benefits.
6
6.2.3 Considerations on Review. In considering the review,
the Company shall take into account all materials and information the
Claimant submits relating to the claim, without regard to whether such
information was submitted or considered in the initial benefit
determination.
6.2.4 Timing of Company Response. The Company shall respond
in writing to such Claimant within 60 days after receiving the request
for review. If the Company determines that special circumstances
require additional time for processing the claim, the Company can
extend the response period by an additional 60 days by notifying the
Claimant in writing, prior to the end of the initial 60-day period,
that an additional period is required. The notice of extension must set
forth the special circumstances and the date by which the Company
expects to render its decision.
6.2.5 Notice of Decision. The Company shall notify the
Claimant in writing of its decision on review. The Company shall write
the notification in a manner calculated to be understood by the
Claimant. The notification shall set forth:
(a) The specific reasons for the denial,
(b) A reference to the specific provisions of
the Plan on which the denial is based,
(c) A statement that the Claimant is entitled to
receive, upon request and free of charge, reasonable access
to, and copies of, all documents, records and other
information relevant (as defined in applicable ERISA
regulations) to the Claimant's claim for benefits, and
(d) A statement of the Claimant's right to bring
a civil action under ERISA Section 502(a).
ARTICLE 7
AMENDMENTS AND TERMINATION
7.1 Amendment or Termination of Agreement. This Agreement may be
amended or terminated only by at a written agreement signed by the Company and
the Executive.
7.2 Termination by Operation of Law. Notwithstanding the previous
paragraph in this Article 7, the Company may amend or terminate this Agreement
at any time if, pursuant to legislative, judicial or regulatory action,
continuation of the Agreement would (i) cause benefits to be taxable to the
Executive prior to actual receipt, or (ii) result in significant financial
penalties or other significantly detrimental ramifications to the Company (other
than the financial impact of paying the benefits). In the event of a termination
of the Agreement under this Section 7.2, the Company shall pay to the Executive
a single lump-sum payment equaling one hundred percent (100%) of the Executive
Benefit Accrual one hundred eighty (180) days from termination of the Agreement.
7.3 Termination by Company. The Company may terminate this
Agreement at any time. In the event the Company terminates this Agreement, for
reasons other than those set forth in Section 7.1 or Section 7.2, the Company,
subject to Section 2.6 and Section 5.3, shall pay the Executive the benefit
provided in subsection Section 2.5, assuming, for purposes of this Section 7.3
only, that upon Termination of the Agreement by the Company under this Section
7.3 Termination of Employment occurred, even if the Executive continues
employment with the Company after Termination of the Agreement under this
Section 7.3.
ARTICLE 8
MISCELLANEOUS
8.1 Binding Effect. This Agreement shall bind the Executive and
the Company, and their beneficiaries, survivors, executors, administrators and
permitted transferees.
8.2 No Guaranty of Employment. This Agreement is not an employment
policy or contract. It does not give the Executive the right to remain an
employee of the Company, nor does it interfere with the Company's
7
right to discharge the Executive. It also does not require the Executive to
remain an employee nor interfere with the Executive's right to terminate
employment at any time.
8.3 Non-Transferability. Benefits under this Agreement cannot be
sold, transferred, assigned, pledged, attached or encumbered in any manner,
except in accordance with Article 4 with respect to designation of
beneficiaries.
8.4 Tax Withholding. The Company shall withhold any taxes that are
required to be withheld from the benefits provided under this Agreement.
8.5 Applicable Law. The Agreement and all rights hereunder shall
be governed by the laws of the State of Mississippi, except to the extent
preempted by the laws of the United States of America.
8.6 Unfunded Arrangement. The Executive and beneficiary are
general unsecured creditors of the Company for the payment of benefits under
this Agreement. The benefits represent the mere promise by the Company to pay
such benefits. The rights to benefits are not subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance,
attachment, or garnishment by creditors. Any insurance on the Executive's life
is a general asset of the Company to which the Executive and beneficiary have no
preferred or secured claim.
8.7 Severability. Without limitation of any other section
contained herein, in case any one or more provisions contained in this Agreement
shall for any reason be held to be invalid, illegal or unenforceable in any
other respect, such invalidity, illegality or unenforceability shall not affect
the other provisions of this Agreement. In the event any one or more of the
provisions found in the Agreement shall be held to be invalid, illegal or
unenforceable by any governmental regulatory agency or court of competent
jurisdiction, this Agreement shall be construed as if such invalid, illegal or
unenforceable provision had never been a part of this Agreement and such
provision shall be deemed substituted by such other provisions as will most
nearly accomplish the intent of the parties to the extent permitted by
applicable law.
8.8 Administration. The Company shall have powers which are
necessary to administer this Agreement, including but not limited to:
(a) Interpreting the provisions of the Agreement;
(b) Establishing and revising the method of accounting
for the Agreement;
(c) Maintaining a record of benefit payments; and
(d) Establishing rules and prescribing any forms
necessary or desirable to administer the Agreement.
8.9 Named Fiduciary. The Company shall be the named fiduciary and
plan administrator under this Agreement. It may delegate to others certain
aspects of the management and operational responsibilities including the
employment of advisors and the delegation of ministerial duties to qualified
individuals.
8.10 Full Obligation. Notwithstanding any provision to the
contrary, when the Company has paid either a Lifetime Benefit or a Death Benefit
as appropriate under any section of the Agreement, the Company has completed its
obligation to the Executive.
IN WITNESS WHEREOF, the Executive and a duly authorized Company officer
have signed this Agreement as of the date indicated below.
COMPANY: EXECUTIVE:
THE PEOPLES BANK
By: _________________________________ __________________________________
8
XXXXXX X. XXXXXX
Its: _________________________________
Date: _________________ Date:_________________
9
EXHIBIT A
BENEFICIARY DESIGNATION
I, _____________________________, designate the following as beneficiary of any
death benefits payable under the Amendment and Restatement of Executive
Supplemental Income Agreement between myself and The Peoples Bank:
Primary Beneficiary
Name Relationship
Address
Contingent Beneficiary
Name Relationship
Address
NOTE: TO NAME A TRUST AS BENEFICIARY, PLEASE PROVIDE THE NAME OF THE TRUSTEE AND
THE EXACT DATE OF THE TRUST AGREEMENT.
I understand that I may change these beneficiary designations by filing a new
written designation with the Company. I further understand that the designations
will be automatically revoked if the beneficiary predeceases me, or, if I have
named my spouse as beneficiary, in the event of the dissolution of our marriage.
Date
Accepted by the Company this _____ day of _____________, 20___
By:
Title:
10
AMENDMENT AND RESTATEMENT OF
EXECUTIVE SUPPLEMENTAL INCOME AGREEMENT
This Agreement, effective as of October 1, 2002 (The "Effective Date"),
is made by and between The Peoples Bank, a state-chartered commercial bank with
its principal office located in Biloxi, Mississippi (hereinafter referred to as
the "Company"), and A. Xxx Xxxxxx (hereinafter referred to as the "Executive").
This Agreement hereby amends and restates, in its entirety, a prior agreement,
with an initial effective date of January 1, 1995 (hereinafter the "Prior
Agreement"), made by and between the Company and the Executive.
INTRODUCTION
The Company and the Executive entered into the Prior Agreement in order
to provide certain benefits to the Executive as an officer of the Company upon
the Executive's retirement.
The Company and the Executive, by this current Agreement, desire to
amend and desire to restate the Prior Agreement, in its entirety, to include and
reflect the terms set forth herein and to incorporate the benefit accumulated to
date by the Executive under Prior Agreement.
Therefore, in order to encourage the Executive to remain an employee of
the Company, the Company is willing to provide salary continuation benefits to
the Executive. The Company will pay the benefits from its general assets.
AGREEMENT
The Executive and the Company agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Definitions. Whenever used in this Agreement, the following
words and phrases shall have the meanings specified:
1.1.1 "Change of Control" means:
(a) a change in the ownership of the capital stock of the
Company or Peoples Financial Corporation (the "Holding Company"),
whereby a corporation, person or group acting in concert (a "Person")
as described in Section 14(d)(2) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), holds or acquires, directly or
indirectly, beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of a number of shares of capital
stock of the Company or Holding Company which constitutes fifty percent
(50%) or more of the combined voting power of the Company's or Holding
Company's outstanding capital stock then entitled to vote generally in
the election of directors; or
(b) the persons who were members of the Board of
Directors of the Company or Holding Company immediately prior to a
tender offer, exchange offer, contested election or any combination of
the foregoing, cease to constitute a majority of such Board of
Directors; or
(c) the adoption by the Board of Directors of the Company
or of the Holding Company of a merger, consolidation or reorganization
plan involving the Company or Holding Company in which the Company or
the Holding Company is not the surviving entity, or a sale of all or
substantially all of the assets of the Company or Holding Company. For
purposes of this Agreement, a sale of all or substantially all of the
assets of the Company or Holding Company shall be deemed to occur if
any Person acquires (or during the 12-month period ending on the date
of the most recent acquisition by such Person, has acquired) gross
assets of the Company or Holding Company that have an aggregate fair
market value equal to fifty percent (50%) of the fair market value of
all of the respective gross assets of the Company or Holding Company
immediately prior to such acquisition or acquisitions; or
1
(d) a tender offer or exchange offer is made by any
Person which, if successfully completed, would result in such Person
beneficially owning (within the meaning of Rule 13d-3 promulgated under
the Exchange Act) either fifty percent (50%) or more of the Company's
or Holding Company's outstanding shares of Common Stock or shares of
capital stock having fifty percent (50%) or more the combined voting
power of the Company's or Holding Company's then outstanding capital
stock (other than an offer made by the Company or the Holding Company),
and sufficient shares are acquired under the offer to cause such person
to own fifty percent (50%) or more of the voting power; or
(e) any other transactions or series of related
transactions occurring which have substantially the same effect as the
transactions specified in any of the preceding clauses of this
Subsection (1.1.1).
1.1.1.1 "Permitted Transfers" means that a
Shareholder, as hereinafter defined in Subsection 1.1.10 may
make the following transfers and such transfers shall be
deemed not to be a Change of Control under Subsection 1.1.1:
(a) To any trust, company, or
partnership created solely for the
benefit of any Shareholder or any
spouse of or any lineal descendant
of any Shareholder;
(b) To any individual or entity by bona
fide gift;
(c) To any spouse or former spouse of
any Shareholder pursuant to the
terms of a decree of divorce;
(d) To any officer or employee of the
Company pursuant to any incentive
stock option plan established by
the Shareholder;
(e) To any family member of any
Shareholder;
(f) After receipt of any necessary
regulatory approvals, to any
company or partnership, including,
but not limited to, a family
limited partnership, a majority of
the stock or interests of which
company or partnership are owned by
any of the Shareholder; or
(g) To any existing Shareholder as of
the Effective Date.
1.1.2 "Code" means the Internal Revenue Code of 1986, as amended.
References to a Code section shall be deemed to be to that section as it now
exists and to any successor provision.
1.1.3 "Disability" means the Executive's suffering a sickness,
accident or injury which has been determined by the carrier of any individual or
group long-term disability insurance policy carried by the Company covering the
Executive, or, if no such long-term disability policy exists, then as determined
by the Social Security Administration, to be a disability rendering the
Executive totally and permanently disabled. The Executive must submit proof to
the Company of the carrier's or Social Security Administration's determination
upon the request of the Company.
1.1.4 "Discount Rate" means eight percent (8%).
1.1.5 "Early Retirement Date" means the date the Executive: (i)
attains at least age fifty-five (55); (ii) attains at least his fifteen (15)
year anniversary of employment at the Company; and, (iii) has participated in
the Prior Agreement, including this amendment and restatement of the Prior
Agreement, for five (5) years.
1.1.6 "Executive Benefit Accrual" means the amount accrued as a
liability to the Executive by the Company by virtue of the terms of the Prior
Agreement through the Effective Date and by virtue of the terms of this
Agreement under Generally Accepted Accounting Principles (GAAP).
2
1.1.7 "Normal Retirement Date" means the date the Executive attains
age sixty-five (65).
1.1.8 "Plan Year" means each twelve (12) consecutive month period
commencing on the Effective Date. For example, the twelve month period
commencing on the date the Company and the Executive execute this Agreement
shall constitute then first Plan Year. The twelve month period following the
first Plan Year shall constitute the second Plan Year and so on.
1.1.9 "Salary" means the base annual amount, without bonus or other
benefits, paid to the Executive by the Company as of the earlier to occur of:
(i) Termination of Employment; or, (ii) the Company' termination of the
Agreement under Section 7.3.
1.1.10 "Shareholder" means the existing owners of all issued and
outstanding stock of the Company or Holding Company as of the date this
Agreement is signed.
1.1.11 "Termination of Employment" or "Terminates Employment" means
the Executive's ceasing to be employed by the Company for any reason whatsoever,
voluntary or involuntary, other than by reason of an approved leave of absence.
ARTICLE 2
LIFETIME BENEFITS
2.1 Normal Retirement Benefit. If Termination of Employment occurs
on or after the Normal Retirement Date, the Company shall pay to the Executive
the benefit described in this Section 2.1.
2.1.1 Amount of Benefit. The benefit under this Section 2.1
is fifty percent (50%) of the Executive's Salary.
2.1.2 Payment of Benefit. The Company shall pay the annual
benefit determined under subsection 2.1.1 for a period of fifteen (15)
years, payable monthly (one-twelfth [1/12th] of the annual benefit)
beginning on the last day of the month commencing with the month
following Termination of Employment. The monthly payments under this
subsection 2.1.2 shall total one hundred eighty (180) substantially
equal payments over a period of one hundred eighty (180) months.
2.2 Early Retirement Benefit. If Termination of Employment occurs
on or after the Early Retirement Date and prior to the Normal Retirement Date,
the Company shall pay to the Executive the benefit described in this Section 2.2
in lieu of any other benefit under this Agreement.
2.2.1 Amount of Benefit. The benefit under this Section 2.2
is the annual benefit set forth in subsection 2.1.1 reduced by one-half
of a percent (0.5%) for each month or partial month between Termination
of Employment and the Normal Retirement Date. By way of example, assume
the Executive elects to retire at age 59 1/2, which is 66 months prior
to the Normal Retirement Date. Assume further the annual benefit under
subsection 2.1.1 equals thirty percent (30%) of Salary. Based on these
assumptions the percentage of Salary payable under this subsection
2.2.1 would equal 30% times 67% (100% minus the product of 66 times
0.5%). The resulting annual benefit under this subsection 2.2.1, based
on the assumptions in this example, would equal 20.10% (30% multiplied
by 67%) of Salary.
2.2.2 Payment of Benefit. The Company shall pay the annual
benefit determined under subsection 2.2.1 for a period of fifteen (15)
years, payable monthly (one-twelfth [1/12th] of the annual benefit)
beginning on the last day of the month commencing with the month
following Termination of Employment. The monthly payments under this
subsection 2.2.2 shall total one hundred eighty (180) substantially
equal payments over a period of one hundred eighty (180) months.
2.3 Termination of Employment Prior to the Early Retirement Date
or Prior to the Normal Retirement Date. Subject to the provisions of Section
2.5, if Termination of Employment occurs, for reasons other than death or
Disability, before either the Early Retirement Date or prior to the Normal
Retirement Date, the Company shall
3
pay to the Executive the benefit described in this Section 2.3.
2.3.1 Amount of Benefit. The benefit under this Section 2.3
is the Executive Benefit Accrual as of Termination of Employment.
2.3.2 Payment of Benefit. The Company shall pay to the
Executive the benefit set forth in subsection 2.3.1, in lieu of any
other benefit under this Agreement, in a single lump-sum within sixty
(60) days of Termination of Employment.
2.4 Disability Benefit. If Termination of Employment due to a
Disability occurs prior to the Normal Retirement Date, the Company shall pay to
the Executive the benefit described in this Section 2.4.
2.4.1 Amount of Benefit. Subject to the provisions of
Section 2.6 and Section 5.3, the annual benefit under this Section 2.4
is the annual benefit set forth in subsection 2.1.1.
2.4.2 Payment of Benefit. The Company shall pay the annual
benefit determined under subsection 2.4.1, in lieu of any other benefit
under this Agreement, for a period of fifteen (15) years, payable
monthly (one-twelfth [1/12th] of the annual benefit) beginning on the
last day of the month commencing with the month following the
Executive's Normal Retirement Date. The monthly payments under this
subsection 2.4.2 shall total one hundred eighty (180) substantially
equal payments over a period of one hundred eighty (180) months.
2.4.3 Death During Disability. In the event the Executive
dies subsequent to Termination of Employment due to Disability and
prior to receiving any payment under this Agreement, the Company shall
pay the Executive's designated beneficiary the annual benefit set forth
in subsection 3.1.1 and in the manner set forth in Section 3.1.2 in
lieu of any other benefit under this Agreement.
2.5 Change of Control Benefit. Upon a Change of Control prior to
Termination of Employment, the Company, subject to the provisions of Section 2.6
and Section 5.3, shall pay to the Executive the benefit described in this
Section 2.5 in lieu of any other benefit under this Agreement.
2.5.1 Amount of Benefit. The benefit under this Section 2.5
is the present value of the payments under Section 2.1, assuming, for
purposes of determining present value under this subsection 2.5.1 only,
that the Executive was entitled to benefit payments under Section 2.1
at Termination of Employment. In determining this present value the
Company shall utilize the Discount Rate.
2.5.2 Payment of Benefit. The Company shall pay to the
Executive the benefit set forth in subsection 2.5.1, in lieu of any
other benefit under this Agreement, in a single lump-sum within sixty
(60) days of Termination of Employment.
2.6 Excess Parachute Payment. Notwithstanding any provision of
this Agreement to the contrary, the Company shall not pay any benefit under this
Agreement to the extent the benefit would be a non-deductible parachute payment
under Section 280G of the Code.
ARTICLE 3
DEATH BENEFITS
3.1. Death During Active Service. The Company shall pay to the
Executive's beneficiary the benefit described in this Section 3.1 if the
Executive dies: (i) while employed by the Company; or, (ii) after Termination of
Employment due to Disability prior to the Normal Retirement Date.
3.1.1. Amount of Benefit. The annual benefit under this
Section 3.1 is the annual benefit set forth in Section 2.1.1.
3.1.2. Payment of Benefit. The Company shall pay the annual
benefit determined under
4
subsection 3.1.1, in lieu of any other benefit under this Agreement,
for a period of fifteen (15) years, payable monthly (one-twelfth
[1/12th] of the annual benefit) beginning on the last day of the month
commencing with the month following the Executive's death. The monthly
payments under this subsection 3.1.2 shall total one hundred eighty
(180) substantially equal payments over a period of one hundred eighty
(180) months.
3.2. Death During Benefit Period. If the Executive dies
after benefit payments have commenced under section of this Agreement, but
before receiving all such payments, the Company shall pay the remaining benefits
to the Executive's beneficiary at the same time and in the same amounts that
would have been paid to the Executive had the Executive survived. If the
Executive's designated beneficiary dies after benefit payments have commenced
under this Agreement but before receiving all such payments, the Company shall
pay the present value of the remaining benefits due under this Agreement,
utilizing the a discount rate of seven and one-half percent (7.5%) to determine
the present value of the remaining payments, to the estate of the Executive's
designated beneficiary in a single lump sum within sixty (60) days of the death
of the Executive's designated beneficiary.
ARTICLE 4
BENEFICIARIES
4.1 Beneficiary Designations. The Executive shall designate a
beneficiary by filing with the Company a written designation of beneficiary on a
form substantially similar to the form attached as Exhibit A. The Executive may
revoke or modify the designation at any time by filing a new designation.
However, designations will only be effective if signed by the Executive and
accepted by the Company during the Executive's lifetime. The Executive's
beneficiary designation shall be deemed automatically revoked if the beneficiary
predeceases the Executive, or if the Executive names a spouse as beneficiary and
the marriage is subsequently dissolved. If the Executive dies without a valid
beneficiary designation, all payments shall be made to the Executive's surviving
spouse, if any, and if none, to the Executive's surviving children and the
descendants of any deceased child by right of representation, and if no children
or descendants survive, to the Executive's estate.
4.2 Facility of Payment. If a benefit is payable to a minor, to a
person declared incompetent, or to a person incapable of handling the
disposition of his or her property, the Company may pay such benefit to the
guardian, legal representative or person having the care or custody of such
minor, incompetent person or incapable person, or to a custodian selected by the
Company under the Mississippi Uniform Transfers to Minors Act for the benefit of
such minor. The Company may require proof of incompetency, minority or
guardianship as it may deem appropriate prior to distribution of the benefit.
Such distribution shall completely discharge the Company from all liability with
respect to such benefit.
ARTICLE 5
GENERAL LIMITATIONS
Notwithstanding any provision of this Agreement to the contrary, the
Company shall not pay any benefit under this Agreement if any of the following
occur:
5.1 Termination for Cause. If the Company terminates the
Executive's employment for any of the following reasons:
5.1.1 Conviction in a court of competent jurisdiction of a
felony; or
5.1.2 Fraud, dishonesty, or embezzlement. Also, any willful
violation of any law or willful violation of a significant Company
policy committed in connection with the Executive's employment, with
either resulting in an adverse effect on the Company.
5
5.2 Suicide. No benefits shall be payable if the Executive commits
suicide within two (2) years after the date of this Agreement, or if the
Executive has made any material misstatement of fact on any application for life
insurance purchased by the Company.
5.3 Golden Parachute Payment. Notwithstanding any provision of
this Agreement to the contrary, the Company shall not be required to pay any
benefit under this Agreement if, upon the advice of counsel, the Company
determines that the payment of such benefit would be prohibited by 12 C.F.R.
Part 359 or any successor regulations regarding employee compensation
promulgated by any regulatory agency having jurisdiction over the Company or its
affiliates or to the extent the benefit would be a non-deductible excess
parachute payment under Section 280G of the Code. To the extent possible, such
benefit payment shall be proportionately reduced to allow payment within the
fullest extent permissible under applicable law.
ARTICLE 6
CLAIMS AND REVIEW PROCEDURES
6.1 Claims Procedure. Any individual ("Claimant") who has not
received benefits under the Plan that he or she believes should be paid shall
make a claim for such benefits as follows:
6.1.1 Initiation - Written Claim. The Claimant initiates a
claim by submitting to the Company a written claim for the benefits.
6.1.2 Timing of Company Response. The Company shall respond
to such Claimant within 90 days after receiving the claim. If the
Company determines that special circumstances require additional time
for processing the claim, the Company can extend the response period by
an additional 90 days by notifying the Claimant in writing, prior to
the end of the initial 90-day period, that an additional period is
required. The notice of extension must set forth the special
circumstances and the date by which the Company expects to render its
decision.
6.1.3 Notice of Decision. If the Company denies part or all
of the claim, the Company shall notify the Claimant in writing of such
denial. The Company shall write the notification in a manner calculated
to be understood by the Claimant. The notification shall set forth:
(a) The specific reasons for the denial,
(b) A reference to the specific provisions of
the Plan on which the denial is based,
(c) A description of any additional information
or material necessary for the Claimant to
perfect the claim and an explanation of why
it is needed,
(d) An explanation of the Plan's review
procedures and the time limits applicable to
such procedures, and
(e) A statement of the Claimant's right to bring
a civil action under ERISA Section 502(a)
following an adverse benefit determination
on review.
6.2 Review Procedure. If the Company denies part or all of the
claim, the Claimant shall have the opportunity for a full and fair review by the
Company of the denial, as follows:
6.2.1 Initiation - Written Request. To initiate the review,
the Claimant, within 60 days after receiving the Company's notice of
denial, must file with the Company a written request for review.
6.2.2 Additional Submissions - Information Access. The
Claimant shall then have the opportunity to submit written comments,
documents, records and other information relating to the claim. The
Company shall also provide the Claimant, upon request and free of
charge, reasonable access to, and copies of, all documents, records and
other information relevant (as defined in applicable ERISA regulations)
to the Claimant's claim for benefits.
6
6.2.3 Considerations on Review. In considering the review,
the Company shall take into account all materials and information the
Claimant submits relating to the claim, without regard to whether such
information was submitted or considered in the initial benefit
determination.
6.2.4 Timing of Company Response. The Company shall respond
in writing to such Claimant within 60 days after receiving the request
for review. If the Company determines that special circumstances
require additional time for processing the claim, the Company can
extend the response period by an additional 60 days by notifying the
Claimant in writing, prior to the end of the initial 60-day period,
that an additional period is required. The notice of extension must set
forth the special circumstances and the date by which the Company
expects to render its decision.
6.2.5 Notice of Decision. The Company shall notify the
Claimant in writing of its decision on review. The Company shall write
the notification in a manner calculated to be understood by the
Claimant. The notification shall set forth:
(a) The specific reasons for the denial,
(b) A reference to the specific provisions of
the Plan on which the denial is based,
(c) A statement that the Claimant is entitled to
receive, upon request and free of charge,
reasonable access to, and copies of, all
documents, records and other information
relevant (as defined in applicable ERISA
regulations) to the Claimant's claim for
benefits, and
(d) A statement of the Claimant's right to bring
a civil action under ERISA Section 502(a).
ARTICLE 7
AMENDMENTS AND TERMINATION
7.1 Amendment or Termination of Agreement. This Agreement may be
amended or terminated only by at a written agreement signed by the Company and
the Executive.
7.2 Termination by Operation of Law. Notwithstanding the previous
paragraph in this Article 7, the Company may amend or terminate this Agreement
at any time if, pursuant to legislative, judicial or regulatory action,
continuation of the Agreement would (i) cause benefits to be taxable to the
Executive prior to actual receipt, or (ii) result in significant financial
penalties or other significantly detrimental ramifications to the Company (other
than the financial impact of paying the benefits). In the event of a termination
of the Agreement under this Section 7.2, the Company shall pay to the Executive
a single lump-sum payment equaling one hundred percent (100%) of the Executive
Benefit Accrual one hundred eighty (180) days from termination of the Agreement.
7.3 Termination by Company. The Company may terminate this
Agreement at any time. In the event the Company terminates this Agreement, for
reasons other than those set forth in Section 7.1 or Section 7.2, the Company,
subject to Section 2.6 and Section 5.3, shall pay the Executive the benefit
provided in subsection Section 2.5, assuming, for purposes of this Section 7.3
only, that upon Termination of the Agreement by the Company under this Section
7.3 Termination of Employment occurred, even if the Executive continues
employment with the Company after Termination of the Agreement under this
Section 7.3.
ARTICLE 8
MISCELLANEOUS
8.1 Binding Effect. This Agreement shall bind the Executive and
the Company, and their beneficiaries, survivors, executors, administrators and
permitted transferees.
8.2 No Guaranty of Employment. This Agreement is not an employment
policy or contract. It does not give the Executive the right to remain an
employee of the Company, nor does it interfere with the Company's
7
right to discharge the Executive. It also does not require the Executive to
remain an employee nor interfere with the Executive's right to terminate
employment at any time.
8.3 Non-Transferability. Benefits under this Agreement cannot be
sold, transferred, assigned, pledged, attached or encumbered in any manner,
except in accordance with Article 4 with respect to designation of
beneficiaries.
8.4 Tax Withholding. The Company shall withhold any taxes that are
required to be withheld from the benefits provided under this Agreement.
8.5 Applicable Law. The Agreement and all rights hereunder shall
be governed by the laws of the State of Mississippi, except to the extent
preempted by the laws of the United States of America.
8.6 Unfunded Arrangement. The Executive and beneficiary are
general unsecured creditors of the Company for the payment of benefits under
this Agreement. The benefits represent the mere promise by the Company to pay
such benefits. The rights to benefits are not subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance,
attachment, or garnishment by creditors. Any insurance on the Executive's life
is a general asset of the Company to which the Executive and beneficiary have no
preferred or secured claim.
8.7 Severability. Without limitation of any other section
contained herein, in case any one or more provisions contained in this Agreement
shall for any reason be held to be invalid, illegal or unenforceable in any
other respect, such invalidity, illegality or unenforceability shall not affect
the other provisions of this Agreement. In the event any one or more of the
provisions found in the Agreement shall be held to be invalid, illegal or
unenforceable by any governmental regulatory agency or court of competent
jurisdiction, this Agreement shall be construed as if such invalid, illegal or
unenforceable provision had never been a part of this Agreement and such
provision shall be deemed substituted by such other provisions as will most
nearly accomplish the intent of the parties to the extent permitted by
applicable law.
8.8 Administration. The Company shall have powers which are
necessary to administer this Agreement, including but not limited to:
(a) Interpreting the provisions of the Agreement;
(b) Establishing and revising the method of accounting
for the Agreement;
(c) Maintaining a record of benefit payments; and
(d) Establishing rules and prescribing any forms
necessary or desirable to administer the Agreement.
8.9 Named Fiduciary. The Company shall be the named fiduciary and
plan administrator under this Agreement. It may delegate to others certain
aspects of the management and operational responsibilities including the
employment of advisors and the delegation of ministerial duties to qualified
individuals.
8.10 Full Obligation. Notwithstanding any provision to the
contrary, when the Company has paid either a Lifetime Benefit or a Death Benefit
as appropriate under any section of the Agreement, the Company has completed its
obligation to the Executive.
IN WITNESS WHEREOF, the Executive and a duly authorized Company officer
have signed this Agreement as of the date indicated below.
COMPANY: EXECUTIVE:
THE PEOPLES BANK
By: ___________________________ _________________________________
8
A. XXX XXXXXX
Its: _________________________________
Date: _________________________ Date: ____________________
9
EXHIBIT A
BENEFICIARY DESIGNATION
I, _____________________________, designate the following as beneficiary of any
death benefits payable under the Amendment and Restatement of Executive
Supplemental Income Agreement between myself and The Peoples Bank:
Primary Beneficiary
Name Relationship
Address
Contingent Beneficiary
Name Relationship
Address
NOTE: TO NAME A TRUST AS BENEFICIARY, PLEASE PROVIDE THE NAME OF THE TRUSTEE AND
THE EXACT DATE OF THE TRUST AGREEMENT.
I understand that I may change these beneficiary designations by filing a new
written designation with the Company. I further understand that the designations
will be automatically revoked if the beneficiary predeceases me, or, if I have
named my spouse as beneficiary, in the event of the dissolution of our marriage.
Date
Accepted by the Company this _____ day of _____________, 20___
By:
Title:
10
