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EXHIBIT 10(f)
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Exhibit 10(f)
SALARY CONTINUATION AGREEMENT
THIS AGREEMENT is effective this 1st day of December, 1999, by and
between SOUTHSIDE BANCSHARES CORP. (the "Company"), with its principal place of
business in St. Louis, Missouri, and XXXXXX X. XXXXXXXX (the "Executive").
INTRODUCTION
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" shall be deemed to have occurred as
of the first day any one more of the following conditions shall have been
satisfied:
(a) Any individual, corporation (other than the Company),
partnership, trust, association, pool, syndicate, or any other entity
or any group of persons (other than the Southside Bancshares Corp.1993
Non-Qualified Employees Stock Ownership Plan) acting in concert becomes
the beneficial owner, as that concept is defined in Rule 13d-3
promulgated by the Securities and Exchange Commission under the
Securities Exchange Act of 1934, as amended, of the securities of the
Company possessing fifty percent (50%) or more of the voting power for
the election of directors of the Company;
(b) There shall be consummated any consolidation, merger or
other business combination involving the Company or the securities of
the Company in which holders of voting securities of the Company, as
the case may be, immediately prior to such consummation own, as a
group, immediately after such consummation, voting securities of the
Company, as the case may be (or if the Company does not survive such
transaction(s), voting securities of the corporation(s) surviving such
transaction(s)) having less than fifty percent (50%) of the total
voting power in an election of the directors of the Company (or such
other surviving corporation (s));
(c) During any period of two (2) consecutive years,
individuals who at the beginning of such period constitute the
directors of the Company cease for any reason to constitute at least a
majority thereof;
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(d) Removal by the stockholders of the Company of all or a
majority of the incumbent directors of the Company; or
(e) There shall be consummated any sale, lease, exchange, or
other transfer (in one transaction or a series of related transactions)
of all, or substantially all, of the assets of the Company (on a
consolidated basis) to a party which is not controlled by or under
common control with the Company, as the case may be.
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, if the Executive is covered by a
Company sponsored disability insurance policy, total disability as
defined in such policy without regard to any waiting period. If the
Executive is not covered by such a policy, Disability means a physical
or mental impairment, non-self-induced, as diagnosed by a medical
doctor selected by the Company, that so incapacitates or disables
Executive such that Executive is no longer able to perform the
essential functions of his position with reasonable accommodation. As a
condition to any benefits, the Company may require the Executive to
submit to such physical or mental evaluations and tests as the
Company's Board of Directors deems appropriate.
1.1.4. "Early Retirement Date" means the date the Executive
attains age fifty-five (55).
1.1.5. "Early Retirement Percentage" means fifty percent (50%)
on the date the Executive attains age fifty-five (55).
1.1.6. "Normal Retirement Date" means the date the Executive
attains age sixty-five (65).
1.1.7. "Plan Year" means the twelve (12) consecutive month
period beginning on the effective date of this Agreement and each
anniversary thereof.
1.1.8. "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.
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1.1.9. "Discount Rate" shall mean eight percent (8%).
ARTICLE 2
LIFETIME BENEFITS
2.1. Normal Retirement Benefit. If Termination of Executive's
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 annual benefit under this
Section 2.1 is One Hundred Ninety-three Thousand Five Hundred Dollars
($193,500.00), which annual amount will be increased each Plan Year,
until the Executive's Normal Retirement Date, by three and one-half
percent (3.5%) compounded annually.
2.1.2. Payment of Benefit. The Company shall pay the annual
benefit determined under subsection 2.1.1 for a period not to exceed
the earlier of fifteen (15) years from Executive's Termination of
Employment or through the month the Executive dies. The Company's
payments shall be made in equal monthly installments (1/12 of the
annual benefit). These equal monthly payments to the Executive will
begin on the last day of the month which follows the month of the
Executive's retirement and continuing until the earlier of the
expiration of one hundred eighty (180) months from the first payment or
the month of the Executive's death.
2.2. Early Retirement Benefit. If Termination of Executive's Employment
occurs on or after the Early Retirement Date but before the Normal Retirement
Date, the Company shall pay to the Executive the benefit described in this
Section 2.2.
2.2.1. Amount of Benefit. The annual benefit under this
Section 2.2 is One Hundred Ninety-three Thousand Five hundred Dollars
($193,500.00) which annual amount will be increased each Plan Year,
until the Executive retires, by three and one-half percent (3.5%)
compounded annually, multiplied by the Early Retirement Percentage.
Five percent (5%) will be added to the Early Retirement Percentage for
each anniversary of the Early Retirement Date following such date on
which the executive continues to be employed until the Early Retirement
Percentage equals one hundred percent (100%).
2.2.2. Payment of Benefit. The Company shall pay the annual
benefit determined under subsection 2.2.1 for a period not to exceed
the earlier of fifteen (15) years from Executive's Termination of
Employment or through the month the Executive dies. The Company's
payments shall be made in equal monthly installments (1/12 of the
annual benefit). These equal monthly payments to the Executive will
begin on the last day of the month which follows the month of the
Executive's retirement under this Section 2.2 and continuing until the
earlier of the expiration of one hundred eighty (180) months from the
first payment or the month of the Executive's death.
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2.3. Termination of Employment. If Termination of Employment occurs
before the Executive's Early Retirement Date, for reasons other than death or
Disability, the Company shall 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 benefit set forth on the attached Schedule A based on the number
of completed Plan Years of employment preceding the Executive's
Termination of Employment multiplied by the vesting percentage at
termination described in 2.3.2.
2.3.2. Vesting Schedule. The Executive shall vest at a rate of
ten percent (10%) for each subsequently completed Plan Year that this
Agreement is in force such that after ten (10) years the Executive
shall be one hundred percent (100%) vested in the benefit.
2.3.3. Payment of Benefit. The Company shall pay the benefit
in a single lump sum to the Executive within thirty (30) days following
the Executive's Termination of Employment.
2.4. Disability Benefit. If the Termination of Employment occurs while
the Executive suffers from a Disability prior to the Early Retirement Date, the
Company shall pay to the Executive the benefit described in this Section 2.4.
2.4.1. Amount and Payment of Benefit. Except as may be
provided by Section 3.2 , the amount of benefit and method of payment
under this Section 2.4 is established by the Executive with a written
election and filed with the Company. The Company shall pay the elected
amount to the Executive in accordance with the written election made by
the Executive. The form of the election shall follow the form and
content found on the attached Exhibit A. The attached Exhibit A,
including the terms governing the Executive's election under this
Section 2.4.1, are incorporated into this Agreement by reference.
2.5. Change of Control Benefit. Upon a Change of Control while the
Executive is in the active service of the Company and (i) the Company thereafter
terminates the Executive; or (ii) the Executive terminates his employment after
either a change in job responsibilities or a reduction in the compensation paid
annually to the Executive prior to his Normal Retirement Date, then the Company
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 and Payment of Benefit. The benefit under this
Section 2.5 is one hundred percent (100%) of the benefit determined
under Schedule A based on the number of completed Plan Years, in
accordance with Schedule A, on the date of Termination of Employment.
The Company shall pay this benefit to the Executive in a single lump
sum within thirty (30) days from Termination of Employment following a
Change in Control.
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2.5.2. Parachute Payment. If it is determined that any portion
of the benefit payment to the Executive under this Agreement
constitutes a parachute payment under Section 280G of the Code subject
to the excise tax of Section 4999 of the Code, the Executive shall be
entitled to receive from the Company a lump sum cash payment sufficient
to place the Executive in the same net after tax position that the
Executive would have been in had such payment not been subject to such
excise tax; provided, however, the Executive shall be entitled to a
payment under this Section 2.5.2 only to the extent that the Executive
is not entitled to an equivalent payment under any other agreement.
2.6. Payment of Benefits in Pay Status. Upon a Change of Control where
benefits are in pay status to the Executive following the Executive's
retirement, death, or Disability, one hundred percent (100%) of the present
value of any remaining payments otherwise due pursuant to this Agreement will,
in lieu of such remaining payments, be paid in full in a lump sum within thirty
(30) days after a Change in Control. The Discount Rate shall be used to
determine present value.
ARTICLE 3
DEATH BENEFITS
3.1 Death During Active Service. If the Executive dies while employed
by the Company and prior to receiving any payments under this Agreement, the
Company shall have no obligation to pay to the Executive's beneficiary any
amount under this Agreement.
3.2 Death Subsequent to Either Retirement Date. If the Executive dies
subsequent to the date that he retires and while receiving payments under
Section 2.1 or Section 2.2 of this Agreement, the Company's obligation to make
the final payment under Section 2.1.2 or Section 2.2.2 on the last day of the
month of the Executive's death shall constitute the Company's final obligation
to pay the Executive or the Executive's estate under the terms of this
Agreement.
3.3 Death During Disability. In the event of the Executive's death
following Termination of Employment while suffering a Disability, but where the
termination is prior to Early Retirement Age, the Company shall have no
obligation to pay to the Executive's beneficiary any amount under this
Agreement.
ARTICLE 4
GENERAL LIMITATIONS
Notwithstanding any provision of this Agreement to the contrary, the
Company shall not pay any benefit under this Agreement:
4.1. Termination for Cause. If the Company terminates the Executive's
employment for any of the following reasons:
4.1.1. Gross negligence or gross neglect of duties;
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4.1.2. Commission of a felony or of a misdemeanor involving
moral turpitude; or
4.1.3. Fraud, dishonesty or willful violation of any law or
significant Company policy committed in connection with the Executive's
employment and resulting in personal financial benefit to the Executive
and in an adverse effect on the Company.
ARTICLE 5
CLAIMS AND REVIEW PROCEDURES
5.1. Claims Procedure. The Company shall notify the Executive in
writing, within ninety (90) days of his written application for benefits, of his
eligibility or ineligibility for benefits under the Agreement. If the Company
determines that the Executive is not eligible for benefits or full benefits, the
notice shall set forth (1) the specific reasons for such denial, (2) a specific
reference to the provisions of the Agreement on which the denial is based, (3) a
description of any additional information or material necessary for the claimant
to perfect his or her claim, and a description of why it is needed, and (4) an
explanation of the Agreement's claims review procedure and other appropriate
information as to the steps to be taken if the beneficiary wishes to have the
claim reviewed. If the Company determines that there are special circumstances
requiring additional time to make a decision, the Company shall notify the
Executive of the special circumstances and the date by which a decision is
expected to be made, and may extend the time for up to an additional ninety-day
period.
5.2. Review Procedure. If the Executive is determined by the Company
not to be eligible for benefits, or if the Executive believes that he is
entitled to greater or different benefits, the Executive shall have the
opportunity to have such claim reviewed by the Company by filing a petition for
review with the Company within sixty (60) days after receipt of the notice
issued by the Company. Said petition shall state the specific reasons which the
Executive believes entitle him to benefits or to greater or different benefits.
Within sixty (60) days after receipt by the Company of the petition, the Company
shall afford the Executive (and counsel, if any) an opportunity to present his
position to the Company orally or in writing, and the Executive (or counsel)
shall have the right to review the pertinent documents. The Company shall notify
the Executive of its decision in writing within the sixty-day period, stating
specifically the basis of its decision, written in a manner calculated to be
understood by the Executive and the specific provisions of the Agreement on
which the decision is based. If, because of the need for a hearing, the
sixty-day period is not sufficient, the decision may be deferred for up to
another sixty-day period at the election of the Company, but notice of this
deferral shall be given to the Executive.
ARTICLE 6
AMENDMENTS AND TERMINATION
6.1. Amendment or Termination of Agreement After a Change in Control.
The Company may amend or terminate this Agreement at any time prior to the
Executive's Termination of Employment by written notice to the Executive;
provided, however, that if the Company amends or terminates this Agreement prior
to the Executive's Normal Retirement Date while the Executive is in the active
service of the Company and subsequent to a Change of
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Control, then the Company shall pay the Executive one hundred percent (100%) of
the benefit determined under Schedule A based on the number of completed Plan
Years, in accordance with Schedule A, on the date of termination of this
Agreement. The Company shall pay this benefit to the Executive in a single lump
sum within thirty (30) days from Termination of Agreement following a Change in
Control.
6.2. Amendment or Termination Prior to a Change in Control. The Company
may amend or terminate this Agreement at any time prior to a Change in Control
by written notice to the Executive.
6.2.1. Subsequent to Executive's Normal Retirement Date. In
the event of any such amendment or termination after payment of
benefits has commenced, the benefit the Executive shall be entitled is
one hundred percent (100%) of the present value of any unpaid benefit
under Article 2. The Discount Rate shall be used to determine present
value. The Company shall pay the benefit under this Section 6.2.1 in a
single lump sum payment within sixty (60) days of amendment or
termination of this Agreement.
6.2.2. Prior to Executive's Normal Retirement Date. If
amendment or termination of this Agreement under Section 6.2 occurs
after the effective date of this Agreement and before payment of
benefits has commenced, the Company shall pay the Executive an amount
equal to one hundred percent (100%) of the amount of accrued benefit
reflected in Schedule A based o completed Plan Years. The Company shall
pay this benefit, if any, to the Executive in a single lump sum payment
within sixty (60) days of Agreement amendment or termination.
ARTICLE 7
MISCELLANEOUS
7.1. Binding Effect. This Agreement shall bind the Executive and the
Company, and their beneficiaries, survivors, executors, administrators and
permitted transferees.
7.2. 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 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.
7.3. Non-Transferability. Benefits under this Agreement cannot be sold,
transferred, assigned, pledged, attached or encumbered in any manner.
7.4. Tax Withholding. The Company shall withhold any taxes that are
required to be withheld from the benefits provided under this Agreement.
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7.5. Applicable Law. The Agreement and all rights hereunder shall be
governed by the laws of the State of Missouri, except to the extent preempted by
the laws of the United States of America.
7.6. Unfunded Arrangement. The Executive is a general unsecured
creditor 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 has no preferred or secured claim.
7.7. 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. This Agreement shall be construed as if such
invalid, illegal or unenforceable provision had never been a part of this
Agreement and shall be deemed substituted therefore such other provisions as
will most nearly accomplish the intent of the parties to the extent permitted by
applicable law, in case this Agreement or any one or more of its provisions
shall be held to be invalid, illegal or unenforceable by any governmental
regulatory agency or court of competent jurisdiction.
IN WITNESS WHEREOF, the Executive and a duly authorized Company officer
have signed this Agreement as of the date indicated below.
/s/ Xxxxxx X. Xxxxxxxx Date: 12/1/99
XXXXXX X. XXXXXXXX
SOUTHSIDE BANCSHARES CORP.
By: /s/ Xxxxxx X. Xxxx Date: 12/1/99
Title: Chief Financial Officer
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EXHIBIT A
EXECUTIVE RETIREMENT BENEFIT ELECTION
THIS ELECTION is made and entered into as of 1st day of December, 1999,
by SOUTHSIDE BANCSHARES CORP. (the "Company") located in St. Louis, Missouri,
pursuant to the Salary Continuation Agreement between the Company and XXXXXX X.
XXXXXXXX (the "Executive") dated December 1, 1999, (the "Agreement").
The Executive, by initialing in ink either OPTION 1 or OPTION 2 below
hereby elects to receive the Disability Benefit described in the elected option
and receive the payment or payments in accordance to the option the Executive
elects.
OPTION 1
(initials)
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a. Benefit Amount. The amount of the benefit is the amount set
forth on the attached Schedule A based on the number of completed Plan
Years preceding the Executive's Termination of Employment.
b. Payment of Benefit. The Company shall pay the benefit in a
single lump sum to the Executive within thirty (30) days following the
Executive's Termination of Employment.
OPTION 2
/s/TMT (initials)
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a. Benefit Amount. The amount of the benefit is a percentage
of the annual benefit set forth in Section 2.1 determined as of the
Normal Retirement Date. The fraction to be utilized to determine the
percentage has a numerator equal to the amount found on Schedule A of
the Agreement based upon the number of completed Plan Years by the
Executive as of Termination of Employment increased each subsequent
Plan Year until the Executive's Normal Retirement Date by six percent
(6%) and a denominator equal to the amount found on Schedule A of the
Agreement based upon the Executive having completed all Plan Years up
to the Executive's Normal Retirement Date. The Discount Rate as
described in Section 1.1.9 of the Agreement shall be used to determine
the present value.
b. Payment of Benefit. The Company shall pay the annual
benefits for a period of fifteen (15) years from Executive's Normal
Retirement Date. The Company's payments shall be made in equal monthly
installments (1/12th of the annual benefit). These equal monthly
payments to the Executive will begin on the last day of the month which
follows the month of the Executive attaining the Normal Retirement Date
and continuing until the expiration of one hundred eighty (180) months
from the first payment.
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EXHIBIT A (CONTINUED)
The Executive and Company acknowledge and agree that each and every
election to select a benefit payment pursuant to OPTION 1 or OPTION 2 made under
this EXHIBIT A EXECUTIVE RETIREMENT BENEFIT ELECTION, in order to be valid and
effective, must be made by December 31st of the year prior to the calendar year
preceding the Executive's Termination of Employment.
The Executive and Company agree and acknowledge that any election to
select a benefit payment pursuant to OPTION 1 or OPTION 2 made under this
EXHIBIT A EXECUTIVE RETIREMENT BENEFIT ELECTION not made within the time frame
set forth in the paragraph above shall be null and void. When a null and void
election is made the most recent election which is not null and void shall
determine the method in which the Executive's retirement benefit shall be paid
under Section 2.4.1 of the Agreement.
The Executive and the Company acknowledge and agree that the Company,
in the absence of a valid election by the Executive under this EXHIBIT A
EXECUTIVE RETIREMENT BENEFIT ELECTION, the Company shall pay any benefit under
Section 2.4.1 of this Agreement under OPTION 1 above.
The Executive and the Company understands that the Executive may change
the election set forth above, consistent with the restrictions set forth in this
EXHIBIT A EXECUTIVE RETIREMENT BENEFIT ELECTION, by filing a new written
designation with the Company on a form following this EXHIBIT A EXECUTIVE
RETIREMENT BENEFIT ELECTION.
Executive:
Signature /s/ Xxxxxx X. Xxxxxxxx Date December 1, 1999
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Accepted by the Company this 1st day of December, 1999.
By: /s/ Xxxxxx X. Xxxx
Title: Chief Financial Officer
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SCHEDULE A
SALARY CONTINUATION AGREEMENT BETWEEN
SOUTHSIDE BANCSHARES CORP. AND XXXXXX XXXXXXXX
Plan Year* Completed
before Termination occurs Compensation Balance
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1 $ 29,307
2 62,178
3 99,068
4 140,500
5 187,069
6 239,456
7 298,447
8 364,947
9 440,002
10 524,835
11 620,875
12 729,812
13 853,658
14 994,840
15 1,156,330
16 1,341,839
17 1,556,131
18 1,805,560
19 2,099,108
20 2,450,713
21 2,886,007
22 3,474,940
End of Schedule
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SCHEDULE A (CONTINUED)
SALARY CONTINUATION AGREEMENT BETWEEN
SOUTHSIDE BANCSHARES CORP. AND XXXXXX XXXXXXXX
* Plan Year means the anniversary year of the date of the Agreement.
To calculate an amount for less than a full Plan Year, take the number of
completed months of service into the current Plan Year and divide by 12.
Then multiply that fraction by the difference between (i) the Plan Year
balance shown above for the Plan Year in which termination occurs and (ii)
the previous Plan Year's balance. Then add that amount to the previous Plan
Year's balance. The result provides credit for all prior full plan years
plus a ratio percentage of the current plan year. For example, if the
Executive leaves the Bank during the 5th plan year four months after the
fourth year plan anniversary, then you would take 4/12 times the balance
shown for Plan Year 5 minus the balance shown for Plan Year 4. Then add
that amount to the balance shown for Plan Year 4 to determine the amount
due as a termination payment.
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