AMENDED AND RESTATED SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT
EXHIBIT 10.7
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 Xxxx XxXxxxx (the “Executive”), effective as of October 28,
2008. The Agreement was originally entered into by the Bank and the
Executive effective as of March 1, 2007 (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 sixty-five (65) and to recognize
his 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 the final regulations thereunder. 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 Senior Vice President and Chief Financial 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 the Bank’s 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
WHERES, 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. Establishment
of Accumulation Account. An Accumulation Account shall be
maintained on the books of the Employer for the Executive with respect to this
Agreement. The Accumulation Account shall be utilized solely as a
device for the measurement and determination of the benefits, if any, payable to
the Executive pursuant to this Agreement.
2. Annual
Credits to Accumulation Account. Each calendar year commencing
January 1, 2007 and ending the following December 31st, the
Board of Directors of the Bank shall credit the Executive’s Accumulation Account
with an amount equal to ten percent (10%) of the Executive’s Base Salary (which
shall mean, for each calendar year, the base salary payable to the Executive by
the Bank in such calendar year). The Accumulation Account shall be
credited as of each December 31st. The
Executive may not make any contributions under this Agreement.
3. Earnings on
Accumulation Account. All amounts credited to the Accumulation
Account shall be credited with earnings, as of the last day of each calendar
year commencing December 31, 2008, at a rate to be determined by the Board of
Directors of the Bank annually. The rate for the year ending December
31, 2008 shall be the average of the Employer’s average cost of funds and the
average yield on its interest-earning assets for such calendar
year.
4. Normal
Retirement Benefit. Upon any retirement by the Executive from
the employ of the Employer at age sixty-five (65) (the “Normal Retirement Age”)
or thereafter which constitutes a Separation from Service (as defined herein),
the Executive shall be one-hundred percent (100%) vested in his Accumulation
Account. Upon a Separation from Service on or after reaching the
Normal Retirement Age, the payments elected pursuant to Section 7 of this
Agreement shall commence on the first day of the month following the lapse of
six months after such Separation from Service. 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 8(a) of this
Agreement). 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.
5. Early
Retirement Benefit.
(a) If
the Executive remains in the employ of the Employer to age fifty-five (55) (the
“Early Retirement Age”), the Executive shall be seventy-five percent (75%)
vested in his Accumulation Account. Upon a Separation from Service on
or after reaching Early Retirement Age but prior to attaining the Normal
Retirement Age, the payments elected pursuant to Section 7 of this Agreement
shall commence on the first day of the month following the lapse of six months
after such Separation from Service.
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(b) Upon
a Separation from Service after attaining Early Retirement Age but prior to
attaining the Normal Retirement Age, (i) the vested portion of the
Executive’s Accumulation Account shall be seventy-five percent (75%) plus two
and one-half percent (2 ½%) for each full year after the Executive has attained
the age of fifty-five (55); and (ii) the payments elected pursuant to Section 7
of this Agreement shall commence on the first day of the month following the
lapse of six months after such Separation from Service. For example,
if the Executive has a Separation from Service at age fifty-eight (58), his
vested benefit shall be 82.50% and he shall be entitled to 82.50% of his
Accumulation Account, payable pursuant to Section 7 of this
Agreement.
(c) Notwithstanding
the foregoing, the Executive’s Accumulation Account shall become one-hundred
percent (100%) vested in the amount accrued as of the date of the Executive’s
death, permanent disability (as defined in Section 8(a) of this Agreement), of a
Separation from Service by the Employer without Cause (as defined herein) on or
after reaching Early Retirement Age, or of a Change in Control (as defined in
Section 9 of this Agreement). 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.
6. Forfeiture
of Accumulation Account. If the Executive has a Separation
from Service prior to attaining the age of fifty-five (55) or if the Executive’s
employment with the Employer is terminated by the Employer for Cause, the vested
amount of his benefit will be zero percent (0%) and he will not be entitled to
any benefit under this Agreement.
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7.
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Distribution
of Accumulation Account in the Event of Normal or Early
Retirement.
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(a) Initial
Election. Payment of the Accumulation Account following a
Separation from Service shall be a single lump sum payment or quarterly
installment payments over a period not in excess of ten (10) years as elected by
the Executive on an election form, which must specify the form (e.g., lump sum
or installments) in which payments will be made. Such election form
must be completed and submitted to the Committee (as defined in Section 10 of
this Agreement) within thirty (30) days of the initial effective date of this
Agreement. If a payment election was not made within such time
period, then the payment election shall be deemed to be a lump sum payment as of
the first day of the month following the lapse of six moths after a Separation
from Service. In the event installment payments are elected, payment
of the Accumulation Account shall include any earnings on the outstanding
undistributed and unpaid balance of the Accumulation Account.
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(b) Amount of
Each Quarterly Installment. The amount of each quarterly
installment paid to the Executive or his beneficiaries shall be determined by
multiplying the value of the Executive’s Account as of the close of business on
the fifth business day preceding such payment by a fraction. The
numerator of the fraction shall in all cases be one, and the denominator of the
fraction shall be the number of quarterly installments remaining to be paid to
the Executive or his beneficiaries, including the quarterly installment for
which the calculation is being made. For example, if the Executive elected to
receive 10 quarterly installments, the amount of the first quarterly installment
shall be 1/10th of the Executive’s vested Accumulation Account, the second
annual installment shall be 1/9th of the then remaining account, and so
on. The amount of the last quarterly installment payment shall be the
then unpaid vested balance of the Accumulation Account.
(c) Transitional
Elections Prior to 2009. On or before December 31, 2008, if
the Executive wishes to change his payment election, the Executive may do so by
completing a payment election form approved by the Committee (as defined in
Section 10 of this Agreement), provided that any such election (i) must be made
prior to the Executive’s Separation from Service, death or permanent disability,
(ii) shall not take effect before the date that is 12 months after the date
the election is made by the Executive and accepted by the Committee, (iii) does
not cause a payment that would otherwise be made in the year of the election to
be delayed to a later year, and (iv) does not accelerate into the year in which
the election is made a payment that is otherwise scheduled to be made in a later
year.
(d) Changes in
Payment Elections after 2008. On or after January 1, 2009, if
the Executive wishes to change his payment election, the Executive may do so by
completing a payment election form approved by the Committee, provided that any
such election (i) must be made prior to the Executive’s Separation from Service,
death or permanent disability, (ii) must be made at least 12 months before the
date on which any benefit payments as of a fixed date or pursuant to a fixed
schedule are scheduled to commence, (iii) shall not take effect until at least
12 months after the date the election is made by the Executive and accepted by
the Committee, and (iv) for payments to be made upon a Separation from Service,
must provide an additional deferral period of at least five years from the date
such payment would otherwise have been made (or in the case of any installment
payments treated as a single payment, five years from the date the first amount
was scheduled to be paid). For purposes of this Agreement and clause
(iv) above, all installment payments under this Agreement shall be treated as a
single payment.
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8. Disability
or Death.
(a) In
the event that the Executive becomes permanently disabled while in the employ of
the Employer, the Executive will be entitled to receive one-hundred percent
(100%) of his Accumulation Account. Payment of the Accumulation
Account shall be made by lump sum on the first day of the first full quarter
following the disability of the Executive. 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.
(b) In
the event that the Executive elects installment payments and commences to
receive the Accumulation Account under this Agreement and dies prior to the
receipt of the remaining installment payments, the remainder of the Accumulation
Account shall be payable until the expiration of such term to the
beneficiary(ies) designated by the Executive. In the event the
Executive either dies while employed by the Employer whether before or after age
sixty-five (65) or dies after a Separation from Service but before the
commencement of his benefits, then (i) the Executive’s beneficiary(ies) will be
entitled to receive one-hundred percent (100%) of his Accumulation Account, and
(ii) the beneficiary(ies) designated by the Executive shall receive the
Accumulation Account payable by lump sum on the first day of the first full
quarter following the Executive’s death.
9. Separation
from Service Concurrently With or Following a Change in
Control. 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 one-hundred
percent (100%) of his Accumulation Account in a lump sum on the first day of the
third full quarter following the Separation from Service. 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.
10. 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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11. 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
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(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.
12.
Statement
of Accumulation Account. Within 90 days after the close of
each calendar year, the Committee shall submit to the Executive a statement in
such form as the Committee deems desirable setting forth the balance as of the
last day of the calendar year in the Accumulation Account maintained for the
Executive.
13.
Withholding. To
the extent required by the law in effect at the time payment of the Accumulation
Account is made, the Bank shall withhold from such payment any taxes or other
amounts required by law to be withheld.
14. 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.
15. 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.
16. 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.
17. 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 or 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.
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18. Successors. This
Agreement shall be binding upon and inure to the benefit of the Employer, its
successors and assigns and the Executive and his heirs, executors,
administrators, and legal representatives.
19. Governing
Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Louisiana.
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/Xxxx XxXxxxx | ||
| Xxxx XxXxxxx | |||
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