BancorpSouth, Inc. Change in Control Agreement
EXHIBIT 10(r)
BancorpSouth, Inc.
Change in Control Agreement
Change in Control Agreement
This Agreement (“Agreement”) is entered into this 10th day of January, 2008, by
and between BancorpSouth, Inc. (the “Company”) and Xxxxxx X. Xxxxx (“Employee”).
WITNESSETH:
Whereas, Employee is employed as Vice Chairman of the Company; and
Whereas, the Company desires to provide certain severance payments to Employee in the event
that Employee’s employment with the Company is terminated in connection with a change in control of
the Company;
Now, Therefore, based upon the premises set forth herein and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as
follows
ARTICLE I. DEFINITIONS
Terms used in this Agreement that are defined are indicated by initial capitalization of the
term. References to an “Article” or a “Section” mean an article or a section of this Agreement. In
addition to those terms that are specifically defined herein, the following terms are defined for
purposes hereof:
“Administrator” means a committee consisting of the Company’s chief executive officer,
the secretary of the Company, the vice president of human resources, and any other individuals
appointed by the chief executive officer. The Administrator may delegate any of its duties or
authorities to any person or entity. If a Change in Control occurs, as described in this Agreement,
the Administrator shall be the committee of individuals who were committee members immediately
prior to the Change in Control.
“Benefit” means the benefits described in Article II.
“Change in Control” means a transaction or circumstance in which any of the following
have occurred:
| (a) | any “person” as such term is used in sections 13(d) and 14(d) of the Exchange Act, other than a trustee or other fiduciary holding securities under an employee benefit plan of the Company or a corporation controlling the Company or owned directly or indirectly by the shareholders of the Company in substantially the same proportions as their ownership of stock of the Company, becomes the “beneficial owner” (as defined in Rule 13d-3 under said Act), directly or indirectly, of securities of the Company representing more than 25% of the total voting power represented by the Company’s then outstanding Voting Securities (as defined below), or | |
| (b) | during any period of two consecutive years, individuals who at the beginning of such period constitute the Board and any new director whose election by the Board or nomination for election by the Company’s shareholders was approved by a vote of at least two-thirds of the directors then still in office who either were directors at the |
| beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof, or | ||
| (c) | the shareholders of the Company approve a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the Voting Securities (i.e., any securities of the entity which vote generally in the election of its directors) of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into Voting Securities of the surviving entity) more than 65% of the total voting power represented by the Voting Securities of the Company or such surviving entity outstanding immediately after such merger or consolidation, or | |
| (d) | the shareholders of the Company approve a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of all or substantially all of its assets. | |
| “Code” means the Internal Revenue Code of 1986, as amended. | ||
| “ERISA” means the Employee Retirement Income Security Act of 1974, as amended. |
ARTICLE II. CHANGE IN CONTROL TERMINATION PAYMENT
Section 2.1 Benefits on Termination.
(a) Amount. Subject to the conditions, limitations and adjustments that are provided for
herein, the Company will provide Benefits to Employee the sum of the amounts described below if,
within the 24 month period following a Change in Control, Employee’s employment with the Company
terminates pursuant to Section 2.3 of this Agreement:
| (1) | An amount equal to 200% of the Employee’s annual base compensation determined by reference to his base salary in effect at the time of Change in Control. | ||
| (2) | An amount equal to 200% of the highest annual bonus that Employee would be eligible to receive during the fiscal year ending during which the Change in Control occurs. | ||
| (3) | For a period of 24 months, participation in medical, life, disability and similar benefit plans that are offered to similarly situated employees of the Company immediately prior to the applicable Change in Control for the Eligible Employee and his dependents. Such participation may be pursuant to the continuation coverage rights of Eligible Employees pursuant to Part 6 of Title I of ERISA (“COBRA”) or the Company may provide such benefits directly through the purchase of insurance or otherwise. Notwithstanding the foregoing, the period for participation in a self-funded medical plan pursuant to this paragraph 3 shall not exceed the maximum period of continuation coverage provided under COBRA. If benefits are provided pursuant to COBRA continuation rights, the Company shall pay a cash amount to the Eligible Employee at the time of severance that is sufficient to cover all premiums required for such COBRA coverage under the appropriate benefit plans. |
| (4) | For a period of 24 months, participation in general and executive fringe benefits offered to similarly situated executive employees immediately prior to the applicable Change in Control, including, but not limited to, auto allowance, financial planning, annual physical examination, and civic and country club dues. |
(b) Adjustments to the Amount of Benefit. Notwithstanding anything herein to the contrary, the
amounts due to Employee under Section 2.1 (a) shall be adjusted in accordance with Section 2.2 if
any payment provided to Employee is determined to be subject to the excise tax described in section
4999 of the Code.
(c) Time for Payment; Interest. The cash Benefits payable made under this Section 2.1 shall be
paid to Employee in a single lump sum within ten days following the date of termination. The
Company’s obligation to pay to Employee any amounts under this Section 2.1 will bear interest at
the lesser of (i) 10% or (ii) the maximum rate allowed by law until paid by the Company, and all
accrued and unpaid interest will bear interest at the same rate, all of which interest will be
compounded annually.
(d) Troubled Institution Limitation. All Benefit payments hereunder are subject to the
limitations on golden parachute and indemnification payments set forth in 12 USC §1823(k), the
regulations promulgated thereunder, and other law that prohibits payment of any portion of Benefits
by the Company to Employee by the Company. To the extent possible, this limitation shall be applied
by reducing only the portion of Benefits that exceed such legal limitation.
2.2 Benefit Adjustments. Notwithstanding the amount of Benefits described in Section 2.l(a),
Benefits shall be limited in the event that Employee would realize less income on the receipt of
Benefits and other “change in control payments” (as defined in section 280G of the Code), net of
taxes, after deducting the amount of excise taxes that would be imposed pursuant to section 4999 of
the Code. In such an event, the Benefits payable hereunder shall be reduced so that Benefits
received in combination with all other change in control payments to be received by Employee equal
the maximum amount that does not result in the receipt of a “parachute payment” (as defined by
section 280G(b)(2) of the Code) by Employee. This reduction shall not apply if the amount of
Benefits and other change in control payments received by Employee exceed such reduced amount after
deducting the excise tax that would be imposed pursuant to section 4999 of the Code.
2.3 Termination of Employment. Employee shall only be entitled to the Benefits described in
Section 2.1, as adjusted by Section 2.2, if Employee’s termination of employment is on account of
termination by Company without cause or termination by Employee with cause, which are described as
follows:
(a) By Company Without Cause. Termination of employment by the Company without cause shall
occur if the Company provides oral or written notice to Employee of involuntary termination that is
not on account of just cause. For this purpose, termination for “just cause” will only occur upon
written notice to Employee that employment is involuntarily terminated due to any of the following:
| (1) | conviction of Employee for a crime involving fraud, dishonesty or theft, or of any felony which, in the reasonable judgment of the Board, materially affects Employee’s ability to perform his duties pursuant to this Agreement; |
| (2) | commission by Employee of an act of fraud, embezzlement, or material dishonesty against the Company or its affiliates; or | ||
| (3) | intentional neglect of or material inattention to Employee’s duties, which neglect or inattention remains uncorrected for more than 30 days following written notice from the chief executive officer of the Company detailing the Company’s concern. |
(b) By Employee With Cause. Termination of employment by Employee with cause shall occur if
Employee terminates employment for any of the following reasons:
| (1) | A material adverse alteration in Employee’s position, responsibilities or status from that which was in effect immediately prior to a Change in Control. | ||
| (2) | A reduction in Employee’s compensation as in effect immediately prior to the Change in Control, or a substantial reduction in the benefits provided to Employee prior to the Change in Control. | ||
| (3) | Relocation of Employee by the Company to a location that is more than 35 miles from the Employee’s current workplace. | ||
| (4) | The material breach of the Company of any portion of its employment policies and/or any employment agreement with Employee. |
Provided, however, that 180 days after Employee begins performing duties pursuant to a position
that was offered by the Company (or its successor) following a Change in Control and that would
have otherwise resulted in the occurrence of the events described in this Section 2.3(b), the
occurrence of the events described in this Section 2.3(b) shall be determined by reference to the
position as it was accepted by Employee following the Change in Control.
ARTICLE III. ADMINISTRATION
Section 3.1. The provisions of this Agreement are intended to provide severance benefits and
protection to Employee. The Administrator has absolute discretion to interpret the terms of this
Agreement and to make all determinations required in the administration hereof, including making
determinations about eligibility for and the amounts of Benefits. All decisions of the
Administrator are final, binding and conclusive on all parties.
Section 3.2. Benefits can only be denied or forfeited if Employee does not satisfy the
conditions for receiving payment that are described herein or if the Company validly amends the
Agreement as described in Section 4.4.
Section 3.3. If Employee’s claim for Benefits is denied, the Administrator will furnish
written notice of denial to Employee within 90 days of the date the claim is received, unless
special circumstances require an extension of time for processing the claim. This extension will
not exceed 90 days, and Employee must receive written notice stating the grounds for the extension
and the length of the extension within the initial 90-day review period. If the Administrator does
not provide written notice, Employee may deem the claim denied and seek review according to the
appeals procedures set forth below.
(a) Notice of Denial. The notice of denial to the Claimant shall state:
| (1) | The specific reasons for the denial. | ||
| (2) | Specific references to pertinent provisions of the Agreement on which the denial was based. | ||
| (3) | A description of any additional material or information needed for Employee to perfect his claim and an explanation of why the material or information is needed. | ||
| (4) | A statement that Employee may request a review upon written application to the Administrator, review pertinent documents, and submit issues and comments in writing and that any appeal that Employee wishes to make of the adverse determination must be in writing to the Administrator within 60 days after Employee receives notice of denial of benefits. | ||
| (5) | The name and address of the Administrator to which Employee may forward an appeal. The notice may state that failure to appeal the action to the Administrator in writing within the 60-day period will render the determination final, binding and conclusive. |
(b) Appeals Procedure. If Employee appeals to the Administrator, Employee or his authorized
representative may submit in writing whatever issues and comments he believes to be pertinent. The
Administrator shall reexamine all facts related to the appeal and make a final determination of
whether the denial of benefits is justified
under the circumstances. The Administrator shall advise Employee in writing of:
| (1) | The Administrator’s decision on appeal. | ||
| (2) | The specific reasons for the decision. | ||
| (3) | The specific provisions of the Agreement on which the decision is based. |
Notice of the Administrator’s decision shall be given within 60 days of the Claimant’s written
request for review, unless additional time is required due to special circumstances. In no event
shall the Administrator render a decision on an appeal later than 120 days after receiving a
request for a review.
ARTICLE IV. GENERAL TERMS
Section 4.1 Notices. All notices and other communications hereunder will be in writing or by
written telecommunication, and will be deemed to have been duly given if delivered personally or if
sent by overnight courier or by written telecommunication, to the relevant address set forth below,
or to such other address as the recipient of such notice or communication will have specified to
the other party hereto in accordance with this Section:
If to the Company to:
BancorpSouth, Inc.
Personnel Director
X.X. Xxx 000
Xxxxxx, XX 00000
Personnel Director
X.X. Xxx 000
Xxxxxx, XX 00000
If to Employee, to:
Xxxxxx X. Xxxxx
0000 Xxxxxxxx Xxxx
Xxxxxx, XX
Xxxxxx, XX
Section 4.2 Withholding; No Offset. All payments required to be made by the Company under this
Agreement to Employee will be subject to the withholding of such amounts, if any, relating to
federal, state and local taxes as may be required by law. No payment under this Agreement will be
subject to offset or reduction attributable to any amount Employee may owe to the Company or any
other person, except as required by law.
Section 4.3 Entire Agreement; Modification. This Agreement and its Attachments constitute the
complete and entire agreement between the parties with respect to the subject matter hereof and
supersedes all prior agreements between the parties. The parties have executed this Agreement based
upon the express terms and provisions set forth herein and have not relied on any communications or
representations, oral or written, which are not set forth in this Agreement.
Section 4.4 Amendment. This Agreement may not be modified by an subsequent agreement unless
the modifying agreement: (i) is in writing;
(ii) contains an express provision referencing this Agreement; (iii) is signed and executed on
behalf of the Company by an officer of the Company other than Employee; and (iv) is signed by
Employee.
Section 4.5 Choice of Law. This Agreement and the performance hereof will be construed and
governed in accordance with the laws of the State of Mississippi, without regard to its choice of
law principles, except to the extent that federal law controls or preempts state law.
Section 4.6 Successors and Assigns. The obligations, duties and responsibilities of Employee
under this Agreement are personal and shall not be assignable. In the event of Employee’s death or
disability, this Agreement shall be enforceable by Employee’s estate, executors or legal
representatives. The obligations, duties and responsibilities of Company hereunder shall be binding
upon any successor of the Company (whether through a transaction described as a Change in Control
or otherwise).
Section 4.7 Waiver of Provisions. Any waiver of any terms and conditions hereof must be in
writing and signed by the parties hereto. The waiver of any of the terms and conditions of this
Agreement shall not be construed as a waiver of any subsequent breach of the same or any other
terms and conditions hereof.
Section 4.8 Severability. The provisions of this Agreement and the amount of Benefits payable
hereunder shall be deemed severable, and if any portion shall be held invalid, illegal or
enforceable for any reason, the remainder of this Agreement and/or Benefit payment shall be
effective and binding upon the parties.
Section 4.9 Counterparts. This Agreement may be executed in multiple counterparts, each of
which will be deemed an original, and all of which together will constitute one and the same
instrument.
ARTICLE V. ERISA RIGHTS AND INFORMATION
The parties acknowledge that the following information is provided to Employee hereunder in
connection with Employee’s rights as a welfare plan participant under ERISA. The terms “you” and
“yours” refer to Employee.
As a participant in a welfare plan maintained by the Company, you are entitled to certain rights
and protections under ERISA. ERISA provides that all plan participants shall be entitled to:
| • | Examine, without charge, at the Administrator’s office and at other specified locations, all plan documents, including insurance contracts, and copies of all documents filed by the plan with the U.S. Department of Labor, such as detailed annual reports and plan descriptions. | |
| • | Obtain copies of all plan documents and other plan information upon written request to the Administrator. The Administrator may make a reasonable charge for the copies. | |
| • | Receive a summary of the plan’s annual financial report. The Administrator is required by law to furnish each participant with a copy of this summary annual report. |
In addition to creating rights for plan participants, ERISA imposes duties upon the people who are
responsible for the operation of the employee benefit plan. The people who operate your plan,
called “fiduciaries” of the plan, have a duty to do so prudently and in the interest of you and
other plan participants and beneficiaries. No one, including the Company or any other person, may
fire you or otherwise discriminate against you in any way to prevent you from obtaining a benefit
under this plan or from exercising your rights under ERISA.
If a claim for a Benefit is denied in whole or in part, you must receive a written explanation of
the reason for the denial. You have the right to have the Administrator review and reconsider your
claim.
Under ERISA, there are steps you can take to enforce the above rights. For instance, if you request
materials from the plan and do not receive them within 30 days, you may file suit in a federal
court. In such a case, the court may require the Administrator to provide the materials and pay you
up to $100 a day until you receive the materials, unless the materials were not sent because of
reasons beyond the control of the Administrator.
If you have a claim for benefits that is denied or ignored, in whole or in part, you may file suit
in a state or federal court. If it should happen that plan fiduciaries misuse the plan’s money or
if you are discriminated against for asserting your rights, you may seek assistance from the U.S.
Department of Labor or you may file suit in a federal court. The court will decide who should pay
court costs and fees. If you lose, the court may order you to pay these costs and fees, for
example, if it finds your claim is frivolous.
If you have any questions about your plan, you should contact the Administrator. If you have any
questions about this statement or about your rights under ERISA, you should contact the nearest
Area Office of the U.S. Labor-Management Services Administration, Department of Labor.
Summary of ERISA Information
Name of Plan: BancorpSouth, Inc. Change in Control Plan
Name and Address of the Company:
BancorpSouth, Inc.
Xxx Xxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Xxx Xxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Who Pays for the Plan: The cost of the plan is paid entirely by the Company.
The Company’s Employer Identification No.: 00-0000000
Plan Number: 520
Plan Year: January 1 to December 31
Plan Administrator, Name, Address and Telephone No.
Administrator of the BancorpSouth, Inc. Change in Control plan
c/o Xxxxx Xxxxxxx
BancorpSouth, Inc.
Xxx Xxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
(000) 000-0000
c/o Xxxxx Xxxxxxx
BancorpSouth, Inc.
Xxx Xxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
(000) 000-0000
Agent for Service of Legal Process on the Plan: Chief executive officer or Administrator.
Benefits are paid out of the general assets of the Company. The Company may, in its discretion
establish a “grantor trust” to fund the payment of Benefits. Otherwise, this plan does not give you
any rights to any particular assets of the Company. Cash amounts paid under a severance plan are
generally considered taxable income to the recipient.
IN WITNESS WHEREOF, Company and Employee have caused this Agreement to be executed on the day
and year indicated below to be effective on the day and year first written above.
Employee |
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/s/ Xxxxxx Xxxxx
|
1/10/08 | |||||
Xxxxxx X. Xxxxx
|
Date | |||||
COMPANY: |
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BancorpSouth, Inc. |
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By: /s/ W. O. Xxxxx
|
1/10/08 | |||||
Title: Senior Vice President
|
(Date) |
