EXHIBIT 10.6
THE STILLWATER NATIONAL BANK AND TRUST COMPANY
SUPPLEMENTAL PROFIT SHARING PLAN AND AGREEMENT
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PLAN AND AGREEMENT, made as of the 19th day of December 2002, by and
between Xxxx Xxxxx (the "Executive"), and Stillwater National Bank and Trust
Company (the "Stillwater National").
WHEREAS, Stillwater National previously has established the Employee's
Profit Sharing Plan and Trust as a qualified plan under the Internal Revenue
Code of 1986, as amended.
WHEREAS, the amounts of the annual profit sharing contributions made by
Stillwater National to the Executive's account in the Primary Plan as a
percentage of his compensation may be less than the percentages payable to other
employees' accounts under Primary Plan by reason of provisions of the Code
applicable to such qualified plans.
WHEREAS, Stillwater National has established this Stillwater National
Bank and Trust Company Supplemental Profit Sharing Plan and Agreement (the
"Plan"), in order that it may make tax-deferred contributions to a plan for the
benefit of the Executive.
NOW THEREFORE, it is mutually agreed as follows:
1. DEFINITIONS.
(a) "Affiliate" shall mean any "parent corporation" or "subsidiary
corporation" of Stillwater National, as such terms are defined in
Section 424(e) and (f), respectively, of the Code.
(b) "Beneficiary" means the person or persons selected by the Executive on
a form provided by Stillwater National to receive the benefits provided
under this Plan in the event of the Executive's death.
(c) "Board" shall mean the Board of Directors of Stillwater National.
(d) "Change in Control" shall mean any one of the following events
occurring after the date hereof: (1) the acquisition of ownership,
holding or power to vote more than 51% of any class if voting
securities of Stillwater National or Southwest, (2) the acquisition of
the power to control the election of a majority of Stillwater
National's or Southwest's directors, (3) the exercise of a controlling
influence over the management or policies of Stillwater National or
Southwest by any person or by persons acting as a "group" (within the
meaning of Section 13(d) of the Securities Exchange Act of 1934), or
(4) the failure of Continuing Directors to constitute at least
two-thirds of the Board of Directors of Southwest or Stillwater
National (the "Southwest Board") during any period of two consecutive
years. For purposes of this Plan, "Continuing Directors" shall include
only those individuals who were members of Southwest Board at the
Effective Date and those other individuals whose election or nomination
for election as a member of Southwest Board was approved by a vote of
at least two-thirds of the Continuing Directors then in office. For
purposes of this subparagraph only, the term "person" refers to an
individual or a corporation, partnership, trust, association, joint
venture, pool, syndicate, sole proprietorship, unincorporated
organization or any other form of entity not specifically listed
herein. The decision of the Committee as to whether a change in control
has occurred shall be conclusive and binding.
(e) "Code" means the Internal Revenue Code of 1986, as amended.
(f) "Committee" shall mean the Compensation Committee of the Board.
(g) "Compensation" means salary, bonus, and other cash compensation,
including amounts deferred by the Executive under any and all elective
deferred compensation plans of Stillwater National and its
Subsidiaries.
(h) "Continuous Service" shall mean the absence of any interruption or
termination of service as an Employee of Southwest or any present or
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future Affiliate. Continuous Service shall not be considered
interrupted in the case of sick leave, military leave or any other
leave of absence approved by Southwest or Stillwater National or in the
case of transfers between payroll locations of Southwest or among
Southwest, Stillwater National or any other Affiliate.
(i) "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
(j) "Non-Employee Director" means any member of the Board who, at the time
discretion under the Plan is exercised, would be a "Non-Employee
Director" within the meaning of Rule 16b-3 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended, if
Stillwater National were an issuer for purposes of that rule.
(k) "Parent" shall mean any present or future corporation that would be a
"parent corporation" as defined in Subsections 424(e) and (g) of the
Code.
(l) "Permanent Disability means a physical or mental infirmity that impairs
the Executive's ability to substantially perform his duties and that
results in the Executive's becoming eligible for long-term disability
benefits under a long-term disability plan maintained for Stillwater
National employees (or, if Stillwater National has no such plan in
effect, that impairs the Executive's ability to substantially perform
his duties for a period of one-hundred and eighty consecutive days).
(m) "Plan" means this Plan.
(n) "Plan Account" means the account described in Section 2 of the Plan.
(o) "Plan Year" means the calendar year.
(p) "Primary Market Area" means Xxxxx County, Oklahoma, the Tulsa, Oklahoma
MSA, the Oklahoma City Oklahoma MSA, the Wichita Kansas MSA and the
Dallas Texas MSA.
(q) "Profit Sharing Plan" means the Stillwater National Bank and Trust
Company Profit Sharing Plan and Trust, as amended, or any successor
plan thereto.
(r) "Southwest" shall mean Southwest Bancorp, Inc.
(s) "Stillwater National" shall mean Stillwater National Bank and Trust
Company.
(t) "Subsidiary" shall mean any present or future corporation which would
be a "subsidiary corporation" as defined in Subsections 424(f) and (g)
of the Code.
(u) "Termination for Just Cause" means termination by Stillwater National
or Southwest of Executive's employment because of the Executive's
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 minor offenses) or any final cease-and-desist order), or
committing any other act that causes significant damage to the
reputation of the Bank or any of its Affiliates. Notwithstanding the
foregoing, the Executive shall not be deemed to have been terminated
for Just Cause by Southwest or Stillwater National unless there shall
have been delivered to the Executive a copy of a resolution duly
adopted by the affirmative vote of not less than a majority of the
entire membership of the Board of Southwest or Stillwater National at a
meeting of such Board called and held for the purpose (after reasonable
notice to the Executive and an opportunity for the Executive to be
heard before the Board), finding that in the good faith opinion of such
Board the Executive was guilty of conduct described above.
(v) "Termination for Good Reason" means termination by the Executive of his
employment with Stillwater National or Southwest because of a material
breach by Stillwater National under a binding employment agreement with
the Executive; a material reduction in the Executive's responsibilities
or authority, or a requirement that the Executive report to any person
or group other than the board of directors of Stillwater National and
Southwest; assignment to the Executive of duties of a nonexecutive
nature or duties for which he is not reasonably equipped by his skills
and experience; any material reduction in salary or material reduction
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in benefits below the amounts to which he was entitled prior to a
Change in Control; a requirement that the Executive relocate his
principal business office or his principal place of residence outside
the Principal Market Area, or the assignment to the Executive of duties
that would reasonably require such a relocation; a requirement that the
Executive spend more than ninety normal working days away from the
Primary Market Area during any consecutive twelve-month period; or
failure to provide office facilities, secretarial services, and other
administrative services to Executive that are substantially equivalent
to the facilities and services provided to the Executive immediately
prior to the Change in Control (excluding brief periods during which
office facilities may be temporarily unavailable due to fire, natural
disaster, or other calamity). Notwithstanding the foregoing: a
reduction or elimination of the Executive's benefits under one or more
benefit plans maintained by of Stillwater National and Southwest as
part of a good faith, overall reduction or elimination of such plan or
plans or benefits thereunder applicable to all participants in a manner
that does not discriminate against the Executive (except as such
discrimination may be necessary to comply with law) shall not
constitute an event of Good Reason provided that benefits of the type
or to the general extent as those offered under such plans prior to
such reduction or elimination are not available to other officers of
Stillwater National or any company that controls Stillwater National
under a plan or plans in or under which the Executive is not entitled
to participate, and receive benefits, on a fair and nondiscriminatory
basis. This provision shall not affect the rights of the Executive to
enforce this Plan.
(w) "Transaction" means (i) the liquidation or dissolution of Southwest,
(ii) a merger or consolidation in which Southwest is not the surviving
entity; or (iii) the sale or other disposition of all or substantially
all of the voting securities or assets of Stillwater National.
(x) "Trust" means an irrevocable grantor trust established by Stillwater
National, or a successor thereto, in connection with this Plan to
provide the benefits described in the Plan, the assets of which are
subject to the claims of Stillwater National's creditors in the event
of bankruptcy or insolvency, and the terms of which conform to the
terms of the model trust as descried in IRS Revenue Procedure 92-64
(and any successor thereto) and otherwise meet the requirements for a
"rabbi trust" under ERISA and the Code and of the provisions of this
Plan.
(y) "Trustee" means the independent third-party corporation or individual
selected by Stillwater National to serve as Trustee for the Trust.
2. PLAN ACCOUNT.
Stillwater National shall establish and maintain the Plan Account for the
benefit of the Executive or for the benefit of his designated beneficiary upon
the death of the Executive, and shall credit the account with contributions and
earnings and debit the account for distributions, as described in this Plan.
3. CONTRIBUTIONS.
Stillwater National shall make contributions to the Plan Account as follows:
(a) Supplemental Profit Sharing Contributions. Stillwater National shall
credit the Plan Account with the amount equal to the difference between
the aggregate amount of contributions which would have been allocated
with respect to the Executive under the Profit Sharing Plan based on
the Executive's Compensation without regard to the limitations imposed
by the Code on the Profit Sharing Plan, or otherwise contained in the
Plan, and the aggregate amount of contributions actually made with
respect to the Executive, without regard to forfeitures. For purposes
of determining the amount which would have been allocated to the Profit
Sharing Plan, such amount shall be deemed to be proportionate to the
ratio of the actual contribution made to such plan over the
compensation taken into account under such plan. Such contributions
shall be credited to the Plan Account at substantially the same time as
contributions are made to the Profit Sharing Plan. Stillwater National
is not required to make any Supplemental Profit Sharing Contribution
for any period in which it does not make a contribution to the Profit
Sharing Plan. No Supplemental Profit Sharing Contributions shall be
made following a termination of the Executive's employment for Cause or
voluntary termination without Good Reason. The Supplemental Profit
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Sharing Contribution for the calendar year in which the Executive's or
his Beneficiary's rights under the Plan vest shall be prorated based
upon the number of days in the calendar year prior to the vesting date
over 365.
(b) Discretionary Contributions. Stillwater National may make, but is not
required by this Plan to make, additional, discretionary contributions
to the Plan Account at such times and in such amounts as it may deem
appropriate.
(c) Earnings. Until the Plan Account is fully distributed to the Executive
or his Beneficiary, the Plan Account shall be credited as of the last
day of each calendar quarter with earnings as though the balance of the
Plan Account at the beginning of such calendar quarter were invested in
an uninsured, nondeposit fund account having an annual return for each
calendar quarter equal to the annualized average interest rate earned
(non-taxable equivalent) by Stillwater National on average
interest-earning assets for such calendar quarter, and except as
provided in Section 6 hereof, as calculated in good faith by Stillwater
National. (For example, the earnings rate for the first calendar
quarter of 2002 would have been 6.65%, if the Plan were then in
effect.)
(d) Unfunded Arrangement. The parties intend that this Plan be unfunded for
purposes of ERISA and the Code. The Executive and his Beneficiary are
general unsecured creditors of Stillwater National for the payment of
benefits under this Plan. The benefits represent the mere promise by
Stillwater National 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 of the Executive or his Beneficiary. Any representation or
assertion contrary to this section 3(d) is a material breach of this
Plan by the representing or asserting party, which, if such party is
the Executive or, following his death, a Beneficiary, shall immediately
result in the cessation of any and all payments and the elimination of
any liability hereunder for any payment not made prior to such
assertion or representation, and, if such party is Stillwater National
or an Affiliate of Stillwater National, shall subject Stillwater
National to liability for actual damages for such breach.
4. DISTRIBUTIONS.
(a) Vesting. The amounts deferred and any related accumulated income on
such deferrals shall be fully vested upon the following occurs,
provided the Executive has Continuously Served from the date of this
Plan to such date:
(1) The Executive's retirement on or after Age 62;
(2) The Executive's 72nd birthday;
(3) The Executive's Permanent Disability;
(4) Termination of Executive's employment by Stillwater National
Without Cause;
(5) Termination of Executive's employment by the Executive With
Good Reason;
(6) Termination of the Plan; or
(7) A Change in Control.
(b) When Payments Start. Distribution shall begin during the first 15 days
of January in the calendar year immediately following the year in which
the earliest of the events listed in (1) through (6) of subsection (a)
occurs.
(c) Manner of Distributions. Distributions will occur in the manner
selected by the Executive below, provided that the Executive may change
the method of distribution as to future contributions and earnings
thereon, only, and only from the choices offered below, by written
notice to Stillwater National. The Executive, pursuant to the Plan,
hereby elects to have the amount contributed and any related
accumulated earnings distributed as follows:
[Choose One]
( ) monthly over a five-year period
( ) monthly over a ten-year period
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( ) monthly over a fifteen-year period
( ) in a lump sum
(d) Cash Distributions. All distributions made pursuant to the Plan and
this Agreement will be made in cash.
(e) Distributions after Death. If the Executive dies before the entire
amount credited to the Executive under the Plan has been paid to the
Executive, the amount remaining shall be distributed to the Executive's
Beneficiary in accordance with the method selected by the Executive. If
the Executive has not designated a Beneficiary, or if no designated
Beneficiary is living on the date of distribution, such amount shall be
distributed to those persons or such trust entitled to receive
distributions of the Executive's benefits under the Profit Sharing
Plan.
(f) Emergency Distributions. In the event the Executive incurs an
unforeseeable emergency, the Executive may make a written request to
the Stillwater National for a hardship withdrawal from his or her
account. An unforeseeable emergency is a severe financial hardship to
the Executive resulting from a sudden and unexpected illness or
accident of the Executive or of a dependent (as defined in Section
152(a) of the Code), loss of the Executive's property due to casualty,
or other similar extraordinary and unforeseeable circumstances arising
as a result of events beyond the control of the Executive. Withdrawals
of amounts because of an unforeseeable emergency are only permitted to
the extent reasonably needed to satisfy the emergency need. This
section shall be interpreted in a manner consistent with Sections
1.457-2(h)(4) and 1.457-2(h)(5) of the Treasury Regulations.
5. PLAN ADMINISTRATION.
(a) Committee. The Plan shall be administered by the Committee. In the
absence at any time of a duly appointed Committee, the Plan shall be
administered by the Board. Except as limited by the express provisions
of the Plan or by resolutions adopted by the Board, the Committee shall
have sole and complete authority and to prescribe, amend and rescind
rules and regulations relating to the Plan, and to make other
determinations necessary or advisable for the administration of the
Plan. The Committee shall have and may exercise such other power and
authority as may be delegated to it by the Board from time to time.
(b) Indemnification and Limitation of Liability. In addition to such other
rights of indemnification as they may have, the members of the
Committee shall be indemnified by Stillwater National in connection
with any claim, action, suit or proceeding relating to any action taken
or failure to act under or in connection with the Plan to the maximum
extent provided for under Stillwater National's Certificate of
Incorporation or Bylaws with respect to the indemnification of
Directors. Stillwater National nor any of its officers, directors,
Affiliates, or agents shall be liable to the Executive, his Beneficiary
or any other person for any claim, loss, liability or expense incurred
in connection with the Plan, unless attributable to fraud or willful
misconduct on the part of such person.
(c) Costs and Statements. Stillwater National shall pay the expenses of
administration and the costs of employing employment counsel and
accountants with respect to the Plan or its administration, including
without limitation, the administrative and other costs of the Trust.
Stillwater National shall furnish individual annual statements of
accrued benefits to the Executive or current Beneficiary, in such form
as determined by Stillwater National or as required by law.
(d) 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, Stillwater National may pay such
benefit to the guardian, legal representative, or person having the
care or custody of such minor, incompetent person, or incapable person.
Stillwater National may require proof of incompetency, minority, or
guardianship as it may deem appropriate prior to the distribution of
the benefit. Such distribution shall completely discharge Stillwater
National from all liability with respect to such benefit.
6. TRUST.
Prior to or simultaneously with any Transaction and within ten calendar days of
any other Change in Control, unless and to the extent the Executive has
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previously provided a written release of any claims under this Plan, Stillwater
National shall establish a valid trust under the law of the State of Oklahoma
with an independent trustee that has or may be granted corporate trust powers
under Oklahoma law, deposit in such trust an amount equal to 200% of the Plan
Account balance immediately prior to the establishment of the Trust, and provide
the Trustee of the Trust with a written direction to invest such amount in
securities supported by the full faith and credit of the United States except
for amounts held in one or more deposit accounts as needed on a short-term basis
to pay amounts due to the Executive or his Beneficiary as provided below, to
hold said amount and any investment return thereon in a segregated account, and
to pay such amounts due to the Executive (or upon his death, his Beneficiary)
under this Plan. Upon the final payment of all amounts due to the Executive or
his Beneficiary under this Plan, the Trustee of the Trust shall pay to
Stillwater National the entire balance, if any, remaining in the Trust. Payments
from the Trust to the Executive shall be considered payments made by Stillwater
National for purposes of this Agreement. Payment of such amounts to the
Executive from the Trust, however, shall not relieve Stillwater National from
any obligation to pay amounts in excess of those paid from the Trust, or from
any obligation to take actions or refrain from taking actions otherwise required
by this Plan. In no event may the Trust invest in securities or obligations
issued by Stillwater National or any of its Affiliates or successors. Stillwater
National shall have no right or power to direct the Trustee to return or divert
any of the Trust assets before all payments of benefits have been made.
Stillwater National shall pay all fees and expenses of the Trust, including,
without limitation, Trustee fees, and all income taxes on earnings of the Trust
from its assets outside of the Trust. In the event that Stillwater National
shall not provide the earnings rate referred to under Section 3(c) hereof, the
Trustee shall calculate such rate based upon reports of condition furnished by
Stillwater National to its primary federal banking regulator or upon other
publicly available reports. The Executive's and his Beneficiary's rights under
this Plan shall be those of a general, unsecured creditor, he shall have no
claim against the assets of the Trust, and the assets of the Trust shall be
considered general assets of Stillwater National subject to the claims of
creditors of Stillwater National in the event of its bankruptcy or insolvency.
7. NO EFFECT ON PROFIT SHARING PLAN.
This Plan has no effect upon benefits under or the terms of the Profit Sharing
Plan.
8. FORFEITURE OR SUSPENSION OF PLAN BENEFITS.
(a) In General. The Executive shall completely forfeit any and all rights
to any and all benefits under this Plan upon his termination for Cause
or his voluntary termination without Good Reason.
(b) Competition. Regardless of anything herein to the contrary, except in
the case of a termination of employment by Stillwater National without
Just Cause, a termination of employment by the Executive with Good
Reason, or with the permission of Stillwater National, if the Executive
shall, during the two years immediately following the Executive's
termination of employment, serve as an officer or director or employee
of any bank holding company, bank, savings association, savings and
loan holding company, or mortgage company (any of which, a "Financial
Institution") which Financial Institution offers products or services
competing with those offered by the Bank from offices in any county in
the Primary Market Area, or shall interfere with the relationship of
Stillwater National and any of its employees, agents, or
representatives, then the Committee shall direct that any unpaid
balance of any payments to the Executive under this Agreement be
suspended, and shall thereupon notify the Executive of such suspension,
in writing. Thereupon, if the Committee shall determine that such
behavior by the executive exists at any time after a period of one
month following notification of such suspension, all rights of the
Executive and his Beneficiary under this Plan, including rights to any
and all further payments hereunder, shall thereupon terminate.
(c) Certain Regulatory Events. If the Executive is removed and/or
permanently prohibited from participating in the conduct of Stillwater
National's affairs by an order issued under Sections 8(e)(4) or 8(g)(1)
of the Federal Deposit Insurance Act ("FDIA") (12 U.S.C. xx.xx.
1818(e)(4) and (g)(1)), all obligations of Stillwater National under
this Agreement shall terminate as of the effective date of the order,
but vested rights of the parties shall not be affected. If Stillwater
National is in default (as defined in Section 3(x)(1) of FDIA), all
obligations of Stillwater National under this Agreement shall terminate
as of the date of default, but vested rights of the parties shall not
be affected. If a notice served under Sections 8(e)(3) or (g)(1) of the
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FDIA (12 U.S.C. xx.xx. 1818(e)(3) and (g)(1)) suspends and/or
temporarily prohibits the Executive from participating in the conduct
of Stillwater National's affairs, Stillwater National's obligations
under this Agreement shall be suspended as of the date of such service,
unless stayed by appropriate proceedings. If the charges in the notice
are dismissed, Stillwater National may, in its discretion, (i) pay the
Executive all or part of the contributions or payments withheld while
its contract obligations were suspended, and (ii) reinstate (in whole
or in part) any of its obligations which were suspended.
9. TERMINATION.
Stillwater National may terminate this Plan only upon termination of the Profit
Sharing Plan or with the Agreement of the Executive. No termination of the Plan
shall directly or indirectly reduce the balance of the Plan Account as of the
effective date of such termination. Upon termination of the Plan, distribution
of the Plan Account in accordance with Section amounts credited to such account
shall be made to the Executive or his or her Beneficiary in accordance with
Section 4. No contributions will be credited to the Plan Account after
termination of the Plan, but earnings will continue to be credited to the Plan
Account until all amounts are distributed to the Executive or his Beneficiary.
10. GOVERNING LAW.
The Plan shall be governed by and construed in accordance with the laws of the
State of Oklahoma, except to the extent that federal law shall be deemed to
apply.
11. SUCCESSORS AND ASSIGNS.
The Plan shall be binding upon Stillwater National's successors.
12. AMENDMENTS.
No amendments or additions to this Plan shall be binding unless made in writing
and signed by all of the parties, except as herein otherwise specifically
provided. This document supersedes any previous version of the Plan.
13. SEVERABILITY.
The provisions of this Agreement shall be deemed severable and the invalidity or
unenforceability of any provision shall not affect the validity or
enforceability of the other provisions hereof.
14. HEADINGS.
Headings contained herein are for convenience of reference only.
15. ENTIRE AGREEMENT.
This Agreement, together with any understanding or modifications thereof as
agreed to in writing by the parties, shall constitute the entire agreement among
the parties hereto with respect to the subject matter hereof, other than written
agreements with respect to specific plans, programs or arrangements described in
Sections 5 and 6.
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands the day and
year first above-written.
XXXX XXXXX, Executive
/s/ Xxxx Xxxxx
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STILLWATER NATIONAL BANK
AND TRUST COMPANY
By /s/ Xxxxx X. Xxxxxxx
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/s/ Xxxxxxx X. Xxxxxxx
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