<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period ________ to ________
Commission File No. 1-10160
UNION PLANTERS CORPORATION
(Exact name of registrant as specified in its charter)
Tennessee 62-0859007
(State of incorporation) (IRS Employer Identification No.)
Union Planters Administrative Center
7130 Goodlett Farms Parkway
Memphis, Tennessee 38018
----------------------------------------
(Address of principal executive offices)
Registrant's telephone number, including area code: (901) 580-6000
--------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [ ]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date.
Class Outstanding at October 31, 1999
- ------------------------- --------------------------------
Common stock $5 par value 141,030,678
<PAGE> 2
UNION PLANTERS CORPORATION AND SUBSIDIARIES
FORM 10-Q FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999
INDEX
<TABLE>
<CAPTION>
Page
----
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
a) Consolidated Balance Sheet -September 30, 1999,
September 30, 1998, and December 31, 1998..........................................................3
b) Consolidated Statement of Earnings -
Three and Nine Months Ended September 30, 1999 and 1998............................................4
c) Consolidated Statement of Changes in Shareholders' Equity -
Nine Months Ended September 30, 1999 ..............................................................5
d) Consolidated Statement of Cash Flows -
Nine Months Ended September 30, 1999 and 1998......................................................6
e) Notes to Unaudited Consolidated Financial Statements...............................................7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.....................................................14
Item 3. Quantitative and Qualitative Disclosures about Market Risk........................................35
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.................................................................................38
Item 2. Changes in Securities.............................................................................38
Item 3. Defaults Upon Senior Securities...................................................................38
Item 4. Submission of Matters to a Vote of Security Holders...............................................38
Item 5. Other Information.................................................................................38
Item 6. Exhibits and Reports on Form 8-K..................................................................38
Signatures........................................................................................40
</TABLE>
2
<PAGE> 3
UNION PLANTERS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
<TABLE>
<CAPTION>
SEPTEMBER 30,
------------------------------- DECEMBER 31,
1999 1998 1998
------------ ------------ ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Cash and due from banks .................................................. $ 1,008,345 $ 985,383 $ 1,271,614
Interest-bearing deposits at financial institutions ...................... 41,983 26,356 47,583
Federal funds sold and securities purchased under agreements to resell ... 84,222 190,432 94,568
Trading account assets ................................................... 225,510 255,583 275,992
Loans held for resale .................................................... 305,784 202,833 441,214
Available for sale investment securities (Amortized cost: $7,966,492
$8,057,815 and $8,208,570, respectively) ............................... 7,845,191 8,194,225 8,301,703
Loans .................................................................... 21,398,942 20,354,926 19,611,168
Less: Unearned income .................................................. (33,028) (37,425) (34,342)
Allowance for losses on loans .................................... (358,721) (361,005) (321,476)
------------ ------------ ------------
Net loans ........................................................... 21,007,193 19,956,496 19,255,350
Premises and equipment, net .............................................. 648,090 549,207 553,251
Accrued interest receivable .............................................. 298,429 281,412 293,066
FHA/VA claims receivable ................................................. 137,066 143,154 126,164
Mortgage servicing rights ................................................ 120,223 104,307 101,466
Goodwill and other intangibles ........................................... 973,399 366,817 386,994
Other assets ............................................................. 459,057 362,395 542,988
------------ ------------ ------------
TOTAL ASSETS ..................................................... $ 33,154,492 $ 31,618,600 $ 31,691,953
============ ============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits
Noninterest-bearing ................................................... $ 4,181,748 $ 3,426,372 $ 4,194,402
Certificates of deposit of $100,000 and over .......................... 2,190,474 2,869,220 2,614,694
Other interest-bearing ................................................ 18,019,231 17,915,507 18,087,359
------------ ------------ ------------
Total deposits ................................................... 24,391,453 24,211,099 24,896,455
Short-term borrowings .................................................... 4,046,075 1,855,949 1,648,039
Medium-term senior notes ................................................. 75,000 105,000 105,000
Federal Home Loan Bank advances .......................................... 203,402 617,638 279,992
Other long-term debt ..................................................... 854,539 1,056,528 1,053,740
Accrued interest, expenses, and taxes .................................... 232,180 277,916 278,237
Other liabilities ........................................................ 399,914 461,934 446,412
------------ ------------ ------------
TOTAL LIABILITIES ................................................ 30,202,563 28,586,064 28,707,875
------------ ------------ ------------
Commitments and contingent liabilities ................................... -- -- --
Shareholders' equity
Convertible preferred stock ............................................ 21,718 24,501 23,353
Common stock, $5 par value; 300,000,000 shares authorized;
141,781,749 issued and outstanding (140,977,582 at September 30, 1998,
and 141,924,958 at December 31, 1998) ............................... 708,909 704,888 709,625
Additional paid-in capital ............................................. 770,642 678,319 691,789
Retained earnings ...................................................... 1,540,317 1,555,443 1,516,712
Unearned compensation .................................................. (12,868) (15,550) (14,646)
Accumulated other comprehensive income-unrealized gains (losses)
on available for sale securities, net ................................ (76,789) 84,935 57,245
------------ ------------ ------------
TOTAL SHAREHOLDERS' EQUITY ....................................... 2,951,929 3,032,536 2,984,078
------------ ------------ ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY ....................... $ 33,154,492 $ 31,618,600 $ 31,691,953
============ ============ ============
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
3
<PAGE> 4
UNION PLANTERS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF EARNINGS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------------ ---------------------------
1999 1998 1999 1998
--------- -------- ---------- -----------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
INTEREST INCOME
Interest and fees on loans .................................. $ 454,656 $460,363 $1,300,762 $ 1,388,301
Interest on investment securities
Taxable ................................................... 105,720 94,671 319,818 274,309
Tax-exempt ................................................ 17,481 16,785 52,574 45,709
Interest on deposits at financial institutions .............. 879 204 2,316 1,231
Interest on federal funds sold and securities purchased under
agreements to resell ...................................... 1,104 3,730 2,936 15,398
Interest on trading account assets .......................... 3,834 3,964 11,363 9,787
Interest on loans held for resale ........................... 4,528 3,975 18,319 9,912
--------- -------- ---------- -----------
Total interest income ............................... 588,202 583,692 1,708,088 1,744,647
--------- -------- ---------- -----------
INTEREST EXPENSE
Interest on deposits ........................................ 200,210 225,716 619,510 668,154
Interest on short-term borrowings ........................... 39,315 20,362 84,657 58,475
Interest on long-term debt .................................. 20,448 34,897 68,406 104,725
--------- -------- ---------- -----------
Total interest expense .............................. 259,973 280,975 772,573 831,354
--------- -------- ---------- -----------
NET INTEREST INCOME ................................. 328,229 302,717 935,515 913,293
PROVISION FOR LOSSES ON LOANS ................................. 20,365 51,222 54,384 127,472
--------- -------- ---------- -----------
NET INTEREST INCOME AFTER PROVISION FOR LOSSES ON
LOANS ............................................. 307,864 251,495 881,131 785,821
--------- -------- ---------- -----------
NONINTEREST INCOME
Service charges on deposit accounts ......................... 44,273 40,126 125,663 115,636
Mortgage banking revenue .................................... 23,506 23,763 75,208 67,032
Bank card income ............................................ 7,906 10,706 18,949 31,124
Factoring commissions ....................................... 7,583 8,108 22,014 22,849
Trust service income ........................................ 4,241 6,565 17,955 19,296
Profits and commissions from trading activities ............. 1,094 1,222 2,958 4,653
Investment securities gains (losses) ........................ (1,224) 1,635 1,968 (15,095)
Other income ................................................ 35,703 32,658 125,337 125,472
--------- -------- ---------- -----------
Total noninterest income ............................ 123,082 124,783 390,052 370,967
--------- -------- ---------- -----------
NONINTEREST EXPENSE
Salaries and employee benefits .............................. 123,369 117,626 376,470 347,893
Net occupancy expense ....................................... 23,550 19,173 65,461 55,698
Equipment expense ........................................... 20,024 18,708 59,262 53,135
Goodwill and other intangible amortization .................. 15,040 7,622 40,188 20,084
Other expense ............................................... 84,016 180,707 257,866 361,147
--------- -------- ---------- -----------
Total noninterest expense ........................... 265,999 343,836 799,247 837,957
--------- -------- ---------- -----------
EARNINGS BEFORE INCOME TAXES ........................ 164,947 32,442 471,936 318,831
Applicable income taxes ....................................... 55,413 18,292 159,288 120,816
--------- -------- ---------- -----------
NET EARNINGS ........................................ $ 109,534 $ 14,150 $ 312,648 $ 198,015
========= ======== ========== ===========
NET EARNINGS APPLICABLE TO COMMON SHARES ............ $ 109,101 $ 13,647 $ 311,311 $ 196,411
========= ======== ========== ===========
EARNINGS PER COMMON SHARE (NOTE 10)
Basic ............................................... $ .77 $ .10 $ 2.19 $ 1.42
Diluted ............................................. .76 .10 2.16 1.39
AVERAGE COMMON SHARES OUTSTANDING (IN THOUSANDS)
Basic ............................................... 142,557 140,739 142,464 138,267
Diluted ............................................. 144,570 142,406 144,680 142,714
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
4
<PAGE> 5
UNION PLANTERS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
(UNAUDITED)
<TABLE>
<CAPTION>
CONVERTIBLE ADDITIONAL
PREFERRED COMMON PAID-IN RETAINED
STOCK STOCK CAPITAL EARNINGS
----------- --------- ----------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
BALANCE, JANUARY 1, 1999 ............................ $ 23,353 $ 709,625 $ 691,789 $ 1,516,712
Comprehensive income:
Net earnings ....................................... -- -- -- 312,648
Other comprehensive income, net of taxes
Net change in the unrealized gains
(losses) on available for sale securities .... -- -- -- --
Total comprehensive income ................ -- -- -- --
Cash dividends:
Common stock, $1.50 per share ...................... -- -- -- (214,400)
Preferred stock, $1.50 per share ................... -- -- -- (1,337)
Common stock issued under
employee benefit plans,
net of stock exchanged ............................. -- 2,329 15,160 --
Issuance of common stock
for acquisitions ................................... -- 7,024 71,340 4,120
Conversion of preferred stock ....................... (1,635) 409 1,226 --
Conversion of debt of an
acquired entity .................................... -- 1,258 3,282 --
Common stock repurchased ............................ -- (11,736) (12,155) (77,426)
-------- --------- --------- -----------
BALANCE, SEPTEMBER 30, 1999 ......................... $ 21,718 $ 708,909 $ 770,642 $ 1,540,317
======== ========= ========= ===========
<CAPTION>
UNREALIZED
GAINS
(LOSSES)
ON AVAILABLE
UNEARNED FOR SALE
COMPENSATION SECURITIES TOTAL
------------ ------------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
BALANCE, JANUARY 1, 1999 ............................ $(14,646) $ 57,245 $ 2,984,078
Comprehensive income:
Net earnings ....................................... -- -- 312,648
Other comprehensive income, net of taxes
Net change in the unrealized gains
(losses) on available for sale securities .... -- (134,034) (134,034)
-----------
Total comprehensive income ................ -- -- 178,614
Cash dividends:
Common stock, $1.50 per share ...................... -- -- (214,400)
Preferred stock, $1.50 per share ................... -- -- (1,337)
Common stock issued under
employee benefit plans,
net of stock exchanged ............................. 1,778 -- 19,267
Issuance of common stock
for acquisitions ................................... -- -- 82,484
Conversion of preferred stock ....................... -- -- --
Conversion of debt of an
acquired entity .................................... -- -- 4,540
Common stock repurchased ............................ -- -- (101,317)
-------- --------- -----------
BALANCE, SEPTEMBER 30, 1999 ......................... $(12,868) $ (76,789) $ 2,951,929
======== ========= ===========
</TABLE>
<TABLE>
<CAPTION>
TAX
BEFORE-TAX (EXPENSE) NET OF TAX
AMOUNT BENEFIT AMOUNT
---------- --------- ----------
<S> <C> <C> <C>
DISCLOSURE OF RECLASSIFICATION AMOUNT:
Net change in the unrealized gains (losses)
on available for sale securities
arising during the period .............. $(212,466) $ 79,634 $(132,832)
Less: reclassification for gains
included in net income ........ 1,968 (766) 1,202
--------- -------- ---------
Net change in the unrealized gains (losses)
on available for sale securities ........ $(214,434) $ 80,400 $(134,034)
========= ======== =========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
5
<PAGE> 6
UNION PLANTERS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
-------------------------------
1999 1998
----------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
OPERATING ACTIVITIES
Net earnings ........................................................................ $ 312,648 $ 198,015
Reconciliation of net earnings to net cash provided by operating activities:
Provision for losses on loans, other real estate, and FHA/VA foreclosure claims ... 55,532 132,495
Depreciation and amortization of premises and equipment ........................... 50,301 48,887
Amortization of goodwill, mortgage servicing rights, and other intangibles ........ 55,045 36,687
Provisions for merger-related charges ............................................. -- 51,369
Net amortization of investment securities ......................................... 15,952 2,548
Net realized (gains) losses on sales of investment securities ..................... (1,968) 15,095
Deferred income tax benefit (expense) ............................................. 854 (35,546)
(Increase) decrease in assets
Trading account assets and loans held for resale .............................. 191,539 (95,298)
Other assets .................................................................. 191,925 74,671
Increase (decrease) in accrued interest, expenses, taxes, and other liabilities ... (128,235) 17,855
Other, net ........................................................................ 6,222 1,745
----------- -----------
Net cash provided by operating activities ................................... 749,815 448,523
----------- -----------
INVESTING ACTIVITIES
Net decrease in short-term investments .............................................. 775,655 6,240
Proceeds from sales of available for sale securities ................................ 1,100,093 1,098,055
Proceeds from maturities, calls, and prepayments of available for sale securities ... 4,217,090 3,164,414
Purchases of available for sale securities .......................................... (4,823,567) (5,806,783)
Net decrease in loans ............................................................... 415,704 713,895
Net cash received from (paid for) acquisitions of financial institutions ............ (32,028) 1,292,971
Purchases of premises and equipment, net ............................................ (57,539) (51,717)
Other, net .......................................................................... -- 305
----------- -----------
Net cash provided by investing activities ................................... 1,595,408 417,380
----------- -----------
FINANCING ACTIVITIES
Net decrease in deposits ............................................................ (4,154,225) (873,661)
Net increase in short-term borrowings ............................................... 2,138,656 18,102
Proceeds from long-term debt, net ................................................... -- 727,479
Repayment of long-term debt ......................................................... (303,955) (810,308)
Proceeds from issuance of common stock .............................................. 17,440 36,219
Purchases of common stock, including transactions
of acquired entities prior to acquisition ......................................... (101,317) (151,095)
Cash dividends paid ................................................................. (215,759) (183,474)
Other, net .......................................................................... 322 (2,000)
----------- -----------
Net cash used by financing activities ....................................... (2,618,838) (1,238,738)
----------- -----------
Net decrease in cash and cash equivalents ........................................... (273,615) (372,835)
Cash and cash equivalents at the beginning of the period ............................ 1,366,182 1,523,039
----------- -----------
Cash and cash equivalents at the end of the period .................................. $ 1,092,567 $ 1,150,204
=========== ===========
SUPPLEMENTAL DISCLOSURES
Cash paid for
Interest .......................................................................... $ 795,755 $ 791,534
Income taxes ...................................................................... 136,070 131,355
Unrealized gains (losses) on available for sale securities .......................... (121,301) 136,410
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
6
<PAGE> 7
UNION PLANTERS CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. PRINCIPLES OF ACCOUNTING
The consolidated financial statements have been prepared in accordance
with generally accepted accounting principles. The foregoing financial
statements are unaudited; however, in the opinion of management, all
adjustments, including normal recurring adjustments, necessary for a fair
presentation of the consolidated financial statements have been included.
The accounting policies followed by Union Planters Corporation and its
subsidiaries (collectively, the Corporation) for interim financial reporting
are consistent with the accounting policies followed for annual financial
reporting except as noted below. The notes included herein should be read in
conjunction with the notes to the consolidated financial statements included in
the Corporation's 1998 Annual Report to Shareholders (1998 Annual Report), a
copy of which is Exhibit 13 to the Corporation's Annual Report on Form 10-K for
the year ended December 31, 1998 (1998 10-K).
In 1999, the Corporation has changed the presentation of mortgage
servicing income and certain other mortgage banking revenues. A new line,
mortgage banking revenues, has been added to the statement of earnings and
includes mortgage servicing income, gain on sale of residential mortgages,
mortgage origination fees, sale of servicing, and other miscellaneous fees of
the mortgage banking operations. Prior year amounts for mortgage banking
revenues and certain other 1998 amounts have been reclassified to be consistent
with the 1999 financial reporting presentation.
In the third quarter of 1999, the Corporation changed its policy related
to placing single family residential mortgage loans on nonaccrual status to
conform to industry practice. Previously, single family residential mortgage
loans were automatically placed on nonaccrual status after they became past due
90 days or more. Prospectively such loans will only be placed on nonaccrual
status if the loan is not in the process of collection or is not well-secured.
The impact of this change was to reduce nonaccrual single family residential
mortgage loans approximately $50 million with loans past due 90 days or more
increasing by a corresponding amount.
NOTE 2. ACQUISITIONS
CONSUMMATED ACQUISITIONS
On January 31, 1999, the Corporation exchanged 1,404,816 shares of its
common stock for all of the outstanding shares of First Mutual Bancorp. (First
Mutual), the parent of First Mutual Bank, S.B., in Decatur, Illinois, in a
transaction accounted for as a purchase. The Corporation repurchased, in the
open market, a majority of the common stock issued to facilitate the purchase.
At the date of acquisition, First Mutual had total assets of approximately $403
million, total loans of $285 million, and total deposits of $315 million.
Goodwill and other intangibles resulting from the acquisition totaled $37
million.
On February 1, 1999, the Corporation consummated the acquisition of First
& Farmers Bancshares, Inc., in Somerset, Kentucky, the parent of First &
Farmers Bank of Somerset in Somerset, Kentucky, and Bank of Cumberland in
Burkesville, Kentucky. Cash in the amount of $76 million was paid for the
acquisition which was accounted for as a purchase. At the date of acquisition,
First & Farmers Bancshares, Inc. had total assets of $335 million, total loans
of $185 million, and total deposits of $318 million.
Goodwill and other intangibles resulting from the acquisition totaled $42
million.
On March 5, 1999, the Corporation purchased 56 branches of First Chicago
NBD Corporation in Indiana. In the transaction, the Corporation purchased $852
million of loans, acquired certain branch locations and equipment totaling $23
million, and assumed $1.7 billion of deposit liabilities. The premium paid
(goodwill and other intangibles) for the purchase was approximately $279
million.
On July 16, 1999, the Corporation's lead bank, Union Planters Bank,
National Association (the Bank or UPB) completed the acquisition of Republic
Banking Corporation of Florida (Nasdaq:RBCF) (Republic), the parent company of
Republic National Bank of Miami, Miami, Florida. In the transaction, UPB
acquired Republic National Bank's 25 Miami-Dade and two Broward County banking
centers and approximately $1.4 billion in assets, $1.0 billion in loans, and
$1.3 billion in total deposits. The purchase price was $410 million in cash.
Goodwill and other intangibles resulting from the acquisition are currently
estimated to be $266 million.
7
<PAGE> 8
Because the above purchase acquisitions, in the aggregate, are
insignificant to the historical consolidated results of the Corporation, pro
forma information has been omitted. Additionally, pro forma information for the
branch purchase is not available due to lack of information available for
operation of the branches on a historical basis. Reference is made to Note 2 of
the consolidated financial statements on pages 45 through 47 of the 1998 Annual
Report for information regarding acquisitions completed in 1998.
Goodwill and other intangibles resulting from the above acquisitions will
be amortized over lives up to 25 years.
NOTE 3. LOANS
Loans are summarized by type as follows:
<TABLE>
<CAPTION>
SEPTEMBER 30,
-------------------------------- DECEMBER 31,
1999 1998 1998
----------- ----------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Commercial, financial, and agricultural .... $ 4,588,050 $ 3,518,359 $ 3,543,925
Foreign .................................... 386,661 221,953 197,120
Accounts receivable - factoring ............ 606,115 643,894 615,952
Real estate - construction ................. 1,554,455 1,148,331 1,195,779
Real estate - mortgage
Secured by 1-4 family residential ........ 5,425,444 5,882,666 5,647,520
FHA/VA government-insured/guaranteed ..... 538,398 762,998 759,911
Other mortgage ........................... 4,809,855 4,401,250 4,386,182
Home equity ................................ 571,790 487,759 482,665
Consumer
Credit cards and related plans ........... 78,670 537,712 96,091
Other consumer ........................... 2,767,044 2,682,862 2,622,402
Direct lease financing ..................... 72,460 67,142 63,621
----------- ----------- -----------
TOTAL LOANS ...................... $21,398,942 $20,354,926 $19,611,168
=========== =========== ===========
</TABLE>
Nonperforming loans are summarized as follows:
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1999 1998
------------- ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
NONACCRUAL LOANS (NOTE 1)
Domestic ............................... $146,361 $150,378
Foreign ................................ 912 --
RESTRUCTURED LOANS ....................... 2,147 5,612
-------- --------
TOTAL NONPERFORMING LOANS ...... $149,420 $155,990
======== ========
FHA/VA GOVERNMENT-INSURED/GUARANTEED LOANS
ON NONACCRUAL STATUS ................... $ 7,750 $ 9,232
======== ========
</TABLE>
Reference is made to Note 1 for a discussion of a change in the
nonaccrual policy related to single family residential mortgage loans.
NOTE 4. ALLOWANCE FOR LOSSES ON LOANS
The changes in the allowance for losses on loans for the three and nine
months ended September 30, 1999 are summarized as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED,
SEPTEMBER 30, SEPTEMBER 30,
1999 1999
------------------ ------------------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
BEGINNING BALANCE ............................ $340,586 $321,476
Provision for losses on loans ................ 20,365 54,384
Recoveries of loans previously charged off ... 16,120 40,190
Loans charged off ............................ (39,965) (100,404)
Increase due to acquisitions ................. 21,615 43,075
-------- --------
BALANCE, SEPTEMBER 30, 1999 .................. $358,721 $358,721
======== ========
</TABLE>
8
<PAGE> 9
As of September 30, 1999, the Corporation had an impaired loan with a
balance of $6.3 million and a valuation reserve of $1.7 million, which was
established in the fourth quarter of 1998. During 1999 the loan has been
charged-down $5.6 million.
NOTE 5. INVESTMENT SECURITIES
The amortized cost and fair value of investment securities are summarized
as follows:
<TABLE>
<CAPTION>
SEPTEMBER 30, 1999
--------------------------------------------------------------
UNREALIZED
AMORTIZED ------------------------
COST GAINS LOSSES FAIR VALUE
---------- ------- -------- ----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
AVAILABLE FOR SALE SECURITIES
U.S. Government obligations
U.S. Treasury ................................. $ 174,947 $ 1,031 $ 446 $ 175,532
U.S. Government agencies
Collateralized mortgage obligations ......... 2,478,741 1,224 57,821 2,422,144
Mortgage-backed ............................. 682,837 5,866 11,252 677,451
Other ....................................... 1,128,532 3,663 15,640 1,116,555
---------- ------- -------- ----------
Total U.S. Government obligations ..... 4,465,057 11,784 85,159 4,391,682
Obligations of states and political subdivisions 1,326,432 18,754 31,460 1,313,726
Other stocks and securities ..................... 2,175,003 5,842 41,062 2,139,783
---------- ------- -------- ----------
TOTAL AVAILABLE FOR SALE SECURITIES ... $7,966,492 $36,380 $157,681 $7,845,191
========== ======= ======== ==========
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31, 1998
--------------------------------------------------------------
UNREALIZED
AMORTIZED ------------------------
COST GAINS LOSSES FAIR VALUE
---------- -------- -------- ----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
AVAILABLE FOR SALE SECURITIES
U.S. Government obligations
U.S. Treasury ................................. $ 390,538 $ 5,809 $ 60 $ 396,287
U.S. Government agencies
Collateralized mortgage obligations ......... 2,581,446 12,908 6,051 2,588,303
Mortgage-backed ............................. 733,224 13,970 819 746,375
Other ....................................... 1,491,394 17,695 975 1,508,114
---------- -------- ------- ----------
Total U.S. Government obligations ..... 5,196,602 50,382 7,905 5,239,079
Obligations of states and political subdivisions 1,293,257 53,558 1,149 1,345,666
Other stocks and securities ..................... 1,718,711 4,168 5,921 1,716,958
---------- -------- ------- ----------
TOTAL AVAILABLE FOR SALE SECURITIES ... $8,208,570 $108,108 $14,975 $8,301,703
========== ======== ======= ==========
</TABLE>
Investment securities having a fair value of approximately $3.0 billion
and $3.1 billion at September 30, 1999 and December 31, 1998, respectively,
were pledged to secure public and trust funds on deposit, securities sold under
agreements to repurchase, and Federal Home Loan Bank (FHLB) advances.
The following table presents the gross realized gains and losses on
available for sale investment securities for the three and nine months ended
September 30, 1999 and 1998.
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
---------------------- -----------------------
1999 1998 1999 1998
------ ------ ------ -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Realized gains ......... $ 467 $2,000 $5,626 $ 8,873
Realized losses ........ 1,691 365 3,658 23,968
</TABLE>
9
<PAGE> 10
NOTE 6. OTHER NONINTEREST INCOME AND EXPENSE
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
----------------------- -----------------------
1999 1998 1999 1998
-------- --------- --------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
OTHER NONINTEREST INCOME
ATM usage fees ............................................. $ 6,917 $ 5,361 $ 18,183 $ 14,431
Annuity sales income ....................................... 3,977 2,631 13,812 5,285
Brokerage fee income ....................................... 4,191 4,754 13,841 14,503
Insurance commissions ...................................... 4,610 3,628 13,052 10,353
Gain on sale of FHA/VA loans ............................... -- -- 5,317 19,605
Gain on sale of credit card portfolio ...................... -- -- 3,268 --
Gain on sale of corporate trust business ................... -- -- 2,417 --
Letters of credit fees ..................................... 1,869 1,741 5,037 4,721
Gain on sales of branches/deposits and other selected assets 983 (3) 3,917 2,787
Earnings (loss) of unconsolidated subsidiaries ............. (630) 540 (760) 2,432
Other income ............................................... 13,786 14,006 47,253 51,355
-------- --------- --------- --------
TOTAL OTHER NONINTEREST INCOME ..................... $ 35,703 $ 32,658 $ 125,337 $125,472
======== ========= ========= ========
OTHER NONINTEREST EXPENSE
Other contracted services .................................. $ 7,814 $ 9,039 $ 24,229 $ 21,227
Communications ............................................. 8,752 6,426 25,112 18,396
Stationery and supplies .................................... 7,624 6,699 23,804 20,303
Postage and carrier ........................................ 8,294 6,925 23,437 21,396
Advertising and promotion .................................. 7,228 5,121 20,708 17,514
Amortization of mortgage servicing rights .................. 4,269 5,801 14,857 15,923
Other personnel services ................................... 4,286 4,035 13,198 10,528
Merchant credit card charges ............................... 5,536 3,539 12,584 9,592
Legal fees ................................................. 3,331 3,066 9,576 8,155
Travel ..................................................... 2,924 2,459 8,528 7,117
Miscellaneous charge-offs .................................. 2,472 3,248 7,620 9,151
Consultant fees ............................................ 2,068 4,140 6,396 8,321
Taxes other than income .................................... 1,270 2,854 5,248 9,732
FDIC insurance ............................................. 1,508 770 4,544 1,260
Other real estate expense .................................. 679 2,539 3,578 7,482
Federal Reserve fees ....................................... 1,433 1,068 4,035 3,101
Brokerage and clearing fees on trading activities .......... 1,164 1,141 3,749 4,009
Accounting and audit fees .................................. 994 1,366 3,526 3,847
Dues, subscriptions, and contributions ..................... 1,106 1,675 3,365 5,665
Insurance .................................................. 749 1,318 1,981 3,484
Provision for losses on FHA/VA foreclosure claims .......... 633 824 883 3,546
Merger-related expenses .................................... -- 85,336 -- 103,676
Other expense .............................................. 9,882 21,318 36,908 47,722
-------- --------- --------- --------
TOTAL OTHER NONINTEREST EXPENSE .................... $ 84,016 $ 180,707 $ 257,866 $361,147
======== ========= ========= ========
</TABLE>
NOTE 7. INCOME TAXES
Applicable income taxes for the nine months ended September 30, 1999,
were $159.3 million, resulting in an effective tax rate of 33.75%. Applicable
income taxes for the same period in 1998 were $120.8 million, resulting in an
effective tax rate of 37.89%. The decrease in the effective rate in 1999, as
compared to 1998, is due primarily to the change in the mix of taxable and
nontaxable revenues and the decrease in the amount of nondeductible
merger-related expenses. The tax expense (benefit) applicable to investment
securities gains and losses for the three and nine months ended September 30,
1999 was ($.5) million and $.8 million, respectively, which compares to $.6
million and ($5.9) million, respectively, for the same periods in 1998.
At September 30, 1999, the Corporation had a net deferred tax asset of
$250.9 million compared to $160.6 million at December 31, 1998. The net
deferred tax asset includes a deferred tax asset (liability) related to the net
unrealized gain (loss) on available for sale securities of $44.5 million and
($35.9) million at those dates, respectively. Management continues to believe
that, based upon historical earnings, normal operations will continue to
generate sufficient taxable income to realize the portion of the deferred tax
asset that is dependent upon the generation of future taxable income.
10
<PAGE> 11
NOTE 8. BORROWINGS
SHORT-TERM BORROWINGS
Short-term borrowings include federal funds purchased and securities sold
under agreements to repurchase, FHLB advances, and other short-term borrowings.
Federal funds purchased arise from the Corporation's market activity with its
correspondent banks and borrowing to meet liquidity needs and generally mature
in one business day. Securities sold under agreements to repurchase are secured
by U. S. Government and agency securities.
Short-term borrowings are summarized as follows:
<TABLE>
<CAPTION>
SEPTEMBER 30,
------------------------- DECEMBER 31,
1999 1998 1998
---------- ---------- ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Balances at quarter end:
Federal funds purchased and securities sold under agreements to repurchase ... $2,045,586 $1,826,996 $1,647,249
FHLB advances ................................................................ 2,000,000 15,000 --
Other short-term borrowings .................................................. 489 13,953 790
---------- ---------- ----------
Total short-term borrowings ........................................ $4,046,075 $1,855,949 $1,648,039
========== ========== ==========
Federal funds purchased and securities sold under agreements to repurchase
Daily average balance ...................................................... $1,951,404 $1,433,903 $1,454,025
Weighted average interest rate ............................................. 4.52% 5.09% 5.17%
</TABLE>
SHORT- AND MEDIUM-TERM SENIOR NOTES
The Corporation's principal subsidiary, UPB, has a $5 billion senior and
subordinated bank note program to supplement UPB's funding sources. Under the
program UPB may from time to time issue senior bank notes having maturities
ranging from 30 days to one year from their respective issue dates (Short-Term
Senior Notes), senior bank notes having maturities of more than one year to 30
years from their respective dates of issue (Medium-Term Senior Notes), and
subordinated bank notes with maturities from 5 years to 30 years from their
respective dates of issue (Subordinated Notes). At September 30, 1999 and
December 31, 1998, UPB had no Short-Term Senior Notes or Subordinated Notes
outstanding under this program. A summary of the Medium-Term Senior Notes
follows.
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1999 1998
------------- -------------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Balances at period end ... $75,000 $105,000
Variable-rate notes ...... -- --
Fixed-rate notes ......... 75,000 105,000
Range of maturities ...... 10/99 - 10/01 8/99 - 10/01
</TABLE>
FEDERAL HOME LOAN BANK ADVANCES
Certain of the Corporation's banking and thrift subsidiaries had
outstanding advances (original maturities greater than one year) from the FHLB
under Blanket Agreements for Advances and Security Agreements (the Agreements).
The Agreements enable these subsidiaries to borrow funds from the FHLB to fund
mortgage loan programs and to satisfy certain other funding needs. The value of
the mortgage-backed securities and mortgage loans pledged under the Agreements
must be maintained at not less than 115% and 150%, respectively, of the
advances outstanding. At September 30, 1999, the Corporation had an adequate
amount of mortgage-backed securities and loans to satisfy the collateral
requirements. A summary of the advances is as follows.
<TABLE>
<CAPTION>
SEPTEMBER 30,
--------------------------------- DECEMBER 31,
1999 1998 1998
------------- ------------- -------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Balance at period end ..... $ 203,402 $ 617,638 $ 279,992
Range of interest rates ... 3.25% - 6.85% 3.25% - 7.95% 3.25% - 8.36%
Range of maturities ....... 2000-2015 1998 - 2015 1999 - 2015
</TABLE>
11
<PAGE> 12
OTHER LONG-TERM DEBT
The Corporation's other long-term debt is summarized as follows.
Reference is made to Note 9 to the consolidated financial statements in the
1998 Annual Report for additional information regarding these borrowings.
<TABLE>
<CAPTION>
SEPTEMBER 30,
------------------------ DECEMBER 31,
1999 1998 1998
-------- ---------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Corporation-Obligated Mandatorily Redeemable Capital
Pass-through Securities of Subsidiary Trust holding solely a
Corporation-Guaranteed Related Subordinated Note (Trust
Preferred Securities) ....................................... $199,035 $ 199,000 $ 199,009
Variable-rate asset-based certificates ....................... 175,000 275,000 275,000
6 3/4% Subordinated Notes due 2005 ........................... 99,640 99,581 99,595
6.25% Subordinated Notes due 2003 ............................ 74,787 74,735 74,748
6.5% Putable/Callable Subordinated Notes due 2018 ............ 301,577 301,763 301,716
Revolving loan ............................................... -- 75,000 74,500
Subordinated notes of acquired entities due 1998 and 1999 ... -- 6,848 4,896
Other long-term debt ......................................... 4,500 24,601 24,276
-------- ---------- ----------
TOTAL OTHER LONG-TERM DEBT ......................... $854,539 $1,056,528 $1,053,740
======== ========== ==========
</TABLE>
NOTE 9. SHAREHOLDERS' EQUITY
PREFERRED STOCK
The Corporation's outstanding preferred stock, all of which is
convertible into shares of the Corporation's common stock, is summarized as
follows:
<TABLE>
<CAPTION>
SEPTEMBER 30,
------------------- DECEMBER 31,
1999 1998 1998
------- ------- ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Preferred stock, without par value, 10,000,000 shares authorized
Series F Preferred Stock
300,000 shares authorized, none issued (1) ............................... $ -- $ N/A $ N/A
Series E, 8% Cumulative, Convertible,
Preferred Stock (stated at liquidation value of $25 per share),
868,700 shares issued and outstanding (980,046 at September 30, 1998 and
934,128 at December 31, 1998) .......................................... 21,718 24,501 23,353
------- ------- -------
TOTAL PREFERRED STOCK .............................................. $21,718 $24,501 $23,353
======= ======= =======
</TABLE>
- ------------
(1) At September 30, 1998 and December 31, 1998, the Corporation had
authorized but unissued shares of Series A Preferred Stock related to a
Shareholder Rights Plan. That plan expired January 19, 1999 and was
replaced by a new Shareholder Rights Plan, which relates to a new Series
F Preferred Stock. See Note 10 to the consolidated financial statements
in the 1998 Annual Report.
DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
On July 16, 1999, the Corporation increased the authorized shares for the
Dividend Reinvestment and Stock Purchase Plan by 2,000,000 shares.
1998 STOCK INCENTIVE PLAN FOR OFFICERS AND EMPLOYEES
In October 1999, an additional 1.5 million shares were authorized for
issuance and registered under this plan.
STOCK REPURCHASE PLAN
On August 9, 1999, the Corporation's Board of Directors authorized the
purchase of up to 5% of the Corporation's common stock or approximately 7.1
million shares. The purchases will take place over the next 18 to 24 months
either in the open market or in privately negotiated transactions. Through
September 30, 1999, the Corporation had purchased 1.2 million shares
(approximately 1.9 million shares purchased through October 31, 1999).
12
<PAGE> 13
NOTE 10. EARNINGS PER SHARE
The calculation of net earnings per share is summarized as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------------------ -----------------------------
1999 1998 1999 1998
------------ ------------ ------------ ------------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
BASIC
Net earnings .................................. $ 109,534 $ 14,150 $ 312,648 $ 198,015
Less preferred dividends .................... 433 503 1,337 1,604
------------ ------------ ------------ ------------
Net earnings applicable to common shares ...... $ 109,101 $ 13,647 $ 311,311 $ 196,411
============ ============ ============ ============
Average common shares outstanding ............. 142,556,840 140,738,865 142,464,382 138,266,997
============ ============ ============ ============
Net earnings per common share - basic ......... $ .77 $ .10 $ 2.19 $ 1.42
============ ============ ============ ============
DILUTED
Net earnings .................................. $ 109,534 $ 14,150 $ 312,648 $ 198,015
Elimination of interest on convertible debt ... 17 -- 37 864
------------ ------------ ------------ ------------
Net earnings applicable to common shares ...... $ 109,551 $ 14,150 $ 312,685 $ 198,879
============ ============ ============ ============
Average common shares outstanding ............. 142,556,840 140,738,865 142,464,382 138,266,997
Stock option adjustment ....................... 857,419 1,667,446 913,388 1,766,249
Preferred stock adjustment .................... 1,097,234 -- 1,130,449 1,719,003
Effect of other dilutive securities ........... 58,201 -- 172,202 961,733
------------ ------------ ------------ ------------
Average common shares outstanding ............. 144,569,694 142,406,311 144,680,421 142,713,982
============ ============ ============ ============
Net earnings per common share - diluted ....... $ .76 $ .10 $ 2.16 $ 1.39
============ ============ ============ ============
</TABLE>
NOTE 11. LINES OF BUSINESS REPORTING
<TABLE>
<CAPTION>
THREE MONTHS ENDED SEPTEMBER 30, 1999 NINE MONTHS ENDED SEPTEMBER 30, 1999
----------------------------------------------- -----------------------------------------------
OTHER OTHER
OPERATING PARENT CONSOLIDATED OPERATING PARENT CONSOLIDATED
BANKING UNITS COMPANY TOTAL BANKING UNITS COMPANY TOTAL
----------- ---------- -------- ------------ ----------- ---------- -------- ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net interest income ............. $ 317,258 $ 13,263 $ (2,292) $ 328,229 $ 894,252 $ 48,354 $ (7,091) $ 935,515
Provision for losses on loans ... (15,842) (4,523) -- (20,365) (46,350) (8,034) -- (54,384)
Noninterest income (1) .......... 74,306 50,045 (1,028) 123,323 214,471 154,545 (892) 368,124
Noninterest expense ............. (220,309) (44,252) (1,178) (265,739) (658,623) (134,082) (6,021) (798,726)
Other significant items, net .... (501) -- -- (501) 8,980 11,002 1,425 21,407
----------- ---------- -------- ----------- ----------- ---------- -------- -----------
Earnings before taxes (1) ....... $ 154,912 $ 14,533 $ (4,498) $ 164,947 $ 412,730 $ 71,785 $(12,579) $ 471,936
=========== ========== ======== =========== =========== ========== ======== ===========
Average assets .................. $30,377,645 $2,524,234 $217,102 $33,118,981 $29,882,591 $2,711,035 $228,460 $32,822,086
=========== ========== ======== =========== =========== ========== ======== ===========
</TABLE>
<PAGE> 14
<TABLE>
<CAPTION>
THREE MONTHS ENDED SEPTEMBER 30, 1998 NINE MONTHS ENDED SEPTEMBER 30, 1998
----------------------------------------------- -----------------------------------------------
OTHER OTHER
OPERATING PARENT CONSOLIDATED OPERATING PARENT CONSOLIDATED
BANKING UNITS COMPANY TOTAL BANKING UNITS COMPANY TOTAL
----------- ---------- -------- ------------ ----------- ---------- -------- ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net interest income ............. $ 277,490 $ 25,285 $ (58) $ 302,717 $ 834,495 $ 77,471 $ 1,327 $ 913,293
Provision for losses on loans ... (38,772) (12,450) -- (51,222) (89,172) (38,300) -- (127,472)
Noninterest income (1) .......... 74,656 47,611 884 123,151 222,423 132,463 3,379 358,265
Noninterest expense ............. (209,944) (38,772) (2,089) (250,805) (612,098) (112,673) (3,129) (727,900)
Merger-related and other
significant items, net ........ (84,174) -- (7,225) (91,399) (107,812) 19,605 (9,148) (97,355)
----------- ---------- -------- ----------- ----------- ---------- -------- -----------
Earnings before taxes (1) ....... $ 19,256 $ 21,674 $ (8,488) $ 32,442 $ 247,836 $ 78,566 $ (7,571) $ 318,831
=========== ========== ======== =========== =========== ========== ======== ===========
Average assets .................. $27,653,902 $2,932,035 $297,884 $30,883,821 $27,226,836 $3,014,295 $286,196 $30,527,327
=========== ========== ======== =========== =========== ========== ======== ===========
</TABLE>
- ------------
(1) Parent company noninterest income and earnings before taxes are net of
the intercompany dividend eliminations of $185.8 million and $92.9
million for the three months ended September 30, 1999 and 1998,
respectively, and $294.9 million and $140.9 million, respectively, for
the nine months ended September 30, 1999 and 1998.
13
<PAGE> 15
NOTE 12. CONTINGENT LIABILITIES
The Corporation and/or various subsidiaries are parties to certain
pending or threatened civil actions, which are described in Item 3, Part I of
the Corporation's 1998 10-K, in Note 20 to the Corporation's consolidated
financial statements on page 67 of the 1998 Annual Report, and in Note 12 of
the Quarterly Reports on Form 10-Q for the quarterly periods ended March 31,
1999 and June 30, 1999. Various other legal proceedings pending against the
Corporation and/or its subsidiaries have arisen in the ordinary course of
business.
Based upon present information, including evaluations of certain actions
by outside counsel, management believes that neither the Corporation's
financial position, results of operations, nor liquidity will be materially
affected by the ultimate resolution of pending or threatened legal proceedings.
There were no significant developments during the third quarter of 1999 in any
of the pending or threatened actions that affected such opinion.
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following provides a narrative discussion and analysis of significant
changes in the Corporation's results of operations and financial condition.
This discussion should be read in conjunction with the consolidated financial
statements and related financial analysis set forth in the Corporation's 1998
Annual Report, the interim unaudited consolidated financial statements and
notes for the three and nine months ended September 30, 1999 included in Part I
hereof, and the supplemental financial data included in this discussion.
CAUTIONARY STATEMENT ABOUT FORWARD-LOOKING INFORMATION
This discussion contains certain forward-looking statements (as defined
in the Private Securities Litigation Reform Act of 1995). Such statements are
based on management's expectations as well as certain assumptions made by, and
information available to, management. Specifically, this discussion contains
forward-looking statements with respect to the following items:
- effects of projected changes in interest rates
- effects of changes in general economic conditions
- the adequacy of the allowance for losses on loans
- the effect of legal proceedings on the Corporation's
financial condition, results of operations, and liquidity
- estimated charges related to recently completed acquisitions
and estimated cost savings related to the integration of
completed acquisitions and the consolidation of banking
subsidiaries
- Year 2000 issues related to the Corporation and third parties
When used in this discussion, the words "anticipate," "project,"
"expect," "believe," "should" and similar expressions are intended to identify
forward-looking statements.
These forward-looking statements involve significant risks and
uncertainties including changes in general economic and financial market
conditions, changes in banking laws and regulations, the Corporation's ability
to execute its business plans, including its plan to address the Year 2000
issue, and the ability of third parties to address Year 2000 issues. Although
the Corporation believes that the expectations reflected in the forward-looking
statements are reasonable, actual results could differ materially.
14
<PAGE> 16
SELECTED FINANCIAL DATA
The following table presents selected financial highlights for the three-
and nine-month periods ended September 30, 1999 and 1998.
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
----------------------- PERCENTAGE ---------------------- PERCENTAGE
1999 1998 CHANGE 1999 1998 CHANGE
-------- ------- --------- -------- -------- ----------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C>
Net earnings ............................. $109,534 $14,150 674% $312,648 $198,015 58%
Per share
Basic ................................ .77 .10 670 2.19 1.42 54
Diluted .............................. .76 .10 660 2.16 1.39 55
Return on average assets ............... 1.31% .18% 1.27% .87%
Return on average common equity ........ 14.43 1.84 14.01 9.10
Cash earnings ............................ $123,475 $21,199 482 $347,146 $216,904 60
Per share
Basic ................................ .86 .15 473 2.43 1.56 56
Diluted .............................. .85 .15 467 2.40 1.53 57
Cash operating earnings .................. $124,982 $95,525 $334,066 $297,833
Per share
Basic ................................ .87 .68 28 2.34 2.14 9
Diluted .............................. .86 .67 28 2.31 2.09 11
Return on average assets ............... 1.50% 1.23% 1.36% 1.30%
Return on average common equity ........ 16.48 12.83 14.98 13.72
Return on average tangible assets ...... 1.54 1.24 1.39 1.32
Return on average tangible common equity 24.00 14.22 19.75 15.04
Dividends per common share ............... $ .50 $ .50 $ 1.50 $ 1.50
Net interest margin (FTE) ................ 4.49% 4.31% 4.35% 4.45%
Interest rate spread (FTE) ............... 3.84 3.50 3.67 3.65
Expense ratio ............................ 1.53 1.54 1.59 1.53
Efficiency ratio ......................... 54.36 56.10 56.93 54.61
Book value per common share .............. $ 20.67 $ 21.34
Shareholders' equity to total assets ..... 8.90% 9.59%
Leverage ratio ........................... 7.03 9.16
Common share prices
High closing price ..................... $ 49.00 $ 61.94 $ 49.00 $ 67.31
Low closing price ...................... 39.19 40.25 39.19 40.25
Closing price at quarter end ........... 40.75 50.25 40.75 50.25
</TABLE>
- --------------------
Cash earnings = Net earnings adjusted for the after-tax impact of goodwill and
other intangibles amortization
Cash operating earnings = Net earnings adjusted for the after-tax impact of
goodwill and other intangibles amortization, merger-related charges, and other
significant items
Return on average tangible assets = Cash operating earnings divided by average
tangible assets (average total assets minus average goodwill and other
intangibles)
Return on average tangible common equity = Cash earnings minus preferred stock
dividends divided by average common equity (average common equity minus average
goodwill and other intangibles)
Net interest margin = Net interest income (FTE) as a percentage of average
earning assets
Interest rate spread = Difference in the FTE yield on average earning assets
and the rate on average interest-bearing liabilities
Expense ratio = Operating net noninterest expense (noninterest expense minus
noninterest income, excluding significant nonrecurring revenues/expenses,
investment securities gains (losses) and goodwill and other intangibles
amortization) divided by average assets
Efficiency ratio = Operating noninterest expense (excluding significant
nonrecurring expenses and goodwill and other intangibles amortization) divided
by net interest income (FTE) plus noninterest income, excluding significant
nonrecurring revenues and investment securities gains (losses)
FTE = Fully taxable-equivalent basis
15
<PAGE> 17
OPERATING RESULTS - THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1999
The following table presents a summary of the Corporation's operating
results for the three and nine months ended September 30, 1999 and 1998
identifying significant items impacting the results for the periods shown.
UNION PLANTERS CORPORATION
SUMMARY OF CONSOLIDATED RESULTS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------------ ---------------------------
1999 1998 1999 1998
--------- --------- ----------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Interest income .................................................... $ 588,202 $ 583,692 $ 1,708,088 $ 1,744,647
Interest expense ................................................... (259,973) (280,975) (772,573) (831,354)
--------- --------- ----------- -----------
NET INTEREST INCOME ........................................... 328,229 302,717 935,515 913,293
PROVISION FOR LOSSES ON LOANS ...................................... (20,365) (51,222) (54,384) (127,472)
--------- --------- ----------- -----------
NET INTEREST INCOME AFTER PROVISION FOR LOSSES ON LOANS ....... 307,864 251,495 881,131 785,821
NONINTEREST INCOME
Service charges on deposit accounts .............................. 44,273 40,126 125,663 115,636
Mortgage banking revenue ......................................... 23,506 23,763 75,208 67,032
Bank card income ................................................. 7,906 10,706 18,949 31,124
Factoring commissions ............................................ 7,583 8,108 22,014 22,849
Trust service income ............................................. 4,241 6,565 17,955 19,296
Profits and commissions from trading activities .................. 1,094 1,222 2,958 4,653
Other income ..................................................... 34,720 32,661 105,377 97,675
--------- --------- ----------- -----------
Total noninterest income ...................................... 123,323 123,151 368,124 358,265
--------- --------- ----------- -----------
NONINTEREST EXPENSE
Salaries and employee benefits ................................... 123,369 117,626 376,470 347,893
Net occupancy expense ............................................ 23,550 19,173 65,461 55,698
Equipment expense ................................................ 20,024 18,708 59,262 53,135
Goodwill and other intangibles amortization ...................... 15,040 7,622 40,188 20,084
Other expense .................................................... 83,756 87,676 257,345 251,090
--------- --------- ----------- -----------
Total noninterest expense ..................................... 265,739 250,805 798,726 727,900
--------- --------- ----------- -----------
EARNINGS BEFORE MERGER-RELATED CHARGES, OTHER SIGNIFICANT
ITEMS, AND INCOME TAXES ..................................... 165,448 123,841 450,529 416,186
MERGER-RELATED CHARGES AND OTHER SIGNIFICANT ITEMS
Gain on sale of the credit card portfolio ........................ -- -- 3,268 --
Gain on securitization and sale of FHA/VA loans .................. -- -- 5,317 19,605
Gain on sale of corporate trust business ......................... -- -- 2,417 --
Gain on sale of ARM loans ........................................ -- -- 5,041 --
Net gain (loss) on sales of branches and other selected assets ... 983 (3) 3,917 8,187
Investment securities gains (losses) ............................. (1,224) 1,635 1,968 (15,095)
Merger-related expenses .......................................... -- (85,336) -- (103,671)
Charter consolidation and other charges related to ongoing
integration of operations ..................................... -- (7,360) -- (8,055)
Other, net ....................................................... (260) (335) (521) 1,674
--------- --------- ----------- -----------
EARNINGS BEFORE INCOME TAXES .................................. 164,947 32,442 471,936 318,831
Applicable income taxes ............................................ (55,413) (18,292) (159,288) (120,816)
--------- --------- ----------- -----------
NET EARNINGS .................................................. $ 109,534 $ 14,150 $ 312,648 $ 198,015
========= ========= =========== ===========
NET EARNINGS ....................................................... $ 109,534 $ 14,150 $ 312,648 $ 198,015
Goodwill and other intangibles amortization, net of taxes .......... 13,941 7,049 34,498 18,889
--------- --------- ----------- -----------
CASH EARNINGS ................................................ 123,475 21,199 347,146 216,904
Merger-related charges and other significant items, net of taxes ... 1,507 74,326 (13,080) 80,929
--------- --------- ----------- -----------
CASH OPERATING EARNINGS ...................................... $ 124,982 $ 95,525 $ 334,066 $ 297,833
========= ========= =========== ===========
</TABLE>
16
<PAGE> 18
The table which follows presents the contributions to diluted earnings per
common share. A discussion of the operating results follows this table.
UNION PLANTERS CORPORATION
CONTRIBUTIONS TO DILUTED EARNINGS PER COMMON SHARE
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, EPS
---------------------- INCREASE
1999 1998 (DECREASE)
-------- -------- ----------
<S> <C> <C> <C>
Net interest income-FTE ....................................... $ 6.67 $ 6.57 $ .10
Provision for losses on loans ................................. (.38) (.89) .51
-------- -------- ------
Net interest income after provision for losses on loans-FTE ... 6.29 5.68 .61
-------- -------- ------
Noninterest income
Service charges on deposit accounts ......................... .87 .81 .06
Mortgage banking revenue .................................... .52 .47 .05
Bank card income ............................................ .13 .22 (.09)
Factoring commissions ....................................... .15 .16 (.01)
Trust service income ........................................ .12 .14 (.02)
Profits and commissions from trading activities ............. .02 .03 (.01)
Investment securities gains (losses) ........................ .01 (.11) .12
Other income ................................................ .87 .88 (.01)
-------- -------- ------
TOTAL NONINTEREST INCOME ............................ 2.69 2.60 .09
-------- -------- ------
Noninterest expense
Salaries and employee benefits .............................. 2.60 2.44 (.16)
Net occupancy expense ....................................... .45 .39 (.06)
Equipment expense ........................................... .41 .37 (.04)
Goodwill and other intangible amortization .................. .28 .14 (.14)
Other expense ............................................... 1.78 2.53 .75
-------- -------- ------
TOTAL NONINTEREST EXPENSE ........................... 5.52 5.87 .35
-------- -------- ------
EARNINGS BEFORE INCOME TAXES-FTE ..................... 3.46 2.41 1.05
Applicable income taxes-FTE ................................... 1.30 1.02 (.28)
-------- -------- ------
NET EARNINGS ........................................ 2.16 1.39 .77
Less preferred stock dividends ................................ -- -- --
-------- -------- ------
DILUTED EARNINGS PER SHARE .......................... $ 2.16 $ 1.39 $ .77
======== ======== ======
Change in net earnings applicable to diluted earnings
per share using previous year average shares outstanding .... $ .80
Change in average shares outstanding .......................... (.03)
------
Change in net earnings ........................................ $ .77
======
Average diluted shares (in thousands) ......................... 144,680 142,714
======== ========
</TABLE>
17
<PAGE> 19
ACQUISITIONS
The following table presents the balances at date of acquisition for the
acquisitions accounted for as purchases, which were completed after September
30, 1998.
<TABLE>
<CAPTION>
BALANCE AT DATE OF ACQUISITION
-----------------------------------------------------------
INDIANA
BRANCH REPUBLIC OTHER
PURCHASE BANKING CORP. ACQUISITIONS TOTAL
-------- ------------- ------------ -------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C>
Cash and due from banks and
federal funds sold ............. $ 13 $ 376 $ 88 $ 477
Interest-bearing deposits at
financial institutions ......... 745 1 24 770
Available for sale securities .... -- 128 140 268
Loans ............................ 852 961 522 2,335
Allowance for losses on loans .... (15) (21) (8) (44)
Premises and equipment, net ...... 23 52 11 86
Goodwill and other intangibles ... 279 266 81 626
Other assets ..................... 7 30 18 55
------ ------ ---- ------
Total assets ........... $1,904 $1,793 $876 $4,573
====== ====== ==== ======
Total deposits ................... $1,698 $1,318 $689 $3,705
Short-term borrowings ............ 198 50 9 257
Long-term debt ................... -- -- 5 5
Other liabilities ................ 8 15 10 33
------ ------ ---- ------
Total liabilities ...... $1,904 $1,383 $713 $4,000
====== ====== ==== ======
Purchase price/capital
contribution/
equity ......................... $ -- $ 410 $163 $ 573
====== ====== ==== ======
</TABLE>
EARNINGS OVERVIEW
For the third quarter of 1999, the Corporation reported earnings of
$109.5 million, or $.76 per diluted common share. This compares to net earnings
for the same period in 1998 of $14.2 million, or $.10 per diluted common share.
Net earnings for the second quarter of 1999 were $105.8 million, or $.73 per
diluted common share. Results for the third quarter of 1998 were impacted by
merger-related and other significant charges.
Cash operating earnings for the third quarter of 1999 were $125.0
million, or $.86 per diluted common share compared to $95.5 million, or $.67
per diluted common share for the same period in 1998. This represented a 28%
increase in cash operating earnings per diluted common share. For the second
quarter of 1999, cash operating earnings were $108.0 million, or $.75 per
diluted common share. Cash operating earnings for the third quarter of 1999
represented an annualized return on average assets (ROA) of 1.50% and an
annualized return on average common equity (ROE) of 16.48% which compares to
1.23% and 12.83%, respectively, for the same period in 1998. These ratios were
1.31% and 14.49%, respectively, for the second quarter of 1999.
The increase in net earnings in the third quarter of 1999 compared to the
second quarter of 1999 is attributable primarily to an increase in net interest
income and lower noninterest expenses. Partially offsetting these items was a
decrease in noninterest income and a higher provision for losses on loans. The
"Summary of Consolidated Results" above and the following discussion and
analysis of operating results provides a more complete discussion of the
significant items affecting the Corporation's results.
For the nine months ended September 30, 1999, net earnings were $312.6
million, or $2.16 per diluted common share, compared to $198.0 million, or
$1.39 per diluted common share, for the same period in 1998. Cash operating
earnings for this period in 1999 were $334.1 million, or $2.31 per diluted
common share. This compares to $297.8 million, or $2.09 per diluted common
share for the same period in 1998. Cash operating earnings for the first nine
months of 1999 resulted in a ROA of 1.36% and a ROE of 14.98% compared to 1.30%
and 13.72%, respectively, in 1998.
18
<PAGE> 20
EARNINGS ANALYSIS
NET INTEREST INCOME
Net interest income (FTE) for the third quarter of 1999 was $337.8
million, which compares to $310.4 million for the third quarter of 1998 and
$321.2 million for the second quarter of 1999. For the nine months ended
September 30, 1999, net interest income (FTE) was $964.2 million compared to
$937.8 million for the same period in 1998. Reference is made to the
Corporation's average balance sheet and analysis of volume and rate changes,
which follow this discussion for additional information regarding the changes
in net interest income.
The net interest margin for the third quarter of 1999 was 4.49% which
compares to 4.31% and 4.35% for the third quarter of 1998 and second quarter of
1999, respectively. The interest-rate spread increased to 3.84% for the third
quarter of 1999 from 3.50% for the same period in 1998 and increased from 3.68%
for the second quarter of 1999.
The increases in net interest income have been driven by growth of
earning assets and a decrease in the cost of interest-bearing liabilities. The
rates paid on these liabilities have decreased 61 basis points, from 4.71% for
the third quarter of 1998 to 4.10% for the third quarter of 1999. Emphasis is
continuing to be placed on reducing high cost borrowings of acquired entities
to improve their margins. Additionally, more standard pricing of basic
transaction accounts and standard terms on other depository products
implemented during the first quarter of 1999 helped improve the net interest
margin in the second and third quarters of 1999. Additionally, the investment
portfolio yield has increased due to reinvestments in higher yielding longer
term securities and the disposal of $425 million of lower yielding
mortgage-backed securities of an acquired entity. Average earning assets have
increased from the investment of funds received in the Florida and Indiana
Branch Purchases and the Republic acquisition.
The Florida Branch Purchase refers to the purchase of 24 branches and
assumption of $1.4 billion of deposits liabilities of California Federal Bank
of Florida in September 1998. In the Indiana Branch Purchase, the Corporation
purchased $852 million of loans, acquired 56 branch locations, and assumed $1.7
billion of deposit liabilities of First Chicago NBD Corporation in Indiana in
March 1999. The Republic acquisition was completed in July 1999 and had total
assets of $1.4 billion, total loans of $1.0 billion, and total deposits of $1.3
billion (see Note 2 the unaudited interim consolidated financial statements).
The high level of mortgage loan refinancing in the fourth quarter of 1998
and first quarter of 1999 due to the low interest-rate environment reduced
mortgage loan yields. Downward pressure on loan yields also occurred in 1999
primarily as a result of the fourth quarter of 1998 sale of the Corporation's
credit card portfolio (approximately $440 million of loans in the fourth
quarter of 1998 and approximately $20 million in the first quarter of 1999).
These loans had a weighted average yield of approximately 12%. Also, the first
quarter 1999 securitization and sale of approximately $132 million FHA/VA
loans, with a weighted average yield of 9.7%, impacted loan yields. Yields on
mortgage loans and variable-rate commercial loans increased in the second and
third quarters of 1999 as interest rates have risen (1/2% prime rate increase
in this time period).
19
<PAGE> 21
INTEREST INCOME
The following table presents a breakdown of average earning assets for
the three and nine months ended September 30, 1999 and 1998.
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------ ------------------
1999 1998 1999 1998
----- ----- ----- -----
(DOLLARS IN BILLIONS)
<S> <C> <C> <C> <C>
Average earning assets .................................. $29.9 $28.6 $29.6 $28.2
Comprised of:
Loans ............................................... 72% 72% 71% 73%
Investment securities ............................... 27 26 28 25
Other earning assets ................................ 1 2 1 2
--------------
Fully taxable-equivalent yield on average earning assets 7.94% 8.21% 7.84% 8.40%
</TABLE>
Interest income (FTE) increased $6.5 million for the third quarter of
1999 compared to the same period in 1998. The increase is attributable
primarily to an increase in average earning assets, which resulted in a $26.6
million increase in interest income. This increase was partially offset by a
lower yield on average earning assets, which decreased interest income $20.1
million. The decrease in yield is attributable primarily to the factors
discussed above. Compared to the second quarter of 1999, interest income
increased approximately $22.9 million due to growth of average earning assets
and a higher yield.
For the nine months ended September 30, 1999, interest income decreased
$32.4 million compared to the same period in 1998. The yield on earning assets
decreased from 8.40% in 1998 to 7.84% in 1999. The yield decline resulted in a
$110.9 million decline in interest income. Partially offsetting this decrease
was a $1.4 billion increase in average earning assets, which represented a
$78.5 million increase in interest income. Growth of investment securities
resulted primarily from funds received in the Corporation's Florida and Indiana
Branch Purchases. Additionally, the acquisition of Republic at the beginning of
the third quarter of 1999 contributed to the increase.
INTEREST EXPENSE
The following table presents a breakdown of average interest-bearing
liabilities for the three and nine months ended September 30, 1999 and 1998.
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------ ------------------
1999 1998 1999 1998
----- ----- ----- -----
(DOLLARS IN BILLIONS)
<S> <C> <C> <C> <C>
Average interest-bearing liabilities .................... $25.1 $23.7 $24.8 $23.4
Comprised of:
Deposits ............................................ 83% 84% 85% 84%
Short-term borrowings ............................... 13 7 10 7
FHLB advances and long-term debt .................... 4 9 5 9
--------------
Rate paid on average interest-bearing liabilities ....... 4.10% 4.71% 4.17% 4.75%
</TABLE>
Interest expense decreased $21.0 million in the third quarter of 1999
compared to the same period in 1998. The decrease was due primarily to a
decrease in the rates paid on average interest-bearing liabilities, which
resulted in a decrease of approximately $29.6 million. The average rate paid
for interest-bearing liabilities was 4.10% for the third quarter of 1999
compared to 4.71% for the same period in 1998. This decrease was partially
offset by a $1.5 billion increase in average interest-bearing liabilities,
which increased interest expense approximately $8.6 million. The increase in
average interest-bearing liabilities related primarily to the Florida and
Indiana Branch Purchases in the third quarter of 1998 and first quarter of
1999, respectively and the Republic acquisition in the third quarter of 1999.
Compared to the second quarter of 1999, interest expense increased $6.3 million
in the third quarter of 1999. An increase in average interest-bearing
liabilities accounted for almost all of the increase.
20
<PAGE> 22
For the nine months ended September 30, 1999, interest expense decreased
$58.8 million compared to the same period in 1998. The decrease related
primarily to a decrease in the average rate paid for interest-bearing
liabilities from 4.75% for the first nine months of 1998 to 4.17% in 1999. This
resulted in a reduction in interest expense of $84.3 million. Partially
offsetting this decrease was a $1.4 billion increase in average
interest-bearing liabilities, which increased interest expense $25.5 million.
The growth of interest-bearing liabilities related primarily to the branch
purchases (Florida and Indiana) and to the Republic acquisition.
PROVISION FOR LOSSES ON LOANS
The provision for losses on loans for the third quarter of 1999 was $20.4
million, or .39% of average loans on an annualized basis, compared to $51.2
million, or 1.03% of average loans, for the same period in 1998. The provision
for the third quarter of 1999 compared to a provision of $17.7 million, or .35%
of average loans, in the second quarter of 1999. For the nine months ended
September 30, 1999, the provision for losses on loans was $54.4 million, or
.36% of average loans, compared to $127.5 million, or .87% of average loans,
for the same period in 1998.
The decrease in the provision for losses between 1999 and 1998 for the
above periods was due primarily to the sale of substantially all of the credit
card portfolio, which resulted in a decline in the provision of approximately
$10.5 million ($33.5 million year to date). The remaining decrease was
attributable to lower provisions for losses on loans related to entities
acquired in 1998. The increase compared to the second quarter of 1999 related
primarily to a few isolated problem credits. Reference is made to the
"Allowance for Losses on Loans" discussion for additional information regarding
loan charge-offs and other items impacting the provision for losses on loans.
NONINTEREST INCOME
Noninterest income for the third quarter of 1999 was $123.1 million,
which compared to $124.8 million for the third quarter of 1998 and $140.7
million for the second quarter of 1999. For the nine months ended September 30,
1999, noninterest income increased $19.1 million to $390.1 million compared to
the same period in 1998. The major components of noninterest income are
presented on the consolidated statement of earnings and in Note 6 to the
unaudited interim consolidated financial statements included in Item 1, Part I
of this report.
The following items, which are identified in the "Summary of Consolidated
Results," impacted noninterest income. These transactions are not considered
normal recurring items, although certain of the items do recur periodically.
- The Corporation had an investment securities loss of $1.2 million
for third quarter of 1999 compared to a gain of $1.6 million for the
same period in 1998. For the nine months ended September 30, 1999,
the Corporation had an investment securities gain of $2.0 million
compared to an investment securities loss of $15.1 million for the
same periods in 1998. The loss in 1998 was attributable primarily to
the premium write-down of certain high-coupon mortgage-backed
securities of an acquired entity resulting from the acceleration of
prepayments of the underlying loans.
- Pretax gains on the securitization and sale of FHA/VA loans were
$5.3 million in the first quarter of 1999 (approximately $132
million of loans) and $19.6 million in the second quarter of 1998
(approximately $380 million of loans). These transactions involve
the sale of previously past due FHA and VA guaranteed loans owned
and serviced by UPB. Additional sales may take place in the future
depending on market conditions and delinquency status of the
portfolio.
- During the second quarter of 1999, the Corporation sold
approximately $296 million of ARM loans, which resulted in a pretax
gain of $5.0 million. The sale was made to increase liquidity and
free capital for other needs. The sale is not expected to have a
significant impact on net interest income.
- The Bank's Trust Division sold its corporate trust business
(primarily general obligation bond administration for government
entities) in the second quarter of 1999 resulting in a pretax gain
of $2.4 million. An additional gain of $2.1 million may be
recognized in 2001, contingent upon business retention.
- In the fourth quarter of 1998 the Corporation sold its credit card
business. The majority of the gain was recorded in the fourth
quarter of 1998 but portions of the sale did not occur until 1999,
resulting in pretax gains on the sale of the credit card portfolio
of $2.4 million and $874,000, respectively in the first and second
quarters of 1999.
- Pretax gains (losses) on the sale of branches and other selected
assets were $983,000 and $3.9 million, respectively, for the three
and nine months ended September 30, 1999 compared to ($3,000) and
$8.2 million, respectively for the same periods in 1998. The
Corporation may sell certain branches and related loans and deposits
in the future and may incur additional gains or losses.
21
<PAGE> 23
Excluding the above items, noninterest income was $123.3 million and
$368.1 million for the three and nine months ended September 30, 1999 compared
to $123.2 million and $358.3 million for the same periods in 1998. The changes
in noninterest income for the third quarter of 1999 compared to the same period
in 1998 is attributable primarily to the following items:
- $5.7 million increase in service charges on deposit accounts
and ATM usage fees. The growth is attributable to acquired
entities and increased levels of activity. The Florida and
Indiana Branch Purchases and the purchase acquisitions
increased the number of deposit customers and increased the
transaction volumes.
- $1.3 million increase in annuity sales income
- $1.0 million increase in insurance commissions
- $2.8 million decrease in bank card income due to the sale of
the credit card portfolio. The ongoing income relates to the
Corporation's merchant servicing business.
- $2.3 million decrease in trust service income
- $1.1 million decrease in earnings related to unconsolidated
subsidiaries
- $.3 million decrease in mortgage banking revenues
The changes in noninterest income for the nine months ended September
30, 1999 compared to the same period in 1998 are attributable to the following:
- $13.8 million increase in service charges on deposit accounts
and ATM usage fees due primarily to the reasons discussed
above
- $8.5 million increase in annuity sales income
- $8.2 million increase in mortgage banking revenues
- $2.7 million increase in insurance commissions
- $12.2 million decrease in bank card income due primarily to
the sale of the credit card portfolio
- $3.2 million decrease in earnings related to unconsolidated
subsidiaries
- $2.4 million decrease in profits and commissions from SBA
trading activities and brokerage fee income
- $1.3 million decrease in trust service income
The increase in annuity sales income and insurance commissions is the
result of greater emphasis on increasing this fee income source. The
Corporation currently has over 1,700 licensed annuity sales personnel, 125
property and casualty insurance agents, and 100 life and health insurance
agents. Complementing these efforts is the expansion of the Corporation's
brokerage business. Currently the Corporation has over 425 "Series 6"
registered representatives and 70 "Series 7" registered representatives.
Brokerage fee income was $4.2 million and $13.8 million, respectively for the
three and nine months ended September 30, 1999 and compared to $4.8 million and
$14.5 million, respectively, for the same periods in 1998.
During the first quarter of 1999, mortgage banking revenues increased due
to higher volume levels attributable to the high level of refinancing activity
in the lower interest rate environment. Activity slowed some in the second and
third quarters of 1999 as mortgage interest rates increased. The Corporation is
also expanding its presence by purchasing wholesale mortgage production
offices. These include 11 mortgage banking offices in Houston, Texas; Tampa,
Florida; San Antonio, Texas; and Irvine, Dublin, Campbell, Capitola, Saratoga,
Santa Maria, and Bakersfield, California. In October 1999, the acquisition of a
wholesale mortgage origination unit with a strong presence in Florida, Texas,
and Alabama was completed. These purchases complement existing Union Planters'
mortgage production operations and should provide additional revenues in the
future.
NONINTEREST EXPENSE
Noninterest expense for the third quarter of 1999 decreased $77.8 million
to $266.0 million, which compares to $343.8 million for the third quarter of
1998 and $275.0 million for the second quarter of 1999. The decrease related to
merger-related and other significant charges. The major components of
noninterest expense are detailed on the consolidated statement of earnings and
in Note 6 to the unaudited interim consolidated financial statements included
in Item 1, Part I of this report.
The major items impacting noninterest expense between 1998 and 1999 were
merger-related charges totaling $85.3 million and $103.7 million, respectively
for the three and nine months ended September 30, 1998 which were not incurred
in 1999. Also, charges related to consolidation of the Corporation's banking
charters and charges related to ongoing integration of operations totaling $7.4
million and $8.1 million, respectively, for the same two periods in 1998 were
also not incurred in 1999.
22
<PAGE> 24
Noninterest expenses, before the above items, were $265.7 million and
$798.7 million, respectively, for the three and nine months ended September 30,
1999 compared to $250.8 and $727.9 million, respectively, for the same period
in 1998. The major items impacting noninterest expense for the third quarter of
1999 compared to 1998 are as follows:
- $7.4 million increase in goodwill and other intangibles
amortization related to purchase acquisitions and branch
purchases
- $5.7 million increase in salaries and employee benefits
expense related primarily to acquisitions and branch
purchases
- $5.7 million increase in occupancy and equipment expense
related primarily to acquisitions and branch purchases
- $2.3 million in communications expense due to the expansion
of the Corporation's operations
- $2.1 million increase in advertising and promotion expense
- $2.1 million decrease in consultant fees
- $1.9 million decrease in other real estate expense
The significant items impacting noninterest expense for the nine months
ended September 30, 1999 compared to the same period in 1998 follow:
- $28.6 million increase in salaries and employee benefits
related primarily to acquisitions and branch purchases
- $20.1 million increase in goodwill and other intangibles
amortization related to purchase acquisitions and branch
purchases
- $15.9 million increase in occupancy and equipment expense
related primarily to acquisitions and branch purchases
- $6.7 million increase in communications expense
- $3.5 million increase in stationery and supplies expense
- $3.2 million increase in advertising and promotion expense
- $3.0 million increase in other contracted service expense
- $4.5 million decrease in taxes other than income taxes,
primarily franchise taxes
- $3.9 million decrease in other real estate expense
The largest component of noninterest expense, salaries and employee
benefits, was $123.4 million for the third quarter of 1999 compared to $117.6
million for the same quarter last year and compared to $129.9 million for the
second quarter of 1999. Full-time-equivalent employees at September 30, 1999
were 13,249 compared to 12,217 at September 30, 1998, 13,076 at June 30, 1999
and 12,330 at December 31, 1998. Increases in the number of employees from
acquisitions/branch purchases and from emphasis being placed on expanding the
Corporation's mortgage operations and annuity and insurance sales efforts have
been partially offset by reductions related to consolidation and integration of
operations. Additional reductions are expected in the fourth quarter of 1999.
The Corporation is continuing its efforts to integrate all of its 1998
and 1999 acquisitions and to consolidate the existing operations of all of its
banks. Efforts include consolidation of individual bank data bases,
centralizing "back office" functions, centralizing credit administration
functions, centralizing call centers, standardizing procedures and processes,
and standardizing products and services. The Corporation has completed all the
planned conversions. The centralization of credit administration centers is
continuing and is scheduled to be completed by the end of 1999.
Technology improvements such as integrated customer information solutions
(for example, data warehouse, operational data store and integrated desktop
(branch and call center)), imaging, and Internet delivery are expected to be
completed by the end of 1999. Year 2000 remediation and testing are completed.
The Corporation's Internet delivery system is being developed through a
company, FundsXpress, Inc., in which the Corporation owns approximately a
one-third interest. Currently, Union Planters has approximately 30,000
customers using the system and is working to increase that number through a
marketing campaign that started the first of June. The system will support both
retail and commercial customers and will include the following services:
- Balance inquiry / transfers / transaction history /
statements
- Bill payment services
- Brokerage services (currently piloting this service)
- ATM network delivery (two networks under contract and one in
production)
- Bill presentment (internet and ATM)
- Images of checks and statements
- Submission and approval of loan applications
23
<PAGE> 25
- Other traditional and nontraditional products
Management continues to anticipate additional cost savings related to
integration of acquired entities and consolidation of existing operations.
Additional savings are expected but the total savings are not expected to be
fully implemented until early in 2000. Reference is made to the discussion
under the heading "Acquisitions - Operating Philosophy" on pages 12 and 13 of
the 1998 Annual Report. The technology improvements are expected to help the
organization operate more efficiently.
24
<PAGE> 26
UNION PLANTERS CORPORATION AND SUBSIDIARIES
CONSOLIDATED DAILY AVERAGE BALANCE SHEET AND INTEREST RATES
<TABLE>
<CAPTION>
THREE MONTHS ENDED
SEPTEMBER 30,
----------------------------------------------------------------------------
1999 1998
------------------------------------ --------------------------------------
INTEREST FTE INTEREST FTE
AVERAGE INCOME/ YIELD/ AVERAGE INCOME/ YIELD/
BALANCE EXPENSE RATE BALANCE EXPENSE RATE
------------ --------- ----- ------------ --------- -----
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Interest-bearing deposits at financial $ 85,019 $ 879 4.10% $ 28,518 $ 204 2.84%
institutions.....................................
Federal funds sold and securities purchased
under agreements to resell................... 94,312 1,104 4.64 259,734 3,730 5.70
Trading account assets......................... 231,917 3,834 6.56 250,228 3,964 6.28
Investment securities (1) (2)
Taxable...................................... 6,666,613 105,720 6.29 6,246,353 94,671 6.01
Tax-exempt................................... 1,321,480 25,691 7.71 1,195,011 23,155 7.69
------------ --------- ------------ ---------
Total investment securities............ 7,988,093 131,411 6.53 7,441,364 117,826 6.28
Loans, net of unearned income (1) (3) (4)...... 21,467,801 460,577 8.51 20,586,515 465,607 8.97
------------ --------- ------------ ---------
TOTAL EARNING ASSETS (1) (2) (3) (4)... 29,867,142 597,805 7.94 28,566,359 591,331 8.21
--------- ---------
Cash and due from banks........................ 965,325 867,529
Premises and equipment......................... 624,552 547,072
Allowance for losses on loans.................. (361,829) (347,948)
Goodwill and other intangibles................. 940,256 286,679
Other assets................................... 1,083,535 964,130
------------ ------------
TOTAL ASSETS........................... $ 33,118,981 $ 30,883,821
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Money market accounts.......................... $ 4,502,475 $ 31,514 2.78% $ 3,132,536 $ 31,012 3.93%
Savings deposits............................... 4,618,517 24,348 2.09 4,500,687 24,220 2.14
Certificates of deposit of $100,000 and over... 2,251,806 28,781 5.07 2,849,249 42,677 5.94
Other time deposits............................ 9,434,587 115,567 4.86 9,487,637 127,807 5.34
Short-term borrowings
Federal funds purchased and securities sold
under agreements to repurchase............. 2,040,452 24,261 4.72 1,542,373 19,630 5.05
Other........................................ 1,126,624 15,054 5.30 69,411 732 4.18
Long-term debt
Federal Home Loan Bank advances.............. 204,522 2,682 5.20 933,519 12,703 5.40
Subordinated capital notes................... 477,066 7,783 6.47 478,433 7,722 6.40
Medium-term senior notes..................... 91,304 1,537 6.68 121,304 2,020 6.61
Trust Preferred Securities................... 199,031 4,128 8.23 198,996 4,128 8.23
Other........................................ 197,842 4,318 8.66 364,565 8,324 9.06
------------ --------- ------------ ---------
TOTAL INTEREST-BEARING LIABILITIES..... 25,144,226 259,973 4.10 23,678,710 280,975 4.71
Noninterest-bearing demand deposits............ 4,262,360 3,530,530 --
------------ --------- ------------ ---------
TOTAL SOURCES OF FUNDS................. 29,406,586 259,973 27,209,240 280,975
--------- ---------
Other liabilities.............................. 691,412 710,419
Shareholders' equity
Preferred stock............................. 21,945 26,565
Common equity............................... 2,999,038 2,937,597
------------ ------------
Total shareholders' equity............. 3,020,983 2,964,162
------------ ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY.. $ 33,118,981 $ 30,883,821
============ ============
NET INTEREST INCOME (1).......................... $ 337,832 $ 310,356
========= =========
INTEREST-RATE SPREAD (1)......................... 3.84% 3.50%
NET INTEREST MARGIN (1).......................... 4.49% 4.31%
TAXABLE-EQUIVALENT ADJUSTMENTS:
Loans........................................ $ 1,393 $ 1,269
Securities................................... 8,210 6,370
--------- ---------
TOTAL.................................. $ 9,603 $ 7,639
========= =========
</TABLE>
- ----------------------
(1) Taxable-equivalent yields are calculated assuming a 35% federal income tax
rate.
(2) Yields are calculated on historical cost and exclude the impact of the
unrealized gains (losses) on available for sale
securities.
(3) Includes loan fees in both interest income and the calculation of the
yield on income.
(4) Includes loans on nonaccrual status.
25
<PAGE> 27
UNION PLANTERS CORPORATION AND SUBSIDIARIES
ANALYSIS OF VOLUME AND RATE CHANGES
<TABLE>
<CAPTION>
THREE MONTHS ENDED SEPTEMBER 30,
1999 VERSUS 1998
-----------------------------------------
DUE TO CHANGE IN: (1)
------------------------ TOTAL
AVERAGE AVERAGE INCREASE
VOLUME RATE (DECREASE)
-------- -------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
INTEREST INCOME
Interest-bearing deposits at financial institutions .......... $ 551 $ 124 $ 675
Federal funds sold and securities purchased
under agreements to resell ................................. (2,035) (591) (2,626)
Trading account assets ....................................... (298) 168 (130)
Investment securities (FTE) .................................. 8,877 4,708 13,585
Loans, net of unearned income (FTE) .......................... 19,467 (24,497) (5,030)
-------- -------- --------
TOTAL INTEREST INCOME ................................ 26,562 (20,088) 6,474
-------- -------- --------
INTEREST EXPENSE
Money market accounts ........................................ 11,183 (10,681) 502
Savings deposits ............................................. 627 (499) 128
Certificates of deposit of $100,000 and over ................. (8,177) (5,719) (13,896)
Other time deposits .......................................... (711) (11,529) (12,240)
Short-term borrowings ........................................ 19,313 (360) 18,953
Long-term debt ............................................... (13,633) (816) (14,449)
-------- -------- --------
TOTAL INTEREST EXPENSE ............................... 8,602 (29,604) (21,002)
-------- -------- --------
CHANGE IN NET INTEREST INCOME .................................. $ 17,960 $ 9,516 $ 27,476
======== ======== ========
PERCENTAGE INCREASE IN NET INTEREST INCOME FROM PRIOR PERIOD ... 8.85%
========
</TABLE>
- --------------
(1) The increase or decrease due to the change in the balance sheet mix has
been allocated proportionately to volume and rate change.
26
<PAGE> 28
UNION PLANTERS CORPORATION AND SUBSIDIARIES
CONSOLIDATED DAILY AVERAGE BALANCE SHEET AND INTEREST RATES
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
------------------------------------------------------------------------
1999 1998
---------------------------------- -----------------------------------
INTEREST FTE INTEREST FTE
AVERAGE INCOME/ YIELD/ AVERAGE INCOME/ YIELD/
BALANCE EXPENSE RATE BALANCE EXPENSE RATE
------------ ----------- ------ ------------ ----------- -----
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Interest-bearing deposits at financial institutions... $ 78,904 $ 2,316 3.92% $ 34,403 $ 1,231 4.78%
Federal funds sold and securities
purchased under agreements to resell................ 82,131 2,936 4.78 370,991 15,398 5.55
Trading account assets................................ 242,300 11,363 6.27 203,998 9,787 6.41
Investment securities (1) (2)
Taxable............................................. 6,941,227 319,818 6.16 5,870,966 274,309 6.25
Tax-exempt.......................................... 1,321,441 77,428 7.83 1,071,608 65,751 8.20
------------ ----------- ------------ -----------
Total investment securities................... 8,262,668 397,246 6.43 6,942,574 340,060 6.55
Loans, net of unearned income (1) (3) (4)............. 20,949,727 1,322,882 8.44 20,616,015 1,402,700 9.10
------------ ----------- ------------ -----------
TOTAL EARNING ASSETS (1) (2) (3) (4).......... 29,615,730 1,736,743 7.84 28,167,981 1,769,176 8.40
----------- -----------
Cash and due from banks............................... 1,018,114 921,559
Premises and equipment................................ 591,106 542,312
Allowance for losses on loans......................... (351,376) (336,950)
Goodwill and other intangibles........................ 718,163 252,443
Other assets.......................................... 1,230,349 979,982
------------ ------------
TOTAL ASSETS................................. $ 32,822,086 $ 30,527,327
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Money market accounts................................ $ 4,133,379 $ 94,241 3.05% $ 3,139,526 $ 91,190 3.88%
Savings deposits..................................... 4,818,180 70,413 1.95 4,377,164 72,132 2.20
Certificates of deposit of $100,000 and over......... 2,342,882 92,277 5.27 2,842,473 124,668 5.86
Other time deposits.................................. 9,712,950 362,579 4.99 9,397,339 380,164 5.41
Short-term borrowings
Federal funds purchased and securities sold under
agreements to repurchase......................... 1,951,404 66,002 4.52 1,433,903 54,571 5.09
Other.............................................. 474,220 18,655 5.26 75,832 3,904 6.88
Long-term debt
Federal Home Loan Bank advances.................... 335,014 12,633 5.04 1,063,988 41,521 5.22
Subordinated capital notes......................... 479,200 23,337 6.51 398,862 20,338 6.82
Medium-term senior notes........................... 100,385 5,060 6.74 130,384 6,492 6.66
Trust Preferred Securities......................... 199,022 12,383 8.32 198,987 12,384 8.32
Other.............................................. 253,021 14,993 7.92 345,363 23,990 9.29
------------ ----------- ------------ -----------
TOTAL INTEREST-BEARING LIABILITIES........... 24,799,657 772,573 4.17 23,403,821 831,354 4.75
Noninterest-bearing demand deposits.................. 4,347,165 -- 3,507,533
------------ ----------- ------------ -----------
TOTAL SOURCES OF FUNDS....................... 29,146,822 772,573 26,911,354 831,354
----------- -----------
Other liabilities.................................... 682,362 695,743
Shareholders' equity
Preferred stock................................... 22,609 34,380
Common equity..................................... 2,970,293 2,885,850
------------ ------------
Total shareholders' equity................... 2,992,902 2,920,230
------------ ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY........ $ 32,822,086 $ 30,527,327
============ ============
NET INTEREST INCOME (1)................................ $ 964,170 $ 937,822
=========== ===========
INTEREST-RATE SPREAD (1)............................... 3.67% 3.65%
===== ====
NET INTEREST MARGIN (1)................................ 4.35% 4.45%
===== ====
TAXABLE-EQUIVALENT ADJUSTMENTS:
Loans.............................................. $ 3,801 $ 4,487
Securities......................................... 24,854 20,042
----------- -----------
TOTAL........................................ $ 28,655 $ 24,529
=========== ===========
</TABLE>
- ----------------------
(1) Taxable-equivalent yields are calculated assuming a 35% federal income
tax rate.
(2) Yields are calculated on historical cost and exclude the impact of the
unrealized gains (losses) on available for sale securities.
(3) Includes loan fees in both interest income and the calculation of the
yield on income.
(4) Includes loans on nonaccrual status.
27
<PAGE> 29
UNION PLANTERS CORPORATION AND SUBSIDIARIES
ANALYSIS OF VOLUME AND RATE CHANGES
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30,
1999 VERSUS 1998
---------------------------------------
DUE TO CHANGE IN: (1)
------------------------ TOTAL
AVERAGE AVERAGE INCREASE
VOLUME RATE (DECREASE)
-------- --------- ----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
INTEREST INCOME
Interest-bearing deposits at financial institutions ...................... $ 1,342 $ (257) $ 1,085
Federal funds sold and securities purchased under agreements to resell ... (10,577) (1,885) (12,462)
Trading account assets ................................................... 1,800 (224) 1,576
Investment securities (FTE) .............................................. 63,572 (6,386) 57,186
Loans, net of unearned income (FTE) ...................................... 22,405 (102,223) (79,818)
-------- --------- --------
TOTAL INTEREST INCOME ............................................ 78,542 (110,975) (32,433)
-------- --------- --------
INTEREST EXPENSE
Money market accounts .................................................... 25,171 (22,120) 3,051
Savings deposits ......................................................... 6,880 (8,599) (1,719)
Certificates of deposit of $100,000 and over ............................. (20,497) (11,894) (32,391)
Other time deposits ...................................................... 12,469 (30,054) (17,585)
Short-term borrowings .................................................... 32,458 (6,276) 26,182
Long-term debt ........................................................... (30,942) (5,377) (36,319)
-------- --------- --------
TOTAL INTEREST EXPENSE ........................................... 25,539 (84,320) (58,781)
-------- --------- --------
CHANGE IN NET INTEREST INCOME (FTE) ........................................ $ 53,003 $ (26,655) $ 26,348
======== ========= ========
PERCENTAGE DECREASE IN NET INTEREST INCOME OVER PRIOR PERIOD ............... 2.81%
========
</TABLE>
- ------------
FTE = Fully taxable-equivalent basis
(1) The change due to both rate and volume has been allocated to change due to
volume and change due to rate in proportion to the relationship of the
absolute dollar amounts of the change in each.
FINANCIAL CONDITION
The Corporation's total assets were $33.2 billion at September 30, 1999
compared to $31.6 billion at September 30, 1998 and $31.7 billion at December
31, 1998. Average assets were $33.1 billion for the third quarter of 1999
compared to $30.9 billion for the third quarter of 1998. For the nine months
ended September 30, 1999 average assets totaled $32.8 billion compared to $30.5
billion for the same period in 1998. Banks acquired and the Indiana and Florida
Branch Purchases were the primary reasons for the growth of total assets both
at period end and on average. See the "Acquisitions" section of this discussion
and Note 2 to the unaudited interim consolidated financial statements for
additional information regarding the impact of acquisitions.
INVESTMENT SECURITIES
The Corporation's investment securities portfolio of $7.8 billion at
September 30, 1999 consisted entirely of available for sale securities, which
are carried on the balance sheet at fair value. This compares to investment
securities of $8.2 billion and $8.3 billion at September 30, 1998 and December
31, 1998, respectively. At September 30, 1999 these securities had a net
unrealized pretax loss of $121.3 million compared to net unrealized gains of
$136.4 million and $93.1 million at September 30, 1998, and December 31, 1998,
respectively. The change from a net unrealized gain to a net unrealized loss
resulted primarily from the significant rise in interest rates since the latter
part of 1998. Reference is made to Note 5 to the unaudited interim consolidated
financial statements which provides the composition of the investment portfolio
at September 30, 1999 and December 31, 1998.
U.S. Treasury and U.S. Government agency obligations represented 56.0% of
the investment securities portfolio at September 30, 1999, 71% of which were
Collateralized Mortgage Obligations (CMOs) and mortgage-backed securities
issues. The Corporation has some credit risk in the investment portfolio;
however, management does not consider that risk to be significant and does not
believe that cash flows will be significantly impacted. Reference is made to
the "Net Interest Income" and "Market Risk and Asset/Liability Management"
discussions for information regarding the market-risk in the investment
securities portfolio.
28
<PAGE> 30
The limited credit risk in the investment securities portfolio at
September 30, 1999 consisted of 24.1% of investment grade CMOs, 16.7 % of
municipal obligations, and 3.2% of other stocks and securities (primarily
equity securities and Federal Reserve Bank and Federal Home Loan Bank Stock).
At September 30, 1999, the Corporation had approximately $9.3 million of
structured notes, which constituted less than 1% of the investment securities
portfolio. Structured notes have uncertain cash flows, which are driven by
interest-rate movements and may expose a company to greater market risk than
traditional medium-term notes. All of the Corporation's investments of this
type are U. S. Government agency issues (primarily Federal Home Loan Bank and
Federal National Mortgage Association). The structured notes vary in type but
primarily include step-up bonds and index-amortizing notes.
LOANS
Loans, net of unearned income, at September 30, 1999 were $21.4 billion
compared to $20.3 billion and $20.2 billion at September 30, 1998 and June 30,
1999, respectively. Average loans for the third quarter of 1999 were $21.5
billion compared to $20.6 billion for the third quarter of 1998 and $20.9
billion for the second quarter of 1999. For the nine months ended September 30,
1999, average loans were $20.9 billion compared to $20.6 billion for the same
period in 1998. Note 3 to the unaudited interim consolidated financial
statements included in Part I. Item 1 of this report presents the composition
of the loan portfolio.
Excluding the FHA/VA government-insured/guaranteed loans, acquisitions,
the sale of the credit card portfolio, and other loan sales, average loans for
the third quarter of 1999 compared to the same period in 1998 decreased 1.53%.
A decline in residential mortgage loans due to the high level of refinancing
activity was the primary reason for the decrease. Compared to the second
quarter of 1999, average loans for the third quarter of 1999 increased
approximately $80 million.
ALLOWANCE FOR LOSSES ON LOANS
The Corporation maintains the allowance for losses on loans at a level
which is believed adequate to absorb losses inherent in the loan portfolio. A
formal review is prepared quarterly to assess the risk in the portfolio and to
determine the adequacy of the allowance for losses on loans. The review
includes analyses of certain problem loans, historical loan loss experience,
the level of classified and nonperforming loans, reviews and evaluations of
specific loans, changes in the nature and volume of loans, the results of
regulatory examinations, and current economic conditions and the related impact
on specific borrowers and industry groups. The review is presented to and
approved by senior management and a committee of the Board of Directors.
29
<PAGE> 31
The following table provides a reconciliation of the allowance for losses
on loans (the allowance) at the dates indicated and certain key ratios for the
nine-month periods ended September 30, 1999 and 1998 and for the year ended
December 31, 1998.
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, YEAR ENDED
------------------------------- DECEMBER 31,
1999 1998 1998
------------ ------------ ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
BALANCE AT THE BEGINNING OF PERIOD ............................... $ 321,476 $ 324,474 $ 324,474
LOANS CHARGED OFF
Commercial, financial, and agricultural ........................ 41,245 32,899 65,815
Foreign ........................................................ 207 -- 1,831
Real estate - construction ..................................... 2,413 2,951 3,714
Real estate - mortgage ......................................... 21,281 19,065 28,654
Credit cards and related plans ................................. 3,068 40,629 50,723
Consumer ....................................................... 31,800 30,169 64,435
Direct lease financing ......................................... 390 24 125
------------ ------------ ------------
Total charge-offs ...................................... 100,404 125,737 215,297
------------ ------------ ------------
RECOVERIES ON LOANS PREVIOUSLY CHARGED OFF
Commercial, financial, and agricultural ........................ 17,742 6,844 8,931
Foreign ........................................................ 75 20 20
Real estate - construction ..................................... 388 280 310
Real estate - mortgage ......................................... 6,072 2,839 5,825
Credit cards and related plans ................................. 1,908 3,365 4,113
Consumer ....................................................... 13,909 6,730 9,812
Direct lease financing ......................................... 96 5 5
------------ ------------ ------------
Total recoveries ....................................... 40,190 20,083 29,016
------------ ------------ ------------
Net charge-offs .................................................. (60,214) (105,654) (186,281)
Provision charged to expense ..................................... 54,384 127,472 204,056
Allowance related to the sale of certain loans ................... -- -- (36,693)
Increase due to acquisitions ..................................... 43,075 14,713 15,920
------------ ------------ ------------
BALANCE AT END OF PERIOD ............................... $ 358,721 $ 361,005 $ 321,476
============ ============ ============
Total loans, net of unearned income, at end of period ............ $ 21,365,914 $ 20,317,501 $ 19,576,826
Less: FHA/VA government insured/guaranteed loans ................. 538,398 762,998 759,911
------------ ------------ ------------
LOANS USED TO CALCULATE RATIOS ......................... $ 20,827,516 $ 19,554,503 $ 18,816,915
============ ============ ============
Average total loans, net of unearned income, during period ....... $ 20,949,727 $ 20,616,015 $ 20,498,773
Less: Average FHA/VA government-insured/guaranteed loans ......... 621,243 1,025,467 958,921
------------ ------------ ------------
AVERAGE LOANS USED TO CALCULATE RATIOS ................. $ 20,328,484 $ 19,590,548 $ 19,539,852
============ ============ ============
RATIOS (1):
Allowance at end of period to loans, net of unearned income .... 1.72% 1.85% 1.71%
Charge-offs to average loans, net of unearned income (2) ....... .66 .86 1.10
Recoveries to average loans, net of unearned income (2) ........ .26 .14 .15
Net charge-offs to average loans, net of unearned income (2) ... .40 .72 .95
Provision to average loans, net of unearned income (2) ......... .36 .87 1.04
</TABLE>
- --------------------
(1) Ratio calculations exclude FHA/VA government-insured/guaranteed loans,
since they represent minimal credit risk.
(2) Amounts annualized for September 30, 1999 and 1998.
The allowance at September 30, 1999, was $358.7 million, an increase of
$37.2 million from December 31, 1998, and compared to $361.0 million at
September 30, 1998. The increase from December 31, 1998 relates primarily to
purchase acquisitions, which increased the allowance $43.1 million. Net
charge-offs for the third quarter of 1999 were $23.8 million compared to $69.3
million and $22.2 million for the third quarter of 1998 and the second quarter
of 1999, respectively. The sale of the Corporation's credit card portfolio
reduced net charge-offs approximately $7 million and $36 million, respectively,
for the three and nine months ended September 30, 1999 compared to the same
periods in 1998.
30
<PAGE> 32
NONPERFORMING ASSETS
NONACCRUAL, RESTRUCTURED, AND PAST DUE LOANS AND FORECLOSED PROPERTIES
<TABLE>
<CAPTION>
SEPTEMBER 30,
-------------------- DECEMBER 31,
1999 1998 1998
-------- -------- ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
NONACCRUAL LOANS
Domestic .............................................................................. $146,361 $146,970 $150,378
Foreign ............................................................................... 912 1,276 --
RESTRUCTURED LOANS ...................................................................... 2,147 6,414 5,612
-------- -------- --------
TOTAL NONPERFORMING LOANS ..................................................... 149,420 154,660 155,990
-------- -------- --------
FORECLOSED PROPERTY
Other real estate owned, net .......................................................... 31,756 23,431 23,937
Other foreclosed property ............................................................. 1,429 4,412 2,670
-------- -------- --------
TOTAL FORECLOSED PROPERTIES ................................................... 33,185 27,843 26,607
-------- -------- --------
TOTAL NONPERFORMING ASSETS .................................................... $182,605 $182,503 $182,597
======== ======== ========
LOANS PAST DUE 90 DAYS OR MORE AND STILL ACCRUING INTEREST
Domestic .............................................................................. $ 80,205 $ 57,515 $ 48,626
Foreign ............................................................................... -- -- --
-------- -------- --------
TOTAL LOANS PAST DUE 90 DAYS OR MORE AND STILL ACCRUING INTEREST .............. $ 80,205 $ 57,515 $ 48,626
======== ======== ========
FHA/VA GOVERNMENT-INSURED/GUARANTEED LOANS
Loans past due 90 days or more and still accruing interest ............................ $261,681 $348,954 $355,124
Nonaccrual ............................................................................ 7,750 9,309 9,232
RATIOS (1):
Nonperforming loans as a percentage of loans .......................................... .72% .79% .83%
Nonperforming assets as a percentage of loans plus foreclosed properties .............. .88 .93 .97
Allowance for losses on loans as a percentage of nonperforming loans .................. 240 233 206
Loans past due 90 days or more and still accruing interest as a percentage of loans ... .39 .29 .26
</TABLE>
- --------------------
(1) FHA/VA government-insured/guaranteed loans are excluded from loans in the
ratio calculations.
The breakdown of nonaccrual loans and loans past due 90 days or more and
still accruing interest, both excluding FHA/VA loans, is as follows:
<TABLE>
<CAPTION>
NONACCRUAL LOANS (1) LOANS PAST DUE 90 DAYS OR MORE (1)
---------------------------------------- --------------------------------------
SEPTEMBER 30, JUNE 30, DECEMBER 31, SEPTEMBER 30, JUNE 30, DECEMBER 31,
1999 1999 1998 1999 1999 1998
------------- -------- ------------ ------------- -------- ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
LOAN TYPE
Secured by single family residential ...... $ 24,761 $ 75,953 $ 73,433 $53,525 $ 4,534 $12,991
Secured by nonfarm nonresidential ......... 33,461 33,730 25,242 2,152 1,938 8,193
Other secured real estate ................. 23,379 22,543 17,616 6,744 3,669 5,387
Commercial, financial, and agricultural,
including foreign loans and direct
lease financing ......................... 61,503 59,310 26,831 12,534 11,430 15,041
Credit cards and related plans ............ 68 6 58 117 114 2,044
Other consumer ............................ 4,101 5,207 7,198 5,133 4,173 4,970
-------- -------- -------- ------- ------- -------
TOTAL ............................. $147,273 $196,749 $150,378 $80,205 $25,858 $48,626
======== ======== ======== ======= ======= =======
</TABLE>
- --------------------
(1) See the preceding table for the amount of FHA/VA government-insured
guaranteed/loans on nonaccrual and past due 90 days or more and still
accruing interest.
LOANS OTHER THAN FHA/VA LOANS. As a percentage of loans and foreclosed
properties, nonperforming assets were .88% at September 30, 1999 compared to
.93% at September 30, 1998 and 1.15% at June 30, 1999. The coverage of
nonperforming loans (allowance for losses on loans as a percentage of
nonperforming loans) was 240% at September 30, 1999, which compares to 233% at
September 30, 1998 and 172% at June 30, 1999.
31
<PAGE> 33
During the third quarter of 1999, the Corporation changed its nonaccrual
policy related to certain single family residential loans to conform to
industry practice. (Reference is made to Note 1 to the unaudited interim
consolidated financial statements.) This change reduced nonaccrual loans
approximately $50 million and increased loans past due 90 days or more by a
corresponding amount. The earnings impact of this change was not significant to
the consolidated results. Nonperforming assets and loans past due 90 days or
more as a percentage of loans and foreclosed properties was 1.26% compared to
1.23% at September 30, 1998 and 1.28% at June 30, 1999.
Adjusting for the change in policy, nonaccrual loans and loans past due
90 days or more were level with June 30, 1999. The Republic acquisition added
approximately $8 million in nonaccrual loans during the quarter.
FHA/VA LOANS. FHA/VA government-insured/guaranteed loans (FHA/VA loans)
do not, in management's opinion, have traditional credit risk inherent in the
balance of the loan portfolio and risk of principal loss is considered minimal.
FHA/VA loans past due 90 days or more and still accruing interest totaled
$261.7 million at September 30, 1999 which compared to $349.0 million and
$306.2 million at September 30, 1998 and June 30, 1999, respectively. The
decrease in past due loans relates primarily to a decline in the overall volume
of these loans. At September 30, 1999, September 30, 1998, and June 30, 1999,
$7.8 million, $9.3 million and $7.4 million, respectively, of these loans were
placed on nonaccrual status by management because the contractual payment of
interest by FHA/VA had stopped due to missed filing dates. No loss of principal
is expected from these loans.
In its capacity as servicer of FHA/VA loans, the Corporation is
responsible for foreclosure and the related costs of foreclosure. These costs
are estimated each period based on historical loss experience and are shown as
provisions for losses on FHA/VA foreclosure claims in noninterest expense. At
September 30, 1999 and June 30, 1999, the Corporation had reserves for these
losses of $25.8 million and $26.5 million, respectively.
POTENTIAL PROBLEM ASSETS
Potential problem assets are assets which are generally secured and not
currently considered nonperforming, but where information about possible credit
problems has caused management to have serious doubts as to the ability of the
borrowers to comply in the future with present repayment terms. Historically,
these assets were loans, which became nonperforming. At September 30, 1999, the
Corporation had potential problem assets of $41.4 million, composed of 13
loans, the largest being $13 million. Potential problem assets (all loans) were
$64.3 million (22 loans) and $66.8 million (52 loans), respectively, at June
30, 1999 and December 31, 1998.
DEPOSITS
The Corporation's core deposit base is its most important and stable
funding source and consists of deposits from the communities served by the
Corporation.
<TABLE>
<CAPTION>
AVERAGE DEPOSITS
---------------------------------------------------------------------------
THREE MONTHS ENDED
------------------------------------------- NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
--------------------------- JUNE 30, ----------------------------
1999 1998 1999 1999 1998
------------ ------------ ------------ ------------ ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Demand deposits................................ $ 4,262,360 $ 3,530,530 $ 4,476,077 $ 4,347,165 $ 3,507,533
Money market accounts (1)...................... 4,502,475 3,132,536 4,323,100 4,133,379 3,139,526
Savings deposits (2)........................... 4,618,517 4,500,687 4,793,308 4,818,180 4,377,164
Other time deposits (3)........................ 9,434,587 9,487,637 9,829,513 9,712,950 9,397,339
------------ ------------ ------------ ------------ ------------
Total core deposits.................. 22,817,939 20,651,390 23,421,998 23,011,674 20,421,562
Certificates of deposit of $100,000 and over... 2,251,806 2,849,249 2,286,601 2,342,882 2,842,473
------------ ------------ ------------ ------------ ------------
Total average deposits .............. $ 25,069,745 $ 23,500,639 $ 25,708,599 $ 25,354,556 $ 23,264,035
============ ============ ============ ============ ============
</TABLE>
- --------------------
(1) Includes money market savings accounts and super NOW accounts.
(2) Includes regular and premium savings accounts and NOW accounts.
(3) Includes certificates of deposit under $100,000 and other time deposits.
The above table presents the components of average deposits for the past
several quarters. The acquisitions of Republic and the Florida and Indiana
Branch Purchases added at their respective dates of acquisition $1.3 billion,
$1.4 billion and $1.7 billion, respectively. (See Note 2 to the unaudited
interim consolidated financial statements.) Excluding the impact of the
acquisitions, the Corporation has experienced a decline in total deposits as a
result of not competing as aggressively for public funds (which require
pledging of the
32
<PAGE> 34
Corporation's investment securities portfolio), the competitive market in
general, and increased competition from other investment products, including
the Corporation's annuity sales program and brokerage services.
LIQUIDITY
The Corporation requires liquidity sufficient to meet cash requirements
for deposit withdrawals, to make new loans and satisfy loan commitments, to
take advantage of attractive investment opportunities, and to repay borrowings
at maturity. Deposits, available for sale securities, and money market
investments are the Corporation's primary sources of liquidity. Liquidity is
also achieved through short-term borrowings, borrowings under available lines
of credit, and issuance of securities and debt instruments in the financial
markets. The Corporation has adequate liquidity to meet its operating
requirements.
Parent company liquidity is achieved and maintained by dividends received
from subsidiaries, interest on advances to subsidiaries, and interest on its
available for sale investment securities portfolio. At September 30, 1999, the
parent company had cash and cash equivalents totaling $232 million. Net working
capital (total assets maturing in one year less liabilities maturing in one
year) was $320 million. At October 1, 1999, the Corporation's banking
subsidiaries could have paid dividends totaling $264 million without prior
regulatory approval. The actual amount of dividends that will be paid to the
parent company in the fourth quarter of 1999 will be limited by management to
approximately $192 million due to capital and liquidity requirements of
individual subsidiary financial institutions. Dividends from UPB have been
increased to help fund the Corporation's Share Repurchase Plan (see Note 9 to
the unaudited interim consolidated financial statements).
The payment of additional dividends by the Corporation's subsidiaries
will be dependent on the future earnings and growth of the subsidiaries.
Management believes that the parent company has adequate liquidity to meet its
cash needs, including the payment of its regular shareholders' dividends,
servicing of its debt, and cash needed for acquisitions.
SHAREHOLDERS' EQUITY
The Corporation's total shareholders' equity decreased by $32.1 million
from December 31, 1998 to $3.0 billion at September 30, 1999. The net decrease
related primarily to the net change in the unrealized gain or loss on available
for sale securities and the repurchase of common stock. This change and the
other components impacting shareholders' equity are detailed below:
- $134.0 million decrease in the fair value of available for
sale securities, net of taxes
- $101.3 million decrease due to shares repurchased
- $106.3 million increase due to stock issued for acquisitions,
employee benefit plans, and conversion of debt of an acquired
entity
- $96.9 million increase due to net retained earnings (net
earnings less dividends)
CAPITAL ADEQUACY
The following table presents capital adequacy information for the Corporation:
<TABLE>
<CAPTION>
SEPTEMBER 30,
-------------- DECEMBER 31,
1999 1998 1998
---- ---- ------------
<S> <C> <C> <C>
CAPITAL ADEQUACY DATA
Total shareholders' equity/total assets (at period end) ......... 8.90% 9.59% 9.42%
Average shareholders' equity/average total assets ............... 9.12 9.57 9.54
Tier 1 capital/unweighted average assets (leverage ratio) (1) ... 7.03 9.16 8.86
</TABLE>
- --------------------
(1) Based on period-end capital and quarterly adjusted average assets.
33
<PAGE> 35
The following table presents the Corporation's risk-based capital and
capital adequacy ratios. The Corporation's regulatory capital ratios qualify
the Corporation for the "well-capitalized" regulatory classification.
RISK-BASED CAPITAL
<TABLE>
<CAPTION>
SEPTEMBER 30,
-------------------------- DECEMBER 31,
1999 1998 1998
------------ ------------ ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
TIER 1 CAPITAL
Shareholders' equity ............................................................ $ 2,951,929 $ 3,032,536 $ 2,984,078
Trust Preferred Securities and minority interest in consolidated subsidiaries ... 202,223 208,765 202,197
Less: Goodwill and other intangibles ........................................... (969,347) (360,897) (381,601)
Disallowed deferred tax asset ......................................... (1,147) (1,373) (1,144)
Unrealized (gain) loss on available for sale securities .............. 76,789 (84,935) (57,245)
------------ ------------ ------------
TOTAL TIER 1 CAPITAL .................................................... 2,260,447 2,794,096 2,746,285
TIER 2 CAPITAL
Allowance for losses on loans ................................................... 278,593 259,929 258,173
Qualifying long-term debt ....................................................... 461,047 476,079 461,110
Other adjustments ............................................................... 37 -- 218
------------ ------------ ------------
TOTAL CAPITAL BEFORE DEDUCTIONS ......................................... 3,000,124 3,530,104 3,465,786
Less investment in unconsolidated subsidiaries .................................. (10,678) (10,866) (10,736)
------------ ------------ ------------
TOTAL CAPITAL ........................................................... $ 2,989,446 $ 3,519,238 $ 3,455,050
============ ============ ============
RISK-WEIGHTED ASSETS .............................................................. $ 22,207,344 $ 20,705,047 $ 20,590,574
============ ============ ============
RATIOS AS A PERCENT OF END OF PERIOD RISK-WEIGHTED ASSETS
Tier 1 capital .................................................................. 10.18% 13.49% 13.34%
Total capital ................................................................... 13.46 17.00 16.78
</TABLE>
The Corporation's capital ratios have been impacted by acquisitions,
which utilized some of the Corporation's excess capital capacity. Regulatory
capital ratios are further impacted by goodwill and other intangibles resulting
from these acquisitions which are deducted from capital in calculating
regulatory capital. The repurchase of common shares in connection with
acquisitions and the Corporation's share repurchase plan (see Note 9 to the
unaudited interim consolidated financial statements), reduced total
shareholders' equity and regulatory capital by $101.3 million. The
Corporation's capital ratios still fall within the "well-capitalized"
regulatory capital category.
YEAR 2000 RISK FACTORS
The 1998 Annual Report contains a discussion of the potential problems
that may occur related to the Year 2000, the Corporation's plans to address
Year 2000 problems, and the estimated costs for the Corporation to become Year
2000 compliant. On March 26, 1999, the Corporation announced that Year 2000
testing and certification had been successfully completed on all its "mission
critical" systems. The core processing system for UPB, which drives main bank
functions such as customer account information and loans, was successfully
tested Year 2000 compliant. In addition, the variety of software used to
support other critical functions, including wire transfer, cash management, the
ATM system, direct deposit, and others, were successfully tested as of February
28, 1999. All of the critical phases of the Corporation's plan which were
listed in the Corporation's 1998 Annual Report and Quarterly Report on Form
10-Q for the quarter ended March 31, 1999 have now been completed.
The primary focus of the Corporation's Year 2000 plan in the third
quarter and over the remainder of 1999 will be planning and testing of the
Corporation's Business Resumption Plan in the event of problems related to the
Year 2000. This plan includes having back-up power and telecommunications, and
sufficient resources to deal with possible liquidity demands. Review of the
various components of the plan and outlining responsibilities will be the
primary focus over the next few months. Testing of the plan and constant
updating will be ongoing. Additionally, the Corporation is focusing on employee
and customer education regarding Year 2000. This includes answering questions
regarding the Corporation's preparedness for the Year 2000, conducting Year
2000 simulations with customers, and participating in local Year 2000 groups
and community awareness efforts.
The Corporation has completed all the planned conversions of acquired
entities to the Corporation's systems. One conversion of a small acquired bank
is planned in early 2000. Management does not have any significant conversions
or enhancements to its systems scheduled the remainder of 1999.
34
<PAGE> 36
The Corporation is continuing to monitor the preparedness of its major
customers. The preparedness of customers has been reviewed and the
relationships have been risk rated. As part of the Corporation's normal credit
review process any "High Risk Y2K Credits" are reviewed and if concerns are
identified the loans will be downgraded and appropriate reserves will be
allocated to the loans. All "Medium Risk Y2K Credits" of $2.0 million or more
were reviewed prior to June 30, 1999 and as a result of that review no credit
downgrades were recommended.
The Corporation's total cost of Year 2000 activities is not expected to
exceed $1.5 million (approximately $719,000 has been incurred in 1999). This
cost does not include salaries and employee benefits of employees working on
the Year 2000 project, as these costs are not separately tracked. The
additional costs the Corporation expects to incur over the remainder of 1999
are expected to relate to customer awareness and assurances regarding the Year
2000 and the Corporation's preparedness for the Year 2000. These costs are not
expected to be significant.
The Corporation is continuing to test various aspects of its operating
systems to attempt to prevent any problems related to the Year 2000. These
efforts will continue throughout the rest of 1999. While management believes it
is Year 2000 compliant, there are substantial risks associated with the Year
2000, many of which are outside the Corporation's control. If major loan
customers are not prepared for the Year 2000 or if external parties have major
failures related to the Year 2000 (e.g., shutdown of communications systems,
disruption of electrical services, government services not operating properly,
etc.), any resulting problems could create situations that might have a
material adverse affect on the Corporation's financial condition, liquidity, or
operating results.
The above information constitutes Year 2000 Readiness Disclosure,
pursuant to the Year 2000 Information and Readiness Disclosure Act.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
ASSET LIABILITY AND MARKET RISK MANAGEMENT
The Corporation's assets and liabilities are principally financial in
nature and the resulting earnings thereon, primarily net interest income, are
subject to changes as a result of changes in market interest rates and the mix
of the various assets and liabilities. Interest rates in the financial markets
affect the Corporation's decisions on pricing its assets and liabilities which
impacts net interest income, the Corporation's primary cash flow stream. As a
result, a substantial part of the Corporation's risk management activities is
devoted to managing interest-rate risk. Currently, the Corporation does not
have any significant risks related to foreign exchange, commodities or equity
risk exposure.
INTEREST-RATE RISK. One of the most important aspects of management's
efforts to sustain long-term profitability for the Corporation is the
management of interest-rate risk. Management's goal is to maximize net interest
income within acceptable levels of interest-rate risk and liquidity. To achieve
this goal, a proper balance must be maintained between assets and liabilities
with respect to size, maturity, repricing date, rate of return, and degree of
risk. Reference is made to the "Investment Securities," and "Loans" discussions
in Item 2 above for additional information regarding risks related to these
items.
The Corporation's Funds Management Committee oversees the conduct of
asset/liability management. The Committee meets monthly and reviews the outlook
for the economy and interest rates, the Corporation's balance sheet structure,
and yields on earning assets and rates on interest-bearing liabilities.
The Corporation uses interest-rate sensitivity analysis (GAP analysis) to
monitor the amounts and timing of balances exposed to changes in interest
rates, as shown in the following table. The analysis presented has been made at
a point in time and could change significantly on a daily basis.
In addition to GAP analysis, the Corporation uses a simulation model in
evaluating interest-rate risk. The key assumptions used in simulation analysis
include the following:
- Prepayment speeds on mortgage-related assets
- Cash flows and maturities of all financial instruments
- Changes in volumes and pricing
- Future shape of the yield curve
35
<PAGE> 37
- Money market spreads
- Credit spreads
- Deposit sensitivity
- Management's financial capital plan
These assumptions are inherently uncertain and, as a result, the
simulation cannot precisely estimate net interest income or precisely predict
the impact of higher or lower interest rates on net interest income. Actual
results will differ from simulated results due to timing, magnitude, and
frequency of interest rate changes and changes in market conditions and
management strategies.
At September 30, 1999, the GAP analysis indicated that the Corporation
was liability sensitive with $4.3 billion more liabilities than assets
repricing within one year. This position represents 13% of total assets and is
outside of management's internal policy not to exceed 10% of total assets.
Included in interest-sensitive liabilities within one year are $4.4 billion of
money market and savings deposits for which management has the discretion to
set interest rates based on market rates and competition. Management is
evaluating strategies to reduce the liability sensitive position.
Balance sheet simulation analysis has been conducted at September 30,
1999 to determine the impact on net interest income for the coming twelve
months under several interest-rate scenarios. One such scenario uses rates at
September 30, 1999, and holds the rates and volumes constant for simulation.
When this position is subjected to immediate and parallel shifts in interest
rates ("rate shocks") of 200 basis points rising and 200 basis points falling,
the annual impact on the Corporation's net interest income is a negative $85
million and a positive $60 million pretax, respectively. These scenarios are
well within the Corporation's policy of limiting the projected impact on net
interest income from "rate shocks" to less than 5% of shareholders' equity.
Another simulation uses management's conclusions as to a "most likely" scenario
of interest rates rising 25 basis points over the next three months and
remaining level over the remainder of the twelve month period resulting in no
significant impact on net interest income from the constant rate/volume
projection.
36
<PAGE> 38
UNION PLANTERS CORPORATION AND SUBSIDIARIES
RATE SENSITIVITY ANALYSIS AT SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
INTEREST-SENSITIVE WITHIN (1) (7)
------------------------------------------------------------------------------------------
0-90 91-180 181-365 1-3 3-5 5-15 OVER 15 NONINTEREST-
DAYS DAYS DAYS YEARS YEARS YEARS YEARS BEARING TOTAL
-------- ------- ------- ------- ------ ------ ------- ------------ -------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Loans and leases (2) (3) (4) ..... $ 6,941 $ 1,865 $ 2,992 $ 5,801 $2,583 $ 621 $ 44 $ 552 $21,399
Investment securities (5) (6) .... 510 205 401 1,584 1,760 3,184 323 (122) 7,845
Other earning assets ............. 657 -- -- -- -- -- -- -- 657
Other assets ..................... -- -- -- -- -- -- -- 3,253 3,253
-------- ------- ------- ------- ------ ------ ------ ------- -------
Total Assets ................. $ 8,108 $ 2,070 $ 3,393 $ 7,385 $4,343 $3,805 $ 367 $ 3,683 $33,154
======== ======= ======= ======= ====== ====== ====== ======= =======
SOURCES OF FUNDS
Money market deposits (7) (8) .... $ 1,549 $ -- $ 1,549 $ 1,863 $ -- $ -- $ -- $ -- $ 4,961
Savings deposits ................. 1,310 -- -- 1,310 -- 1,350 -- -- 3,970
Other time deposits .............. 2,624 2,248 2,432 1,477 262 42 3 -- 9,088
Certificates of deposit of
$100,000 and over ............... 755 512 562 319 39 3 -- -- 2,190
Short-term borrowings ............ 4,044 1 1 -- -- -- -- -- 4,046
Short- and medium-term
bank notes ...................... 15 -- -- 60 -- -- -- -- 75
Federal Home Loan Bank
advances ........................ 100 100 -- 2 -- 1 -- -- 203
Other long-term debt ............. 1 1 26 52 175 299 301 -- 855
Noninterest-bearing deposits ..... -- -- -- -- -- -- 4,182 4,182
Other liabilities ................ -- -- -- -- -- 632 632
Shareholders' equity ............. -- -- -- -- -- -- -- 2,952 2,952
-------- ------- ------- ------- ------ ------ ------ ------- -------
Total sources of funds ....... $ 10,398 $ 2,862 $ 4,570 $ 5,083 $ 476 $1,695 $ 304 $ 7,766 $33,154
======== ======= ======= ======= ====== ====== ====== ======= =======
Interest-rate sensitivity gap ..... $ (2,290) $ (792) $(1,177) $ 2,302 $3,867 $2,110 $ 63 $(4,083) --
Cumulative interest-rate
Sensitivity gap (8) .............. (2,290) (3,082) (4,259) (1,957) 1,910 4,020 4,083 -- --
Cumulative gap as a
percentage of total assets (8) ... (7)% (9)% (13)% (6)% 6% 12% 12% --% --%
</TABLE>
- --------------------
Management has made the following assumptions in presenting the above analysis:
(1) Assets and liabilities are generally scheduled according to their
earliest repricing dates regardless of their contractual maturities.
(2) Nonaccrual loans and accounts receivable-factoring are included in the
noninterest-bearing category.
(3) Fixed-rate mortgage loan maturities are estimated based on the currently
prevailing principal prepayment patterns of comparable mortgage-backed
securities.
(4) Delinquent FHA/VA loans are scheduled based on foreclosure and repayment
patterns.
(5) The scheduled maturities of mortgage-backed securities and CMOs assume
principal prepayment of these securities on dates estimated by
management, relying primarily upon current and consensus interest-rate
forecasts in conjunction with the latest consensus prepayment schedules.
(6) Securities are generally scheduled according to their call dates when
valued at a premium to par.
(7) Money market deposits and savings deposits that have no contractual
maturities are scheduled according to management's best estimate of their
repricing in response to changes in market rates. The impact of changes
in market rates would be expected to vary by product type and market.
(8) If all money market and savings deposits had been included in the 0-90
Days category above, the cumulative gap as a percentage of total assets
would have been negative (25%), (28%), (26%) and (10%) for the 0-90 Days,
91-180 Days, 181-365 Days and 1-3 Years categories, and positive 2%, 12%
and 12%, respectively, for the 3-5 Years, 5-15 Years and over 15 Years
categories at September 30, 1999.
37
<PAGE> 39
PART II -- OTHER INFORMATION
ITEM 1 -- LEGAL PROCEEDINGS
During the period covered by this report, there have been no new material
legal proceedings or material developments in pending material litigation to
which the Corporation or any of its subsidiaries is a party or of which any of
their property is subject, other than ordinary routine litigation incidental to
their business. Information concerning legal proceedings is contained in Item
3, Part I of the Corporation's 1998 Form 10-K , Note 19 to the Corporation's
consolidated financial statements on page 67 of the 1998 Annual Report, Note 12
of the Corporation's Quarterly Reports on Form 10-Q for the quarterly periods
ended March 31, 1999 and June 30, 1999, and Note 12 to the Corporation's
unaudited interim consolidated financial statements included herein under Item
1 of Part I.
ITEM 2 -- CHANGES IN SECURITIES
None.
ITEM 3 -- DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4 -- SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5 -- OTHER INFORMATION
None
ITEM 6 -- EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits:
<TABLE>
<S> <C>
3(b) Amended and Restated Bylaws, as most recently restated
October 21, 1999, of Union Planters Corporation
10(a) Amended and Restated Trust Under Union Planters Corporation
Supplemental Executive Retirement for Certain Executive
Officers
10(b) Union Planters Corporation Supplemental Executive Retirement
Agreement with Benjamin W. Rawlins, Jr.
10(c) Amendment to Union Planters Corporation Supplemental
Executive Retirement Agreement with Benjamin W. Rawlins, Jr.
10(d) Amendment No. 2 to Union Planters Corporation Supplemental
Executive Retirement Agreement with Benjamin W. Rawlins, Jr.
10(e) Union Planters Corporation Supplemental Executive Retirement
Agreement with Jackson W. Moore
10(f) Amendment to Union Planters Corporation Supplemental
Executive Retirement Agreement with Jackson W. Moore
10(g) Amendment No. 2 to Union Planters Corporation Supplemental
Executive Retirement Agreement with Jackson W. Moore
10(h) Union Planters Corporation Supplemental Executive Retirement
Agreement with M. Kirk Walters
10(i) Amendment to Union Planters Corporation Supplemental
Executive Retirement Agreement with M. Kirk Walters
10(j) Amendment No. 2 to Union Planters Corporation Supplemental
Executive Retirement Agreement with M. Kirk Walters
</TABLE>
38
<PAGE> 40
10(k) Union Planters Corporation Supplemental Executive Retirement
Agreement with John W. Parker
10(l) Amendment to Supplemental Executive Retirement Agreement with
John W. Parker
10(m) Trust Under Union Planters Corporation Deferred Compensation
Plan for Executives
10(n) Amendment to Trust Under Union Planters Corporation Deferred
Compensation Plan for Executives
11 Computation of Per Share Earnings (incorporated by reference
to Note 10 to the Corporation's unaudited interim
consolidated financial statements included herein)
27 Financial Data Schedule (for SEC use only)
b) Reports on Form 8-K:
<TABLE>
<CAPTION>
Date of Current Report Subject
---------------------- --------------------------------------------
<S> <C>
1. July 15, 1999 Press release announcing second quarter 1999
net earnings, reported under Item 5
2. October 21, 1999 Press release announcing third quarter 1999
net earnings, reported under Item 5
</TABLE>
39
<PAGE> 41
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
UNION PLANTERS CORPORATION
----------------------------------------------
(Registrant)
Date: November 10, 1999
---------------------------
By: /s/ Benjamin W. Rawlins, Jr.
-------------------------------------------
Benjamin W. Rawlins, Jr.
Chairman and Chief Executive Officer
By: /s/ John W. Parker
-------------------------------------------
John W. Parker
Executive Vice President and
Chief Financial Officer
By: /s/ M. Kirk Walters
-------------------------------------------
M. Kirk Walters
Senior Vice President, Treasurer,
and Chief Accounting Officer
40
<PAGE> 42
UNION PLANTERS CORPORATION
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ---------------------- ------------------------------------------------------------------------------------
<S> <C>
3(b) Amended and Restated Bylaws, as most recently restated October 21, 1999, of
Union Planters Corporation
10(a) Amended and Restated Trust Under Union Planters Supplemental Executive Retirement
for Certain Executive Officers
10(b) Union Planters Corporation Supplemental Executive Retirement Agreement with
Benjamin W. Rawlins, Jr.
10(c) Amendment to Union Planters Corporation Supplemental Executive Retirement
Agreement with Benjamin W. Rawlins, Jr.
10(d) Amendment No. 2 to Union Planters Corporation Supplemental Executive Retirement
Agreement with Benjamin W. Rawlins, Jr.
10(e) Union Planters Corporation Supplemental Executive Retirement Agreement with
Jackson W. Moore
10(f) Amendment to Union Planters Corporation Supplemental Executive Retirement
Agreement with Jackson W. Moore
10(g) Amendment No. 2 to Union Planters Corporation Supplemental Executive Retirement
Agreement with Jackson W. Moore
10(h) Union Planters Corporation Supplemental Executive Retirement Agreement with
M. Kirk Walters
10(i) Amendment to Union Planters Corporation Supplemental Executive Retirement
Agreement with M. Kirk Walters
10(j) Amendment No. 2 to Union Planters Corporation Supplemental Executive Retirement
Agreement with M. Kirk Walters
10(k) Union Planters Corporation Supplemental Executive Retirement Agreement with
John W. Parker
10(l) Amendment to Union Planters Corporation Supplemental Executive Retirement
Agreement with John W. Parker
10(m) Trust Under Union Planters Corporation Deferred Compensation Plan for Executives
10(n) Amendment to Trust Under Union Planters Corporation Deferred Compensation Plan for
Executives
11 Computation of Per Share Earnings (incorporated by reference to Note 10 to the
Corporation's unaudited interim consolidated financial statements included herein)
27 Financial Data Schedule (for SEC use only)
</TABLE>
41
<PAGE> 1
EXHIBIT 3(B)
AMENDED AND RESTATED BYLAWS
<PAGE> 2
AMENDED AND RESTATED BYLAWS
OF
UNION PLANTERS CORPORATION
(A TENNESSEE CORPORATION)
---------------------------------------
ARTICLE I
MEETINGS OF SHAREHOLDERS
SECTION 1. ANNUAL MEETING. The annual meeting of the shareholders of
the Corporation for the election of Directors and for the transaction of such
other business as may come before the meeting shall be held on the third
Thursday in April of each year if not a legal holiday, and if a legal holiday,
at such time as shall be designated by the Board. If the annual meeting shall
not be held on the day hereinabove provided for, the Board shall call a special
meeting for the election of Directors as soon thereafter as convenient, and in
any event not later than 30 days after said day.
SECTION 2. SPECIAL MEETINGS. Special meetings of the shareholders,
unless otherwise prescribed by law, may be called for any purpose or purposes
whatsoever at any time by the Chairman of the Board, the President, the
Secretary or the holders of not less than one tenth (1/10) of the shares
entitled to vote at such meeting.
SECTION 3. NOTICE OF MEETING; WAIVER OF NOTICE. Written or printed
notice stating the place, day, hour, purpose or purposes for which the meeting
is called and the person or persons calling the meeting shall be delivered
either personally or by mail or at the direction of the Chairman of the Board,
the President, the Secretary or other person or persons calling the meeting to
each shareholder entitled to vote at the meeting. If mailed, such notice shall
be delivered not less than ten (10) nor more than sixty (60) days before the
date of the meeting and shall be deemed to be delivered when deposited in the
United States Mail addressed to the shareholder at his address as it appears on
the stock transfer records of the Corporation, with postage thereon prepaid. If
delivered personally, such notice shall be delivered not less than five (5) nor
more than sixty (60) days before the date of the meeting and shall be deemed
delivered when actually received by the shareholder. A certificate of the
Secretary or other person giving the notice, or of a transfer agent of the
Corporation, that the notice required by this Section has been given, in the
absence of fraud, shall be prima facie evidence of the facts therein stated.
Whenever the shareholders of this Corporation are authorized to take any action
after notice or after the lapse of a prescribed period of time, such action may
be taken without notice and without the lapse of such period of time, if at any
time before or after such action is completed each shareholder entitled to such
notice or entitled to participate in the action to be taken, (or his
attorney-in-fact or proxy holder), shall submit a signed waiver of notice of
such requirement. When a meeting is adjourned to another time or place, it
shall not be necessary to give any notice of the adjourned meeting if the time
and place to which the meeting is adjourned are announced at the meeting at
which the adjournment is taken, and at the adjourned meeting any business may
be transacted that might have been transacted on the original date of the
meeting. However, if after the adjournment the Board shall fix a new record
date for the adjourned meeting, a notice of the adjourned meeting shall be
given to each shareholder of record on the new record date entitled to vote at
the meeting.
SECTION 4. PLACE OF MEETINGS. Meetings of the shareholders may be held
at such place, either within or without the State of Tennessee, as may be set
by the Board. If the Board shall fail to set the place of the meeting, the
meeting shall be held at the principal office of the Corporation.
SECTION 5. QUORUM. At all meetings of the shareholders, the holders of
a majority of the shares of stock of the Corporation entitled to vote, present
in person or by proxy, shall constitute a quorum for the transaction of any
business, except as otherwise provided by statute or by the Charter or these
Bylaws. When a quorum is once present to organize a meeting, it is not broken
by the subsequent withdrawal of any of those present. A meeting may be
adjourned despite the absence of a quorum. The absence from any meeting of
holders of the number of shares of stock of the Corporation in excess of a
majority thereof which may be required by the laws of the State of Tennessee or
other applicable statute, the Charter, or these Bylaws, for action upon any
given matter, shall not
<PAGE> 3
prevent action at such meeting upon any other matter or matters which may
properly come before the meeting, if there shall be present thereat, in person
or by proxy, holders of the number of shares of stock of the Corporation
required for action in respect of such other matter or matters.
SECTION 6. ORGANIZATION. At each meeting of the shareholders, the
Chairman of the Board or in his absence or inability to act, the Vice chairman,
or in the absence or inability to act of the Chairman of the Board and the Vice
Chairman, the President, shall act as Chairman of the meeting. The Secretary,
or in his absence or inability to act, any person appointed by the Chairman of
the meeting shall act as Secretary of the meeting and keep the minutes thereof.
SECTION 7. ORDER OF BUSINESS. The order of business at all meetings of
the shareholders shall be as determined by the Chairman of the meeting.
SECTION 8. VOTING; CONSENT OF SHAREHOLDERS IN LIEU OF MEETING. Except
as otherwise provided by statute or the Charter, each holder of record of
shares of stock of the Corporation having voting power shall be entitled at
each meeting of the shareholders to one vote upon each matter submitted to a
vote for every share of such stock standing in his name on the record of
shareholders of the Corporation:
(a) On the date fixed by the Board in accordance with Section 6 of
Article VI hereof as the record date for the determination of the
shareholders who shall be entitled to notice of and to vote at such
meeting; or
(b) If such record date shall not have been fixed for the determination
of shareholders entitled to notice of or entitled to vote at a meeting of
shareholders, the date on which notice of the meeting is mailed shall be
the record date for such determination of shareholders. When a
determination of shareholders entitled to vote at any meeting of
shareholders has been made as provided in this Section, such determination
shall apply to any adjournment thereof.
Every shareholder entitled to vote at a meeting of shareholders or to
express consent or dissent without a meeting may authorize another person or
persons to act for him by proxy. Every proxy must be signed by the shareholder
or his attorney-in-fact. No proxy shall be valid after the expiration of eleven
(11) months from the date thereof unless otherwise provided in the proxy. Every
proxy shall be revocable prior to its use at the pleasure of the shareholder
executing it, except as otherwise provided in this Section or by law. The
authority of the holder of a proxy to act shall not be revoked by the
incompetence or the death of the shareholder who executed the proxy unless,
before the authority is exercised, written notice of an adjudication of such
incompetence or the death of the shareholder who executed the proxy unless,
before the authority is exercised, written notice of an adjudication of such
incompetence or written notice of such death is received by the corporate
officer responsible for maintaining the list of shareholders. A proxy
authorized by a shareholder which is entitled "irrevocable proxy" and which
states it is irrevocable is irrevocable when it is held by one of the following
or a nominee of any of the following:
(a) a pledge;
(b) a person who has purchased or agreed to purchase the shares;
(c) a person designated by or under an agreement comporting with the
law.
Notwithstanding a provision in a proxy stating that it is irrevocable,
the proxy becomes revocable after the pledge is redeemed or such agreement has
terminated.
A proxy may be revoked notwithstanding a provision making it
irrevocable, by a purchaser of shares without knowledge of the existence of the
provision unless the existence of the proxy and its irrevocability is noted
conspicuously on the face or back of the certificate representing such shares.
Whenever shareholders are required or permitted to take any action by
vote, such action may be taken without a meeting on written consent, setting
forth the action so taken, signed by all of the persons or entities entitled to
vote thereon.
If a vote shall be taken on any question, then unless required by
statute, or determined by the Chairman of the meeting to be advisable, any such
vote need not be by ballot. On a vote by ballot, each ballot shall be signed by
the shareholder voting, or by his
<PAGE> 4
proxy, if there be such proxy, and shall state the number of shares voted.
SECTION 9. LIST OF SHAREHOLDERS. A list of shareholders of the
Corporation as of the record date, certified by the officer responsible for the
preparation or by the Corporation's transfer agent, shall be open for
inspection at any meeting of the shareholders. If the right to vote at any
meeting is challenged, the Chairman of the meeting may rely on such list as
evidence of the right of the persons challenged to vote at such meeting.
SECTION 10. INSPECTORS OF ELECTION. The Board may, in advance of any
meeting of shareholders, appoint two or more inspectors to act at such meeting
or at any adjournment thereof. If the inspectors shall not be so appointed, or
if any of them shall fail to appear or act, the Chairman of the meeting may,
and on request of any shareholder entitled to vote thereat shall, appoint
inspectors. Each inspector, before entering upon the discharge of his duties,
shall take and sign an oath faithfully to execute the duties of inspector at
such meeting with strict impartiality and according to the best of his ability.
The inspectors shall determine the number of shares outstanding and the voting
power of each, the number of shares represented at the meeting, the existence
of a quorum, the validity and effect of proxies, and shall receive votes,
ballots or consents, hear and determine all challenges and questions arising in
connection with the right to vote, count and tabulate all votes, ballots or
consents, determine the results, and do such acts as are proper to conduct the
election or vote with fairness to all shareholders. On request of the Chairman
of the meeting or any shareholder entitled to vote thereat, the inspectors
shall make a report in writing of any challenge, request or matter determined
by them, and shall execute a certificate of the facts found by them. No
director or candidate for the office of director shall act as inspector of an
election of directors. Inspectors need not be shareholders of the Corporation.
SECTION 11. EXAMINATION OF CORPORATE RECORDS BY SHAREHOLDERS. Any
person who shall have been a shareholder of record for at least six (6) months
immediately preceding his demand, or who shall be the holder of record of at
least five percent (5%) of all of the outstanding shares of the Corporation,
upon written demand stating the purpose thereof, shall have the right to
examine, in person, or by agent or attorney, at any reasonable time or times,
for any proper purpose, the Corporation's books and records of account and the
minutes and records of meetings of shareholders, the Board and the Committees
of the Board, and to make extracts therefrom. Notwithstanding the foregoing,
upon proof of proper purpose by a shareholder of the Corporation, irrespective
of the period of time during which such shareholder shall have been a
shareholder of record and irrespective of the percentage of outstanding shares
held by him, a court having equity jurisdiction in Shelby County, Tennessee,
may compel the production for examination by such shareholder of the books,
documents and records of the Corporation. By resolution, the Board may adopt
further policies in respect of the right of the shareholders of the Corporation
to inspect said books and records provided that said policies shall not be more
restrictive than the provisions of applicable law at the time.
ARTICLE II
BOARD OF DIRECTORS
SECTION 1. GENERAL POWERS. Except as otherwise provided by law or by
the Charter, the business and affairs of the Corporation shall be managed by
the Board of Directors. The Board may exercise all such authority and powers of
the Corporation and do all such lawful acts and things as are not by statute or
the charter directed or required to be exercised or done by the shareholders.
SECTION 2. NUMBER, CLASSIFICATION, ELECTION, ETC. The number of
directors of the corporation shall not be more than fifteen (15) and, pursuant
to Article NINTH of the Amended and Restated Charter of the Corporation, shall
be divided into three classes as equally as possible and designated Class I,
Class II and Class III as follows:
Class I shall consist of directors elected to hold office for a term
expiring at the 1997 Annual Meeting of Shareholders at which their respective
successors are to be elected for a term expiring at the 2000 Annual Meeting;
and
Class II shall consist of directors elected to hold office for a term
expiring at the 1998 Annual Meeting of Shareholders at which their respective
successors are to be elected for a term expiring at the 2001 Annual Meeting;
and
Class III shall consist of directors elected to hold office for a term
expiring at the 1999 Annual Meeting of Shareholders at which their respective
successors are to be elected for a term expiring at the 2002 Annual Meeting.
<PAGE> 5
Thereafter, each class of directors shall be elected to hold office for
terms expiring on the third annual meeting succeeding the annual meeting at
which they were last elected. The successor to any director who shall have been
elected by the directors to fill a vacancy on the Board shall serve only until
the next annual meeting of shareholders for a term expiring at the same time as
the terms of the other members of the same class. Notwithstanding the
foregoing, any director whose term shall expire at any annual meeting shall
continue to serve until such time as his successor shall have been duly elected
and shall have qualified unless his position on the Board shall have been
abolished by action taken to reduce the size of the Board prior to said
meeting. No amendment of the Bylaws decreasing the number of directors shall
have the effect of shortening the term of any director. All directors shall be
at least 21 years of age. Except as to persons who were Directors on February
21, 1985, mandatory retirement is established at age 70, to be effective at the
regular Annual Shareholders Meeting following the 70th birthday; provided,
however, a Director who is elected to the Board in connection with an
acquisition by the Corporation and is 70 years of age or reaches his 70th
birthday during said initial term as a member of the Board shall serve until
the expiration of the term of the Class in which he was elected. Directors need
not be shareholders of the Corporation nor need they be residents of Tennessee.
Except as otherwise provided by law or by Charter, the directors shall be
elected by written ballot at annual meetings of shareholders. Article NINTH of
the Corporation's Charter, as amended by the shareholders on April 16, 1981,
provides that the number of directors of the Corporation shall be as provided
in these Bylaws from time to time but shall not be less than 7 nor more than 25
and establishes guidelines for increasing the number of directors by amendment
of the Bylaws by two-thirds vote of the directors then in office.
SECTION 3. PLACE OF MEETING. Regular meetings of the Board shall be
held at such place within or without the State of Tennessee as the Board may
from time to time determine. Special meetings may be held at such place in
Shelby County, Tennessee, as may be determined by the person calling said
meeting. In all cases the place of the meeting shall be specified in the notice
thereof.
SECTION 4. ORGANIZATION MEETING. The Board of Directors shall meet for
the purpose of organization, the election of officers, and the transaction of
other business as soon as practicable after each annual meeting of the
shareholders, on the same day and at the same place where such annual meeting
shall be held. Notice of such meeting need not be given if held at said time
and place. Such meeting may be held at any other time or place (within or
without the State of Tennessee) which shall be specified in a notice thereof
given as hereinafter provided in Section 7 of this ARTICLE II.
SECTION 5. REGULAR MEETINGS. Regular meetings of the Board of Directors
of this Corporation shall be held on the third Thursday of each month at 9:30
a.m., in the Fourth Floor Executive Conference Room, Union Planters
Administrative Center, 7130 Goodlett Farms Parkway, Memphis, Tennessee. If any
day fixed for a regular meeting shall be a legal holiday at the place where the
meeting is to be held, then the meeting which otherwise would be held on that
day shall be held at the same hour on the next succeeding business day. Notice
of regular meetings of the Board need not be given except as otherwise required
by law.
SECTION 6. SPECIAL MEETINGS. Special meetings of the Board may be
called by the Chairman of the Board, the President, Executive Vice President,
the Secretary or any three or more Directors of the Corporation.
SECTION 7. NOTICE OF MEETINGS. Notice of each special meeting of the
Board (and of each regular meeting for which notice shall be required) shall be
given by the Secretary or by or under the supervision of the persons calling
the meeting as hereinafter provided in this Section 7, in which notice shall be
stated the time and place of the meeting. Notice of each such meeting shall be
delivered to each director, either personally or by telephone, telegraph, cable
or other method of communication, at least 24 hours before the time at which
such meeting is to be held, or by first-class mail, postage prepaid, addressed
to him at his residence or usual place of business, and deposited in the mail
at least two days before the day on which the meeting is to be held. Notice of
any such meeting need not be given to any director who shall, either before or
after the meeting, submit a signed waiver of notice or who shall attend such
meeting (other than for the express purpose of objecting to the transaction of
any business because the meeting is not lawfully called or convened). Neither
the business to be transacted at, nor the purpose of any regular or special
meeting of the Board, need be specified in the notice or waiver of notice of
such meeting unless otherwise required by law of the Bylaws.
SECTION 8. QUORUM AND MANNER OF ACTING. A majority of the entire Board
shall be present in person at any meeting of the Board in order to constitute a
quorum for the transaction of business at such meeting, and except as otherwise
expressly required by the Charter, these Bylaws or any applicable statute, the
act of a majority of the directors present at any meeting at which a quorum is
present shall be act of the Board. In the absence of a quorum at any meeting of
the Board, a majority of the directors present thereat may adjourn such meeting
to another time and place until a quorum shall be present thereat. Notice of
the time and place of any such adjourned meeting shall be given to the
directors who were not present at the time of the adjournment and, unless such
time and place
<PAGE> 6
were announced at the meeting at which the adjournment was taken, to the other
directors. At any adjourned meeting at which a quorum is present, any business
may be transacted which might have been transacted at the meeting as originally
called.
SECTION 9. ORGANIZATION. At each meeting of the Board, the Chairman of
the Board, or, in his absence or inability to act, the Vice Chairman, or, in
his absence or inability to act, the President, or in his absence or inability
to act, another director chosen by a majority of the directors present shall
act as Chairman of the meeting and preside thereat. The Secretary or, in his
absence or inability to act, any person appointed by the Chairman shall act as
Secretary of the meeting and keep the minutes thereof.
SECTION 10. RESIGNATIONS. Any director of the Corporation may resign at
any time by giving written notice of his resignation to the Board or to the
Chairman of the Board, the Vice Chairman or to the President or to the
Secretary of the Corporation. Any such resignation shall take effect at the
time specified therein or, if the time when it shall become effective shall not
be specified therein, immediately upon its receipt; and, unless otherwise
specified therein, the acceptance of such resignation shall not be necessary to
make it effective.
SECTION 11. VACANCIES. Newly created directorships resulting from an
increase in the number of directors and vacancies occurring in the Board for
any reason, without cause or for cause, may be filled by the shareholders or by
the Board of Directors. If the number of Directors remaining in office
constitutes fewer than a quorum, then the vacancy may be filled by a vote of
the majority of those Directors then in office. No person who has attained the
age of seventy (70) years shall be appointed to fill any vacancy.
SECTION 12. REMOVAL OF DIRECTORS. Any or all of the directors of the
Corporation may be removed with or without cause by vote of the holders of
sixty-six and two-thirds percent (66 2/3%) or more of the outstanding shares of
the capital stock of the Corporation entitled to vote generally in the election
of directors.
SECTION 13. ACTION BY WRITTEN CONSENT. Any action required or permitted
to be taken at any meeting of the Board of Directors may be taken without a
meeting on written consent, setting forth the action so taken, signed by all of
the directors entitled to vote thereon. The instrument of consent shall be
filed with the minutes of the proceedings of the Board of Directors.
ARTICLE III
EXECUTIVE AND OTHER COMMITTEES
SECTION 1. EXECUTIVE COMMITTEE. The Board may, by resolution adopted by
a majority of the entire Board, designate an Executive Committee consisting of
five (5) or more of the directors of the Corporation, which Committee shall
have and may exercise all of the authority of the Board of Directors with
respect to all matters other than:
(a) The adoption, amendment or repeal of any Bylaw;
(b) The submission to shareholders of any action requiring
shareholders' authorization;
(c) The filling of vacancies in the Board of Directors or in any
committee thereof;
(d) The declaration of dividends or making of other corporate
distributions;
(e) The issuance of Common Stock, Preferred Stock or any other
obligation of the Corporation exchangeable for or convertible into its
capital stock of any class or any warrant, right or option to acquire the
same; or
(f) The removal or replacement of any officer elected by the Board or
appointed by the Chairman of the Board or President pursuant to authority
conferred upon them or either of them by the Board.
The Board may designate one or more directors as alternate members of
the Executive Committee, who may replace any absent member or members at any
meeting of such committee. The Executive Committee shall serve at the pleasure
of the Board. The Executive Committee shall keep written minutes of its
proceedings and shall report such minutes to the Board. All such proceedings
shall be subject to revision or alteration by the Board; provided, however, that
third parties shall not be prejudiced by such revision or
<PAGE> 7
alteration.
SECTION 2. OTHER COMMITTEES. The Board may, by resolution adopted by a
majority of the entire Board, designate other Committees, each consisting of
three or more of the directors of the Corporation, which Committees, except as
otherwise proscribed by statute, shall have and may exercise the authority of
the Board to the extent that such authority shall be conferred by resolutions
designating such Committee or Committees adopted by vote of a majority of the
entire Board.
SECTION 3. GENERAL. A majority of any committee may determine its
action and fix the time and place of its meetings, unless the Board shall
otherwise provide. In the absence or disqualification of any member of any
committee, the member or members thereof present at any meeting and not
disqualified from voting, whether or not he or they constitute a quorum, may
unanimously appoint another member of the Board of Directors to act at the
meeting in the place and stead of any such absent or disqualified member. In
determining the existence of a quorum, the Secretary of the Corporation shall
not be counted unless he shall be a director of the Corporation and shall have
been duly appointed as a member of such committee. The Board shall have the
power at any time to change the membership of any committee, to fill all
vacancies, to designate alternate members to replace any absent or disqualified
member, or to dissolve any such committee. Nothing herein shall be deemed to
prevent the Board from appointing one or more committees consisting in whole or
in part of persons who are not directors of the Corporation; provided, however,
that no such committee shall have or may exercise any authority or power of the
Board in the management of the business or affairs of the Corporation.
ARTICLE IV
OFFICERS
SECTION 1. NUMBER AND QUALIFICATIONS. The officers of the Corporation
shall include the Chairman of the Board, the Vice Chairman, the President, one
or more Executive Vice Presidents, one or more Vice Presidents, the Treasurer
and the Secretary. Any two or more offices may be held by the same person,
except the offices of President and Secretary. Such officers shall be elected
by the Board of Directors each year at the organizational meeting held after
the Annual Meeting of shareholders, each to hold office until the meeting of
the Board following the next Annual Meeting of the shareholders and until his
successor shall have been duly elected and shall have qualified, or until his
death, or until he shall have resigned or have been removed in the manner
provided by law and these Bylaws. The Board may from time to time elect, or
delegate to the Chairman of the Board the power to appoint such other officers
(including one or more Assistant Vice Presidents, one or more Assistant
Treasurers, and one or more Assistant Secretaries) and such agents, as may be
necessary or desirable to carry on the business of the Corporation. Such other
officers and agents shall have such duties and shall hold their offices for
such terms as may be prescribed by the Board or by the appointing authority.
SECTION 2. RESIGNATIONS. Any officer of the Corporation may resign at
any time by giving written notice of his resignation to the Board, the Chairman
of the Board, the Vice Chairman, the President or the Secretary. Any such
resignation shall take effect at the time specified therein or, if the time
when it shall become effective shall not be specified therein, immediately upon
its receipt; and, unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective.
SECTION 3. REMOVAL. Any officer or agent of the Corporation may be
removed, either with or without cause, at any time, by the vote of the majority
of the entire Board at any meeting of the Board, or, except in the case of an
officer or agent elected or appointed by the Board, by the Chairman of the
Board or the President.
SECTION 4. VACANCIES. A vacancy in any office, whether arising from
death, resignation, removal or any other cause, may be filled by the Board at
any regular or special meeting for the unexpired portion of the term of the
office which shall be vacant, in the manner prescribed in these Bylaws for the
regular election or appointment to such office.
SECTION 5. THE CHAIRMAN. The Chairman of the Board shall be the Chief
Executive Officer of the Corporation and shall have the general and active
management of the business of the Corporation and shall have general and active
supervision and direction over the business and affairs of the Corporation and
over its several officers, agents and employees, subject, however, to the
control of the Board. He shall, if present, preside at each meeting of the
Shareholders and of the Board. He shall perform all duties incident to the
office of the Chairman of the Board and such other duties as may, from time to
time, be assigned to him by the Board. The Chairman of the Board shall be
authorized to do or cause to be done all things appropriate, including
preparation, execution and filing of any
<PAGE> 8
Registration Statements or other documents to effectuate the registration of
the Corporation's securities (when necessary or desirable) with the Securities
and Exchange Commission pursuant to the Securities Act of 1933 and the
Securities Exchange Act of 1934, as amended, and to effectuate the registration
of the Corporation's securities as may be necessary or desirable pursuant to
the securities laws of any state. The Chairman is also authorized to execute
and cause to be filed on behalf of the Corporation any reports which may be
required by the securities laws or other laws of the United States or of any
state pursuant to any regulations adopted with respect thereto.
SECTION 5(A). THE VICE CHAIRMAN. The Vice Chairman shall have those
duties assigned to him by the Chairman or the Board. In the case of the absence
of the Chairman or his inability to act, the Vice Chairman shall perform the
duties of the Chairman, and when so acting shall have all of the powers of, and
be subject to all the restrictions upon, the Chairman.
SECTION 6. THE PRESIDENT. The President shall have general and active
supervision and direction over the other officers, agents and employees and
shall see that their duties are properly performed, subject, however, to the
control of the Board. Concurrently with the Chairman of the Board, the
President is hereby authorized to do or cause to be done all things
appropriate, including preparation, execution and filing of the registration of
the Corporation's securities (when necessary or desirable) with the Securities
and Exchange Commission pursuant to the Securities Act of 1933 and the
Securities Exchange Act of 1934, as amended, and to effectuate registration of
the Corporation's Securities as may be necessary or desirable pursuant to the
securities laws of any state. The President is also authorized to execute and
cause to be filed on behalf of the Corporation any reports which may be
required by the securities laws or other laws of the United States or any state
or pursuant to any regulations adopted with respect thereto. In the case of the
absence of the Chairman of the Board and the Vice Chairman or their inability
to act, the President shall perform the duties of the Chairman of the Board,
and when so acting, shall have all the powers of, and be subject to all the
restrictions upon, the Chairman of the Board. He shall perform all duties
incident to the office of the Chairman of the Board and such other duties as,
from time to time, may be assigned to him by the Board or these Bylaws.
SECTION 7. EXECUTIVE VICE-PRESIDENT. At the request of the Chairman of
the Board, the Vice Chairman and the President, or in the case of their absence
or inability to act, the Executive Vice-President shall perform the duties of
the Chairman of the Board, the Vice Chairman and the President, and when so
acting shall have all the powers of, and be subject to all the restrictions
upon, the Chairman of the Board, the Vice Chairman and the President. The
Executive Vice-President shall perform all duties incident to the office of
Executive Vice-President and such other duties as from time to time may be
assigned to him by the Board, the Chairman of the Board, the Vice Chairman, the
President, or by these Bylaws. One Executive Vice-President shall be the chief
financial officer of the Corporation.
SECTION 8. VICE PRESIDENTS. Each Vice-President shall perform all such
duties as from time to time may be assigned to him by the Board, the Chairman
of the Board, the Vice Chairman or the President. Vice-Presidents shall have
seniority based upon length of service as Vice-President. Unless the Board
shall otherwise provide, the Senior Vice-President shall perform the duties of
the Executive Vice-President in case of his absence or inability to act, or if
an Executive Vice-President shall not have been appointed by the Board.
SECTION 9. THE TREASURER. The Treasurer shall:
(a) Have charge and custody of, and be responsible for, all the funds
and securities of the Corporation;
(b) Keep full and accurate records of receipts and disbursements in
books belonging to the Corporation.
(c) Cause all monies and other valuables to be deposited to the credit
of the Corporation;
(d) Receive, and give receipts for, monies due and payable to the
Corporation from any source whatsoever;
(e) Disburse the funds of the Corporation and supervise the investment
of its funds as ordered or authorized by the proper vouchers therefor; and
(f) In general, perform all the duties incident to the office of
Treasurer, and such other duties as from time to time may be assigned to
him by the Board, the President, the Vice Chairman or the Chairman of the
Board.
<PAGE> 9
SECTION 10. THE SECRETARY. The Secretary shall:
(a) Keep or cause to be kept in one or more books provided for the
purpose, the minutes of all meetings of the Board, the committees of the
Board and the shareholders;
(b) See that all notices are duly given in accordance with the
provisions of these Bylaws and as required by law;
(c) Be custodian of the records and the seal of the Corporation and
affix and attest the seal to all stock certificates of the Corporation
(unless the seal of the Corporation on such certificates shall be facsimile
as hereinafter provided) and affix and attest the seal to all other
documents to be executed on behalf of the Corporation under its seal;
(d) See that the books, reports, statements, certificates and other
documents and records required by law to be kept and filed are properly
kept and filed;
(e) In general, perform all the duties incident to the office of
Secretary and such other duties as from time to time may be assigned to him
by the Board, the Chairman of the Board, the Vice Chairman or the
President.
SECTION 11. OFFICERS' BOND OR OTHER SECURITY. If required by the Board,
any officer of the Corporation shall give a bond or other security for the
faithful performance of his duties, in such amount and with such surety or
sureties as the Board may require.
ARTICLE V
INDEMNIFICATION
The Corporation does hereby indemnify its directors and officers to the
fullest extent permitted by the laws of the State of Tennessee and by Article
TWELVE of its Charter. The Corporation may indemnify any other person to the
extent permitted by the Charter and by applicable law.
ARTICLE VI
SHARES, ETC.
SECTION 1. STOCK CERTIFICATES. Each shareholder of the Corporation
shall be entitled upon request to have a certificate in such form conforming to
law as shall be approved by the Board, representing the number of shares of
stock of the Corporation owned by him. The certificates representing shares of
stock shall be signed in the name of the Corporation by the Chairman of the
Board or the President or a Vice-President or an Assistant Vice-President and
by the Secretary or an Assistant Secretary or the Treasurer or an Assistant
Treasurer, and sealed with the seal of the Corporation (which seal may be a
facsimile engraved or printed); provided, however, that where any such
certificate is countersigned by a transfer agent and/or a registrar (other than
the Corporation or one of its employees), the signatures of the Chairman of the
Board, President, Vice-President, Secretary, or Treasurer upon such
certificates may be facsimiles, engraved or printed. In case any officer who
shall have signed such certificate shall have ceased to be such officer before
such certificates shall be issued, they may nevertheless be issued by the
Corporation with the same effect as if such officer were still in office at the
date of their issue.
SECTION 2. BOOKS OF ACCOUNT AND RECORD OF SHAREHOLDERS. There shall be
kept correct and complete books and records of account, minutes of the
proceedings of its shareholders, Board of Directors and the committees of the
Board, and of all the business and transactions of the Corporation. There shall
also be kept at the office of its transfer agent or at both, a record
containing the names and addresses of all shareholders of the Corporation, the
number of shares of stock held by each, and the dates when they became the
owners of record thereof. Such shareholder records may be in written form, on
magnetic tape, disk pack storage, or in any other form capable of being
converted into written form within a reasonable time for visual inspection.
SECTION 3. TRANSFERS OF SHARES. Transfers of shares of stock of the
Corporation shall be made on the stock records of the Corporation only upon
authorization by the registered holder thereof, or by his attorney thereunto
authorized by power of attorney
<PAGE> 10
duly executed and filed with the Secretary or with a transfer agent or transfer
clerk, and on surrender of the certificate or certificates for such shares
properly endorsed or accompanied by a duly executed stock transfer power and
the payment of all applicable taxes with respect to the transfer. Except as
otherwise provided by law, the Corporation shall be entitled to recognize the
exclusive right of a person in whose name any share or shares stand on the
record of shareholders as the owner of such shares or shares for all purposes,
including, without limitation, the right to receive dividends or other
distributions, and to vote as such owner, and the Corporation shall not be
bound to recognize any equitable or legal claim to or interest in any such
share or shares on the part of any other person. Whenever any transfers of
shares shall be made for collateral security and not absolutely, and written
notice thereof shall be given to the Secretary or to such transfer agent or
transfer clerk, such facts shall be stated in the entry of the transfer.
SECTION 4. REGULATIONS. The Board may make such additional rules and
regulations, not inconsistent with applicable law, the Charter or these Bylaws,
as it may deem expedient concerning the issue, transfer, and registration of
certificates for shares of stock of the Corporation. It may appoint one or more
transfer agents or one or more transfer clerks and one or more registrars, and
may require all certificates for shares of stock to bear the signature or
signatures of any of them.
SECTION 5. LOST, DESTROYED OR MUTILATED CERTIFICATES. The holder of any
certificate(s) representing shares of the Corporation shall immediately notify
the Corporation of any loss, destruction or mutilation of such certificate(s),
and the corporation may issue a new certificate or certificates of stock in the
place of any certificate theretofore issued by it which the owner thereof shall
allege to have been lost or destroyed or which shall have been mutilated. As a
condition precedent to the issuance of replacement certificates, such owner or
his legal representative as principal shall give to the Corporation a bond with
"open" (unlimited) penalty and in such form and with such surety or sureties as
the person designated by the Board in his absolute discretion shall determine
to be sufficient to indemnify the Corporation against any claim that may be
made against it on account of the alleged loss or destruction of any such
certificate, or the issuance of a new certificate. Any transfer agent which may
be appointed by the Corporation shall be and is hereby designated as the person
to make the determination whether the bond furnished meets the requirements of
this Section 5 unless the Board, by resolution, shall designate some other
person to do so. Anything herein to the contrary notwithstanding, the Board, in
its absolute discretion, may refuse to issue any such new certificate, except
pursuant to legal proceedings under the laws of the State of Tennessee.
SECTION 6. FIXING OF RECORD DATES. The Board may fix, in advance, a
date not less than ten (10) days prior to the date then fixed for the holding
of any meeting of the shareholders as the time as of which the shareholders
entitled to notice of and to vote at such meeting or whose consent or dissent
is required or may be expressed for any purpose, as the case may be, shall be
determined, and all persons who as holders or record of voting stock at such
time, and no others, shall be entitled to such notice of, and to vote at such
meeting or to express their consent or dissent, as the case may be. The Board
may fix in advance a date not more than sixty (60) days and not less than ten
(10) days prior to the date fixed for the payment of any dividends; or for the
making of any distribution; or for the allotment of rights to subscribe for
securities of the Corporation; or for the delivery of evidences of rights or
evidence of interests arising out of any change, conversion or exchange of
capital stock or other securities; as the record date for the determination of
shareholders entitled to receive any such dividend, distribution, allotment,
rights or interests, and in such case only the shareholders of record at the
time so fixed shall be entitled to receive such dividend, distribution,
allotment, rights or interests.
ARTICLE VII
OFFICES
SECTION 1. PRINCIPAL OFFICE. The principal office of the Corporation
shall be at 7130 Goodlett Farms Parkway, Memphis, Tennessee 38018, County of
Shelby, or at such other address as may be fixed by the Board.
SECTION 2. OTHER OFFICES. The Corporation may also have an office or
offices other than said principal office at such place or places, either within
or without the State of Tennessee, as the Board shall from time to time
determine or the business of the Corporation may require.
<PAGE> 11
ARTICLE VIII
FISCAL YEAR
The fiscal year of the Corporation shall be the calendar year.
ARTICLE IX
SEAL
The form of seal of the Corporation shall be determined by the Board of
Directors.
ARTICLE X
MISCELLANEOUS
SECTION 1. REPORTS TO SHAREHOLDERS. The books of account of the
Corporation shall be examined by an independent firm of public accountants at
the close of each annual period of the Corporation and at such other times, if
any, as may be directed by the Board. A report to the shareholders based upon
such examination shall be mailed to each shareholder of the Corporation of
record on such date with respect to each report as may be determined by the
Board, at his address as the same appears on the stock transfer records of the
Corporation. Each such report shall show the assets and liabilities of the
Corporation as of the close of the annual or other period covered by the
report. This report shall also show the Corporation's income and expenses from
the period from the end of the Corporation's preceding fiscal year to the close
of the annual or other period covered by the report, any other information
which may be required by law or regulation lawfully adopted and shall set forth
such other matters as the Board or such independent firm of public accountants
shall determine.
SECTION 2. SELECTION AND TERMINATION OF FIRM OF INDEPENDENT PUBLIC
ACCOUNTANTS. The independent auditors and accountants for the Corporation shall
be selected by the Board at a meeting held within thirty (30) days before the
beginning of the fiscal year and before the Annual Meeting of Shareholders
except that any vacancy occurring between Annual Meetings as a result of the
resignation of the accountants may be filled by the vote of a majority of those
members of the entire Board who are not salaried officers or employees of the
Corporation or of any affiliate of the Corporation. Such selection shall be
submitted for ratification or rejection at the next succeeding Annual Meeting
of Shareholders if such meeting be held, or at the next succeeding Special
Meeting of Shareholders in said fiscal year if the Annual Meeting shall not be
held on the date designated in the Bylaws therefor; provided, however, that a
Special Meeting of Shareholders need not be called to ratify or reject the
selection by the Board of independent auditors and accountants in the above
manner to fill a vacancy occurring between Annual Meeting as a result of the
resignation of said auditors and accountants. The employment of such
accountants shall be conditioned upon the right of the Corporation, either by
the unanimous vote of the entire Board of Directors or by vote of a majority of
the outstanding voting securities at any meeting called for the purpose, to
terminate such employment without penalty. If the selection of accountants
shall be rejected by the Shareholders or their employment be terminated by the
Shareholders in the manner provided above, the vacancy so occurring may be
filled by the vote of a majority of the outstanding voting securities either at
the meeting at which the rejection or termination by the Shareholders occurred
or, if not so filled, at a subsequent meeting which shall be called for the
purpose.
ARTICLE XI
AMENDMENTS
These Bylaws may be amended or repealed, in whole or in part, or new
Bylaws may be adopted, by the Board of Directors at any meeting thereof by vote
of a majority of the entire Board, unless a greater affirmative vote is
required by the Charter; provided, however, that notice of such meeting shall
have been given as provided in these Bylaws, which notice shall mention that
amendment or repeal of the Bylaws, or the adoption of new Bylaws, is one of the
purposes of the meeting. Any such Bylaws adopted by the Board may be amended or
repealed, or new Bylaws may be adopted by vote of the shareholders of the
Corporation, at any annual or special meeting thereof; provided, however, that
notice of such meeting shall have been given as provided in these Bylaws, which
notice shall mention that amendment or repeal of these Bylaws, or the adoption
of new Bylaws, is one of the purposes of such meeting.
<PAGE> 12
ARTICLE XII
SHAREHOLDER PROPOSALS TO BE PRESENTED
AT ANNUAL MEETINGS
Any proposal of a shareholder which is to be presented at any annual
meeting of shareholders shall be sent so as to be received by the Corporation
at its principal offices not less than one hundred twenty (120) days in advance
of the date of the Corporation's proxy statement issued in connection with the
previous year's annual meeting of shareholders.
October 21, 1999
<PAGE> 1
EXHIBIT 10(A)
<PAGE> 2
AMENDED AND RESTATED TRUST UNDER
UNION PLANTERS CORPORATION
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
This Amended and Restated Trust Agreement ("Trust Agreement") made this 31st
day of August, 1999, amends and restates that certain Trust Agreement dated as
of May 9, 1995, as previously amended on May 23, 1995 and April 17, 1997, by
and between Union Planters Corporation as grantor ("Company") and the Union
Planters Bank, N. A. Trust Department as trustee ("Trustee").
WHEREAS, Company adopted the Supplemental Executive Retirement Plan ("Plan"),
effective February 23, 1995, for selected executive officers of Union Planters
Corporation and its subsidiaries ("Participants"), and such Plan and
Participant Agreements under the Plan are included with this Trust Agreement as
Appendix A;
WHEREAS, those terms which are defined in the Plan and accompanying Participant
Agreements shall have the same meaning in this trust Agreement as they do in
the Plan and accompanying Participant Agreements;
WHEREAS, Company has incurred or experts to incur liability under the terms of
such Plan and accompanying Participant Agreements;
WHEREAS, Company wishes to establish a trust (hereinafter called "Trust") and
to contribute to the Trust assets that shall be held therein, subject to the
claims of Company's creditors in the event of Company's insolvency, as herein
defined, until paid to Participants and their Beneficiaries in such manner and
at such times as specified in the Plan;
WHEREAS, it is the intention of the parties that this Trust shall constitute an
unfunded arrangement and shall not affect the status of the Plan as an unfunded
plan maintained for the purpose of providing deferred compensation under Title
I of the Employee Retirement Income Security Act of 1914;
WHEREAS, it is the intention of Company to make Contributions to the Trust to
provide itself with a source of funds to assist it in the meeting of its
liabilities under the Plan;
NOW, THEREFORE, the Company and Trustee do hereby establish this Trust and
agree that this Trust shall be comprised, held and disposed of as follows:
SECTION 1
ESTABLISHMENT OF TRUST
1.1 The Trust hereby established is irrevocable by Company.
1.2 Within sixty (60) days from the establishment of this Trust, Company shall
irrevocably deposit in this Trust the sum necessary to fund the current
aggregate payment obligations to Participants under the Plan. For these
purposes, the current funding obligation shall be that amount required to be
placed on the Company's financial statements in accordance with the provisions
of Generally Accepted Accounting Principles ("GAAP") as a liability for future
payment obligations under the Plan. Furthermore, in its sole discretion,
additional amounts in excess of the current funding obligation may also be
irrevocably deposited by Company in the Trust. Such amounts shall become the
initial principal of the Trust to be held, administered and disposed of by
Trustee as provided in this Trust Agreement.
Although sums deposited by Company into the Trust may be held in the form of
one or more common, pooled investment funds, for administrative accounting
purposes, subaccounts shall be established under the Trust Agreement for each
Participant ("Participant Subaccounts"). The Trustee shall allocate to such
Participant Subaccounts amounts deposited by Company to the Trust under the
provisions of Sections 1.2, 1.3, and 1.4 of the Trust Agreement. Such
allocations, shall be in the sole discretion of the Trustee and Individual
Participant allocations need not necessarily conform to that amount required to
be placed on the Company's financial statements in accordance with the
provisions of Generally Accepted Accounting Principles ("GAAP") as a liability
for future payment
<PAGE> 3
obligations under the Plan. For purposes of such allocations, Trustee may
utilize any information provided by the Company as deemed relevant, including
any annual or more frequent statements prepared by Company for Participants
showing those benefits which have accrued to Participants.
1.3 Company shall, within ninety (90) days following the end of any calendar
year during which a Participant is covered under the Plan, make additional
irrevocable deposits of cash or other property to the Trust to augment the
initial principal under the provisions of Section 1.2 of this Trust. The amount
of such additional deposits shall be equal to the additional amount required to
be placed on the Company's financial statements during such calendar year in
accordance with the provisions of Generally Accepted Accounting Principles
("GAAP") as a liability for future payment obligations under the Plan.
Furthermore, in its sole discretion, amounts in excess of the additional amount
required to be placed on the Company's financial statements may also be
irrevocably deposited by Company in the Trust. Such additional amounts shall be
hold, administered and disposed of by the Trustee as provided in this Trust
Agreement
1.4 Upon a Change of Control or Involuntary Termination of Employment, as
defined in Sections 13.4 and 13.5 of this Trust, Company shall within thirty
(30) days following the Change of Control or Involuntary Termination of
Employment, make an additional Irrevocable contribution to the Trust.
In the case of a Change of Control, the contribution shall be an amount that,
when combined with previous contributions to the Trust under Sections 1.2 and
1.3 of this Trust, is sufficient to pay all participants or Beneficiaries, the
benefits to which each Participant or their Beneficiaries would be entitled
pursuant to the terms of the Plan assuming termination of employment as of the
date on which the Change of Control occurred. In the case of an Involuntary
Termination of Employment, the contribution shall be an amount that, when
combined with previous contributions to the Trust under Sections 1.2 and 1.3 of
this Trust, is sufficient to pay each Participant subject to the Involuntary
Termination of Employment the benefits to which such Participant or his
Beneficiary would be entitled pursuant to the terms of the Plan assuming
termination of employment as of the date on which the Involuntary Termination
of Employment occurred. Furthermore, in its sole discretion, additional amounts
in excess of that required in the case of a Change of Control or Involuntary
Termination of Employment may also be irrevocably deposited by Company in the
Trust.
The amount to be transferred to the Trust upon a Change in Control shall
include the aggregate amount of all future premiums that are scheduled to be
paid following the Change in Control on any insurance policies which insure the
life of a Participant or a Participant and his spouse pursuant to a split
dollar life insurance program maintained by Company. On or about August 31,
1999, Company has delivered to Trustee a schedule of such future payments,
which shall be considered definitive and binding unless and until Company
presents a revised schedule of future premium payments to Trustee, provided,
however, that if such revised schedule reflects a reduced premium for any
policy year, then such schedule shall not be effective unless it is accompanied
by the written consent of the Participant whose life is insured by the policy
with such reduced premium(s). In addition, the amount to be transferred to the
Trust upon a Change in Control shall include an amount equal to two percent
(2%) of the fair market value of assets of the Trust following the Change in
Control transfer described in this paragraph, such amount representing a good
faith estimate of the future cost of administering the Trust to completion.
Additional amounts shall subsequently be contributed by the Company to the
Trust with ninety (90) days following the end of each calendar year to insure
that the Trusts assets are sufficient to pay each Participant or Beneficiary
described above the Benefits to which such Participants or their Beneficiaries
would be entitled pursuant to the terms of the Plan. Such additional amounts
shall be hold, administered and disposed of by the Trustee as provided in this
Trust Agreement.
1.5 The Trust is intended to be a grantor trust, of which Company is the
grantor, within the meaning of Subpart E, Part 1, Subchapter J, Chapter 1,
Subtitle A of the Internal Revenue Code of 1986, as amended, and shall be
construed accordingly.
1.6 The principal of the Trust, and any earnings thereon shall be held separate
and apart from other funds of Company and shall be used exclusively for the
uses and purposes of Participants and general creditors as herein set forth.
Participants and their Beneficiaries shall have no preferred claim on, or any
beneficial ownership interest in, any assets of the Trust. Any rights created
under the Plan and this Trust Agreement shall be mere unsecured contractual
rights of Participants and their Beneficiaries against Company. Any assets held
by the Trust will be subject to the claims of Company's general creditors under
federal and state law in the event of insolvency, as defined in Section 3.1.
<PAGE> 4
SECTION 2
PAYMENTS TO PARTICIPANTS AND THEIR BENEFICIARIES
2.1 Company shall deliver to Trustee a schedule (the "Payment Schedule") that:
(i), indicates the amounts payable with respect of each Participant (and his
Beneficiaries), (ii) provides a formula or other instructions acceptable to
Trustee for determining the amounts so payable, (iii) indicates the form in
which such amounts are to be paid (as provided for or available under the
Plan), and (iv) provides the time of commencement for payment of such amounts.
Except as otherwise provided herein, Trustee shall make payments to the
Participants and their Beneficiaries in accordance with such Payment Schedule.
The Trustee shall make provision for the reporting and withholding of any
federal, state or local taxes that may be required to be withheld with respect
to the payment of benefits pursuant to the terms of the Plan and shall pay
amounts withheld to the appropriate taxing authorities or determine that such
amounts have been reported, withheld and paid by Company.
2.2 The entitlement of a Participant or his Beneficiaries to benefits under the
Plan shall be determined by Company or such party as: it shall designate under
the Plan, and any claim for such benefits shall be considered and reviewed
under the procedures set out in the Plan.
2.3 Company may make payment of benefits directly to Participants or their
Beneficiaries as they become due under the terms of the Plan. Company shall
notify Trustee of its decision to make payment of benefits directly prior to
the time amounts are payable to Participants or their Beneficiaries. In
addition, if the principal of the Trust, and any earnings thereon, are not
sufficient to make payments of benefits in accordance with the terms of the
Plan, Company shall make the balance of each such payment as it falls due.
Trustee shall notify Company where principal and earnings are not sufficient.
SECTION 3
TRUSTEE RESPONSIBILITY REGARDING PAYMENTS TO
TRUST BENEFICIARY WHEN COMPANY IS INSOLVENT
3.1 Trustee shall cease payment of benefits to Participants and their
Beneficiaries if the Company to insolvent. Company shall be considered
"Insolvent" for purposes of this Trust Agreement if; (i) Company is unable to
pay its debts as they become due, (ii) Company is subject to a pending
proceeding as a debtor under the United States Bankruptcy Code, or (iii)
Company is determined to be insolvent or in receivership by its appropriate
bank regulatory agency.
3.2 At all times during the continuance of this Trust, as provided in Section
1.4, the principal and income of the Trust shall be subject to claims of
general creditors of Company under federal and state law as set forth below.
(a) The Board of Directors and the Chief Executive Officer of Company
shall have the duty to inform Trustee in writing of Company's
insolvency. If a person claiming to be a creditor of Company alleges
in writing to Trustee that Company has become insolvent, Trustee shall
determine whether Company is insolvent and, pending such
determination, Trustee shall discontinue payment of benefits to
Participants or their Beneficiaries.
(b) Unless Trustee has actual knowledge of Company's insolvency, or
has received notice from Company or a person claiming to be a creditor
alleging that company is insolvent, Trustee shall have no duty to
inquire whether Company is insolvent. Trustee may in all events rely
on such evidence concerning Company's solvency as may be furnished to
Trustee and that provides Trustee with a reasonable basis for making a
determination concerning Company's solvency.
(c) If at any time Trustee has determined that Company is insolvent
Trustee shall discontinue payments to Participants or their
Beneficiaries and shall hold the assets of the Trust for the benefit
of Company's general creditors. Nothing in this Trust Agreement shall
in any way diminish any rights of Participants or their Beneficiaries
to pursue their rights as general creditors of Company with respect to
benefits due under the Plan or otherwise.
(d) Trustee shall resume the payment of benefits to Participants or
their Beneficiaries in accordance with Section 2 of this Trust
Agreement only after Trustee has determined that Company is not
insolvent (or is no longer insolvent).
<PAGE> 5
3.3 Provided that there are sufficient assets, if Trustee discontinues the
payment of benefits from the Trust pursuant to Section 3.2 and subsequently
resumes such payments, the first payment following such discontinuance shall
include the aggregate amount of all payments due to Participants or their
Beneficiaries under the terms of the Plan for the period of such
discontinuance, less the aggregate amount of any payments made to Participants
or their Beneficiaries by Company in lieu of the payments provided under during
any such period of discontinuance.
SECTION 4
REVERSION OF TRUST ASSETS TO COMPANY
4.1 The Trust is irrevocable and the Company shall have no right or power to
direct Trustee to return to Company or to divert to others any of the Trust
assets before all payment of benefits have been made to Participants and their
Beneficiaries pursuant to the terms of the Plan.
SECTION 5
INVESTMENT AUTHORITY
5.1 The duties, powers, and responsibilities of the Trustee shall be limited as
specifically set forth in this Section 6 and as otherwise limited in this Trust
Agreement. The Trustee's powers shall include the following.
(a) The power to invest only in United States Treasury Department
Securities (or, where necessary) Money Market Mutual Funds which are
invested solely in United States Treasury Department Securities or
obligations), hereinafter referred to as "Treasury Securities." All
rights associated with such Treasury Securities, including any voting
rights and dividend rights, shall be exercised by Trustee or the
person designated by Trustee, and shall in no event be exercisable by
or rest with Participants.
(b) The power to hold, manage and control the Treasury Securities hold
in trust, to invest and reinvest the same, in such manner as the
Trustee deems to be reasonably sound. Company shall establish an
investment policy for Trustee which shall state Trust asset investment
and reinvestment policy. The Trustee shall not be held responsible for
any loss incurred through an investment error made in good faith, but
shall be liable only for the Trustee's willful misconduct.
(c) The power to take and hold title to Treasury Securities in the
name of the Trustee or a nominee of the Trustee without disclosing the
name or existence of the Trust.
(d) The power to give general and special powers of attorney with or
without rights of substitution, and generally to exercise any powers
of an owner with regard to investment of the Trust assets.
(e) The power to sue or defend in any suit or legal proceeding by or
against the Trust. The Trustee shall have full power in the Trustee's
discretion to compound, compromise, and adjust all claims and demand
in favor of or against the Trust upon such terms and conditions as the
Trustee deemed appropriate; provided, however, that the Trustee shall
be indemnified by the Company for all expenses and liabilities in
connection with any such proceedings.
(f) The power to employ such agents, attorneys in fact, experts, and
investment and legal counsel, and to delegate discretionary powers to
or rely upon information or advice furnished by any such persons.
(g) The power to do all acts, whether or not expressly authorized,
which may be necessary or proper for the protection of the assets of
the Trust, or for carrying out any duty imposed hereunder.
5.2 Notwithstanding any powers granted to the Trustee, pursuant to this Trust
Agreement or to applicable law, the Trustee shall not have any power that could
give this Trust the objective of carrying on a lousiness and dividing the gains
therefrom, within the meaning of Section 301.7701-2 of the Procedure and
Administrative Regulations promulgated pursuant to the Internal Revenue Code.
<PAGE> 6
5.3 To the extent that the Trustee is directed by the Company to invest part or
all of the Trust Fund in insurance contracts, the type and amount thereof shall
be specified by the Company. The Trustee shall be under no duty to make inquiry
as to the propriety of the type or amount so specified.
Each insurance contract issued shall provide that the Trustee shall be the
owner thereof with the power to exercise all rights, privileges, options and
elections granted by or permitted under such contract or under the rules of the
insurer. Prior to a Change in Control, the exercise by the Trustee of any
incidents of ownership under any contract shall be subject to the direction of
the Company, and after a Change in Control, such exercise shall be at the
discretion of the Trustee.
The Trustee shall have no power to name a beneficiary of the policy other than
the Trust, to assign the policy (as distinct from conversion of the policy to a
different form) other than to a successor Trustee, or to loan to any person the
proceeds of any borrowing against such policy. Despite the foregoing, the
Trustee may (i) loan to the Company the proceeds of any borrowing against an
insurance policy held in the Trust Fund or (ii) assign all, or any portion, of
a policy to the Company if under other provisions of this Trust Agreement the
Company is entitled to receive assets from the Trust.
SECTION 6
DISPOSITION OF INCOME
6.1 During the term of this Trust, all of the income received by the Trust, not
of expenses and taxes, shall be accumulated and reinvested by the Trustee in
accordance with the terms of the Trust Agreement. Such accumulated and
reinvested income may be used by the Trustee in calculating the Company's
required contributions to the Trust under the provisions of Sections 1.3 and
1.4 of the Trust Agreement.
SECTION 7
ACCOUNTING BY TRUSTEE
7.1 Trustee shall keep accurate and detailed records of all investments,
receipts, disbursements, and all other transactions required to be made,
including such specific records as shall be agreed upon in writing between
Company and Trustee. Within ninety (90) days following the close of each
calendar year and within ninety (90) days after the removal or resignation of
Trustee, Trustee shall deliver to Company a written account of its
administration of the Trust during such year or during the period from the
close of the last preceding year to the date of such removal or resignation,
setting forth all investments, receipts, disbursements and other transactions
effected by it, including a description of all securities and investments
purchased and sold with the cost or not proceeds of sum purchases or sales
(accrued interest paid or receivable being shown separately), and showing all
cash, securities and other property held in the Trust at the end of such year
or as of the date of such removal or resignation, as the case may be.
SECTION 8
RESPONSIBILITY OF TRUSTEE
8.1 Trustee shall act with we care, skill, prudence and diligence under the
circumstances then prevailing that a prudent person acting in like capacity and
familiar with such matters would use in the conduct; of an enterprise of a like
character and with like aims, provided, however, that Trustee shall incur no
liability to any person for any action taken pursuant to a direction, request
or approval given by Company which is contemplated by, and in conformity with,
the terms of the Plan or this Trust and is given in writing by Company. In the
event of a dispute between Company and any third party, including a
Participants or Beneficiary, Trustee may apply to a Court of competent
jurisdiction to resolve the dispute.
8.2 If Trustee undertakes or defends any litigation arising in connection with
this Trust Agreement Company agrees to indemnify Trustee against Trustee's
costs, expenses and liabilities (including, without limitation, attorneys' fees
and expenses) relating thereto and to be primarily liable for such payments. If
Company does not pay such costs, expenses and liabilities in a reasonably
timely manner, Trustee may obtain funds to make payment from the Trust.
<PAGE> 7
8.3 Trustee may consult with legal counsel (who may also be counsel for Company
generally) with respect to any of its duties or obligations hereunder.
8.4 Trustee may hire agents, accountants, attorneys, actuaries, investment
advisors, financial consultants or other professionals to assist it in
performing any of its duties or obligations hereunder.
8.5 Trustee shall have, without exclusion, all powers conferred on Trustees by
applicable law, unless expressly provided otherwise in this Trust Agreement;
provided, however, that if an insurance policy is held as an asset of the
Trust, Trustee shall have no power to name a Beneficiary of the policy other
than the Trust, to assign the policy (as distinct from conversion of the policy
to a different form) other than to a successor Trustee, or to loan to any
person the proceeds of any borrowing against such policy.
SECTION 9
COMPENSATION AND EXPENSES OF TRUSTEE
9.1 Company shall pay any administrative and Trustee's fees and expenses,
SECTION 10
RESIGNATION AND REMOVAL OF TRUSTEE
10.1 Trustee may resign at any time by written notice to Company, which shall
be effective thirty (30) days after receipt of such notice unless Company and
Trustee agree otherwise.
10.2 Trustee may be removed by Company on thirty (30) days notice or upon
shorter notice accepted by Trustee. Notwithstanding the foregoing, for a period
of five (5) years following a Change in Control, Trustee may be removed by
Company only with the prior written consent of a majority of Participants who
are entitled to any future benefit under the Plan at the time of such proposed
removal.
10.3 Upon resignation or removal of Trustee and appointment of a successor
Trustee, all assets shall subsequently be transferred to the successor Trustee.
The transfer shall be completed within sixty (60) days after receipt of notice
of resignation, removal or transfer, unless Company extends the time limit.
10.4 If Trustee resigns or is removed, a successor shall be appointed in
accordance with Section 11 by the effective date of resignation or removal
under Sections 10.1 or 10.2. If no such appointment has been made, Trustee may
apply to a court of competent jurisdiction for appointment of a successor or
for instructions. All expenses of Trustee in connection with the termination
proceeding shall be allowed as administrative expenses of the Trust.
10.5 Notwithstanding anything to the contrary in this Section 10, upon a Change
in Control, (a) Union Planters Bank, N.A. Trust Department shall automatically
cease to serve as Trustee, without the necessity of executing any documentation
or taking further action, and (b) Wachovia Bank, N.A. shall automatically
become the successor Trustee, without the necessity of executing any
documentation other than a written acknowledgement of its acceptance of such
successor trusteeship. If Wachovia Bank, N.A. fails or refuses to execute such
acknowledgement within five (5) business days following the Change in Control,
then the successor trustee shall be appointed by Company, but only with the
prior approval of a majority of Participants eligible to receive benefits under
the Plan, pursuant to the provisions of Section 11.1.
SECTION 11
APPOINTMENT OF SUCCESSOR
11.1 If Trustee resigns (or is removed) in accordance with Sections 10.1 or
10.2, Company may appoint any third party, such as a bank trust department or
other party that may be granted corporate trustee powers under state law, as a
successor to replace Trustee upon resignation or removal. The appointment shall
require the prior approval in writing of a majority of Participants eligible to
<PAGE> 8
receive benefits under the Plan and shall subsequently be effective when
accepted in writing by the new Trustee, who shall have all of the rights and
powers of the former Trustee, including ownership rights in the Trust assets.
The former Trustee shall execute any instrument necessary or reasonably
requested by Company or the successor Trustee to evidence the transfer.
11.2 The successor Trustee need not examine the records and acts of any prior
Trustee and may retain or dispose of existing Trust assets, subject to Sections
7 and 8. The successor Trustee shall not be responsible for and Company shall
indemnify and defend the successor Trustee from any claim or liability
resulting from any action or inaction of any prior Trustee or from any other
past event, or any condition existing at the time it becomes successor Trustee.
SECTION 12
AMENDMENT OR TERMINATION
12.1 This Trust Agreement may be amended by a written instrument executed by
Trustee and Company. Notwithstanding the foregoing, no such amendment shall
conflict with the terms of the Plan or shall make the Trust revocable.
Notwithstanding the foregoing, for a period of five (5) years following a
Change in Control, the Trust may not be amended without the written consent of
a majority of Participants who are entitled to any future benefit under the
Plan at the time of such amendment.
12.2 The Trust shall not terminate until the date on which all Participants and
their Beneficiaries are no longer entitled to benefits, pursuant to the terms
of the Plan.
12.3 Notwithstanding the provisions of Section 12.2 of the Trust, upon written
approval of all Participants (or, if the Participant is deceased, the
Participant's Beneficiary) entitled to payment of benefits pursuant to the
terms of the Plan, Company may terminate this Trust prior to the time all
benefit payments under the Plan have been made. All assets in the Trust at
termination shall then be returned to Company, provided appropriate provisions
are made for no payment of any benefits to Participants (or, if a Participant
is deceased, a Participant's Beneficiary).
SECTION 13
MISCELLANEOUS
13.1 Any provision of this Trust Agreement prohibited by law shall be
ineffective to the extent of any such prohibition, without invalidating the
remaining provisions hereof.
13.2 Benefits payable to Participants and their Beneficiaries under this Trust
Agreement may not be anticipated, assigned (either at law or in equity),
alienated, pledged, encumbered or subjected to attachment, garnishment, levy,
execution or other legal or equitable process.
13.3 This Trust Agreement shall be governed by and construed in accordance with
the laws of Tennessee.
13.4 For purposes of this Trust Agreement, Change of Control shall mean the
occurrence of any of the following events:
(i) The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act")) (a "Person") of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Securities Exchange Act of
1934, as amended) of 25% or more of either (A) the then outstanding shares of
common stock of Company (the "Outstanding Company Common Stock") or (B) the
combined voting power of the then outstanding voting securities of Company
entitled to vote generally in the election of directors (the "Outstanding
Company Voting Securities"); provided, however, that for purposes of this
subsection (i), the following acquisitions shall not constitute a Change of
Control (w) any acquisition directly from Company, (x) any acquisition by
Company, (y) any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by Company or any corporation controlled by Company, or
(z.) any acquisition by any Person pursuant to a transaction which complies
with clauses (A), (B) and (C) of subsection (iii) of this Section 13.4; or
(ii) Individuals who, as of the date hereof, constitute the Board of
Directors of Company (the "Incumbent Board") cease for
<PAGE> 9
any reason to constitute at least a majority of the Board; provided, however,
that any individual becoming a director subsequent to the date hereof whose
election, or nomination for election by Company's shareholders, was approved by
a vote of at least a majority of the directors then comprising the Incumbent
Board shall be considered as though such individual were a member of the
incumbent Board, but excluding, for this purpose, any such individual whose
initial assumption of office, occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board, or
(iii)Consummation of a reorganization, merger or consolidation or sale or
other disposition of all or substantially all of the assets of Company (a
"Business Combination") in each case, unless, following such Business
Combination,
(A) all or substantially all of the individuals and entities who
were the beneficial owners, respectively, of the Outstanding Company Common
Stock and outstanding Company Voting Securities immediately prior to such
Business Combination beneficially own, directly or indirectly, more than 65%
of, respectively, the then outstanding shares of common stock and the combined
voting power of the outstanding voting securities entitled to vote generally in
the election of directors, as the case may be, of the corporation resulting
from such Business Combination (including, without limitation, a corporation,
which as a result of such transaction owns Company or all or substantially all
of Company's assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership, immediately prior to
such Business Combination of the Outstanding Company Common Stock and
Outstanding Company Voting Securities, as the case may be, and
(B) no Person (excluding any corporation resulting from such
Business Combination or any employee benefit plan (or related trust) of Company
or such corporation resulting from such Business Combination) beneficially
owns, directly or indirectly, 25% or more at respectively, the then outstanding
shares of common stock of the corporation resulting from such Business
Combination or the combined voting power of the then outstanding voting
securities of such corporation except to the extent that such ownership existed
prior to the Business Combination, and
(C) at least a majority of the members of the board of directors of
the corporation resulting from such Business Combination were members of the
Incumbent Board at the time of the execution of the initial agreement or of the
action of the Board, providing for such Business Combination.
13.5 For purposes of this Trust Agreement an Involuntary Termination of
Employment shall consist of a termination of employment by a Participant due
to: (i) Good Reason (as defined under a Participants Agreement), (ii) death or
disability, or (iii) any termination of employment following the date a
Participant reaches Normal Retirement Age or becomes an Eligible Participant
under the Participation Agreement.
13.6 Notwithstanding anything to the contrary contained in this Trust Agreement
or in the Plan: (i) in the event that the Internal Revenue Service prevails in
its claim that amounts contributed to and held in the Trust, and/or earnings
thereon, constitute taxable income to a Participants or his Beneficiary for any
taxable year of him , prior to the taxable year in which such contributions
and/or earnings are distributed to him, or (ii) in the event that legal counsel
satisfactory to the Company, the Trustee and the applicable Participants or his
Beneficiary renders an opinion that the Internal Revenue Service would likely
prevail in such a claim, the assets in the Trust Fund shall be immediately
distributed to the Participants or his Beneficiary. For purposes of this
Section 13.6, the Internal Revenue Service shall be deemed to have prevailed in
a claim if such claim is upheld by a court of final jurisdiction, or if the
Trustee, based upon an opinion of legal counsel satisfactory to the Company,
the Trustee and the Participants or his Beneficiary, fails to appeal a decision
of the internal Revenue Service, or of a court of applicable jurisdiction, with
respect to such claim, to an appropriate internal Revenue Service appeals
authority of to a court of higher jurisdiction within the appropriate time
period.
SECTION 14
EFFECTIVE DATE
14.1 Effective date of this Amended and Restated Trust Agreement shall be
August 31, 1999.
<PAGE> 10
UNION PLANTERS CORPORATION UNION PLANTERS BANK, N.A.
TRUST DEPARTMENT
BY: /s/ Benjamin W. Rawlins, Jr. BY: /s/ E. J. House, Jr.
---------------------------- --------------------
Benjamin W. Rawlins, Jr.
Chairman and CEO TITLE: Executive Vice President
<PAGE> 1
EXHIBIT 10(B)
<PAGE> 2
UNION PLANTERS CORPORATION
SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT
This Supplemental Executive Retirement Agreement ("Agreement") has been adopted
by Union Planters Corporation ("Employer") and Benjamin W. Rawlins, Jr.
("Participant") effective the 23rd day of February, 1995.
RECITALS
WHEREAS, Union Planters Corporation ("Employer") previously entered into a
Deferred Compensation Agreement ("Previous Agreement") with the Participant on
March 1, 1985;
WHEREAS, the Previous Agreement was amended from time to time to provide
additional benefits to the Participant and/or to clarify certain provisions of
the Previous Agreement, and
WHEREAS, the Board at its regular monthly meeting in February, 1995, approved
the adoption of the Union Planters Corporation Supplemental Executive
Retirement Plan ("Plan");
WHEREAS, in consideration of the Employer's desire to change the terms of the
Previous Agreement and the Participant's desire to participate in the Plan,
Employer and the Participant agree to terminate the Previous Agreement; and
WHEREAS, as consideration for the termination of the Previous Agreement, both
Employer and Participant agree to abide by the terms and conditions of the
Plan, which are evidenced through this Agreement.
NOW THEREFORE, Employer and Participant hereby adopt this Agreement pursuant to
the terms and provisions set forth below.
ARTICLE I
DEFINITIONS
Whenever used herein the following terms shall have the meanings hereinafter
set forth. Words in the masculine gender shall include the feminine and the
singular shall include the plural, and vice versa, unless qualified by the
context. Any headings used herein are included for ease of reference only, and
are not to be construed so as to alter the terms hereof.
1.1. "AGREEMENT" shall mean the Union Planters Corporation Supplemental
Executive Retirement Agreement.
1.2. "APPLICABLE FEDERAL RATE" shall mean 120% of the applicable federal rate
(as calculated on a mid-term, monthly basis) pursuant to Code Section 1274, as
amended.
1.3. "AVERAGE BASE SALARY INCREASE RATE" shall mean the greater of the
following: (i) the average annual
<PAGE> 3
increase in base salary and bonus (calculated using four (4) decimal places)
received by the Participant or Eligible Participant during the three complete
calendar years preceding termination of employment (for whatever reason), or
(ii) Five Percent (5%).
1.4. "BENEFICIARY" shall mean the person or persons Participant has designated
in writing to Employer to receive benefits under the Agreement in the event of
the Participant's death. If the Participant has not specifically designated any
Beneficiary for purposes of the Agreement, then the Beneficiary shall become
the Participant's estate. In the case of the death of the Beneficiary before
completion of payments under the Agreement to the Beneficiary, then the
Beneficiary's estate shall become entitled to any remaining payments. In either
case, any remaining payments under the terms of the Agreement shall be made in
the form of a lump sum payment as follows: an amount equal to the present value
of any remaining payments to be made under the Agreement shall be paid on the
first business day of the second month following the Participant's (or if
appropriate, Beneficiary's) date of death, and for purposes of determining the
present value of the payments, the Discount Rate which exists on the
Participant's (or, if appropriate, Beneficiary's) date of the death shall be
used.
1.5. "BOARD" shall mean the Board of Directors of Union Planters Corporation.
1.6. "CHANGE IN CONTROL" shall mean the occurrence of the earliest of any of
the following events:
(a) the acquisition by any entity, person, or group (excluding any
entity, person or group owning Voting Stock at the effective date of this
Agreement) of beneficial ownership, as that term is defined in Rule 13d-3 of
the Securities Exchange Act of 1934, of Twenty Five percent (25%) or more of
the Voting Stock of Employer;
(b) The commencement and consummation by any entity, person or group
(other than Employer) of a tender offer or an exchange offer for more
than Twenty Five percent (25%) or more of the Voting Stock of
Employer; or
(c) the effective date of a (i) merger or consolidation of Employer
with one or more other corporations as a result of which the holders
of the Voting Stock of Employer immediately prior to such merger or
consolidation hold less than Eighty Percent (80%) of the Voting Stock
of the surviving or resulting corporation, or (ii) a sale of transfer
of a majority of the property of Employer, other than to an entity of
which Employer controls 80% or more of the Voting Stock.
1.7. "CODE" shall mean the Internal Revenue Code of 1986, as amended.
1.8. "DISABILITY" shall mean a physical or mental condition of the Participant,
determined in the sole discretion of the Board, which prohibits Participant
from carrying out his normal duties and responsibilities as an employee of
Employer.
1.9. "DISCOUNT RATE" shall mean that immediate annuity interest rate used by
the Pension Benefit Guaranty Corporation ("PBGC") under Section 4062, Appendix
B to Part 2619, of the Employee Retirement Income Security Act ("ERISA").
1.10. "ELIGIBLE PARTICIPANT" shall Mean the Participant once he earns at least
10 Years of Service with the
<PAGE> 4
Employer and attains the following indicated ages, based on the Participant's
actual age as of January 1, 1995.
<TABLE>
<CAPTION>
Age Participant Can
Participant's Age as of January 1, 1995 Qualify as Eligible Participant
--------------------------------------- -------------------------------
<S> <C>
Less than Age 50 55
Age 50 through 54 57
Age 55 through 60 59
Age 61 or over 64
</TABLE>
For purposes of the Agreement (where appropriate), the term "Participant" shall
include a reference to an Eligible Participant.
1.11. "EMPLOYER" shall mean the Union Planters Corporation, or to the extent
provided in Section 5.9, any successor corporation or other entity resulting
from a merger or consolidation into or with Employer or a transfer or sale of a
majority of the assets of Employer.
1.12. "FINAL AVERAGE EARNINGS" shall mean the average base salary plus bonus
earned by the Participant or Eligible Participant during the three complete
calendar years preceding termination of employment (for whatever reason).
1.13. "FORMER ELIGIBLE PARTICIPANT" shall mean Participant who, after becoming
an Eligible Participant, terminates service with the Employer and who, under
the terms of the Agreement, is then entitled to payment of a benefit. For
purposes of the Agreement (where appropriate), the term "Participant" shall
include a reference to a Former Eligible Participant.
1.14. "GOOD REASON" shall mean a termination of employment with the Employer
if, without the Participant's express written consent:
(i) Employer shall assign to Participant duties of a nonexecutive nature
or for which Participant is not reasonably equipped by his skills and
experience; or
(ii) Employer shall reduce the salary of the Participant, or
materially reduce the amount of paid vacations to which he is
entitled, or reduce his fringe benefits and perquisites; or
(iii) Employer shall fail to provide office facilities, secretarial
services, and other administrative services to the Participant which
are substantially equivalent to the facilities and services provided
to the Participant at the initial date of the Participant's
participation in the Agreement; or
(iv) Employer shall terminate incentive and benefit plans or
arrangements, or reduce or limit the Participant's participation
therein, relative to the level of participation of other executives of
similar rank, to such an extent as to materially reduce the aggregate
value of the Participant's incentive compensation and benefits below
their aggregate value as of the initial date of the Participant's
participation in the Agreement.
<PAGE> 5
1.15. "INSTALLMENT PAYMENT ACCOUNT" shall mean that account created pursuant to
the terms of Article II of the Agreement to facilitate payment of benefits
under the Agreement to the Participant in the form of installment payments.
1.16. "NORMAL RETIREMENT AGE" shall mean the following indicated ages based on
the Participant's actual age as of January 1, 1995:
<TABLE>
<CAPTION>
Participant's
Participant's Age as of January 1, 1995 Normal Retirement Age
--------------------------------------- ---------------------
<S> <C>
Less than Age 60 62
Age 60 or over 65
</TABLE>
1.17. "NORMAL RETIREMENT BENEFIT" shall mean an annual sum equal to 65% of the
Participant's Final Average Earnings, payable each year for the remaining
actuarially-determined life of the Participant in accordance with the
provisions of Article II of the Agreement. For purposes of determining the
Participant's remaining actuarially-determined life, Table V ("Ordinary Life
Annuities, One Life - Expected Return") of Code Regulation 1.72-9, as amended,
shall be used, with the assumption that the Participant terminated employment
on the first day of the first year of the Participant's Normal Retirement Age
(regardless of the Participant's actual age at termination of employment).
1.18. "PARTICIPANT" shall mean Benjamin W. Rawlins, Jr., who is an employee of
Employer and to whom or with respect to whom a benefit may be payable under the
Agreement. For purposes of the Agreement, the term "Participant" shall include
a reference to the Participant once he becomes an Eligible Participant or
Former Eligible Participant.
1.19. "REDUCED RETIREMENT BENEFIT" shall mean the following percentages of the
Participant's Normal Retirement Benefit, payable to an Eligible Participant in
accordance with the provisions of Section 2.3 of the Agreement if the Eligible
Participant terminates employment before attaining Normal Retirement Age
("NRA").
<TABLE>
<CAPTION>
Years Employment
Terminates Prior to NRA Reduced Retirement Benefit
------------------------------------ ------------------------------------
<S> <C>
More than 7 Years 0% of Normal Retirement Benefit
From 6 to 7 Years 58% of Normal Retirement Benefit
From 5 to 6 Years 64% of Normal Retirement Benefit
From 4 to 5 Years 70% of Normal Retirement Benefit
From 3 to 4 Years 75% of Normal Retirement Benefit
From 2 to 3 Year 82% of Normal Retirement Benefit
From 1 to 2 Years 88% of Normal Retirement Benefit
Up to 1 Year 94% of Normal Retirement Benefit
</TABLE>
1.20. "VOTING STOCK" shall mean that class (or classes) of common stock of the
Employer entitled to vote in the election of the Employer's directors.
<PAGE> 6
1.21. "YEAR OF SERVICE" shall mean any calendar year of employment by the
Participant with Employer in which the Participant accumulates at least 1000
hours of service. For these purposes, the provisions of Department of Labor
Regulations 2530.200-2(b) and (c) are incorporated herein by reference as they
relate to the determination of "hour of service."
ARTICLE II
BENEFITS UNDER THE AGREEMENT
2.1. BENEFITS. Either a Normal Retirement Benefit or Reduced Retirement Benefit
shall be paid under the terms of the Agreement as set forth in this Article II.
2.2. VOLUNTARY TERMINATION OF EMPLOYMENT BEFORE BECOMING ELIGIBLE PARTICIPANT.
Should Participant voluntarily terminate employment with the Employer before
becoming an Eligible Participant, then the Participant (and any person claiming
benefits for or on behalf of the Participant) will forfeit all rights to
benefits under this Agreement; provided, however, that a termination of
employment for Good Reason or in accordance with Sections 2.4, 2.5, or 2.6 of
the Agreement will not be considered a voluntary termination of employment
subject to this Section 2.2 of the Agreement.
2.3. VOLUNTARY TERMINATION OF EMPLOYMENT AFTER BECOMING AN ELIGIBLE PARTICIPANT
BUT BEFORE NORMAL RETIREMENT AGE. Should the Participant, once becoming an
Eligible Participant, voluntarily terminate service with the Employer before
Normal Retirement Age (i.e., for reasons other than Good Reason or those
described in Sections 2.4, 2.5 or 2.6 of the Agreement), he will be entitled to
the Reduced Retirement Benefit payable at his election in either of the
following forms. Should Participant fail to specifically elect a form of
benefit payment, a Lump Sum Distribution will be made to the Participant.
(a) LUMP SUM DISTRIBUTION. An amount equal to the present value of the
Participant's total Reduced Retirement Benefit shall be paid to the
Participant in one lump sum distribution on the first business day of
the second month following the Participant's termination of
employment. For purposes of determining the present value of the
Participant's total Reduced Retirement Benefit, the Discount Rate
which exists on the date of the Participant's termination of
employment shall be used.
(b) PERIODIC DISTRIBUTION. An amount equal to the present value of the
Participant's total Reduced Retirement Benefit shall be credited to an
Installment Payment Account and shall be payable in up to 180
successive monthly installments. The first payment shall commence on
the first business day of the second month following the date of
termination of employment, and each successive payment shall occur
monthly in succeeding months on the first business day of such months.
In order for Participant to elect a Periodic Distribution under the
terms of this Section 2.3(b), the Participant must elect, in the
taxable year (or years) prior to the Participant's termination of
employment with the Employer, both the Periodic Distribution option
and the number of monthly installments to be made (up to a maximum of
180).
For purposes of determining the present value of the Participant's
total Reduced Retirement Benefit, the Discount Rate which exists on
the date of the Participant's termination of employment shall be used.
To determine the amount of each installment payment, a fraction shall
be applied to the Participant's
<PAGE> 7
Installment Payment Account on each payment date. The numerator shall
consist of one (1) and the denominator shall consist of the total
number of installment payments remaining (including the current
payment). During the installment payment period, interest shall be
credited to the Participant's Installment Payment Account on a monthly
basis using the Applicable Federal Rate in existence on the first
business day of each month during which payments are made.
2.4. TERMINATION OF EMPLOYMENT PRIOR TO NORMAL RETIREMENT AGE DUE TO DEATH OR
DISABILITY. Should Participant, before or after becoming an Eligible
Participant, terminate service with the Employer prior to Normal Retirement Age
because of death or disability, he will be entitled to the Normal Retirement
Benefit following termination of employment, payable in one of the distribution
forms described in Sections 2.7(a) and (b) of the Agreement.
2.5. INVOLUNTARY TERMINATION OF EMPLOYMENT PRIOR TO NORMAL RETIREMENT AGE.
Should Participant, before or after becoming an Eligible Participant,
involuntarily terminate service with the Employer (or voluntarily terminate
service with Good Reason) prior to Normal Retirement Age (for reasons other
than those described in Section 2.4 and 2.6), he will he entitled to the Normal
Retirement Benefit, without regard to the Participant's age or years of service
at the time of involuntary termination of employment. The Normal Retirement
Benefit will be payable in one of the distribution forms described in Sections
2.3(a) and (b) of the Agreement.
For purposes of calculating the Normal Retirement Benefit under this Section
2.5, Participant's Final Average Earnings shall be that amount at the date of
termination of employment increased at the Average Base Salary Increase Rate,
compounded annually, for the number of years (carried to two (2) decimal
places) needed to reach the Participant's age 65 birthday.
2.6. INVOLUNTARY TERMINATION OF EMPLOYMENT FOLLOWING A CHANGE IN CONTROL.
Should a Change in Control occur, Participant will be entitled to the Normal
Retirement Benefit following termination of employment (for whatever reason),
without regard to the Participant's age or years of service at the time of
involuntary termination of employment and without regard to whether the
Participant has become an Eligible Participant. The Normal Retirement Benefit
will be payable in accordance with the distribution forms described in Sections
2.7(a) and (b) of the Agreement.
For purposes of calculating the Normal Retirement Benefit under this Section
2.6, Participant's Final Average Earnings shall be that amount at the date of
termination of employment increased at the Average Base Salary Increase Rate,
compounded annually, for the number of years (carried to two (2) decimal
places) needed to reach the Participant's age 65 birthday.
2.7. TERMINATION OF EMPLOYMENT AT OR AFTER NORMAL RETIREMENT AGE. Should
Participant become an Eligible Participant and subsequently terminate service
with the Employer (for whatever reason) at or after Normal Retirement Age, he
(or, if appropriate, his Beneficiary) will be entitled to the Normal Retirement
Benefit, payable at his election in either of the following forms. Should
Participant fail to specifically elect a form of benefit payment, a Lump Sum
Distribution will be made to the Participant (or, if appropriate, to his
Beneficiary).
(a) LUMP SUM DISTRIBUTION. An amount equal to the present value of the
Participant's total Normal Retirement Benefit shall be paid to the
Participant in one lump sum distribution on the first business day
<PAGE> 8
of the second month following the Participant's termination of
employment. For purposes of determining the present value of the
Participant's total Normal Retirement Benefit, the Discount Rate which
exists on the date of the Participant's termination of employment
shall be used.
(b) PERIODIC DISTRIBUTION. An amount equal to the present value of the
Participant's total Normal Retirement Benefit shall be credited to an
Installment Payment Account and shall be payable in up to 180
successive monthly installments. The first payment shall commence on
the first business day of the second month following the date of
termination of employment, and each successive payment shall occur
monthly in succeeding months on the first business day of such months.
In order for Participant to elect a Periodic Distribution under the
terms of this Section 2.7(b), the Participant must elect, in this
taxable year (or years) prior to the Participant's termination of
employment with the Employer, both the Periodic Distribution option
and the number of monthly installments to be made (up to a maximum of
180).
For purposes of determining the present value of the Participant's
total Normal Retirement Benefit the Discount Rate which exists on the
date of the Participant's termination of employment shall be used. To
determine the amount of each installment payment, a fraction shall be
applied to the Participant's Installment Payment Account on each
payment date. The numerator shall consist of one (1) and the
denominator shall consist of the total number of installment payments
remaining (including the current payment). During the installment
payment period, interest shall be credited to the Participant's
Installment Payment Account on a monthly basis using the Applicable
Federal Rate in existence on the first business day of each month
during which payments are made.
2.8. DEATH WHILE BENEFIT PAYMENTS BEING MADE. Should Participant die after
becoming a Former Eligible Participant and after the commencement of Normal
Retirement or Reduced Retirement Benefit payments to the Participant, then any
remaining payments will be made to the Participant's Beneficiary in the same
form being made to the Participant at the date of his death. Alternatively, at
the Beneficiaries election (with the consent of the Employer), payment may be
made in a lump sum payment as follows: an amount equal to the present value of
the remaining payments shall be paid on the first business day of the second
month following the Participant's date of death, and for purposes of
determining the present value of the remaining payments, the Discount Rate
which exists on the date of the Participant's date of death shall be used.
ARTICLE III
ADMINISTRATION OF THE AGREEMENT
3.1. ADMINISTRATION BY EMPLOYER. Employer shall be responsible for the general
operation and administration of the Agreement and for carrying out the
provisions thereof. The Board or Employer may engage the services of outside
counsel, accountants, financial advisors and other such professional to assist
it in its administrative duties.
3.2. GENERAL POWERS OF ADMINISTRATION. Employer is hereby designated as a
fiduciary under the Agreement Employer, as fiduciary, shall have authority to
control, interpret and manage the operation and administration of
<PAGE> 9
the Agreement.
Any decision by Employer or the Board denying a claim by Participant or a
Beneficiary for benefits under the Agreement shall be stated in writing and
shall be delivered or mailed to the Participant or Beneficiary. Such statement
shall set forth the specific reasons for the denial, written to the best of the
Employer's ability in a manner that may be understood without legal counsel. In
addition, Employer shall afford a reasonable opportunity to the Participant or
Beneficiary for a full and fair review of the decision denying such claim.
Notwithstanding the above provisions of Section 3.2, to the extent that the
Employee Retirement Income Security Act ("ERISA") may require specific
procedures to be followed in the event of a denial of a claim, such provisions
of ERISA will be followed.
ARTICLE IV
AMENDMENT OR TERMINATION OF AGREEMENT
4.1. AMENDMENT OR TERMINATION OF AGREEMENT. Any amendment to this Agreement
shall be made pursuant to a resolution of the Board and, if such amendment
directly or indirectly affects the benefits payable under the Agreement, such
amendment must be mutually agreed to in writing by Participant (or, in the
event that the Participant is deceased at the date of amendment, the
Participant's Beneficiary).
ARTICLE V
GENERAL PROVISIONS
5.1. PARTICIPANT'S RIGHTS UNSECURED. The Agreement at all times shall be
unfunded as defined under provisions of the Code. The right of Participant or
any Beneficiary to receive a distribution hereunder shall be an uninsured claim
against the general assets of Employer in the event of the Employer's
insolvency or bankruptcy.
Employer shall implement a form of trust arrangement (known generally as a
"rabbi trust") to hold employer assets which will be used to make payments to
the Participant (or the Participant's Beneficiary) under the terms of the
Agreement. Such trust arrangement will not be a "funded" arrangement under the
provisions of the Code, and a copy of such trust arrangement shall be included
with this Agreement as Exhibit A.
5.2. INDEPENDENCE OF OTHER BENEFIT AGREEMENTS. Participation in the Agreement
shall in no way restrict or otherwise impact Participant's participation in any
other welfare benefit plan, employment or other contract, deferred compensation
agreement, equity participation plan or any other form of retirement benefit
plan sponsored by Employer.
5.3. NO SECURED GUARANTEE OF BENEFITS. In the event of the insolvency or
bankruptcy of Employer, Participant shall remain a general creditor of the
Employer with respect to any benefits payable under the Agreement and nothing
contained in the Agreement shall constitute a secured guaranty by Employer or
any other person or entity that the assets of Employer will be sufficient to
pay any benefit hereunder in the event of the Employer's insolvency or
bankruptcy.
<PAGE> 10
5.4. NO ENLARGEMENT OF EMPLOYEE RIGHTS. No Participant shall have any right to
receive a distribution of any benefits under the Agreement except in accordance
with the terms of the Agreement. Establishment of the Agreement shall not be
construed to give any Participant the right to be retained in the service of
Employer.
5.5. SPENDTHRIFT PROVISION. No Interest of any person or entity in, or right to
receive a distribution under, the Agreement shall be subject in any manner to
sale, transfer, assignment, pledge, attachment, garnishment or other alienation
or encumbrance of any kind; nor may such interest or right to receive a
distribution be taken, either voluntarily or involuntarily for the satisfaction
of the debts of, or other obligations or claims against, such person or entity,
including claims for alimony, support, separate maintenance and claims in
bankruptcy proceedings.
5.6. APPLICABLE LAW. The Agreement shall be construed and administered under
the laws of the State of Tennessee.
5.7. SEVERABILITY. In the event that any of the provisions of the Agreement are
held to be inoperative or invalid by any court of competent jurisdiction, then:
(i) insofar as is reasonable, effect will be given to the intent manifested in
the provision held invalid or inoperative, and (ii) the validity and
enforceability of the remaining provisions of the Agreement will not be
affected thereby.
5.8. INCAPACITY OF RECIPIENT. If any person entitled to a distribution under
the Agreement is deemed by Employer to be incapable (physically or mentally) of
personally receiving and giving a valid receipt for any payment pursuant to the
Agreement, then, unless and until claim therefore shall have been made by a
duly appointed guardian or other legal representative of such person, Employer
may provide for such payment or any part thereof to be made to any other person
or institution then contributing toward or providing for the care and
maintenance of such person. Any such payment shall be a payment for the account
of such person and a complete discharge of any liability of Employer end the
Agreement with respect to such payment.
5.9. SUCCESSORS. The terms and conditions of the Agreement will be binding on
the Employer's and Participant's successors, heirs and assigns (herein,
"Participant Successors" and "Employer Successors").
5.10. UNCLAIMED BENEFITS. Participant shall keep Employer informed of his or
her current address and the current address of his or her Beneficiary. Employer
shall not be obligated to search for the whereabouts of any person. If the
location of Participant is not made known to Employer within a one (1) year
period after the date on which payment of the Participant's Normal Retirement
or Reduced Retirement Benefit is first to be made, then payment may be made by
the Employer to the Beneficiary instead. If, within one (1) additional year
after such initial one (1) year period, Employer is unable to locate any
designated Beneficiary of the Participant, then Employer shall have no further
obligation to pay any benefit under the Agreement to such Participant or
designated Beneficiary and any such "benefit shall be irrevocably forfeited.
5.11. LIMITATIONS ON LIABILITY. Participant and any other person claiming
benefits under the Agreement shall be entitled under this Agreement only to
those payments provided in accordance with the provisions of the Agreement
("Payment Claims"). With the exception of the provisions of Section 5.13 of the
Agreement, neither Employer, Employer Successor nor any individual acting as
employee or agent of Employer or Employer Successor shall be liable to
Participant or any other person for any other claim, loss, liability or expense
under
<PAGE> 11
this Agreement not directly related to a Payment Claim.
5.12. FORFEITURE OF BENEFITS. Notwithstanding any other provision of the
Agreement, should Participant engage in theft, fraud, embezzlement or willful
misconduct causing significant property damage to Employer, then any benefits
payable to such Participant under the Agreement will automatically be
forfeited. The determination of theft, embezzlement or willful misconduct will
be made by the Board in good faith, but such determination does not require an
actual criminal indictment or conviction prior to or after such decision. In
any determination of forfeiture pursuant to this Section 5.12, Participant will
be given the opportunity to refute any such decision by the Board, but the
Board's decision on the matter will be considered final and binding on
Participant and all other parties.
5.13. PAYMENT OF ATTORNEY'S FEES, COURT COSTS, AND LOSS OF BENEFITS. Should
either the Employer or Employer Successor (for these purposes, "Employer") or
Participant bring an action at law (or through arbitration) in order that the
Agreement's terms be enforced, then the party prevailing in the action at law
(or through arbitration) shall be entitled to reimbursement from the losing
party for reasonable attorney's fees, court costs and other similar amounts
expended in the enforcement of the Agreement. In addition, should the
prevailing party be Participant, he shall also be entitled to interest on any
delayed payments, with such interest computed at the Applicable Rate.
5.14. PAYMENT OF TAXES. Should the payment of any benefits under this Agreement
be classified as payment of an excess parachute payment under the provisions of
Code Sections 280G and 4999, then an additional payment will be made to the
Participant based on the amount of excise tax or penalty payable by the
Participant because of such classification. Such payment will be made within
two (2) months following Participant's termination of employment, once a good
faith determination is made by either Employer or Participant that the payment
of any benefit under the Agreement will constitute an excess parachute payment.
The amount payable to the Participant will be calculated as follows: (amount of
excise tax or penalty payable by Participant) divided by (one (1) minus the
highest marginal income tax rate under the Code for individuals).
ARTICLE VI
CONTINUATION OF MEDICAL PLAN COVERAGE
6.1. CONTINUATION OF MEDICAL COVERAGE. Following termination of employment with
the Employer, if Participant is entitled to payment of the Normal or Reduced
Retirement Benefit under the terms of the Agreement, then Participant, his
spouse and dependents will continue to be covered under the Employer's health
insurance program ("Health Plan") to the same extent as was present immediately
prior to the date of termination of employment. Employer shall continue to pay
Health Plan coverage costs of the Participant, his spouse and other dependents
under the Health Plan on the same basis as was applicable to active Employer
employees covered at the time of termination of employment.
6.2. PERIOD OF CONTINUED COVERAGE. Such coverage will continue for the period
equal to the shortest of the following: (1) for the number of years required
for the Participant to reach age 65, (2) until the Participant obtains
employment with another employer (who provides substantially similar coverage
under its health plan as was provided by Employer), or (3) until the death of
the Participant.
6.3. ALTERNATIVE COVERAGE. If continued participation in the Health Plan by
Participant, his spouse and any
<PAGE> 12
dependents is; not possible under the terms of the Health Plan, Employer will
either: (1) provide substantially identical benefits through another health
insurance plan, or will (2) provide an annual cash payment to Participant
sufficient to permit Participant to obtain substantially equivalent individual,
spouse and dependent coverage under a health insurance plan of his choosing. If
any cash payment is made to Participant, the amount of cash payment will be
"grossed up" for income tax purposes (using the maximum individual income lax
rate under the Code at the time of payment) to insure no net out of pocket
costs to the Participant in obtaining such additional coverage.
IN WITNESSES WHEREOF, the undersigned Employer and Participant do hereby
execute this Agreement effective the date first stated above.
UNION PLANTERS CORPORATION
By: /s/ M. Kirk Walters /s/ B. W. Rawlins
------------------- -----------------
Benjamin W. Rawlins, Jr.
Name: M. Kirk Walters
---------------
Title: Senior Vice President and Treasurer
-----------------------------------
By: /s/ M. E. Bruce
---------------
Marvin E. Bruce
Chairman, UPC Salary and Benefits Committee
<PAGE> 1
EXHIBIT 10(C)
<PAGE> 2
AMENDMENT TO
SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT
THIS AMENDMENT, dated as of April 17, 1997 by and between Union Planters
Corporation ("Employer") and Benjamin W. Rawlins, Jr. ("Participant"), amends
that certain Supplemental Executive Retirement Agreement, dated as of February
23, 1995, by and between Employer and Participant (the "SERP").
WHEREAS, Employer and Participant desire to amend the SERP as provided
herein;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements set forth herein and for other good and valuable
consideration, the receipt and adequacy of which is hereby acknowledged, the
parties hereto agree as follows:
1. Definition of "Change in Control". The current definition
of the term "Change in Control" in Section 1.6 of the SERP is hereby
deleted in its entirety and the following is substituted in lieu
thereof
"Change in Control" shall mean the occurrence of any of the
following events:
(i) The acquisition by any individual,
entity or group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act")) (a "Person") of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the
Securities Exchange Act of 1934, as amended) of 25% or more
of either (A) the then outstanding shares of common stock of
Employer (the "Outstanding Company Common Stock") or (B) the
combined voting power of the then outstanding voting
securities of Employer entitled to vote generally in the
election of directors (the "Outstanding Company Voting
Securities"); provided, however, that for purposes of this
subsection (i), the following acquisitions shall not
constitute a Change in Control: (w) any acquisition directly
from Employer, (x) any acquisition by Employer, (y) any
acquisition by any employee benefit plan (or related trust)
sponsored or maintained by Employer or any corporation
controlled by Employer, or (z) any acquisition by any Person
pursuant to a transaction which complies with clauses (A),
(B) and (C) of subsection (iii) of this Section 1.6, or
(ii) Individuals who, as of the date
hereof, constitute the Board of Directors of Employer (the
"Incumbent Board") cease for any reason to constitute at
least a majority of the Board; provided, however, that any
individual becoming a director subsequent to the date hereof
whose election, or nomination for election by Employer's
shareholders, was approved by a vote of at least a majority
of the directors then comprising the Incumbent Board shall
be considered as though such individual were a member of the
Incumbent Board, but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a
result of an actual or threatened election Contest with
respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by
or on behalf of a Person other than the Board; or
<PAGE> 3
(iii) Consummation of a reorganization,
merger or consolidation or sale or other disposition of all
or substantially all of the assets of Employer (a "Business
Combination"), in each case, unless, following such Business
Combination,
(A) all or substantially all of the
individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company
Common Stock and outstanding Company Voting
Securities immediately prior to such Business
Combination beneficially own, directly or
indirectly, more than 65% of, respectively, the then
outstanding shares of common stock and the combined
voting power of the then outstanding voting
securities entitled to vote generally in the
election of directors, as the case may be, of the
corporation resulting from such Business Combination
(including, without limitation, a corporation which
as a result of such transaction owns Employer or all
or substantially all of Employees assets either
directly or through one or more subsidiaries) in
substantially the same proportions as their
ownership, immediately prior to such Business
Combination of the Outstanding Company Common Stock
and Outstanding Company Voting Securities, as the
case may be, and
(B) no Person (excluding any
corporation resulting from such Business Combination
or any employee benefit plan (or related trust) of
Employer or such corporation resulting from such
Business Combination) beneficially owns, directly or
indirectly, 25% or more of, respectively, the then
outstanding shares of common stock of the
corporation resulting from such Business Combination
or the combined voting power of the then outstanding
voting securities of such corporation except to the
extent that such ownership existed prior to the
Business Combination, and
(C) at least a majority of the
members of the board of directors of the corporation
resulting from such Business Combination were
members of the Incumbent Board at the time of the
execution of the initial agreement, or of the action
of the Board, providing for such Business
Combination,
2. Definition of "Disability". The current definition of the
term "Disability" in Section 1.8 of the SERP is hereby deleted in
its entirety and the following is substituted in lieu thereof.
"Disability" shall mean a mental or physical disability as
determined by the Board in accordance with standards and
procedures similar to those under Employer's employee
long-term disability plan, if any. At any time that
Employer does not maintain such a long-term disability
plan. Disability shall mean the inability of Participant,
as determined by the Board, to substantially perform his
regular duties and responsibility due to a medically
determinable physical or mental illness which has lasted
(or can reasonably be expected to last) for a period of six
consecutive months.,
3. Definition of "Final Average Earnings". The current
definition of the term "Final Average Earnings" in Section 1.12 of
the SERP is hereby deleted in its entirety and the following is
substituted in lieu thereof.
<PAGE> 4
"Final Average Earnings" shall mean the sum of (i) the
Participant's or Eligible Participant's highest base salary
in effect during any calendar year preceding his termination
of employment, including the year in which such termination
occurs, and (ii) the Participant's or Eligible Participant's
highest annual bonus payable with respect to any calendar
year preceding his termination of employment, including the
year in which such termination occurs.
4. Excise Tax Provision. Section 5.14 of the SERP, relative
to the excise tax imposed by Section 4999 of the Internal Revenue
Code of 1986, as amended, is hereby deleted in its entirety.
**********************************************
The terms of the SERP not hereby amended shall be and remain in full
force and effect and are not affected by this Amendment.
IN WITNESS WHEREOF, Participant and Employer have duly executed this
Amendment as of the day and year first above written.
/s/ B. W. Rawlins
-----------------
Benjamin W. Rawlins, Jr.
Participant
UNION PLANTERS CORPORATION
By: /s/ M. Kirk Walters
-------------------
<PAGE> 1
EXHIBIT 10(D)
<PAGE> 2
AMENDMENT NO. 2 TO
SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT
THIS AMENDMENT, dated as of August 31, 1999, by and between Union
Planters Corporation ("Employer") and Benjamin W. Rawlins, Jr. ("Participant"),
amends that certain Supplemental Retirement Agreement, dated as of February 23,
1995, as previously amended April 17, 1997, by and between Employer and
Participant (the "SERP").
WHEREAS, Employer and Participant desire to amend the SERP as provided
herein;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements set forth herein and for other good and valuable
consideration, the receipt and adequacy of which is hereby acknowledged, the
parties hereto agrees as follows:
1. Reduction of Benefits to Reflect "Cost of Funds" under Split Dollar
Insurance Program. There is hereby added a new Section 2.9 to the SERP to read
as follows:
"2.9 REDUCTION OF BENEFITS TO REFLECT "COST OF FUNDS" UNDER SPLIT
DOLLAR INSURANCE PROGRAM. Employer and Participant have entered into a
Split Dollar Agreement dated August 31, 1999 ("Split Dollar
Agreement"), pursuant to which certain life insurance coverage will be
provided on the joint lives of Participant and his spouse, Alice
Jenkins Rawlins. Under the Split Dollar Agreement, on August 31, 1999,
Employer paid a premium of $503,732 for the life insurance policy
providing second to die coverage on Participant and his said spouse
("Policy"), and Employer will pay four additional premiums of
$503,775, $503,817, $503,918, and $504,062 on the Policy on the next
four respective anniversaries of such initial premium payment date.
Under paragraph 8 of the Split Dollar Agreement, when Participant and
his said spouse are no longer living or certain other events earlier
occur, Employer will be reimbursed for the cumulative amount of
premiums paid under the split dollar program (without interest).
In order to insure that Employer will also be reimbursed for the
opportunity cost of making the premium payments under the split dollar
program, the present value of the amount payable under this Article II
shall be reduced (but not below zero) by an amount to be referred to
as the "Cost of Funds Reimbursement." The Cost of Funds Reimbursement
shall be determined (and the reduction described in the immediately
preceding sentence shall be made) as of Participant's termination of
employment for any reason (hereafter referred to as the "Cost of Funds
Settlement Date"). The Cost of Funds Reimbursement shall be the sum of
(a) plus (b), determined as follows:
(a) There shall first be calculated the interest expense on each
premium payment under the Program, determined as though Employer had
borrowed the premium payment at an interest rate determined under
Section 7520(a)(2) of the Internal Revenue Code of 1986, as amended
("Applicable Federal Rate" or "AFR"). The interest expense for the
first twelve months after a premium payment is made shall be
determined using the AFR as in effect for the month such premium
payment is made, and shall remain in effect until the one-year
anniversary of the date such premium payment was made. As of such
one-year anniversary, the interest expense with respect to such
premium for the next twelve months shall be
<PAGE> 3
determined using the AFR in effect for the month which includes such
one-year anniversary, and so forth until the Cost of Funds Settlement
Date occurs. The aggregate interest expense for all premiums under the
Program for all years from the date the first premium payment is made
until the Cost of Funds Settlement Date occurs shall be the amount
under this paragraph (a).
(b) There shall next be determined as of the Cost of Funds
Settlement Date the present value of all future interest expense of
all premiums under the Program, including both premiums paid and
premiums not yet accrued or paid as of the Cost of Funds Settlement
Date. The future interest expense shall run from the Cost of Funds
Settlement Date to the earliest date on which Employer is entitled to
reimbursement under paragraph 8 of the Split Dollar Agreement of the
cumulative premiums paid by Employer under the Policy. For this
purpose, (i) all future interest expense shall be determined using the
AFR in effect for the month in which the Cost of Funds Settlement Date
occurs, rather than the AFR which was in effect at the time the most
recent premium payment was made, (ii) no future interest expense shall
accrue for a future premium payment until the date such premium is
due, and (iii) the future interest expense shall be discounted to
present value using the AFR in effect for the month in which the Cost
of Funds Settlement Date occurs. The present value of all future
interest expense as determined under this paragraph shall be the
amount determined under this paragraph (b).
(c) If prior to the 15th anniversary of the date the initial
premium payment was made under the Split Dollar Program, the Employer
is reimbursed under the Split Dollar Agreement for all amounts that
would be owed to the Employer under the Split Dollar Agreement upon
the death of the survivor of the Participant and his spouse named in
paragraph (a) above (such date to be referred to herein as the
"Premium Reimbursement Date"), then an additional amount shall be paid
under this Section 2.9 determined as follows: (i) the future interest
expense under paragraph (b) immediately above shall be re-calculated
as of the Cost of Funds Settlement Date as though it was known as of
such date that the future interest expense for premiums under the
Split Dollar Program would run only until the actual Premium
Reimbursement Date, using the AFR in effect for the Cost of Funds
Settlement Date; (ii) there shall be subtracted from the actual amount
determined under paragraph (b) immediately above the amount determined
under clause (c)(i) immediately preceding; and (iii) the remainder
determined under clause (c)(ii) immediately preceding shall be
credited with interest using the AFR as of the Cost of Funds
Settlement Date, such interest to run from the Cost of Funds
Settlement Date to the Premium Reimbursement Date. The additional
payment determined under this paragraph (c) shall be made to the
Participant if he is then living, and if he is not then living, then
to the Participant's Beneficiary. Such payment shall be made in the
same form being under this Agreement as of the Premium Reimbursement
Date. If no payments are being made under this Agreement as of such
date, or, alternatively, at the Participant's or Beneficiary's
election, as applicable (with the consent of the Employer), payment
shall be made to the Participant or Beneficiary, as applicable, in a
lump sum payment as soon as practicable after the Premium
Reimbursement Date."
**************************************************
The terms of the SERP not hereby amended shall be and remain in full
force and effect and are not affected by this Amendment.
<PAGE> 4
IN WITNESS WHEREOF, Participant and Employer have duly executed this
Amendment as of the day and year first above written.
/s/ Benjamin W. Rawlins, Jr.
----------------------------
Benjamin W. Rawlins, Jr.
Participant
UNION PLANTERS CORPORATION
By: /s/ M. Kirk Walters
-------------------
Its: Senior Vice President and Treasurer
-----------------------------------
<PAGE> 1
EXHIBIT 10(E)
<PAGE> 2
UNION PLANTERS CORPORATION
SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT
This Supplemental Executive Retirement Agreement ("Agreement") has been adopted
by Union Planters Corporation ("Employer") and Jackson W. Moore ("Participant")
effective the 23rd day of February, 1995.
RECITALS
WHEREAS, Union Planters Corporation ("Employer") previously entered into a
Deferred Compensation Agreement ("Previous Agreement") with the Participant on
July 1, 1989;
WHEREAS, the Previous Agreement was amended from time to time to provide
additional benefits to the Participant and/or to clarify certain provisions of
the Previous Agreement, and
WHEREAS, the Board at its regular monthly meeting in February, 1995, approved
the adoption of the Union Planters Corporation Supplemental Executive
Retirement Plan ("Plan");
WHEREAS, in consideration of the Employer's desire to change the terms of the
Previous Agreement and the Participant's desire to participate in the Plan,
Employer and the Participant agree to terminate the Previous Agreement; and
WHEREAS, as consideration for the termination of the Previous Agreement, both
Employer and Participant agree to abide by the terms and conditions of the
Plan, which are evidenced through this Agreement.
NOW THEREFORE, Employer and Participant hereby adopt this Agreement pursuant to
the terms and provisions set forth below.
ARTICLE I
DEFINITIONS
Whenever used herein the following terms shall have the meanings hereinafter
set forth. Words in the masculine gender shall include the feminine and the
singular shall include the plural, and vice versa, unless qualified by the
context. Any headings used herein are included for ease of reference only, and
are not to be construed so as to alter the terms hereof.
1.1. "AGREEMENT" shall mean the Union Planters Corporation Supplemental
Executive
<PAGE> 3
Retirement Agreement.
1.2. "APPLICABLE FEDERAL RATE" shall mean 120% of the applicable federal rate
(as calculated on a mid-term, monthly basis) pursuant to Code Section 1274, as
amended.
1.3. "AVERAGE BASE SALARY INCREASE RATE" shall mean the greater of the
following: (i) the average annual increase in base salary and bonus (calculated
using four (4) decimal places) received by the Participant or Eligible
Participant during the three complete calendar years preceding termination of
employment (for whatever reason), or (ii) Five Percent (5%).
1.4. "BENEFICIARY" shall mean the person or persons Participant has designated
in writing to Employer to receive benefits under the Agreement in the event of
the Participant's death. If the Participant has not specifically designated any
Beneficiary for purposes of the Agreement, then the Beneficiary shall become
the Participant's estate. In the case of the death of the Beneficiary before
completion of payments under the Agreement to the Beneficiary, then the
Beneficiary's estate shall become entitled to any remaining payments. In either
case, any remaining payments under the terms of the Agreement shall be made in
the form of a lump sum payment as follows: an amount equal to the present value
of any remaining payments to be made under the Agreement shall be paid on the
first business day of the second month following the Participant's (or if
appropriate, Beneficiary's) date of death, and for purposes of determining the
present value of the payments, the Discount Rate which exists on the
Participant's (or, if appropriate, Beneficiary's) date of the death shall be
used.
1.5. "BOARD" shall mean the Board of Directors of Union Planters Corporation.
1.6. "CHANGE IN CONTROL" shall mean the occurrence of the earliest of any of
the following events:
(a) the acquisition by any entity, person, or group (excluding any
entity, person or group owning Voting Stock at the effective date of
this Agreement) of beneficial ownership, as that term is defined in
Rule 13d-3 of the Securities Exchange Act of 1934, of Twenty Five
percent (25%) or more of the Voting Stock of Employer;
(b) The commencement and consummation by any entity, person or group
(other than Employer) of a tender offer or an exchange offer for more
than Twenty Five percent (25%) or more of the Voting Stock of
Employer; or
(c) the effective date of a (i) merger or consolidation of Employer
with one or more other corporations as a result of which the holders
of the Voting Stock of Employer immediately prior to such merger or
consolidation hold less than Eighty Percent (80%) of the Voting Stock
of the surviving or resulting corporation, or (ii) a sale of transfer
of a majority of the property of Employer, other than to an entity of
which Employer controls 80% or more of the Voting Stock.
<PAGE> 4
1.7. "CODE" shall mean the Internal Revenue Code of 1986, as amended.
1.8. "DISABILITY" shall mean a physical or mental condition of the Participant,
determined in the sole discretion of the Board, which prohibits Participant
from carrying out his normal duties and responsibilities as an employee of
Employer.
1.9. "DISCOUNT RATE" shall mean that immediate annuity interest rate used by
the Pension Benefit Guaranty Corporation ("PBGC") under Section 4062, Appendix
B to Part 2619, of the Employee Retirement Income Security Act ("ERISA").
1.10. "ELIGIBLE PARTICIPANT" shall Mean the Participant once he earns at least
10 Years of Service with the Employer and attains the following indicated ages,
based on the Participant's actual age as of January 1, 1995.
<TABLE>
<CAPTION>
Age Participant Can
Participant's Age as of January 1, 1995 Qualify as Eligible Participant
--------------------------------------- -------------------------------
<S> <C>
Less than Age 50 55
Age 50 through 54 57
Age 55 through 60 59
Age 61 or over 64
</TABLE>
For purposes of the Agreement (where appropriate), the term "Participant" shall
include a reference to an Eligible Participant.
1.11. "EMPLOYER" shall mean the Union Planters Corporation, or to the extent
provided in Section 5.9, any successor corporation or other entity resulting
from a merger or consolidation into or with Employer or a transfer or sale of a
majority of the assets of Employer.
1.12. "FINAL AVERAGE EARNINGS" shall mean the average base salary plus bonus
earned by the Participant or Eligible Participant during the three complete
calendar years preceding termination of employment (for whatever reason).
1.13. "FORMER ELIGIBLE PARTICIPANT" shall mean Participant who, after becoming
an Eligible Participant, terminates service with the Employer and who, under
the terms of the Agreement, is then entitled to payment of a benefit. For
purposes of the Agreement (where appropriate), the term "Participant" shall
include a reference to a Former Eligible Participant.
1.14. "GOOD REASON" shall mean a termination of employment with the Employer
if, without the Participant's express written consent:
(i) Employer shall assign to Participant duties of a nonexecutive nature
or for
<PAGE> 5
which Participant is not reasonably equipped by his skills and experience; or
(ii) Employer shall reduce the salary of the Participant, or materially
reduce the amount of paid vacations to which he is entitled, or reduce his
fringe benefits and perquisites; or
(iii) Employer shall fail to provide office facilities, secretarial
services, and other administrative services to the Participant which are
substantially equivalent to the facilities and services provided to the
Participant at the Initial date of the Participant's participation in the
Agreement; or
(iv) Employer shall terminate incentive and benefit plans or arrangements,
or reduce or limit the Participant's participation therein, relative to
the level of participation of other executives of similar rank, to such an
extent as to materially reduce the aggregate value of the Participant's
incentive compensation and benefits below their aggregate value as of the
initial date of the Participant's participation in the Agreement.
1.15. "INSTALLMENT PAYMENT ACCOUNT" shall mean that account created pursuant to
the terms of Article II of the Agreement to facilitate payment of benefits
under the Agreement to the Participant in the form of installment payments.
1.16. "NORMAL RETIREMENT AGE" shall mean the following indicated ages based on
the Participant's actual age as of January 1, 1995:
<TABLE>
<CAPTION>
Participant's
Participant's Age as of January 1, 1995 Normal Retirement Age
--------------------------------------- ---------------------
<S> <C>
Less than Age 60 62
Age 60 or over 65
</TABLE>
1.17. "NORMAL RETIREMENT BENEFIT" shall mean an annual sum equal to 65% of the
Participant's Final Average Earnings, payable each year for the remaining
actuarially-determined life of the Participant in accordance with the
provisions of Article II of the Agreement. For purposes of determining the
Participant's remaining actuarially-determined life, Table V ("Ordinary Life
Annuities, One Life - Expected Return") of Code Regulation 1.72-9, as amended,
shall be used, with the assumption that the Participant terminated employment
on the first day of the first year of the Participant's Normal Retirement Age
(regardless of the Participant's actual age at termination of employment).
1.18. "PARTICIPANT" shall mean Jackson W. Moore, who is an employee of Employer
and to whom or with respect to whom a benefit may be payable under the
Agreement. For purposes of the Agreement, the term "Participant" shall include
a reference to the Participant once he becomes an Eligible Participant or
Former Eligible Participant.
<PAGE> 6
1.19. "REDUCED RETIREMENT BENEFIT" shall mean the following percentages of the
Participant's Normal Retirement Benefit, payable to an Eligible Participant in
accordance with the provisions of Section 2.3 of the Agreement if the Eligible
Participant terminates employment before attaining Normal Retirement Age
("NRA").
<TABLE>
<CAPTION>
Years Employment
Terminates Prior to NRA Reduced Retirement Benefit
----------------------- --------------------------
<S> <C>
More than 7 Years 0% of Normal Retirement Benefit
From 6 to 7 Years 58% of Normal Retirement Benefit
From 5 to 6 Years 64% of Normal Retirement Benefit
From 4 to 5 Years 70% of Normal Retirement Benefit
From 3 to 4 Years 75% of Normal Retirement Benefit
From 2 to 3 Year 82% of Normal Retirement Benefit
From 1 to 2 Years 88% of Normal Retirement Benefit
Up to 1 Year 94% of Normal Retirement Benefit
</TABLE>
1.20. "VOTING STOCK" shall mean that class (or classes) of common stock of the
Employer entitled to vote in the election of the Employer's directors.
1.21. "YEAR OF SERVICE" shall mean any calendar year of employment by the
Participant with Employer in which the Participant accumulates at least 1000
hours of service. For these purposes, the provisions of Department of Labor
Regulations 2530.200-2(b) and (c) are incorporated herein by reference as they
relate to the determination of "hour of service."
ARTICLE II
BENEFITS UNDER THE AGREEMENT
2.1. BENEFITS. Either a Normal Retirement Benefit or Reduced Retirement Benefit
shall be paid under the terms of the Agreement as set forth in this Article II.
2.2. VOLUNTARY TERMINATION OF EMPLOYMENT BEFORE BECOMING ELIGIBLE PARTICIPANT.
Should Participant voluntarily terminate employment with the Employer before
becoming an Eligible Participant, then the Participant (and any person claiming
benefits for or on behalf of the Participant) will forfeit all rights to
benefits under this Agreement; provided, however, that a termination of
employment for Good Reason or in accordance with Sections 2.4, 2.5, or 2.6 of
the Agreement will not be considered a voluntary termination of employment
subject to this Section 2.2 of the Agreement.
2.3. VOLUNTARY TERMINATION OF EMPLOYMENT AFTER BECOMING AN ELIGIBLE PARTICIPANT
BUT BEFORE NORMAL RETIREMENT AGE. Should the Participant, once becoming an
Eligible Participant, voluntarily terminate service with the Employer before
Normal Retirement Age (i.e., for reasons other than Good Reason or those
described in Sections 2.4, 2.5 or 2.6 of the Agreement), he will be entitled to
the Reduced Retirement Benefit payable at
<PAGE> 7
his election in either of the following forms. Should Participant fail to
specifically elect a form of benefit payment, a Lump Sum Distribution will be
made to the Participant.
(a) LUMP SUM DISTRIBUTION. An amount equal to the present value of the
Participant's total Reduced Retirement Benefit shall be paid to the
Participant in one lump sum distribution on the first business day of
the second month following the Participant's termination of
employment. For purposes of determining the present value of the
Participant's total Reduced Retirement Benefit, the Discount Rate
which exists on the date of the Participant's termination of
employment shall be used.
(b) PERIODIC DISTRIBUTION. An amount equal to the present value of the
Participant's total Reduced Retirement Benefit shall be credited to an
Installment Payment Account and shall be payable in up to 180
successive monthly installments. The first payment shall commence on
the first business day of the second month following the date of
termination of employment, and each successive payment shall occur
monthly in succeeding months on the first business day of such months.
In order for Participant to elect a Periodic Distribution under the
terms of this Section 2.3(b), the Participant must elect, in the
taxable year (or years) prior to the Participant's termination of
employment with the Employer, both the Periodic Distribution option
and the number of monthly installments to be made (up to a maximum of
180).
For purposes of determining the present value of the Participant's
total Reduced Retirement Benefit, the Discount Rate which exists on
the date of the Participant's termination of employment shall be used.
To determine the amount of each installment payment, a fraction shall
be applied to the Participant's Installment Payment Account on each
payment date. The numerator shall consist of one (1) and the
denominator shall consist of the total number of installment payments
remaining (including the current payment). During the installment
payment period, interest shall be credited to the Participant's
Installment Payment Account on a monthly basis using the Applicable
Federal Rate in existence on the first business day of each month
during which payments are made.
2.4. TERMINATION OF EMPLOYMENT PRIOR TO NORMAL RETIREMENT AGE DUE TO DEATH OR
DISABILITY. Should Participant, before or after becoming an Eligible
Participant, terminate service with the Employer prior to Normal Retirement Age
because of death or disability, he will be entitled to the Normal Retirement
Benefit following termination of employment, payable in one of the distribution
forms described in Sections 2.7(a) and (b) of the Agreement.
<PAGE> 8
2.5. INVOLUNTARY TERMINATION OF EMPLOYMENT PRIOR TO NORMAL RETIREMENT AGE.
Should Participant, before or after becoming an Eligible Participant,
involuntarily terminate service with the Employer (or voluntarily terminate
service with Good Reason) prior to Normal Retirement Age (for reasons other
than those described in Section 2.4 and 2.6), he will he entitled to the Normal
Retirement Benefit, without regard to the Participant's age or years of service
at the time of involuntary termination of employment. The Normal Retirement
Benefit will be payable in one of the distribution forms described in Sections
2.3(a) and (b) of the Agreement.
For purposes of calculating the Normal Retirement Benefit under this Section
2.5, Participant's Final Average Earnings shall be that amount at the date of
termination of employment increased at the Average Base Salary Increase Rate,
compounded annually, for the number of years (carried to two (2) decimal
places) needed to reach the Participant's age 65 birthday.
2.6. INVOLUNTARY TERMINATION OF EMPLOYMENT FOLLOWING A CHANGE IN CONTROL.
Should a Change in Control occur, Participant will be entitled to the Normal
Retirement Benefit following termination of employment (for whatever reason),
without regard to the Participant's age or years of service at the time of
involuntary termination of employment and without regard to whether the
Participant has become an Eligible Participant. The Normal Retirement Benefit
will be payable in accordance with the distribution forms described in Sections
2.7(a) and (b) of the Agreement.
For purposes of calculating the Normal Retirement Benefit under this Section
2.6, Participant's Final Average Earnings shall be that amount at the date of
termination of employment increased at the Average Base Salary Increase Rate,
compounded annually, for the number of years (carried to two (2) decimal
places) needed to reach the Participant's age 65 birthday.
2.7. TERMINATION OF EMPLOYMENT AT OR AFTER NORMAL RETIREMENT AGE. Should
Participant become an Eligible Participant and subsequently terminate service
with the Employer (for whatever reason) at or after Normal Retirement Age, he
(or, if appropriate, his Beneficiary) will be entitled to the Normal Retirement
Benefit, payable at his election in either of the following forms. Should
Participant fail to specifically elect a form of benefit payment, a Lump Sum
Distribution will be made to the Participant (or, if appropriate, to his
Beneficiary).
(a) LUMP SUM DISTRIBUTION. An amount equal to the present value of the
Participant's total Normal Retirement Benefit shall be paid to the
Participant in one lump sum distribution on the first business day of
the second month following the Participant's termination of
employment. For purposes of determining the present value of the
Participant's total Normal Retirement Benefit, the Discount Rate which
exists on the date of the Participant's termination of employment
shall be used.
<PAGE> 9
(b) PERIODIC DISTRIBUTION. An amount equal to the present value of the
Participant's total Normal Retirement Benefit shall be credited to an
Installment Payment Account and shall be payable in up to 180
successive monthly installments. The first payment shall commence on
the first business day of the second month following the date of
termination of employment, and each successive payment shall occur
monthly in succeeding months on the first business day of such months.
In order for Participant to elect a Periodic Distribution under the
terms of this Section 2.7(b), the Participant must elect, in this
taxable year (or years) prior to the Participant's termination of
employment with the Employer, both the Periodic Distribution option
and the number of monthly installments to be made (up to a maximum of
180).
For purposes of determining the present value of the Participant's
total Normal Retirement Benefit the Discount Rate which exists on the
date of the Participant's termination of employment shall be used. To
determine the amount of each installment payment, a fraction shall be
applied to the Participant's Installment Payment Account on each
payment date. The numerator shall consist of one (1) and the
denominator shall consist of the total number of installment payments
remaining (including the current payment). During the installment
payment period, interest shall be credited to the Participant's
Installment Payment Account on a monthly basis using the Applicable
Federal Rate in existence on the first business day of each month
during which payments are made.
2.8. DEATH WHILE BENEFIT PAYMENTS BEING MADE. Should Participant die after
becoming a Former Eligible Participant and after the commencement of Normal
Retirement or Reduced Retirement Benefit payments to the Participant, then any
remaining payments will be made to the Participant's Beneficiary in the same
form being made to the Participant at the date of his death. Alternatively, at
the Beneficiaries election (with the consent of the Employer), payment may be
made in a lump sum payment as follows: an amount equal to the present value of
the remaining payments shall be paid on the first business day of the second
month following the Participant's date of death, and for purposes of
determining the present value of the remaining payments, the Discount Rate
which exists on the date of the Participant's date of death shall be used.
ARTICLE III
ADMINISTRATION OF THE AGREEMENT
3.1. ADMINISTRATION BY EMPLOYER. Employer shall be responsible for the general
operation and administration of the Agreement and for carrying out the
provisions thereof. The Board or Employer may engage the services of outside
counsel, accountants, financial advisors and other such professional to assist
it in its administrative duties.
<PAGE> 10
3.2. GENERAL POWERS OF ADMINISTRATION. Employer is hereby designated as a
fiduciary under the Agreement Employer, as fiduciary, shall have authority to
control, interpret and manage the operation and administration of the
Agreement.
Any decision by Employer or the Board denying a claim by Participant or a
Beneficiary for benefits under the Agreement shall be stated in writing and
shall be delivered or mailed to the Participant or Beneficiary. Such statement
shall set forth the specific reasons for the denial, written to the best of the
Employer's ability in a manner that may be understood without legal counsel. In
addition, Employer shall afford a reasonable opportunity to the Participant or
Beneficiary for a full and fair review of the decision denying such claim.
Notwithstanding the above provisions of Section 3.2, to the extent that the
Employee Retirement Income Security Act ("ERISA") may require specific
procedures to be followed in the event of a denial of a claim, such provisions
of ERISA will be followed.
ARTICLE IV
AMENDMENT OR TERMINATION OF AGREEMENT
4.1. AMENDMENT OR TERMINATION OF AGREEMENT. Any amendment to this Agreement
shall be made pursuant to a resolution of the Board and, if such amendment
directly or indirectly affects the benefits payable under the Agreement, such
amendment must be mutually agreed to in writing by Participant (or, in the
event that the Participant is deceased at the date of amendment, the
Participant's Beneficiary).
ARTICLE V
GENERAL PROVISIONS
5.1. PARTICIPANT'S RIGHTS UNSECURED. The Agreement at all times shall be
unfunded as defined under provisions of the Code. The right of Participant or
any Beneficiary to receive a distribution hereunder shall be an uninsured claim
against the general assets of Employer in the event of the Employer's
insolvency or bankruptcy.
Employer shall implement a form of trust arrangement (known generally as a
"rabbi trust") to hold employer assets which will be used to make payments to
the Participant (or the Participant's Beneficiary) under the terms of the
Agreement. Such trust arrangement will not be a "funded" arrangement under the
provisions of the Code, and a copy of such trust arrangement shall be included
with this Agreement as Exhibit A.
5.2. INDEPENDENCE OF OTHER BENEFIT AGREEMENTS. Participation in the Agreement
shall in no way restrict or otherwise impact Participant's participation in any
other welfare benefit plan, employment or other contract, deferred compensation
agreement, equity participation plan or any other form of retirement benefit
plan sponsored by Employer.
<PAGE> 11
5.3. NO SECURED GUARANTEE OF BENEFITS. In the event of the insolvency or
bankruptcy of Employer, Participant shall remain a general creditor of the
Employer with respect to any benefits payable under the Agreement and nothing
contained in the Agreement shall constitute a secured guaranty by Employer or
any other person or entity that the assets of Employer will be sufficient to
pay any benefit hereunder in the event of the Employer's insolvency or
bankruptcy.
5.4. NO ENLARGEMENT OF EMPLOYEE RIGHTS. No Participant shall have any right to
receive a distribution of any benefits under the Agreement except in accordance
with the terms of the Agreement. Establishment of the Agreement shall not be
construed to give any Participant the right to be retained in the service of
Employer.
5.5. SPENDTHRIFT PROVISION. No Interest of any person or entity in, or right to
receive a distribution under, the Agreement shall be subject in any manner to
sale, transfer, assignment, pledge, attachment, garnishment or other alienation
or encumbrance of any kind; nor may such interest or right to receive a
distribution be taken, either voluntarily or involuntarily for the satisfaction
of the debts of, or other obligations or claims against, such person or entity,
including claims for alimony, support, separate maintenance and claims in
bankruptcy proceedings.
5.6. APPLICABLE LAW. The Agreement shall be construed and administered under
the laws of the State of Tennessee.
5.7. SEVERABILITY. In the event that any of the provisions of the Agreement are
held to be inoperative or invalid by any court of competent jurisdiction, then:
(i) insofar as is reasonable, effect will be given to the intent manifested in
the provision held invalid or inoperative, and (ii) the validity and
enforceability of the remaining provisions of the Agreement will not be
affected thereby.
5.8. INCAPACITY OF RECIPIENT. If any person entitled to a distribution under
the Agreement is deemed by Employer to be incapable (physically or mentally) of
personally receiving and giving a valid receipt for any payment pursuant to the
Agreement, then, unless and until claim therefore shall have been made by a
duly appointed guardian or other legal representative of such person, Employer
may provide for such payment or any part thereof to be made to any other person
or institution then contributing toward or providing for the care and
maintenance of such person. Any such payment shall be a payment for the account
of such person and a complete discharge of any liability of Employer end the
Agreement with respect to such payment.
5.9. SUCCESSORS. The terms and conditions of the Agreement will be binding on
the Employer's and Participant's successors, heirs and assigns (herein,
"Participant Successors" and "Employer Successors").
5.10. UNCLAIMED BENEFITS. Participant shall keep Employer informed of his or
her current address and the current address of his or her Beneficiary. Employer
shall not be
<PAGE> 12
obligated to search for the whereabouts of any person. If the location of
Participant is not made known to Employer within a one (1) year period after
the date on which payment of the Participant's Normal Retirement or Reduced
Retirement Benefit is first to be made, then payment may be made by the
Employer to the Beneficiary instead. If, within one (1) additional year after
such initial one (1) year period, Employer is unable to locate any designated
Beneficiary of the Participant, then Employer shall have no further obligation
to pay any benefit under the Agreement to such Participant or designated
Beneficiary and any such "benefit shall be irrevocably forfeited.
5.11. LIMITATIONS ON LIABILITY. Participant and any other person claiming
benefits under the Agreement shall be entitled under this Agreement only to
those payments provided in accordance with the provisions of the Agreement
("Payment Claims"). With the exception of the provisions of Section 5.13 of the
Agreement, neither Employer, Employer Successor nor any individual acting as
employee or agent of Employer or Employer Successor shall be liable to
Participant or any other person for any other claim, loss, liability or expense
under this Agreement not directly related to a Payment Claim.
5.12. FORFEITURE OF BENEFITS. Notwithstanding any other provision of the
Agreement, should Participant engage in theft, fraud, embezzlement or willful
misconduct causing significant property damage to Employer, then any benefits
payable to such Participant under the Agreement will automatically be
forfeited. The determination of theft, embezzlement or willful misconduct will
be made by the Board in good faith, but such determination does not require an
actual criminal indictment or conviction prior to or after such decision. In
any determination of forfeiture pursuant to this Section 5.12, Participant will
be given the opportunity to refute any such decision by the Board, but the
Board's decision on the matter will be considered final and binding on
Participant and all other parties.
5.13. PAYMENT OF ATTORNEY'S FEES, COURT COSTS, AND LOSS OF BENEFITS. Should
either the Employer or Employer Successor (for these purposes, "Employer") or
Participant bring an action at law (or through arbitration) in order that the
Agreement's terms be enforced, then the party prevailing in the action at law
(or through arbitration) shall be entitled to reimbursement from the losing
party for reasonable attorney's fees, court costs and other similar amounts
expended in the enforcement of the Agreement. In addition, should the
prevailing party be Participant, he shall also be entitled to interest on any
delayed payments, with such interest computed at the Applicable Rate.
5.14. PAYMENT OF TAXES. Should the payment of any benefits under this Agreement
be classified as payment of an excess parachute payment under the provisions of
Code Sections 280G and 4999, then an additional payment will be made to the
Participant based on the amount of excise tax or penalty payable by the
Participant because of such classification. Such payment will be made within
two (2) months following Participant's termination of employment, once a good
faith determination is made by either Employer or Participant that the payment
of any benefit under the Agreement will constitute an
<PAGE> 13
excess parachute payment. The amount payable to the Participant will be
calculated as follows: (amount of excise tax or penalty payable by Participant)
divided by (one (1) minus the highest marginal income tax rate under the Code
for individuals).
ARTICLE VI
CONTINUATION OF MEDICAL PLAN COVERAGE
6.1. CONTINUATION OF MEDICAL COVERAGE. Following termination of employment with
the Employer, if Participant is entitled to payment of the Normal or Reduced
Retirement Benefit under the terms of the Agreement, then Participant, his
spouse and dependents will continue to be covered under the Employer's health
insurance program ("Health Plan") to the same extent as was present immediately
prior to the date of termination of employment. Employer shall continue to pay
Health Plan coverage costs of the Participant, his spouse and other dependents
under the Health Plan on the same basis as was applicable to active Employer
employees covered at the time of termination of employment.
6.2. PERIOD OF CONTINUED COVERAGE. Such coverage will continue for the period
equal to the shortest of the following: (1) for the number of years required
for the Participant to reach age 65, (2) until the Participant obtains
employment with another employer (who provides substantially similar coverage
under its health plan as was provided by Employer), or (3) until the death of
the Participant.
6.3. ALTERNATIVE COVERAGE. If continued participation in the Health Plan by
Participant, his spouse and any dependents is; not possible under the terms of
the Health Plan, Employer will either: (1) provide substantially identical
benefits through another health insurance plan, or will (2) provide an annual
cash payment to Participant sufficient to permit Participant to obtain
substantially equivalent individual, spouse and dependent coverage under a
health insurance plan of his choosing. If any cash payment is made to
Participant, the amount of cash payment will be "grossed up" for income tax
purposes (using the maximum individual income lax rate under the Code at the
time of payment) to insure no net out of pocket costs to the Participant in
obtaining such additional coverage.
IN WITNESSES WHEREOF, the undersigned Employer and Participant do hereby
execute this Agreement effective the date first stated above.
UNION PLANTERS CORPORATION
By: /s/ Benjamin W. Rawlins, Jr. /s/ Jackson W. Moore
---------------------------- --------------------
Benjamin W. Rawlins, Jr. Jackson W. Moore
Chairman and CEO
<PAGE> 1
EXHIBIT 10(F)
<PAGE> 2
AMENDMENT TO
SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT
THIS AMENDMENT, dated as of April 17, 1997 by and between Union Planters
Corporation ("Employer") and Jackson W. Moore ("Participant"), amends that
certain Supplemental Executive Retirement Agreement, dated as of February 23,
1995, by and between Employer and Participant (the "SERP").
WHEREAS, Employer and Participant desire to amend the SERP as provided
herein;
NOW, THEREFORE, in consideration, of the foregoing and of the mutual
covenants and agreements set forth herein and for other good and valuable
consideration, the receipt and adequacy of which is hereby acknowledged, the
parties hereto agree as follows:
1. Definition of "Change in Control". The current definition of the term
"Change in Control" in Section 1.6 of the SERP is hereby deleted in its
entirety and the following is substituted in lieu thereof.
"Change in Control" shall mean the occurrence of any of the following
events:
(i) The acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) (a "Person") of
beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Securities Exchange Act of 1934, as amended) of 25% or more
of either (A) the then outstanding shares of common stock of Employer
(the "Outstanding Company Common Stock") or (B) the combined voting
power of the then outstanding voting securities of Employer entitled
to vote generally in the election of directors (the "Outstanding
Company Voting Securities; provided, however, that for purposes of
this subsection (1), the following acquisition shall not constitute a
Change in Control: (w) any acquisition directly from Employer, (x) any
acquisition by Employer, (y) any acquisition by any employee benefit
plan (or related trust) sponsored or maintained by Employer or any
corporation controlled by Employer, or (z) any acquisition by any
Person pursuant to a transaction which complies with clauses (A), (B)
and (C) of subsection (iii) of this Section 1.6; or
(ii) Individuals who, as of the date hereof, constitute
the Board of Directors of Employer (the "Incumbent Board") cease for
any reason to constitute at least a majority of the Board, provided,
however, that any individual becoming a director subsequent to the
date hereof whose election, or nomination for election by Employer's
shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered as
though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal
<PAGE> 3
of directors or other actual of threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board, or
(iii) Consummation of a reorganization merger or
consolidation or sale or other disposition of all or substantially all
of the assets of Employer (a "Business Combination"), in each case,
unless, following such Business Combination,
(A) all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the
Outstanding Company Common Stock and outstanding Company
Voting Securities immediately prior to such Business
Combination beneficially own, directly or indirectly, more
than 65% of, respectively, the then outstanding shares of
common stock and the combined voting power of the then
outstanding voting securities entitled to vote generally in
the election of directors, as the case may be of the
corporation resulting from such Business Combination
(including, without limitation, a corporation which as a
result of such transaction owns Employer or all or
substantially all of Employer's assets either directly of
through one or more subsidiaries) in substantially the same
proportions as their ownership, immediately prior to such
Business Combination of the Outstanding Company Common Stock
and Outstanding Company Voting Securities, as the case may
be, and
(B) no Person (excluding any corporation resulting
from such Business Combination or any employee benefit plan
(or related trust) of Employer or such corporation resulting
from such Business Combination) beneficially owns, directly
or indirectly, 25% or more of, respectively, the then
outstanding shares of common stock of the corporation
resulting from such Business Combination or the combined
voting power of the then outstanding voting securities of
such corporation except to the extent that such ownership
existed prior to the Business Combination, and
(C) at least a majority of the members of the board
of directors of the corporation resulting from such Business
Combination were members of the Incumbent Board at that time
of the execution of the initial agreement, or of the action
of the Board, providing for such Business Combination,
2. Definition of "Disability". The current definition of the term
"Disability" in Section 1.8 of the SERP is hereby deleted in its entirety and
the following is substituted in lieu thereof:
"Disability" shall mean a mental or physical disability as determined
by the Board in accordance with standards and procedures similar to
those under Employer's employee long-term disability plan, if any. At
any time that Employer does not
<PAGE> 4
maintain such a long-term disability plan, Disability shall mean the
inability of Participant, as determined by the Board, to substantially
perform his regular duties and responsibility due to a medically
determinable physical or mental illness which has lasted (or can
reasonably be expected to last) for a period of six consecutive months.
3. Definition of "Final Average Earnings". The current definition of the
term "Final Average Earnings" in Section 1.12 of the SERP is hereby deleted in
its entirety and the following is substituted in lieu thereof:
"Final Average Earnings" shall mean the sum of (i) the Participant's
or Eligible Participant's highest base salary in effect during any
calendar year preceding his termination of employment, including the
year in which such termination occurs, and (ii) the Participant's or
Eligible Participant's highest annual bonus payable with respect to
any calendar year preceding his termination of employment, including
the year in which such termination occurs.
4. Excise Tax Provision. Section 5.14 of the SERP, relating to the excise
tax imposed by Section 4999 of the Internal revenue code of 1986, as amended,
is hereby deleted in its entirety.
**************************************************************
The terms of the SERP not hereby amended shall be and remain in full
force and effect and are not affected by this Amendment.
IN WITNESS WHEREOF, Participant and Employer have duly executed this
Amendment as of the day and year first above written.
/s/ Jackson W. Moore
--------------------
Jackson W. Moore
Participant
UNION PLANTERS CORPORATION
By: /s/ M. Kirk Walters
-------------------
<PAGE> 1
EXHIBIT 10(G)
<PAGE> 2
AMENDMENT NO. 2 TO
SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT
THIS AMENDMENT, dated as of August 31, 1999, by and between Union
Planters Corporation ("Employer") and Jackson W. Moore ("Participant"), amends
that certain Supplemental Retirement Agreement, dated as of February 23, 1995,
as previously amended April 17, 1997, by and between Employer and Participant
(the "SERP").
WHEREAS, Employer and Participant desire to amend the SERP as provided
herein;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements set forth herein and for other good and valuable
consideration, the receipt and adequacy of which is hereby acknowledged, the
parties hereto agrees as follows:
1. Reduction of Benefits to Reflect "Cost of Funds" under Split Dollar
Insurance Program. There is hereby added a new Section 2.9 to the SERP to read
as follows:
"2.9 REDUCTION OF BENEFITS TO REFLECT "COST OF FUNDS" UNDER SPLIT
DOLLAR INSURANCE PROGRAM. Employer and Participant have entered into a
Split Dollar Agreement dated August 31, 1999 ("Split Dollar
Agreement"), pursuant to which certain life insurance coverage will be
provided on the joint lives of Participant and his spouse, Elizabeth
W. Moore. Under the Split Dollar Agreement, on August 31, 1999,
Employer paid a premium of $3,608,280 for the life insurance policy
providing second to die coverage on Participant and his said spouse
("Policy"), and Employer will pay four additional premiums of
$3,608,010, $3,607,740, $3,607,740 and $3,607,200 on the Policies on
the next four respective anniversaries of such initial premium payment
date. Under paragraph 8 of the Split Dollar Agreement, when
Participant and his said spouse are no longer living or certain other
events earlier occur, Employer will be reimbursed for the cumulative
amount of premiums paid under the split dollar program (without
interest).
In order to insure that Employer will also be reimbursed for the
opportunity cost of making the premium payments under the split dollar
program, the present value of the amount payable under this Article II
shall be reduced (but not below zero) by an amount to be referred to
as the "Cost of Funds Reimbursement." The Cost of Funds Reimbursement
shall be determined (and the reduction described in the immediately
preceding sentence shall be made) as of Participant's termination of
employment for any reason (hereafter referred to as the "Cost of Funds
Settlement Date"). The Cost of Funds Reimbursement shall be the sum of
(a) plus (b), determined as follows:
(a) There shall first be calculated the interest expense on each
premium payment under the Program, determined as though Employer had
borrowed the premium payment at an interest rate determined under
Section 7520(a)(2) of the Internal Revenue Code of 1986, as amended
("Applicable Federal Rate" or "AFR"). The interest expense for the
first twelve months after a premium payment is made shall be
<PAGE> 3
determined using the AFR as in effect for the month such premium
payment is made, and shall remain in effect until the one-year
anniversary of the date such premium payment was made. As of such
one-year anniversary, the interest expense with respect to such
premium for the next twelve months shall be determined using the AFR
in effect for the month which includes such one-year anniversary, and
so forth until the Cost of Funds Settlement Date occurs. The aggregate
interest expense for all premiums under the Program for all years from
the date the first premium payment is made until the Cost of Funds
Settlement Date occurs shall be the amount under this paragraph (a).
(b) There shall next be determined as of the Cost of Funds
Settlement Date the present value of all future interest expense of
all premiums under the Program, including both premiums paid and
premiums not yet accrued or paid as of the Cost of Funds Settlement
Date. The future interest expense shall run from the Cost of Funds
Settlement Date to the earliest date on which Employer is entitled to
reimbursement under paragraph 8 of the Split Dollar Agreement of the
cumulative premiums paid by Employer under the Policy. For this
purpose, (i) all future interest expense shall be determined using the
AFR in effect for the month in which the Cost of Funds Settlement Date
occurs, rather than the AFR which was in effect at the time the most
recent premium payment was made, (ii) no future interest expense shall
accrue for a future premium payment until the date such premium is
due, and (iii) the future interest expense shall be discounted to
present value using the AFR in effect for the month in which the Cost
of Funds Settlement Date occurs. The present value of all future
interest expense as determined under this paragraph shall be the
amount determined under this paragraph (b).
(c) If prior to the 15th anniversary of the date the initial premium
payment was made under the Split Dollar Program, the Employer is
reimbursed under the Split Dollar Agreement for all amounts that
would be owed to the Employer under the Split Dollar Agreement upon
the death of the survivor of the Participant and his spouse named in
paragraph (a) above (such date to be referred to herein as the
"Premium Reimbursement Date"), then an additional amount shall be paid
under this Section 2.9 determined as follows: (i) the future interest
expense under paragraph (b) immediately above shall be re-calculated
as of the Cost of Funds Settlement Date as though it was known as of
such date that the future interest expense for premiums under the
Split Dollar Program would run only until the actual Premium
Reimbursement Date, using the AFR in effect for the Cost of Funds
Settlement Date; (ii) there shall be subtracted from the actual amount
determined under paragraph (b) immediately above the amount determined
under clause (c)(i) immediately preceding; and (iii) the remainder
determined under clause (c)(ii) immediately preceding shall be
credited with interest using the AFR as of the Cost of Funds
Settlement Date, such interest to run from the Cost of Funds
Settlement Date to the Premium Reimbursement Date. The additional
payment determined under this paragraph (c) shall be made to the
Participant if he is then living, and if he is not then living, then
to the Participant's Beneficiary. Such payment shall be made in the
same form being under this Agreement as of the Premium Reimbursement
Date. If no payments are being made under this Agreement as of such
date, or, alternatively, at the Participant's or Beneficiary's
election, as applicable (with the consent of the Employer), payment
shall be made to the Participant or Beneficiary, as applicable, in a
lump sump payment as soon as practicable after the Premium
Reimbursement Date."
**************************************************
The terms of the SERP not hereby amended shall be and remain in full
force and effect and are not affected by this Amendment.
<PAGE> 4
IN WITNESS WHEREOF, Participant and Employer have duly executed this
Amendment as of the day and year first above written.
/s/ Jackson W. Moore
---------------------------------
Jackson W. Moore
Participant
UNION PLANTERS CORPORATION
By: /s/ M. Kirk Walters
-------------------
Its: Senior Vice President and Treasurer
-----------------------------------
<PAGE> 1
EXHIBIT 10(H)
<PAGE> 2
UNION PLANTERS CORPORATION
SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT
This Supplemental Executive Retirement Agreement ("Agreement") has been adopted
by Union Planters Corporation ("Employer") and M. Kirk Walters ("Participant")
effective the 23 day of February, 1995.
RECITALS
WHEREAS, Union Planters Corporation ("Employer") previously entered into a
Deferred Compensation Agreement ("Previous Agreement") with the Participant on
April 17, 1980;
WHEREAS, the Previous Agreement was amended from time to time to provide
additional benefits to the Participant and/or to clarify certain provisions of
the Previous Agreement; and
WHEREAS, the Board at its regular monthly meeting in February, 1995, approved
the adoption of the Union Planters Corporation Supplemental Executive
Retirement Plan ("Plan");
WHEREAS, in consideration of the Employer's desire to change the terms of the
Previous Agreement and the Participant's desire to participate in the Plan,
Employer and the Participant agree to terminate the Previous Agreement, and
WHEREAS, as consideration for the termination of the Previous Agreement, both
Employer and Participant agree to abide by the terms and conditions of the
Plan, which are evidenced through this Agreement.
NOW THEREFORE, Employer and Participant hereby adopt this Agreement pursuant to
the terms and provisions set forth below.
ARTICLE I
DEFINITIONS
Whenever used herein the following terms shall have the meanings hereinafter
set forth. Words in the masculine gender shall include the feminine and the
singular shall include the plural, and vice versa, unless qualified by the
context. Any headings used herein are included for ease of reference only, and
are not to be construed so as to alter the terms hereof.
1.1. "AGREEMENT" shall mean the Union Planters Corporation Supplemental
Executive Retirement Agreement.
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1.2. "APPLICABLE FEDERAL RATE" shall mean 120% of the applicable federal rate
(as calculated on a mid-term, monthly basis) pursuant to Code Section 1274, as
amended.
1.3. "AVERAGE BASE SALARY INCREASE RATE" shall mean the greater of the
following: (i) the average annual increase in base salary and bonus (calculated
using four (4) decimal places) received by the Participant or Eligible
Participant during the three complete calendar years preceding termination of
employment (for whatever reason), or (ii) Five Percent (5%).
1.4. "BENEFICIARY" shall mean the person or persons Participant has designated
in writing to Employer to receive benefits under the Agreement in the event of
the Participant's death. If the Participant has not specifically designated any
Beneficiary for purposes of the Agreement, then the Beneficiary shall become
the Participant's estate. In the case of the death of the Beneficiary before
completion of payments under the Agreement to the Beneficiary, then the
Beneficiary's estate shall become entitled to any remaining payments. In either
case, any remaining payments under the terms of the Agreement shall be made in
the form of a lump sum payment as follow: an amount equal to the present value
of any remaining payments to be made under the Agreement shall be paid on the
first business day of the second month following the Participant's (or if
appropriate, Beneficiary's) date of death, and for purposes of determining the
present value of the payments, the Discount Rate which exists on the
Participants (or, if appropriate, Beneficiary's) date of the death shall be
used.
1.5. "BOARD" shall mean the Board of Directors of Union Planters Corporation.
1.6. "CHANGE IN CONTROL" shall mean the occurrence of the earliest of any of
the following events:
(a) the acquisition by any entity, person, or group (excluding any
entity, person or group owning Voting Stock at the effective date of
this Agreement) of beneficial ownership, as that term is defined in
Rule 13d-3 of the Securities Exchange Art of 1934, of Twenty Five
percent (25%) or more of the Voting Stock of Employer;
(b) the commencement and consummation by any entity, person or group
(other than Employer) of a tender offer or an exchange offer for more
than Twenty Five percent (25%) or more of the Voting Stock of
Employer; or
(c) the effective date of a (i) merger or consolidation of Employer
with one or more other corporations as a result of which the holders
of the Voting Stock of Employer immediately prior to such merger or
consolidation hold less than Eighty Percent (80%) of the Voting Stock
of the surviving or resulting corporation, or (ii) a sale or transfer
of a majority of the property of Employer, other than to an entity of
which Employer controls 80% or more of the Voting Stock.
<PAGE> 4
1.7. "CODE" shall mean the Internal Revenue Code of 1986, as amended.
1.8. "DISABILITY" shall mean a physical or mental condition of the Participant,
determined in the sale discretion of the Board, which prohibits Participant
from carrying out his normal duties and responsibilities as an employee of
Employer.
1.9. "DISCOUNT RATE" shall mean that immediate annuity interest rate used by
the Pension Benefit Guaranty Corporation ("PBGC") under Section 4062, Appendix
B to Part 2619, of the Employee Retirement income Security Act ("ERISA").
1.10. "ELIGIBLE PARTICIPANT" shall mean the Participant once he earns at least
10 Years of Service with the Employer and attains the following indicated ages,
based on the Participant's actual age as of January 1, 1995.
<TABLE>
<CAPTION>
Age Participant Can
Participants Age as of January 1, 1995 Qualify as Eligible Participant
-------------------------------------- -------------------------------
<S> <C>
Less than Age 50 55
Age 50 through 54 57
Age 55 through 60 59
Age 61 or over 64
</TABLE>
For purposes of the Agreement (where appropriate), the term "Participant' shall
include a reference to an Eligible Participant.
1.11. "EMPLOY" shall mean the Union Planters Corporation, or to the extent
provided in Section 5.9, any successor corporation or other entity resulting
from a merger or consolidation into or with Employer or a transfer or sale of a
majority of the assets of Employer.
1.12. "FINAL AVERAGE EARNINGS" shall mean the average base salary plus bonus
earned by the Participant or Eligible Participant during the three complete
calendar years preceding termination of employment (for whatever reason).
1.13. "FORMER ELIGIBLE PARTICIPANT" shall mean Participant who, after becoming
an Eligible Participant, terminates service with the Employer and who, under
the terms of the Agreement, is then entitled to payment of a benefit. For
purposes of the Agreement (where appropriate), the term "Participant" shall
include a reference to a Former Eligible Participant.
1.14. "GOOD REASON" shall mean a termination of employment with the Employer
if, without the Participants express written consent:
(i) Employer shall assign to Participant duties of a nonexecutive
nature or for which Participant is not reasonably equipped by his
skill's and experience; or
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(ii) Employer shall reduce the salary of the Participant, or
materially reduce the amount of paid vacations to which he is
entitled, or reduce his fringe benefits and perquisites; or
(iii) Employer shall fail to provide office facilities, secretarial
services, and other administrative services to the Participant which
are substantially equivalent to the facilities and services provided
to the Participant at the initial date of the Participant's
participation in the Agreement; or
(iv) Employer shall terminate incentive and benefit plans or
arrangements, or reduce or limit the Participant's participation
therein, relative to the level of participation of other executives of
similar rank, to such an extent as to materially reduce the aggregate
value of the Participant's incentive compensation and benefits below
their aggregate value as of the initial date of the Participant's
participation in the Agreement.
1.15. "INSTALLMENT PAYMENT ACCOUNT" shall mean that account created pursuant to
the terms of Article 11 of the Agreement to facilitate payment of benefits
under the Agreement to the Participant in the form of installment payments.
1.16. "NORMAL RETIREMENT AGE" shall mean the following indicated ages based on
the Participant's actual age as of January 1, 1995:
<TABLE>
<CAPTION>
Participant's
Participant Age as of January 1, 1995 Normal Retirement Age
------------------------------------- ---------------------
<S> <C>
Less than Age 60 62
Age 60 or over 65
</TABLE>
1.17. "NORMAL RETIREMENT BENEFIT" shall mean an annual sum equal to 65% of the
Participant's Final Average Earnings, payable each year for the remaining
actuarially-determined life of the Participant in accordance with the
provisions of Article 11 of the Agreement. For purposes of determining the
Participant's remaining actuarially-determined life, Table V ("Ordinary Life
Annuities, One Life - Expected Return") of Code Regulation 1.72-9, as amended,
shall be used, with the assumption that the Participant terminated employment
on the first day of the first year of the Participant's Normal Retirement Age
(regardless of the Participant's actual age at termination of employment),
1.18. "PARTICIPANT" shall mean M. Kirk Walters, who is an employee of Employer
and to whom or with respect to whom a benefit may be payable under the
Agreement. For purposes of the Agreement, the term "Participant" shall include
a reference to the Participant once he becomes an Eligible Participant or
Former Eligible Participant.
1.19. "REDUCED RETIREMENT BENEFIT" shall mean the following percentages of the
Participant's Normal Retirement Benefit, payable to an Eligible Participant in
accordance
<PAGE> 6
with the provisions of Section 2.3 of the Agreement if the Eligible Participant
terminates employment before attaining Normal Retirement Age ("NRA").
<TABLE>
<CAPTION>
Years Employment
Terminates Prior to NRA Reduced Retirement Benefit
----------------------- --------------------------
<S> <C>
More then 7 Years 0% of Normal Retirement Benefit
From 6 to 7 Years 58% of Normal Retirement Benefit
From 5 to 6 Years 64% of Normal Retirement Benefit
From 4 to 5 Years 70% of Normal Retirement Benefit
From 3 to 4 Years 76% of Normal Retirement Benefit
From 2 to 3 Years 82% of Normal Retirement Benefit
From 1 to 2 Years 88% of Normal Retirement Benefit
Up to 1 Year 94% of Normal Retirement Benefit
</TABLE>
1.20. "VOTING STOCK" shall mean that class (or classes) of common stock of the
Employer entitled to vote in the election of the Employer's directors.
1.21. "YEAR OF SERVICE" shall mean any calendar year of employment by the
Participant with Employer in which the Participant accumulates at least 1000
hours of service. For these purposes, the provisions of Department of Labor
Regulations 2530.200-2(b) and (c) are incorporated herein by reference as they
relate to the determination of "hour of service."
ARTICLE II
BENEFITS UNDER THE AGREEMENT
2.1. BENEFITS. Either a Normal Retirement Benefit or Reduced Retirement Benefit
shall be paid under the terms of the Agreement, as set forth in this Article
11.
2.2. VOLUNTARY TERMINATION OF EMPLOYMENT BEFORE BECOMING ELIGIBLE PARTICIPANT.
Should Participant voluntarily terminate employment with the Employer before
becoming an Eligible Participant, then the Participant (and any person claiming
benefits for or on behalf of the Participant) will forfeit all rights to
benefits under this Agreement; provided, however, that a termination of
employment for Good Reason or in accordance with Sections 2.4, 2.5, or 2.6 of
the Agreement will not be considered a voluntary termination of employment
subject to this Section 2.2 of the Agreement.
2.3. VOLUNTARY TERMINATION OF EMPLOYMENT AFTER BECOMING AN ELIGIBLE PARTICIPANT
BUT BEFORE NORMAL RETIREMENT AGE. Should the Participant, once becoming an
Eligible Participant, voluntarily terminate service with the Employer before
Normal Retirement Age (i.e., for reasons other than Good Reason or those
described in Sections 2.4, 2.5 or 2,6 of the Agreement), he will be entitled to
the Reduced Retirement Benefit, payable at his election in either of the
following forms. Should Participant fail to specifically elect a form of
benefit payment, a Lump Sum Distribution will be made to the Participant.
<PAGE> 7
(a) LUMP SUM DISTRIBUTION. An amount equal to the present value of the
Participant's total Reduced Retirement Benefit shall be paid to the
Participant in one lump sum distribution on the first business day of
the second month following the Participant's termination of
employment. For purposes of determining the present value of the
Participant's total Reduced Retirement Benefit, the Discount Rate
which exists on the date of the Participant's termination of
employment shall be used.
(b) PERIODIC DISTRIBUTION. An amount equal to the present value of the
Participant's total Reduced Retirement Benefit shall be credited to an
installment Payment Account and shall be payable in up to 180
successive monthly installments, The first payment shall commence on
the first business day Of the second month following the date of
termination Of employment, and each successive payment shall occur
monthly in succeeding months on the first business day of such months.
In order for Participant to elect a Periodic Distribution under the
terms of this Section 2.3 (b), the Participant must elect, in the
taxable year (or years) prior to the Participant's termination of
employment with the Employer, both the Periodic Distribution option
and the number of monthly installments to be made (up to a maximum of
180).
For purposes of determining the present value of the Participants
total Reduced Retirement Benefit, the Discount Rate which exists on
the date of the Participant's termination of employment shall be used,
To determine the amount of each installment payment, a traction shall
be applied to the Participants Installment Payment Account on each
payment date. The numerator shall consist of one (1) and the
denominator shall consist of the total number of installment payments
remaining (including the current payment). During the installment
payment period, interest shall be credited to the Participants
Installment Payment Account on a monthly basis using the Applicable
Federal Rate in existence on the first business day of each month
during which payments are made.
2.4. TERMINATION OF EMPLOYMENT PRIOR TO NORMAL RETIREMENT AGE DUE TO DEATH OR
DISABILITY. Should Participant, before or after becoming an Eligible
Participant, terminate service with the Employer prior to Normal Retirement Age
because of death or Disability, he will be entitled to the Normal Retirement
Benefit following termination of employment payable in one of the distribution
forms described in Sections 2-7 (a) and (b) of the Agreement.
2.5. INVOLUNTARY TERMINATION OF EMPLOYMENT PRIOR TO NORMAL RETIREMENT AGE.
Should Participant, before or after becoming an Eligible Participant,
involuntarily terminate service with the Employer (or voluntarily terminate
service with Good Reason) prior to Normal Retirement Age (for reasons other
than those described in Section 2.4 and 2.6), he will be entitled to the
Normal Retirement Benefit, without regard to the
<PAGE> 8
Participants age or years of service at the time of involuntary termination of
employment. The Normal Retirement Benefit will be payable in one of the
distribution forms described in Sections 2.3 (a) and (b) of the Agreement.
For purposes of calculating the Normal Retirement Benefit under this Section
2.5, Participant's Final Average Earnings shall be that amount at the date of
termination of employment increased at the Average Base Salary Increase Rate,
compounded annually, for the number of years (carried to two (2) decimal
places) needed to reach the Participant's age 65 birthday.
2.6. INVOLUNTARY TERMINATION OF EMPLOYMENT FOLLOWING A CHANGE IN CONTROL.
Should a Change in Control occur, Participant will be entitled to the Normal
Retirement Benefit following termination of employment (for whatever reason),
without regard to the Participant's age or years of service at the time of
involuntary termination of employment and without regard to whether the
Participant has become an Eligible Participant. The Normal Retirement Benefit
will be payable in accordance with the distribution forms described in Sections
2.7 (a) and (b) of the Agreement,
For purposes of calculating the Normal Retirement Benefit under this Section
2.6, Participant's Final Average Earnings shall be that amount at the date of
termination of employment increased at the Average Base Salary Increase Rate,
compounded annually, for the number of years (carried to two (2) decimal
places) needed to reach the Participants age 65 birthday.
2.7. TERMINATION OF EMPLOYMENT AT OR AFTER NORMAL RETIREMENT AGE. Should
Participant become an Eligible Participant and subsequently terminate service
with the Employer (for whatever reason) at or after Normal Retirement Age, he
(or, if appropriate, his Beneficiary) will be entitled to the Normal Retirement
Benefit, payable at his election in either of the following forms. Should
Participant fail to specifically elect a form of benefit payment, a Lump Sum
Distribution will be made to the Participant (or, if appropriate, to his
Beneficiary).
(a) LUMP SUM, DISTRIBUTION. An amount equal to the present value of
the Participant's total Normal Retirement Benefit shall be paid to the
Participant in one lump sum distribution on the first business day of
the second month following the Participant's termination of
employment. For purposes of determining the present value of the
Participant's total Normal Retirement Benefit, the Discount Rate which
exists on the date of the Participants termination of employment shall
be used.
(b) PERIODIC DISTRIBUTION. An amount equal to the present value of the
Participant's total Normal Retirement Benefit shall be credited to an
Installment Payment Account and shall be payable in up to 180
successive monthly installments. The first payment shall commence on
the first business clay of the
<PAGE> 9
second month following the date of termination of employment, and each
successive payment shall occur monthly in succeeding months on the
first business day of such months.
In order for Participant to elect a Periodic Distribution under the
terms of this Section 2.7 (b), the Participant must elect, in the
taxable year (or years) prior to the Participant's termination of
employment with the Employer, both the Periodic Distribution option
and the number of monthly installments to be made (up to a maximum of
180).
For purposes of determining the present value of the Participants
total Normal Retirement Benefit, the Discount Rate which exists on the
date of the Participant's termination of employment shall be used. To
determine the amount of each installment payment, a fraction shall be
applied to the Participants Installment Payment Account on each
payment date. The numerator shall consist of one (1) and the
denominator shall consist of the total number of installment payments
remaining (including the current payment). During the installment
payment period, interest shall be credited to the Participants
Installment Payment Account on a monthly basis using the Applicable
Federal Rate in existence on the first business day of each month
during which payments are made.
2.8. DEATH WHILE BENEFIT PAYMENTS BEING MADE. Should Participant die after
becoming a Former Eligible Participant and after the commencement of Normal
Retirement or Reduced Retirement Benefit payments to the Participant, then any
remaining payments will be made to the Participant's Beneficiary in the same
form being made to the Participant at the date of his death. Alternatively, at
the Beneficiaries election (with the consent of the Employer), payment may be
made in a lump sum payment as follows: an amount equal to the present value of
the remaining payments shall be paid on the first business day of the second
month following the Participant's date of death, and for purposes of
determining the present value of the remaining payments, the Discount Rate
which exists on the date of the Participant's date of death shall be used.
ARTICLE III
ADMINISTRATION OF THE AGREEMENT
3.1. ADMINISTRATION BY EMPLOYER. Employer shall be responsible for the general
operation and administration of the Agreement and for carrying out the
provisions thereof. The Board or Employer may engage the services of outside
counsel, accountants, financial advisors and other such professional to assist
it in its administrative duties.
3.2. GENERAL POWERS OF ADMINISTRATION. Employer is hereby designated as a
fiduciary under the Agreement. Employer, as fiduciary, shall have authority to
control, interpret
<PAGE> 10
and manage the operation and administration of the Agreement.
Any decision by Employer or the Board denying a claim by Participant or a
Beneficiary for benefits under the Agreement shall be stated in writing and
shall be delivered or mailed to the Participant or Beneficiary. Such statement
shall set forth the specific reasons for the denial, written to the best of the
Employee's ability in a manner that may be understood without legal counsel. In
addition, Employer shall afford a reasonable opportunity to the Participant or
Beneficiary for a full and fair review of the decision denying such claim.
Notwithstanding the above provisions of Section 3.2, to the extent that the
Employee Retirement Income Security Act ("ERISA") may require specific
procedures to be followed in the event of a denial of a claim, such provisions
of ERISA will be followed.
ARTICLE IV
AMENDMENT OR TERMINATION OF AGREEMENT
4.1. AMENDMENT OR TERMINATION OF AGREEMENT. Any amendment to this Agreement
shall be made pursuant to a resolution of the Board and, if such amendment
directly or indirectly affects the benefits payable under the Agreement, such
amendment must be mutually agreed to in writing by Participant (or, in the
event that the Participant is deceased at the date of amendment, the
Participant's Beneficiary).
ARTICLE V
GENERAL PROVISIONS
5.1. PARTICIPANT'S RIGHTS UNSECURED. The Agreement at all times shall be
unfunded as defined under provisions of the Code. The right of Participant or
any Beneficiary to receive a distribution hereunder shall be an uninsured claim
against the general assets of Employer in the event of the Employees insolvency
or bankruptcy.
Employer shall Implement a form of trust arrangement (known generally as a
"rabbi trust") to hold employer assets which will be used to make payments to
the Participant (or the Participant's Beneficiary) under the terms of the
Agreement. Such trust arrangement WILL not be a "funded" arrangement under the
provisions of the Code, and a copy of such trust arrangement shall be included
with this Agreement as Exhibit A.
5.2. INDEPENDENCE OF OTHER BENEFIT AGREEMENTS. Participation in the Agreement
shall in no way restrict or otherwise impact Participant's participation in any
other welfare benefit plan, employment or other contract, deferred compensation
agreement, equity participation plan or any other form of retirement benefit
plan sponsored by Employer.
5.3. NO SECURED GUARANTEE OF BENEFITS. In the event of the insolvency or
bankruptcy of Employer, Participant shall remain a general creditor of the
Employer with respect to any
<PAGE> 11
benefits payable under the Agreement and nothing contained in the Agreement
shall constitute a secured guaranty by Employer or any other person or entity
that the assets of Employer will be sufficient to pay any benefit hereunder in
the event of the Employers insolvency or bankruptcy.
5.4. NO ENLARGEMENT OF EMPLOYEE RIGHTS. No Participant shall have any right to
receive a distribution of any benefits under the Agreement except in accordance
with the terms of the Agreement, Establishment of the Agreement shall not be
construed to give any Participant the right to be retained in the service of
Employer.
5.5. SPENDTHRIFT PROVISION. No interest of any person or entity in, or right to
receive a distribution under, the Agreement shall be subject in any manner to
sale, transfer, assignment, pledge, attachment, garnishment, or other
alienation or encumbrance of any kind; nor may such interest or right to
receive a distribution be taken, either voluntarily or involuntarily for the
satisfaction of the debts of, or other obligations or claims against, such
person or entity, including claims for alimony, support, separate maintenance
and claims in bankruptcy proceedings.
5.6. APPLICABLE LAW. The Agreement shall be construed and administered under
the laws of the State of Tennessee.
5.7. SEVERABILITY. In the event that any of the provisions of the Agreement are
held to be inoperative or invalid by any court of competent jurisdiction, then:
(i) insofar as is reasonable, effect will be given to the intent manifested in
the provision held invalid or inoperative, and (ii) the validity and
enforceability of the remaining provisions of the Agreement will not be
affected thereby.
5.8. INCAPACITY OF RECIPIENT. If any person entitled to a distribution under
the Agreement is deemed by Employer to be incapable (physically or mentally) of
personally receiving and giving a valid receipt for any payment pursuant to the
Agreement, then, unless and until claim therefore shall have been made by a
duly appointed guardian or other legal representative of such person, Employer
may provide for such payment or any part thereof to be made to any other person
or institution then contributing toward or providing for the care and
maintenance of such person. Any such payment shall be a payment for the account
of such person and a complete discharge of any liability of Employer and the
Agreement with respect to such payment.
5.9. SUCCESSORS. The terms and conditions of the Agreement will be binding on
the Employees and Participants successors, heirs and assigns (herein,
"Participant Successors" and "Employer Successors").
5.10 UNCLAIMED BENEFITS. Participant shall keep Employer informed of his or her
current address and the current address of his or her Beneficiary. Employer
shall not be obligated to search for the whereabouts of any person. If the
location of Participant is not made
<PAGE> 12
known to Employer within a one (1) year period after the date on which payment
of the Participant's Normal Retirement or Reduced Retirement Benefit is first to
be made, then payment may be made by the Employer to the Beneficiary instead-
If, within one (1) additional year after such initial one (1) year period,
Employer is unable to locate any designated Beneficiary of the Participant, then
Employer shall have no further obligation to pay any benefit under the Agreement
to such Participant or designated Beneficiary and any such benefit shall be
irrevocably forfeited.
5.11. LIMITATIONS ON LIABILITY. Participant and any other person claiming
benefits under the Agreement shall be entitled under this Agreement only to
those payments provided in accordance with the provisions of the Agreement
("Payment Claims"). With the exception of the provisions of Section 5.13 of the
Agreement, neither Employer, Employer Successor nor any individual acting as
employee or agent of Employer or Employer Successor shall be liable to
Participant or any other person for any other claim, loss, liability or expense
under this Agreement not directly related to a Payment Claim.
5.12. FORFEITURE OF BENEFITS. Notwithstanding any other provision of the
Agreement, should Participant engage in theft, fraud, embezzlement or willful
misconduct causing significant property damage to Employer, then any benefits
payable to such Participant under the Agreement will automatically be
forfeited. The determination of theft, embezzlement or willful misconduct will
be made by the Board in good faith, but such determination does not require an
actual criminal indictment or conviction prior to or after such decision. In
any determination of forfeiture pursuant to this Section 5.12, Participant will
be given the opportunity to refute any such decision by the Board, but the
Board's decision on the matter will be considered final and binding on
Participant and all other parties.
5.13 PAYMENT OF ATTORNEY'S FEES, COURT COSTS, AND LOSS OF BENEFITS. Should
either the Employer or Employer Successor (for these purposes, "Employer") or
Participant bring an action at law (or through arbitration) in order that the
Agreement's terms be enforced, then the party prevailing in the action at law
(or through arbitration) shall be entitled to reimbursement from the losing
party for reasonable attorney's fees, court costs and other similar amounts
expended in the enforcement of the Agreement. In addition, should the
prevailing party be Participant, he. shall also be entitled to interest on any
delayed payments, with such interest computed at the Applicable Rate.
5.14. PAYMENT OF TAXES. Should the payment of any benefits under this Agreement
be classified as payment of an excess parachute payment under the provisions of
Code Sections 280G and 4999, then an additional payment will be made to the
Participant based on the amount of excise tax or penalty payable by the
Participant because of such classification. Such payment will be made within
two (2) months following Participant's termination of employment, once a good
faith determination is made by either Employer or Participant that the payment
of any benefit under the Agreement will constitute an excess parachute payment.
The amount payable to the Participant will be calculated as
<PAGE> 13
follows: (amount of excise tax or penalty payable by Participant) divided by
(one (1) minus the highest marginal income tax rate under the Code for
individuals).
ARTICLE V1
CONTINUATION OF MEDICAL PLAN COVERAGE
6.1. CONTINUATION OF MEDICAL COVERAGE. Following termination of employment with
the Employer, if Participant is entitled to payment of the Normal or Reduced
Retirement Benefit under the terms of the Agreement, then Participant, his
spouse and dependents will continue to be covered under the Employer's health
insurance program ("Health Plan") to the same extent as was present immediately
prior to the date of termination of employment. Employer shall continue to pay
Health Plan coverage costs of the Participant, his spouse and other dependents
under the Health Plan on the same basis as was applicable to active Employer
employees covered at the time of termination of employment.
6.2. PERIOD OF CONTINUED COVERAGE. Such coverage will continue for the period
equal to the shortest of the following: (1) for the number of years required
for the Participant to reach age 65, (2) until the Participant obtains
employment with another employer (who provides substantially similar coverage
under its health plan as was provided by Employer), or (3) until the death of
the Participant.
6.3. ALTERNATIVE COVERAGE. If continued participation in the Health Plan by
Participant, his spouse and any dependents is not possible under the terms of
the Health Plan, Employer will either: (1) provide substantially Identical
benefits through another health insurance plan, or will (2) provide an annual
cash payment to Participant sufficient to permit Participant to obtain
substantially equivalent individual, spouse and dependent coverage under a
health insurance plan of his choosing. It any cash payment is made to
Participant, the amount of cash payment will be "grossed up" for income tax
purposes (using the maximum individual income tax rate under the Code at the
time of payment) to insure no net out of pocket costs to the Participant in
obtaining such additional coverage.
IN WITNESSES WHEREOF, the undersigned Employer and Participant do hereby
execute this Agreement effective the date first stated above.
UNION PLANTERS CORPORATION
By: /s/ Benjamin W. Rawlins, Jr. /s/ M. Kirk Walters
---------------------------- -------------------
Benjamin W. Rawlins, Jr. M. Kirk Walters
Chairman and CEO
<PAGE> 1
EXHIBIT 10(I)
<PAGE> 2
AMENDMENT TO
SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT
THIS AMENDMENT, dated as of April 23, 1997 by and between Union Planters
Corporation ("Employer") and M. Kirk Walters ("Participant"), amends that
certain Supplemental Executive Retirement Agreement, dated as of February 23,
1995, by and between Employer and Participant (the "SERP").
WHEREAS, Employer and Participant desire to amend the SERP as provided
herein;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements set forth herein and for other good and valuable
consideration, the receipt and adequacy of which is hereby acknowledged, the
parties hereto agree as follows:
1. Definition of "Change in Control". The current definition of the term
"Change in Control" in Section 1.6 of the SERP is hereby deleted in its
entirety and the following is substituted in lieu thereof:
"Change in Control" shall mean the occurrence of any of the following
events:
(i) The acquisition by any individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act")) (a "Person") of
beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Securities Exchange Act of 1934, as amended) of 25% or more
of either (A) the then outstanding shares of common stock of Employer
(the "Outstanding Company Common Stock") or (B) the combined voting
power of the then outstanding voting securities of Employer entitled
to vote generally in the election of directors (the "Outstanding
Company Voting Securities"); provided, however, that for purposes of
this subsection (i), the following acquisitions shall not constitute a
Change in Control: (w) any acquisition directly from Employer, (x) any
acquisition by Employer, (y) any acquisition by any employee benefit
plan (or related trust) sponsored or maintained by Employer or any
corporation controlled by Employer, or (z) any acquisition by any
Person pursuant to a transaction which complies with clauses (A), (B)
and (C) of subsection (iii) of this Section 1.6; or
(ii) Individuals who, as of the date hereof, constitute the
Board of Directors of Employer (the "Incumbent Board") cease for any reason to
constitute at least a majority of the Board; provided, however, that any
individual becoming a director subsequent to the date hereof whose election, or
nomination for election by Employer's shareholders, was approved by a vote of
at least a majority of the directors then comprising the Incumbent Board shall
be considered as though such individual were a member of the Incumbent Board,
but excluding, for this purpose, any such individual whose initial assumption
of office occurs as a result of an actual
<PAGE> 3
or threatened election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or consents by
or on behalf of a Person other than the Board; or
(iii) Consummation of a reorganization, merger or consolidation
or sale or other disposition of all or substantially all of the assets
of Employer (a "Business Combination"), in each case, unless,
following such Business Combination,
(A) all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the
Outstanding Company Common Stock and outstanding Company
Voting Securities immediately prior to such Business
Combination beneficially own, directly or indirectly, more
than 65% of, respectively, the then outstanding shares of
common stock and the combined voting power of the then
outstanding voting securities entitled to vote generally in
the election of directors, as the case may be, of the
corporation resulting from such Business Combination
(including, without limitation, a corporation which as a
result of such transaction owns Employer or all or
substantially all of Employer's assets either directly or
through one or more subsidiaries) in substantially the same
proportions as their ownership, immediately prior to such
Business Combination of the Outstanding Company Common Stock
and Outstanding Company Voting Securities, as the case may
be, and
(B) no Person (excluding any corporation resulting
from such Business Combination or any employee benefit plan
(or related trust) of Employer or such corporation resulting
from such Business Combination) beneficially owns, directly
or indirectly, 25% or more of, respectively, the then
outstanding shares of common stock of the corporation
resulting from such Business Combination or the combined
voting power of the then outstanding voting securities of
such corporation except to the extent that such ownership
existed prior to the Business Combination, and
(C) at least a majority of the members of the board
of directors of the corporation resulting from such Business
Combination were members of the Incumbent Board at the time
of the execution of the initial agreement, or of the action
of the Board, providing for such Business Combination.
2. Definition of "Disability". The current definition of the term
"Disability" in Section 1.8 of the SERP is hereby deleted in its entirety and
the following is substituted in lieu thereof:
"Disability" shall mean a mental or physical disability as determined by
the Board in accordance with standards and procedures similar to those under
<PAGE> 4
Employer's employee long-term disability plan, if any. At any time that
Employer does not maintain such a long-term disability plan, Disability shall
mean the inability of Participant, as determined by the Board, to substantially
perform his regular duties and responsibility due to a medically determinable
physical or mental illness which has lasted (or can reasonably be expected to
last) for a period of six consecutive months.
3. Definition of "Final Average Earnings". The current definition of the
term "Final Average Earnings" in Section 1.12 of the SERP is hereby deleted in
its entirety and the following is substituted in lieu thereof:
"Final Average Earnings" shall mean the sum of (i) the Participant's or
Eligible Participant's highest base salary in effect during any calendar year
preceding his termination of employment, including the year in which such
termination occurs, and (ii) the Participant's or Eligible Participant's
highest annual bonus payable with respect to any calendar year preceding his
termination of employment, including the year in which such termination occurs.
4. Excise Tax Provision. Section 5.14 of the SERP is hereby deleted
in its entirety and the following is substituted in lieu thereof:
5.14 Payment of Taxes. Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that any payment
of benefits under this Agreement (the "SERP Payment") would be subject
to the excise tax imposed by Section 4999 of the Code, or any interest
or penalties are incurred by Participant with respect to such excise
tax (such excise tax, together with any such interest and penalties,
are hereinafter collectively referred to as the "Excise Tax"), then
Participant shall be entitled to receive an additional payment (an
"Excise Tax Gross-Up Payment") in an amount such that after payment by
Participant of all taxes (including any interest or penalties imposed
with respect to such taxes), including, without limitation, any income
taxes (and any interest and penalties imposed with respect thereto)
and Excise Tax imposed upon the Excise Tax Gross-Up Payment,
Participant retains an amount of the Excise Tax Gross-Up Payment equal
to the Excise Tax imposed upon the SERP Payment. The Excise Tax
Gross-Up Payment will be made within two (2) months following
Participant's termination of employment, once a good faith
determination has been made by either Employer or Participant that the
SERP Payment is subject to the excise tax imposed by Section 4999 of
the Code.
*****************************************************
The terms of the SERP not hereby amended shall be and remain in full
force and effect and are not affected by this Amendment.
IN WITNESS WHEREOF, Participant and Employer have duly executed this
Amendment as of the day and year first above written.
<PAGE> 5
/s/ M. Kirk Walters
-------------------
M. Kirk Walters
Participant
UNION PLANTERS CORPORATION
By: /s/ Jackson W. Moore
<PAGE> 1
EXHIBIT 10(J)
<PAGE> 2
AMENDMENT NO. 2 TO
SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT
THIS AMENDMENT, dated as of August 31, 1999, by and between Union
Planters Corporation ("Employer") and M. Kirk Walters ("Participant"), amends
that certain Supplemental Retirement Agreement, dated as of February 23, 1995,
as previously amended April 23, 1997, by and between Employer and Participant
(the "SERP").
WHEREAS, Employer and Participant desire to amend the SERP as provided
herein;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements set forth herein and for other good and valuable
consideration, the receipt and adequacy of which is hereby acknowledged, the
parties hereto agrees as follows:
1. Reduction of Benefits to Reflect "Cost of Funds" under Split Dollar
Insurance Program. There is hereby added a new Section 2.9 to the SERP to read
as follows:
"2.9 REDUCTION OF BENEFITS TO REFLECT "COST OF FUNDS" UNDER SPLIT
DOLLAR INSURANCE PROGRAM. Employer and Participant have entered into a
Split Dollar Agreement dated August 31, 1999 ("Split Dollar
Agreement"), pursuant to which certain life insurance coverage will be
provided on the joint lives of Participant and his spouse, Linda Gail
Walters. Under the Split Dollar Agreement, on August 31, 1999,
Employer paid a premium of $218,000 for the life insurance policy
providing second to die coverage on Participant and his said spouse
("Policy"), and Employer will pay four additional premiums of $218,000
each on the Policy on the next four anniversaries of such initial
premium payment date. Under paragraph 8 of the Split Dollar Agreement,
when Participant and his said spouse are no longer living or certain
other events earlier occur, Employer will be reimbursed for the
cumulative amount of premiums paid under the split dollar program
(without interest).
In order to insure that Employer will also be reimbursed for the
opportunity cost of making the premium payments under the split dollar
program, the present value of the amount payable under this Article II
shall be reduced (but not below zero) by an amount to be referred to
as the "Cost of Funds Reimbursement." The Cost of Funds Reimbursement
shall be determined (and the reduction described in the immediately
preceding sentence shall be made) as of Participant's termination of
employment for any reason (hereafter referred to as the "Cost of Funds
Settlement Date"). The Cost of Funds Reimbursement shall be the sum of
(a) plus (b), determined as follows:
(a) There shall first be calculated the interest expense on each
premium payment under the Program, determined as though Employer had
borrowed the premium payment at an interest rate determined under
Section 7520(a)(2) of the
<PAGE> 3
Internal Revenue Code of 1986, as amended ("Applicable Federal Rate"
or "AFR"). The interest expense for the first twelve months after a
premium payment is made shall be determined using the AFR as in effect
for the month such premium payment is made, and shall remain in effect
until the one-year anniversary of the date such premium payment was
made. As of such one-year anniversary, the interest expense with
respect to such premium for the next twelve months shall be determined
using the AFR in effect for the month which includes such one-year
anniversary, and so forth until the Cost of Funds Settlement Date
occurs. The aggregate interest expense for all premiums under the
Program for all years from the date the first premium payment is made
until the Cost of Funds Settlement Date occurs shall be the amount
under this paragraph (a).
(b) There shall next be determined as of the Cost of Funds
Settlement Date the present value of all future interest expense of
all premiums under the Program, including both premiums paid and
premiums not yet accrued or paid as of the Cost of Funds Settlement
Date. The future interest expense shall run from the Cost of Funds
Settlement Date to the earliest date on which Employer is entitled to
reimbursement under paragraph 8 of the Split Dollar Agreement of the
cumulative premiums paid by Employer under the Policy. For this
purpose, (i) all future interest expense shall be determined using the
AFR in effect for the month in which the Cost of Funds Settlement Date
occurs, rather than the AFR which was in effect at the time the most
recent premium payment was made, (ii) no future interest expense shall
accrue for a future premium payment until the date such premium is
due, and (iii) the future interest expense shall be discounted to
present value using the AFR in effect for the month in which the Cost
of Funds Settlement Date occurs. The present value of all future
interest expense as determined under this paragraph shall be the
amount determined under this paragraph (b).
(c) If prior to the 15th anniversary of the date the initial
premium payment was made under the Split Dollar Program, the Employer
is reimbursed under the Split Dollar Agreement for all amounts that
would be owed to the Employer under the Split Dollar Agreement upon
the death of the survivor of the Participant and his spouse named in
paragraph (a) above (such date to be referred to herein as the
"Premium Reimbursement Date"), then an additional amount shall be paid
under this Section 2.9 determined as follows: (i) the future interest
expense under paragraph (b) immediately above shall be re-calculated
as of the Cost of Funds Settlement Date as though it was known as of
such date that the future interest expense for premiums under the
Split Dollar Program would run only until the actual Premium
Reimbursement Date, using the AFR in effect for the Cost of Funds
Settlement Date; (ii) there shall be subtracted from the actual amount
determined under paragraph (b) immediately above the amount determined
under
2
<PAGE> 4
clause (c)(i) immediately preceding; and (iii) the remainder
determined under clause (c)(ii) immediately preceding shall be
credited with interest using the AFR as of the Cost of Funds
Settlement Date, such interest to run from the Cost of Funds
Settlement Date to the Premium Reimbursement Date. The additional
payment determined under this paragraph (c) shall be made to the
Participant if he is then living, and if he is not then living, then
to the Participant's Beneficiary. Such payment shall be made in the
same form being under this Agreement as of the Premium Reimbursement
Date. If no payments are being made under this Agreement as of such
date, or, alternatively, at the Participant's or Beneficiary's
election, as applicable (with the consent of the Employer), payment
shall be made to the Participant or Beneficiary, as applicable, in a
lump sump payment as soon as practicable after the Premium
Reimbursement Date."
**************************************************
The terms of the SERP not hereby amended shall be and remain in full
force and effect and are not affected by this Amendment.
IN WITNESS WHEREOF, Participant and Employer have duly executed this
Amendment as of the day and year first above written.
/s/ M. Kirk Walters
-------------------
M. Kirk Walters
Participant
UNION PLANTERS CORPORATION
By: /s/ Jackson W. Moore
--------------------
Its: President
---------
3
<PAGE> 1
EXHIBIT 10(K)
<PAGE> 2
EXHIBIT 10(K)
UNION PLANTERS CORPORATION
SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT
This Supplemental Executive Retirement Agreement ("Agreement") has been adopted
by Union Planters Corporation ("Employer") and John W. Parker ("Participant")
effective the 23 day of February, 1995.
RECITALS
WHEREAS, the Board at its regular monthly meeting in February, 1995, approved
the adoption of the Union Planters Corporation Supplemental Executive
Retirement Plan ("Plan");
and WHEREAS, both Employer and Participant agree to abide by the terms and
conditions of the Plan, which are evidenced through this Agreement.
NOW THEREFORE, Employer and Participant hereby adopt this Agreement pursuant to
the terms and provisions set forth below.
ARTICLE I
DEFINITIONS
Whenever used herein the following terms shall have the meanings hereinafter
set forth. Words in the masculine gender shall include the feminine and the
singular shall include the plural, and vice versa, unless qualified by the
context. Any headings used herein are included for ease of reference only, and
are not to be construed so as to alter the terms hereof.
1.1. "Agreement" shall mean the Union Planters Corporation Supplemental
Executive Retirement Agreement.
1.2. "APPLICABLE FEDERAL RATE" shall mean 120% of the applicable federal rate
(as calculated on a mid-term, monthly basis) pursuant to Code Section 1274, as
amended.
1.3. Beneficiary" shall mean the person or persons Participant has designated
in writing to Employer to receive benefits under the Agreement in the event of
the Participant's death. If the Participant has not specifically designated any
1
<PAGE> 3
Beneficiary for purposes of the Agreement, then the Beneficiary shall become
the Participant's estate. In the case of the death of the Beneficiary before
completion of payments under the Agreement to the Beneficiary, then the
Beneficiary's estate shall become entitled to any remaining payments. In either
case, any remaining payments under the terms of the Agreement shall be made in
the form of a lump sum payment as follow: an amount equal to the present value
of any remaining payments to be made under the Agreement shall be paid on the
first business day of the second month following the Participant's (or if
appropriate, Beneficiary's) date of death, and for purposes of determining the
present value of the payments, the Discount Rate which exists on the
Participant's (or, if appropriate, Beneficiary's) date of the death shall be
used.
1.4. "BOARD" shall mean the Board of Directors of Union Planters Corporation.
1.5. "CHANGE IN CONTROL" shall mean the occurrence of the earliest of any of
the following events:
(a) The acquisition by any entity, person, or group (excluding any
entity, person or group owning Voting Stock at the effective date of
this Agreement) of beneficial ownership, as that term is defined in
Rule 13d-3 of the Securities Exchange Act of 1934, of Twenty Five
percent (25%) or more of the Voting Stock of Employer;
(b) the commencement and consummation by any entity, person or group
(other than Employer) of a tender offer or an exchange offer for more
than Twenty Five percent (25%) or more of the Voting Stock of
Employer; or
(c) the effective date of a (i) merger or consolidation of Employer
with one or more other corporations as a result of which the holders
of the Voting Stock of Employer immediately prior to such merger or
consolidation hold less than Eighty Percent (80%) of the Voting Stock
of the surviving or resulting corporation, or (ii) a sale or transfer
of a majority of the property of Employer, other than to an entity of
which Employer controls 80% or more of the Voting Stock.
1.6. "CODE" shall mean the Internal Revenue Code of 1986, as amended.
1.7. "DISABILITY" shall mean a physical or mental condition of the Participant,
determined in the sole discretion of the Board, which prohibits Participant
from carrying out his normal duties and responsibilities as an employee of
Employer.
2
<PAGE> 4
1.8. "DISCOUNT RATE" shall mean that immediate annuity interest rate used by
the Pension Benefit Guaranty Corporation ("PBGC") under Section 4062, Appendix
B to Part 2619, of the Employee Retirement Income Security Act ("ERISA").
1.9. "ELIGIBLE PARTICIPANT" shall mean the Participant once he earns at least
10 Years of Service with the Employer and attains the following indicated ages,
based on the Participant's actual age as of January 1, 1995.
<TABLE>
<CAPTION>
Age Participant Can
Participant's Age as of January 1, 1995 Qualify as Eligible Participant
- --------------------------------------- -------------------------------
<S> <C>
Less than Age 50 55
Age 50 through 54 57
Age 55 through 60 59
Age 61 or over 64
</TABLE>
For purposes of the Agreement (where appropriate), the term "Participant" shall
include a reference to an Eligible Participant.
1.10. "EMPLOYER " shall mean the Union Planters Corporation, or to the extent
provided in Section 5.9, any successor corporation or other entity resulting
from a merger or consolidation into or with Employer or a transfer or sale of a
majority of the assets of Employer.
1.11. "FINAL AVERAGE EARNINGS" shall mean the average base salary plus bonus
earned by the Participant or Eligible Participant during the three complete
calendar years preceding termination of employment (for whatever reason).
1.12. "FORMER ELIGIBLE PARTICIPANT" shall mean Participant who, after becoming
an Eligible Participant, terminates service with the Employer and who, under
the terms of the Agreement, is then entitled to payment of a benefit. For
purposes of the Agreement (where appropriate), the term "Participant" shall
include a reference to a Former Eligible Participant.
1.13. "INSTALLMENT PAYMENT ACCOUNT" shall mean that account created pursuant to
the terms of Article 11 of the Agreement to facilitate payment of benefits
under the Agreement to the Participant in the form of installment payments.
3
<PAGE> 5
1.14. "NORMAL RETIREMENT AGE" shall mean the following indicated ages based on
the Participant's actual age as of January 1, 1995:
<TABLE>
<CAPTION>
Participant's
Participant's Age as of January 1, 1995 Normal Retirement Age
- --------------------------------------- ---------------------
<S> <C>
Less than Age 60 Age 62
60 or over 65
</TABLE>
1.15. "NORMAL RETIREMENT BENEFIT" shall mean an annual sum equal to 65% of the
Participant's Final Average Earnings, payable each year for the remaining
actuarially-determined life of the Participant in accordance with the
provisions of Article II of the Agreement. For purposes of determining the
Participant's remaining actuarially-determined life, Table V ("Ordinary Life
Annuities, One Life Expected Return") of Code Regulation 1.729, as amended,
shall be used, with the assumption that the Participant terminated employment
on the first day of the first year of the Participant's Normal Retirement Age
(regardless of the Participant's actual age at termination of employment).
1.16. "PARTICIPANT" shall mean John W. Parker, who is an employee of Employer
and to whom or with respect to whom a benefit may be payable under the
Agreement. For purposes of the Agreement, the term "Participant" shall include
a reference to the Participant once he becomes an Eligible Participant or
Former Eligible Participant.
1.17. "REDUCED RETIREMENT BENEFIT" shall mean the following percentages of the
Participant's Normal Retirement Benefit, payable to an Eligible Participant in
accordance with the provisions of Section 2.3 of the Agreement if the Eligible
Participant terminates employment before attaining Normal Retirement Age
("NRA").
<TABLE>
<CAPTION>
Years Employment
Terminates Prior to NRA Reduced Retirement Benefit
----------------------- --------------------------
<S> <C>
More than 7 Years 0% of Normal Retirement Benefit
From 6 to 7 Years 58% of Normal Retirement Benefit
From 5 to 6 Years 64% of Normal Retirement Benefit
From 4 to 5 Years 70% of Normal Retirement Benefit
From 3 to 4 Years 76% of Normal Retirement Benefit
From 2 to 3 Years 82% of Normal Retirement Benefit
From 1 to 2 Years 88% of Normal Retirement Benefit
Up to 1 Year 94% of Normal Retirement Benefit
</TABLE>
1.18. "VOTING STOCK" shall mean that class (or classes) of common stock of the
Employer entitled to vote in the election of the Employers directors.
4
<PAGE> 6
1.19. "YEAR OF SERVICE" shall mean any calendar year of employment by the
Participant with Employer in which the Participant accumulates at least 1000
hours of service. For these purposes, the provisions of Department of Labor
Regulations 2530.2002(b) and (c) are incorporated herein by reference as they
relate to the determination of "hour of service."
ARTICLE 11
BENEFITS UNDER THE AGREEMENT
2.1. BENEFITS. Either a Normal Retirement Benefit or Reduced Retirement Benefit
shall be paid under the terms of the Agreement, as set forth in this Article
II.
2.2. VOLUNTARY TERMINATION OF EMPLOYMENT BEFORE BECOMING ELIGIBLE PARTICIPANT.
Should Participant voluntarily terminate employment with the Employer before
becoming an Eligible Participant, then the Participant (and any person claiming
benefits for or on behalf of the Participant) will forfeit all rights to
benefits under this Agreement.
2.3. VOLUNTARY TERMINATION OF EMPLOYMENT AFTER BECOMING AN ELIGIBLE PARTICIPANT
BUT BEFORE NORMAL RETIREMENT AGE. Should the Participant, once becoming an
Eligible Participant, voluntarily terminate service with the Employer before
Normal Retirement Age, he will be entitled to the Reduced Retirement Benefit,
payable at his election in either of the following forms. Should Participant
fail to specifically elect a form of benefit payment, a Lump Sum Distribution
will be made to the Participant.
(a) LUMP SUM DISTRIBUTION. An amount equal to the present value of the
Participant's total Reduced Retirement Benefit shall be paid to the
Participant in one lump sum distribution on the first business day of
the second month following the Participant's termination of
employment. For purposes of determining the present value of the
Participant's total Reduced Retirement Benefit, the Discount Rate that
exists on the date of the Participant's termination of employment
shall be used.
(b) PERIODIC DISTRIBUTION. An amount equal to the present value of the
Participant's total Reduced Retirement Benefit shall be credited to an
Installment Payment Account and shall be payable in up to 180
successive monthly installments. The first payment shall commence on
the first business day of the second month following the date of
termination of employment, and each successive payment shall occur
monthly in succeeding months on the first business day of such months.
5
<PAGE> 7
In order for Participant to elect a Periodic Distribution under the
terms of this Section 2.3 (b), the Participant must elect, in the
taxable year (or years) prior to the Participant's termination of
employment with the Employer, both the Periodic Distribution option
and the number of monthly installments to be made (up to a maximum of
180).
For purposes of determining the present value of the Participant's
total Reduced Retirement Benefit, the Discount Rate that exists on the
date of the Participant's termination of employment shall be used. To
determine the amount of each installment payment, a fraction shall be
applied to the Participant's Installment Payment Account on each
payment date. The numerator shall consist of one; (1) and the
denominator shall consist of the total number of installment payments
remaining (including the current payment). During the installment
payment period, interest shall be credited to the Participant's
Installment Payment Account on a monthly basis using the Applicable
Federal Rate in existence on the first business day of each month
during which payments are made.
2.4. TERMINATION OF EMPLOYMENT PRIOR TO NORMAL RETIREMENT AGE DUE TO DEATH OR
DISABILITY. Should Participant, before or after becoming an Eligible
Participant, terminate service with the Employer prior to Normal Retirement Age
because of death or Disability, he will be entitled to the Normal Retirement
Benefit following termination of employment, payable in one of the distribution
forms described in Sections 2.6 (a) and (b) of the Agreement.
2.6. INVOLUNTARY TERMINATION OF EMPLOYMENT FOLLOWING A CHANGE IN CONTROL.
Should a Change in Control occur, Participant will be entitled to the Normal
Retirement Benefit following an involuntary termination of employment, without
regard to the Participant's age or years of service at the time of involuntary
termination of employment and without regard to whether the Participant has
become an Eligible Participant. The Normal Retirement Benefit will be payable
in accordance with the distribution forms described in Sections 2.6 (a) and (b)
of the Agreement.
2.6. TERMINATION OF EMPLOYMENT AT OR AFTER NORMAL RETIREMENT AGE. Should
Participant become an Eligible Participant and subsequently terminate service
with the Employer (for whatever reason) at or after Normal Retirement Age, he
(or, if appropriate, his Beneficiary) will be entitled to the Normal Retirement
Benefit, payable at his election in either of the following forms. Should
Participant fail to specifically elect a form of benefit payment, a Lump Sum
Distribution will be made to the Participant (or, if appropriate, to his
Beneficiary).
6
<PAGE> 8
(a) LUMP SUM DISTRIBUTION. An amount equal to the present value of the
Participant's total Normal Retirement Benefit shall be paid to the
Participant in one lump sum distribution on the first business day of
the second month following the Participant's termination of
employment. For purposes of determining the present value of the
Participant's total Normal Retirement Benefit, the Discount Rate which
exists on the date of the Participant's termination of employment
shall be used.
(b) PERIODIC DISTRIBUTION. An amount equal to the present value of the
Participant's total Normal Retirement Benefit shall be credited to an
Installment Payment Account and shall be payable in up to 180
successive monthly installments. The first payment shall commence on
the first business day of the second month following the date of
termination of employment, and each successive payment shall occur
monthly in succeeding months on the first business day of such months.
In order for Participant to elect a Periodic Distribution under the
terms of this Section 2.6 (b), the Participant must elect, in the
taxable year (or years) prior to the Participant's termination of
employment with the Employer, both the Periodic Distribution option
and the number of monthly installments to be made (up to a maximum of
180).
For purposes of determining the present value of the Participant's
total Normal Retirement Benefit, the Discount Rate which exists on the
date of the Participant's termination of employment shall be used. To
determine the amount of each installment payment, a fraction shall be
applied to the Participant's Installment Payment Account on each
payment date. The numerator shall consist of one (1) and the
denominator shall consist of the total number of installment payments
remaining (including the current payment). During the installment
payment period, interest shall be credited to the Participant's
Installment Payment Account on a monthly basis using the Applicable
Federal Rate in existence on the first business day of each month
during which payments are made.
2.7. DEATH WHILE BENEFIT PAYMENTS BEING MADE. Should PARTICIPANT DIE AFTER
becoming a Former Eligible Participant and after the commencement of Normal
Retirement or Reduced Retirement Benefit payments to the Participant, then any
remaining payments will be made to the Participant's Beneficiary in the same
form being made to the Participant at the date of his death. Alternatively, at
the Beneficiaries election (with the consent of the Employer), payment may be
made in a lump sum payment as follows: an amount equal to the present value of
the remaining payments shall be paid on the first business day of the second
month following the Participant's date of death, and for purposes of
determining the
7
<PAGE> 9
present value of the remaining payments, the Discount Rate which exists on the
date of the Participant's date of death shall be used.
ARTICLE III
ADMINISTRATION OF THE AGREEMENT
3.1. ADMINISTRATION BY EMPLOYEE. Employer shall be responsible for the general
operation and administration of the Agreement and for carrying out the
provisions thereof. The Board or Employer may engage the services of outside
counsel, accountants, financial advisors and other such professional to assist
it in its administrative duties.
3.2. GENERAL POWERS OF ADMINISTRATION. Employer is hereby designated as a
fiduciary under the Agreement. Employer, as fiduciary, shall have, authority to
control, interpret and manage the operation and administration of the
Agreement. Any decision by Employer or the Board denying a claim by Participant
or a Beneficiary for benefits under the Agreement shall be stated in writing
and shall be delivered or mailed to the Participant or Beneficiary. Such
statement shall set forth the specific reasons for the denial, written to the
best of the Employer's ability in a manner that may be understood without legal
counsel. In addition, Employer shall afford a reasonable opportunity to the
Participant or Beneficiary for a full and fair review of the decision denying
such claim.
Notwithstanding the above provisions of Section 3.2, to the extent that the
Employee Retirement Income Security Act ("ERISA") may require specific
procedures to be followed in the event of a denial of a claim, such provisions
of ERISA will be followed.
ARTICLE IV
AMENDMENT OR TERMINATION OF AGREEMENT
4.1. AMENDMENT OR TERMINATION OF AGREEMENT. Any amendment to this Agreement
shall be made pursuant to a resolution of the Board and, if such amendment
directly or indirectly affects the benefits payable under the Agreement,
such amendment must be mutually agreed to in writing by Participant (or, in
the event that the Participant is deceased at the date of amendment, the
Participant's Beneficiary).
8
<PAGE> 10
ARTICLE V
GENERAL PROVISIONS
5.1. PARTICIPANT'S RIGHTS UNSECURED. The Agreement at all times shall be
unfunded as defined under provisions of the Code. The right of Participant or
any Beneficiary to receive a distribution hereunder shall be an uninsured claim
against the general assets of Employer in the event of the Employers insolvency
or bankruptcy.
Employer shall implement a form of trust arrangement (known generally as a
"rabbi trust") to hold employer assets which will be used to make payments to
the Participant (or the Participant's Beneficiary) under the terms of the
Agreement, Such trust arrangement will not be a "funded" arrangement under the
provisions of the Code, and a copy of such trust arrangement shall be included
with this Agreement as Exhibit A.
5.2. INDEPENDENCE OF OTHER BENEFIT AGREEMENTS. Participation in the Agreement
shall in no way restrict or otherwise impact Participant's participation in any
other welfare benefit plan, employment or other contract, deferred compensation
agreement, equity participation plan or any other form of retirement benefit
plan sponsored by Employer.
5.3. NO SECURED GUARANTEE OF BENEFITS. In the event of the insolvency or
bankruptcy of Employer, Participant shall remain a general creditor of the
Employer with respect to any benefits payable under the Agreement and nothing
contained in the Agreement shall constitute a secured guaranty by Employer or
any other person or entity that the assets of Employer will be sufficient to
pay any benefit hereunder in the event of the Employer's insolvency or
bankruptcy.
6.4. NO ENLARGEMENT OF EMPLOYEE RIGHTS. No Participant shall have any right to
receive a distribution of any benefits under the Agreement except in accordance
with the terms of the Agreement. Establishment of the Agreement shall not be
construed to give any Participant the right to be retained in the service of
Employer.
5.5. SPENDTHRIFT PROVISION. No interest of any person or entity in, or right to
receive a distribution under, The Agreement shall be subject in any manner to
sale, transfer, assignment, pledge, attachment, garnishment, or other
alienation or encumbrance of any kind; nor may such interest or right to
receive a distribution be taken, either voluntarily or involuntarily for the
satisfaction of the debts of, or other obligations or claims against, such
person or entity, including claims for alimony, support, separate maintenance
and claims in bankruptcy proceedings.
9
<PAGE> 11
6.6. APPLICABLE LAW. The Agreement shall be construed and administered under
the laws of the State of Tennessee.
5.7. SEVERABILITY. In the event that any of the provisions of the Agreement
are held to be inoperative or invalid by any court of competent jurisdiction,
then: (i) insofar as is reasonable, effect will be given to the intent
manifested in the provision held invalid or inoperative, and (ii) the validity
and enforceability of the remaining provisions of the Agreement will not be
affected thereby.
6.8. INCAPACITY OF RECIPIENT. If any person entitled to a distribution under
the Agreement is deemed by Employer to be incapable (physically or mentally) of
personally receiving and giving a valid receipt for any payment pursuant to the
Agreement, then, unless and until claim therefore shall have been made by a
duly appointed guardian or other legal representative of such person, Employer
may provide for such payment or any part thereof to be made to any other person
or institution then contributing toward or providing for the care and
maintenance of such person. Any such payment shall be a payment for the account
of such person and a complete discharge of any liability of Employer and the
Agreement with respect to such payment.
5.9. SUCCESSORS. The terms and conditions of the Agreement will be binding on
the Employers and Participant's successors, heirs and assigns (herein,
"Participant Successors" and "Employer Successors").
5.10. UNCLAIMED BENEFITS. Participant shall keep Employer informed of his or
her current address and the current address of his or her Beneficiary. Employer
shall not be obligated to search for the whereabouts of any person. If the
location of Participant is not made known to Employer within a one (1) year
period after the date on which payment of the Participant's Normal Retirement
or Reduced Retirement Benefit is first to be made, then payment may be made by
the Employer to the Beneficiary instead. If, within one (1) additional year
after such initial one (1) year period, Employer is unable to locate any
designated Beneficiary of the Participant, then Employer shall have no further
obligation to pay any benefit under the Agreement to such Participant or
designated Beneficiary and any such benefit shall be irrevocably forfeited.
5.11. LIMITATIONS ON LIABILITY. Participant and any other person claiming
benefits under the Agreement shall be entitled under this Agreement only to
those payments provided in accordance with the provisions of the Agreement
("Payment Claims"). With the exception of the provisions of Section 5.13 of the
Agreement, neither Employer, Employer Successor nor any individual acting as
employee or agent of Employer or Employer Successor shall be liable to
Participant or any
10
<PAGE> 12
other person for any other claim, loss, liability or expense under this
Agreement not directly related to a Payment Claim.
6.12. FORFEITURE OF BENEFITS. Notwithstanding any other provision of the
Agreement, should Participant engage in theft, fraud, embezzlement or willful
misconduct causing significant property damage to Employer, then any benefits
payable to such Participant under the Agreement will automatically be
forfeited. The determination of theft, embezzlement or willful misconduct will
be made by the Board in good faith, but such determination does not require an
actual criminal indictment or conviction prior to or after such decision. In
any determination of forfeiture pursuant to this Section 5.12, Participant will
be given the opportunity to refute any such decision by the Board, but the
Board's decision on the matter will be considered final and binding on
Participant and all other parties.
5.13. PAYMENT OF ATTORNEY'S FEES, COURT COSTS, AND LOSS OF BENEFITS. Should
either the Employer or Employer Successor (for these purposes, "Employer) or
Participant bring an action at law (or through arbitration) in order that the
Agreement's terms be enforced, then the party prevailing in the action at law
(or through arbitration) shall be entitled to reimbursement from the losing
party for reasonable attorney's fees, court costs and other similar amounts
expended in the enforcement of the Agreement. In addition, should the
prevailing party be Participant, he shall also be entitled to interest on any
delayed payments, with such interest computed at the Applicable Rate.
6.14. PAYMENT OF TAXES. Should the payment of any benefits under this Agreement
be classified as payment of an excess parachute payment under the provisions of
Code Sections 28OG and 4999, then an additional payment will be made to the
Participant based on the amount of excise tax or penalty payable by the
Participant because of such classification. Such payment will be made within
two (2) months following Participant's termination of employment, once a good
faith determination is made by either Employer or Participant that the payment
of any benefit under the Agreement will constitute an excess parachute payment.
The amount payable to the Participant will be calculated as follows: (amount of
excise tax or penalty payable by Participant) divided by (one (1) minus the
highest marginal income tax rate under the Code for individuals).
11
<PAGE> 13
ARTICLE VI
CONTINUATION OF MEDICAL PLAN COVERAGE
6.1. CONTINUATION OF MEDICAL COVERAGE. Following termination of employment with
the Employer, if Participant is entitled to payment of the Normal or Reduced
Retirement Benefit under the terms of the Agreement, then Participant, his
spouse and dependents will continue to be covered under the Employer's health
insurance program ("Health Plan") to the same extent as was present immediately
prior to the date of termination of employment. Employer shall continue to pay
Health Plan coverage costs of the Participant, his spouse and other dependents
under the Health Plan on the same basis as was applicable to active Employer
employees covered at the time of termination of, employment.
6.2. PERIOD OF CONTINUED COVERAGE. Such coverage will continue for the period
equal to the shortest of the following: (1) for the number of years required
for the Participant to reach age 65, (2) until the Participant obtains
employment with another employer (who provides substantially similar coverage
under its health plan as was provided by Employer), or (3) until the death of
the Participant.
6.3. ALTERNATIVE COVERAGE. If continued participation in the Health Plan by
Participant, his spouse and any dependents is not possible under the terms of
the Health Plan, Employer will either: (1) provide substantially identical
benefits through another health insurance plan, or will (2) provide an annual
cash payment to Participant sufficient to permit Participant to obtain
substantially equivalent individual, spouse and dependent coverage under a
health insurance plan of his choosing. If any cash payment is made to
Participant, the amount of cash payment will be "grossed up" for income tax
purposes (using the maximum individual income tax rate under the Code at the
time of payment) to insure no net out of pocket costs to the Participant in
obtaining such additional coverage.
IN WITNESSES WHEREOF, the undersigned Employer and Participant do hereby
execute this Agreement effective the date first stated above.
UNION PLANTERS CORPORATION
By: /s/ Benjamin W. Rawlins, Jr. /s/ John W. Parker
------------------------ --------------
Chairman and CEO
12
<PAGE> 1
EXHIBIT 10(L)
<PAGE> 2
AMENDMENT TO
SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT
THIS AMENDMENT, dated as of April 23, 1997 by and between Union
Planters Corporation ("Employer") and John W. Parker ("Participant"), amends
that certain Supplemental Executive Retirement Agreement, dated as of February
23, 1995, by and between Employer and Participant (the "SERP").
WHEREAS, Employer and Participant desire to amend the SERP as provided
herein;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements set forth herein and for other good and valuable
consideration, the receipt and adequacy of which is hereby acknowledged, the
parties hereto agree as follows:
1. Definition of "Change in Control". The current definition of the
term "Change in Control" in Section 1.5 of the SERP is hereby deleted in its
entirety and the following is substituted in lieu thereof
"Change in Control" shall mean the occurrence of any of the following
events:
(i) The acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) (a "Person") of
beneficial ownership (within the meaning of Rule l3d3 promulgated
under the Securities Exchange Act of 1934, as amended) of 25% or more
of either (A) the then outstanding shares of common stock of Employer
(the "Outstanding Company Common Stock") or (B) the combined voting
power of the then outstanding voting securities of Employer entitled
to vote generally in the election of directors (the "Outstanding
Company Voting Securities"); provided, however, that for purposes of
this subsection (I), the following acquisitions shall not constitute a
Change in Control: (w) any acquisition directly from Employer, (x) any
acquisition by Employer, (y) any acquisition by any employee benefit
plan (or related trust) sponsored or maintained by Employer or any
corporation controlled by Employer, or (z) any acquisition by any
Person pursuant to a transaction which complies with clauses (A), (B)
and (C) of subsection (iii) of this Section 1.5; or
(ii) Individuals who, as of the date hereof, constitute the
Board of Directors of Employer (the "Incumbent Board") cease for any
reason to constitute at least a majority of the Board; provided,
however, that any individual becoming a director subsequent to the
date hereof whose election, or nomination for election by Employer's
shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered as
though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors
or other
<PAGE> 3
actual or threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board; or
(iii) Consummation of a reorganization, merger or
consolidation or sale or other disposition of all or substantially all
of the assets of Employer (a "Business Combination"), in each case,
unless, following such Business Combination,
(A) all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the
Outstanding Company Common Stock and outstanding Company
Voting Securities immediately prior to such Business
Combination beneficially own, directly or indirectly, more
than 65% of, respectively, the then outstanding shares of
common stock and the combined voting power of the then
outstanding voting securities entitled to vote generally in
the election of directors, as the case may be, of the
corporation resulting from such Business Combination
(including, without limitation, a corporation which as a
result of such transaction owns Employer or all or
substantially all of Employer's assets either directly or
through one or more subsidiaries) in substantially the same
proportions as their ownership, immediately prior to such
Business Combination of the Outstanding Company Common Stock
and Outstanding Company Voting Securities, as the case may
be, and
(B) no Person (excluding any corporation resulting
from such Business Combination or any employee benefit plan
(or related trust) of Employer or such corporation resulting
from such Business Combination) beneficially owns, directly
or indirectly, 25% or more of, respectively, the then
outstanding shares of common stock of the corporation
resulting from such Business Combination or the combined
voting power of the then outstanding voting securities of
such corporation except to the extent that such ownership
existed prior to the Business Combination, and
(C) at least a majority of the members of the board
of directors of the corporation resulting from such Business
Combination were members of the Incumbent Board at the time
of the execution of the initial agreement, or of the action
of the Board, providing for such Business Combination.
3. Definition of "Disability". The current definition of the term
"Disability" in Section 1.7 of the SERP is hereby deleted in its entirety and
the following is substituted in lieu thereof
"Disability" shall mean a mental or physical disability as determined
by the Board in accordance with standards and procedures similar to
those under Employer's employee longterm disability plan, if any. At
any time that Employer does not maintain such a longterm disability
plan, Disability shall mean the inability of Participant, as
determined by the Board, to substantially perform his regular duties
and responsibility due to a medically determinable physical or mental
illness which has lasted (or can reasonably be expected to last) for a
period of six consecutive months.
-2-
<PAGE> 4
3. Definition of "Final Average Earnings". The current definition of
the term "Final Average Earnings" in Section 1. 11 of the SERP is hereby
deleted in its entirety and the following is substituted in lieu thereof
"Final Average Earnings" shall mean the sum of (i) the Participant's
or Eligible Participant's highest base salary in effect during any
calendar year preceding his termination of employment, including the
year in which such termination occurs, and (ii) the Participant's or
Eligible Participant's highest annual bonus payable with respect to
any calendar year preceding his termination of employment, including
the year in which such termination occurs.
Excise Tax Provision. Section 5.14 of the SERP is hereby deleted in
its entirety and the following is substituted in lieu thereof
5.14. Payment of Taxes. Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that any payment
of benefits under this Agreement (the "SERP Payment") would be subject
to the excise tax imposed by Section 4999 of the Code, or any interest
or penalties are incurred by Participant with respect to such excise
tax (such excise tax, together with any such interest and penalties,
are hereinafter collectively referred to as the "Excise Tax"), then
Participant shall be entitled to receive an additional payment (an
"Excise Tax Gross-Up Payment") in an amount such that after payment by
Participant of all taxes (including any interest or penalties imposed
with respect to such taxes), including, without limitation, any income
taxes (and any interest and penalties imposed with respect thereto)
and Excise Tax imposed upon the Excise Tax Gross-Up Payment,
Participant retains an amount of the Excise Tax Gross-Up Payment equal
to the Excise Tax imposed upon the SERP Payment. The Excise Tax
Gross-Up Payment will be made within two (2) months following
Participant's termination of employment, once a good faith
determination has been made by either Employer or Participant that the
SERP Payment is subject to the excise tax imposed by Section 4999 of
the Code.
The terms of the SERP not hereby amended shall be and remain in full
force and effect and are not affected by this Amendment.
-3-
<PAGE> 5
IN WITNESS WHEREOF, Participant and Employer have duly executed this Amendment
as of the day and year first above written.
/s/ John W. Parker
--------------------------
John W. Parker
Participant
UNION PLANTERS CORPORATION
By:/s/ M. Kirk Walters
-----------------------
M. Kirk Walters
Senior VP & Treasurer
<PAGE> 1
EXHIBIT 10(M)
<PAGE> 2
TRUST UNDER
UNION PLANTERS CORPORATION
DEFERRED COMPENSATION PLAN FOR EXECUTIVES
This Trust Agreement ("Trust Agreement") effective the 1st day of January, 1996,
by and between Union Planters Corporation as grantor ("Company") and the Union
Planters National Bank Trust Department as trustee ("Trustee").
WHEREAS, Company adopted the Deferred Compensation Plan for Executives
("Plan"), effective January 1, 1996, for selected executive officers of Union
Planters Corporation and its subsidiaries ("Participants"), and such Plan and
Deferred Compensation Election Forms ("Forms") under the Plan are included with
this Trust Agreement as Appendix A;
WHEREAS, those terms which are defined in the Plan and accompanying Forms shall
have the same meaning in this Trust Agreement as they do in the Plan and
accompanying Forms;
WHEREAS, Company has incurred or expects to incur liability under the terms of
such Plan and accompanying Forms;
WHEREAS, Company wishes to establish a trust (hereinafter called "Trust") and
to contribute to the Trust assets that shall be held therein, subject to the
claims of Company's creditors in the event of Company's insolvency, as herein
defined, until paid to Participants and their Beneficiaries in such manner and
at such times as specified in the Plan;
WHEREAS, it is the intention of the parties that this Trust shall constitute an
unfunded arrangement and shall not affect the status of the Plan as an unfunded
plan maintained for the purpose of providing deferred compensation under Title
I of the Employee Retirement Income Security Act of 1974;
WHEREAS, it is the intention of Company to make contributions to the Trust to
provide itself with a source of funds to assist it in the meeting of its
liabilities under the Plan;
NOW, THEREFORE, the Company and Trustee do hereby establish this Trust and
agree that this Trust shall be comprised, held and disposed of as follows:
SECTION 1
ESTABLISHMENT OF TRUST
1.1 The Trust hereby established is irrevocable by Company.
1.2 Within sixty (60) days from the establishment of this Trust, Company shall
irrevocably deposit in this Trust the sum necessary to fund the current
aggregate obligations to Participants under the Plan. Furthermore, in its sole
discretion, additional amounts in excess of the current funding obligation may
also be irrevocably deposited by Company into the Trust. For these purposed,
the current funding obligation shall be that amount required to be placed on
the Company's financial statements in accordance with the provisions of
Generally Accepted Accounting Principles ("GAAP") as a liability for future
payment obligations under the Plan. Such amounts shall become the initial
principal of the Trust to be held, administered, and disposed of by Trustee as
provided in this Trust Agreement.
Although sums deposited by Company into the Trust may be held in the form of
one or more common, pooled investment funds, for administrative accounting
purposes, a subaccount ("Participant Subaccount") shall be established under
the Trust Agreement for each Participant. Subject to the provisions of this
Section 1.2 of the Trust Agreement, each Participant's Subaccount shall be
substantially equivalent in value to the three Subaccounts (i.e., Deferred
<PAGE> 3
Contribution, Matching Contribution and Supplemental Contribution Subaccounts)
established under the Plan for each Participant. The Trustee shall allocate to
such Participant Subaccounts amounts deposited by Company to the Trust under
the provisions of Sections 1.2, 1.3, and 1.4 of the Trust Agreement. Such
allocations shall be in the sole discretion of the Trustee and individual
Participant allocations need not necessarily conform to that amount required to
be placed on the Company's financial statements in accordance with the
provisions of Generally Accepted Accounting Principles ("GAAP") as a liability
for future payment obligations under the Plan. For purposes of such allocations,
Trustee may utilize any information provided by the Company as deemed relevant,
including any annual or more frequent statements prepared by Company for
Participants showing those benefits which have accrued to Participants.
1.3 Company shall, within ninety (90) days following the end of any calendar
year during which a Participant is covered under the Plan, make additional
irrevocable deposits of cash or other property to the Trust to augment the
initial principal under the provisions of Section 1.2 of this Trust.
Furthermore, in its sole discretion, additional amounts in excess of the
additional amount required may also be irrevocably deposited by Company into the
Trust. The amount of such additional deposits shall be equal to the additional
amount required to be placed on the Company's financial statements during such
calendar year in accordance with the provisions of Generally Accepted Accounting
Principles ("GAAP") as a liability for future payment obligations under the
Plan. Such additional amounts shall be held, administered and disposed of by the
Trustee as provided in this Trust Agreement.
1.4 Upon a Change of Control or termination of employment by a Participant for
Good Reason ("Good Reason Termination"), as defined in Sections 13.4 and 13.5 of
this Trust, Company shall within thirty (30) days following the Change of
Control or Good Reason Termination, make an additional irrevocable contribution
to the Trust.
In the case of a Change of Control, the contribution shall be an amount that,
when combined with previous contributions to the Trust under Sections 1.2 and
1.3 of this Trust, is sufficient to pay all Participants or Beneficiaries the
benefits to which each Participant or their Beneficiaries would be entitled
pursuant to the terms of the Plan assuming termination of employment as of the
date on which the Change of Control occurred. In the case of a Good Reason
Termination, the contribution shall be an amount that, when combined with
previous contributions to the Trust under Sections 1.2 and 1.3 of this Trust, is
sufficient to pay each Participant terminating employment for Good Reason the
benefits to which such Participant or his Beneficiary would be entitled pursuant
to the terms of the Plan assuming termination of employment as of the date on
the Good Reason Termination.
Additional amounts shall subsequently be contributed by the Company to the Trust
with ninety (90) days following the end of each calendar year to insure that the
Trust's assets are sufficient to pay each Participant or Beneficiary described
above the benefits to which such Participants or their Beneficiaries would be
entitled pursuant to the terms of the Plan. Such additional amounts shall be
held, administered and disposed of by the Trustee as provided in this Trust
Agreement. Furthermore, in its sole discretion, additional amounts in excess of
that required in the case of a Change of Control or Good Reason Termination may
also be irrevocably deposited by Company into the Trust.
1.5 The Trust is intended to be a grantor trust, of which Company is the
grantor, within the meaning of Subpart E, Part I, Subchapter J, Chapter I,
Subtitle A of the Internal Revenue Code of 1986, as amended, and shall be
construed accordingly.
1.6 The principal of the Trust, and any earnings thereon shall be held separate
and apart from other funds of Company and shall be used exclusively for the uses
and purposes of Participants and general creditors as herein set forth.
Participants and their Beneficiaries shall have no preferred claim on, or any
beneficial ownership interest in, any assets of the Trust. Any rights created
under the Plan and this Trust Agreement shall be mere unsecured contractual
rights of Participants and their Beneficiaries against Company. Any assets held
by the Trust will be subject to the claims of Company's general creditors under
federal and state law in the event of insolvency, as defined in Section 3.1.
2
<PAGE> 4
SECTION 2
PAYMENTS TO PARTICIPANTS AND THEIR BENEFICIARIES
2.1 Company shall deliver to Trustee a schedule (the "Payment Schedule") that:
(i), indicates the amounts payable with respect of each Participant (and his
Beneficiaries), (ii) provides a formula or other instructions acceptable to
Trustee for determining the amounts so payable, (iii) indicates the form in
which such amounts are to be paid (as provided for or available under the
Plan), and (iv) provides the time of commencement for payment of such amounts.
Except as otherwise provided herein, Trustee shall make payments to the
Participants and their Beneficiaries in accordance with such Payment Schedule.
The Trustee shall make provision for the reporting and withholding of any
federal, state or local taxes that may be required to be withheld with respect
to the payment of benefits pursuant to the terms of the Plan and shall pay
amounts withheld to the appropriate taxing authorities or determine that such
amounts have been reported, withheld and paid by Company.
2.2 The entitlement of a Participant or his Beneficiaries to benefits under
the Plan shall be determined by Company or such party as it shall designate
under the Plan, and any claim for such benefits shall be considered and
reviewed under the procedures set out in the Plan.
2.3 Company may make payment of benefits directly to Participants or their
Beneficiaries as they become due under the terms of the Plan. Company shall
notify Trustee of its decision to make payment of benefits directly prior to the
time amounts are payable to Participants or their Beneficiaries. In addition,
if the principal of the Trust, and any earnings thereon, are not sufficient to
make payments of benefits in accordance with the terms of the Plan, Company
shall make the balance of each such payment as it falls due. Trustee shall
notify Company where principal and earnings are not sufficient.
SECTION 3
TRUSTEE RESPONSIBILITY REGARDING PAYMENTS TO
TRUST BENEFICIARY WHEN COMPANY IS INSOLVENT
3.1 Trustee shall cease payment of benefits to Participants and their
Beneficiaries if the Company is Insolvent. Company shall be considered
"Insolvent" for purposes of this Trust Agreement if: (i) Company is unable to
pay its debts as they become due, (ii) Company is subject to a pending
proceeding as a debtor under the United States Bankruptcy Code, or (iii)
Company is determined to be insolvent or in receivership by its appropriate
bank regulatory agency.
3.2 At all times during the continuance of this Trust, as provided in Section
1.4, the principal and income of the Trust shall be subject to claims of general
creditors of Company under federal and state law as set forth below.
(a) The Board of Directors and the Chief Executive Officer of Company
shall have the duty to inform Trustee in writing of Company's Insolvency.
if a person claiming to be a creditor of Company alleges in writing to
Trustee that Company has become Insolvent, Trustee shall determine whether
Company is insolvent and, pending such determination, Trustee shall
discontinue payment of benefits to Participants or their Beneficiaries.
(b) Unless Trustee has actual knowledge of Company's Insolvency, or has
received notice from Company or a person claiming to be a creditor
alleging that Company is Insolvent, Trustee shall have no duty to inquire
whether Company is Insolvent. Trustee may in all events rely on such
evidence concerning Company's solvency as may be furnished to Trustee and
that provides Trustee with a reasonable basis for making a determination
concerning Company's solvency.
(c) If at any time Trustee has determined that Company is Insolvent,
Trustee shall discontinue payments to Participants or their Beneficiaries
and shall hold the assets of the Trust for the benefit of Company's
general creditors. Nothing in this Trust Agreement shall in any way
diminish any rights of Participants or their
3
<PAGE> 5
Beneficiaries to pursue their rights as general creditors of Company with
respect to benefits due under the Plan or otherwise.
(d) Trustee shall resume the payment of benefits to Participants or their
Beneficiaries in accordance with Section 2 of this Trust Agreement only
after Trustee has determined that Company is not Insolvent (or is no longer
Insolvent).
3.3 Provided that there are sufficient assets, if Trustee discontinues the
payment of benefits from the Trust pursuant to Section 3.2 and subsequently
resumes such payments, the first payment following such discontinuance shall
include the aggregate amount of all payments due to Participants or their
Beneficiaries under the terms of the Plan for the period of such
discontinuance, less the aggregate amount of any payments made to Participants
or their Beneficiaries by Company in lieu of the payments provided under during
any such period of discontinuance.
SECTION 4
REVERSION OF TRUST ASSETS TO COMPANY
4.1 The Trust is irrevocable and the Company shall have no right or power to
direct Trustee to return to Company or to divert to others to any of the Trust
assets before all payment of benefits have been made to Participants and their
Beneficiaries pursuant to the terms of the Plan.
SECTION 5
INVESTMENT AUTHORITY
5.1 The duties, powers, and responsibilities of the Trustee shall be limited
as specifically set forth in this Section 5 and as otherwise limited in this
Trust Agreement. The Trustee's powers shall include the following.
(a) The power to invest only in the United States Treasury Department
Securities (or, where necessary, Money Market Mutual Funds which are
invested solely in the United States Treasury Department Securities or
obligations hereinafter referred to the "Treasury Securities." All rights
associated with such Treasury Securities, including any voting rights and
dividend rights, shall be exercised by Trustee or the person designated by
Trustee, and shall in no event be exercisable by or rest with Participants.
(b) The power to hold, manage, and control the Treasury Securities held in
trust, to invest and reinvest the same, in such manner as the Trustee deems
to be reasonably sound. Company shall establish an investment policy for
Trustee which shall state Trust asset investment and reinvestment policy.
The Trustee shall not be held responsible for any loss incurred through an
investment error made in good faith, but shall be liable only for the
Trustee's willful misconduct.
(c) The power to take and hold title to Treasury Securities in the name of
the Trustee or a nominee of the Trustee without disclosing the name of
existence of the Trust.
(d) The power to give general and special powers of attorney with or
without rights of substitution, and generally to exercise any powers of an
owner with regard to investment of the Trust assets.
(e) The power to sue or defend in any suit or legal proceeding by or
against the Trust. The Trustee shall have full power in the Trustee's
discretion to compound, compromise, and adjust all claims and demand in
favor of or against the Trust, upon such terms and conditions as the
Trustee deemed appropriate; provided, however, that the Trustee shall be
indemnified by the Company for all expenses and liabilities in connection
with any such proceedings.
4
<PAGE> 6
(f) The power to employ such agents, attorneys in fact, experts, and
investment and legal counsel, and to delegate discretionary powers to or rely
upon information or advice furnished by any such persons.
(g) The power to do all acts, whether or not expressly authorized, which
may be necessary or proper for the protection of the assets of the Trust, or
for carrying out any duty imposed hereunder.
5.2 Notwithstanding any powers granted to the Trustee, pursuant to this Trust
Agreement or to applicable law, the Trustee shall not have any power that could
give this Trust the objective of carrying on a business and dividing the gains
therefrom, within the meaning of Section 301.7701-2 of the Procedure and
Administrative Regulations promulgated pursuant to the Internal Revenue Code.
SECTION 6
DISPOSITION OF INCOME
6.1 During the term of this Trust, all of the income received by the Trust,
net of expenses and taxes, shall be accumulated and reinvested by the Trustee
in accordance with the terms of the Trust Agreement. Such accumulated and
reinvested income may be used by the Trustee in calculating the Company's
required contributions to the Trust under the provisions of Sections 1.3 and
1.4 of the Trust Agreement.
SECTION 7
ACCOUNTING BY TRUSTEE
7.1 Trustee shall keep accurate and detailed records of all investments,
receipts, disbursements, and all other transactions required to be made,
including such specific records as shall be agreed upon in writing between
Company and Trustee. Within ninety (90) days following the close of each
calendar year and within ninety (90) days after the removal or resignation of
Trustee, Trustee shall deliver to Company a written account of its
administration of the Trust during such year or during the period from the
close of the last preceding year to the date of such removal or resignation,
setting forth all investments, receipts, disbursements, and other transactions
effected by it, including a description of all securities and investments
purchased and sold with the cost or net proceeds of such purchases or sales
(accrued interest paid or receivable being shown separately), and showing all
cash, securities and other property held in the Trust at the end of such year
or as of the date of such removal or resignation, as the case may be.
SECTION 8
RESPONSIBILITY OF TRUSTEE
8.1 Trustee shall act with the care, skill, prudence and diligence under the
circumstances then prevailing that a prudent person acting in like capacity and
familiar with such matters would use in the conduct of an enterprise of a like
character and with like aims; provided, however, that Trustee shall incur no
liability to any person for any action taken pursuant to a direction, request or
approval given by Company which is contemplated by, and in conformity with, the
terms of the Plan or this Trust and is given in writing by Company. In the event
of a dispute between Company and any third party, including a Participants or
Beneficiary, Trustee may apply to a court of competent jurisdiction to resolve
the dispute.
8.2 If Trustee undertakes or defends any litigation arising in connection with
this Trust Agreement, Company agrees to indemnify Trustee against Trustee's
costs, expenses and liabilities (including, without limitation, attorneys' fees
and expenses) relating thereto and to be primarily liable for such payments. If
Company does not pay such costs, expenses and liabilities in a reasonably
timely manner, Trustee may obtain funds to make payment from the Trust.
8.3 Trustee may consult with legal counsel (who may also be counsel for
Company generally) with respect to any of its duties or obligations hereunder.
5
<PAGE> 7
8.4 Trustee may hire agents, accountants, attorneys, actuaries, investment
advisors, financial consultants, or other professionals to assist it in
performing any of its duties or obligations hereunder.
8.5 Trustee shall have, without exclusion, all powers conferred on Trustees by
applicable law, unless expressly provided otherwise in this Trust Agreement;
provided, however, that if an insurance policy is held as an asset of the
Trust, Trustee shall have no power to name a Beneficiary of the policy other
than the Trust, to assign the policy (as distinct from conversion of the policy
to a different form) other than to a successor Trustee, or to loan to any
person the proceeds of any borrowing against such policy.
SECTION 9
COMPENSATION AND EXPENSES OF TRUSTEE
9.1 Company shall pay any administrative and Trustee's fees and expenses.
SECTION 10
RESIGNATION AND REMOVAL OF TRUSTEE
10.1 Trustee may resign at any time by written notice to Company, which shall
be effective thirty (30) days after receipt of such notice unless Company and
Trustee agree otherwise.
10.2 Trustee may be removed by Company on thirty (30) days notice or upon
shorter notice accepted by Trustee.
10.3 Upon resignation or removal of trustee and appointment of a successor
Trustee, all assets shall subsequently be transferred to the successor Trustee.
The transfer shall be completed within sixty (60) days after receipt of notice
of resignation, removal, or transfer, unless Company extends the time limit.
10.4 If Trustee resigns or is removed, a successor shall be appointed in
accordance with Section 11 by the effective date of resignation or removal
under Sections 10.1 or 10.2. If no such appointment has been made, Trustee may
apply to a court of competent jurisdiction for appointment of a successor or
for instructions. All expenses of Trustee in connection with the termination
proceeding shall be allowed as administrative expenses of the Trust.
SECTION 11
APPOINTMENT OF SUCCESSOR
11.1 If Trustee resigns (or is removed) in accordance with Sections 10.1 or
10.2, Company may appoint any third party, such as a bank trust department or
other party that may be granted corporate trustee powers under state law, as a
successor to replace Trustee upon resignation or removal. The appointment shall
require the prior approval in writing of a majority of Participants eligible to
receive benefits under the Plan and shall subsequently be effective when
accepted in writing by the new Trustee, who shall have all of the rights and
powers of the former Trustee, including ownership rights in the Trust assets.
The former Trustee shall execute any instrument necessary or reasonably
requested by Company or the successor Trustee to evidence the transfer.
11.2 The successor Trustee need not examine the records and acts of any prior
Trustee and may retain or dispose of existing Trust assets, subject to Sections
7 and 8. The successor Trustee shall not be responsible for and Company shall
indemnify and defend the successor Trustee from any claim or liability
resulting from any action or inaction of any prior Trustee or from any other
past event, or any condition existing at the time it becomes successor Trustee.
6
<PAGE> 8
SECTION 12
AMENDMENT OR TERMINATION
12.1 This Trust Agreement may be amended by a written instrument executed by
Trustee and Company. Notwithstanding the foregoing, no such amendment shall
conflict with the terms of the Plan or shall make the Trust revocable.
12.2 The Trust shall not terminate until the date on which all Participants
and their Beneficiaries are no longer entitled to benefits pursuant to the
terms of the Plan.
12.3 Notwithstanding the provisions of Section 12.2 of the Trust, upon
written approval of all Participants (or, if the Participant is deceased, the
Participant's Beneficiary) entitled to payment of benefits pursuant to the
terms of the Plan, Company may terminate this Trust prior to the time all
benefit payments under the Plan have been made. All assets in the Trust at
termination shall then be returned to Company, provided appropriate provisions
are made for full payment of any benefits to Participants (or, if a Participant
is deceased, a Participant's Beneficiary).
SECTION 13
MISCELLANEOUS
13.1 Any provision of this Trust Agreement prohibited by law shall be
ineffective to the extent of any such prohibition without invalidating the
remaining provisions hereof.
13.2 Benefits payable to Participants and their Beneficiaries under this
Trust Agreement may not be anticipated, assigned (either at law or in equity),
alienated, pledged, encumbered or subjected to attachment, garnishment, levy,
execution, or other legal or equitable process.
13.3 This Trust Agreement shall be governed by and construed in accordance
with the laws of Tennessee.
13.4 For purposes of this Trust Agreement, Change of Control shall have the
same definition as that found in Section 1.3 of the Plan.
13.5 For purposes of this Trust Agreement, termination of employment for
Good Reason shall have the same definition as that found in Section 1.14 of
the Plan.
13.6 Notwithstanding anything to the contrary contained in this Trust
Agreement or in the Plan: (i) in the event that the Internal Revenue Service
prevails in its claim that amounts contributed to and held in the Trust,
and/or earnings thereon, constitute taxable income to a Participants or his
Beneficiary for any taxable year of him, prior to the taxable year in which
such contributions and/or earnings are distributed to him, or (ii) in the
event that legal counsel satisfactory to the Company, the Trustee and the
applicable Participants or his Beneficiary renders an opinion that the Internal
Revenue Service would likely prevail in such a claim, the assets in the Trust
Fund shall be immediately distributed to the Participants or his Beneficiary.
For purposes of this Section 13.6, the Internal Revenue Service shall be deemed
to have prevailed in a claim if such claim is upheld by a court of final
jurisdiction, or if the Trustee, based upon an opinion of legal counsel
satisfactory to the Company, the Trustee and the Participants or his
Beneficiary, fails to appeal a decision of the Internal Revenue Service, or of
a court of applicable jurisdiction, with respect to such claim, to an
appropriate Internal Revenue Service appeals authority or to a court of
higher jurisdiction within the appropriate time period.
7
<PAGE> 9
Section 14
EFFECTIVE DATE
--------------
14.1 Effective date of this Trust Agreement shall be January 1, 1996.
------------
UNION PLANTERS NATIONAL BANK
UNION PLANTERS CORPORATION TRUST DEPARTMENT
By: Benjamin W. Rawlins, Jr. By: John D. Temple
-------------------------------- --------------------------------
Benjamin W. Rawlins, Jr.
Chairman and CEO Title: Executive Vice President and
Manager Trust
8
<PAGE> 1
EXHIBIT 10(N)
<PAGE> 2
UNION PLANTERS CORPORATION AMENDMENT TO
TRUST UNDER UNION PLANTERS CORPORATION
DEFERRED COMPENSATION PLAN FOR EXECUTIVES
THIS AMENDMENT, dated as of August 31, 1999, by and between Union
Planters Corporation as grantor ("Company") and Union Planters Bank, N.A. Trust
Department as trustee ("Trustee"), amends that certain Trust under Union
Planters Corporation Deferred Compensation Plan for Executives dated as of
January 1, 1996, by and between Company and Trustee ("Trust").
WHEREAS, Employer and Participant desire to amend the Trust as provided
herein;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements set forth herein and for other good and valuable
consideration, the receipt and adequacy of which is hereby acknowledged, the
parties hereto agrees as follows:
1. Restriction on Removal of Trustee following a Change in Control.
There is hereby added a new sentence to the end of Section 10.2, to
read as follows:
"Notwithstanding the foregoing, for a period of five (5) years
following a Change in Control, Trustee may be removed by Company only
with the prior written consent of a majority of Participants who are
entitled to any future benefit under the Plan at the time of such
proposed removal."
3. Automatic Appointment of New Trustee Upon a Change in Control. There
is hereby added a new Section 10.5 to read as follows:
"Notwithstanding anything to the contrary in this Section 10, upon a
Change in Control, (a) Union Planters Bank, N.A. Trust Department
shall automatically cease to serve as Trustee, without the necessity
of executing any documentation or taking further action, and (b)
Wachovia Bank, N.A. shall automatically become the successor Trustee,
without the necessity of executing any documentation other than a
written acknowledgement of its acceptance of such successor
trusteeship. If Wachovia Bank, N.A. fails or refuses to execute such
acknowledgement within five (5) business days following the Change in
Control, then the successor trustee shall be appointed by Company, but
only with the prior approval of a majority of Participants eligible to
receive benefits under the Plan, pursuant to the provisions of Section
11.1."
<PAGE> 3
3. Restriction on Amendment of the Trust following a Change in Control.
There is hereby added to Section 12.1 a new sentence to read as follows:
"Notwithstanding the foregoing, for a period of five (5) years
following a Change in Control, the Trust may not be amended without
the written consent of a majority of Participants who are entitled to
any future benefit under the Plan at the time of such amendment."
**************************************************
The terms of the Trust not hereby amended shall be and remain in full
force and effect and are not affected by this Amendment.
IN WITNESS WHEREOF, Company and Trustee have duly executed this Amendment
as of the day and year first above written.
UNION PLANTERS CORPORATION
By: Benjamin W. Rawlins, Jr.
------------------------
Its: Chairman and Chief Executive Officer
------------------------------------
UNION PLANTERS BANK, N.A. TRUST
DEPARTMENT
By: E. J. House, Jr.
----------------
Its: Executive Vice President
------------------------
-2-
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