AMENDED AND RESTATED SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT
EXHIBIT 10.6
AMENDED
AND RESTATED
This
Amended and Restated Supplemental Executive Retirement Agreement (the
“Agreement”) is entered into by and between the Bank of New Orleans (the “Bank”
or “Employer”) and Xxxxxxxx X. XxXxx, III (the “Executive”), effective as of
October 28, 2008. The Agreement was originally entered into by
the Bank and the Executive effective as of December 19, 2006 (the “Prior
Agreement’).
PREAMBLE
The
purpose of this Agreement is to provide the Executive with supplemental
retirement benefits in order to provide him with a reasonable level of
retirement income which will assist him in maintaining an appropriate standard
of living in retirement. An integral part of the Agreement is to
encourage and induce the Executive to remain as a full-time executive officer of
the Bank until he attains the retirement age of 65 and to recognize his prior
service to the Bank. The parties intend that this Agreement shall at
all times be characterized as a “top hat” plan of deferred compensation
maintained for the Executive who is a highly compensated employee, as described
under Sections 201(2), 301(a)(3) and 401(a)(1) of the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”), and the Agreement shall at all times
satisfy Section 409A of the Internal Revenue Code of 1986, as amended (the
“Code”), and as enacted under the American Jobs Creation Act of
2004. The provisions of the Agreement shall be construed to
effectuate such intentions. The Agreement shall be unfunded for tax
purposes and for purposes of Title I of ERISA.
WITNESSETH:
WHEREAS, the
Executive is currently President and Chief Executive Officer of the
Bank;
WHEREAS, the
Executive has provided valuable service as an executive officer of the Bank for
many years, and the Bank wishes to recognize such service and his continued
service through his retirement at age sixty-five (65);
WHEREAS, to
induce the Executive to continue in its employ to age sixty-five (65), the Bank
proposes to supplement the benefits payable to the Executive under the Bank’s
401(k) retirement plan; and
WHEREAS, the
Bank and the Executive desire to amend and restate the Prior Agreement in order
to comply with Section 409A of the Code and the final regulations
thereunder.
NOW, THEREFORE,
in consideration of the premises and the mutual promises of the parties
hereto, the parties agree as follows:
1.
Service
Period. This Agreement requires the Executive to serve as a
full-time officer of the Bank for a period of ten (10) years in order to receive
the full retirement benefits provided by this Agreement, except as otherwise
provided herein. In recognition of his significant years of service
to the Bank, the Executive was deemed to have provided four (4) years of service
as of December 19, 2006 for purposes of this Agreement. The Executive
is thereafter required to provide an additional six (6) years of service in
order to become 100% vested. The Bank made the appropriate accrual
for the four (4) years of credited service as of December 19,
2006.
2. Retirement
Benefit. Upon any retirement by the Executive from the employ
of the Employer at or after age sixty-five (65) which constitutes a Separation
from Service (as defined herein), the Executive shall be entitled to receive
from the Employer an annual supplemental retirement benefit equal to $100,000
(the “Supplemental Retirement Benefit”), payable in equal quarterly installments
of $25,000 for ten (10) consecutive years. The quarterly installment
payments shall begin with the first day of the third full quarter following the
Executive’s retirement. For purposes hereof, Separation from Service
shall mean a termination of the Executive’s services (whether as an employee or
as an independent contractor) to Louisiana Bancorp, Inc. (the “Company”) and the
Bank for any reason other than death or permanent disability (as defined in
Section 3(a) below). Whether a Separation from Service has occurred
shall be determined in accordance with the requirements of Section 409A of the
Code based on whether the facts and circumstances indicate that the Company, the
Bank and the Executive reasonably anticipated that no further services would be
performed after a certain date or that the level of bona fide services the
Executive would perform after such date (whether as an employee or as an
independent contractor) would permanently decrease to no more than twenty
percent (20%) of the average level of bona fide services performed (whether as
an employee or an independent contractor) over the immediately preceding
thirty-six (36) month period.
3. Disability
or Death.
(a) In
the event that the Executive becomes permanently disabled while in the employ of
the Employer, the Executive shall be entitled to receive the Supplemental
Retirement Benefit payable in equal quarterly installments beginning with the
first day of the first full quarter following the disability of the Executive
and continuing thereafter for a period of ten (10) years. For
purposes hereof, permanent disability shall mean the Executive (i) is unable to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or can be expected to last for a continuous period of not less than twelve
months; or (ii) is, by reason of any medically determinable physical or mental
impairment which can be expected to result in death or can be expected to last
for a continuous period of not less than twelve months, receiving income
replacement benefits for a period of not less than three months under an
accident and health plan covering employees of the Bank. The
determination of the Board of Directors of the Bank as to disability shall be
binding on the Executive. Nothing contained in this Agreement shall
limit or affect the Executive’s right to the continuation of his salary during
any waiting period imposed by a disability plan.
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(b) In
the event that the Executive commences to receive Supplemental Retirement
Benefits under this Agreement and dies prior to the receipt of ten (10) years of
such benefits, the remainder of the Supplemental Retirement Benefits shall be
payable until the expiration of such term to the beneficiary(ies) designated by
the Executive, except as set forth in Section 5 below. In the event
the Executive dies while employed by the Employer whether before or after age
sixty-five (65), the beneficiary(ies) designated by the Executive shall receive
the Supplemental Retirement Benefit payable in equal quarterly installments
beginning with the first day of the first full quarter following the Executive’s
death and continuing thereafter for a period of ten (10)
years.
4. Separation
from Service.
(a) Except
as set forth in Section 4(b) below, in the event that the Executive has a
Separation from Service prior to the Executive reaching age sixty-five (65),
whether with or without Cause (as defined herein), the Executive shall be
entitled to receive the Accrued Amount (as defined in Section 7 of this
Agreement) payable in a lump sum on the first day of the third full quarter
following the Executive’s Separation from Service. For purposes of
this Agreement, termination of the Executive’s employment for Cause shall mean
termination because of personal dishonesty, incompetence, willful misconduct,
breach of fiduciary duty involving personal profit, intentional failure to
perform stated duties, willful violation of any law, rule or
regulation (other than traffic violations or similar offenses) or final
cease-and-desist order or material breach of any provision of this
Agreement. For purposes of this paragraph, no act or failure to act
on the Executive’s part shall be considered “willful” unless done, or omitted to
be done, by the Executive not in good faith and without reasonable belief that
the Executive’s action or omission was in the best interest of the
Bank.
(b) In
the event that the Executive has a Separation from Service other than for Cause
concurrently with or within two years following a Change in Control (as defined
herein), the Executive shall receive the Supplemental Retirement Benefit set
forth in Section 2 hereof beginning with the first day of the third full quarter
following the Separation from Service and continuing thereafter for a period of
ten (10) years. For purposes of this Agreement, a “Change in Control”
shall mean a change in the ownership of the Company or the Bank, a change in the
effective control of the Company or the Bank or a change in the ownership of a
substantial portion of the assets of the Company or the Bank, in each case as
provided under Section 409A of the Code and the regulations thereunder;
provided, however, the conversion of the Bank from mutual to stock form of
organization shall not be deemed to be a Change in Control.
5. Designation
of Beneficiary. The Executive may from time to time, by
providing a written notification to the Employer, designate any person or
persons (who may be designated concurrently, contingently or successively), his
estate or any trust or trusts created by him to receive benefits which are
payable under this Agreement. Each beneficiary designation shall
revoke all prior designations and will be effective only when filed in writing
with the Employer’s Compensation Committee, or any successor thereto (the
“Committee”). If the Executive fails to designate a beneficiary or if
a beneficiary dies before the date of the Executive’s death and no contingent
beneficiary has been designated, then the benefits which are payable as
aforesaid shall be paid to his estate. If benefits to be paid to a
beneficiary commence and such beneficiary dies before all benefits to which such
beneficiary is entitled have been paid, the remaining benefits shall be paid to
the successive beneficiary or beneficiaries designated by the Executive, if any,
and if none to the estate of such beneficiary.
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6. Claims
Procedure. The Executive or his designated beneficiary or
beneficiaries may make a claim for benefits under this Agreement by filing a
written request with the Committee. If a claim is wholly or partially
denied, the Committee shall furnish the claimant with written notice setting
forth in a manner calculated to be understood by the
claimant:
(a) the
specific reason or reasons for the denial;
(b) specific
reference to the pertinent provisions of this Agreement on which the denial is
based;
(c) a
description of any additional material or information necessary for the claimant
to perfect his claim and an explanation why such material or information is
necessary; and
(d) appropriate
information as to the steps to be taken if the claimant wishes to submit his
claim for review.
Such
notice shall be furnished to the claimant within ninety (90) days after the
receipt of his claim, unless special circumstances require an extension of time
for processing his claim. If an extension of time for processing is
required, the Committee shall, prior to the termination of the initial ninety
(90) day period, furnish the claimant with written notice indicating the special
circumstances requiring an extension and the date by which the Committee expects
to render its decision. In no event shall an extension exceed a
period of ninety (90) days from the end of the initial ninety (90) day
period.
A
claimant may request the Committee to review a denied claim. Such
request shall be in writing and must be delivered to the Committee within sixty
(60) days after receipt by the claimant of written notification of denial of
claim. A claimant or his duly authorized representative
may:
(a) review
pertinent documents, and
(b) submit
issues and comments in writing.
The
Committee shall notify the claimant of its decision on review not later than
sixty (60) days after receipt of a request for review, unless special
circumstances require an extension of time for processing, in which case a
decision shall be rendered as soon as possible, but not later than one hundred
twenty (120) days after receipt of a request for review. If an
extension of time for review is required because of special circumstances,
written notice of the extension must be furnished to the claimant prior to the
commencement of the extension. The Committee’s decision on the review
shall be in writing and shall include specific reasons for the decision, as well
as specific references to the pertinent provisions of this Agreement on which
the decision is based.
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7.
Vested
Benefit. The Executive shall be one hundred percent (100%)
vested in all amounts that are accrued for his benefit under the Agreement as of
the date(s) of such accrual(s) (the “Accrued Amount”). Pursuant to
Section 1 of this Agreement, the Executive was forty percent (40%) vested in the
Supplemental Retirement Benefit effective as of December 19, 2006. If
a Change in Control occurs before the Executive attains the age of sixty-five
(65), the Executive shall become fully vested in the Supplemental Retirement
Benefit set forth in Section 2 hereof effective as of the date of the Change in
Control.
8.
Withholding. To
the extent required by the law in effect at the time payment of the Supplemental
Retirement Benefit or Accrued Amount is made, the Bank shall withhold from such
payment any taxes or other amounts required by law to be
withheld.
9.
Unsecured
Promise. Nothing contained in this Agreement shall create or
require the Employer to create a trust of any kind to fund the benefits payable
hereunder. To the extent that the Executive or any other person
acquires a right to receive payments from the Employer, such individual shall at
all times remain an unsecured general creditor of the
Employer.
10.
Assignment. The
right of the Executive or any other person to the payment of benefits under this
Agreement shall not be subject to alienation, assignment, garnishment,
attachment, execution or levy of any kind, and any attempt to cause such
benefits to be so subjected shall not be recognized by the
Employer.
11.
Employment. Nothing
contained herein shall be construed to grant the Executive the right to be
retained in the employ of the Employer or any other rights or interests other
than those specifically set forth.
12.
Amendment,
Suspension or Termination. This Agreement shall be binding
upon and inure to the benefit of the Employer and the
Executive. Notwithstanding anything in the Agreement to the contrary,
the Board of Directors of the Bank may amend in good faith any terms of the
Agreement, including retroactively, in order to comply with Section 409A of the
Code. Prior to the commencement of payment of benefits to the
Executive of his beneficiary, the Employer, upon sixty (60) days prior written
notice to the Executive, shall have the right to suspend, terminate or amend
this Agreement; provided, however, no such suspension, termination or amendment
shall adversely affect the rights of the Executive or any beneficiary to the
funds and benefits which have accrued as of the date of such
action.
13.
Successors. This
Agreement shall be binding upon and inure to the benefit of the Employer, it
successors and assigns and the Executive and his heirs, executors,
administrators, and legal representatives.
14.
Governing
Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Louisiana.
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IN WITNESS
WHEREOF, this Agreement has been executed as of the date first written
above.
| Attest: | BANK OF NEW ORLEANS | ||
| /s/Xxxx X. Xxxxxxxxxxxx | By: | /s/Xxxxxx X. Xxxxxx | |
| Xxxx X. Xxxxxxxxxxxx | Xxxxxx X. Xxxxxx | ||
| Corporate Secretary | Chairman of the Compensation Committee | ||
| On behalf of the Board of Directors | |||
| EXECUTIVE | |||
| By: | /s/Xxxxxxxx X. XxXxx, III | ||
| Xxxxxxxx X. XxXxx, III | |||
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